UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 ss. 240.14a-11(c) or ss. 240.14a-12
RIGHT MANAGEMENT CONSULTANTS, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(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:
N/A
(2) Aggregate number of securities to which transaction applies:
N/A
(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):
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
(5) Total fee paid:
N/A
[ ] 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>
RIGHT MANAGEMENT CONSULTANTS, INC.
1818 Market Street
33rd Floor
Philadelphia, Pennsylvania 19103
-----------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, MAY 7, 1998
-----------------------
The annual meeting of shareholders (together with any and all
adjournments and postponements, the "Meeting") of Right Management Consultants,
Inc., a Pennsylvania corporation (the "Company"), will be held on Thursday, May
7, 1998, at 10:00 a.m., at the Company's headquarters, 1818 Market Street, 33rd
Floor, Philadelphia, Pennsylvania, for the following purposes:
1. To elect ten directors to hold office until the annual meeting of
shareholders in 1999 and until their respective successors are duly
elected and qualified.
2. To ratify the selection by the Board of Directors of Arthur Andersen
LLP as the Company's independent public accountants for the current
fiscal year.
3. Such other business as may properly come before the Meeting.
The Board of Directors has fixed the close of business on March 27,
1998 as the record date for the Meeting. Only shareholders of record at that
time are entitled to notice of and to vote at the Meeting and any adjournment or
postponement thereof. A list of such holders will be open to the examination of
any shareholder, for any purpose germane to the Meeting, at the Company's
headquarters detailed above, for a period of ten days prior to the Meeting.
The enclosed proxy is solicited by the Company. Reference is made to
the accompanying proxy statement for further information with respect to the
business to be transacted at the Meeting.
The Board of Directors urges you to sign, date and return the enclosed
proxy promptly. You are cordially invited to attend the Meeting in person. The
return of the enclosed proxy will not affect your right to vote in person if you
do attend the Meeting.
By Order of the Board of Directors
/s/ G. Lee Bohs
-------------------------
Chief Financial Officer, Treasurer and
Secretary
Philadelphia, Pennsylvania
April 6, 1998
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
1818 Market Street
33rd Floor
Philadelphia, PA 19103
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
May 7, 1998
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Right Management Consultants, Inc., a
Pennsylvania corporation (the "Company"), for use at the Company's annual
meeting of shareholders (together with any and all adjournments and
postponements, the "Meeting") which is scheduled to be held on Thursday, May 7,
1998, at 10:00 a.m., at the Company's headquarters, 1818 Market Street, 33rd
Floor, Philadelphia, Pennsylvania. This proxy statement, the foregoing notice
and the enclosed proxy are being sent to shareholders on or about April 6, 1998.
The Board of Directors knows of no matters that are likely to be
brought before the Meeting other than those specified in the notice thereof. If
any other matters properly come before the Meeting, however, the persons named
in the enclosed proxy, or their duly constituted substitutes acting at the
Meeting, will be authorized to vote or otherwise act thereon in accordance with
their judgment on such matters. If the enclosed proxy is properly executed and
returned prior to voting at the Meeting, the shares represented thereby will be
voted in accordance with the instructions marked thereon. In the absence of
instructions, executed proxies will be voted "FOR" all the nominees of the Board
of Directors and "FOR" the ratification of the selection by the Board of
Directors of Arthur Andersen LLP as the Company's independent public accountants
for the current fiscal year.
Any proxy may be revoked at any time prior to its exercise by notifying
the Secretary of the Company in writing, by delivering a duly executed proxy
bearing a later date or by attending the Meeting and voting in person.
All references in this proxy statement to amounts of shares or per
share data reflect both of the Company's three-for-two stock splits, effective
November 10, 1995 and July 26, 1996, respectively.
VOTING SECURITIES, VOTING RIGHTS AND SECURITY OWNERSHIP
Voting Securities
At the close of business on March 27, 1998, the record date fixed for
the determination of shareholders entitled to notice of and to vote at the
Meeting, there were outstanding 6,723,130 shares of the Company's common stock,
par value $0.01 per share ("Common Stock"), each of which has one vote per
share. The presence at the Meeting, in person or by proxy, of shareholders
entitled to cast at least a majority of the votes which all shareholders are
entitled to cast shall constitute a quorum for the purpose of considering the
matters expected to be voted on at the Meeting. Abstentions, and any shares as
to which a broker or nominee indicates that it does not have discretionary
authority to vote on a particular matter, will be treated as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum but as unvoted for purposes of determining whether the
<PAGE>
approval of shareholders has been obtained with respect to any such matter and
thus will have the effect of a vote to "Withhold Authority" in the election of
directors or as a vote "Against" the ratification of Arthur Andersen LLP as the
Company's independent public accountants for the current year. Ten directors
will be elected at the Meeting by a plurality of all votes cast at the Meeting,
which means that the ten nominees who receive the most votes will be elected.
The votes of a majority of the shares of shareholders who are either present in
person or represented by proxy at the Meeting are required to approve the other
proposal. Shareholders of the Company do not have the right to cumulate votes in
the election of directors or otherwise.
Principal Shareholders and Management's Holdings
The following table sets forth certain information as of March 27, 1998
with respect to the holdings of Common Stock of each nominee for director, all
directors and officers as a group and each shareholder who was known to the
Company to be the beneficial owner of more than 5% of the outstanding shares of
Common Stock. Except as otherwise specified, the named beneficial owner has sole
voting and investment power. As used in this table, "beneficially owned" means
the sole or shared power to vote or dispose of, or to direct the voting or
disposition of, the shares, or the right to acquire such power within 60 days of
March 27, 1998 with respect to any shares.
A Shareholders' Agreement is in effect among the Company and all
holders of 2% or more of the outstanding shares of Common Stock of the Company
who were shareholders on September 25, 1986 and who remain shareholders,
directors or employees of the Company whereby each party has granted the
Company, and after the Company, the other parties to the Agreement, certain
rights of first refusal with respect to a proposed sale of shares to a third
party by such shareholder.
Pursuant to the Affiliate Agreements, the Affiliates may have a right
of first refusal to purchase shares of the Company's Common Stock in case of
certain proposed sales or exchanges of the Company's Common Stock. Under the
terms of the Affiliate Agreements, in the event that 51% or more of the Common
Stock of the Company is proposed to be sold by one or more shareholders of the
Company in a single transaction (exclusive of a corporate merger or
consolidation in which the Company is not the surviving party and transactions
in which the common stock of another company is exchanged for the Common Stock
of the Company), the Affiliates may have a right of first refusal to acquire the
Common Stock of the Company being sold under the same terms as the proposed
transaction.
2
<PAGE>
All of the individuals listed below are directors of the Company,
except for Ms. Nancy N. Geffner and Mr. John J. Gavin, who are "named officers."
Their address is the same as the Company's listed on the previous page.
<TABLE>
<CAPTION>
Number of Percent
Shares of
Name of Shareholder Beneficially Owned Class (1)
------------------- ------------------ ---------
<S> <C> <C> <C>
Heartland Advisors, Inc. 762,600 (2) 11.3%
FMR Corporation 660,400 (3) 9.8%
T. Rowe Price Associates, Inc. 569,000 (4) 8.5%
Richard J. Pinola 540,450 (5) 8.0%
Dimensional Fund Advisors Inc. 420,850 (6) 6.3%
Joseph T. Smith 225,441 (7) 3.4%
Frank P. Louchheim 178,414 (8) 2.7%
Larry A. Evans 113,287 (9) 1.7%
Frederick R. Davidson 64,385 1.0%
Nancy N. Geffner 50,972 (10) *
John R. Bourbeau 19,013 (11) *
John J. Gavin 15,866 (12) *
Dr. Marti D. Smye 9,000 (13) *
Catherine Y. Selleck 7,000 (14) *
Rebecca J. Maddox 5,673 (15) *
Raymond B. Langton 5,600 (16) *
All Directors and Officers as a Group (20 persons) 1,460,777 (17) 21.7%
* Less than 1%.
<FN>
(1) Any securities not currently outstanding but subject to options
exercisable by such shareholder within 60 days of March 27, 1998 are
deemed to be outstanding for the purpose of computing the percentage of
outstanding securities of the class owned by such person.
(2) Based on Schedule 13G dated February 2, 1998 filed by Heartland
Advisors, Inc. ("Heartland") with the Securities and Exchange
Commission (the "SEC"). In such Schedule, Heartland reported having
sole voting power with respect to 752,100 shares and sole dispositive
power with respect to all 762,600 shares. Heartland's address is 790
North Milwaukee Street, Milwaukee, WI 53202.
(3) Based on Schedule 13G dated February 11, 1998 filed by FMR Corporation
("FMR") with the SEC. In such Schedule, FMR reported having sole voting
power with respect to 1,000 shares and sole dispositive power with
respect to all 660,400 shares. FMR's address is 82 Devonshire Street,
Boston, MA 02109.
3
<PAGE>
(4) Based on Schedule 13G dated February 12, 1998 filed by T. Rowe Price
Associates, Inc. ("Price Associates") with the SEC. In such Schedule,
Price Associates reported having sole voting power with respect to
44,000 shares and sole dispositive power with respect to all 569,000
shares and states the following: "These securities are owned by various
individual and institutional investors including T. Rowe Price Small
Cap Value Fund, Inc. (which owns 500,000 shares, representing 7.4% of
the shares outstanding), which Price Associates serves as investment
adviser with power to direct investments and/or sole power to vote the
securities. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates
expressly disclaims that it is, in fact, the beneficial owner of such
securities." Price Associates' address is 100 E. Pratt Street,
Baltimore, MD 21202.
(5) The number of shares listed as held by Mr. Pinola includes (a)
currently exercisable options to purchase an aggregate of 367,800
shares of the Company's Common Stock, and (b) restricted stock awards
totaling 7,800 shares of the Company's Common Stock.
(6) Based on Schedule 13G dated February 9, 1998 filed by Dimensional Fund
Advisors, Inc. ("Dimensional") with the SEC. In such Schedule,
Dimensional reported having sole voting power with respect to 287,500
shares and sole dispositive power with respect to all 420,850 shares
and states the following: "Dimensional, a registered investment
advisor, is deemed to have beneficial ownership of 420,850 shares of
the Company's Common Stock, all of which shares are held in portfolios
of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of the DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and DFA Participation
Group Trust, investment vehicles for qualified employee benefit plans,
all of which Dimensional serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares." Dimensional's
address is 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401.
(7) The number of shares listed as held by Mr. Smith includes (a)
currently exercisable options to purchase an aggregate of 163,200
shares of the Company's Common Stock, and (b) restricted stock awards
totaling 4,800 shares of the Company's Common Stock.
(8) The number of shares listed as held by Mr. Louchheim includes (a) an
aggregate of 1,575 shares which are held by certain of his children as
custodian for a total of seven minor grandchildren of Mr. Louchheim, as
to which Mr. Louchheim disclaims beneficial ownership, and (b)
currently exercisable options to purchase an aggregate of 3,000 shares
of the Company's Common Stock.
(9) The number of shares listed as held by Mr. Evans includes (a) an
aggregate of 450 shares which are held by Mr. Evans as custodian for
his two children and 11,700 shares held by his wife, as to which Mr.
Evans disclaims beneficial ownership, and (b) currently exercisable
options to purchase an aggregate of 9,750 shares of the Company's
Common Stock.
(10) The number of shares listed as held by Ms. Geffner includes (a) an
aggregate of 2,250 shares which are held by Ms. Geffner for the benefit
of her two children, as to which Ms. Geffner disclaims beneficial
ownership, (b) currently exercisable options to purchase an aggregate
of 4,125 shares of the Company's Common Stock, and (C) restricted stock
awards totaling 1,200 shares of the Company's Common Stock.
(11) The number of shares listed as held by Mr. Bourbeau includes currently
exercisable options to purchase an aggregate of 4,500 shares of the
Company's Common Stock.
(12) The number of shares listed as held by Mr. Gavin includes currently
exercisable options to purchase an aggregate of 6,666 shares of the
Company's Common Stock.
(13) The number of shares listed as held by Dr. Smye includes currently
exercisable options to purchase an aggregate of 6,000 shares of the
Company's Common Stock.
4
<PAGE>
(14) The number of shares listed as held by Ms. Selleck includes currently
exercisable options to purchase an aggregate of 4,500 shares of the
Company's Common Stock.
(15) The number of shares listed as held by Ms. Maddox includes currently
exercisable options to purchase an aggregate of 4,500 shares of the
Company's Common Stock.
(16) The number of shares listed as held by Mr. Langton includes currently
exercisable options to purchase an aggregate of 4,500 shares of the
Company's Common Stock.
(17) The number of shares in the aggregate listed as held by the directors
and executive officers of the Company as a group includes (a) currently
exercisable options to purchase an aggregate of 703,691 shares of the
Company's Common Stock, (b) restricted stock awards of 21,450 shares of
the Company's Common Stock, and (c) 4,643 shares held in the Company's
401(K) Plan.
</FN>
</TABLE>
Compliance with Section 16 (a) of Securities Exchange Act of 1934
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 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 regulations to furnish
the Company with copies of all Section 16 (a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 1997, all
Section 16 (a) reports by its officers, directors and greater than ten percent
beneficial owners were timely filed except one report relating to a Common Stock
purchase for Ms. Maddox, and the initial statement of ownership for Mr.
Davidson, which were filed late.
5
<PAGE>
ELECTION OF DIRECTORS
Nominees for Election
At the Meeting, the shareholders will elect ten directors to hold
office until the annual meeting of shareholders in 1999 and until their
respective successors are duly elected and qualified. Unless contrary
instructions are given, the shares represented by the enclosed proxy will be
voted "FOR" the election of the nominees for director shown below.
The Board of Directors believes that the nominees are willing to serve
as directors. If any nominee at the time of his or her election is unable or
unwilling to serve or is otherwise unavailable for election, and as a result
another nominee is designated, the persons named in the enclosed proxy or their
substitutes will have discretion and authority to vote or to refrain from voting
for the other nominee in accordance with their judgment. The nominees for
election as directors, together with certain information about them, are as
follows:
Director
Name Since Age Position(s)
Frank P. Louchheim 1980 74 Founding Chairman
Richard J. Pinola 1989 52 Chairman of the Board of
Directors and Chief
Executive Officer
Joseph T. Smith 1991 62 President and Chief Operating
Officer
Larry A. Evans 1980 55 Executive Vice President and
Founding Principal
John R. Bourbeau 1995 53 President of Right Associates(R)
of the Great Lakes Region, an
Affiliate of the Company
Raymond B. Langton 1995 53 President and Chief Executive
Officier of SKM Applied
Technology Partners
Rebecca J. Maddox 1995 44 President and Co-founder of
Capital Rose, Inc.
Catherine Y. Selleck 1995 64 Business Consultant
Dr. Marti D. Smye 1996 47 President of People Tech (a
subsidiary of the Company)
Frederick R. Davidson 1997 61 President of Davidson and
Associates, Pty. Ltd.
(a joint venture of the Company)
6
<PAGE>
Mr. Louchheim was one of the founders of the Company and from November
1980 until September 1987, Mr. Louchheim served as President, Chief Executive
Officer and Chairman of the Board of Directors of the Company. From January 1992
to December 31, 1993, he served as the full-time Chairman of the Board of
Directors. Effective January 1, 1994, Mr. Louchheim was appointed Founding
Chairman and continues as a Director.
Mr. Pinola was elected as a Director by the Board in October 1989. Mr.
Pinola is a Certified Public Accountant and joined Penn Mutual Life Insurance
Company in 1969. He was appointed President and Chief Operating Officer in 1988,
which positions he held until his resignation in September 1991. Mr. Pinola was
a financial consultant to various organizations from September 1991 until July
1992, at which time he was appointed President and Chief Executive Officer of
the Company. Effective January 1, 1994, Mr. Pinola was appointed Chairman of the
Board of Directors and continues as Chief Executive Officer. Mr. Pinola also
serves as a director of two outside companies: Epitaxx and K-Tron International,
a publicly held company.
Mr. Smith joined the Penn Mutual Life Insurance Company in 1963. In
1976, he was promoted to Vice President of Administration and Human Resources,
which position he held until his resignation in 1980. From 1981 to 1984, Mr.
Smith worked as an independent consultant offering a range of consulting
services to businesses. He joined the Company as a Senior Consultant in
Professional Services in August 1984 and, from August 1988 until September 1992
held the position of Regional Managing Principal of the Company's Philadelphia
office. Mr. Smith was elected as a Director in May 1991. From September 1992
through December 1993, Mr. Smith served as the Company's Chief Operating
Officer. Effective January 1, 1994, Mr. Smith was appointed President and
continues as Chief Operating Officer.
Prior to May 1978, Mr. Evans was professionally involved in the
international finance and venture capital industries. From May 1978 to November
1980, Mr. Evans was employed as an independent outplacement consultant for
Bernard Haldane Associates, Inc., reporting to Mr. Louchheim. Since November
1980, Mr. Evans has served as Executive Vice President and a Director of the
Company. From January 1990 until May 1995, Mr. Evans served as Regional Managing
Principal of several Company offices. In May 1995, Mr. Evans joined the
Company's corporate office where he works together with the Company's regional
offices in marketing to major national and international accounts.
In 1981, Mr. Bourbeau founded Right Associates(R) of the Great Lakes
Region, an Affiliate of the Company, where he currently serves as the Regional
Managing Principal and which has offices in Southfield, Grand Rapids, Lansing
and Midland, Michigan, as well as Toledo, Ohio. Mr. Bourbeau also serves as a
board member for the State of Michigan Chamber of Commerce and is a member of
the Economic Club of Detroit.
In July 1987, Mr. Langton became President of SKF Bearing Industries,
where he was responsible for the manufacture and original equipment sales of all
SKF standard bearings in the U.S. Mr. Langton served as President and Chief
Executive Officer of SKF USA Inc. until February 1997. Mr. Langton is currently
the President and Chief Executive Officer of SKM Applied Technology Partners.
Mr. Langton is on the Board of Directors of MSC Industrial Direct Co., Inc. and
is a member of the Regional Advisory Board of First Union Bank. He holds an MBA
from the Wharton School, University of Pennsylvania.
7
<PAGE>
Ms. Maddox is President and Founder of Capital Rose, Inc., a strategic
marketing firm which specializes in assisting Fortune 1000 companies capitalize
on growth opportunities in the women's market. Ms. Maddox is a Certified Public
Accountant, holds an MBA from Columbia University and is the author of Inc. Your
Dreams. Ms. Maddox is also a member of the Regional Advisory Board of PNC Bank.
Ms. Selleck spent many years with IBM, in various executive capacities.
Subsequent to her positions with IBM, Ms. Selleck joined Metaphor, a software
and services company, where she served as President and Chief Executive Officer.
She is now an independent business consultant to information technology
companies on a wide range of business issues. Ms. Selleck is a Trustee of
Occidental College.
From 1981 to 1989, Dr. Smye was a partner of the industrial psychology
firm, Jackson Smith. From this company, in 1989 she founded the change
leadership consulting firm, People Tech Consulting, Inc. ("People Tech"). People
Tech was acquired by the Company in April 1996. In addition, she is the author
of two books titled You Don't Change a Company by Memo: The Simple Truths About
Managing Change and Corporate Abuse: How "Lean and Mean" Robs People and
Profits. Dr. Smye also serves on various boards of both private companies and
community associations, including the Public Policy Forum and the Harvard
Business School Club of Toronto.
Mr. Davidson is the President of Davidson and Associates, Pty. Ltd., an
Asia-Pacific career transition firm of which the Company acquired a fifty-one
percent interest during 1997. Mr. Davidson was elected a Director by the Board
of Directors on July 24, 1997. Mr. Davidson has published numerous articles on
career planning, termination practices and managing large scale staff
reductions, and he is the author of The Art of Executive Firing and Handbook of
Executive Survival. Mr. Davidson is the founding president of the Australian
Association of Outplacement Consulting Firms.
Committees of the Board of Directors
The Board of Directors has four committees: the Compensation and
Options Committee, the Audit Committee, the Executive and Finance Committee and
the Nominating Committee.
The Compensation and Options Committee is comprised of Mr. Langton,
Chairman, Ms. Maddox and Ms. Selleck. The Committee's principle duties involve
reviewing proposals made by the Chief Executive Officer to grant stock options,
evaluating the rationale and expected contributions of the grantees to the
future results of the Company, and determining whether to approve grants with
any modifications it deems appropriate. This Committee is also responsible for
remuneration agreements with the Chief Executive Officer and the President/Chief
Operating Officer.
The Audit Committee is comprised of Ms. Selleck, Chairman, Mr. Bourbeau
and Mr. Langton. Its principle function is to oversee the annual audit and
financial reporting of the Company.
Messrs. Pinola, Bourbeau, Louchheim, Smith, and Ms. Maddox serve on the
Executive and Finance Committee, of which Mr. Pinola is the Chairman. This
Committee assumes the responsibilities relating to director review of annual
budgets and the overall financial performance of the Company.
8
<PAGE>
Messrs. Pinola, Louchheim, Evans, and Langton serve on the Nominating
Committee, of which Mr. Pinola is the Chairman. The Committee recommends to the
Board of Directors nominees for election or reelection as director at the next
annual meeting of shareholders. The Nominating Committee will consider nominees
recommended by shareholders, which nominations should be submitted in writing to
the Nominating Committee on or before the date specified under "Shareholder
Proposals" below in order to be considered for the next annual meeting. The
Nominating Committee is under no obligation to recommend any persons identified
by shareholders as nominees to the Board of Directors.
During 1997, the Board of Directors met seven times, the Compensation
and Options Committee met five times, the Audit Committee met two times, and the
Executive and Finance Committee met once. The Nominating Committee did not meet
in 1997. Mr. Evans attended fewer than 75% of all Board meetings that he was
scheduled to attend during the year.
Certain Relationships and Related Party Transactions
Right Associates(R) of the Great Lakes Region ("RAGLR"), the
Affiliate owned by Mr. Bourbeau, received approximately $525,000 in fees from
the Company for services the Affiliate performed on behalf of the Company. RAGLR
paid the Company approximately $2,521,000 in royalties and fees for services the
Company performed on behalf of RAGLR, in addition to payments for reimbursable
expenses and materials purchased by this Affiliate from the Company. The fees
paid and received by RAGLR were in accordance with the Company's standard fee
and royalty arrangement with all of the Company's franchisees under the Right
Associates Affiliate Agreement.
Effective September 1, 1994, the Company acquired the business and
certain assets of the career management consulting firm Jannotta, Bray &
Associates, Inc. ("JBA"). Simultaneously with this acquisition, the Company sold
certain assets associated with JBA's Michigan operations to RAGLR for
$1,200,000. In connection with this sale, the Company received a three year term
note of $700,000 from RAGLR. The note is collateralized by RAGLR's outstanding
stock, to be paid in equal installments of principal plus interest at the prime
rate on the outstanding balance. The outstanding balance on the note was paid in
full by RAGLR during 1997.
9
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes the compensation of the Chief Executive
Officer and the four other most highly compensated executive officers for 1997
(the "named officers"), as well as the compensation paid to each such individual
for 1995 and 1996.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Common
Restricted Stock
Stock Underlying All Other
Name Year Salary Bonus Awards ($) (1) Options (#) Compensation (2)
<S> <C> <C> <C> <C> <C> <C>
Richard J. Pinola 1997 $500,000 $ --- $ --- 42,300 $27,375
Chairman of the 1996 450,000 337,500 120,900 61,425 26,063
Board and CEO 1995 385,000 512,531 101,250 241,500 48,341
Joseph T. Smith 1997 $325,000 $ --- $ --- 26,100 $18,625
President and COO 1996 300,000 195,000 74,400 40,500 18,563
1995 250,000 230,938 66,825 67,500 3,465
John J. Gavin 1997 (3) $325,000 $ --- $ --- --- $ ---
Executive Vice 1996 (4) 21,667 --- --- 20,000 ---
President 1995 N/A N/A N/A N/A N/A
Dr. Marti D. Smye 1997 $240,000 (5) $64,000 $ --- --- $ ---
President - People 1996 (6) 200,000 --- --- 9,000 ---
Tech 1995 N/A N/A N/A N/A N/A
Nancy N. Geffner 1997 $260,000 $ --- $ --- --- $2,375
EVP -New York 1996 250,000 --- 18,600 5,625 3,563
Group 1995 250,000 319,250 --- --- 3,465
<FN>
(1) Mr. Pinola, Mr. Smith, and Ms. Geffner hold restricted shares of 7,800,
4,800, and 1,200, respectively, with year-end 1997 values of
approximately $99,000, $61,000, and $15,000, respectively. The amount
reflected above as compensation for 1996 and 1995 was calculated by
applying the closing price of the Company's Common Stock on the NASDAQ
National Market System (the "NASDAQ") on the date of the grant ($15.50
and $9.00 for 1996 and 1995, respectively) to the number of restricted
shares awarded. The Company has never paid any dividends on its stock
and currently expects that all of its earnings will be retained and
reinvested in the Company's business. These restricted shares were
distributed at the beginning of 1995 and 1996 and are subject to the
attainment of minimum three year cumulative earnings per share ("EPS")
levels. If the Company does not meet its minimum cumulative EPS target,
then the restricted shares will be forfeited by the recipient.
Otherwise the restrictions will lapse at the beginning of the fourth
year after grant upon the attainment of the minimum EPS levels with
increasing increments calculated (upon achievement of increasing EPS
levels) up to 100% of such restricted stock subject to the calculation
of the final cumulative EPS for the deferred periods. Based on the
final three year cumulative EPS results from 1995 to 1997, the
recipients of the 1995 award received 60% of the restricted shares. The
remaining 40% of the restricted shares granted in 1995 were forfeited
by the recipient back to the Company.
10
<PAGE>
(2) Includes amounts paid, payable or accrued in connection with
retirement. Such amounts consist of contributions and allocations
relating to qualified and non-qualified defined contribution plans.
Matching contributions to the qualified defined contribution plans vest
at a rate of 33 1/3% per year from the date of hire. Contributions to
the non-qualified plans vest according to the terms in each officer's
respective employment agreement. See "Employment Agreements."
(3) As an incentive to join the Company in late 1996, Mr. Gavin's base
salary during 1997 included a guaranteed bonus of $65,000.
(4) Mr. Gavin joined the Company in December 1996. His 1996 salary was
prorated based on length of service.
(5) Dr. Smye's bonus during 1997 was the result of the Company's People
Tech line of business achieving internal revenue goals.
(6) Dr. Smye joined the Company in March 1996. Her 1996 salary was prorated
based on length of service.
</FN>
</TABLE>
Stock Option Grants
The table below shows option grants in 1997 to the named officers.
<TABLE>
<CAPTION>
Individual Grants
-----------------
Number of % of Total Potential Realizable Value at
Underlying Options Assumed Annual Rates of
Options Granted to Stock Price Appreciation for
Granted Employees Exercise Expiration Option Term (2)
Name in 1997 (1) in 1997 Price Date 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
Mr. Pinola 42,300 17.5% $18.50 2/6/07 $761,756 $2,785,199
Mr. Smith 26,100 10.8% $18.50 2/6/07 470,020 1,718,527
<FN>
(1) All of the grants detailed above were made on February 6, 1997 in
connection with the Company achieving its 1996 EPS target. The first
one-third of each grant became exercisable on February 6, 1998. All
options vest on a cumulative basis, one-third each year. All options
were granted at an exercise price equal to the closing price of the
Company's Common Stock on the NASDAQ as of the date of grant. If a
change in control (as defined in the 1993 Stock Incentive Plan pursuant
to which the options were granted) were to occur before the expiration
date, these options would vest and become exercisable immediately.
(2) The potential realizable values are based on an assumption that the
stock price of the Company's Common Stock will appreciate at the annual
rate shown (compounded annually) from the date of grant until the end
of the option term. These values do not take into account amounts
required to be paid as income taxes under the Internal Revenue Code and
any applicable state laws or option provisions providing for
termination of an option following termination of employment,
non-transferability or vesting over a three year period. These amounts
are calculated based on the requirements promulgated by the SEC and do
not reflect the Company's estimate of future stock price growth of the
shares of the Company's Common Stock.
</FN>
</TABLE>
11
<PAGE>
Option Exercises and Year-end Option Value
The table below shows information concerning the exercise of stock
options during 1997 by each of the named officers and the year-end value of the
in-the-money unexercised options.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at 12/31/97 (#) at 12/31/97 ($) (1)
Shares Acqd. Value
on Exercise (#) Realized ($) Exercisable Non-exercisable Exercisable Non-exercisable
<S> <C> <C> <C> <C> <C> <C>
Mr. Pinola 96,750 $595,517 327,725 163,750 $832,720 $27,335
Mr. J. Smith 28,125 197,719 137,250 75,600 446,100 18,638
Mr. J. Gavin --- --- 6,666 13,334 --- ---
Dr. M. Smye --- --- 3,000 6,000 --- ---
Ms. Geffner (2) 15,375 137,527 2,250 3,750 10,553 ---
<FN>
(1) Based on the closing price ($12.75) on the NASDAQ on December 31, 1997.
(2) Ms. Geffner subsequently sold all 15,375 shares acquired upon stock
option exercise.
</FN>
</TABLE>
Employment Agreements and Change in Control Agreements
Effective January 1, 1996, the Company entered into an agreement with
Mr. Pinola which has an initial term expiring on December 31, 1998. Pursuant to
this agreement, Mr. Pinola's initial base salary was determined to be $450,000,
subject to annual review and adjustment at the discretion of the Board of
Directors of the Company, but in no event shall it be less than $450,000 without
Mr. Pinola's consent. Mr. Pinola's base salary was increased to $500,000 for
1997, with no increase for 1998.
In addition, the Company will pay to Mr. Pinola annually as incentive
compensation a cash bonus based upon the Company's financial performance for
that year in such amounts, if any, as are determined by the Company's Board of
Directors or its Compensation and Options Committee. Mr. Pinola is also entitled
to participate in and receive the benefits of any profit sharing, retirement
plans and insurance programs made available to other similarly situated
employees of the Company.
The agreement also entitles Mr. Pinola to participate in a deferred
compensation plan to which 5% of his compensation, including base salary and
bonuses, is credited annually. Mr. Pinola's deferred compensation account
balance vests at the rate of 10% per year, beginning at age 47. The account
balance is payable as a life annuity (based on specified mortality tables) in
equal monthly installments with interest on the unpaid balance upon his
termination of service with the Company (except for death or if he is discharged
for cause) on or after age 62, subject to earlier payment in the event of death
or disability prior to termination of service, termination by the Company
without cause and under certain circumstances relating to a change in control of
the Company. In the event there is a change in control of the Company, as
defined in his agreement, the Company shall establish a trust and shall, from
time to time, transfer into such trust sufficient assets to meet the Company's
obligation to pay the deferred compensation benefits to Mr. Pinola and his
beneficiaries. Also, if Mr. Pinola's employment is terminated within two years
after the change in control, he shall be entitled to begin receiving his
deferred compensation benefits as if he had reached his normal retirement date
prior to such termination.
12
<PAGE>
Mr. Pinola's employment agreement is renewable for successive one
year terms unless either party gives the other party written notice of
non-renewal at least 120 days prior to the expiration of the then current term.
Notwithstanding the foregoing, Mr. Pinola's employment with the Company will not
be renewed under this agreement on or after December 31 of the calendar year in
which he reaches sixty-five years of age. In the event that Mr. Pinola's
employment is terminated by the Company without cause, his employment is not
renewed at the end of the initial term or any renewal term of his employment
agreement, or if Mr. Pinola terminates his employment as a result of various
reasons specified in the agreement, he will be entitled to severance
compensation equal to the greater of $450,000 or his total salary and cash bonus
paid during the 12 month period immediately preceding the termination. This
amount will be payable over the longer of the remaining term of the agreement or
12 months from the date of termination. Upon certain changes in control (as
defined in the agreement) of the Company, Mr. Pinola may, upon written notice
given to the Company within 60 days thereafter, elect to either (a) continue his
employment with the Company for a period equal to the greater of the then
current term or a period which expires two years after the date of the change in
control or (b) terminate his employment and receive severance compensation. If
Mr. Pinola elects to continue to be employed by the Company, the annual
compensation payable to him shall not be less than the greater of the total
amount of the base salary and cash bonus paid to him during the 12 months
immediately preceding the change in control or $450,000.
Effective January 1, 1996, the Company and Mr. Joseph Smith entered
into an employment agreement having an initial term expiring December 31, 1998.
The terms of Mr. Smith's agreement are substantially the same as those of Mr.
Pinola's agreement except that his initial base salary is $300,000 and any
component of his compensation determined by his initial base salary is based
upon $300,000. Mr. Smith's base salary was increased to $325,000 for 1997, with
no increase for 1998. Mr. Smith is also entitled to participate in a deferred
compensation plan with substantially the same terms as outlined above for Mr.
Pinola, except that Mr. Smith vests in his plan at the rate of 20% per year,
beginning at age 61.
Mr. Louchheim and the Company also entered into an agreement
modifying Mr. Louchheim's Supplemental Executive Retirement Plan (the "SERP")
with the Company. The SERP, as modified, provides that upon retirement Mr.
Louchheim shall be paid each year 50% of the average of his total annual
compensation (base salary plus bonus payments) with respect to the four
consecutive years in which such four year average compensation is the greatest
during his employment with the Company. One-twelfth of such amount (after
deducting therefrom his social security payments and the amount of his 401(K)
plan attributable to the Company's matching contributions that are payable to
him in a given year, based on certain assumptions) shall be paid to him monthly
following retirement. In the event of Mr. Louchheim's death, the Company shall
pay a survivor's benefit to his spouse for life in monthly installments equal to
one-half of the retirement benefit he was entitled to receive on the date of his
death. Effective January 1, 1997, Mr. Louchheim began collecting benefits in
accordance with the SERP. He remains active as the Company's Founding Chairman
and a member of the Board of Directors. In the event there is a change of
control of the Company (as defined in the modified SERP) and Mr. Louchheim
retires within two years thereafter, the Company is required to pay to Mr.
Louchheim within 30 days after his retirement an amount equal to the net present
value of the total benefits he would have received under the SERP, with the
calculation of such amount based on specified mortality tables.
13
<PAGE>
To enhance the loyalty of, and assist in the retention of key members
of the Company's management, the Board of Directors adopted in February 1997 a
policy to provide for the potential payment of severance to all Executive Vice
Presidents in the event of a change in control of the Company. Under this
policy, the Executive Vice Presidents would be entitled to a severance payment
payable over two years if their employment was involuntarily terminated within
eighteen months of a change in control. The total amount payable annually would
not be less than the greater of : (1) the total amount of base salary and
incentive payments paid during the calendar year immediately preceding the
change in control; or (2) the annualized amount of the Executive Vice
President's then current salary as of the date of the change of control if the
respective Executive Vice President did not work the full calendar year
immediately preceding the change in control. Under this policy, a change in
control includes the sale of a controlling interest in the Company's Common
Stock, the sale of all or substantially all of the Company's assets, or a merger
or consolidation where the surviving entity is not controlled by the present
management of the Company.
Pursuant to the Company's Affiliate Agreements, the Affiliates may
have a right of first refusal to purchase shares of the Company's Common Stock
in case of certain proposed sales or exchanges of the Company's Common Stock.
Under the terms of the Affiliate Agreements, in the event that 51% or more of
the Common Stock of the Company is proposed to be sold by one or more
stockholders of the Company in a single transaction (exclusive of a corporate
merger or consolidation in which the Company is not the surviving party and
transactions in which the common stock of another company is exchanged for the
Common Stock of the Company), the Affiliates may have a right of first refusal
to acquire the Common Stock of the Company being sold under the same terms as
the proposed transaction.
Compensation of Directors
For 1997, the Company paid all directors who were not Company
officers or employees $17,000 per year as a director's fee, plus $750 for each
Board of Directors meeting attended and $750 for each Committee meeting attended
plus reasonable out-of-pocket expenses for attending such meetings. The Company
also paid the Audit Committee Chairman and the Compensation and Options
Committee Chairman $1,500 and $2,500 respectively, per year. No additional fees
were received by members of the Nominating Committee for services thereon.
In addition, pursuant to the Company's 1995 Directors' Stock Option
Plan, each director who was not a Company officer or employee received a grant
of 4,500 options on December 31, 1997. The first one-third of such options
become exercisable on December 31, 1998. The options vest on a cumulative basis,
one-third each year and they expire on December 31, 2002. These options were
granted at an exercise price equal to the then current closing price of the
Company's Common Stock on the NASDAQ as of the date of grant of $12.75.
14
<PAGE>
COMPENSATION AND OPTIONS COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation and Options Committee of the Board of Directors
(within this report, the "Committee") is comprised of non-employee directors of
the Company listed in this report. The Committee is responsible for overseeing
management's recommendations on the Company's executive compensation and stock
option proposals, policies, and programs. In addition, the Committee recommends
to the Board of Directors, on an annual basis, the compensation to be paid to
the Chief Executive Officer ("CEO").
Compensation Philosophy
This report reflects the Company's compensation philosophy as adopted
by the Committee and endorsed by the Board of Directors. The Company's executive
compensation programs are intended to provide its executives and managing
principals with competitive market salaries and the opportunity to earn
incentive compensation related to performance expectations identified by
management. The broad objectives of the Company's executive compensation
program, as developed by the Committee and subject to periodic review, are to:
(1) Support and reinforce the Company's business strategy and link
pay to shareholder value;
(2) Align compensation with the goals and key performance measures of
the business;
(3) Attract and retain high quality executives and managing
principals; and
(4) Reward such employees for superior performance, as measured by
financial results and key strategic achievements.
A significant portion of executive pay is variable, uncapped, and tied
to improvement in EPS and, in the case of managing principals, improvement in
their office and group's operating income performance. This policy reflects
management's belief that continuous improvement in EPS and group operating
income directly contribute towards creating shareholder value through the
potential of increasing the Company's stock price.
Pay Positioning
The Committee's executive compensation program is constructed to
provide an opportunity for compensation, through the three components described
below (base salaries, annual incentive compensation and long-term incentives),
to vary with performance relative to a peer group of professional services
companies. Competitive levels of pay for purposes of compensation comparison are
provided periodically by compensation consultants and published surveys. The
primary companies used in the compensation comparison are other consulting firms
selected by the outside compensation consultant retained by the Company.
Privately-held professional services companies of similar size are considered in
determining pay level opportunity.
Pay Mix and Measurement For Executives
The compensation of executives currently includes base salary, annual
incentive compensation and stock option awards. The Committee considers the
total compensation of each of the named officers and the other executives in
reviewing each element of compensation. In general, the proportion of an
executive's incentive compensation increases with the executive's level of
responsibility. Executives also receive various benefits, including life,
medical, and disability insurance, similar to those generally available to all
employees of the Company.
15
<PAGE>
Base Salaries
The Committee, based on management's recommendations, seeks to set base
salaries for the Company's executives at levels that are competitive for
executives with comparable roles and responsibilities within other comparison
companies. The Company maintains an executive salary administration program
which uses ongoing internal and periodic external comparisons to set salary
ranges at or around the median levels of the comparison companies.
Individual executive salaries are reviewed annually. Annual salary
adjustments are determined by a subjective evaluation of: (1) the position's
responsibilities, (2) competitive market rates, (3) strategic importance of the
position, and (4) individual performance and contributions. The annual salaries
for executives (other than the CEO, whose salary is evaluated by the Committee
with the Board of Directors) are approved by the Committee following a review
with the CEO and Chief Operating Officer ("COO").
Annual Incentive Compensation
The Committee administers an annual cash incentive plan for executives.
The annual cash incentive plan reflects the Company's belief that executives'
contributions to shareholder value come from maximizing earnings and the annual
incentive payments to executives are made upon the achievement of annual
corporate financial objectives (expressed as a post-incentive EPS goal) that
reflect targeted annual growth. Individual award targets are established at the
beginning of the year and are based on an individual's position and contribution
to the Company results. Increased awards are made for achievement that is
significantly above target levels. The Company did not achieve its 1997 EPS
target. As a result, no corporate executive officers received an incentive award
based on EPS results. In addition, each executive is measured annually against
qualitative criteria selected to provide incentives for performance towards
strategic Company initiatives. Achievement or failure to achieve these criteria
as recommended by the Company's CEO and Chief Operating Officer ("COO") may
increase or decrease the individual's annual incentive amount by up to 20%. The
Board of Directors and the Committee review similar criteria for the Company's
CEO and COO with the ability to increase or decrease the individual's annual
incentive compensation by up to 20% for achievement or failure to achieve these
goals. For 1997, no adjustment was made to incentive pay for any executive of
the Company or for the Company's CEO and COO.
In addition to the incentive to achieve the EPS goal, certain
executives and managing principals responsible for individual region and/or
group performance are rewarded based on the achievement of regional and/or group
revenue and operating income targets. No awards are made unless a threshold
regional and/or group operating income level is achieved that generally reflects
growth over the prior year.
Long-term Incentives ("LTI")
The Company provides executives with the opportunity to earn annual
stock options in order to retain and motivate them to improve long-term stock
values. Annual grants of stock options are made to executives based on a market
analysis of LTI levels within a peer group of companies. The annual grants are
intended to reflect the individuals' respective responsibilities, as well as the
actual and expected contribution of the individuals to the Company's long-term
success.
Stock options are granted only if the Company achieves its annual EPS
target and, in the case of managing principals, the group achieves its earnings
target, as applicable to the individual for the preceding year. Grants vest in
equal amounts over a three year period and are exercisable over a ten year
period. The Committee reviews and establishes the grants for all executive
officers.
16
<PAGE>
The Company did not meet its EPS target for 1997 and accordingly, no
stock options were granted based on EPS results.
Retirement Compensation
The intent of the Committee's retirement compensation policy is to
provide employees and executives with certain tax-qualified retirement benefits.
The Company maintains a defined contribution savings plan available
substantially to all employees, including executives, under Section 401(K) of
the Internal Revenue Code. Under this plan, the Company contributes 25% of the
participating employee's contribution. Employee contributions are generally
limited to 10% of their compensation, subject to Internal Revenue Code
limitations. The Company also provides discretionary contributions if the
Company meets or exceeds the EPS target. No discretionary contributions were
made for 1997 as the Company did not meet its EPS target.
In addition, the Company provides a non-qualified deferred compensation
plan to eligible employees to help them save for retirement. Under the plan,
participants may defer payment of up to 10% of their annual cash compensation,
subject to limitations and reduced by amounts contributed to the Company's
401(K) plan.
Section 162 (m)
Section 162(m) of the Internal Revenue Code of 1986, as amended
("Section 162(m)") generally imposes a $1,000,000 limit on the amount of
compensation deductible by the Company that it pays to certain executive
officers except for qualified "performance-based compensation." Compensation
attributable to options granted under the various stock option plans currently
in effect are expected to qualify for deductibility under Section 162(m). The
Committee monitors the effect of Section 162(m) on the deductibility of such
compensation paid by the Company and intends to optimize the deductibility of
such compensation to the extent deductibility is consistent with the objectives
of the executive compensation program. The Committee, however, intends to weigh
the benefits of full deductibility with the objectives of the executive
compensation program and, if the Committee believes to do so is in the best
interests of the Company and its shareholders, will make compensation
arrangements that may not be fully deductible due to Section 162(m).
During 1997, the provisions of Section 162(m) did not cause any
compensation paid by the Company to be non-deductible.
17
<PAGE>
Chief Executive Officer Compensation
The principles guiding compensation for the Company's CEO are
substantially the same as those set forth for other executives as previously
described in this report. During 1997, the Company's most highly compensated
officer was Richard J. Pinola, Chairman of the Board and CEO. Mr. Pinola's
performance was reviewed by the Committee which made recommendations to the
Board regarding his annual cash compensation (salary plus annual incentive) and
approved his long-term incentive awards.
In accordance with Mr. Pinola's Employment Agreement noted previously
in this report, effective January 1, 1997, Mr. Pinola's annual base salary was
increased to $500,000. This increase was approved by the Board of Directors. Mr.
Pinola received no additional compensation based on 1997 results. Mr. Pinola's
annual base salary will remain at $500,000 during 1998.
Compensation and Options Committee
Raymond B. Langton, Chairman
Rebecca J. Maddox
Catherine Y. Selleck
Compensation Committee Interlocks and Insider Participation in Compensation
During 1997, there were no interlocking relationships between any
executive officers of the Company and any entity whose directors or executive
officers serve on the Board of Directors' Compensation and Options Committee,
nor did any current or past officers of the Company serve on the Compensation
and Options Committee. Except as discussed in the section "Certain Relationships
and Related Party Transactions" with respect to the transactions with RAGLR, the
franchise owned by Mr. Bourbeau, no member of any committee in 1997 had any
relationship with the Company other than as a director and member of such
committee.
18
<PAGE>
COMMON STOCK PERFORMANCE
Set forth below is a line graph comparing the cumulative total
shareholder return on the Company's Common Stock, based on the market price of
the Common Stock, with the cumulative total return (assuming dividend
reinvestment) of common stock listed on the NASDAQ and common stock issued by
companies in a peer group selected by the Company for the five year period
December 31, 1992 through December 31, 1997. The peer group consists of the
following companies: Robert Half International, Inc., Staff Builders, Inc.,
Healthcare Compare Corp., Information Resources, Inc. and National Tech Team,
Inc. The peer group is consistent with the peer group from the previous year.
The companies included in the peer group were selected primarily because they
were publicly-held, professional service firms with international operations,
had revenues similar to those of the Company and were in favorable financial
condition.
[GRAPH OMITTED]
<TABLE>
<CAPTION>
Graph Data
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
<S> <C> <C> <C> <C> <C> <C>
The Company $100.00 $190.00 $202.50 $348.58 $500.12 $286.59
Peer Group 100.00 108.12 107.71 143.33 178.98 250.00
NASDAQ 100.00 114.80 112.21 158.70 195.19 239.53
</TABLE>
Assumes $100 invested on December 31, 1992 and all dividends reinvested.
19
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT
PUBLIC ACCOUNTANTS
Subject to the shareholders' ratification, the Board of Directors has
appointed the firm of Arthur Andersen LLP, which served as the Company's
independent public accountants for the last fiscal year, to serve as the
Company's independent public accountants for the current fiscal year. If the
shareholders do not ratify this appointment by the affirmative vote of a
majority of shares present in person or represented by proxy at the Meeting,
other independent accountants will be considered by the Board of Directors upon
recommendation of the Audit Committee.
A representative of Arthur Andersen LLP is expected to be present at
the Meeting and will have the opportunity to make a statement if he desires to
do so. The representative is also expected to be available to respond to
appropriate questions.
The Board of Directors recommends a vote "FOR" ratification of the
appointment of the independent public accountants.
OTHER BUSINESS
The Board of Directors does not know of any further business to be
presented at the Meeting. However, should any other matter requiring a vote the
shareholders arise, the persons appointed by the enclosed proxy intend to vote
on those matters in accordance with their judgment as to the best interests of
the Company.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Annual
Meeting of Shareholders in 1999 must be received by the Company by December 4,
1998 in order to be considered for inclusion in the Company's proxy statement
and form of proxy relating to that meeting.
SOLICITATION OF PROXIES
The accompanying form of proxy is being solicited on behalf of the
Board of Directors of the Company. The expense of solicitation of proxies for
the Meeting will be paid by the Company. In addition to the mailing of the proxy
material, the Company may solicit proxies in person or by telephone or telegraph
by directors, officers or regular employees of the Company or its subsidiaries.
20
<PAGE>
ANNUAL REPORT ON FORM 10-K
The Company will provide without charge to each person solicited by
this proxy statement, on the written request of any such person, a copy of the
Company's Annual Report on Form 10-K as filed with the SEC for its most recent
fiscal year, including the financial statements and the financial statement
schedules required to be filed with the SEC. Such written request should be
directed to Mr. Paul J. Straub, Manager of Financial Reporting, at the address
of the Company appearing on the first page of this proxy statement.
The Board of Directors hopes that shareholders will attend the
Meeting. Whether or not you plan to attend the Meeting, shareholders are urged
to complete, date, sign and return the enclosed proxy promptly in the
accompanying envelope. Shareholders who attend the Meeting may vote their shares
personally even though they have sent in their proxies.
By Order of the Board of Directors
/s/ G. Lee Bohs
------------------------------
Chief Financial Officer, Treasurer and Secretary
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
Annual Meeting of Shareholders -- Thursday, May 7, 1998
The undersigned shareholder of RIGHT MANAGEMENT CONSULTANTS, INC. (the
"Company"), revoking all previous proxies, hereby constitutes and appoints
RICHARD J. PINOLA and JOSEPH T. SMITH, and each of them acting as individually,
as the attorney and proxy of the undersigned, with full power of substitution,
for and in the name and stead of the undersigned, to attend the Annual Meeting
of Shareholders of the Company the "Meeting" to be held on Thursday, May 7,
1998, at 10:00 A.M. at the Company's headquarters, 1818 Market Street, 33rd
Floor, Philadelphia, Pennsylvania, and to vote all shares of Common Stock of the
Company which the undersigned would be entitled to vote if personally present at
the Meeting, and at any adjournment or postponement thereof; provided that said
proxies are authorized and directed to vote as indicated with respect to the
following matters:
1. [ ] FOR all nominees for director named below.
[ ] WITHHOLD AUTHORITY to vote for all nominees for director named below.
[ ] FOR all of the nominees for director named below, except WITHHOLD
AUTHORITY to vote for the nominee(s) whose name(s) is (are) lined
through.
Nominees: FRANK P. LOUCHHEIM, RICHARD J. PINOLA, JOSEPH T. SMITH, LARRY
A. EVANS, JOHN R. BOURBEAU, RAYMOND B. LANGTON, REBECCA J. MADDOX,
CATHERINE Y. SELLECK, MARTI D. SMYE and FREDERICK R. DAVIDSON
2. [ ] FOR the ratification of the Selection by the Board of Directors of
Arthur Andersen LLP, as the Company's independent public
[ ] AGAINST accountants for the current fiscal year.
[ ] ABSTAIN
3. In their discretion, the proxies will vote on such other business as
may properly come before the Meeting.
<PAGE>
This Proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholders. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE NOMINEES FOR DIRECTOR AND "FOR" PROPOSAL 2 REFERRED TO IN THIS
PROXY. This proxy also delegates discretionary authority to vote with respect to
any other business which may properly come before the Meeting or any adjournment
or postponement thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE ANNUAL REPORT, NOTICE OF
SAID MEETING AND THE PROXY STATEMENT FURNISHED IN CONNECTION THEREWITH. The
undersigned also hereby ratifies all that the said attorneys and proxies may
do by virtue hereof and hereby confirms that this proxy shall be valid and
may be voted whether or not the shareholder's name is signed as set forth
below or a seal is affixed or the description, authority or capacity of the
person signing is given or other defect of signature exists.
NOTE: PLEASE MARK, DATE AND SIGN THIS
PROXY CARD AND RETURN IT IN THE ENCLOSED
ENVELOPE. Please sign this proxy exactly
as name appears in address below. If
shares are registered in more than one
name, all owners should sign. If signing
in a fiduciary or representative
capacity, such as attorney-in-fact,
executor, administrator, trustee or
guardian, please give full title and
attach evidence of authority.
Corporations please sign with full
corporate name by a duly authorized
officer and affix the corporate seal.
Dated:_________________________ , 1998
________________________________(SEAL)
(Shareholder's Signature)
________________________________(SEAL)
(Shareholder's Signature)
