<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SPR Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
SPR INC.
2015 SPRING ROAD, SUITE 750
OAK BROOK, ILLINOIS 60523
APRIL 27, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
SPR Inc. (the "Company"), to be held at 10:00 a.m., on Thursday, June 4, 1998 at
the Hyatt Regency Oak Brook, 1909 Spring Road, Oak Brook, Illinois 60523.
The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement describe the formal matters to be acted upon at the meeting. At the
meeting, stockholders will be asked to: (i) elect a new Board of Directors for
the coming year; (ii) ratify and approve the appointment of Arthur Andersen LLP
as independent auditors of the Company for the fiscal year ending December 31,
1998; and (iii) transact such other business as may properly come before the
meeting and any adjournments thereof.
The foregoing information is qualified in its entirety by the contents of
the Notice of Annual Meeting of Stockholders and the Proxy Statement which are
enclosed with this letter. If you have any questions regarding the matters to be
voted on at the Annual Meeting, you may contact the undersigned at (630)
990-2040.
It is important that your shares be represented at the meeting regardless
of the number of shares you hold. Please take a moment to review the Proxy
Statement and complete, sign, and mail the enclosed proxy card in the
accompanying return envelope promptly, regardless of whether you intend to be
present at the meeting. Your proxy is revocable at any time prior to its use. If
you have multiple accounts and receive more than one set of these materials,
please be sure to vote each proxy received.
We look forward to seeing you at the meeting.
Sincerely,
SPR Inc.
/s/ Robert M. Figliulo
Robert M. Figliulo,
CEO and Chairman of the Board
<PAGE> 3
SPR INC.
2015 SPRING ROAD, SUITE 750
OAK BROOK, ILLINOIS 60523
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, JUNE 4, 1998
To the Stockholders of SPR Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of SPR Inc.
(the "Company"), will be held at 10:00 a.m., on Thursday, June 4, 1998 at the
Hyatt Regency Oak Brook, 1909 Spring Road, Oak Brook, Illinois 60523, for the
following purposes:
1. To elect five (5) directors to hold office until the next annual
meeting of stockholders or until their successors have been elected and
qualified.
2. To ratify and approve the appointment of Arthur Andersen LLP as
independent auditors of the Company for the fiscal year ending December 31,
1998.
3. To transact such other business as may properly come before the
meeting and any adjournment thereof.
Additional information relating to these matters is set forth in the
attached Proxy Statement.
The Board of Directors has fixed the close of business on April 17, 1998,
as the record date for determining stockholders entitled to notice of and to
vote at the Annual Meeting or any adjournments thereof (the "Record Date"). Only
stockholders of record at the close of business on the Record Date are entitled
to notice of and to vote at the Annual Meeting. A list of stockholders entitled
to vote at the Annual Meeting will be available for examination at the offices
of the Company for at least 10 days prior to the Annual Meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, WHETHER OR
NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE URGED TO PROMPTLY
MARK, SIGN, DATE AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE ENCLOSED,
SELF-ADDRESSED, STAMPED ENVELOPE SO THAT YOUR SHARES OF STOCK MAY BE REPRESENTED
AND VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A
QUORUM MAY BE ASSURED AT THE MEETING. YOUR PROXY WILL BE RETURNED TO YOU IF YOU
SHOULD BE PRESENT AT THE ANNUAL MEETING AND SHOULD REQUEST SUCH RETURN OR IF YOU
SHOULD REQUEST SUCH RETURN IN THE MANNER PROVIDED FOR REVOCATION OF PROXIES ON
THE INITIAL PAGES OF THE ENCLOSED PROXY STATEMENT.
April 27, 1998 By Order of the Board of Directors
/s/ Robert M. Figliulo
Robert M. Figliulo
CEO and Chairman of the Board
<PAGE> 4
SPR INC.
2015 SPRING ROAD, SUITE 750
OAK BROOK, ILLINOIS 60523
PROXY STATEMENT
ANNUAL MEETING OF THE STOCKHOLDERS TO BE
HELD ON THURSDAY, JUNE 4, 1998 AT 10:00 A.M.
INTRODUCTION
This Proxy Statement is furnished to the stockholders of SPR Inc. ("SPR" or
the "Company") in connection with the solicitation by the Board of Directors of
the Company of proxies to be used at the Annual Meeting of the Stockholders of
the Company (the "Annual Meeting"). The Annual Meeting will be held at 10:00
a.m., on Thursday, June 4, 1998, at the Hyatt Regency Oak Brook, 1909 Spring
Road, Oak Brook, Illinois 60523 for the purposes specified in the accompanying
Notice of Annual Meeting of Stockholders. This Proxy Statement and enclosed form
of proxy ("Proxy") were first sent to stockholders on or about April 27, 1998.
PROCEDURAL MATTERS
The Board of Directors of the Company is soliciting proxies from the
stockholders of the Company in connection with the Annual Meeting. The enclosed
Proxy enables stockholders to vote on all matters scheduled to come before the
Annual Meeting or any adjournments thereof. The matters scheduled to come before
the Annual Meeting include: (i) electing five (5) directors to hold office until
the next annual meeting of stockholders or until their successors have been
elected and qualified; (ii) ratifying and approving the appointment of Arthur
Andersen LLP as independent auditors of the Company for the fiscal year ending
December 31, 1998; and (iii) transacting such other business as may properly
come before the meeting and any adjournments thereof, as more fully described
below.
VOTING REQUIREMENTS
Record Date and Outstanding Shares. The Board of Directors has fixed the
close of business on April 17, 1998 as the record date (the "Record Date") for
the determination of stockholders entitled to notice of and vote at the Annual
Meeting or any adjournments thereof. As of the Record Date, the Company had
outstanding 8,091,371 shares of the Company's common stock (the "Common Stock").
Each of the outstanding shares of Common Stock is entitled to one vote on all
matters coming before the Annual Meeting.
Required Vote. A plurality of the vote of the shares of Common Stock
present and entitled to vote, in person or by proxy at the meeting, is required
to elect the nominees for director. The Company's by-laws provide that there is
no right of cumulative voting in the election of directors. The affirmative vote
of the holders of a majority of the outstanding Common Stock is required to
ratify and approve the appointment of Arthur Andersen LLP as independent
auditors of the Company for the fiscal year ending December 31, 1998. Proxies
marked "abstain" and broker non-votes will be considered present at the meeting
for quorum purposes, but will not be counted for the purpose of determining the
number of votes cast with respect to any matter. However, abstentions and broker
non-votes will have the effect of a "no" vote if the vote required is a majority
of the shares outstanding and entitled to be voted.
Voting of Proxies. When Proxies are returned properly executed, the shares
represented thereby will be voted by the persons named in the Proxy in
accordance with the stockholder's directions. Stockholders are urged to specify
their choices by marking the enclosed Proxy; if no choice has been specified,
the shares will be voted in accordance with the recommendations of the Board of
Directors contained in this Proxy Statement. The Board of Directors does not
presently intend to bring any business before the Annual Meeting other than the
specific proposals referred to in this Proxy Statement and specified in the
Notice of Annual Meeting, and
<PAGE> 5
so far as is known to the Board of Directors, no other matters are to be brought
before the Annual Meeting. As to any other business that may properly come
before the Annual Meeting, however, it is intended that proxies, in the form
enclosed, will be voted in respect thereof in accordance with the judgment of
the persons voting such proxies. The Company encourages the personal attendance
of its stockholders at the Annual Meeting. Execution of the accompanying Proxy
may be revoked at any time before it is voted. Revocation is effective upon
receipt by the Company of either (i) a subsequently dated Proxy, or (ii) an
instrument revoking the Proxy. Additionally, a stockholder may revoke a
previously executed Proxy by voting in person at the Annual Meeting. A
revocation will not affect a vote on any matters taken prior to the receipt of
such revocation. Your attendance at the Annual Meeting will not of itself revoke
a Proxy.
Quorum. The required quorum for the transaction of business at the Annual
Meeting will be a majority of the shares of Common Stock entitled to vote on the
Record Date. Broker "non-votes" are included for purposes of determining whether
a quorum is present at the Annual Meeting. A broker "non-vote" occurs when a
nominee holding shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power with
respect to that item and has not received instructions from the beneficial
owner.
Annual Report to Stockholders. The Company's Annual Report to Stockholders
for the year ended December 31, 1997, containing financial and other information
pertaining to the Company, is being furnished to stockholders simultaneously
with this Proxy Statement.
The cost of soliciting Proxies will be borne by the Company. In addition to
the use of the mails, Proxies may be solicited by the directors, officers, and
employees of the Company, without additional compensation, by personal
interview, telephone, telegram or otherwise.
2
<PAGE> 6
PROPOSAL NO. 1
ELECTION OF DIRECTORS
A board of five (5) directors are to be elected at the Annual Meeting to
serve until the next annual meeting, or until their successors are elected and
shall have qualified. All of such directors shall be elected by the holders of
Common Stock. The persons named as proxy holders in the accompanying Proxy
intend to vote each properly signed and submitted Proxy FOR the election as a
director of each of the persons named as a nominee unless authority to vote in
the election of directors is withheld on such Proxy. If, for any reason, at the
time of the election, one or more of such nominees should be unable to serve,
the Proxy will be voted for a substitute nominee or nominees selected by the
Board of Directors. Directors are elected by a plurality of votes cast at the
Annual Meeting.
THE COMPANY RECOMMENDS VOTING "FOR" THE NOMINEES.
CURRENT DIRECTORS AND NOMINEES FOR DIRECTOR
The following table sets forth the name, age and the positions held of each
director currently holding office. All of the directors, except for Michael J.
Fletcher, are standing as nominees for re-election.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Robert M. Figliulo........................ 43 CEO and Chairman of the Board of Directors
David A. Figliulo......................... 37 Executive Vice President and Director
Michael J. Fletcher(1).................... 42 Director of Professional Development -- Tulsa and
Director
Ronald L. Taylor(2)....................... 53 Director
Sydnor W. Thrift, Jr.(3).................. 68 Director
David P. Yeager(2)(3)..................... 44 Director
</TABLE>
- -------------------------
(1) Mr. Fletcher is not standing for re-election.
(2) Member of the Audit Committee of the Board of Directors.
(3) Member of the Compensation Committee of the Board of Directors.
Directors hold office for one year and until their successors are elected
and qualified.
Robert M. Figliulo has served as Chief Executive Officer and Chairman of
SPR since June 1997 and previously served as President and Chairman of SPR
Chicago. Since joining the Company in May 1976, Mr. Figliulo has held numerous
positions, including Programmer, Analyst, Account Manager, General Manager of
both the Tulsa and Chicago offices and Vice President of Marketing. Mr. Figliulo
received a Masters in Business Administration from the University of Chicago in
1987. Mr. Figliulo is the brother of David Figliulo.
David A. Figliulo has served as Executive Vice President and Director of
SPR since June 1997, and previously served as Vice President of SPR Chicago.
Since joining the Company in July 1989, Mr. Figliulo has served as an Account
Manager and as the Vice President of Sales in the Company's Chicago office.
Prior to joining the Company, Mr. Figliulo worked as an Account Manager for
Baxter Healthcare, an international pharmaceutical company, in the Oxygen
Systems Division and was recognized as the division's top salesman in the United
States in 1987, 1988 and 1989. Mr. Figliulo is the brother of Robert Figliulo.
Michael J. Fletcher has served as General Manager and is currently serving
as Director of Professional Development -- Tulsa. Previously, he served as
President of SPR Tulsa. Mr. Fletcher joined SPR in 1986 as a Recruiter in the
Chicago office and since that time has held a variety of positions in both the
Tulsa and Chicago offices including Branch Manager of the Tulsa office, Field
Support Representative and Technical Manager. Prior to joining SPR, Mr. Fletcher
worked in the staffing support and personnel recruiting industry. Mr. Fletcher
is not standing for re-election as a director of the Company.
Ronald L. Taylor has served since 1987 as a Director, President and Chief
Operating Officer of DeVry, Inc., one of the largest publicly-owned,
degree-granting, higher education companies in North
3
<PAGE> 7
America. Mr. Taylor co-founded Keller Graduate School of Management and was,
from 1973 to 1987, its President and Chief Operating Officer. Mr. Taylor
received a Masters in Business Administration degree from Stanford University in
1971.
Sydnor W. Thrift, Jr. has served as Director of Player Development for the
Baltimore Orioles professional baseball team since November 1994. From November
1991 through October 1994, Mr. Thrift served as the Assistant General Manager
for the Chicago Cubs professional baseball team. From January 1991 through
October 1991, Mr. Thrift served as a consultant to three professional baseball
teams: the San Francisco Giants, the Los Angeles Dodgers and the New York Mets.
David P. Yeager has served as Vice Chairman of the Board of Directors of
Hub Group, Inc., the largest intermodal marketing company in the United States,
since January 1992. Mr. Yeager has also served as Chief Executive Officer of Hub
Group, Inc. since March 1995 and was President of Hub Group, Inc. from October
1985 through December 1991. Mr. Yeager received a Masters in Business
Administration degree from the University of Chicago in 1987.
MEETINGS
During the year ended December 31, 1997 the Board of Directors held five
meetings. Each director attended at least 75% of the aggregate of the number of
board meetings held and the total number of meetings of committees on which he
served that were held during 1997.
BOARD COMMITTEES
In October 1996, the Board of Directors established a Compensation
Committee consisting of Messrs. Thrift and Yeager and an Audit Committee
consisting of Messrs. Taylor and Yeager. The Compensation Committee makes
recommendations to the Board of Directors concerning compensation of the
Company's officers and employees. The Compensation Committee also oversees and
administers the Employee Stock Purchase Plan and the Company's Combined
Incentive and Non-statutory Stock Option Plan (the "Option Plan"). The Audit
Committee reviews the results and scope of audits and other services provided by
the Company's independent auditors and monitors and reviews the Company's
financial policies and internal control procedures. The Compensation Committee
held one meeting in 1997. The Audit Committee held one meeting in 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to the October 1996 merger of SPR Chicago, SPR Tulsa and SPR
Wisconsin into the Company (the "Merger"), none of such entities had a
compensation committee or any other committee of their respective boards of
directors performing similar functions. Decisions concerning compensation of
executive officers were made by the boards of directors of each of the
respective companies. Mr. Robert Figliulo and Mr. David Figliulo, former
executive officers and directors of SPR Chicago, determined their 1996
compensation. Mr. Fletcher, a former executive officer and director of SPR
Tulsa, determined his 1996 compensation and Mr. John Figliulo, the sole officer
and director of SPR Wisconsin, determined his 1996 compensation.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive $1,000 for each
board meeting attended and $500 for each committee meeting attended on a date
other than a date on which the board meets and are reimbursed for their
reasonable out-of-pocket expenses incurred in attending board and committee
meetings. These directors are also entitled to receive stock options under the
Company's Option Plan for serving on the Board of Directors. Employee directors
do not receive additional compensation for serving on the Board of Directors.
4
<PAGE> 8
EXECUTIVE OFFICERS
The executive officers of the Company, and their ages and positions as of
March 31, 1998, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Robert M. Figliulo................... 43 Chief Executive Officer and Chairman of
the Board of Directors
David A. Figliulo.................... 37 Executive Vice President and Director
Stephen J. Tober..................... 33 Executive Vice President -- Finance and
Business Development
Stephen T. Gambill................... 47 Vice President and Chief Financial Officer
Stephen E. Tone...................... 40 Vice President -- Project Services
Julia R. Wort........................ 31 Vice President -- Sales
</TABLE>
Executive officers of the Company are appointed by, and serve at the
direction of, the Board of Directors.
Robert M. Figliulo. See the description under "Current Directors and
Nominees for Director."
David A. Figliulo. See the description under "Current Directors and
Nominees for Director."
Stephen J. Tober has served as Executive Vice President -- Finance and
Business Development since June 1997. Prior to joining the Company, Mr. Tober
worked in the investment banking division of Smith Barney Inc. from 1995 through
1997. From 1991 through 1995 Mr. Tober worked in the corporate finance group of
the law firm Latham & Watkins. Mr. Tober received a J.D. degree from the
University of Virginia School of Law in 1991 and a B.A. degree from Amherst
College in 1987.
Stephen T. Gambill has served as Vice President and Chief Financial Officer
since July 1996. From 1982 through July 1996, Mr. Gambill, a certified public
accountant, held various financial management positions within Natural Gas
Pipeline Company of America, a large natural gas pipeline, and most recently
served as its Director of Accounting. Prior to 1982, Mr. Gambill held various
auditing positions with the public accounting firms of Coopers and Lybrand and
Deloitte, Haskins & Sells. Mr. Gambill received a Masters in Business
Administration degree from the University of Chicago in 1987.
Stephen E. Tone has served as Vice President of Project Services since
November 1997. Mr. Tone joined SPR in September of 1992 as the Director of
Project Services -- Chicago. Prior to joining the Company, Mr. Tone worked for a
variety of technology firms including XA Systems and Technology Solutions
Company. Mr. Tone obtained his Bachelor of Computer Science degree from
California State University in 1985.
Julia R. Wort has served as the Vice President of Sales since November
1997. Ms. Wort joined the Company in September 1992 as a Sales Representative
and most recently served as Director of Sales -- Milwaukee. Prior to joining the
Company, Ms. Wort was employed as a Sales Representative for a distributor of
specialized commercial hardware and software and a Sales Representative for a
major hospitality marketing firm. Ms. Wort received a B.S. degree in Political
Science from the University of Illinois in 1989.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers (as defined under Section 16 of
the Exchange Act), directors, and greater than 10% stockholders, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission (the "Commission"). Based solely on a review of the forms it has
received and on written representations from certain reporting persons that no
such forms were required for them, the Company believes that, during 1997, all
Section 16 filing requirements applicable to its officers, directors and greater
than 10% beneficial owners were complied with by such persons.
5
<PAGE> 9
PROPOSAL NO. 2
RATIFICATION AND APPROVAL OF AUDITORS
Subject to stockholder approval at the Annual Meeting, the Board of
Directors has selected Arthur Andersen LLP ("Arthur Andersen") as the Company's
independent auditors for the fiscal years ending December 31, 1997 and 1998.
Prior to the Merger, Arthur Andersen served as independent public
accountants for SPR Wisconsin, SPR Tulsa and Systems Inc. and Ernst & Young LLP
served as independent public accountants for SPR Chicago. In connection with the
Company's initial public offering the Board of Directors of the Company on
September 9, 1996 dismissed Ernst & Young LLP and selected Arthur Andersen to
serve as independent public accountants for the Company. The Company informed
Ernst & Young LLP of its dismissal on September 9, 1996. During the period from
January 14, 1994 to December 31, 1994 and for the year ended December 31, 1995,
Ernst & Young LLP's report on the financial statements of SPR Chicago did not
contain an adverse opinion, disclaimer of opinion, qualification or modification
as to uncertainty, audit scope or accounting principles. There were no
disagreements with Ernst & Young LLP on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedures from
January 14, 1994 through September 9, 1996 or with respect to SPR Chicago's
financial statements.
The affirmative vote of a majority of the votes cast on this Proposal 2
shall constitute both the ratification and approval of Arthur Andersen as the
Company's independent auditors for the calendar year 1998.
A representative of Arthur Andersen is expected to be present at the Annual
Meeting. The representative will have an opportunity to make a statement and
will be available to respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION AND APPROVAL
OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
6
<PAGE> 10
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information with respect to the
annual and all other compensation earned for the years ended December 31, 1996
and 1997 for the Company's Chief Executive Officer and the four most highly
compensated executive officers other than the Chief Executive Officer
(collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS
---------------------------------- ---------------------
NAME AND OTHER ANNUAL RESTRICTED OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK(#) SARS(#) COMPENSATION
------------------ ---- ------ ----- ------------ ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert M. Figliulo......... 1997 $180,000 $218,180 -- -- -- $11,242(1)
Chief Executive Officer
and 1996 $140,000 $104,694 -- -- -- $ 6,121(1)
Chairman of the Board of
Directors
David A. Figliulo.......... 1997 $135,000 $142,782 -- -- -- $ 9,499(2)
Executive Vice President 1996 $100,000 $ 63,290 -- -- -- $ 9,499(2)
and Director
Stephen J. Tober(3)........ 1997 $ 86,538 $ 27,084 -- -- 328,939 --
Executive Vice President
-- 1996 -- -- -- -- -- --
Finance and Business
Development
Stephen T. Gambill(4)...... 1997 $150,000 $ 6,667 -- -- 31,328 $ 5,498(5)
Vice President and Chief 1996 $ 60,577 $ -- -- -- -- $ --
Financial Officer
Michael J. Fletcher........ 1997 $125,000 $ 98,396 -- -- -- $11,183(6)
Director of Professional 1996 $108,039 $ 93,273 -- -- -- $ 6,164(6)
Development -- Tulsa and
Director
</TABLE>
- -------------------------
(1) Includes: (i) $11,242 and $5,621 of automobile lease payments made by the
Company, in 1997 and 1996, respectively, and (ii) $500 in matching payments
under the Company's 401(k) plan in each of 1997 and 1996.
(2) Includes: (i) $8,999 and $8,999 of automobile lease payments made by the
Company in 1997 and 1996, respectively, and (ii) $500 in matching payments
under the Company's 401(k) plan in each of 1997 and 1996.
(3) Joined the Company in June 1997. Represents amounts paid from June 1997
through December 31, 1997.
(4) Joined the Company in July 1996. Represents amounts paid from July 1996
through December 31, 1996.
(5) Includes $4,998 of automobile lease payments and $500 in matching payments
under the Company's 401(k) plan made by the Company in 1997.
(6) Includes $11,183 and $6,164 of automobile lease payments made by the Company
in 1997 and 1996, respectively.
7
<PAGE> 11
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
NUMBER OF ASSUMED ANNUAL
SECURITIES RATES OF STOCK
UNDERLYING % OF TOTAL PRICE APPRECIATION
OPTIONS GRANTED(1) OPTIONS EXERCISE FOR OPTION TERM(4)
------------------ GRANTED TO PRICE EXPIRATION -----------------------
ISO NQSO EMPLOYEES(2) ($/SHARE)(3) DATE 5% 10%
------- -------- ------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert M. Figliulo..... -- -- -- -- -- -- --
David A. Figliulo...... -- -- -- -- -- -- --
Stephen J. Tober....... 13,055 315,884 40% 7.66 2007 $2,307,573 $5,157,764
Stephen T. Gambill..... 13,055 18,273 4% 7.66 2007 $ 219,296 $ 491,223
Michael J. Fletcher.... -- -- -- -- -- -- --
</TABLE>
- -------------------------
(1) All options were granted on June 2, 1997. The Incentive Stock Options
("ISOs") and Non-statutory Stock Options ("NQSOs") vest at the rate of 20%
per year over a five year period commencing on the first anniversary of the
stock option grant, except that options to purchase 245,399 shares granted
to Mr. Tober vested immediately upon grant, and the remainder of Mr. Tober's
options vest at the rate of 25% per year over a four year period.
(2) Based on an aggregate of 787,889 options granted in 1997 to employees of the
Company, including the Named Executive Officers.
(3) The exercise price was determined by the Board of Directors on that date.
The exercise price is payable in cash or, subject to certain limitations, by
delivery of shares of Common Stock.
(4) The potential realizable value is calculated based on the term of the option
at the time of grant (ten years). Stock price appreciation of 5% and 10% is
based on the fair value at the time of grant and assumes that the option is
exercised at the exercise price and sold on the last day of its term at the
appreciated price, pursuant to rules promulgated by the Commission. The
potential realizable value does not represent the Company's prediction of
its stock price performance. This table does not take into account
appreciation for the fair value of the Common Stock from the date of grant
to date. There can be no assurance that the actual stock price appreciation
over the ten-year option will be at the assumed 5% and 10% levels or at any
other defined level.
The following table sets forth certain information with respect to the
value of options held at December 31, 1997 by the Named Executive Officers who
held options during 1997. The Named Executive Officers did not exercise any
options to purchase Common Stock during 1997.
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT DECEMBER 31, OPTIONS AT DECEMBER 31,
1997 1997(1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Robert M. Figliulo............................ -- -- $ -- $ --
David A. Figliulo............................. -- -- $ -- $ --
Stephen J. Tober.............................. 245,399 83,540 $2,292,027 $780,264
Stephen T. Gambill............................ -- 31,328 $ -- $292,604
Michael J. Fletcher........................... -- -- $ -- $ --
</TABLE>
- -------------------------
(1) The closing price for the Common Stock as reported on the Nasdaq National
Market on December 31, 1997 (the last day of trading in 1997) was $17.00.
Value is calculated on the basis of the difference between the option
exercise price and $17.00, multiplied by the number of shares of Common
Stock underlying the option.
8
<PAGE> 12
EMPLOYMENT AGREEMENTS
The Company has entered into substantially identical employment agreements
with Robert Figliulo, David Figliulo, Michael Fletcher, Stephen Tober, and
Stephen Gambill. The agreements provide that upon termination of employment by
the Company, other than for Cause (as defined in the agreements), death or
retirement, the Company shall pay the executive an amount equal to no more than
the executive's annual base compensation in effect at the time of termination.
The agreements also generally provide that in the event of a Change in Control
(as defined in the agreements) and the occurrence of certain events, and to the
extent deductible under then applicable tax laws, the Company shall pay the
executive a payment equal to the sum of: (i) the executive's most recent base
annual compensation and annual bonus for the fiscal year prior to the date of
the Change in Control; plus (ii) the cash value of the insurance protection
(including dependent coverage) then in effect with respect to the Company's
health insurance plan, based upon the cost of such insurance to the Company for
a 12-month period following the Change in Control date. The agreements also
contain noncompetition, nonsolicitation and nondisclosure covenants.
STOCK PLANS
Employee Stock Purchase Plan. The Company has reserved an aggregate of
476,029 additional shares of Common Stock for issuance under the Company's
Employee Stock Purchase Plan (the "Purchase Plan"). The Purchase Plan is
intended to qualify under Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"), and will permit eligible employees of the Company to
purchase Common Stock through payroll deductions of up to 20% of their total
cash compensation; provided that employees may be prohibited from purchasing
more than $25,000 worth of stock in any calendar year. The Purchase Plan has two
six-month offering periods, beginning on January 1 and July 1 of each year, with
the first offering period commencing on October 2, 1997, the date of the
Company's initial public offering. The purchase price of Common Stock purchased
under the Purchase Plan shall be the lesser of: (i) 85% of the fair market value
of the Common Stock (as calculated pursuant to the Purchase Plan) on the first
day of an offering period or (ii) 85% of the fair market value of the Common
Stock on the last day of an offering period. The Purchase Plan is administered
by the Compensation Committee of the Board of Directors. The Board of Directors
is authorized to amend or terminate the Purchase Plan at any time. However, the
Board of Directors may not, without stockholder approval, modify the Purchase
Plan if stockholder approval of the amendment is required for the Purchase Plan
to continue to comply with the requirements of Rule 16b-3 under the Exchange Act
or Section 423 of the Code.
Combined Incentive and Non-statutory Stock Option Plan. The Company has
reserved an aggregate of 1,044,252 shares of Common Stock for issuance under the
Option Plan, which may be granted to employees, officers and directors of the
Company. The Option Plan is administered by the Compensation Committee of the
Board of Directors. The Compensation Committee provides for awards of NQSO's and
ISO's to purchase shares of Common Stock and stock appreciation rights ("SARs"),
provided that any director who is not an employee of the Company may not be
awarded an ISO. The Option Plan limits the aggregate fair market value of the
shares of Common Stock with respect to which ISOs are exercisable for the first
time in any calendar year to $100,000. No such annual limitation applies to NQSO
grants under the Option Plan.
The exercise price for options and SARs may be paid: (i) in cash; (ii) by
surrendering shares already owned by the optionee; or (iii) if the Compensation
Committee so determines, by instructing a broker to sell enough of the
optionee's exercised shares to deliver to the Company sufficient sales proceeds
to pay the exercise price. The exercise price per share of Common Stock may not
be less than 85% (100% in the case of an ISO) of the fair market value of the
Common Stock (as calculated pursuant to the Option Plan) on the date the stock
option is granted. The base value of an SAR will equal not less than 85% of the
market value of a share of Common Stock on the grant date. Option agreements
covering options and SARs to be granted under the Option Plan will generally
provide that such options and SARs will be exercisable within fifteen years from
the date of grant (ten years in the case of ISOs) and will generally vest in
annual installments as determined by the Compensation Committee. In the case of
any eligible employee who owns or is deemed to own stock possessing more than
10% of the total combined voting power of all classes of stock of the Company,
the exercise price of any ISOs granted under the Option Plan may not be less
than 110% of the fair
9
<PAGE> 13
market value of the Common Stock on the date of grant and the exercise period
may not exceed five years from the date of grant.
The Board of Directors can terminate or amend the Option Plan at any time,
except that no such action generally will be able to adversely affect any right
or obligation regarding any awards previously made under the Option Plan without
the consent of the recipient. In addition, no amendment may be effective without
the prior approval of stockholders, if such approval is required for the Option
Plan to continue to comply with applicable regulations of the Code and the
Commission. In the event of any changes in the capital structure of the Company,
such as a stock dividend or stock split, the Board of Directors must make
equitable adjustments to outstanding unexercised awards and to the provisions of
the Option Plan to reflect any increase or decrease in the number of issued
shares of Common Stock. If the Company becomes a party to a merger,
reorganization, liquidation or similar transaction, the Board of Directors may
make such arrangements it deems advisable regarding outstanding awards, such as
substituting new awards for outstanding awards, assuming outstanding awards or
terminating or paying for outstanding awards.
On June 2, 1997 options to purchase 819,216 shares of Common Stock at an
exercise price of $7.66 per share were granted to certain employees and outside
directors under the Option Plan, of which options to purchase 276,725 shares of
Common Stock are presently exercisable.
On January 5, 1998 options to purchase 35,200 shares of Common Stock at an
exercise price of $16.13 per share were granted to certain employees other than
Named Executive Officers.
10
<PAGE> 14
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee"),
which is composed entirely of outside, non-employee directors, establishes the
Company's compensation strategy and policies and determines the nature and
amount of all compensation for the Company's executive officers.
The Company's compensation policies for executive officers, as determined
by the Compensation Committee, are to (a) provide competitive compensation in
order to attract and retain superior executive talent, (b) link a significant
portion of compensation to financial results as reflected in returning value to
stockholders in order to reward successful performance, and (c) provide
long-term equity compensation, to further align the interests of executive
officers with those of stockholders and further reward successful performance.
The principal components of the Company's compensation program are (i) base
salary, (ii) annual cash incentive bonuses based upon achievement of
pre-determined financial targets for the Company, as well as individual
contributions to the Company's performance, and (iii) stock option awards, which
enable the executives to profit only as stockholder value increases.
In making its compensation decisions, the Committee considers overall
Company financial performance, as well as individual executive contributions, as
measured against certain objective and subjective factors which the Company
considers important. In November 1997, the Board of Directors commissioned an
independent third party to conduct a study of the Company's compensation program
and to make recommendations regarding the program for 1998 and beyond. This
study included a survey of compensation practices within the Information
Technology Services Industry.
ANNUAL BASE CASH COMPENSATION
The Company's policy is to pay its executive officers at competitive levels
for comparable positions. Compensation levels for individual executive officers
may be more or less than competitive averages, depending upon a subjective
assessment of individual factors such as the executive's position, skills,
achievements, tenure with the Company and other historical factors. In addition,
compensation levels for individual executive officers during the last fiscal
year reflect the Company's status as a private company prior to the Company's
October 1997 initial public offering.
ANNUAL CASH INCENTIVE BONUSES
The Company's bonus plan recognizes and rewards executives for taking
actions that build the value of the Company, generate competitive total returns
for stockholders, and provide value-added solutions for the Company's customers.
For executive officers, bonus compensation is based on individual performance
and Company performance. The component of the bonus based on individual
performance is conditioned on the individual meeting certain pre-determined
objectives and the component of the bonus based on Company performance is based
on the Company meeting certain performance goals.
LONG-TERM INCENTIVE COMPENSATION
The Company's Long-Term Incentive Compensation program strives to reward
executive performance that successfully executes the Company's long-term
business strategy and builds stockholder value. The program allows for the
awarding of options and stock appreciation rights. Prior to the Company's
October 1997 initial public offering, options were granted to two of the
Company's executive officers. No options were granted to the Company's Chief
Executive Officer in 1997.
DISCUSSION OF CEO COMPENSATION
Robert M. Figliulo's compensation was based on overall performance of the
Company and on relative levels of compensation for CEO's within the Information
Technology Services Industry. Mr. Figliulo was a party to an employment
agreement with the Company during 1997 which provided for a minimum annual base
salary and a discretionary cash bonus award.
11
<PAGE> 15
The Company's Board of Directors approved the following compensation for
Mr. Figliulo during 1997: (i) a base salary of $180,000 and (ii) a cash bonus of
$218,180. The Compensation Committee will determine Mr. Figliulo's compensation
for 1998.
COMPENSATION COMMITTEE:
David Yeager Sydnor Thrift
12
<PAGE> 16
CERTAIN TRANSACTIONS
The Company's business was started in 1973 by Systems Inc., which was
founded by Eugene Figliulo. By 1993, all the stock of Systems Inc. was owned by
Eugene Figliulo, his eight children and a nephew of Eugene Figliulo.
During the years ended December 31, 1995 and 1996, the Company made
distributions of $744,559 and $800,663, to its stockholders to enable them to
pay income taxes attributable to S corporation income of the Company for such
periods. During 1997, the Company declared distributions of $4,885,771 to
persons who were stockholders of the Company prior to the October 1997 initial
public offering. These distributions represent a portion of the Company's
undistributed S corporation earnings from the date of the merger which occurred
in October 1996 through the closing date of the initial public offering plus
other income tax related distributions. Robert Figliulo, David Figliulo and
Michael Fletcher, directors and officers of the Company, received approximately
$610,000, $610,000 and $272,000, respectively, of such distribution.
In January 1997, the Company made an unsecured loan to Robert Figliulo in
the principal amount of $80,000. The loan was evidenced by a demand promissory
note bearing interest at 7% per annum. The entire unpaid principal balance plus
accrued interest was paid by Mr. Figliulo to the Company in October 1997.
Prior to the closing date of the initial public offering in October 1997,
the Company entered into a tax indemnity agreement with each of its then current
stockholders which provides, among other things, that the Company will indemnify
such stockholders against additional income taxes resulting from adjustments
made (as a result of a final determination made by a competent tax authority) to
the taxable income reported by the Company as an S corporation for periods prior
to the initial public offering, but only to the extent those adjustments result
in a decrease in income taxes otherwise payable by the Company as a C
corporation for periods after the initial public offering.
13
<PAGE> 17
PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total returns for the
Company, the Nasdaq Stock Market -- U.S. & Foreign Index and the Nasdaq Computer
& Data Processing Services Index during the period commencing on October 2,
1997, the date of the Company's initial public offering, and ending December 31,
1997. The comparison assumes $100 was invested on October 2, 1997 in the
Company's Common Stock, the Nasdaq Stock Market -- U.S. & Foreign Index and the
Nasdaq Computer & Data Processing Services Index and assumes the reinvestment of
all dividends, if any.
<TABLE>
<CAPTION>
Nasdaq
Computer &
Nasdaq Stock Data
Market -- Processing
Measurement Period U.S. & Services
(Fiscal Year Covered) SPR Inc. Foreign Index Index
<S> <C> <C> <C>
10/2/97 100 100 100
12/31/97 106.25 92.25 94.19
</TABLE>
14
<PAGE> 18
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of April 8, 1998: (i) each person known by the
Company to own beneficially more than 5% of the Common Stock, (ii) each of the
Company's directors, (iii) each of the Company's Named Executive Officers, and
(iv) all directors and Executive Officers of the Company as a group. Each person
or entity named below has an address in care of the Company's principal
executive offices. The Company believes that the beneficial owners of the Common
Stock listed below, based on information furnished by such owners, have sole
voting and investment power with respect to such shares.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
---------------------
NAME SHARES PERCENT
---- ------ -------
<S> <C> <C>
Robert M. Figliulo(1)....................................... 1,586,581 19.6%
David A. Figliulo(2)........................................ 1,440,331 17.8
Stephen J. Tober(3)......................................... 266,793 3.2
Stephen T. Gambill(4)....................................... 12,063 *
Ronald L. Taylor(5)......................................... 15,442 *
Sydnor W. Thrift, Jr.(5).................................... 13,942 *
David P. Yeager(5).......................................... 13,442 *
Michael J. Fletcher......................................... 534,880 6.6
Rene M. Potter.............................................. 535,291 6.6
All Directors and Executive Officers as a Group (10
persons).................................................. 3,904,359 46.4%
</TABLE>
- -------------------------
* Less than 1%.
(1) Includes 372,947 shares owned by the Robert M. Figliulo 1997 Grantor
Retained Annuity Trust, for which Robert M. Figliulo serves as sole trustee
and has sole investment and voting discretion.
(2) Includes 372,947 shares owned by the David A. Figliulo 1997 Grantor Retained
Annuity Trust, for which David A. Figliulo serves as the sole trustee and
has sole investment and voting discretion. Does not include an aggregate of
100,000 shares held by Figliulo Family Associates, L.P., a Delaware limited
partnership of which partnership Mr. Figliulo is a General Partner. Mr.
Figliulo disclaims beneficial ownership of such shares.
(3) Represents 266,284 shares subject to an option granted under the Option Plan
that is exercisable within 60 days.
(4) Includes 6,265 shares subject to an option granted under the Option Plan
that is exercisable within 60 days.
(5) Includes 10,442 shares subject to an option granted under the Option Plan
that is exercisable within 60 days.
15
<PAGE> 19
PROPOSALS FOR THE 1999 ANNUAL MEETING
The next annual meeting of the stockholders is scheduled to be held in June
1999. Stockholder proposals for inclusion in the Company's proxy statement for
that meeting must be received at the Company's principal office not later than
December 28, 1998. Stockholder proposals must be mailed to the Company's
principal executive office at 2015 Spring Road, Suite 750, Oak Brook, Illinois
60523 to the attention of the Secretary of the Company.
OTHER MATTERS
Management does not know of any other matters to be brought before the
Annual Meeting. If any other matter is properly presented for consideration at
the Annual Meeting, it is intended that the proxies will be voted by the persons
named therein in accordance with their judgment on such matters. The Company's
Annual Report to Stockholders for the year ended December 31, 1997 is enclosed
herewith.
By Order of the Board of Directors
/s/ Robert M. Figliulo
Robert M. Figliulo,
CEO and Chairman of the Board
April 27, 1998
16
<PAGE> 20
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
OF SPR INC.
TO BE HELD ON JUNE 4, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking any proxy heretofore given, hereby appoints
Robert M. Figliulo and Stephen J. Tober who hold the power to appoint a
substitute, proxies of the undersigned, with full power of substitution, with
respect to all of the shares of Common Stock of SPR Inc. in which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of SPR
Inc. to be held at 10:00 a.m. on Thursday, June 4, 1998, at the Hyatt Regency
Oak Brook, 1909 Spring Road, Oak Brook, Illinois 60523 and any adjournments
thereof.
In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting or any adjournments
thereof.
PLEASE MARK IN THE BOX IN THE FOLLOWING MANNER, USING DARK INK ONLY [X].
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE SIGN AND RETURN ALL CARDS IN
THE ENCLOSED ENVELOPE.
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
[ ] FOR all nominees listed below (except as marked [ ] WITHOLD AUTHORITY to vote
to the contrary below) for all Nominees listed below.
Robert M. Figliulo, David A. Figliulo, Ronald L. Taylor, Sydnor W. Thrift, Jr., and David P. Yeager
(Instruction: To withold authority to vote for any individual nominee write that nominee's name on the line provided below)
</TABLE>
- ------------------------------------------------------------------------------
2. TO RATIFY AND APPROVE THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT
AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 21
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. IF NO SPECIFICATION IS MADE,
THIS PROXY WILL BE VOTED FOR THE MATTERS SPECIFICALLY REFERRED TO ABOVE.
Dated _______________ ___, 1998
__________________________________ ___________________________________
Print Name Signature
__________________________________ ___________________________________
Print Name Signature
__________________________________ ___________________________________
(Number of Shares Held of Record) Title
Please sign as name appears hereon. If stock is registered in the name
of two or more persons, each should sign. Executors, attorneys, corporate
officers, administrators and trustees should add their titles.
