SCHEDULE 14A
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
X Definitive Proxy Statement
__ Definitive Additional Materials
__ Soliciting Material Pursuant to Exchange Act Rule 14a-11 or 14a-12
RIGHT MANAGEMENT CONSULTANTS, INC.
(Name of Registrant as Specified In Its Charter)
----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing Fee (check the appropriate box):
X No Fee Required
__ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which the transaction applies;
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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 is
calculated and state how it was determined.)
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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__ 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:
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4) Date Filed:
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<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 4, 2000
-----------------------
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
4, 2000, at 10:00 a.m., at the Company's headquarters, 1818 Market Street, 33rd
Floor, Philadelphia, Pennsylvania, for the following purposes:
1. To elect eleven directors to hold office until the annual meeting of
shareholders in 2001 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. To transact such other business as may properly come before the
Meeting.
The Board of Directors has fixed the close of business on March 17,
2000 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 Board of Directors of 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/ CHARLES J. MALLON
Secretary
Philadelphia, Pennsylvania
April 7, 2000
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
1818 Market Street
33rd Floor
Philadelphia, PA 19103
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
May 4, 2000
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 4,
2000, 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 7, 2000.
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 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.
VOTING SECURITIES, VOTING RIGHTS AND SECURITY OWNERSHIP
Voting Securities
At the close of business on March 17, 2000, the record date fixed for
the determination of shareholders entitled to notice of and to vote at the
Meeting, there were outstanding 6,031,883 shares of the Company's common shares,
par value $0.01 per share ("Common Shares"), 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 approval of
shareholders has been obtained with respect to any such matter. Eleven directors
will be elected at the Meeting by a plurality of all votes cast at the Meeting,
which means that the eleven 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
2
<PAGE>
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 17, 2000
with respect to the holdings of Common Shares 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 Common
Shares. 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 17, 2000 with respect to any shares.
All of the individuals listed below are directors of the Company,
except for Mr. Erik A. Dithmer and Mr. James E. Greenway, 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>
FMR Corporation 728,200 (2) 12.1%
Richard J. Pinola 696,660 (3) 11.5%
T. Rowe Price Associates, Inc. 577,000 (4) 9.6%
Dimensional Fund Advisors, Inc. 435,450 (5) 7.2%
Investment Counselors of Maryland, Inc. 300,500 (6) 5.0%
Joseph T. Smith 288,625 (7) 4.8%
Frank P. Louchheim 182,539 (8) 3.0%
Larry A. Evans 102,712 (9) 1.7%
Frederick R. Davidson 64,385 1.1%
John J. Gavin 52,392 (10) *
Erik A. Dithmer 31,076 (11) *
John R. Bourbeau 28,013 (12) *
Dr. Marti D. Smye 17,242 (13) *
Catherine Y. Selleck 16,000 (14) *
Raymond B. Langton 14,800 (15) *
Rebecca J. Maddox 14,673 (16) *
James E. Greenway 10,863 (17) *
All Directors and Officers as a Group (21 persons) 1,593,824 (18) 26.4%
* Less than 1%.
<FN>
(1) Any securities not currently outstanding but subject to options
exercisable by such shareholder within 60 days of March 17, 2000 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 14, 2000 filed by FMR Corporation
("FMR") with the Securities and Exchange Commission ("SEC"). In such
Schedule, FMR reported having sole voting power with respect to 32,700
shares and sole dispositive power with respect to all 728,200 shares.
FMR's address is 82 Devonshire Street, Boston, MA 02109.
(3) The number of shares listed as held by Mr. Pinola includes (a)
currently exercisable options to purchase an aggregate of 362,060
shares of the Company's Common Shares and (b) an award of 7,000 shares
of the Company's Common Shares, issued effective January 1, 1999 for
Mr. Pinola's performance during 1998.
3
<PAGE>
(4) Based on Schedule 13G dated February 14, 2000 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
47,000 shares and sole dispositive power with respect to all 577,000
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
8.3% 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) Based on Schedule 13G dated February 11, 2000 filed by Dimensional Fund
Advisors, Inc. ("Dimensional") with the SEC. In such Schedule,
Dimensional reported having sole voting power and sole dispositive
power with respect to all 435,450 shares and states the following:
"Dimensional, an investment advisor registered under Section 203 of the
Investment Advisors Act of 1940, furnishes investment advice to four
investment companies registered under the Investment Company Act of
1940, and serves as investment manager to certain other commingled
group trusts and separate accounts. These investment companies, trusts
and accounts are the "Funds". In its role as investment adviser or
manager, Dimensional possesses voting and/or investment power over the
securities of the Issuer described in this schedule that are owned by
the Funds. All securities reported in this schedule are owned by the
Funds. Dimensional disclaims beneficial ownership of such securities."
Dimensional's address is 1299 Ocean Avenue, 11th Floor, Santa Monica,
CA 90401.
(6) Based on Schedule 13G dated February 9, 2000 filed by Investment
Counselors of Maryland, Inc. ("Investment Counselors") with the SEC. In
such Schedule, Investment Counselors reported having sole voting power
with respect to 242,500 shares, shared voting power with respect to
58,000 shares and sole dispositive power with respect to all 300,500
shares. Investment Counselors' address is 803 Cathedral Street,
Baltimore, MD 21201-5297.
(7) The number of shares listed as held by Mr. Smith includes currently
exercisable options to purchase an aggregate of 141,184 shares of the
Company's Common Shares.
(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 7,125 shares
of the Company's Common Shares.
(9) The number of shares listed as held by Mr. Evans includes (a) an
aggregate of 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 11,625 shares of the Company's Common
Shares.
(10) The number of shares listed as held by Mr. Gavin includes currently
exercisable options to purchase an aggregate of 35,002 shares of the
Company's Common Shares.
(11) The number of shares listed as held by Mr. Dithmer includes (a) an
aggregate of 300 shares which are held by Mr. Dithmer as custodian for
his six grandchildren and (b) currently exercisable options to purchase
an aggregate of 10,750 shares of the Company's Common Shares
(12) The number of shares listed as held by Mr. Bourbeau includes currently
exercisable options to purchase an aggregate of 13,500 shares of the
Company's Common Shares.
(13) The number of shares listed as held by Dr. Smye includes currently
exercisable options to purchase an aggregate of 11,000 shares of the
Company's Common Shares.
4
<PAGE>
(14) The number of shares listed as held by Ms. Selleck includes currently
exercisable options to purchase an aggregate of 13,500 shares of the
Company's Common Shares.
(15) The number of shares listed as held by Mr. Langton includes currently
exercisable options to purchase an aggregate of 13,500 shares of the
Company's Common Shares.
(16) The number of shares listed as held by Ms. Maddox includes currently
exercisable options to purchase an aggregate of 13,500 shares of the
Company's Common Shares.
(17) The number of shares listed as held by Mr. Greenway includes (a) an
aggregate of 4,196 shares held in a Company Stock Fund under the
Company's 401(K) Plan, and (b) currently exercisable options to
purchase an aggregate of 3,667 shares of the Company's Common Shares.
(18) 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 662,540 shares of the
Company's Common Shares and (b) 8,913 shares held in a Company Stock
Fund under 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 Shares 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, 1999, all
Section 16 (a) reports by its officers, directors and greater than ten percent
beneficial owners were timely filed except one report each, relating to Common
Shares purchased by Dr. Smye and by Mr. Szwec.
5
<PAGE>
ELECTION OF DIRECTORS
Nominees for Election
At the Meeting, the shareholders will elect eleven directors to hold
office until the annual meeting of shareholders in 2001 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 76 Founding Chairman
Richard J. Pinola 1989 54 Chairman of the Board of
Directors and
Chief Executive Officer
Joseph T. Smith 1991 64 Vice Chairman of the Board of
Directors
John J. Gavin 1999 43 President and Chief Operating
Officer
Larry A. Evans 1980 57 Executive Vice President and
Founding Principal
John R. Bourbeau 1995 55 President of Midwest
Reemployment Associates, Inc.,
an Affiliate of the Company
Raymond B. Langton 1995 55 President and Chief Executive
Officer of SKM Applied
Technology Partners
Rebecca J. Maddox 1995 46 President of Rebecca J. Maddox Co. LLC
Catherine Y. Selleck 1995 66 Business Consultant
Dr. Marti D. Smye 1996 49 Business Consultant
Frederick R. Davidson 1997 63 Chairman of Davidson &
Associates, Pty. Ltd.
6
<PAGE>
Mr. Louchheim was one of the founders of the Company. From November
1980 until September 1987, he served as President, Chief Executive Officer and
Chairman of the Board of Directors of the Company. He continued to serve as
Chief Executive Officer and Chairman of the Board through December 1991. From
January 1992 to December 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: NSG America 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 in which
capacity he served until December 1998. Effective January 1, 1999, Mr. Smith was
appointed Vice Chairman of the Board of Directors.
Mr. Gavin was employed at Arthur Andersen LLP in Philadelphia for 18
years in which he served as the partner in charge of the
manufacturing/distribution industries. Mr. Gavin joined the Company in December
1996 as Executive Vice President. In this capacity, Mr. Gavin was responsible
for the overall marketing strategy and business development activities for the
Company's worldwide locations. Effective January 1, 1999, Mr. Gavin was
appointed President and Chief Operating Officer of the Company. Also effective
January 1, 1999, Mr. Gavin was elected a Director by the Board of Directors. Mr.
Gavin is a member of the Board of Advisors for Temple University's Fox School of
Business and he is a member of the Board of Trustees of the Eagle's Fly for
Leukemia Foundation.
Mr. Evans was professionally involved in the international finance and
venture capital industries, prior to May 1978. 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. From May 1995 until December 1999, Mr. Evans worked in
the Company's corporate office together with the Company's regional offices in
marketing to major national and international accounts. Effective January 1,
2000, Mr. Evans was appointed to oversee one of the Company's largest Key
Executive Services practices. Mr. Evans serves on various boards of both
non-profit organizations and community associations. He also holds directorships
with Knite, Inc., an automotive components manufacturing company, 4 Anything.com
and 4 Eschoolmall.com, both internet service companies, and he is on the
Advisory Board of Data Com International, a silicon chip manufacturing company.
Mr. Bourbeau founded Midwest Reemployment Associates, Inc., an
Affiliate of the Company, in 1981, where he currently serves as the Regional
Managing Principal and which has offices in Southfield, Grand Rapids, Kalamazoo,
Lansing and Midland, Michigan, as well as Toledo, Ohio. Mr. Bourbeau also serves
as a board member for both the State of Michigan Chamber of Commerce and Human
Synergistics, Inc., and is a member of the Economic Club of Detroit.
7
<PAGE>
Mr. Langton is currently the Chief Executive Officer of SKM Applied
Technology Partners, a manufacturer of engineered rubber and plastic products,
which he co-founded in 1997. From 1986 to 1997, Mr. Langton worked for AB SKF of
Sweden, where he held positions throughout various divisions including President
and Chief Executive Officer of SKF North America and President and Chief
Executive Officer of Chicago Rawhide Worldwide. Prior to joining AB SKF, Mr.
Langton held key managerial posts with Fram Corporation, a Honeywell
company. Mr. Langton is on the Board of Directors of MSC Industrial Direct Co.,
Inc. and was formerly a member of the Regional Advisory Board of First Union
Bank. He is a graduate of the University of Virginia with a BA in History and
has an MBA from the Wharton School, University of Pennsylvania.
Ms. Maddox is President and Founder of Rebecca J. Maddox Co. LLC, 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.
Dr. Smye was a partner of the industrial psychology firm, Jackson
Smith, from 1981 to 1989. 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 three books titled
You Don't Change a Company by Memo: The Simple Truths About Managing Change,
Corporate Abuse: How "Lean and Mean" Robs People and Profits and Is It Too Late
to Runaway and Join the Circus? Dr. Smye is a Board member of both Stride Tool,
Inc. and Tool Source, Inc. She also serves on the Board of the Harvard Business
School Club of Toronto. In March 1999, Dr. Smye was elected an Executive Vice
President of the Company by the Board of Directors, in which capacity she served
until December 1999. Dr. Smye is now an independent business consultant.
Mr. Davidson is the Chairman of Davidson & Associates, Pty. Ltd., an
Asia-Pacific career transition firm of which the Company acquired a fifty-one
percent interest during 1997, and which is now owned 100% by the Company. 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.
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, Ms.
Maddox and Ms. Selleck. During 1999 Mr. Langton served as Chair of this
committee; Ms. Selleck assumed the role of Chair effective January 1, 2000. 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, ensuring
that compensation is at market levels and is supportive of overall Company goals
and objectives, and determining whether to approve stock option grants with any
modifications it deems appropriate. This Committee is also responsible for
remuneration agreements with the Chief Executive Officer, the Vice Chairman, and
the President/Chief Operating Officer.
The Audit Committee is comprised of Ms. Selleck, Mr. Bourbeau and Mr.
Langton. During 1999 Ms. Selleck served as Chair of this committee; Mr. Langton
assumed the role of Chair effective January 1, 2000. The Committee's principle
8
<PAGE>
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 Chair. This
Committee assumes the responsibilities relating to director review of annual
budgets and the overall financial performance of the Company.
Messrs. Pinola, Louchheim, Evans, Langton, and Davidson serve on the
Nominating Committee, of which Mr. Louchheim is the Chair. The Committee
recommends to the Board of Directors nominees for election or reelection as
director at the next annual meeting of shareholders or for vacancies arising
within the Board of Directors. 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 1999, the Board of Directors met seven times, one of which was a
special meeting, the Compensation and Options Committee met nine times, three of
which were special meetings, the Audit Committee met two times, and the
Nominating Committee met once. The Executive and Finance Committee did not meet
during 1999. Mr. Davidson and Dr. Smye attended fewer than 75% of all Board
meetings that they were scheduled to attend during the year.
Certain Relationships and Related Party Transactions
Midwest Reemployment Associates, Inc., ("MRAI"), the Affiliate owned by
Mr. Bourbeau, received approximately $820,000 in fees from the Company during
1999 for services the Affiliate performed on behalf of the Company. MRAI
incurred approximately $3,675,000 in royalties and fees payable to the Company
for services the Company performed during 1999 on behalf of MRAI, including
payments for reimbursable expenses and materials purchased by this Affiliate
from the Company. The fees paid and received by MRAI were in accordance with the
Company's standard fee and royalty arrangement with all of the Company's
franchisees under the Company's Affiliate Agreement.
In connection with the purchase of People Tech, which was acquired by
the Company in April 1996, the Company made earnout payments during 1999
totaling approximately $975,000 to the previous owners of People Tech. Dr. Smye
received approximately $763,000 of this earnout payment.
Effective January 1, 2000, the Company purchased the remaining 36%
minority interest in Davidson & Associates, Pty. Ltd. ("Davidson & Associates"),
an Asia-Pacific career transition firm of which Mr. Davidson is the Chairman.
The Company paid an aggregate of approximately $5,386,000 to the minority
shareholders of Davidson & Associates for this purchase. Verdant Investments,
Pty. Ltd, an entity affiliated with Mr. Davidson, received approximately
$3,866,000 of this purchase price.
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 1999
(the "named officers"), as well as the compensation paid to each such individual
for 1998 and 1997.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Common
Shares (1)
Underlying All Other
Name Year Salary Bonus Options (#) Compensation
<S> <C> <C> <C> <C> <C>
Richard J. Pinola 1999 $530,000 $556,500 125,000 $79,250
Chairman of the 1998 500,000 881,000 (2) 25,000 90,300
Board and CEO 1997 500,000 --- 42,300 52,375
Joseph T. Smith 1999 $350,000 $301,875 65,000 $41,824
Vice Chairman of 1998 325,000 373,750 15,000 53,688
the Board 1997 325,000 --- 26,100 34,875
John J. Gavin 1999 $350,000 $301,875 60,000 $36,877
President and COO 1998 325,000 208,000 10,000 3,750
1997 325,000 --- --- ---
James E. Greenway 1999 $200,000 $152,500 13,500 $ 3,750
EVP and Chief 1998 180,162 99,469 1,500 1,853
Marketing Officer 1997 41,675 (3) --- 3,000 ---
Erik A. Dithmer 1999 $210,000 $118,073 4,500 $ 3,750
EVP - Eastern 1998 210,000 341,438 4,500 3,750
Group 1997 184,300 67,619 5,250 2,375
<FN>
(1) 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."
(2) For his performance during 1998, Mr. Pinola was awarded 7,000 shares of
the Company's Common Shares, issued effective January 1, 1999. At
January 1, 1999, this award of Common Shares had a fair market value of
$99,750, calculated by applying the closing price of the Company's
Common Shares on the NASDAQ on the next business day after the
effective date of the award ($14.25 on January 4, 1999). The fair
market value of this award of Common Shares is included above with Mr.
Pinola's bonus in 1998.
(3) Mr. Greenway joined the Company in September 1997. His 1997 annual
salary of $162,700 was prorated based on length of service.
</FN>
</TABLE>
10
<PAGE>
Stock Option Grants
The table below shows option grants in 1999 to the named officers.
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------
Number of % of Total Potential Realizable Value at
Underlying Options Exercise Assumed Annual Rates of
Options Granted to Price Stock Price Appreciation for
Granted Employees Per Expiration Option Term (2)
Name in 1999 (1) in 1999 Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Richard J. Pinola 50,000 9.6% $14.25 12/31/08 $1,002,216 $3,248,941
25,000 4.8% 15.44 1/10/09 542,955 1,760,128
50,000 9.6% 11.00 12/14/09 773,641 2,507,955
Joseph T. Smith 25,000 4.8% $14.25 12/31/08 $501,108 $1,624,471
15,000 2.9% 15.44 1/10/09 325,773 1,056,077
25,000 4.8% 11.00 12/14/09 386,820 1,253,977
John J. Gavin 25,000 4.8% $14.25 12/31/08 $501,108 $1,624,471
10,000 1.9% 15.44 1/10/09 217,182 704,051
25,000 4.8% 11.00 12/14/09 386,820 1,253,977
James E. Greenway 3,500 0.7% $15.44 1/10/09 $ 76,014 $ 246,418
10,000 1.9% 11.00 12/14/09 154,728 501,591
Erik A. Dithmer 4,500 0.9% $15.44 1/10/09 $ 97,732 $ 316,823
<FN>
(1) All of the grants detailed above with an exercise price of $14.25 and
$15.44 were made on January 1, 1999 and January 11, 1999, respectively,
in connection with the Company achieving its 1998 targets. All of the
grants detailed above with an exercise price of $11.00 were made on
December 15, 1999 in connection with the Company achieving its 1999
targets. The first one-third of each grant becomes exercisable one year
from the date the grant was made. All options vest on a cumulative
basis, one-third each year. All options were granted at an exercise
price equal to the closing price of the Company's Common Shares on the
NASDAQ as of the date of grant. If a change in control (as defined in
the 1993 Stock Incentive Plan pursuant to which the options were
granted) were to occur before the expiration date, these options would
vest and become exercisable immediately.
(2) The potential realizable values are based on an assumption that the
stock price of the Company's Common Shares will appreciate at the
annual rate shown (compounded annually) from the date of grant until
the end of the option term. These values do not take into account
amounts required to be paid as income taxes under the Internal Revenue
Code and any applicable state laws or option provisions providing for
termination of an option following termination of employment,
non-transferability or vesting over a three year period. These amounts
are calculated based on the assumptions required to be used by the SEC
and do not reflect the Company's estimate of future stock price growth
of the Company's Common Shares.
</FN>
</TABLE>
11
<PAGE>
Option Exercises and Year-end Option Value
The table below shows information concerning the exercise of stock
options during 1999 by each of the named officers and the year-end value of the
in-the-money unexercised options.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at 12/31/99 (#) at 12/31/99 ($) (1)
Acqd. on Value
Exercise (#) Realized ($) Exercisable Non-exercisable Exercisable Non-exercisable
<S> <C> <C> <C> <C> <C> <C>
Richard J. Pinola 84,000 $214,830 322,959 155,766 $ --- $ 25,000
Joseph T. Smith 56,250 245,869 119,150 83,700 --- 12,500
John J. Gavin --- --- 23,334 66,666 --- 12,500
James E. Greenway --- --- 2,500 15,500 4,500 7,250
Erik A. Dithmer 2,500 19,933 8,500 9,250 2,250 2,250
<FN>
(1) Based on the closing price ($11.50) on the NASDAQ on December 31, 1999.
</FN>
</TABLE>
Employment Agreements and Change in Control Agreements
Effective January 1, 1999, the Company and Mr. Pinola entered into an
amendment to Mr. Pinola's Employment Agreement, dated December 12, 1995.
Pursuant to the amendment, the term of Mr. Pinola's employment with the Company
was extended for a three year period from January 1, 1999 to December 31, 2001
and his base salary was increased to $530,000 per annum.
Under Mr. Pinola's amended agreement, the Company will pay to Mr.
Pinola annually as incentive compensation a cash bonus based on 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 amended 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 this
deferred compensation benefits as if he had reached his normal retirement date
prior to such termination.
Mr. Pinola's employment agreement is renewable for successive one year
terms beginning January 1, 2002 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 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 $530,000 or his total salary and cash bonus paid during the 12 month
period immediately preceding the termination. This amount will be payable over
12
<PAGE>
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 this
employment and receive severance compensation. In either case, 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 $530,000.
Effective January 1, 1999, the Company and Mr. Smith entered into an
amendment to Mr. Smith's Employment Agreement, dated December 12, 1995. The
terms of the amended agreement are substantially the same as those of Mr.
Pinola's agreement except that Mr. Smith's base salary is increased to $350,000
per annum and any component of his compensation determined by his base salary is
based upon his salary of $350,000. Under Mr. Smith's amended agreement, 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.
Effective January 1, 1999, the Company entered into an Employment
Agreement with Mr. Gavin having an initial term expiring December 31, 2001. The
terms of Mr. Gavin's agreement are substantially the same as those of Mr.
Pinola's and Mr. Smith's amended agreements, except that Mr. Gavin's initial
base salary is $350,000, and any component of his compensation determined by his
initial base salary is based upon his salary of $350,000. Mr. Gavin is also
entitled to participate in a deferred compensation plan with substantially the
same terms as outlined above for Mr. Smith.
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
Shares, 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 the Common Shares held by certain
shareholders of the Company who have granted to the Affiliates this right in
case of certain proposed sales or exchanges of the Company's Common Shares.
Under the terms of the Affiliate Agreements, in the event that 51% or more of
the Common Shares 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 Shares of the Company), the Affiliates may have a right of first refusal
to acquire the Common Shares of the Company held by the aforementioned
shareholders of the Company under the same terms as the proposed transaction.
13
<PAGE>
Compensation of Directors
For 1999, 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 Chair and the Compensation and Options Committee Chair
$1,500 and $2,500, respectively, per year.
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, 1999. The first one-third of such options
become exercisable on December 31, 2000. The options vest on a cumulative basis,
one-third each year, and they expire on December 31, 2004. These options were
granted at an exercise price equal to the closing price of the Company's Common
Shares on the NASDAQ as of the date of grant of $11.50.
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 is
tied to improvement in EPS and, in the case of group executives and regional
managing principals, to their region's and group's operating performance. This
policy reflects management's belief that continuous improvement in EPS and
growth in group revenue and operating income directly contributes toward
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 Company staff and by compensation consultants'
published surveys, outside consulting firms and by the review of comparable
public companies' executive compensation disclosures in their annual proxy
statements. The primary companies used in the compensation comparison are other
publicly held consulting and service firms, although privately-held professional
services companies of similar size are also considered in determining pay level
opportunity. During 1999, the Company engaged an outside consulting firm to
review its executive compensation program for comparability. This review
determined that the current executive compensation program is reasonable when
compared to those within other comparable companies.
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, the Vice Chairman and the President/COO
whose salaries are 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. Awards are increased or decreased for achievement that
is above or below target levels. The Company exceeded its 1999 EPS target which
resulted in corporate executive officers receiving an incentive award greater
than their target amount. 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 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 1999, no
adjustment was made to incentive pay for any executive of the Company.
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 in part based on the achievement of regional
and/or group revenue and income targets. No awards are made unless a threshold
regional and/or group revenue target level is achieved that generally reflects
significant 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 individual meets their sales
target and their group achieves its operating income target 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.
The Company exceeded its EPS target for 1999 and certain groups met
their respective income targets. Accordingly, stock options were granted to all
eligible employees, including managing principals who met their individual
regional sales targets.
16
<PAGE>
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 to
substantially 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. A discretionary contribution of an
additional 12.5% of the participating employee's contribution was made for 1999
as the Company exceeded its EPS target.
In addition, the Company provides a non-qualified creditor exempt
salary savings plan to eligible employees to help them save for retirement.
Under the plan, participants may contribute an elected percentage of their
annual cash compensation.
Effective January 1, 2000, the Board of Directors of the Company
approved a non-qualified Supplemental Executive Retirement Plan for its
executive officers and other key employees for the purpose of providing
supplemental income benefits to plan participants or their survivors upon
participants' retirement or death. The Company has established and maintains a
grantor "rabbi" trust for the purpose of accumulating funds with which to meet
the Company's future obligations under the plan. Although the trust is
irrevocable and assets contributed to the trust can only be used to pay such
benefits with certain exceptions, the benefits under the plan remain obligations
of the Company. The Company has purchased company-owned life insurance policies
for its benefit on the lives of certain participants estimated to be sufficient
to recover, over time, the full cost of the benefits provided plus the cost of
insurance.
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 is 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 1999, 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 1999, 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, Mr. Pinola's annual base salary during 1999 was $530,000. Mr.
Pinola received additional compensation based on the Company exceeding targeted
1999 results.
Compensation and Options Committee
Catherine Y. Selleck, Chair
Rebecca J. Maddox
Raymond B. Langton (Chair during 1999)
18
<PAGE>
Compensation Committee Interlocks and Insider Participation in Compensation
Mr. Pinola, the Company's Chief Executive Officer and Chairman, makes
general recommendations to and reviews with the Compensation and Options
Committee the compensation of the Company's executive officers, other than his
own. This information is carefully considered by the Committee. Except for the
foregoing, during 1999, 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 MRAI, the
franchise owned by Mr. Bourbeau, and with respect to the earnout payment made to
Dr. Smye, and with respect to the purchase of Davidson & Associates, of which
Mr. Davidson is the Chairman, no member of any committee of the Board of
Directors in 1999 had any relationship with the Company other than as a director
and member of such committee.
19
<PAGE>
COMMON SHARES PERFORMANCE
The line graph set forth below compares for the period December 31,
1994 through December 31, 1999, the cumulative total return on the Company's
Common Shares, based on the market price of the Common Shares with the
cumulative total return (assuming dividend reinvestment) of common stock listed
on the Russell 2000 Index, and the common stock issued by companies with SIC
Code: 8742, Management Consulting Services Index ("SIC Code Index"). While the
SIC Code Index was selected primarily because it is representative of the
Company's professional service business, the Russell 2000 Index was selected
because it represents a comparable market capitalization. The Company believes
the SIC Code Index and the Russell 2000 Index compare effectively with the
Company based on the aforementioned selection criteria.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Company $100.00 $172.14 $246.98 $141.53 $163.73 $127.65
SIC Code 100.00 189.95 202.47 237.10 260.59 286.38
Russell 2000 100.00 128.44 149.77 183.23 178.09 212.98
</TABLE>
20
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT
PUBLIC ACCOUNTANTS
Subject to the shareholders' ratification, the Board of Directors,
upon recommendation of the Audit Committee, 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 from the shareholders of the Company.
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 2001 must be received by the Company by December 1,
2000 in order to be considered for inclusion in the Company's proxy statement
and form of proxy relating to that meeting. At the 2001 Annual Meeting of
Shareholders, Management of the Company will have discretionary authority to act
upon such matters as may be brought before the meeting or any adjournment
thereof as to which written notice was not received by the Company on or before
February 21, 2001.
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.
21
<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 Ms. Kimberly A. Fisher, Senior Financial Reporting Associate, at the
address of the Company appearing on the first page of this proxy statement.
The Board of Directors urges shareholders to attend the Meeting.
Whether or not you plan to attend the Meeting, shareholders are asked 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/ CHARLES J. MALLON
Charles J. Mallon
Secretary
22
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
Annual Meeting of Shareholders -- May 4, 2000
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 4,
2000, at 10:00 A.M. at the Company's headquarters, 1818 Market Street,
33rd Floor, Philadelphia, Pennsylvania, and to vote all Common Shares 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, JOHN J.
GAVIN, 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 accountants for
the current fiscal year.
/ / AGAINST
/ / ABSTAIN
3. In their discretion, the proxies will vote on such other business as may
properly come before the Meeting.
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: ----------------------, 2000
---------------------------- (SEAL)
(Shareholder's Signature)
---------------------------- (SEAL)
(Shareholder's Signature)
