-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QFsBPzqUY6+bLbnItjH494LeJ86Tw1IginmItyGNHr0sUEdHE2R/Zf4MHcveXR1X c2Ji1VmObGylyAwTkSIt0w== 0001015402-01-500808.txt : 20010501 0001015402-01-500808.hdr.sgml : 20010501 ACCESSION NUMBER: 0001015402-01-500808 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DA CONSULTING GROUP INC CENTRAL INDEX KEY: 0001051209 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 760418488 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-24055 FILM NUMBER: 1616593 BUSINESS ADDRESS: STREET 1: ONE EXETER PLAZA, FOURTH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6173752800 MAIL ADDRESS: STREET 1: ONE EXETER PLAZA STREET 2: FOURTH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 10-K/A 1 doc1.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 Pursuant to Section 13 or 15(d) of The Securities Act of 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 Commission File No. 00-24055 DA CONSULTING GROUP, INC. (Exact name of registrant as specified in charter) TEXAS 76-0418488 (State or other jurisdiction of (IRS employer incorporation or organization) identification No.) ONE EXETER PLAZA, 4TH FLOOR BOSTON, MASSACHUSETTS 02116 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (617) 375-2800 Securities Registered Pursuant to Section 12(b) of the Act: NONE Securities Registered Pursuant to Section 12(g) of the Act: Title of Class: COMMON SHARES, PAR VALUE $0.01 PER SHARE Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No - - Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [ ]. As of April 30, 2001, the aggregate market value of the Registrant's common stock, $0.01 par value, held by non-affiliates of the Registrant was approximately $5,553,000. As of April 30, 2001, 8,418,604 shares of the Registrant's common stock, $0.01 par value, were outstanding. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The names, ages and present positions of the directors and executive officers of the Company as well as other relevant information are set forth below: Year in Which ------------- First Became ------------- Name Age Position with Company Director - ------------------------ --- ----------------------------- ------------- Virginia L. Pierpont 59 Chairman of the Board of 1987 Directors John E. Mitchell 43 President and Chief Executive 2000 Officer and Director Malcolm G. Wright 44 Chief Operating Officer Dennis C. Fairchild 51 Executive Vice President and Chief Financial Officer Nigel W.E. Curlet 55 Director 1996 Gunther E.A. Fritze 64 Director 1996 B.K. Prasad 64 Director 2000 Richard W. Thatcher, Jr. 61 Director 1996 Virginia L. Pierpont, age 59, founded the Company as a sole proprietorship in 1984, incorporated the business in 1987, and opened its United Kingdom operation in 1988. Ms. Pierpont was the Chief Executive Officer of the Company from 1984 to 1993 and has served as Chairman of the Board from December 1996 through August 1998 and again from April 2000 to the present. She is a member of the Company's Compensation Committee. Ms. Pierpont is a Class B Director whose term expires at the 2003 Annual Meeting. John E. Mitchell, age 43, has served as a director since June 2000. Mr. Mitchell joined the Company in October 1999 as president of its Europe, Middle East, Africa division with primary responsibilities for operational functions within this division. In February 2000, Mr. Mitchell was promoted to Chief Operating Officer of the Company. In April 2000, Mr. Mitchell was promoted to President and Chief Executive Officer. Prior to joining the Company, Mr. Mitchell was with Equifax Inc. from January 1997 to October 1999 as Chief Marketing Officer and before that was with International Business Machines Corporation (IBM) for 18 years serving in various sales and marketing positions. Mr. Mitchell is a Class C Director whose term expires at the 2001 Annual Meeting. Malcolm G. Wright, age 44, joined the Company in March 2000 as Vice President of Europe and, in February 2001, was promoted to Chief Operating Officer. Prior to joining the Company, Mr. Wright was with Equifax Plc from November 1996 to January 2000, and his last position was as European & UK Divisional Director of Commercial Information Services. He also spent 17 years with Dun & Bradstreet and was Director of Multinational Development at Dun & Bradstreet Europe from December 1990 to November 1996. Dennis C. Fairchild, age 51, joined the Company in April 1999 as Executive Vice President and Chief Financial Officer and is primarily responsible for the finance and administrative functions of the Company. Prior to joining the Company, Mr. Fairchild provided consulting services from April 1998 to February 1999. From April 1997 to April 1998, Mr. Fairchild was Chief Financial Officer at National Water & Power. He served as Chief Financial Officer at AmeriQuest Technologies from January 1994 to April 1997 and at Southeast Frozen Foods from March 1990 to January 1994. Mr. Fairchild received his B.A. from Mankato State University. -2- Nigel W.E. Curlet, age 55, has served as a director since December 1996. Since 1976, he has been employed in various capacities by Shell Chemical Company and is currently its Manager-Demand Chain Center of Excellence. Mr. Curlet's prior management roles at Shell were in its information technology, research and development, and operations and strategic planning departments. He is a member of the Company's Audit, Compensation and Stock Option Committees. Mr. Curlet is a Class A director whose term expires at the 2002 Annual Meeting. Gunther E.A. Fritze, age 64, has served as a director since December 1996. Mr. Fritze is retired. From 1962 to 1999, Mr. Fritze was employed in various capacities by Bank of Boston. Mr. Fritze's most recent position was Manager, Finance Companies. Mr. Fritze is a member of the Company's Audit, Compensation and Stock Option Committees. Mr. Fritze is a Class A Director whose term expires at the 2002 Annual Meeting. B.K. Prasad, Ph.D., age 64, has served as a director since December 2000. Dr. Prasad, a corporate strategy and management consultant, has been employed as a Director and Vice President by Comcraft Canada Limited since 1987, and by Comcraft Asia (Pte) Ltd. from 1981 to 1987. Prior to joining Comcraft, Dr. Prasad served in various senior finance and management positions in large industrial organizations. Dr. Prasad holds an LLB, MBA, FCMA, FCA and CPA. Dr. Prasad has been designated by Purse Holding Limited ("Purse") to serve as a member of the Board of Directors pursuant to the Stock Purchase Agreement between the Company and Purse under which Purse has the right to designate one director for so long as Purse owns at least 25% of the Company's Common Stock that it purchased under the Stock Purchase Agreement. Dr. Prasad is a Class C Director whose term expires at the 2001 Annual Meeting. Richard W. Thatcher, Jr., age 61, has served as a director since December 1996. Since 1992, he has been Senior Vice President in the investment banking firm of PMG Capital Corp. Mr. Thatcher is a member of the Company's Audit Committee. Mr. Thatcher is a Class B Director whose term expires at the 2003 Annual Meeting. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors and executive officers, and persons who own more than ten percent of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission ("SEC") initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Officers, directors and greater than ten-percent shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely on review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the year ended December 31, 2000, all Section 16(a) filing requirements applicable to the Company's officers, directors and greater than ten-percent beneficial owners were complied with except (i) Purse Holding Limited, a British Virgin Islands limited company which purchased more than 10% of the Company's Common Stock on October 16, 2000, and Chandaria Charitable Foundation 1982 No. 5, the sole shareholder of Purse Holding Limited, filed a late joint Form 3, and (ii) Virginia L. Pierpont, a director of the Company, filed a late Form 3 to record certain shares of Common Stock held indirectly, a late Form 4 to record a single transaction, and a late Form 5 to record a single transaction. -3- ITEM 11. EXECUTIVE COMPENSATION CASH AND NON-CASH COMPENSATION PAID TO CERTAIN EXECUTIVE OFFICERS The following table sets forth, with respect to services rendered during 2000, 1999, and 1998, the total compensation earned by (i) each individual who served as the Company's Chief Executive Officer during 2000, (ii) each of the four most highly compensated executive officers, other than the Chief Executive Officer, who were serving as executive officers at the end of 2000 and whose respective total annual salary and bonus exceeded $100,000 during 2000, and (iii) two additional individuals who would have been included in part (ii) above but for the fact that the individuals were not serving as executive officers of the Company at the end of 2000 (collectively, the "named executive officers").
SUMMARY COMPENSATION TABLE LONG TERM COMPENSATION ------------ YEAR ANNUAL COMPENSATION (1) AWARDS ---- ----------------------- ------ SECURITIES UNDERLYING ALL OTHER NAME AND PRINCIPAL POSITION SALARY($) (2) BONUS($) OPTIONS (#) COMPENSATION ($) (3) - --------------------------- -------------- --------- ----------- --------------------- John E. Mitchell (4) 2000 $ 311,742 $ 175,500 468,000 $ 16,849 (11) President and Chief Executive Officer 1999 --- --- --- --- 1998 --- --- --- --- Dennis C. Fairchild (5) 2000 $ 189,847 $ 92,000 40,000 $ 17,092 (12) Executive Vice President - Finance and 1999 $ 142,708 $ 55,000 30,750 $ 46,046 Administration, Chief Financial Officer 1998 --- --- --- --- Virginia L. Pierpont (6) 2000 $ 103,125 --- --- --- Chairman of the Board of Directors 1999 --- --- 1,025 --- 1998 --- --- --- --- Nicholas H. Marriner (7) 2000 $ 43,020 --- --- $ 66,634 (13) Former President, Chief Executive Officer 1999 $ 335,000 --- --- --- and Chairman of the Board of Directors 1998 $ 432,000 $ 168,480 --- --- Patrick J. Newton (8) 2000 $ 63,046 --- --- $ 3,330 (14) Former President and Chief Executive 1999 $ 333,505 --- 98,500 --- Officer 1998 $ 306,000 $ 95,068 42,000 $ 2,192,400 Eric J. Fernette (9) 2000 $ 116,048 --- 15,750 $ 113,631 (15) Former Executive Vice President, 1999 $ 155,700 $ 40,000 27,250 --- Human Resources 1998 $ 141,583 $ 132,818 4,200 --- Lisa L. Costello (10) 2000 $ 115,752 --- 40,000 $ 21,759 (16) Former Executive Vice President, 1999 $ 160,260 $ 40,000 33,500 --- Research and Development 1998 $ 156,313 $ 138,856 21,000 ---
_________________ (1) All figures converted to U.S. dollars based upon the exchange rate at the end of the applicable fiscal year. (2) Salary includes amounts deferred, if any, pursuant to the Company's 401(k) plan. (3) Amounts include compensation expense attributed to employee stock awards, employer 401(k) contributions and Company perquisites. -4- (4) Mr. Mitchell joined the Company on October 4, 1999 as president of its Europe, Middle East, Africa division, was elected as the Company's Chief Operating officer effective February 11, 2000 at a base salary of $270,000, and was elected as the President and Chief Executive Officer of the Company effective April 4, 2000 at a base annual salary of $292,500. His base salary increased to $390,000 effective November 1, 2000. (5) Mr. Fairchild was elected as an Executive Vice President and the Chief Financial Officer of the Company on April 14, 1999 at a base annual salary of $175,000. His base salary increased to $220,000 effective November 1, 2000. (6) Ms. Pierpont receives $150,000 annually, beginning May 1, 2000, under her employment agreement for her service as Chairman of the Board of Directors. She also received a $3,125 retainer in the first quarter of 2000 which was paid to all directors who were not also employees of the Company. (7) Mr. Marriner served as Chief Executive Officer of the Company through November 30, 1999. He was elected as the President and Chief Executive Officer of the Company effective February 11, 2000. He resigned his position as Chairman of the Board of Directors, President and Chief Executive Officer effective April 3, 2000. (8) Mr. Newton served as Chief Executive Officer of the Company effective December 1, 1999. His base salary was $378,276 on February 11, 2000, the date his resignation as President and Chief Executive Officer of the Company became effective. (9) Mr. Fernette resigned his position as Executive Vice President - Human Resources on August 15, 2000, at which time his base annual salary was $157,248. (10) Ms. Costello resigned her position as Executive Vice President - Research and Development on August 10, 2000, at which time her base salary was $165,593. (11) Represents $16,849 in car allowance. (12) Represents $14,400 in car allowance and $2,692 in employer 401(k) contributions. (13) Represents $66,634 in severance pay. (14) Represents $3,330 in car allowance. (15) Represents $9,600 in car allowance, $5,250 in employer 401(k) contributions, $89,181 in severance pay, and $9,600 from termination of a deferred compensation plan. (16) Represents $9,000 in car allowance, $4,959 in employer 401(k) contributions, and 7,800 from termination of a deferred compensation plan. -5- STOCK OPTIONS GRANTED TO CERTAIN EXECUTIVE OFFICERS DURING LAST FISCAL YEAR Under the 1997 Stock Option Plan, options to purchase Common Stock are available for grant to directors, officers and other key employees of the Company. The following table sets forth certain information regarding options for the purchase of Common Stock that were awarded to the named executive officers during 2000.
OPTION GRANTS IN CALENDAR YEAR 2000 Number of Securities Percent of Total Potential Realizable Gain Underlying Options Granted to Exercise or at Assumed Annual Rates Options Employees in Base Price Expiration of Stock Appreciation for Option Name Granted (#) (1) Last Fiscal Year ($/Sh) (2) Date Terms - -------------------- --------------- ------------------- ------------ -------------- Compounded Annually -------------------------- 5% ($) 10% ($) ------------- ----------- John E. Mitchell . . 75,000 7% 3.25 2/11/2010 153,293 388,475 75,000 7% 3.25 2/11/2010 153,293 388,475 308,000 (3) 30% 1.44 5/01/2010 278,443 705,269 Dennis Fairchild . . 40,000 (3) 4% 1.44 5/01/2010 36,224 91,800 Virginia L. Pierpont 0 --- --- --- --- --- Nicholas H. Marriner 0 --- --- --- --- --- Patrick J. Newton 0 --- --- --- --- --- Eric J. Fernette . . 15,750 2% 3.44 8/15/2001 34,074 86,349 (4) Lisa L. Costello . . 40,000 4% 1.44 11/10/2000 36,224 91,800 (5)
- ----------------------------- (1) Unless otherwise, noted, all options vest in one-third installments on the second, third, and fourth anniversaries of the date of grant. (2) The exercise price equaled the fair market value of a share of Common Stock on the date of grant as determined by the Board of Directors. The exercise price is payable in cash or by delivery of shares of Common Stock having a fair market value equal to the exercise price of the options exercised. (3) Options vest in one-half installments on May 1, 2001 and May 1, 2002. (4) The options are exercisable for the time period during which Mr. Fernette receives separation payments from the Company under the Agreement and Release between Mr. Fernette and the Company, but not beyond August 15, 2001. (5) The option was terminated three months after Ms. Costello resigned from the Company. -6- STOCK OPTIONS EXERCISED BY NAMED EXECUTIVE OFFICERS DURING 2000 AND HELD BY NAMED EXECUTIVE OFFICERS AT DECEMBER 31, 2000 No options granted by the Company were exercised by the named executive officers during 2000. The following table sets forth certain information regarding options for the purchase of Common Stock that were held by the named executive officers.
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES Number of Securities Underlying Value of Unexercised In-the-Money Shares Unexercised Options at FY-End Options at FY-End Acquired on Value ----------------------------- ----------------- Name Exercise (#) Realized($) (#) ($) (1) - -------------------- ------------ ----------- --- ------- Exercisable Unexercisable Exercisable Unexercisable -------------- -------------- --------------- -------------- John E. Mitchell . . . --- --- 38,500 436,500 --- --- Dennis C. Fairchild . . --- --- 5,375 66,375 --- --- Virginia L. Pierpont . --- --- 1,025 -0- --- --- Nicholas H. Marriner . --- --- -0- -0- --- --- Patrick J. Newton . . . --- --- -0- -0- --- --- Eric J. Fernette . . . --- --- 5,375 65,375 --- --- Lisa L. Costello . . . --- --- -0- -0- --- ---
____________________ (1) Based on $0.781 per share, the closing price of the Common Stock, as reported by the Nasdaq National Market, on December 29, 2000. COMPENSATION OF DIRECTORS During 2000, the Company paid each director who was not also an employee of the Company an annual retainer of $12,500 on a quarterly basis and awarded each such director an option to purchase 5,333 shares of Common Stock pursuant to the Company's 1997 Stock Option Plan, being that number of options determined by dividing $10,000 by the fair market value of a share of Common Stock on June 6, 2000, the date of the Company's 2000 Annual Meeting. During 2001, the Company will pay each director, who is not also an employee of the Company, a $12,500 annual retainer and will award (as of and on the date of the Company's Annual Meeting) pursuant to the 1997 Stock Option Plan, each such director that number of options to purchase Common Stock determined by dividing $10,000 by the fair market value of a share of Common Stock on the date of the Annual Meeting. The Company also reimburses directors for travel expenses incurred on behalf of the Company. Ms. Pierpont received the first quarterly installment of $3,125 of the retainer paid to all non-employee directors of the Company. Thereafter, she did not receive any further installments of the retainer because she entered into an employment agreement under which she receives a salary for serving as the Chairman of the Board, as described below. EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS The Company entered into an employment agreement with Ms. Pierpont, effective April 4, 2000. Pursuant to her employment agreement, Ms. Pierpont receives $150,000 per year and reimbursement for her expenses incurred on behalf of the Company, beginning May 1, 2000, to serve as the Chairman of the Board of Directors. Ms. Pierpont's salary may be increased by the Board upon its annual review at the beginning of each calendar year. Ms. Pierpont serves at the -7- Board's discretion, and, if terminated by the Board, she is entitled to receive her salary for 90 days after she receives notice of termination. If Ms. Pierpont is terminated within 180 days of a change of control of the Company, she is entitled to receive her salary for 180 days after she receives notice of termination. Ms. Pierpont's employment agreement contains a non-compete covenant that is in effect during the term of her employment and for 18 months following her termination. The Company entered into an employment agreement with Mr. Mitchell, the Company's President and Chief Executive Officer, effective April 4, 2000. Pursuant to his employment agreement, Mr. Mitchell received an initial base salary of (British pounds) 195,000 per year which may be increased by the Board upon its annual review at the beginning of each calendar year. The annualized salary of Mr. Mitchell for 2001 is $390,000. Mr. Mitchell receives customary benefits, including medical, dental, disability and life insurance and other employee benefit plans available to employees at his level. Further, he is eligible for an annual performance bonus, as determined by the Company. Mr. Mitchell may be terminated without cause, as defined in the employment agreement, upon 90 days written notice. If so terminated, he is entitled to receive his salary and benefits for 18 months after termination, including any bonus paid or payable for the calendar year before his termination, and all of his outstanding stock options become fully vested and exercisable. If Mr. Mitchell voluntarily terminates his employment agreement on 30 days prior written notice with good reason, as defined in the agreement, then he is entitled to receive his salary and benefits for 12 months, including any bonus paid or payable for the previous calendar year, and all of his stock options become fully vested and exercisable. If Mr. Mitchell terminates his employment agreement on one year's prior written notice, he will receive his salary and benefits for 12 months after the termination is effective, including any bonus paid or payable for the calendar year before the termination. Mr. Mitchell's employment agreement contains a non-compete covenant that is in effect during the term of his employment and for 18 months after his termination, unless termination is by the Company without cause or by Mr. Mitchell for good reason. The Company also entered into a separation agreement with Mr. Mitchell, effective April 4, 2000, the initial term of which is two years. The Company may, in its sole discretion, extend, terminate or modify the agreement within 60 days from and after its expiration and, if it takes no action within 60 days after expiration of the term, the agreement is automatically extended for an additional two years. Also, the agreement remains in force for two years after any change in control of the Company, as defined in the agreement. Under the agreement, if Mr. Mitchell is involuntarily terminated within two years after a change in control of the Company, he is entitled to (i) (British pounds) 195,000 as a lump sum in cash, (ii) a lump sum in cash equal to the cost of his benefits for two years, (iii) out-placement services in connection with finding new employment and (iv) the right to immediately exercise all outstanding stock options granted to him by the Company. The Company entered into an employment agreement with Mr. Wright, the Company's Chief Operating Officer, dated February 6, 2001. Pursuant to his employment agreement, Mr. Wright was entitled to receive an initial base salary of (British pounds) 150,000 per year or such other rate as is shown on his pay slip, subject to annual review, and the Company matches his contributions to his personal pension up to five percent of his total pay. The annualized salary of Mr. Wright for 2001 is $216,000. Each of the Company and Mr. Wright may terminate the employment contract on six months prior notice in writing. Mr. Wright's employment agreement contains a non-compete covenant that is in effect during the term of his employment and for six months following his termination. Prior to his appointment as Chief Operating Officer of the Company, Mr. Wright entered into a change in control separation agreement with the Company, effective September 30, 1999, the initial term of which is two years. The Company may, in its sole discretion, extend, terminate or modify the agreement within 60 days from and after its expiration and, if it takes no action within -8- 60 days after expiration of the term, the agreement is automatically extended for an additional two years. Also, the agreement remains in force for two years after any change in control of the company, as defined in the agreement. Under the agreement, if Mr. Wright is involuntarily terminated within two years after a change in control of the Company, he is entitled to (i) (British pounds) 117,000 as a lump sum in cash, (ii) a lump sum in cash equal to the cost of his benefits for two years, (iii) out-placement services in connection with finding new employment and (iv) the right to immediately exercise all outstanding stock options granted to him by the Company. The Company entered into a change in control separation agreement with Mr. Fairchild, the Company's Chief Financial Officer, effective September 30, 1999, the initial term of which is two years. The Company may, in its sole discretion, extend, terminate or modify the agreement within 60 days from and after its expiration and, if it takes no action within 60 days after expiration of the term, the agreement is automatically extended for an additional two years. Also, the agreement remains in force for two years after any change in control of the Company, as defined in the agreement. Under the agreement, if Mr. Fairchild is involuntarily terminated within two years after a change in control of the Company, he is entitled to (i) $243,250 as a lump sum in cash, (ii) a lump sum in cash equal to the cost of his benefits for two years, (iii) out-placement services in connection with finding new employment and (iv) the right to immediately exercise all outstanding stock options granted to him by the Company. The Company entered into employment agreements with each of Messrs. Marriner, Newton and Fernette and Ms. Costello effective January 1, 1998, the initial terms of which expired on December 31, 1998 and which renewed automatically for additional one-year periods on expiration of prior terms. The initial base annual salaries under the employment agreements of the former executive officers were: $432,000 for Mr. Marriner, $306,000 for Mr. Newton; $144,000 for Mr. Fernette and $144,000 for Ms. Costello. The base annual salary of each of the former executive officers was subject to increases periodically at the discretion of the Board of Directors, and each former executive officer was eligible to receive an annual bonus as determined by the Company. The base annual salary of each of the former executive officers at the time that the officer resigned was: $259,614 for Mr. Marriner; $378,276 for Mr. Newton; $157,248 for Mr. Fernette and $165,593 for Ms. Costello. Each of the employment agreements provided for customary benefits, including life, health and disability insurance and 401(k) plan participation. Each of the employment agreements further provided that if the employee was terminated without cause, such employee was entitled to severance pay: Mr. Fernette and Ms. Costello were entitled to salary and benefits for 12 months and 50% of any bonus paid with respect to the calendar year immediately preceding termination; and Messrs. Marriner and Newton were entitled to salary and benefits for 18 months and 100% of any bonus paid with respect to the calendar year immediately preceding termination. If the former executive employee voluntarily terminated the employment agreement for good reason (as defined therein), Mr. Fernette and Ms. Costello were entitled to salary and benefits for six months, including 50% of any bonus paid with respect to the calendar year immediately preceding termination, and Messrs. Marriner and Newton were entitled to salary and benefits for twelve months, including 100% of any bonus paid with respect to the calendar year immediately preceding termination. In the event the former executive officer was terminated in connection with a change in control (as defined therein), Mr. Fernette and Ms. Costello were entitled to receive one year's base salary and benefits and 100% of any bonus paid with respect to the calendar year immediately preceding termination, and Messrs. Marriner and Newton were entitled to receive two years' base salary and benefits and 200% of any bonus paid with respect to the calendar year immediately preceding termination. In the event of termination of the former executive officer by the Company without cause, by the former executive officer for good reason or following a change of control, all outstanding options held by such officer would become fully vested and exercisable. The former executive employees' employment agreements contained non-compete covenants that were in effect during the terms of their employment and for (i) 18 months after termination for each of Messrs. Marriner and Newton and (ii) 12 months after termination for each of Mr. Fernette and Ms. Costello, unless termination was without cause or by the former executive officer for good reason. -9- The Company entered into an Agreement and Release with Mr. Fernette, dated August 15, 2000, in connection with his termination of employment with the Company effective the same date. Under the Agreement and Release, the Company agreed to pay Mr. Fernette (i) $8,769.60 in lieu of accrued unused vacation, (ii) $7,325.98 as full payout as part of a deferred compensation plan, and (iii) $204,483.92 less customary withholding taxes, in installment payments, beginning August 31, 2000, and ending August 15, 2001, which installment payments may be accelerated. Also, all of Mr. Fernette's outstanding stock options became fully vested and exercisable and remain exercisable during the period of time that he receives separation payments. Additionally, Mr. Fernette's 401(k) benefits fully vested on his last day of employment. Mr. Fernette remained bound by the non-compete covenant in his employment agreement with the Company which was in effect for 12 months after his termination of employment. The Company entered into an agreement with Mr. Marriner, dated April 4, 2000, in connection with his termination of employment with the Company effective the same date. Under the agreement, the Company agreed to pay Mr. Marriner two months salary in lieu of all notice entitlement and, additionally, a lump sum ex gratia payment of (British pounds) 30,000. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION Ms. Pierpont served as a member of the Company's Compensation Committee in 2000 and also serves as the Chairman of the Board of Directors for which she receives a salary of $150,000 annually and reimbursement for her expenses incurred on behalf of the Company. -10- ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information, as of April 30, 2001, with respect to the beneficial ownership of shares of Common Stock of the Company by each person who is known to the Company to be the beneficial owner of more than five percent of the outstanding Common Stock, by each director or nominee for director, by each of the named executive officers, and by all directors and executive officers as a group.
Amount and Nature of Percent of Voting Name and Address of Beneficial Owner Beneficial Ownership (1) Power - ------------------------------------------------ ------------------------ ------------------ EXECUTIVE OFFICERS AND DIRECTORS (2) John E. Mitchell (3) . . . . . . . . . . . . . . 259,900 3.0% Dennis C. Fairchild (4). . . . . . . . . . . . . 41,041 0.5% Virginia L. Pierpont (5) . . . . . . . . . . . . 619,968 7.4% Nicholas H. Marriner (6) . . . . . . . . . . . . 619,968 7.4% Patrick J. Newton. . . . . . . . . . . . . . . . 0 * Eric J. Fernette (7) . . . . . . . . . . . . . . 72,400 0.9% Lisa L. Costello . . . . . . . . . . . . . . . . 4,200 * Nigel W.E. Curlet (8). . . . . . . . . . . . . . 31,538 * Gunther E.A. Fritze (9). . . . . . . . . . . . . 33,658 * Richard W. Thatcher, Jr (9) .. . . . . . . . . . 119,578 1.4% B.K. Prasad. . . . . . . . . . . . . . . . . . . 0 * OTHER SHAREHOLDERS Worcester Discretionary Trust (10). . . . . . . 631,092 7.5% Woodbourne Discretionary Trust (10) . . . . . . 629,034 7.5% Dimensional Fund Advisors, Inc. (11) . . . . . . 480,000 5.7% John Andrew Cowan (12) . . . . . . . . . . . . . 1,260,126 15.0% Roger Geoffrey Barrs (12). . . . . . . . . . . . 1,260,126 15.0% Purse Holding Limited (13) . . . . . . . . . . . 4,000,000 38.4% All directors and executive officers as a group 1,125,683 12.9% (8 persons) . . . . . . . . . . . . . . . .
________________ * Less than 1% (1) Each beneficial owner's percentage ownership is determined by assuming that options that are held by such person (but not those held by any other person) and that are exercisable within 60 days of April 30, 2001 have been exercised. Options that are not exercisable within 60 days of April 30, 2001 have been excluded. Unless otherwise, noted, the Company believes that all persons named in the above table have sole voting and investment power with respect to all shares of Common Stock beneficially owned by them. (2) Unless indicated otherwise, the address of each of these people is: c/o DA Consulting Group, Inc., One Exeter Plaza, Fourth Floor, Boston, Massachusetts 02116. (3) Includes 230,000 shares that may be acquired upon exercise of stock options. -11- (4) Includes 32,041 shares that may be acquired upon exercise of stock options. (5) Includes (i) 370,000 shares owned by Ms. Pierpont's spouse, Nicholas Marriner, the former President and Chief Executive Officer of the Company and Chairman of the Board of Directors, (ii) 8,400 shares held by Ms. Pierpont as custodian for three minors, and (iii) 1,025 shares that may be acquired upon exercise of stock options. Ms. Pierpont disclaims beneficial ownership of the shares owned by her spouse and held as custodian for three minors. (6) Includes (i) 240,543 shares owned by Mr. Marriner's spouse, Virginia Pierpont, the Chairman of the Board of Directors, (ii) 8,400 shares held by his spouse as custodian for three minors, and (iii) 1,025 shares that his spouse may acquire upon exercise of stock options. Mr. Marriner disclaims beneficial ownership of the shares owned by his spouse, held by his spouse as custodian for three minors and which his spouse may acquire upon exercise of stock options. (7) Represents 72,400 shares that may be acquired upon exercise of stock options. (8) Represents (i) 11,130 shares owned by Mr. Curlet's spouse, (ii) 1,450 shares owned by Mr. Curlet's son, and (iii) 18,958 shares that may be acquired upon the exercise of stock options. (9) Includes 18,958 shares that may be acquired upon exercise of stock options. (10) Messrs. John Andrew Cowan and Roger Geoffrey Barrs are the co-trustees of the trust. The trustees have the power to appoint all or any part of the capital and income of the trust to one or more of the beneficiaries described in the trust deed and in such names and proportions and at such time as such trustees shall in their discretion determine. The address of this stockholder is: Victory House, 7th Floor, Prospect Hill, Douglas, Isle of Man, British Isle, IM1 1EQ. (11) Information with respect to the ownership of this stockholder was obtained from Schedule 13G filed February 2, 2001. The address of this stockholder is: 1299 Ocean Avenue, Eleventh Floor, Santa Monica, CA 90401. (12) Represents (i) 631,092 shares held by such stockholder as a co-trustee of the Worcester Discretionary Trust and (ii) 629,034 shares held by such stockholder as co-trustee of the Woodbourne Discretionary Trust. Such stockholder disclaims beneficial ownership of the shares held by the trusts. The address of this stockholder is: Victory House, 7th Floor, Prospect Hill, Douglas, Isle of Man, British Isle, IM1 1EQ. (13) Includes 2,000,000 shares that may be acquired by Purse Holding Limited ("Purse") upon exercise of a warrant, exercisable until October 16, 2003. Purse is a British Virgin Islands limited company. Chanderia Charitable Foundation 1982 No. 5 ("Foundation") is the sole shareholder of Purse. R&H Trust Co. (Bermuda) Limited ("Trust") is the Trustee of Foundation. John David Boden and Paul Barrington Hubbard are the joint owners of Trust. Mr. Boden is also the President and a Director of Trust. Mr. Hubbard is also the Vice-President and a Director of Trust and the settlor of Foundation. Purse, Foundation, Trust, and Messrs. Boden and Hubbard have the shared power to vote or to direct the vote of or to dispose or direct the dispostion of the shares of Common Stock. Foundation, Trust, and Messrs. Boden and Hubbard disclaim beneficial ownership of the 4,000,000 shares of Common Stock. The address of Purse is: Altstetterstrasse 126, P.O. Box 1705, CH-8048, Zurich, Switzerland. The address of Foundation, Trust and Messrs. Boden and Hubbard is: Corner House, 20 Parliament Street, Hamilton HM 12, Bermuda. Information with respect to these stockholders was obtained from Schedule 13D filed March 16, 2001. -12- WARRANTS TO PURCHASE COMMON STOCK On October 16, 2000, the Company consummated the sale to Purse Holding Limited, a British Virgin Islands limited company ("Purse"), of two million shares of the Company's Common Stock for $4.8 million and warrants to purchase up to three million shares of the Company's Common Stock. The sale was effected pursuant to a Securities Purchase Agreement, dated August 2, 2000, between the Company and Purse. In accordance with the terms of the Securities Purchase Agreement, the Company issued (i) two million shares of Common Stock at a price of $2.40 per share and (ii) warrants to purchase (a) two million shares of Common Stock, exercisable until October 16, 2003, at the greater of $3.00 per share or 85% of the market price per share of the Company's Common Stock at the time of exercise, and (b) one million shares of Common Stock, exercisable for the period of time after January 1, 2002, and until October 16, 2003, at $3.00 per share. As of April 30, 2001, there were 8,418,604 shares of the Company's stock outstanding. Therefore, if Purse exercised the warrants, it would own 44% of the outstanding shares of Common Stock, assuming there were no other changes in the number of shares outstanding. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Not Applicable ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) Documents filed as a part of the Report. 1. The following financial statements of the Company and the related report of independent accountants are filed with the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, filed on April 2, 2001:
Page Number ----------- Report of Independent Accountants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Consolidated Financial Statements: Balance Sheets at December 31, 1999 and 2000. . . . . . . . . . . . . . . . . . . . . . . . . . 33 Statements of Operations for the years ended December 31, 1998, 1999, and 2000. . . . . . . . . 34 Statements of Stockholders' Equity for the years ended December 31, 1998, 1999 and 2000 . . . . 35 Statements of Cash Flows for the years ended December 31, 1998, 1999 and 2000 . . . . . . . . . 36 Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2. Schedules for which provisions were made in accordance with applicable accounting regulations of the Securities and Exchange Commission are inapplicable and therefore have been omitted. (b) Reports on Form 8-K. On October 27, 2000 the Company filed a Current Report on form 8-K regarding the consummation of the sale to Purse Holding Limited of shares of common stock and warrants to purchase shares of common stock on October 16, 2000, pursuant to the Securities Purchase Agreement, dated August 2, 2000. -13-
(c) Exhibits EXHIBIT NO. DESCRIPTION - ----------- ----------- 3.1* - Amended and Restated Articles of Incorporation of the Company (incorporated by reference to the Company's Form S-1/A filed April 20, 1998). 3.2* - Bylaws of the Company, amended on August 6, 1999 (incorporated by reference to the Company's Form 10-Q filed November 15, 1999). 4.1* - Specimen Stock Certificate (incorporated by reference to the Company's Form S-1/A filed April 20, 1998). 10.1* - Amended and Restated 1997 Stock Option Plan (incorporated by reference to the Company's Form 10-K filed March 30, 2000).+ 10.2* - Employment Agreement between John Mitchell and the Company dated May 15, 2000 (incorporated by reference to the Company's Form 10-Q filed August 14, 2000).+ 10.3* - Securities Purchase Agreement dated August 2, 2000 between the Company and Purse Holding Limited (incorporated by reference to Annex I to the Company's Definitive Proxy Statement filed September 11, 2000). 10.4* - Change in Control Agreement between Dennis C. Fairchild and the Company dated September 30, 1999 (incorporated by reference to the Company's Form 10-Q filed November 13, 1999).+ 10.5** - Change in Control Agreement between Malcolm Wright and the Company dated April 10, 2000.+ 10.6 - Conditions of Employment Agreement between Malcolm Wright and DA Consulting Services Limited dated February 6, 2001.+ 10.7* - Employment Agreement between the Company and Nick Marriner dated January 31, 1998 (incorporated by reference to the Company's Form S-1/A filed February 23, 1998).+ 10.8* - Employment Agreement between the Company and Patrick J. Newton dated January 31, 1998 (incorporated by reference to the Company's Form S-1/A filed February 23, 1998).+ 10.9* - Employment Agreement between the Company and Eric J. Fernette dated January 31, 1998 (incorporated by reference to the Company's Form S-1/A filed February 23, 1998).+ 10.10* - Amended and Restated Employment Agreement between the Company and Lisa Costello dated March 1, 1998 (incorporated by reference to the Company's Form S-1/A filed March 2, 1998).+ 10.11 - Agreement and Release between the Company and Eric Fernette dated August 15, 2000.+ 10.12 - Separation Agreement between the Company and John Mitchell dated May 15, 2000.+ 10.13 - Employment Agreement between the Company and Virginia L. Pierpont dated October 12, 2000.+ 21.1 - Subsidiaries of the Company 23.1 - Consent of PricewaterhouseCoopers LLP.
_________ + Management contract or compensatory benefit plan or arrangement. * Incorporated by reference. ** Filed with the Company's Form 10-K filed April 2, 2001. -14- SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DA Consulting Group, Inc. Date: April 30, 2001 By: /s/ John E. Mitchell ---------------------------------- John E. Mitchell President and Chief Executive Officer EX-10.6 2 doc2.txt Exhibit 10.6 CONDITIONS OF EMPLOYMENT - -------------------------- This contract of employment is made between the Employer and the Employee named below. It also constitutes a statement of written particulars of employment required pursuant to section 1 of the Employment Rights Act 1996. DATE: (6 February 2001) EMPLOYER: DA CONSULTING SERVICES LIMITED ('the Company') REGISTERED OFFICE: London EXECUTIVE: Malcolm Wright ('the Employee') 1. COMMENCEMENT 1.1 The Employee's employment with the Company commenced on (21 March 2000). 1.2 No period of employment with a previous employer counts as part of continuous employment with the Company. 2. JOB TITLE/DESCRIPTION 2.1 The job title of the Employee is Chief Operating Officer DACG . The Company may require the Employee to carry out other such duties as are necessary to meet business needs. The Employee's duties shall also include acting in such capacity and for such time or times as may be required for any customer of the Company or any of its subsidiary holding or other associated companies on a secondment basis. During such periods of secondment the Employee shall accept all reasonable lawful directions and restrictions given or imposed by the subsidiary holding or associated company or customer. 3. PLACE OF WORK 3.1 DACG's European head office is located in London, however the Employee shall be required to work at such other premises within the U.K. and Europe as may be necessary to properly discharge his/her duties. The Employee may be required to work abroad for periods in excess of one month and in these circumstances the Employee's terms and conditions of employment will remain the same. 1 4. REMUNERATION 4.1 Remuneration will be calculated on an annual salary basis. The annual salary is (British pounds) 150,000, or such other rate as is shown on the Employee's pay slip. Remuneration is paid monthly on the last day of each month or where this day falls on a weekend or public holiday, the last preceding working day. The Employee shall work such overtime, as the Company from time to time thinks necessary according to the needs of the business. 4.2 The Employee's salary shall be at least reviewed annually, without any obligation to increase it. 4.3 It is not Company policy to advance monies to employees on account of wages to be earned. 4.4 The Company may at its sole and absolute discretion decide to introduce a scheme for additional remuneration by way of bonus or profit sharing from time to time. Any such provision shall be subject to variation or withdrawal at any time at the absolute discretion of the Company. 5. HOURS OF WORK 5.1 Employees are expected to work such hours as are from time to time reasonably required by the Company to fit in with the clients' requirements subject to a basic minimum of 40 hours a week. 5.2 By signing this contract the Employee has agreed to opt out of the 48 hour limit and does not wish working time to be limited to less than an average 48 hours per week in accordance with the Working Time Regulations. The Employee is entitled to rescind the agreement to work in excess of a 48 hour average working week by giving the Company two months' notice in writing at any point during employment. 2 6. HOLIDAYS 6.1 The holiday year is from 1st January to 31st December. 6.2 Holiday entitlement is: 6.2.1 22 working days in any calendar year. In the case of employees starting or leaving after the commencement of the holiday year, their holiday entitlement shall be calculated pro rata on a daily basis. Any unused holiday entitlement may not be carried over to the following year without the prior written consent of the Company. 6.2.2 8 days public holidays in any calendar year to be taken as far as possible to coincide with public holidays taken by the clients of the Company. Any unused public holiday may be carried forward and taken by the Employee in the following holiday year at dates to be agreed with by the Company. The rate of pay for each public holiday is eight hours basic time. Unpaid leave may only be taken with specific permission from the Company. 6.3 The Employee shall be required to retain a sufficient number of holidays for the Company's Christmas shutdown. 6.4 Holidays should not be taken unless the Employee has agreed the dates with his/her Line Manager. Other than in exceptional cases, no more than 10 days holiday may be taken at one time. 6.5 Holiday may be taken during the Employee's first 3 months with the company with the permission of the CEO. 6.6 On termination of employment the Employee shall (unless he/she has been dismissed on grounds of gross misconduct) be entitled to pay in lieu of unused holiday entitlement. Deductions shall be made from any final salary due to the Employee on termination of his/her employment if he/she has taken holidays in excess of entitlement. 6.7 The Company reserves the right to require the Employee to work statutory or other public holidays in which event the Company shall at its absolute discretion allocate substitute days as holidays or make a payment in lieu of holiday entitlement. For the purpose of this clause, holiday pay shall be according to the Employee's normal basic rate of remuneration. 3 6.8 Any Employee serving notice is not entitled to take any holiday (save public holidays) unless the Employee's manager agrees in advance that holiday may be taken. However at the Company's absolute discretion it may require the Employee to take holiday that has already accrued or that will accrue during the notice period such times as the Company may require during the notice period. 7. SICKNESS 7.1 The HR Director or the Employee's immediate supervisor must be informed as soon as possible of any absence from work and the reasons for it. 7.2 On the fourth working day of absence due to sickness or injury a certificate of incapacity for work from a registered medical practitioner must be sent to the Company and a further certificate of disability must be sent in each following week of absence. 7.3 Remuneration at the basic time rate (less any statutory sick pay or other social security benefits to which the Employee is entitled whether or not claimed) will be paid for a total period of ten days (whether continuous or aggregated) in any consecutive period of 52 weeks. Remuneration for any further period of absence shall be at the Company's discretion. 7.4 Subject to the provisions of the Access to Medical Reports Act 1998, if required by the Company the Employee will authorise his/her own medical adviser to give the Company any information which it reasonably requires relating to his/her health and fitness for work and will attend for examination by any other medical adviser appointed by the Company. 8. PENSION SCHEME 8.1 DA will match contributions on a pound for pound basis up to 5% of total pay (excluding any equity or car allowances) to an Employee's personal pension with the Norwich Union or other agreed institution. 4 9. TERMINATION OF EMPLOYMENT 9.1 Subject to clause 9.5 below, the following notice periods shall apply: 9.1.1 The Employee shall give the Company 6 months notice in writing to terminate his/her employment. 9.1.2 The Company shall give the Employee 6 months notice in writing to terminate his/her employment: 9.2 The above notice period may be varied or waived with the mutual consent of the parties. 9.3 Notwithstanding the provisions of clause 9.1 the Company shall be entitled (but not obliged) on the service of notice by either party to terminate this agreement for any reason or at anytime thereafter during the currency of such notice, to pay the Employee his/her basic salary (at the rate payable under clause 4.1 hereof and less appropriate tax and national insurance contributions) in lieu of the whole or any part of the notice period. 9.4 The Company is entitled to terminate the Employee's employment without notice or payment in lieu of notice and/or holiday entitlement in the event of gross misconduct. 9.5 The first six months of employment with the Company shall be treated as a probationary period. During this period the Company is entitled to terminate employment at four weeks notice; the Employee must also provide the four weeks notice. 9.6 The Company retirement age is 65 and the Employee's employment shall automatically terminate on attaining that age without entitlement to compensation or damages. 5 9.7 Notwithstanding the provisions of clauses 9.3 and 9.4 once notice termination has been given by either the Employee or the Company, the Company may at any time and for any periods require the Employee to cease performing his/her duties. During any such period the Company shall continue to pay the Employee's salary and provide all other benefits to which the Employee is entitled under this Agreement but shall be under no obligation to provide any work for the Employee. The Company may also require the Employee to stay away from any premises, employees, offices, customers, clients, agents or suppliers of the Company or any Group Company. 10. ACCEPTABLE USE POLICY There are various areas covered by the policy and all users of DACG assets must familiarise themselves with all aspects of this policy. 10.1 PC USAGE 10.1.1 All laptop and desktop PCs and the data and applications stored on them are the property of DACG. 10.1.2 It is the responsibility of the employee using a PC to ensure that all data is regularly backed up to a reliable backup medium e.g. disk, ZIP drive or the central server H:\My Docs drive. 10.1.3 Whilst using a PC an employee must ensure that it is protected from damage or access by any unauthorised party. If left unattended, the PC should be protected by a screen-saver password when in use. 10.1.4 An employee must never divulge to a client or another employee their network logon id and password nor any application logon id or password e.g. SAP logon, as this would compromise the security of the DACG networks and data and the data of our clients. 10.1.5 Any loss of data or hardware will be a matter for HR and the employee's direct report. 6 10.1.6 Every PC must have an asset management tag and any loss or damage to this tag must be notified at once to the IT Support e-mail address (.EMEA-ITSUPPORT) or telephone number +44 (0)207 767 2553. 10.1.7 Under no circumstances may any data, game, program or similar information be installed on a PC without the express written (e-mail will suffice) permission of the IT Support department. Every PC has a standard build and any unauthorised data, game, program etc will be removed by the IT department and HR informed. 10.1.8 A PC is a company asset and may be used only for company business in the service of company clients and it is the responsibility of PC users to ensure that the PC is not put to any other, personal or illegal, use. 10.2 E-MAIL USAGE 10.2.1 Every e-mail sent by an EMEA employee should contain the standard EMEA disclaimer as notified to the employee by IT Support. The disclaimer may change at any time and when a new disclaimer is communicated to an employee it is their responsibility to ensure that they replace the old version immediately. No customisation or change to the disclaimer is permitted except for the employee's name and telephone number and the name part of the e-mail address. 10.2.2 E-mails must be brief and to the point and large attachments should be condensed using WINZIP. The network is busy and must be kept free for essential data e.g. SAP. 10.2.3 Global broadcasts must be kept to a minimum and permission to send a message to the whole of Europe and/or Asia Pacific and/or Americas must be obtained from an employee's direct report BEFORE it is sent. Global broadcasts can severely restrict the performance of our network. 10.2.4 Sending and/or forwarding junk e-mail, 'chain letter' e-mails or 'spam' e-mails is not permitted. Employees should contact IT Support as soon as they receive an example of this type of e-mail so that the IT department can take action to resolve the matter as soon as possible. 7 10.2.5 Collecting e-mail addresses or any other data about others outside DACG without their consent is illegal under the provisions of the 1998 Data Protection Act. 10.2.6 E-mail content should be considered carefully before transmission and MUST contain the disclaimer as per 10.2.2 above. The transmission of any material which is slanderous, obscene, illegal, abusive, harassing, threatening, false, is representative of DACG policy or procedures and/or in any way objectionable is not permitted. 10.2.7 Using another employee's logon id, creating a false id or forging an id to send an e-mail is not permitted. 10.2.8 Transmitting e-mail content, which would infringe the copyright and/or trademark and/or intellectual property of a third party, is not permitted. 10.2.9 Knowingly sending or forwarding e-mail which contains a virus, or any associated harmful construct, is not permitted and any instance of such constructs must be notified to IT Support immediately as a matter of urgency. 10.3 INTERNET USAGE 10.3.1 When not connected to the DACG global network via a direct LAN connection then the Internet may be used, via dial-up, to connect to the DACG Intranet for the purposes of sending and receiving e-mail and completing SAP time sheets. 10.3.2 Downloading any data, programs, files etc from web-sites on the Internet to a DACG PC is strictly forbidden. 10.3.3 Using the Internet to access obscene, illegal or any material that can be construed as objectionable to a DACG employee or any other third party is strictly forbidden. Any instance of corruption and/or the display of any of the aforementioned material whilst accessing a valid site must be notified to IT Support immediately. 10.3.4 Use of the Internet and the World Wide Web for the purpose of research is permitted for DACG related projects and work exclusively. Searching or 'surfing' for personal purposes is not permitted unless permission has been obtained from your direct report, the connection of the PC to the Internet is via a DACG LAN connection and not via dial-up and the searching is being done outside of the employee's normal working hours. 8 10.4 TELEPHONE USAGE 10.4.1 International or national telephone calls for personal reasons are not normally permitted. Under certain circumstances, permission may be granted but an employee must obtain permission from their direct report BEFORE a call is made. 10.4.2 Making abusive, threatening or obscene calls is illegal and will not be tolerated by DACG. 11. DISCIPLINARY PROCEDURE 11.1 Details of the Company's disciplinary procedure are set out in the staff handbook. The Company's disciplinary procedure is not intended to have contractual effect and is subject to variation both in its terms and its application at the discretion of the Company. Employees are entitled to appeal against any disciplinary decision to the Manager nominated by the Manager taking the disciplinary action or, failing nomination the Divisional Vice President within 5 working days of the disciplinary decision being taken. 12. GRIEVANCES 12.1 The Company's grievance procedure is set out in the staff handbook. In the event of any grievance the Employee should in the first instance, refer the matter to his/her manager. It is not intended to have contractual effect and is subject to variation both in its terms and its application at the discretion of the Company. 13. GOOD FAITH 13.1 The Employee shall devote the whole of his/her time and attention in business hours to the business of the Company and use his/her best endeavours to develop and extend that business and act loyally and faithfully to the Company. 13.2 The Employee shall not in any way directly or indirectly carry on or be engaged in or be interested or concerned in any way with any other business or trade which competes with that of the Company except as the owner of shares or securities not exceeding 5% of the total shared issued capital in any company quoted on a recognised Investment Exchange. 9 14. INVENTIONS 14.1 Any inventions or improvements made by the Employee in connection with any of the Company's products, processes or operating methods are the property of the Company, as are any rights appertaining or relating to such inventions or improvements. 14.2 On request the Employee shall at the Company's expense apply for and execute all such documents and carry out all such acts as are necessary to obtain letters patent or such other protection for any invention or improvement in any part of the world in the name of the Company or its nominee. 14.3 This clause is without prejudice to any rights the Employee may have under the Patents Act 1977 as amended. 14.4 The Employee irrevocably and unconditionally waives any and all moral rights conferred on him/her by the Copyrights Designs and Patents Act 1988 for any work in which copyright or design rights are vested in the Company. 15. CONFIDENTIAL INFORMATION 15.1 The Employee is aware that in the course of his employment under this Agreement he will have access to and be entrusted with information in respect of business and finances of the Company and its dealings, transactions and affairs [and likewise in relation to any other Group Company] all of which information is or may be Confidential Information and that the Company is responsible for the creation and development of methods and techniques used for documentation, business writing and training which are not known to the public generally or others in the industry. 15.2 The Employee shall not during the continuance of his employment or afterwards, use or exploit (except for the benefit of the Company) or divulge to any third party any confidential information except he shall be permitted to do so:- 15.2.1 when necessary in the proper performance of the duties of his employment; 15.2.2 with the express written consent of the Board of Directors of the Company; or 10 15.2.3 where this is required by law. 15.3 The Employee shall, during his employment, use his best endeavours to prevent the unauthorised use or disclosure of any Confidential Information whether by any other officer, employee or agent of the Company or otherwise and shall be under an obligation promptly and freely to report to the Board of Directors of the Company any such unauthorised use or disclosure which comes to his knowledge. 15.4 The Employee shall not, during his employment or at any time thereafter make, except for the benefit of the Company or any Group company any copy, record, or memorandum (whether or not recorded in writing or on computer disk or tape) of any Confidential Information and any such copy record or memorandum made by the Employee during his/her employment shall be and remain the property of the Company and accordingly shall be returned by the Employee to the Company on termination of his/her employment in accordance with section 9 (Termination of Employment) or at any time during his employment at the request of the Board of Directors of the Company. 15.5 In this Agreement 'Confidential Information' means: 15.5.1 all information which relates to the business, finances, transactions, affairs, products, services, operations, dealings, specifications, methods, designs, formulae, technology, processes, equipment or activities of the Company and/or any other Group Company and which is designated by the Company and any other Group Company as confidential; and 15.5.2 all information relating to such matters which comes to the knowledge of the Executive in the course of the Employment and which, by reason of its character and/or the manner of its coming to his/her knowledge, is evidently confidential [and without prejudice to the generality of the foregoing shall include information contained in any Customer Lists, Sales Forecasts, Employee Records, Contact Lists, Internal Communications bulletins or presentations provided that information shall not be, or shall cease to be, Confidential Information if and to the extent that it comes to be in public domain otherwise and as a result of the unauthorised act or default of the Executive]. 11 16. POST TERMINATION COVENANTS 16.1 For the purpose of this clause the following words and expressions shall have the following meanings:- 16.1.1 BUSINESS: the business or businesses of the Company [or any Group Company] in or with which the Employee has been involved or concerned at any time during the period of 6 months prior to the Termination Date; 16.1.2 DIRECTLY or INDIRECTLY: the Employee acting either alone or jointly with or on behalf of any person, firm or company, whether as principal, partner, manager, employee, contractor, director, consultant, investor or otherwise; 16.1.3 KEY PERSONNEL: any person who is at the Termination Date or was at any time during the period of 6 months prior to the Termination Date employed [or engaged as a consultant] in the Business in an [executive technical or senior managerial] capacity and with whom the Employee has had dealings other than in a de minimis way during the course of the Employment. 16.1.4 PROSPECTIVE CUSTOMER [CLIENT]: any person, firm or company who has engaged in negotiations, with which the Employee has been personally involved, with the Company [or a Group Company] with a view to purchasing goods and services from the Company [or any Group Company] in the period of 6 months prior to the Termination Date; 16.1.5 RELEVANT CUSTOMER [CLIENT]: any person, firm or company who at any time during the 6 months prior to the Termination Date was a customer [client] of the Company [or any Group Company], with whom or which the Employee directly dealt other than in a de minimis way or for whom or which behalf the Employee was responsible on of the Company [or any Group Company] at any time during the said period; 16.1.6 RELEVANT GOODS AND SERVICES: any goods and services competitive with those supplied by the Company [or any Group Company] at any time during the 6 months prior to the Termination Date in the supply of which the Employee was directly involved or concerned at any time during the said period; 12 16.1.7 RELEVANT PERIOD: the period of the Employee's Employment and the period of 6 months from the Termination Date except that any period of garden leave served by the Executive pursuant to clause 9.7 shall reduce the Relevant Period accordingly; 16.1.8 RELEVANT SUPPLIER: any person, firm or company who at any time during the 6 months prior to the Termination Date was a supplier of any goods or services (other than utilities and goods or services supplied for administrative purposes) to the Company [or any Group Company] and with whom or which the Executive had personal dealings during the course of his employment under this Agreement other than in a de minimis way; and 16.1.9 TERMINATION DATE: the date on which the Employment terminated. 16.2 The Employee shall not without the prior written consent of the Board of Directors directly or indirectly at any time within the Relevant Period engage or be concerned or interested in any business within the Relevant Area which (a) competes or (b) will at any time during the Relevant period compete with the Business. Nothing in this sub-clause shall prevent the Employee from being or becoming a shareholder in any such business [provided that the Employee discloses this to the Company] and such holding or interest aggregated with any holding or interest of any member of the Employee's immediate family does not exceed 3% of any single class of shares or securities of such business. 16.3 The Employee shall not without the prior written consent of the Board directly or indirectly at any time within the Relevant Period:- 16.3.1 (a) solicit the custom of; or (b) facilitate the solicitation of; or (c) deal with any Relevant Customer [Client] in respect of any Relevant Goods or Services; or 16.3.2 (a) solicit the custom of; or (b) facilitate the solicitation of; or (c) deal with any Prospective Customer [Client] in respect of any Relevant Goods or Services; or 13 16.3.3 (a) interfere; or (b) endeavour to interfere, with the continuance of supplies to the Company [and/or any Group Company] (or the terms relating to those supplies) by any Relevant Supplier. 16.4 The Employee shall not without the prior written consent of the Board directly or indirectly at any time during the relevant period:- 16.4.1 entice away from the Company [or any Group Company]; or 16.4.2 endeavour to entice away from the Company [or any Group Company]; or 16.4.3 employ or engage; or 16.4.4 endeavour to employ or engage any Key Personnel. 16.5 The Employee acknowledges [(having taken appropriate legal advice)] that the provisions of this clause are fair, reasonable and necessary to protect the goodwill and interests of the Company [(and any Group Company] ('the Interests'). Whilst the provisions of this clause 15 have been framed by the Company with a view to ensuring that the Interests are adequately protected taking account of the Company's legitimate expectations of the future development of its business, it is acknowledged by the Employee that the business may change over time and as a result it may become necessary for the Company to amend the provisions of this clause 15 in order to ensure that the interests remain adequately protected. The Employee, therefore, agrees that the Company shall be entitled to amend the provisions of this clause 15 in accordance with clause 15.6 below in order to protect the Interests. 16.6 In order to amend the provisions of this clause 15, the Company shall notify the Employee in writing of why it believes it is necessary to amend clause 15 and the amendments that it proposes. The Employee shall then have a period of 14 calendar days in which to put forward any objections which he might have to the proposed amendments. In the event of the Employee not putting forward any such objections, then this clause 15 shall take effect with the proposed amendments in the expiry of the 14 day period. In the event of the Employee putting forward any objections, the Company shall endeavour to 14 accommodate them, [insofar as they are reasonable] and where reasonably possible, [given that the Company's overriding objective must be to ensure adequate protection of the Interests,] to agree the amendments with the Employee. The Company shall then, having considered the Employee's objections, serve a further written notice on the Employee informing him of the final amendments to the Clause 15 which will thereafter take immediate effect. 16.7 The Employee acknowledges that the provisions of this clause 15 shall constitute severable undertakings given for the benefit of the Company [and each Group Company] and may be enforced by the Company [on behalf of any of them]. 16.8 If any of the restrictions or obligations contained in this clause 15 is held not to be valid on the basis that it exceeds what is reasonable for the protection of the goodwill and interests of the Company [and any Group Company] but would be valid if part of the wording were deleted then such restrictions or obligations shall apply with such deletions as may be necessary to make it enforceable. 16.9 The Employee acknowledges and agrees that he/she shall be obliged to draw the provisions of this clause 15 to the attention of any third party who may at any time before or after the termination of the Employee's employment hereunder offer to engage the Employee in any capacity and for whom or with whom the Employee intends to work during the Relevant Period. 16.10 The Employee shall not at any time following the Termination Date represent himself as being connected in any way with the Company or any Group Company. 16.11 If this Agreement or any wider arrangement of which it forms part constitutes an agreement particulars of which are required to be furnished to the Director General of Fair Trading pursuant to section 24 of the Restrictive Trade Practices Act 1976, then none of the parties shall give effect to or enforce or purport to enforce any restriction by virtue of which the Agreement (or wider arrangement) is subjected to registration until the day after the relevant particulars have been duly furnished in accordance with section 24 of that Act. 16.12 [The Employee shall, at the request and cost of the Company, enter into a direct agreement or undertaking with any Group Company to which the Employee provides services whereby he will accept restrictions corresponding to the restrictions in this clause (or such of them as may be appropriate in the circumstances) as the Company may require in the circumstances]. 15 17. DEDUCTIONS FROM SALARY 17.1 For the purposes of the Employment Rights Act 1996 Sections 13 to 16, the Employee hereby consents to the deduction from his/her salary any bonus of any sums owing by the Employee to the Company at any time and he/she also agrees to make any payment to the Company of any sums owed by him/her to the Company upon demand by the Company at any time. This clause is without prejudice to any right of the Company to recover any sums or balance of sums owed by the Executive to the Company by legal proceedings. 18. ALTERATIONS TO CONDITIONS OF EMPLOYMENT 18.1 The Company reserves the right to alter its conditions of employment. Any alterations will be advised in writing at the earliest opportunity and in any event not later than one month after the change. 19. LAW AND JURISDICTION 19.1 This Agreement is governed by and shall be construed in accordance with English law. The parties submit the exclusive jurisdiction of the English courts with regards to any dispute or claim arising under this Agreement. 20. PREVIOUS AGREEMENTS 20.1 This agreement together with any documents referred to herein contains the entire understanding between the parties and supersedes all previous agreements and arrangements (if any) relating to the employment of the Employee by the Company. I acknowledge that I have received a copy of this contract of employment and that I have read, understood and fully accept its terms. 16 Signature on behalf of the Company Signature of Employee Robert Bolton 6 Feb 2001 VP HR /s/ Robert Bolton /s/ Malcom Wright Date Date Feb 6, 2001 Feb 6, 2001 17 EX-10.11 3 doc3.txt Exhibit 10.11 AGREEMENT AND RELEASE --------------------- THIS AGREEMENT AND RELEASE is by and between Eric Fernette ("Mr. Fernette"), a resident of Tomball, Texas, and DA Consulting Group, Inc ("DACG"), a Texas corporation, having its principal place of business in Houston, Texas. WINESSETH: --------- Mr. Fernette, at various times, has been an employee and officer of DACG and certain of its affiliated and subsidiary companies or their predecessors or successors in interest; Mr. Fernette's employment with DACG and any of its affiliated and subsidiary companies will terminate effective on August 15,2000; Mr. Fernette and DACG desire to avoid the expense, delay and uncertainty attendant to any disputes or claims which may arise from Mr. Fernette's employment with and termination from his positions and employment with DACG or any of its parent, sister, affiliated and subsidiary companies and their predecessors or successors in interest including without limitation DA International, Inc. (collectively, the "DACG Companies"); Mr. Fernette desires to release each of the DACG Parties, as defined in this Agreement and Release, individually and collectively, from all claims or causes of action, if any, he may have arising from or relating to his employment or service or termination from DACG or any of the other DACG Companies; and Mr. Fernette and DACG desire to establish their respective rights and obligations for the future. Now, therefore, for and in consideration of the following mutual covenants and promises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Mr. Fernette and DACG hereby agree: 1. Separation. Mr. Fernette has separated from his position and ---------- employment with DACG to be effective on August 15, 2000. Mr. Fernette acknowledges and agrees that he has no authority to and will not act for DACG in any capacity on or after August 15,2000 and that DACG wilt pay his regular salary and earned vacation to the effective date of this agreement, less customary withholding for taxes and applicable deductions, and that such payment will be full satisfaction of all wages, incentive compensation, bonuses, or any other compensation owed him by any DACG Company. 2. Separation Payment. Provided that he complies fully with the terms ------------------- and conditions of this Agreement and Release, DACG agrees to pay to Mr. Fernette $8,769.60 in lieu of accrued unused vacation and $7,325.98 as full payout as part of an Executive Deferred Compensation plan in his final paycheck, plus $204,483.92 minus customary withholding for taxes payable in 24 installments as follows: first 2 payments in the amount of $17,686.83 and the remaining 22 in equal payments of $ 7,686.83; which will be paid on the fifteenth and last day of each month beginning on August 31, 2000 and ending on August 15, 2001. DACG reserves the right, at anytime, to accelerate the payments due to Mr. Fernette by making a single lump sum payment equal to the total of the installments not yet paid minus appropriate withholding taxes. In addition, as agreed in Mr. Fernette's Employment Contract dated January 1, 1998, section 5.c.ii, all outstanding stock options held by Mr. Fernette shall become fully vested and exercisable. Options will be exercisable for the time period in which Mr. Fernette continues to receive separation payments under this Agreement from DACG, with a minimum of three(3) months to exercise from his last day of employment (as per the Company's Stock Option plan), but not beyond August 15,2001. The following options have been identified to be outstanding on the date of Mr. Fernette's separation from employment with DACG: Number of Options Price/Share (Strike Price) Date of Grant 25,200 $ 6.55 8/1/97 4,200 $ 14.50 2/11/98 12,458 $ 15.00 2/5/99 4,042 $ 15.00 2/5/99 10,750 $ 3.69 11/2/99 5,750 $ 3.44 1/3/00 10,000 $ 3.44 1/3/00 In addition, due to reductions in force which affected eligible plan participants, the Company's 401(k) plan was partially terminated in March, 2000. As a result, eligible participants who were affected by a reduction in force or certain involuntary terminations without cause, received full vesting. Mr. Fernette's termination meets this criteria, therefore full vesting of his 401(k) will take place upon his last day of employment. The Company and Mr. Fernette agree that the payments and other considerations received under this Agreement will constitutes as full payment to Mr. Fernette as stated in paragraph 5.(c), of his Employment Agreement dated January 1, 1998 as well as any monies associated with a Executive Deferral Compensation plan and any other special considerations provided to Mr. Fernette under this Agreement. 3. Prior Rights and Obligations. Except as herein set forth, this ------------------------------- Agreement and Release extinguishes all rights, if any, which Mr. Fernette may have, and obligations, if any, which any of the DACG Companies may have, contractual or otherwise, relating to the employment or termination of employment of Mr. Fernette with DACG or any of the other DACG Companies including without limitation all tights or benefits he may have under any employment contract, incentive compensation plan, or stock option plan with any DACG Company. However, Mr. Fernette agrees that he will -2- remain bound by the Covenant Not to Compete provisions of the January 31, 1998 employment agreement. 4. Expenses. Mr. Fernette shall, within ten (10) days of his execution -------- of this Agreement, submit all actual, reasonable and customary expenses incurred by him in the course of his employment with proper documentation and DACG shall reimburse such expenses promptly. 5. Company Assets. Mr. Fernette hereby represents and warrants that he --------------- has no claim or tight, title or interest in any property designated on any DACG Companies' books as property or assets of any of the DACG Companies. Promptly after the effective date of his resignation, Mr. Fernette shall deliver to DACG any such property in his possession or control, including, without limitation, any equipment and any credit cards furnished by DACG Companies for his use. DACG has agreed to allow Mr. Fernette to retain a laptop computer until December 31, 2000, whereupon Mr. Fernette will return the computer to DACG. 6. Proprietary and Confidential Information. In accordance with Mr. ------------------------------------------- Fernette's existing and continuing obligations, Mr. Fernette agrees and acknowledges that the various DACG Companies have developed and own valuable "Proprietary and Confidential Information" which constitutes valuable and unique property including, without limitation, concepts, ideas, plans, strategies, analyses, surveys, and proprietary information related to the past, present or anticipated business of the various DACG Companies. Except as may be required by law, Mr. Fernette agrees that he will not at any time disclose to others, permit to be disclosed, use, permit to be used, copy or permit to be copied, any such Proprietary and Confidential Information (whether or not developed by Mr. Fernette) without DACG's prior written consent. Except as may be required by law, Mr. Fernette further agrees to maintain in confidence any Proprietary and Confidential Information of third parties received or of which he has knowledge as a result of his employment with DACG or any DACG Company. 7. Documents. Mr. Fernette agrees to deliver to DACG to the attention --------- of Susan Stikeleather all correspondence, memoranda, notes, records, data or information, analysis, or other documents and all copies thereof, made, composed or received by Mr. Fernette, solely or jointly with others, and which are in Mr. Fernette's possession, custody or control and which are related in any manner to the past, present or anticipated business of any of the DACG Companies. 8. Cooperation. Mr. Fernette shall cooperate with the DACG Companies to ----------- the extent reasonably required in all matters relating to his employment or the winding up of his pending work on behalf of any DACG Company and the orderly transfer of any such pending work as designated by DACG. This obligation of cooperation shall continue indefinitely subject to Mr. Fernette's reasonable availability and shall include, without limitation, assisting DACG and its counsel in preparing and defending against any claims which may be brought against DACG or any DACG Company or responding to any inquiry by any governmental agency or stock exchange. DACG's -3- requests for Mr. Fernette's cooperation as may be required from time to time shall be reasonable and Mr. Fernette agrees that he shall be reasonable in providing such cooperation, taking into account the needs of the DACG Companies and the position he may have with another employer at the time such cooperation is required. Mr. Fernette shall take such further action and execute and such further documents as may be reasonably necessary or appropriate in order to carry out the provisions and purposes of this Agreement. In the event Mr. Fernette is required to incur expenses in cooperating with any DACG Company, DACG shall reimburse such actual, reasonable and customary expenses as are approved in advance in writing. 9. DACG Parties. Mr. Fernette agrees that DACG, its parent, sister, ------------- affiliated and subsidiary companies, past and present, including but not limited to DA International, Inc., and their respective employees, officers, directors, shareholders, agents and representatives, past or present, shall be defined collectively, including DACG, as the "DACG Parties" and each of them, corporate or individual, individually as a "DACC* Party." 10. Mr. Fernette's Representation. Mr. Fernette represents, warrants and ----------------------------- agrees that he has not filed any claims, appeals, complaints, charges or lawsuits against any of the DACG Parties with any governmental agency or court and that he will not file or permit to he filed or accept benefit from any claim, complaint or petition filed with any court by him or on his behalf at any time hereafter; provided, however, this shall not limit Mr. Fernette from filing an action for the sole purpose of enforcing his rights under this Agreement and Release. Further, Mr. Fernette represents and warrants that no other person or entity has any interest or assignment of any claims or causes of action, if any, he may have against any DACG Party, which have been satisfied fully by this Agreement and Release and which he now releases in their entirety, and that he has not sold, assigned, transferred, conveyed or otherwise disposed of any of the claims, demands, obligations, or causes of action referred to in this Agreement and Release, and that he has the sole right and exclusive authority to execute this Agreement and Release and receive the consideration provided. 11. Release. Mr. Fernette agrees to release, acquit and discharge and ------- does hereby release, acquit and discharge the DACG Parties, individually and collectively, from any and all claims and from any and all causes of action against any of the DACG Patties, of any kind or character, whether now known or not known, he may have against any such DACG Party including, but not limited to, any claim for salary, benefits, expenses, costs, damages, compensation, remuneration or wages; and all claims or causes of action arising from his employment, termination of employment, or any alleged discriminatory employment practices, including but not limited to any and alt claims or causes of action arising under the Age Discrimination in Employment Act, as amended, 29 U.S.C. '621, et seg. and any and all claims or causes of action arising under any other ------ federal, state or local laws pertaining to discrimination in employment or equal employment opportunity. This release also applies to any claims brought by any person or agency or class action under which Mr. Fernette may have a right or benefit. -4- 12. No Admissions. Mr. Fernette expressly understands and agrees that -------------- the terms of this Agreement and Release are contractual and not merely recitals and that the agreements herein and consideration paid is to compromise doubtful and disputed claims, avoid litigation, and buy peace, and that no statement or consideration given shall he construed as an admission of liability by DACG, all such liability being expressly denied. This Agreement and Release does not constitute evidence of unlawful conduct or wrongdoing by DACG. By his execution of this Agreement and Release, Mr. Fernette acknowledges and agrees under oath that (1) he knows of no act, event, or omission by any DACG Party which is unlawful or violates any governmental rule or regulation or any rule or regulation of any stock exchange, (ii) he has not committed nor has he been requested to commit during his employment with DACG or any DACG Company, any act which is unlawful or which violates any governmental rule or regulation or any rule or regulation of any stock exchange, (iii) he has not requested any DACG Party to commit any unlawful act or violate any governmental rule or regulation or any rule or regulation of any stock exchange, and (iv) neither he nor any other person employed by or contracting with any DACG Party has been subjected to any adverse action because any such person refused to commit any unlawful act or violate any governmental rule or regulation or any rule or regulation of any stock exchange. 13. Covenant Not to Compete. Mr. Fernette agrees that he will remain -------------------------- bound by the terms Covenant Not to Compete in Paragraph 6 of his January 31, 1998 employment agreement. 14. Remedies. Mr. Fernette and DACG agree that, because damages at law -------- for any breach or nonperformance of this Agreement and Release by Mr. Fernette, while recoverable, will be inadequate, this Agreement and Release may be enforced in equity by specific performance, injunction, accounting or otherwise. Further, the parties agree that in the event Mr. Fernette violates the provisions of paragraphs 6 or 17 of this Agreement and Release the damage to DACG or any DACG Party shall, at a minimum, exceed the sum of fifty thousand dollars ($50,000.00) and that such sum shall be the amount of liquidated damages for such breach but shall not preclude DACG from recovering actual damages in such greater amount as may be sustained. 15. Enforcement of Agreement and Release. No waiver or nonaction with -------------------------------------- respect to any breach by the other party of any provision of this Agreement and Release, nor the waiver or nonaction with respect to any breach of the provisions of similar agreements with other employees shall be construed to be a waiver of any succeeding breach of such provision, or as a. waiver of the provision itself. Should any provisions hereof be held to be invalid or wholly or partially urn-enforceable, such provisions shall be revised and reduced in scope so as to be valid and enforceable. 16. Choice of Law. This Agreement shall be governed by and construed and --------------- enforced, in all respects, in accordance with the law of the State of Texas without regard to the principles of conflict of law except as preempted by federal law. 17. Merger. This Agreement and Release supersedes, replaces and merges ------ all previous agreements and discussions relating to the same or similar subject matters between Mr. Fernette and -5- DACG and constitutes the entire agreement between Mr. Fernette and DACG with respect to the subject matter of this Agreement and Release. This Agreement and Release may not be changed or terminated orally, and no change, termination or waiver of this Agreement and Release or any of the provisions herein contained shall be binding unless made in writing and signed by all parties, and in the case of DACG, by an authorized officer. 18. No Derogatory Comments. Except as required by judicial process or ------------------------ governmental rule or regulation, Mr. Fernette shall refrain from making public or private comments relating to any DACG Party which are derogatory or which may tend to injure any such party in such party's business, public or private affairs. 19. Confidentiality. Mr. Fernette agrees that he will not disclose the --------------- terms of this Agreement or the consideration received from DACG to any other person, except his attorney or financial advisors and only on the condition that they keep such information strictly confidential; provided, however, that the foregoing obligation of confidence shall not apply to information that is required to be disclosed by any applicable law, rule or regulation of any governmental authority. 20. ADEA Rights. Mr. Fernette acknowledges and agrees: ------------ (i) that he has at least twenty-one days to review this Agreement and Release; (ii) that he has been advised in writing to consult with an attorney regarding the terms of this Agreement and Release prior to executing this Agreement and Release; (iii) that, if he executes this Agreement and Release, that he has seven days following the execution of this Agreement and Release to revoke this Agreement and Release; (iv) that this Agreement and Release shall not become effective or enforceable until the revocation period has expired; (v) that he does not, by the terms of this Agreement and Release, waive claims or rights that may arise after the date he executes this Agreement and Release; (vi) that he is receiving, pursuant to this Agreement and Release, consideration in addition to anything of value to which he is already entitled; and (vii) that this Agreement and Release is written in such a manner that he understands his rights and obligations. -6- 21. Agreement and Release Voluntary. Mr. Fernette acknowledges and ---------------------------------- agrees that he has carefully read this Agreement and Release and understands that it is a release of all claims, known and unknown, past or present including all claims under the Age Discrimination in Employment Act. He further agrees that he has entered into this Agreement and Release for the above stated consideration. He warrants that he is fully competent to execute this Agreement and Release which be understands to be contractual. He further acknowledges that he executes this Agreement and Release of his own free will, after having a reasonable period of tune to review, study and deliberate regarding its meaning and effect, and after being advised to consult an attorney, and without reliance on any representation of any kind or character not expressly set forth herein. Finally, he executes this Agreement and Release fully knowing its effect and voluntarily for the consideration stated above. 22. Notices. Any notices required or permitted to be given under this ------- Agreement and Release shall be properly made if delivered in the case of DACG to: DA Consulting Group, Inc. 5847 San Felipe, Suite 3700 Houston, TX 77057 Attention: Susan Stikeleather and in the case of Mr. Fernette to: 23414 Cannon Creek Trail, Tomball, Texas 77375 -7- IN WITNESS WHEREOF, the parties have caused this Agreement and Release to be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, this day of , 2000 at Houston, Harris County, Texas, to be effective - ---- ----------- the eighth day following execution by Eric Fernette unless earlier revoked. 8-15-2000 /s/ Eric Fernette - ------------------- ------------------------------ Date Eric Fernette STATE OF TEXAS COUNTY OF HARRIS I, Eric Fernette, after first being duly sworn and under penalty of perjury, state that the statements to which I acknowledge and agree in paragraph 14 of this Agreement and Release are true and correct. Subscribed and sworn to before me, this 15th day of August, 2000. ------ ------ /s/ Donna Stehling ------------------------------- NOTARY PUBLIC in and for Texas ------------------------------- 8/15/00 DA CONSULTING GROUP. INC. Date By /s/ Susan Stideleatly ----------------------------- -8- EX-10.12 4 doc4.txt Exhibit 10.12 SEPARATION AGREEMENT AGREEMENT between DA CONSULTING, GROUP, INC., a Texas corporation (the "Company"), and John Mitchell ("Executive"), W I T N E S S E T H : - - - - - - - - - - WHEREAS, the Company desires to retain certain key employee personnel and, accordingly, the Board of Directors of the Company (the "Board") has approved the Company entering into a separation agreement with Executive in order to encourage Executive's continued service to the Company; and WHEREAS, Executive is prepared to perform such services in return for specific arrangements with respect to separation compensation and other benefits; NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive agree as follows: 1. Definitions. ----------- (a) "Change in Control" means (i) any merger, consolidation, or reorganization in which the Company is not the surviving entity (or survives only as a subsidiary of an entity), (ii) any sale, lease, exchange, or other transfer of all or substantially all of the assets of the Company to any other person or entity (in one transaction or a series of related transactions), (iii) dissolution or liquidation of the Company, (iv) as a result of or in connection with a contested election of directors, the persons who were directors of the Company before such election shall cease to constitute a majority of the Board, or (v) any event that is reported by the Company under Item 1 of a Form 8-K filed with the Securities and Exchange Commission; provided, however, that the term "Change in Control" shall not include any reorganization, merger, consolidation, sale, lease, exchange, or similar transaction involving solely the Company and one or more previously wholly-owned subsidiaries of the Company unless such matter is described in clause (v) above. (b) "Change in Duties" shall mean the occurrence, on the date upon which a Change in Control occurs or within two years thereafter, of any one or more of the following: (i) A significant reduction in the nature or scope of Executive's authorities or duties from those applicable to Executive immediately prior to the date on which a Change in Control occurs; (ii) A reduction in Executive's annual base salary from that provided to Executive immediately prior to the date on which a Change in Control occurs; (iii) A diminution in Executive's eligibility to participate in bonus, stock option, incentive award and other compensation plans which provide opportunities to receive compensation which are the greater of (A) the opportunities provided by the Company (including its subsidiaries) for executives with comparable duties or (B) the opportunities under any such plans under which Executive was participating immediately prior to the date on which a Change in Control occurs; (iv) A diminution in employee benefits (including but not limited to medical, dental, life insurance, and long-term disability plans) and perquisites applicable to Executive from the greater of (A) the employee benefits and perquisites provided by the Company (including its subsidiaries) to executives with comparable duties or (B) the employee benefits and perquisites to which Executive was entitled immediately prior to the date on which a Change in Control occurs; or (v) A change in the location of Executive's principal place of employment by the Company by more than 50 miles from the location where Executive was principally employed immediately prior to the date on which a Change in Control occurs. As used in this section, executives with comparable duties shall mean executives reporting directly to the Executive. (c) "Code" shall mean the Internal Revenue Code of 1986, as amended. (d) "Compensation" shall mean the greater of: (i) Executive's annual base salary at the rate in effect immediately prior to the date on which a Change in Control occurs; (ii) Executive's annual base salary at the rate in effect sixty days prior to the date of Executive's Involuntary Termination; or (iii) Executive's annual base salary at the rate in effect at the time of Executive's Involuntary Termination. (e) "Involuntary Termination" shall mean any termination of Executive's employment with the Company which: (i) does not result from a resignation by Executive (other than a resignation pursuant to clause (ii) of this subparagraph (e)); or (ii) results from a resignation by Executive on or before the date which is sixty days after the date upon which Executive receives notice of a Change in Duties; provided, however, the term "Involuntary Termination" shall not include a Termination for Cause or any termination as a result of death, disability under circumstances entitling Executive to benefits under the Company's long-term disability plan, or Retirement. (f) "Retirement" shall mean Executive's resignation on or after the date Executive reaches age sixty-five. (g) "Separation Amount" shall mean the greater of One Hundred Ninety Five Thousand Pounds ((British pounds) 195,000.00) or Executive's annual salary as in effect on the date of Executive's Involuntary Termination. (h) "Termination for Cause" shall mean Executive (i) has engaged in gross negligence or willful misconduct in the performance of Executive's duties, (ii) has willfully refused without proper legal reason to perform Executive's duties and responsibilities, (iii) has materially breached any material provision of any agreement between the Company and Executive, including without limitation paragraph 2 herein, (iv) has materially breached any material corporate policy maintained and established by the Company that is of general applicability to the Company's executive employees, (v) has willfully engaged in conduct that Executive knows or should know is materially injurious to the Company or any of its affiliates, or (vi) has engaged in illegal conduct or any act of serious dishonesty which adversely affects, or reasonably could in the future adversely affect, the value, reliability, or performance of Executive in a material manner; provided, however, that in no event shall a termination of Executive's employment constitute a "Termination for Cause" unless such termination is approved by at least two-thirds of the members of the Board after Executive has been given written notice by the Company of the specific reason for such termination and an opportunity for Executive, together with Executive's counsel, to be heard before the Board. Members of the Board may participate in any hearing that is required pursuant to this subparagraph (h) by means of conference telephone or similar communications equipment by means of which all persons participating in the hearing can hear and speak to each other; provided, however, that at least one-half of the members of the Board shall attend the hearing in person. (i) "Welfare Benefit Plans" shall mean the medical, dental, life insurance, accidental death and dismemberment, and long-term disability plans provided by the Company to its active employees. 2. Services. Executive agrees that Executive shall (a) render services -------- to the Company (as well as any subsidiary thereof or successor thereto) during the period of Executive's employment to the best of Executive's ability and in a prudent and businesslike manner and (b) devote substantially the same time, efforts, and dedication to Executive's duties as heretofore devoted. 3. Separation Benefits. If Executive's employment by the Company or -------------------- any successor thereto shall be subject to an Involuntary Termination that occurs on the date upon which a Change in Control occurs or within two years thereafter, then Executive shall be entitled to receive, as additional compensation for services rendered to the Company (including its subsidiaries), the following separation benefits: (a) A lump sum cash payment in an amount equal to the Separation Amount, which shall be paid to Executive on or before the thirty-first day after the last day of Executive's employment with the Company. -3- (b) All of the outstanding stock options granted by the Company to Executive shall become immediately exercisable in full upon Executive's termination of employment and for a period of three months thereafter or for such greater period as may be provided in the plan or plans pursuant to which such stock options were granted (but in no event shall any such stock option be exercisable after the expiration of the original term of such stock option). (c) A lump sum cash payment in an amount equal to the greater of (1) the Company's cost of coverage for Executive and those of Executive's dependents (including Executive's spouse) who were covered, under the Welfare Benefit Plans on the day prior to Executive's Involuntary Termination or (2) the Company's cost of such coverage paid immediately prior to the Change in Control, for a period of two years. Nothing herein shall be deemed to affect adversely in any way the rights of Executive and Executive's eligible dependents to health care continuation coverage as required pursuant to Part 6 of Title I of the Employee Retirement Income Security Act of 1974, as amended. (d) Executive shall be entitled to receive out-placement services in connection with obtaining new employment up to a maximum cost of Twenty Thousand Pounds ( 20,000.00) (which shall be paid directly by the Company to the provider of such services). 4. Interest on Late Benefit Payments. If any payment provided for in ----------------------------------- Paragraph 3 hereof is not made when due, the Company shall pay to Executive interest on the amount payable from the date that such payment should have been made under such paragraph until such payment is made, which interest shall be calculated at the rate of 1% per month (with a partial month counting as a full month). 5. Certain Additional Payments by the Company. Notwithstanding ----------------------------------------------- anything to the contrary in this Agreement, in the event that any payment or distribution by the Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are hereinafter collectively referred to as the "Excise Tax"), the Company shall pay to Executive an additional payment (a "Gross-up Payment") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, Executive retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payments. The Company and Executive shall make an initial determination as to whether a Gross-up Payment is required and the amount of any such Gross-up Payment. Executive shall notify the Company immediately in writing of any claim by the Internal Revenue Service which, if successful, would require the Company to make a Gross-up Payment (or a Gross-up Payment in excess of that, if any, initially determined by the Company and Executive) within ten days of the receipt of such claim. The Company shall notify Executive in writing at least ten days prior to the due date of any response required with respect to such claim if it plans to contest the claim. If the Company decides to contest such claim, Executive shall cooperate fully with the Company in such action; provided, however, the Company shall bear and pay directly or indirectly all costs and expenses (including additional interest and penalties) incurred in connection with such action and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of the Company's action. If, as a result of the Company's action with respect to a claim, Executive receives a refund of any amount paid by the Company with respect to such claim, Executive shall promptly pay such refund to the Company. If the Company fails to timely notify Executive whether it will contest such claim or the Company determines not to contest such claim, then the Company shall immediately pay to Executive the portion of such claim, if any, which it has not previously paid to Executive. -4- 6. General. ------- (a) Term. The effective date of this Agreement is April 4, 2000. ---- Within sixty days from and after the expiration of two years after said effective date and within sixty days after each successive two-year period of time there-after that this Agreement is in effect, the Company shall have the right to review this Agreement, and in its sole discretion either continue and extend this Agreement, terminate this Agreement, or offer Executive a different agreement. The Compensation Committee of the Board (excluding any member of such committee who is covered by this Agreement or by a similar agreement with the Company) will vote on whether to so extend, terminate, or offer Executive a different agreement and will notify Executive of such action within said sixty-day time period mentioned above. This Agreement shall remain in effect until so terminated or modified by the Company. Failure of the Compensation Committee of the Board to take any action within said sixty days shall be considered as an extension of this Agreement for an additional two-year period of time. Notwithstanding anything to the contrary contained in this "sunset provision," it is agreed that if a Change in Control occurs while this Agreement is in effect, then this Agreement shall not be subject to termination or modification under this "sunset provision," and shall remain in force for a period of two years after such Change in Control, and if within said two years the contingency factors occur which would entitle Executive to the benefits as provided herein, this Agreement shall remain in effect in accordance with its terms. If, within such two years after a Change in Control, the contingency factors that would entitle Executive to said benefits do not occur, thereupon this two-year "sunset provision" shall again be applicable with the sixty-day time period for action by the Compensation Committee of the Board to thereafter commence at the expiration of said two years after such Change in Control and on each two-year anniversary date thereafter. (b) Indemnification. If Executive shall obtain any money judgment --------------- or otherwise prevail with respect to any litigation brought by Executive or the Company to enforce or interpret any provision contained herein, the Company, to the fullest extent permitted by applicable law, hereby indemnifies Executive for Executive's reasonable attorneys' fees and disbursements incurred in such litigation and hereby agrees (i) to pay in full all such fees and disbursements and (ii) to pay prejudgment interest on any money judgment obtained by Executive from the earliest date that payment to Executive should have been made under this Agreement until such judgment shall have been paid in full, which interest shall be calculated at the rate of 1% per month (with a partial month counting as a full month). (c) Payment Obligations. The Company's obligation to pay (or -------------------- cause one of its subsidiaries to pay) Executive the amounts and to make the arrangements provided herein shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company (including its subsidiaries) may have against Executive or anyone else. All amounts payable by the Company (including its subsidiaries hereunder) shall be paid -5- without notice or demand. Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under any provision of this Agreement. Provided, however, that if Executive receives or is entitled to receive payments or benefits as a result of Involuntary Termination from any company affiliated with the Company, all such payments and benefits shall be credited against the Company's obligations pursuant to this Agreement. (d) Successors. This Agreement shall be binding upon and inure to ---------- the benefit of the Company and any successor of the Company, by merger or otherwise. This Agreement shall also be binding upon and inure to the benefit of Executive and Executive's estate. If Executive shall die prior to full payment of amounts due pursuant to this Agreement, such amounts shall be payable pursuant to the terms of this Agreement to Executive's estate. (e) Severability. Any provision in this Agreement which is ------------ prohibited or unenforceable in any jurisdiction by reason of applicable law shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. (f) Non-Alienation. Executive shall not have any right to pledge, -------------- hypothecate, anticipate or assign this Agreement or the rights hereunder, except by will or the laws of descent and distribution. (g) Notices. Any notices or other communications provided for in ------- this Agreement shall be sufficient if in writing. In the case of Executive, such notices or communications shall be effectively delivered if hand delivered to Executive at Executive's principal place of employment or if sent by registered or certified mail to Executive at the last address Executive has filed with the Company. In the case of the Company, such notices or communications shall be effectively delivered if sent by registered or certified mail to the Company at its principal executive offices. (h) Controlling Law. This Agreement shall be governed by, and ---------------- construed in accordance with, the laws of the State of Texas without regard to conflict of law. (i) Full Settlement; Withholding. If Executive is entitled to and ---------------------------- receives the benefits provided hereunder, performance of the obligations of the Company hereunder will constitute full settlement of all claims that Executive might otherwise assert against the Company on account of Executive's termination of employment. Any separation benefits paid pursuant to this Agreement shall be deemed to be a separation payment and not "Compensation" for purposes of determining benefits under the Company's qualified plans (unless and to the extent that any such qualified plan expressly provides otherwise), and shall be subject to any required tax withholding. (j) Unfunded Obligation. The obligation to pay amounts under this ------------------- Agreement is an unfunded obligation of the Company (including its subsidiaries), and no such obligation shall create a trust or be deemed to be secured by any pledge or encumbrance on any property of the Company (including its subsidiaries). -6- (k) Not a Contract of Employment. This Agreement shall not be -------------------------------- deemed to constitute a contract of employment, nor shall any provision hereof affect (i) the right of the Company (or its subsidiaries) to discharge Executive at will or (ii) the terms and conditions of any other agreement between the Company and Executive except as provided herein. (l) Number and Gender. Wherever appropriate herein, words used in ----------------- the singular shall include the plural and the plural shall include the singular. The masculine gender where appearing herein shall be deemed to include the feminine gender. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the 15 day of May , 2000. - ------- -------- "EXECUTIVE" /s/ J Mitchell ---------------------------------------- "COMPANY" DA CONSULTING GROUP, INC. By: /s/ V.L. Pierpont ------------------------------------ Name: V.L. Pierpont ------------------------------- Title: Chairman ------------------------------ -7- EX-10.13 5 doc5.txt Exhibit 10.13 EMPLOYMENT AGREEMENT - --------------------- This Employment Agreement ("Agreement") is made and entered into by DA CONSULTING GROUP, INC., a Texas corporation, formerly known as DA International, Inc. (hereinafter the "Company") and VIRGINIA L. PIERPONT (hereinafter the "Employee"). In consideration of the mutual promises set forth below and other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the Company and Employee agree as follows: 1. EMPLOYMENT. The Company employs Employee and Employee accepts ---------- employment on the terms and conditions set forth in this Agreement. 2. NATURE OF EMPLOYMENT. Employee shall serve as Chairman of the Board -------------------- of Directors. As Chairman, Employee shall lead the Company's Board of Directors (the "Board") in establishing the strategy and overall objectives of the Company and in reviewing the performance of the Company's management in pursuing such strategy and achieving such objectives. Employee shall abide by Company policies, procedures, and practices as they may exist and be in force from time to time. 3. COMPENSATION. ------------ (a) Salary. Effective 4 April 2000 compensation for Employee's ------ services under this Agreement initially shall be One Hundred Fifty Thousand Dollars ($150,000) per year, payable in equal monthly installments in arrears. The Employee's salary shall be reviewed annually by the Board (or the Committee thereof charged with establishing executive compensation, hereinafter, the "Committee") by January 1 of each year and may be increased in the Board's (or such Committee's) discretion, provided that such salary for any year shall not be reduced below the salary for the immediately preceding year. (b) Reimbursement of Expenses. The Company shall reimburse --------------------------- Employee for all expenses reasonably incurred by her on behalf of the Company. In addition, the Company shall reimburse Employee for all expenses incurred by her for her membership and participation in professional associations, continuing education, and maintenance of professional licenses. 4. TERM OF EMPLOYMENT. Employee shall serve at the pleasure of the -------------------- Board. Employee may resign at any time upon 90 days notice, and Employee's employment under this Agreement may be terminated at any time in the discretion of the Board, provided that the compensation and benefits described in Section 3 shall continue to be paid for 90 days following the Board's notice to Employee of her termination of employment under this Agreement. In the event of a change of control taking place and Employee's employment is terminated within 180 days of that event then the Employee will receive 180 days notice and continue to be compensated as described in Section 3 for that duration. 5. COVENANT NOT TO COMPETE. Employee acknowledges that by virtue of -------------------------- her employment relationship, she shall have access to and control of confidential and proprietary information concerning the Company's business and that the Company's business depends, to a considerable extent, on the individual skills, efforts, and leadership of Employee. Accordingly and in consideration of the Company's commitments to Employee under this Agreement, Employee expressly covenants and agrees that during the term of this Agreement and for eighteen (18) months following the termination of her employment (unless such termination is by the Company without Cause or by the Employee for Good Reason), Employee will not, without the prior written consent of Company: (a) on Employee's own or another's behalf, whether as an officer, director, stockholder, partner, associate, owner, employee, consultant or otherwise, directly or indirectly: (i) solicit or do business which is the same, similar to, or otherwise in competition with the business engaged in by the Company, from or with persons or entities who are clients or customers of the Company, who were clients or customers of the Company at any time during the last year of Employee's employment with the Company, or to whom the Company had made proposals for business at any time during the last year of Employee's employment with the Company; or (ii) offer employment to, or otherwise solicit for employment, any employee or other person who had been employed by the Company during the last year of Employee's employment with the Company; (b) be employed (or otherwise engaged) in a management capacity by any person or entity that directly competes with the Company. Employee further acknowledges that the covenants contained in this Section 5 are reasonably necessary to protect the legitimate business interests of the Company and are reasonable with respect to scope, time, and territory and are described with sufficient accuracy and definiteness to enable her to understand the scope of the restrictions imposed on her. The terms and conditions of this Section 5 shall survive expiration or termination of this Agreement or Employee's employment and shall not be affected by any change or modification of this Agreement unless specific reference is made to this Section 5. It is agreed that ownership, directly or indirectly, of not more than five percent (5%) of the issued and outstanding stock of a corporation, the shares of which are regularly traded on a national securities exchange or in the over-the-counter market, shall not be deemed to be in violation of this Section 5. 6. REMEDIES. Employee agrees that her breach or violation of Section 5 -------- (Covenant Not to Compete), will result in immediate and irreparable harm to the Company for which legal remedies would be inadequate. Therefore, in addition to any legal or other relief to which the Company may be entitled, the Company may seek legal and equitable relief, including but not limited to, preliminary and permanent injunctive relief. 7. EMPLOYEE REPRESENTATION. Employee represents and warrants that her ------------------------ employment and obligations under this Agreement will not breach any duty or obligation she owes to another person or entity. 8. COMPANY REPRESENTATION. Company represents and warrants that it has ---------------------- no obligation which would prohibit it from entering into this Agreement or complying with its provisions and that it has the authority to enter into this Agreement. 9. WAIVER OF BREACH. The Company's or Employee's waiver of any breach ----------------- of a provision of this Agreement shall not waive any subsequent breach by the other party. 10. ENTIRE AGREEMENT. This Agreement including any schedule, exhibit or ---------------- attachment hereto: (i) supersedes all other understandings and agreements, oral or written, between the parties with respect to the subject matter of this Agreement including any schedule, exhibit or attachment hereto; and (ii) constitutes the sole agreement between the parties with respect to this subject matter. Each party acknowledges that: (i) no representations, inducements, promises or agreements, oral or written, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement including any schedule, exhibit or attachment hereto; and (ii) no agreement, statement or promise not contained in this Agreement shall be valid. No change or modification of this Agreement shall be valid or binding upon the parties unless such change or modification is in writing and is signed by the parties. 11. SEVERABILITY. If a court of competent jurisdiction holds that any ------------ provision or sub-part thereof contained in this Agreement is invalid, illegal or unenforceable, that invalidity, illegality or unenforceability shall not affect any other provision in this Agreement. Additionally, if any of the provisions, clauses or phrases in Section 5 (Covenant Not to Compete) are held unenforceable by a court of competent jurisdiction, then the parties desire that they be "blue-penciled" or rewritten by the court to the extent necessary to render them enforceable. 12. PARTIES BOUND. The terms, provisions, covenants and agreements -------------- contained in this Agreement shall apply to, be binding upon and inure to the benefit of the Company's successors and assigns; however the Company may not assign this Agreement without the Employee's prior written consent. 13. GOVERNING LAW. This Agreement and the employment relationship -------------- created by it shall be governed by Texas law. IN WITNESS WHEREOF, the parties have entered into this Agreement on the day and year written below. /s/ Virginia L. Pierpont Virginia L. Pierpont Date 12 October 00 DA CONSULTING GROUP, INC. By: /s/ Robert Bolton VP HR for DACG Date 4 April 2000 EX-21.1 6 doc6.txt EXHIBIT 21.1 SUBSIDIARIES OF THE REGISTRANT STATE OR JURISDICTION OF COMPANY INCORPORATION ------- -------------- DA Consulting Group (USA) Inc. Texas DA Consulting Services Limited United Kingdom DA Consulting (Proprietary) Limited South Africa Documentation Software Distributors (PTY) Ltd. South Africa DA Consulting Group (Canada), Ltd. Canada DA Consulting Group Pty Limited Australia Documentation Associates (NZ) Ltd. New Zealand DA Consulting Group Ltd. Isle of Man DA Consultores de Mexico, S. de R.L. Mexico DA Consultores Andina, C.A. Venezuela DA Consulting Group Pte Ltd Singapore EX-23.1 7 doc7.txt Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS ----------------------------------------- We hereby consent to the incorporation by reference in the registration statements on Form S-8(File Nos. 333-71987 and 333-93091)of our report dated March 19, 2001, relating to the financial statements of DA Consulting Group, Inc., which report is included in the DA Consulting Group, Inc. Annual Report on Form 10-K filed for the year ended December 31, 2000. PRICEWATERHOUSECOOPERS LLP April 27, 2001 -----END PRIVACY-ENHANCED MESSAGE-----