<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
METAMOR WORLDWIDE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[METAMOR WORLDWIDE LOGO]
MICHAEL T. WILLIS
President and Chief Executive Officer
April 8, 1998
Dear Fellow Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders of Metamor Worldwide, Inc. (formerly CORESTAFF, Inc.) to be held
at 9:00 a.m. on Tuesday, May 19, 1998, at The Luxury Collection Hotel, 1919
Briar Oaks Lane, Houston, Texas. Your Board of Directors and Executive Officers
look forward to personally greeting those stockholders able to attend.
The matters to be acted on at the meeting are set forth in the
accompanying Notice of Annual Meeting and Proxy Statement. It is important that
your shares be represented at the meeting. Please sign, date and mail the
enclosed proxy in the envelope provided at your earliest convenience.
Very Truly Yours,
/s/ MICHAEL T. WILLIS
------------------------------------------
Michael T. Willis
Chairman of the Board,
President and Chief Executive Officer
Metamor Worldwide, Inc.
4400 Post Oak Parkway, Suite 1100
Houston, Texas 77027-3413
Telephone 713-548-3400
<PAGE> 3
[METAMOR WORLDWIDE LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 19, 1998
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders of
Metamor Worldwide, Inc. (formerly CORESTAFF, Inc., the "Company") will be held
at The Luxury Collection Hotel, 1919 Briar Oaks Lane, Houston, Texas at 9:00
a.m. on Tuesday, May 19, 1998, for the following purposes:
1. To elect three Class III directors of the Company to terms of
office expiring at the 2001 Annual Meeting of Stockholders and until their
respective successors are duly elected and qualified;
2. To approve an amendment to the Company's Employee Stock Purchase
Plan to provide for immediate eligibility of employees into the Plan and
certain other matters;
3. To approve an amendment to the Company's Long-Term Incentive Plan
to increase the number of shares available for issuance under the Plan from
3,840,000 shares to 5,000,000 shares of common stock and certain other matters;
4. To approve an Executive Incentive Plan to provide for incentive
awards designed to reinforce the Company's financial and operating objectives;
5. To ratify the Board of Directors' appointment of Ernst & Young LLP
as the Company's independent auditors for the fiscal year ending December 31,
1998; and
6. To transact such other business as may properly be brought before
the meeting or any adjournment(s) thereof.
Holders of record of the Company's common stock at the close of
business on April 8, 1998, will be entitled to notice of and to vote at the
meeting or any adjournment(s) thereof. The voting stock of the Company should
be represented as fully as possible at the Annual Meeting. Therefore, it would
be appreciated if you would sign, date and return the enclosed proxy at your
earliest convenience. You may, of course, change or withdraw your proxy at any
time prior to the voting at the meeting. However, signing and returning the
proxy will assure your representation at the Annual Meeting.
By Order of the Board of Directors,
/s/ PETER T. DAMERIS
-------------------------------------------
PETER T. DAMERIS
Houston, Texas General Counsel, Senior Vice President and
April 8, 1998 Secretary
YOUR VOTE IS IMPORTANT
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AT THE MEETING
AND SAVE THE EXPENSE OF A SECOND MAILING, PLEASE SIGN, DATE
AND MAIL YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 4
[METAMOR WORLDWIDE LOGO]
4400 POST OAK PARKWAY
SUITE 1100
HOUSTON, TEXAS 77027
PROXY STATEMENT
1998 ANNUAL MEETING OF STOCKHOLDERS
-----------------------------------
The enclosed form of proxy is solicited by the Board of Directors of
Metamor Worldwide, Inc. (formerly CORESTAFF, Inc., the "Company") to be used at
the 1998 Annual Meeting of Stockholders (the "Meeting") to be held at The
Luxury Collection Hotel, 1919 Briar Oaks Lane, Houston, Texas at 9:00 a.m. on
Tuesday, May 19, 1998. This Proxy Statement and the related proxy are to be
first sent or given to the stockholders of the Company on or about April 9,
1998. Each properly executed proxy received at or before the Meeting on May 19,
1998 will be voted at the Meeting as specified therein. If a stockholder does
not specify otherwise, the shares represented by his or her proxy will be voted
FOR the election of all the nominees as Class III directors, FOR the amendment
to the Employee Stock Purchase Plan, FOR the amendment to the Long-Term
Incentive Plan, FOR the approval of the Executive Incentive Plan and FOR the
ratification of the appointment of Ernst & Young LLP as independent auditors.
The shares held by each stockholder who signs and returns the enclosed proxy
will be counted for purposes of determining the presence of a quorum at the
Meeting unless such proxy is timely revoked. A majority of the shares entitled
to be cast on a particular matter, present in person or represented by proxy,
constitutes a quorum as to such matter. Votes cast by proxy or in person at the
Meeting will be counted by the person appointed by the Company to act as
election inspector for the Meeting. Any stockholder giving a proxy may revoke
it at any time provided written notice of such revocation is received by the
Secretary of the Company before such proxy is voted; otherwise, if received in
time, properly completed proxies will be voted at the Meeting in accordance
with the instructions specified thereon. Stockholders attending the Meeting may
revoke their proxies and vote in person.
The Board of Directors has established April 8, 1998, as the record
date (the "Record Date") for determination of stockholders entitled to notice
of and to vote at the Meeting. Only holders of record of the Company's common
stock, $.01 par value per share ("Common Stock"), at the close of business on
the Record Date will be entitled to vote at the Meeting. Each share of Common
Stock is entitled to one vote per share on each matter submitted to a vote of
the stockholders at the Meeting. On the Record Date, 32,066,622 shares of
Common Stock and 440,749 shares of Class B Non-Voting Common Stock, the only
other class of capital stock of the Company outstanding, were issued and
outstanding.
The Company's 1997 Annual Report to Stockholders, including financial
statements, is being mailed herewith to all stockholders entitled to vote at
the Meeting. The Annual Report does not constitute a part of the proxy
soliciting material. See "Availability of Annual Report on Form 10-K."
<PAGE> 5
ITEM 1
ELECTION OF DIRECTORS
The Company's First Amended and Restated Certificate of Incorporation, as
amended ("Certificate of Incorporation") provides for a Board of Directors to
serve in three classes having staggered terms of three years each. At present,
there are nine directors: three directors whose terms of office expire at the
1998 Annual Meeting; three directors whose terms of office expire at the 1999
Annual Meeting; and three directors whose terms of office expire at the 2000
Annual Meeting. Information regarding each of the incumbent directors is set
forth below. At the 1998 Annual Meeting, the stockholders will be asked to
elect three Class III directors. The three nominees for Class III director,
each of whom is currently serving in that capacity, and whose new terms would
expire at the 2001 Annual Meeting of Stockholders, are: Charles H. Cotros,
Donald J. Edwards and Austin P. Young.
Proxies cannot be voted for a greater number of persons than the number of
nominees named on the enclosed form of proxy. A plurality of the votes cast in
person or by proxy by the holders of Common Stock is required to elect a
director. Accordingly, under Delaware law and the Company's Certificate of
Incorporation and Amended and Restated Bylaws ("Bylaws"), abstentions and
"broker non-votes" would not have the same legal effect as a vote against a
particular director. A broker non-vote occurs if a broker or other nominee does
not have discretionary authority and has not received instructions with respect
to a particular item. Stockholders may not cumulate their votes in the election
of directors. Unless otherwise instructed or unless authority to vote is
withheld, the enclosed proxy will be voted "FOR" the election of the nominees
listed below. Although the Board of Directors does not contemplate that any of
the nominees will be unable to serve, if such a situation arises prior to the
Meeting, the persons named in the enclosed proxy will vote for the election of
such other person(s) as may be nominated by the Board of Directors. The Board
of Directors recommends a vote "FOR" each of the following nominees.
DIRECTOR NOMINEES
CHARLES H. COTROS, age 60, has served as a director of the Company since
November 1995. Mr. Cotros has served as Executive Vice President and Chief
Operating Officer of Sysco Corporation ("Sysco") since January 1995 and has
held various positions with Sysco for more than the past five years. Mr. Cotros
has also served as a director of Sysco since 1986.
DONALD J. EDWARDS, age 32, has served as a director of the Company since
August 1995. In addition, Mr. Edwards served as a Vice President of the Company
from May 1995 to August 1995. Mr. Edwards joined Golder, Thoma, Cressey,
Rauner, Inc. in August 1994 and became a Principal in April 1996. From
September 1992 to June 1994, Mr. Edwards attended the Harvard Business School
and received his MBA. Prior to that time, Mr. Edwards served as an associate
with Lazard Freres & Co.
AUSTIN P. YOUNG, age 57, has served as a director and Executive Vice
President - Finance and Administration of the Company since September 1996.
Prior to joining the Company, Mr. Young served as Senior Vice President and
Chief Financial Officer of American General Corporation. Prior to joining
American General Corporation in 1987, Mr. Young was a partner with KPMG Peat
Marwick where his career spanned 22 years.
2
<PAGE> 6
DIRECTORS
MICHAEL T. WILLIS, age 53, has served as Chairman of the Board, Chief
Executive Officer and President of the Company since its formation and has been
in the personnel and temporary services industry for more than 20 years. Mr.
Willis founded The Talent Tree Corporation ("Talent Tree") in 1976 and built it
into one of the largest temporary services companies in the United States. Mr.
Willis sold Talent Tree to Hestair plc in 1987 and then continued as President
and Chief Executive Officer until April 1993. Mr. Willis is also a director of
the Southwest Bank Corporation, Province Healthcare Company and Quanta
Services, Inc.
NUALA BECK, age 46, has served as a director of the Company since April
1996. Ms. Beck, an international economist, serves as the President and is the
founder of Nuala Beck & Associates, Inc., a management consulting firm. Ms.
Beck also serves as a director of Ontario Hydro.
BRUCE V. RAUNER, age 42, has served as a director of the Company since
July 1993. Mr. Rauner joined Golder, Thoma, Cressey, Rauner, Inc. in 1981 and
became a Principal in 1984. Mr. Rauner also serves as a director of The
Coinmach Corporation, Lason, Inc. and Polymer Group.
MICHAEL T. REDDY, age 55, has served as a director of the Company since
December 1997. Mr. Reddy currently is Chairman and Chief Executive Officer of
EDS's Global Financial Markets Group. Mr. Reddy joined EDS in May of 1995 when
EDS acquired FCI Incorporated where Mr. Reddy served as Chairman and Chief
Executive Officer since July 1993. From December 1989 through July 1993, Mr.
Reddy served as Chairman and Chief Executive Office of Technology Support
Services Incorporated. Prior thereto, Mr. Reddy was a Senior Vice President of
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
CHARLES R. SCHNEIDER, age 57, has served as a director of the Company
since October 1994. Mr. Schneider founded U.S. Security Associates, Inc. and
has served as its President and Chief Executive Officer and a director since
November 1993. From October 1986 to November 1993, Mr. Schneider served as
President of Baker Industries, Inc. ("Baker") and as a Vice President of
Borg-Warner Security Corp., the parent of Baker, from August 1987 to September
1993.
JOHN T. TURNER, age 54, has served as a director of the Company since
October 1994. Mr. Turner is Senior Vice President-Corporate Development of
Group 1 Automotive, Inc. During 1996, he served as European Managing
Director-Corporate Development for Services Corporation International. From
1993 to 1996, he was self-employed, managing a variety of personal investments.
From November 1990 to March 1993, Mr. Turner served as a Senior Vice
President-Operations and director of The Loewen Group, Inc. Mr. Turner was also
a founder of Paragon Family Services, Inc. and served as its President from
November 1986 to November 1990.
OTHER EXECUTIVE OFFICERS
PETER T. DAMERIS, age 38, has served as Senior Vice President, General
Counsel and Secretary of the Company since September 1996. Mr. Dameris
previously served as Vice President, General Counsel and Secretary since
January 1995. Prior to joining the Company in January 1995, Mr. Dameris was a
partner with the law firm of Cochran, Rooke and Craft, LLP and served as
counsel to the Company since its formation in July 1993. Mr. Dameris was
associated with Cochran, Rooke and Craft, LLP from June 1989 to January 1995.
3
<PAGE> 7
GEORGE W. FINK, age 50, has served as Executive Vice President of the
Company and President of COMSYS Information Technology Services since September
1995. Prior to joining the Company, Mr. Fink was self-employed, managing a
variety of personal investments. From June 1986 until July 1993 and from August
1993 until March 1994, Mr. Fink served as President and Chief Executive Officer
of Remco America, Inc. and Rent-A-Center, respectively. Prior to joining Remco,
Mr. Fink was a partner with Ernst & Young LLP and a director of the Houston
Office Entrepreneurial Services Group.
KENNETH R. JOHNSEN, age 44, has served as an Executive Vice President of
the Company and President of Metamor Solutions since May 1997. Prior to joining
the Company, Mr. Johnsen was employed with IBM Corporation since 1975 in
various managerial capacities, including Vice President of Worldwide Commercial
Operations for IBM PC Company from January 1997 to May 1997, Vice President,
Business Services and Business Development for ISSC, IBM's outsourcing
subsidiary, from January 1994 to December 1996, and General Manager of IBM
China/Hong Kong from September 1991 to December 1993. Mr. Johnsen is also a
Director of Citadel Computer Systems Incorporated.
ROBERT H. McNABB, age 50, has served as President and Chief Executive
Officer of CORESTAFF Services since April 1998. Mr. McNabb previously served as
President and Chief Operating Officer of Republic Industries' Replacement
Rental Car Business from April 1997 to October 1997 and as Senior Vice
President and general manager of Kelly Services, Inc. from September 1994 to
March 1997. Mr. McNabb served as President of the central division of Talent
Tree from October 1991 to June 1993 and was self-employed from July 1993 to
August 1994 and from November 1997 to March 1998.
EDWARD L. PIERCE, age 41, has served as Senior Vice President, Chief
Financial Officer and Assistant Secretary of the Company since September 1996.
Mr. Pierce previously served as Vice President-Finance and prior thereto as
Vice President and Controller of the Company. Prior to joining the Company in
November 1994, Mr. Pierce served in various financial management capacities
with American Oil and Gas Corporation, including Corporate Controller and
Director of Accounting, Taxation and Reporting from January 1990 to November
1994 and as an Audit Manager for Arthur Andersen & Co. prior thereto.
JOSEPH C. TUSA JR., age 39, has served as Senior Vice President - Business
Services of the Company since October 1997. Mr. Tusa previously served as Vice
President - Business Services. Prior to joining the Company in February 1997,
Mr. Tusa served as Chief Financial Officer and Secretary of DSM Copolymer, Inc.
since April 1990. Mr. Tusa served as Controller of TOTAL American Mining, Inc.
from March 1987 to April 1990 and as an Audit Manager for Arthur Andersen & Co.
prior thereto.
4
<PAGE> 8
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
BOARD MEETINGS. The Board of Directors held six meetings during the year
ended December 31, 1997, and took various corporate actions during 1997 by
means of unanimous written consent. During the year, each director attended
more than 75% of the total number of meetings of the Board of Directors and the
committees on which each such director served. The Company has the following
committees of the Board of Directors:
THE AUDIT COMMITTEE. The Audit Committee, which is comprised of Messrs.
Edwards (Chairman), Schneider and Turner, examines and considers matters
relating to the financial affairs of the Company, including reviewing the
Company's annual financial statements, the scope of the independent annual
audit and the independent auditor's letter to management concerning the
effectiveness of the Company's internal financial and accounting controls.
The Audit Committee held three meetings during the year.
THE COMPENSATION COMMITTEE. The Compensation Committee, which is comprised
of Messrs. Schneider (Chairman), Cotros and Edwards, considers and makes
recommendations to the Company's Board of Directors with respect to programs
for human resource development and management organization and succession,
approves changes in senior executive compensation and makes recommendations to
the Company's Board of Directors with respect to compensation matters and
policies. The Compensation Committee also administers the Company's Long-Term
Incentive Plan. The Compensation Committee held four meetings during the year.
THE STOCK PURCHASE PLAN COMMITTEE. The Stock Purchase Plan Committee,
which is comprised of Ms. Beck and Mr. Young, administers the Company's
Employee Stock Purchase Plan (the "Stock Purchase Plan"). The Stock Purchase
Plan Committee held two meetings during the year.
THE PENSION PLAN COMMITTEE. The Pension Plan Committee, which is comprised
of Messrs. Edwards and Young, administers the CORESTAFF, Inc. 401(k) Retirement
Savings Plan and the CORESTAFF, Inc. Executive Retirement Savings Plan. The
Pension Plan Committee held one meeting during the year.
COMPENSATION OF DIRECTORS
All directors of the Company are entitled to reimbursement for certain
expenses in connection with their travel to and attendance at meetings of the
Board of Directors or committees thereof. Directors who are not officers of the
Company receive a $3,500 fee for each meeting of the Board of Directors
attended by such director. In addition, each director who is not an officer of
the Company or associated with GTC III received a grant of options to purchase
1,000 shares of Common Stock (at an exercise price equal to the fair market
value of the Common Stock on the date the option was granted) under the LTIP
Plan upon appointment to the Board of Directors and will receive an additional
grant of options to purchase 1,000 shares of Common Stock for each year he or
she serves as a director. Such options vest one-third per year over a
three-year period. Other than reimbursement of their expenses, directors who
are employees or officers of the Company will not receive any compensation for
services as a director.
5
<PAGE> 9
ITEM 2
APPROVAL OF AMENDMENT TO
EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors adopted the Metamor Worldwide, Inc. Employee
Stock Purchase Plan (the "Purchase Plan"), an amendment and restatement of the
CORESTAFF, Inc. Employee Stock Purchase Plan, on March 19, 1998, subject to
approval by the stockholders of the Company. The purpose of the Purchase Plan
is to provide an incentive to employees of the Company and certain of its
subsidiaries to acquire or increase an ownership interest in the Company
through the purchase of shares of Common Stock.
The Board has recommended to the stockholders of the Company the
adoption of an amendment to the Purchase Plan to, among other matters, provide
for immediate eligibility of employees into the Purchase Plan. Adoption of the
amendment to the Purchase Plan shall be effective upon receiving the
affirmative vote of the holders of a majority of the Common Stock present or
represented by proxy and entitled to vote at the Meeting. Under Delaware law,
an abstention would have the same legal effect as a vote against this proposal,
but a broker non-vote would not be counted for purposes of determining whether
a majority had been achieved. The Board of Directors recommends voting "FOR"
adoption by the stockholders of the amendment to the Purchase Plan.
SUMMARY OF PURCHASE PLAN
The following general description of certain features of the Purchase
Plan is qualified in its entirety by reference to the Purchase Plan, which is
attached as Appendix A.
SHARES AVAILABLE UNDER THE PURCHASE PLAN; ADJUSTMENTS. Subject to
adjustment as provided in the Purchase Plan, the number of shares of Common
Stock that may be purchased by participating employees under the Purchase Plan
will not in the aggregate exceed 450,000 shares, which may be originally issued
or reacquired shares, including shares bought on the market or otherwise for
purposes of the Purchase Plan. As of December 31, 1997, 124,559 shares of
Common Stock had been issued under the Purchase Plan. Such number of shares is
subject to adjustment in the event of a change in the Common Stock by reason of
a stock dividend or by reason of a subdivision, stock split, reverse stock
split, recapitalization, reorganization, combination, reclassification of
shares or other similar change. Upon any such event, the maximum number of
shares that may be subject to any option, and the number and purchase price of
shares subject to options outstanding under the Purchase Plan, will also be
adjusted accordingly.
ELIGIBILITY. Options under the Purchase Plan will be granted on July
1, 1998, and, thereafter through June 30, 2008, on the first day of each
successive October, January, April and July (each such date being referred to
herein as a "Date of Grant"). Each employee of the Company or any present or
future parent or subsidiary corporation of the Company that has been designated
as a "Participating Company" as of a Date of Grant is eligible to participate
in the Purchase Plan as of such Date of Grant. However, an eligible employee
may not participate if such employee would own (directly or indirectly) 5% or
more of the total combined voting power of all classes of stock of the Company
or a subsidiary, taking into account options to purchase stock and stock that
may be purchased under the Purchase Plan. At December 31, 1997, 976 employees
participated in the Purchase Plan.
6
<PAGE> 10
PARTICIPATION. An eligible employee may elect to participate in the
Purchase Plan for any calendar quarter during the period from July 1, 1998 to
June 30, 2008, by designating a percentage of such employee's eligible
compensation to be deducted for each pay period and paid into the Purchase Plan
for such employee's account. The designated percentage may not be less than 2%
nor more than 5%. An eligible employee may participate in the Purchase Plan
only by means of payroll deduction. No employee will be granted an option under
the Purchase Plan that permits such employee's rights to purchase Common Stock
to accrue at a rate that exceeds $25,000 of fair market value of such stock
(determined at the time such option is granted) for the calendar year in which
such option is outstanding. Unless an employee's payroll deductions are
withdrawn (as described below), the aggregate payroll deductions credited to
the employee's account will be used to purchase shares of Common Stock at the
end of the three-month period beginning on a Date of Grant (the "Option
Period"); provided, however, that the maximum number of shares of Common Stock
that may be purchased by a participant under any quarterly option may not
exceed 5,000 (subject to adjustment in the event of a change in the Common
Stock). The per share purchase price of the Common Stock will be 85% of the
lesser of the fair market value of the Common Stock on the Date of Grant or on
the last day of the Option Period (the "Date of Exercise"). For all purposes
under the Purchase Plan, the fair market value of a share of Common Stock on a
particular date shall be equal to the closing price of such stock on the Nasdaq
National Market on that date (or, if no shares of Common Stock have been traded
on that date, on the next regular business date on which shares of the Common
Stock are so traded). Payroll deductions will be included in the general funds
of the Company, free of any trust or other arrangement and may be used for any
corporate purpose. No interest will be paid or credited to any participant.
CHANGES IN AND WITHDRAWAL OF PAYROLL DEDUCTIONS. A participant may not
change the rate of his or her payroll deductions during an Option Period.
However, a participant may withdraw in whole from the Purchase Plan, but not in
part, at any time prior to the Date of Exercise relating to a particular Option
Period by timely delivering to the Company a notice of withdrawal in the manner
specified by the Company. The Company promptly will refund to the participant
the amount of the participant's payroll deductions under the Purchase Plan that
have not been otherwise returned or used upon exercise of options, and
thereafter the participant's payroll deduction authorization and interest in
unexercised options under the Purchase Plan will terminate.
DELIVERY OF SHARES; RESTRICTIONS ON TRANSFER. As soon as practicable
after each Date of Exercise, the Company will deliver to a custodian
(currently, Smith Barney Inc.) one or more certificates representing (or shall
otherwise cause to be credited to the account of such custodian) the total
number of whole shares of Common Stock respecting options exercised on such
Date of Exercise in the aggregate (for both whole and fractional shares) of all
of the participating employees under the Purchase Plan. Any remaining amount
representing a fractional share will not be certificated (or otherwise so
credited) and such remaining amount will be paid in cash to the custodian. Such
custodian will keep accurate records of the beneficial interests of each
participant in such shares by means of participant accounts under the Purchase
Plan, and will provide each participant with quarterly or such other periodic
statements with respect thereto as the administrative committee under the
Purchase Plan may specify. The administrative committee under the Purchase Plan
may from time to time specify with respect to a particular grant of options a
period of time (the "restriction period") during which participants may not
generally transfer or otherwise dispose of the shares. During this restriction
period, the custodian will retain custody of the shares.
7
<PAGE> 11
TERMINATION OF EMPLOYMENT; LEAVES OF ABSENCE. Except as described
below, if the employment of a participant terminates for any reason, then the
participant's participation in the Purchase Plan ceases and the Company will
refund the amount of such participant's payroll deductions under the Purchase
Plan that have not yet been otherwise returned or used upon exercise of
options. If the employment of a participant terminates after such participant
has attained age 65 or due to death or disability, the participant, or the
participant's personal representative, as applicable, may elect either to (i)
withdraw all of the accumulated unused payroll deductions credited to the
participant's account or (ii) exercise the participant's option for the
purchase of Common Stock at the end of the Option Period. If no such election
is timely received by the Company, the participant or personal representative
will automatically be deemed to have elected the second alternative.
During a paid leave of absence approved by the Company and meeting
Internal Revenue Service regulations, a participant's elected payroll
deductions will continue. A participant may not contribute to the Purchase Plan
during an unpaid leave of absence. If a participant takes an unpaid leave of
absence that is approved by the Company and meets Internal Revenue Service
regulations, then such participant's payroll deductions for such Option Period
that were made prior to such leave may remain in the Purchase Plan and be used
to purchase Common Stock on the Date of Exercise relating to such Option
Period. If a participant takes a leave of absence not described above, then the
participant will be considered to have withdrawn from the Purchase Plan.
RESTRICTION UPON ASSIGNMENT OF OPTION. An option granted under the
Purchase Plan may not be transferred other than by will or the laws of descent
and distribution. Subject to certain limited exceptions, each option is
exercisable, during the employee's lifetime, only by the employee to whom
granted.
ADMINISTRATION, AMENDMENTS AND TERMINATION. The Purchase Plan is to be
administered by a committee appointed from time to time by the Board and
comprised so as to permit the Purchase Plan to comply with Rule 16b-3, as
currently in effect or hereafter modified, promulgated under the Securities
Exchange Act of 1934, as amended. In connection with its administration of the
Purchase Plan, the committee is authorized to interpret the Purchase Plan.
The Purchase Plan may be amended from time to time by the Board;
provided, however, that no change in any option theretofore granted may be made
that would impair the rights of a participant without the consent of such
participant. The Board may in its discretion terminate the Purchase Plan at any
time with respect to any Common Stock for which options have not theretofore
been granted.
MERGER, CONSOLIDATION OR LIQUIDATION OF COMPANY. If the Company is not
the surviving corporation in any merger or consolidation (or survives only as a
subsidiary of another entity), or if the Company is to be dissolved or
liquidated, then, unless a surviving corporation assumes or substitutes new
options (within the meaning of Section 424(a) of the Internal Revenue Code of
1986, as amended (the "Code")) for all options then outstanding, (i) the Date
of Exercise for all options then outstanding will be accelerated to a date
fixed by the administrative committee under the Purchase Plan prior to the
effective date of such merger or consolidation or such dissolution or
liquidation and (ii) upon such effective date, any unexercised options will
expire and the Company promptly will refund to each participant the amount of
such participant's payroll deductions under the Purchase Plan that have not yet
been otherwise returned to him or used upon exercise of options.
The benefits and amounts to be received by any participant under the
Purchase Plan are not currently determinable.
8
<PAGE> 12
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
TAX CONSEQUENCES TO PARTICIPANTS. A participant's payroll deductions
to purchase Common Stock are made on an after-tax basis. There is no tax
liability to the participant when shares of Common Stock are purchased pursuant
to the Purchase Plan. However, the participant may incur tax liability upon
disposition (including by way of gift) of the shares acquired under the
Purchase Plan. The participant's U.S. federal income tax liability will depend
on whether the disposition is a qualifying disposition or a disqualifying
disposition as described below.
If a qualifying disposition of the shares is made by the participant
(i.e., a disposition that occurs more than two years after the first day of the
Option Period in which the shares were purchased), or in the event of death
(whenever occurring) while owning the shares, the participant will recognize in
the year of disposition (or, if earlier, the year of the participant's death)
ordinary income in an amount equal to the lesser of (i) the excess of the fair
market value of the shares at the time of disposition (or death) over the
amount paid for the shares under the option or (ii) 15% of the fair market
value of the shares at the Date of Grant (the beginning of the Option Period).
Upon the sale of the shares, any amount realized in excess of the ordinary
income recognized by the participant will be taxed to the participant as a
long-term capital gain. If the shares are sold at less than the purchase price
under the option, then there will be no ordinary income. Instead, the
participant will have a capital loss equal to the difference between the sales
price and the purchase price paid under the option.
If a disqualifying disposition of the shares is made (i.e., a
disposition (other than by reason of death) within two years after the first
day of the Option Period in which the shares were purchased), the participant
generally will recognize ordinary income in the year of disposition in an
amount equal to any excess of the fair market value of the shares at the Date
of Exercise over the purchase price paid for the shares under the option (even
if no gain is realized on the sale or if a gratuitous transfer is made). Any
further gain (or loss) realized by the participant generally will be taxed as
short-term, mid-term or long-term capital gain (or loss) depending on the
holding period.
TAX CONSEQUENCES TO THE COMPANY OR PARTICIPATING COMPANY. The Company,
or the Participating Company for which a participant performs services, will be
entitled to a deduction only if the participant makes a disqualifying
disposition of any shares purchased under the Purchase Plan. In such case, the
Company or such Participating Company can deduct as a compensation expense the
amount that is ordinary income to the participant provided that, among other
things, (i) the amount meets the test of reasonableness, is an ordinary and
necessary business expense and is not an "excess parachute payment" within the
meaning of Section 280G of the Code, (ii) any applicable reporting obligations
are satisfied and (iii) the one million dollar limitation of Section 162(m) of
the Code is not exceeded.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE METAMOR
WORLDWIDE, INC. EMPLOYEE STOCK PURCHASE PLAN, AS DESCRIBED ABOVE AND AS SET
FORTH IN APPENDIX A, WHICH IS DESIGNATED AS PROPOSAL NO. 2 ON THE ENCLOSED
PROXY.
9
<PAGE> 13
ITEM 3
AMENDMENT TO THE
LONG-TERM INCENTIVE PLAN
The Board of Directors adopted the Metamor Worldwide, Inc. Long Term
Incentive Plan, (the "LTIP Plan"), an amendment and restatement of the
CORESTAFF, Inc. 1995 Long-Term Incentive Plan, on March 19, 1998, subject to
approval by the stockholders of the Company. The purpose of the LTIP Plan is to
promote the interests of the Company, by encouraging employees of the Company,
its subsidiaries and affiliated entities, qualified consultants and
non-employee directors of the Company to acquire or increase their equity
interest in the Company and to provide a means whereby these persons may
develop a sense of proprietorship and personal involvement in the development
and financial success of the Company, and to encourage them to remain with and
devote their best efforts to the business of the Company thereby advancing the
interests of the Company and its stockholders.
The Board has recommended to the stockholders of the Company the adoption
of an amendment to the LTIP Plan to, among other matters, increase the number
of shares available for issuance under the LTIP Plan from 3,840,000 shares to
5,000,000 shares of Common Stock. Adoption of the amendment to the LTIP Plan
shall be effective upon receiving the affirmative vote of the holders of a
majority of the Common Stock present or represented by proxy and entitled to
vote at the Meeting. Under Delaware law, an abstention would have the same
legal effect as a vote against this proposal, but a broker non-vote would not
be counted for purposes of determining whether a majority had been achieved.
The Board of Directors recommends voting "FOR" adoption by the stockholders of
the amendment to the LTIP Plan.
SUMMARY OF LONG-TERM INCENTIVE PLAN
The following general description of certain features of the LTIP Plan
is qualified in its entirety by reference to the LTIP Plan, which is attached
as Appendix B.
The LTIP Plan provides for the grant of any or all of the following
types of awards: (i) stock options, including incentive stock options and
non-qualified stock options; (ii) stock appreciation rights ("SARs") in tandem
with stock options or freestanding; (iii) restricted stock; (iv) performance
share awards; (v) stock value equivalent awards; and (vi) cash awards. Any
stock option granted in the form of an incentive stock option must satisfy the
applicable requirements of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). Awards may be made to the same person on more than one
occasion and may be granted singly, in combination or in tandem as determined
by the Compensation Committee which is currently comprised of Messrs.
Schneider, Cotros and Edwards. As of December 31, 1997, the Company had
non-qualified stock options to purchase an aggregate of 2,436,816 shares of
Common Stock outstanding under the LTIP Plan.
TERM. The Plan was adopted effective as of August 1995 and will
terminate in August 2005 unless earlier terminated by the Board of Directors.
Termination of the LTIP Plan will not affect awards made prior to termination,
but awards will not be made after termination.
ADMINISTRATION. The LTIP Plan is currently administered by the
Compensation Committee. Subject to the terms of the LTIP Plan, and to such
approvals and other authority as the Board of Directors may reserve to itself
from time to time, the Compensation Committee, consistent with the terms of the
LTIP Plan, has authority to (i) select employees to receive an award, (ii)
determine the
10
<PAGE> 14
timing, form, amount, or value and term of grants and awards, (iii) determine
the conditions and restrictions, if any, subject to which grants and awards are
made and become payable under the LTIP Plan, (iv) construe the LTIP Plan and
prescribed rules and regulations with respect to the administration of the LTIP
Plan, and (v) make such other determinations authorized under the LTIP Plan as
the Compensation Committee deems necessary or appropriate.
ELIGIBILITY. All full-time employees of the Company and its
affiliates, qualified consultants of the Company and directors of the Company
who are not otherwise employees of the Company or any of its affiliates
("non-employee directors"), are eligible to participate in the LTIP Plan. The
selection of participants from eligible employees is within the discretion of
the Compensation Committee.
SHARES SUBJECT TO THE LTIP PLAN. There are 3,840,000 shares of Common
Stock reserved for issuance under the LTIP Plan. An additional 1,160,000 shares
of Common Stock have been reserved for issuance subject to approval by the
stockholders of the Company. These shares may be authorized and unissued shares
or treasury shares. Shares are deemed to be issued under the LTIP Plan only to
the extent actually issued pursuant to an award. To the extent that an award
lapses or the rights of an awardee terminate or the award is paid in cash, any
shares subject to such award are again made available for grant. In the event
of any increases or decreases in the number of issued and outstanding shares of
Common Stock pursuant to stock splits, mergers, reorganizations,
recapitalizations, stock dividends or other events described under the terms of
the LTIP Plan, the Compensation Committee shall make appropriate adjustments to
the aggregate number of shares available for issuance under the LTIP Plan and
the number and kinds of shares which may be distributed under the LTIP Plan.
STOCK OPTIONS. Under the LTIP Plan, the Compensation Committee may
grant awards in the form of options to purchase shares of Common Stock. The
Compensation Committee with regard to each stock option determines the number
of shares subject to the option, the manner and time of the option's exercise
and the exercise price per share of the stock subject to the option. The
exercise price of an incentive stock option may not be less than the fair
market value of the Common Stock on the date the option is granted. The
Compensation Committee designates each option as a non-qualified or an
incentive stock option. Each option agreement may provide that the option price
upon exercise can be paid by a participant in cash, shares of Common Stock or a
combination thereof.
In addition, under the LTIP Plan, each non-employee director who
serves in such capacity on the effective date of the LTIP Plan shall receive,
as of such date, non-qualified stock options to purchase 1,000 shares of Common
Stock. Each non-employee director who is elected or appointed to the Board of
Directors for the first time after the effective date of the LTIP Plan shall
receive, as of the date of his or her election or appointment, non-qualified
stock options to purchase 1,000 shares of Common Stock. Each non-employee
director who is in office immediately after the annual meeting of stockholders
each year the LTIP Plan is in effect and who is not entitled to receive an
option pursuant to the preceding provisions set forth in this paragraph shall
receive non-qualified stock options to purchase 1,000 shares of Common Stock.
STOCK APPRECIATION RIGHTS. The LTIP Plan also authorizes the
Compensation Committee to grant SARs either independent of, or in connection
with, a stock option. If granted with a stock option, exercise of the SAR will
result in the surrender of the right to purchase the shares under the option as
to which the SAR was exercised. Upon exercising an SAR, the holder receives for
each share with respect to which the SAR is exercised, an amount equal to the
difference between the exercise price, as determined by the Compensation
Committee, and the fair market value of the Common Stock on the date of
exercise. Payment of such amount may be made in shares of Common Stock, cash or
a
11
<PAGE> 15
combination thereof, as determined by the Compensation Committee. The
Compensation Committee shall specify the effect of termination of employment
(by reason of death, disability, retirement or otherwise) on the exercisability
of the SAR.
RESTRICTED STOCK. The LTIP Plan provides that shares of Common Stock
subject to certain restrictions ("Restricted Stock") may be awarded to eligible
employees from time to time as determined by the Compensation Committee. The
Compensation Committee will determine the nature and extent of the restrictions
on such shares, the duration of such restrictions and any circumstance under
which the Restricted Stock will be forfeited. During any such period of
restriction, recipients shall have most of the rights of a holder of Common
Stock, including but not limited to the right to receive dividends and voting
rights. The Compensation Committee shall determine the effect of the
termination of employment of a recipient of Restricted Stock (by reason of
retirement, disability, death or otherwise) prior to the lapse of any
applicable restrictions. With respect to outstanding awards of Restricted
Stock, the Compensation Committee may in its discretion provide for full
vesting and termination of restrictions on Restricted Stock.
PERFORMANCE SHARE AWARDS. The Plan permits the Compensation Committee
to grant Performance Share Awards to eligible employees under the LTIP Plan
from time to time. Performance Share Awards are awards that are contingent on
the achievement of certain performance objectives, valued by reference to the
price performance of the Common Stock, by reference to the financial or
economic performance of the Company in comparison to a peer group of companies
in the same industry or by reference to other factors, over a specified period
of time.
The length of time over which performance will be measured, the
performance objectives and the criteria to be used in determining whether and
to what degree such objectives have been obtained will be determined by the
Compensation Committee. The Compensation Committee shall also determine the
effect of termination of employment (by reason of death, retirement, disability
or otherwise) during the performance period.
STOCK VALUE EQUIVALENT AWARDS. The Plan permits the Compensation
Committee to grant Stock Value Equivalent Awards to eligible employees from
time to time. Stock Value Equivalent Awards are rights to receive the fair
market value of a specified number of shares of Common Stock, or the
appreciation in the fair market value thereof, over a specified period of time,
pursuant to a vesting schedule, all as determined by the Compensation
Committee. The vested portion of a Stock Value Equivalent Award will be payable
in cash based on the fair market value of the Common Stock on the payment date.
The Compensation Committee shall determine the effect of termination of
employment during the vesting period (by reason of death, retirement,
disability or otherwise) on an employee's Stock Value Equivalent Award.
AMENDMENT. The Board may at any time amend, alter, suspend,
discontinue or terminate the LTIP Plan in any respect without approval of the
stockholders of the Company. No amendment or termination of the LTIP Plan
shall, without the consent of the optionee or participant in the LTIP Plan,
alter or impair the rights of such person under any options, awards or
agreements evidencing options or awards theretofore granted under the LTIP
Plan.
12
<PAGE> 16
PLAN BENEFITS. The following table sets forth certain information
concerning options granted under the LTIP Plan through December 31, 1997:
<TABLE>
<CAPTION>
Options Granted
Group (shares of Common Stock)
----- ------------------------
<S> <C>
Michael T. Willis 187,500
Austin P. Young 105,000
Kenneth R. Johnsen 125,000
George W. Fink 245,000
Rocco N. Aceto 120,000
All current executive officers as a group 1,006,250
All current directors who are not executive
officers as a group 14,000
All employees who are not executive
officers as a group 2,358,330
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE METAMOR
WORLDWIDE, INC. LONG TERM INCENTIVE PLAN, AS DESCRIBED ABOVE AND AS SET FORTH
ON APPENDIX B, WHICH IS DESIGNATED AS PROPOSAL NO. 3 ON THE ENCLOSED PROXY.
13
<PAGE> 17
ITEM 4
APPROVAL OF
EXECUTIVE INCENTIVE PLAN
The Board of Directors adopted the Metamor Worldwide, Inc. Executive
Incentive Plan (the "Incentive Plan") effective as of January 1, 1998, subject
to approval by the stockholders of the Company. The purpose of the Incentive
Plan is to provide participants with incentive awards to the extent they have
contributed to the Company's success, through an ongoing program designed to
reinforce the Company's financial and operating objectives.
The Board has recommended to the stockholders of the Company the
adoption of the Incentive Plan effective January 1, 1998. Adoption of the
Incentive Plan shall be effective upon receiving the affirmative vote of the
holders of a majority of the Common Stock present or represented by proxy and
entitled to vote at the Meeting. Under Delaware law, an abstention would have
the same legal effect as a vote against this proposal, but a broker non-vote
would not be counted for purposes of determining whether a majority had been
achieved. The Board of Directors recommends voting "FOR" adoption by the
stockholders of the Executive Incentive Plan.
BACKGROUND AND REASONS FOR ADOPTION
Under section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), the federal income tax deductibility of compensation paid to the
Company's Chief Executive Officer and each of its four other most highly
compensated executive officers may be limited to the extent such compensation
exceeds $1 million in any one year. Under section 162(m) of the Code, the
Company may deduct compensation in excess of that amount if it qualifies as
"performance-based compensation," as defined in section 162(m) of the Code. The
Incentive Plan is designed to qualify payments thereunder as performance-based
compensation. Stockholder approval of the Incentive Plan will allow the Company
to continue to receive a federal income tax deduction for the payment of
incentive bonuses to its executives.
SUMMARY OF INCENTIVE PLAN
The following general description of certain features of the Incentive
Plan is qualified in its entirety by reference to the Incentive Plan, which is
attached as Appendix C.
ADMINISTRATION. The Incentive Plan is administered by the Compensation
Committee of the Board of Directors of the Company (the "Committee"). The
Committee shall be comprised solely of two or more "outside directors" within
the meaning of section 162(m) of the Code. For each fiscal year of the Company,
the Committee will (1) designate the employees of the Company who are
participants in the Incentive Plan, (2) establish the incentive award
opportunities, performance goals, performance measurement and goal weighting
criteria, and other guidelines applicable in awarding annual incentive plan
awards ("EIP Awards"), (3) certify that the applicable performance measures
relating to the EIP Awards were satisfied, and (4) determine the time and form
of payment of the EIP Awards. In connection with its administration of the
Incentive Plan, the Committee is authorized to interpret the Incentive Plan.
14
<PAGE> 18
ELIGIBILITY. Eligibility for participation in the Incentive Plan is
limited to the Chief Executive Officer, corporate officers, and other key
management employees. For fiscal 1998, the Committee has approved one employee,
the CEO, to participate in the Incentive Plan.
AWARD CRITERIA AND PAYMENT. The award and payment of EIP Awards under
the Incentive Plan is contingent on the attainment of the applicable
predetermined performance measures, which may be related to corporate,
divisional or subsidiary performance and based on one or more of the following
business criteria: earnings before interest and taxes (EBIT), sales, sales
growth, operating profit, net income, economic profit, earnings per share,
return on equity, cash flow, earnings multiple, cash flow multiple, total
shareholder return and stock price. The maximum EIP Award that may be paid to
any participant under the Incentive Plan for any fiscal year is $2,500,000. EIP
Awards are payable at the time determined by the Committee after the close of
the Company's fiscal year. EIP Awards are normally payable in the form of a
single lump sum unless the Committee directs a different form of payment upon
written notification to the participants in the Incentive Plan. Further, the
Committee will designate whether EIP Awards are to be paid in cash, other forms
of property or benefit, or any combination thereof. For fiscal 1998, the
Committee has established a target award percentage for each participant in the
Incentive Plan, ranging from 0% to 150% of the participant's base salary as of
April 1, and has established performance measures based on earnings per share
at year end.
TERMINATION OF EMPLOYMENT. Except as otherwise specifically provided
by the Committee, an employee must (1) be employed by the Company on the first
day and last day of the Company's fiscal year and experience no break in
service or (2) have retired, died or incurred a long-term disability during the
Company's fiscal year in order to receive an EIP Award. In the event a
participant eligible to receive an EIP Award dies prior to the date payment is
made, such participant's EIP Award will be made to his designated beneficiary
at the same time and in the same form EIP Awards are paid to other
participants.
NONALIENATION. No EIP Award will be subject to alienation, sale,
transfer, assignment, pledge, attachment, garnishment or encumbrance of any
kind and will not be subject to or reached by any legal or equitable process in
satisfaction of any debt, liability, or obligation, prior to receipt.
AMENDMENTS AND TERMINATION. The Incentive Plan may be amended from
time to time or terminated at any time by the Committee. In the event the
Incentive Plan is terminated, no EIP Award will be made with respect to the
fiscal year in which the Incentive Plan is terminated except as otherwise
provided by the Committee, and no further EIP Awards will accrue; provided,
however, that EIP Awards payable with respect to a prior fiscal year shall
continue to be an obligation of the Company and will be paid as scheduled.
MERGER, CONSOLIDATION OR ACQUISITION OF COMPANY. In the event of a
merger, consolidation, or acquisition where the Company is not the surviving
corporation, unless the successor or surviving corporation elects to continue
or carry on the Incentive Plan, the Incentive Plan will terminate with respect
to the Company and no additional benefits will accrue for the participants of
the Company. Unpaid EIP Award payments will continue to be paid as scheduled
unless the Company or acquiring organization elects to accelerate payment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE METAMOR
WORLDWIDE, INC. EXECUTIVE INCENTIVE PLAN, AS DESCRIBED ABOVE AND AS SET FORTH
IN APPENDIX C, WHICH IS DESIGNATED AS PROPOSAL NO. 4 ON THE ENCLOSED PROXY.
15
<PAGE> 19
ITEM 5
APPOINTMENT OF INDEPENDENT AUDITORS
Pursuant to the recommendation of the Audit Committee, the Board of
Directors has appointed Ernst & Young LLP, independent auditors, to audit the
consolidated financial statements of the Company for the year ending December
31, 1998. The Company is advised that no member of Ernst & Young LLP has any
direct financial interest or material indirect financial interest in the
Company or any of its subsidiaries in the capacity of promoter, underwriter,
voting trustee, director, officer or employee.
Ratification of this appointment shall be effective upon receiving the
affirmative vote of the holders of a majority of the Common Stock present or
represented by proxy and entitled to vote at the Meeting. Under Delaware law,
an abstention would have the same legal effect as a vote against this proposal,
but a broker non-vote would not be counted for purposes of determining whether
a majority has been achieved. The Board of Directors recommends voting "FOR"
ratification by the stockholders of this appointment.
Representatives of Ernst & Young LLP are expected to be present at the
Meeting, will have the opportunity to make a statement if they desire to do so,
and are expected to be available to respond to appropriate questions at the
Meeting.
16
<PAGE> 20
STOCK OWNERSHIP
The following table sets forth certain information with respect to
beneficial ownership of the Company's equity securities as of March 20, 1998,
based on 32,016,171 shares of Common Stock outstanding: (a) by each person
known to the Company to own beneficially more than 5% of the outstanding shares
of Common Stock, (b) by each director of the Company, (c) by each of the named
executive officers and (d) by all directors and executive officers of the
Company as a group. Each stockholder identified in the table has sole voting
and investment power with respect to such stockholder's shares of stock except
to the extent that authority is shared by his or her spouse under applicable
law or as otherwise noted below.
<TABLE>
<CAPTION>
Shares Owned
Beneficially (1)
--------------------
Name Number Percent
---- ----------- -------
<S> <C> <C>
Golder, Thoma, Cressey Fund III Limited Partnership(2) ........ 3,201,921 10.0%
Michael T. Willis(3) .......................................... 2,357,511 7.4%
Bruce V. Rauner(4) ............................................ 3,201,921 *
George W. Fink ................................................ 134,770 *
Austin P. Young ............................................... 33,619 *
Rocco N. Aceto ................................................ 33,000 *
Charles R. Schneider .......................................... 19,339 *
John T. Turner ................................................ 9,214 *
Charles H. Cotros ............................................. 7,834 *
Donald J. Edwards(5) .......................................... 2,250 *
Nuala M. Beck ................................................. 2,834 *
Michael T. Reddy .............................................. 0 *
Kenneth R. Johnsen ............................................ 0 *
Putnam Investments, Inc. (6) .................................. 3,827,109 12.0%
T. Rowe Price Associates, Inc.(7) ............................. 3,542,700 11.1%
T. Rowe Price New Horizons Fund, Inc.(7) ...................... 1,600,000 5.0%
Morgan Stanley Dean Witter, Discover & Co.(8) ................. 2,204,632 6.9%
All executive officers and directors as a group
(15 persons) .................................................. 5,975,017 18.5%
</TABLE>
- -----------------------------------------------------
* Less than 1%
(1) Including 56,250, 117,800, 21,000, 33,000 and 334 shares for Messrs.
Willis, Fink, Young, Aceto and Cotros, respectively, and 1,834 shares
for each of Mr. Schneider, Mr. Turner and Ms. Beck. Shares of common
stock that are not outstanding but that may be acquired by a person
upon exercise of options within 60 days of March 20, 1998 are deemed
outstanding for the purpose of computing the percentage of outstanding
shares beneficially owned by such person. However, such shares are not
deemed to be outstanding for the purpose of computing the percentage
of outstanding shares beneficially owned by any other person.
(2) Golder, Thoma, Cressey, Rauner Limited Partnership ("GTCR
Partnership") is the sole general partner of Golder, Thoma, Cressey
Fund III Limited Partnership ("GTC III"). The address for GTC III is
6100 Sears Tower, Chicago, Illinois 60606.
(3) The address for Mr. Willis is 4400 Post Oak Parkway, Suite 1100,
Houston, Texas 77027.
(4) Includes all of the shares of Common Stock owned by GTC III. Mr. Rauner
is a general partner of GTCR Partnership, which serves as the sole
general partner of GTC III and over which he may be deemed to have
voting and investment power. The address for Mr. Rauner is 6100 Sears
Tower, Chicago, Illinois 60606.
(5) Mr. Edwards is a Principal with Golder, Thoma, Cressey, Rauner, Inc.
("GTCR Inc."), an affiliate of GTC III.
(6) Based on a Schedule 13G dated January 16, 1998 jointly filed by Putnam
Investments, Inc. ("PI"), Marsh & McLennan Companies, Inc. ("M&MC"),
Putnam Investment Management, Inc. ("PIM"), The Putnam Advisory
Company, Inc. ("PIA") and Putnam New Opportunities Fund ("PNOF"), PI
has shared dispositive power. The address for each of these companies
is One Post Office Square, Boston, Massachusetts 02109, except M&MC
which is 1166 Avenue of the Americas, New York, NY 10036. PI, which is
a wholly-owned subsidiary of M&MC, wholly
17
<PAGE> 21
owns two registered investment advisors: PIM, which is the investment
advisor to the Putnam family of mutual funds and has shared
dispositive power for 3,508,618 shares and PIA, which is the
investment advisor to Putnam's institutional clients and has shared
voting power for 249,016 shares and shared dispositive power for
318,491 shares. As part of the Putnam Family of Funds, and the
3,508,618 shares held by PIM, PNOF held 1,820,000 shares. Both PIM and
PIA have dispository power over the shares as investment managers, but
each of the mutual fund's trustees have voting power over the shares
held by institutional clients.
(7) These securities are owned by various individual and institutional
investors including T. Rowe Price New Horizons Fund, Inc. (which owns
1,600,000 shares, representing 5% of the shares outstanding), which T.
Rowe Price Associates, Inc. ("Price Associates") serves as investment
adviser with the power to direct investments and/or sole power to vote
the securities. For purposes of the reporting requirements of the
Exchange Act, 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. Includes sole
dispositive power for 3,542,700 shares and sole voting power for
329,800 shares. The address for T. Rowe Price Associates, Inc. is 100
E. Pratt Street, Baltimore, MD 21202.
(8) Represents shared dispositive power. Accounts managed on a
discretionary basis by Morgan Stanley, Dean Witter, Discover & Co.
("Morgan Stanley") are known to have the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale
of such securities. No such account holds more than five percent of
the class. The address for Morgan Stanley is 1585 Broadway, New York,
New York 10036.
18
<PAGE> 22
EXECUTIVE COMPENSATION
REPORT FROM THE COMPENSATION COMMITTEE REGARDING EXECUTIVE COMPENSATION
As members of the Compensation Committee, it is our duty to administer
the executive compensation program for the Company. The Compensation Committee
is responsible for establishing appropriate compensation goals for the
executive officers of the Company and evaluating the performance of such
executive officers in meeting such goals and making recommendations to the
Board of Directors with regard to executive compensation
The Company's compensation philosophy is to ensure that executive
compensation be directly linked to continuous improvements in corporate
performance, achievement of specific operational, financial and strategic
objectives and increases in stockholder value. The Compensation Committee
regularly reviews the compensation packages of the Company's executive
officers, taking into account factors which it considers relevant, such as
business conditions within and outside the industry, the Company's financial
performance, the market compensation for executives of similar background and
experience and the performance of the executive officer under consideration.
The particular elements of the Company's compensation programs for executive
officers are described below.
The goals of the Compensation Committee in establishing the Company's
executive compensation program are as follows:
(1) To fairly compensate the executive officers of the
Company and its subsidiaries for their contributions to the Company's
short-term and long-term performance. The elements of the Company's
executive compensation program are (a) annual base salaries, (b)
annual bonuses and (c) equity incentives.
(2) To allow the Company to attract, motivate and retain the
management personnel necessary to the Company's success by providing
an executive compensation program comparable to that offered by
companies with which the Company competes for such management
personnel.
In 1997, Michael T. Willis, the Chief Executive Officer of the
Company, received an increase in base salary from $350,000 to $450,000. The
Compensation Committee determined this salary increase was appropriate based on
(1) a review of market salary levels for the Chief Executive Officer among
companies similar to the Company, and (2) the Company's performance during the
prior year. Mr. Willis' incentive compensation of $450,000 was based solely on
the Company's attainment of 1997 earnings per share objectives set at the
beginning of the year. Mr. Willis received no grants of stock options or other
equity-based compensation in 1997.
19
<PAGE> 23
Section 162(m) of the Internal Revenue Code provides generally that
compensation paid by publicly-held corporations to the chief executive officer
and the four most highly paid senior executive officers in excess of $1 million
per year per executive will be deductible only if paid pursuant to
performance-based compensation plans approved by stockholders of the Company.
It is the intention of the Compensation Committee to consider the deductibility
of compensation is assessing the effectiveness of the Company's executive
compensation plans. The Executive Incentive Plan presented in this proxy
statement for stockholder approval is intended to qualify the Company's bonus
plan as performance-based, so that any compensation paid pursuant to the Plan
will be deductible for federal income tax purposes.
The elements of the executive compensation program described above are
implemented and periodically reviewed and adjusted by the Compensation
Committee. The annual base salaries of the Chief Executive Officer of the
Company and the other executive officers are determined based on individual
performance, experience and comparison with salaries paid by the Company's
industry peers and other companies in similar industries with comparable
revenues while linking the payment of compensation to the Company's achievement
of certain financial goals. In developing salary recommendations, the
Compensation Committee reviewed salaries of similar positions in
similarly-sized companies which engage in the Company's business. The
Compensation Committee confirmed that the overall compensation packages,
including the executive officers' equity ownership in the Company, were
consistent with the Compensation Committee's stated objective.
Compensation Committee of the Board of Directors
Charles R. Schneider
Charles H. Cotros
Donald J. Edwards
20
<PAGE> 24
NAMED OFFICERS' COMPENSATION
The following table sets forth, for the year ended December 31, 1997, the
annual compensation paid to the Company's Chief Executive Officer and to each
of its four most highly compensated executive officers (the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------------
AWARDS
--------------------------------------- -----------------------------------------
ANNUAL COMPENSATION(1) RESTRICTED SECURITIES
NAME AND --------------------------------------- STOCK UNDERLYING LTIP
PRINCIPAL POSITION(S) YEAR SALARY BONUS AWARD(S) OPTIONS PAYOUTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Michael T. Willis(2) 1997 $450,000 $450,000
Chief Executive Officer and 1996 350,000 175,000 187,500
President 1995 308,140 150,000
Austin P. Young(3)
Executive Vice President 1997 310,000 285,296 $ 55,021
Finance and Administration 1996 115,256 60,000 $319,701 105,000
Kenneth R. Johnsen 1997 217,424 375,000 125,000
Executive Vice President
Metamor Solutions
George W. Fink 1997 327,750 160,000 20,000 678,791
Executive Vice President 1996 285,000 142,500
COMSYS IT Services 1995 91,833 -- 225,000
Rocco N. Aceto 1997 279,998 100,000 30,000
Executive Vice President 1996 267,000 -- 90,000
CORESTAFF Services 1995 212,614 460,948
</TABLE>
- -------------------------------------------------
(1) Annual Compensation excludes the aggregate value of perquisites as
such value is less than either $50,000 or 10% of total annual Salary
and Bonus for each Named Officer.
(2) The Company maintains a split-dollar insurance arrangement with Mr.
Willis, pursuant to which Mr. Willis pays the term life portion of the
premiums and the remainder is paid by the Company. The $116,495 paid
by the Company during 1997 was not compensation to Mr. Willis and
therefore the premium is not included in the table above.
(3) Mr. Young was granted 10,482 shares of restricted stock on August 19,
1996, of which 2,849 vested on March 30, 1997, and the remainder will
vest on March 30, 1999. The value of the 10,482 shares at December 31,
1997, based on a closing price of $26.50, was $277,773.
21
<PAGE> 25
The following table provides information regarding the grants of stock
options during the last fiscal year to the Named Officers. The Company did not
grant any stock appreciation rights during the last fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENTAGE OF ANNUAL RATES OF STOCK
NUMBER OF TOTAL OPTIONS PRICE APPRECIATION FOR
SECURITIES GRANTED TO EXERCISE OR ------------------------
UNDERLYING EMPLOYEES IN BASE PRICE EXPIRATION OPTION TERM
NAME OPTIONS GRANTED(1) 1997 PER SHARE DATE 5% 10%
- ------------------- ------------------ ------------- ------------- ------------ ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Kenneth R. Johnsen 125,000 19.4% $19.75 5/21/07 $1,553 $3,935
George W. Fink 20,000 3.1 20.75 3/20/07 261 661
Rocco N. Aceto 30,000 8.7 20.75 3/20/07 392 992
</TABLE>
- --------------------------------
(1) The options vest 20% per year over five years.
The following table provides information with respect to aggregate option
exercises in the last fiscal year and fiscal year-end option values for the
Named Officers. The Company did not grant any stock appreciation rights during
the last fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1997 DECEMBER 31, 1997(2)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ------------ ------------ ----------- ------------- ----------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Michael T. Willis None -- 37,500 150,000 $ 131 $ 525
Austin P. Young None -- 21,000 84,000 -- --
Kenneth R. Johnsen None -- -- 125,000 -- 844
George W. Fink 30,000 $678,791 113,800 65,000 2,449 1,083
Rocco N. Aceto None -- 18,000 102,000 63 424
</TABLE>
- ---------------------------------
(1) Computed based on the difference between the exercise price and the
sale price.
(2) Computed based on the difference between the closing price of $26.50 on
December 31, 1997, and the exercise price.
22
<PAGE> 26
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of
Messrs. Willis, Young, Johnsen, Fink and Aceto (the "Agreements"). The annual
base salaries being paid to Messrs. Willis, Young, Johnsen, Fink and Aceto are
$450,000, $310,000, $350,000, $327,750 and $280,000, respectively, as of
December 31, 1997, and such Agreements provide for periodic salary increases
and bonuses in the discretion of the Company and, in some cases, the Company's
achievement of certain performance objectives. The Agreements continue until
June 30, 2001, and annually thereafter until terminated by either party
thereto. Mr. Aceto resigned as an executive officer on April 1, 1998, and his
employment agreement will terminate May 29, 1998. In addition, the Agreements
generally provide for severance benefits equal to one year of base salary in
the event of termination upon death or total disability or upon non-renewal
after the initial term; two years of base salary in the event of termination
without cause or constructive termination; and two years of base compensation
plus one year of bonus in the event of a change of control. However, each of
the executive officers is subject to a two year non-compete covenant following
the termination of their employment.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is currently comprised of Messrs. Schneider,
Cotros and Edwards. Mr. Schneider serves as the Chairman of the Committee. None
of Messrs. Schneider, Cotros and Edwards have been an employee or officer of
the Company or any of its subsidiaries during the year; however, Mr. Edwards
was an officer of the Company from May through August of 1995.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Mr. Willis owns a fifty percent interest in a firm that provided
certain charter aircraft services to the Company in the amount of $119,979 for
the year ended December 31, 1997. Messrs. Aceto, Amella, Dameris and Schneider
are indebted to the Company in the amounts shown below in connection with the
acquisition by each of them of shares of Common Stock pursuant to a Senior
Management Agreement and, in the case of Mr. Schneider, a Director Stock
Purchase Agreement. The notes relating to these loans are recourse, payable on
demand, bear interest at 8% per annum, with interest due only upon payment of
principal, and are secured by a pledge of such shares of Common Stock.
<TABLE>
<CAPTION>
ORIGINAL DATE OUTSTANDING NUMBER OF PRICE
PRINCIPAL OF AMOUNT SHARES PER
NAME AMOUNT ISSUANCE OF NOTE(1) PURCHASED SHARE
---- -------- ------------ ------------ --------- ------------
<S> <C> <C> <C> <C> <C>
Rocco N. Aceto .................... $355,000 April 1995 $ 431,329.86 171,000 $ 2.08
Joseph V. Amella .................. 355,000 April 1995 431,329.86 171,000 2.08
Peter T. Dameris .................. 75,000 January 1995 92,868.49 171,000 0.44
Charles R. Schneider .............. 2,250 January 1995 2,786.05 5,130 0.44
</TABLE>
- --------------------
(1) Includes accrued interest through December 31, 1997.
SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who beneficially own more than 10% of the Company's
Common Stock ("10% Stockholders"), to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. To the knowledge of the
Company, all of these filing requirements were satisfied by the Company's
directors and officers and the 10% Stockholders.
23
<PAGE> 27
COMPARATIVE STOCK PERFORMANCE
As required by applicable rules of the Securities and Exchange
Commission, set forth below is a performance graph prepared based upon the
following assumptions:
1. $100 was invested on November 8, 1995 (the date the Common
Stock commenced trading on the Nasdaq National Market), in
the Company's Common Stock, the Standard & Poor's 500 Stock
Index (the "S&P 500 Index") and a peer group, selected in
good faith, comprised of Accustaff Incorporated, Interim
Services, Inc., Kelly Services, Inc., Manpower, Inc. and
Norrell Corp.
(the "Peer Group") .
2. Dividends are reinvested on the ex-dividend dates.
COMPARATIVE TOTAL RETURNS
METAMOR WORLDWIDE, INC., THE S&P 500 INDEX AND A PEER GROUP
(PERFORMANCE RESULTS FROM NOVEMBER 8, 1995 TO DECEMBER 31, 1997)
<TABLE>
<CAPTION>
8-Nov-95 31-Dec-95 31-Dec-96 31-Dec-97
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Metamor 100 215 314 351
S&P 500 Index 100 104 128 171
Peer Group 100 104 124 137
</TABLE>
24
<PAGE> 28
STOCKHOLDER PROPOSALS
Any proposals of stockholders intended to be presented at the 1999
Annual Meeting of Stockholders must be received by the Company for inclusion in
the proxy statement and form of proxy relating to the meeting not later than
December 8, 1998. Proponents are requested to submit their proposals by
certified mail, return receipt requested. Detailed information for submitting
resolutions will be provided upon written request to the Secretary of the
Company, 4400 Post Oak Parkway, Suite 1100, Houston, Texas 77027, attention:
Peter T. Dameris, Esq. No stockholder proposals were received for inclusion in
this Proxy Statement.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
Copies of the Company's Annual Report to Stockholders or its Annual
Report on Form 10-K for the fiscal year ended December 31, 1997, as filed with
the Securities and Exchange Commission, are available without charge to
stockholders upon written request to Investor Relations, Metamor Worldwide,
Inc., 4400 Post Oak Parkway, Suite 1100, Houston, Texas 77027.
OTHER MATTERS
As of the date of this Proxy Statement, the management of the Company
has no knowledge of any business to be presented for consideration at the
Meeting other than that described above. If any other business should properly
come before the Meeting, shares represented by proxies will be voted with
respect thereto in accordance with the judgment of the persons named in such
proxies.
The cost of any solicitation of proxies by mail will be borne by the
Company. Arrangements may be made with brokerage firms and other custodians,
nominees and fiduciaries for the forwarding of material to and solicitation of
proxies from the beneficial owners of Common Stock held of record by such
persons, and the Company will reimburse such brokerage firms, custodians,
nominees and fiduciaries for reasonable out of pocket expenses incurred by them
in connection therewith. In addition, the Company has retained American Stock
Transfer & Trust Company to perform a proxy search to determine the beneficial
owners of the Common Stock as of the Record Date and will pay a fee to such
firm of approximately $125 plus reimbursement of expenses.
The information contained in this Proxy Statement in the sections
entitled "Report From the Compensation Committee Regarding Executive
Compensation" and "Comparative Stock Performance" shall not be deemed
incorporated by reference by any general statement incorporating by reference
any information contained in this Proxy Statement into any filing under the
Securities Act of 1933, as amended (the "Securities Act"), or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), except to the extent
that the Company specifically incorporates by reference the information
contained in such sections, and shall not otherwise be deemed filed under the
Securities Act or the Exchange Act.
25
<PAGE> 29
APPENDIX A
METAMOR WORLDWIDE, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE AND RESTATEMENT. The METAMOR WORLDWIDE, INC. EMPLOYEE
STOCK PURCHASE PLAN (the "Plan") is intended to provide an incentive for
employees of METAMOR WORLDWIDE, INC. (the "Company") and certain of its
subsidiaries to acquire or increase a proprietary interest in the Company
through the purchase of shares of the Company's common stock. The Plan as set
forth herein constitutes an amendment and restatement of the CORESTAFF, Inc.
Employee Stock Purchase Plan as previously adopted by the Company and shall
supersede and replace in its entirety such prior plan.
2. DEFINITIONS AND CONSTRUCTION.
2.1 DEFINITIONS. Where the following words and phrases are
used in the Plan, they shall have the respective meanings set forth
below, unless the context clearly indicates to the contrary:
(i) "BOARD" means the Board of Directors of the Company.
(ii) "CODE" means the Internal Revenue Code of 1986, as amended.
(iii) "COMMITTEE" means a committee appointed from time to time by
the Board to administer the Plan as provided in Paragraph 3
and constituted so as to permit the Plan to comply with Rule
16b-3, as currently in effect or as hereafter modified,
promulgated under the Securities Exchange Act of 1934, as
amended.
(iv) "COMPANY" means Metamor Worldwide, Inc., a Delaware
corporation.
(v) "DATE OF EXERCISE" means the last day of each Option Period.
(vi) "DATE OF GRANT" means July 1, 1998, and, thereafter, the first
day of each successive October, January, April and July.
(vii) "ELIGIBLE COMPENSATION" means regular straight-time earnings
or base salary, plus overtime pay, incentive compensation,
bonuses, and commissions.
(viii) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(ix) "OPTION PERIOD" means the three-month period beginning on each
Date of Grant.
(x) "OPTION PRICE" shall have the meaning assigned to such term in
Paragraph 8(b).
(xi) "PARTICIPATING COMPANY" means any present or future parent or
subsidiary corporation of the Company that participates in the
Plan pursuant to Paragraph 4.
A-1
<PAGE> 30
(xii) "PLAN" means this Metamor Worldwide, Inc. Employee Stock
Purchase Plan, as amended from time to time.
(xiii) "RESTRICTION PERIOD" means the period of time, if any, during
which shares of Stock acquired by a participant in the Plan
may not be sold, assigned, pledged, exchanged, hypothecated,
or otherwise transferred, encumbered, or disposed of by such
participant as provided in Paragraph 8.4.
(xiv) "STOCK" means the shares of the Company's common stock, par
value $.01 per share.
2.2 NUMBER AND GENDER. Wherever appropriate herein, words used
in the singular shall be considered to include the plural, and words
used in the plural shall be considered to include the singular. The
masculine gender, where appearing in the Plan, shall be deemed to
include the feminine gender.
2.3 HEADINGS. The headings and subheadings in the Plan are
included solely for convenience, and, if there is any conflict between
such headings or subheadings and the text of the Plan, the text shall
control.
2.4 SEVERABILITY. If any provision of the Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall
not affect the remaining provisions hereof; instead, each provision
shall be fully severable, and the Plan shall be construed and enforced
as if said illegal or invalid provision had never been included herein.
2.5 GOVERNING LAW. All provisions of the Plan shall be
construed in accordance with the laws of the state of Texas, except to
the extent preempted by federal law.
2.6 SECTION 423 OF THE CODE. The Plan is intended to qualify
as an "employee stock purchase plan" under section 423 of the Code. The
provisions of the Plan shall be construed in a manner consistent with
the requirements of that section of the Code.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by
the Committee, the members of which shall be appointed from time to time by the
Board. Each member of the Committee shall serve for a term commencing on a date
specified by the Board and continuing until he dies, resigns, or is removed from
office by the Board. Subject to the provisions of the Plan, the Committee shall
interpret the Plan and all options granted under the Plan, make such rules as it
deems necessary for the proper administration of the Plan, and make all other
determinations necessary or advisable for the administration of the Plan. In
addition, the Committee shall correct any defect or supply any omission or
reconcile any inconsistency in the Plan, or in any option granted under the
Plan, in the manner and to the extent that the Committee deems desirable to
carry the Plan or any option into effect. The Committee shall, in its sole
discretion, make such decisions or determinations and take such actions, and all
such decisions, determinations, and actions taken or made by the Committee
pursuant to this and the other Paragraphs of the Plan shall be conclusive on all
parties. The Committee shall not be liable for any decision, determination, or
action taken in good faith in connection with the administration of the Plan.
The Committee shall have the authority to delegate routine day-to-day
administration of the Plan to such officers and employees of the Company as the
Committee deems appropriate.
4. PARTICIPATING COMPANIES. The Committee may from time to time
designate any present or future parent or subsidiary corporation of the Company
that is eligible by law to participate in the Plan
A-2
<PAGE> 31
as a Participating Company by written instrument delivered to the designated
Participating Company. Such written instrument shall specify the effective date
of such designation and shall become, as to such designated Participating
Company and persons in its employment, a part of the Plan. The terms of the Plan
may be modified as applied to the Participating Company only to the extent
permitted under section 423 of the Code. Transfer of employment among the
Company and Participating Companies (and among any other parent or subsidiary
corporation of the Company) shall not be considered a termination of employment
hereunder. Any Participating Company may, by appropriate action of its Board of
Directors, terminate its participation in the Plan. Moreover, the Committee may,
in its discretion, terminate a Participating Company's Plan participation at any
time.
5. ELIGIBILITY TO PARTICIPATE. Subject to the provisions hereof,
all employees of the Company and the Participating Companies who are employed by
the Company or any Participating Company as of a Date of Grant shall be eligible
to participate in the Plan. The preceding notwithstanding, no option shall be
granted to an employee if such employee, immediately after the option is
granted, owns stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or of its parent or
subsidiary corporations (within the meaning of sections 423(b)(3) and 424(d) of
the Code).
6. STOCK SUBJECT TO THE PLAN. Subject to the provisions of
Paragraph 13 hereof, the aggregate number of shares which may be sold pursuant
to options granted under the Plan shall not exceed 450,000 shares of the
authorized Stock, which shares may be unissued shares or reacquired shares,
including shares bought on the market or otherwise for purposes of the Plan.
Should any option granted under the Plan expire or terminate prior to its
exercise in full, the shares theretofore subject to such option may again be
subject to an option granted under the Plan. Any shares that are not subject to
outstanding options upon the termination of the Plan shall cease to be subject
to the Plan.
7. GRANT OF OPTIONS.
7.1 IN GENERAL. Following the effective date of the Plan and
continuing while the Plan remains in force, the Company shall offer
options under the Plan to purchase shares of Stock to all eligible
employees who elect to participate in the Plan. Except as otherwise
determined by the Committee, these options shall be granted on each
Date of Grant. Except as provided in Paragraph 14, the term of each
option shall be for three months, which shall begin on the Date of
Grant and end on the last day of such three-month period. Subject to
Subparagraph 7.4, the number of shares of Stock subject to an option
for a participant shall be equal to the quotient of (i) the aggregate
payroll deductions withheld on behalf of such participant during the
Option Period in accordance with Subparagraph 7.2, divided by (ii) the
Option Price of the Stock applicable to the Option Period, including
fractions; provided, however, that the maximum number of shares of
Stock that may be subject to any option for a participant may not
exceed 5,000 (subject to adjustment as provided in Paragraph 13).
7.2 ELECTION TO PARTICIPATE; PAYROLL DEDUCTION AUTHORIZATION.
Except as provided in Subparagraph 7.6, each eligible employee may
elect to participate in the Plan by delivering to the Company, within
the time period prescribed by the Committee, a written payroll
deduction authorization in a form prepared by the Company, whereby such
employee gives notice of his election to participate in the Plan as of
the next following Date of Grant, and whereby such employee designates
an integral percentage of his Eligible Compensation to be deducted from
his compensation for each pay period and paid into the Plan for his
account. The designated
A-3
<PAGE> 32
percentage may not be less than 2% nor exceed 5%. An eligible employee
may participate in the Plan only by means of payroll deduction.
7.3 CHANGES IN PAYROLL AUTHORIZATION. The payroll deduction
authorization referred to in Subparagraph 7.2 may not be changed during
the Option Period. However, a participant may withdraw from the Plan as
provided in Paragraph 9.
7.4 $25,000 LIMITATION. No employee shall be granted any
option under the Plan that permits his rights to purchase Stock under
the Plan and under all other employee stock purchase plans of the
Company and its parent and subsidiary corporations to accrue at a rate
which exceeds $25,000 of fair market value of Stock (determined at the
time such option is granted) for each calendar year in which such
option is outstanding at any time (within the meaning of section
423(b)(8) of the Code). Any payroll deductions in excess of the amount
specified in the foregoing sentence shall be returned to the
participant as soon as administratively feasible after the next
following Date of Exercise.
7.5 LEAVES OF ABSENCE. During a paid leave of absence
approved by the Company and meeting the requirements of Treasury
Regulation ss. 1.421-7(h)(2), a participant's elected payroll
deductions shall continue. A participant may not contribute to the Plan
during an unpaid leave of absence. If a participant takes an unpaid
leave of absence that is approved by the Company and meets the
requirements of Treasury Regulation ss. 1.421-7(h)(2), then such
participant's payroll deductions for such Option Period that were made
prior to such leave may remain in the Plan and be used to purchase
Stock under the Plan on the Date of Exercise relating to such Option
Period. If a participant takes a leave of absence that is not described
in the first or third sentence of this Subparagraph 7.5, then he shall
be considered to have withdrawn from the Plan pursuant to the
provisions of Paragraph 9 hereof. Furthermore, notwithstanding the
preceding provisions of this Subparagraph 7.5, if a participant takes a
leave of absence that is described in the first or third sentence of
this Subparagraph 7.5 and such leave of absence exceeds 30 days, then
he shall be considered to have withdrawn from the Plan pursuant to the
provisions of Paragraph 9 hereof on the 31st day of such leave of
absence.
7.6 CONTINUING ELECTION. Subject to the limitation set forth
in Subparagraph 7.4, a participant (i) who has elected to participate
in the Plan pursuant to Subparagraph 7.2 as of a Date of Grant and (ii)
who takes no action to change or revoke such election as of the next
following Date of Grant and/or as of any subsequent Date of Grant prior
to any such respective Date of Grant shall be deemed to have made the
same election, including the same attendant payroll deduction
authorization, for such next following and/or subsequent Date(s) of
Grant as was in effect immediately prior to such respective Date of
Grant. Payroll deductions that are limited by Subparagraph 7.4 shall
recommence at the rate provided in such participant's payroll deduction
authorization at the beginning of the first Option Period that is
scheduled to end in the following calendar year, unless the participant
changes the amount of his payroll deduction authorization pursuant to
Paragraph 7, withdraws from the Plan as provided in Paragraph 9, or is
terminated from participation in the Plan as provided in Paragraph 10.
8. EXERCISE OF OPTIONS.
8.1 GENERAL STATEMENT. Subject to the limitation set forth in
Subparagraph 7.4, each participant in the Plan automatically, and
without any act on his part, shall be deemed to have
A-4
<PAGE> 33
exercised his option on each Date of Exercise to the extent of his
unused payroll deductions under the Plan and to the extent the issuance
of Stock to such participant upon such exercise is lawful.
8.2 "OPTION PRICE" DEFINED. The term "Option Price" shall
mean the per share price of Stock to be paid by each participant on
each exercise of his option, which price shall be equal to 85% of the
lesser of (i) the fair market value of the Stock on the Date of
Exercise or (ii) the fair market value of the Stock on the Date of
Grant. For all purposes under the Plan, the fair market value of a
share of Stock on a particular date shall be equal to the closing price
of the Stock on the Nasdaq National Market on that date (or, if no
shares of Stock have been traded on that date, on the next regular
business date on which shares of the Stock are so traded).
8.3 DELIVERY OF SHARE CERTIFICATES. As soon as practicable
after each Date of Exercise, the Company shall deliver to a custodian
selected by the Committee one or more certificates representing (or
shall otherwise cause to be credited to the account of such custodian)
the total number of whole shares of Stock respecting options exercised
on such Date of Exercise in the aggregate (for both whole and
fractional shares) of all of the participating employees hereunder. Any
remaining amount representing a fractional share shall not be
certificated (or otherwise so credited), and such remaining amount
shall be paid in cash to the custodian. Such custodian shall keep
accurate records of the beneficial interests of each participating
employee in such shares by means of participant accounts under the
Plan, and shall provide each eligible employee with quarterly or such
other periodic statements with respect thereto as may be directed by
the Committee. If the Company is required to obtain from any U.S.
commission or agency authority to issue any such shares, the Company
shall seek to obtain such authority. Inability of the Company to obtain
from any commission or agency (whether U.S. or foreign) authority,
which counsel for the Company deems necessary for the lawful issuance
of any such shares, shall relieve the Company from liability to any
participant in the Plan except to return to him the amount of his
payroll deductions under the Plan that would have otherwise been used
upon exercise of the relevant option.
8.4 RESTRICTIONS ON TRANSFER. The Committee may from time to
time specify with respect to a particular grant of options a
Restriction Period that shall apply to the shares of Stock acquired
pursuant to such options. In the event the Committee has specified that
a Restriction Period will apply with respect to a particular grant of
options, unless another Restriction Period is specified by the
Committee, the Restriction Period applicable to shares of Stock
acquired pursuant to such grant shall be a period of six months after
the Date of Exercise of the options pursuant to which such shares were
acquired. Except as hereinafter provided, during the Restriction Period
applicable to shares of Stock acquired under the Plan, such shares may
not be sold, assigned, pledged, exchanged, hypothecated, or otherwise
transferred, encumbered, or disposed of by the participant who has
purchased such shares; provided, however, that such Restriction shall
not apply to the transfer, exchange, or conversion of such shares of
Stock pursuant to a merger, consolidation, or other plan of
reorganization of the Company, but the stock, securities, or other
property (other than cash) received upon any such transfer, exchange or
conversion shall also become subject to the same transfer restrictions
applicable to the original shares of Stock, and shall be held by the
custodian, pursuant to the provisions hereof. Upon the expiration of
such Restriction Period, if any, the transfer restrictions set forth in
this Subparagraph 8.4 shall cease to apply and the optionee may,
pursuant to procedures established by the Committee and the custodian,
direct the sale or distribution of some or all of the whole shares of
Stock in his Company stock account that are not then subject to
transfer restrictions and, in the event of a sale, request payment of
the net proceeds from such sale. Further, upon the termination of the
A-5
<PAGE> 34
participant's employment with the Company and its parent or subsidiary
corporations for any reason whatsoever, the transfer restrictions set
forth in this Subparagraph 8.4 shall cease to apply and the custodian
shall, upon the request of such participant, deliver to such
participant a certificate issued in his name representing (or otherwise
credit to an account of such participant) the aggregate whole number of
shares of Stock in his Company stock account under the Plan. At the
time of distribution of such shares, any fractional share in such
Company stock account shall be converted to cash based on the fair
market value of the Stock on the date of distribution and such cash
shall be paid to the participant. The Committee may cause the Stock
issued in connection with the exercise of options under the Plan to
bear such legends or other appropriate restrictions, and the Committee
may take such other actions, as it deems appropriate in order to
reflect the transfer restrictions set forth in this Subparagraph 8.4
and to assure compliance with applicable laws.
9. WITHDRAWAL FROM THE PLAN.
9.1 GENERAL STATEMENT. Any participant may withdraw in whole
from the Plan at any time prior to the Date of Exercise relating to a
particular Option Period. Partial withdrawals shall not be permitted. A
participant who wishes to withdraw from the Plan must timely deliver to
the Company a notice of withdrawal in a form prepared by the Company.
The Company, promptly following the time when the notice of withdrawal
is delivered, shall refund to the participant the amount of his payroll
deductions under the Plan which have not yet been otherwise returned to
him or used upon exercise of options, and thereupon, automatically and
without any further act on his part, his payroll deduction
authorization and his interest in unexercised options under the Plan
shall terminate.
9.2 ELIGIBILITY FOLLOWING WITHDRAWAL. A participant who
withdraws from the Plan shall be eligible to participate again in the
Plan upon expiration of the Option Period during which he withdrew
(provided that he is otherwise eligible to participate in the Plan at
such time in accordance with Paragraph 5 hereof).
10. TERMINATION OF EMPLOYMENT AND OF PARTICIPATION.
10.1 GENERAL STATEMENT. Except as provided in Subparagraph
10.2, if the employment of a participant terminates for any reason
whatsoever, then his participation in the Plan automatically, and
without any act on his part, shall terminate as of the date of the
termination of his employment. The Company shall promptly refund to him
the amount of his payroll deductions under the Plan which have not yet
been otherwise returned to him or used upon exercise of options, and
thereupon his interest in unexercised options under the Plan shall
terminate.
10.2 TERMINATION BY RETIREMENT, DEATH, OR DISABILITY. If the
employment of a participant terminates after such participant has
attained age 65 or due to such participant's death or permanent and
total disability (within the meaning of section 22(e)(3) of the Code),
then such participant, or such participant's personal representative,
as applicable, shall have the right to elect either to:
(i) Withdraw all of such participant's accumulated unused
payroll deductions under the Plan; or
(ii) Exercise such participant's option for the purchase
of Stock on the last day of the Option Period during which
termination of employment occurs for the purchase of
A-6
<PAGE> 35
the number of full shares of Stock that the accumulated
payroll deductions at the date of such participant's
termination of employment will purchase at the applicable
Option Price (subject to Subparagraph 7.4), with any excess
payroll deduction amounts to be returned to such participant
or such personal representative.
The participant or, if applicable, such personal representative, must make such
election by giving written notice to the Committee at such time and in such
manner as the Committee prescribes. In the event that no such written notice of
election is timely received by the Committee, the participant or personal
representative will automatically be deemed to have elected as set forth in
Clause (ii) above, and promptly after the exercise so described in Clause (ii)
above, all shares of Stock in such participant's account under the Plan shall be
distributed to the participant or such personal representative.
11. RESTRICTION UPON ASSIGNMENT OF OPTION. An option granted under
the Plan shall not be transferable otherwise than by will or the laws of descent
and distribution. Each option shall be exercisable, during his lifetime, only by
the employee to whom granted. The Company shall not recognize, and shall be
under no duty to recognize, any assignment or purported assignment by an
employee of his option or of any rights under his option or under the Plan.
12. NO RIGHTS OF STOCKHOLDER UNTIL EXERCISE OF OPTION. With
respect to shares of Stock subject to an option, an optionee shall not be deemed
to be a stockholder, and he shall not have any of the rights or privileges of a
stockholder, until such option has been exercised. With respect to an
individual's Stock held by the custodian pursuant to Subparagraph 8.4, the
custodian shall, as soon as practicable, pay the individual any cash dividends
attributable thereto and shall, in accordance with procedures adopted by the
custodian, facilitate the individual's voting rights attributable thereto.
13. ADJUSTMENTS. Whenever any change is made in the Stock, by
reason of a stock dividend or by reason of subdivision, stock split, reverse
stock split, recapitalization, reorganization, combination, reclassification of
shares, or other similar change, appropriate action will be taken by the
Committee to adjust accordingly the number of shares subject to the Plan, the
maximum number of shares that may be subject to any option, and the number and
Option Price of shares subject to options outstanding under the Plan.
14. MERGER, CONSOLIDATION, OR LIQUIDATION OF COMPANY. If the
Company shall not be the surviving corporation in any merger or consolidation
(or survives only as a subsidiary of another entity), or if the Company is to be
dissolved or liquidated, then, unless a surviving corporation assumes or
substitutes new options (within the meaning of section 424(a) of the Code) for
all options then outstanding, (i) the Date of Exercise for all options then
outstanding shall be accelerated to a date fixed by the Committee prior to the
effective date of such merger or consolidation or such dissolution or
liquidation and (ii) upon such effective date, any unexercised options shall
expire, and the Company promptly shall refund to each participant the amount of
such participant's payroll deductions under the Plan that have not yet been
returned to him or used upon exercise of options.
15. USE OF FUNDS; NO INTEREST PAID. All funds received or held by
the Company under the Plan shall be included in the general funds of the
Company, free of any trust or other restriction, and may be used for any
corporate purpose. No interest shall be paid to any participant.
16. EFFECTIVE DATE AND TERM OF THE PLAN. The Plan shall be
effective on April 1,1998, provided the Plan is approved by the stockholders of
the Company within twelve months of such date. Notwithstanding any provision in
the Plan, no option granted under the Plan shall be exercisable prior to
A-7
<PAGE> 36
such stockholder approval, and, if the stockholders of the Company do not
approve the Plan by the Date of Exercise of the first option granted hereunder,
then this amendment and restatement will have no force and effect. Except with
respect to options then outstanding, if not sooner terminated under the
provisions of Paragraph 17, the Plan shall terminate upon, and no further
payroll deductions shall be made and no further options shall be granted after
June 30, 2008.
17. AMENDMENT OR TERMINATION OF THE PLAN. The Board in its
discretion may terminate the Plan at any time with respect to any Stock for
which options have not theretofore been granted. The Board and the Committee
shall each have the right to alter or amend the Plan or any part thereof from
time to time; provided, however, that no change in any option theretofore
granted may be made that would impair the rights of the optionee without the
consent of such optionee.
18. SECURITIES LAWS. The Company shall not be obligated to issue
any Stock pursuant to any option granted under the Plan at any time when the
offer, issuance, or sale of shares covered by such option has not been
registered under the Securities Act of 1933, as amended, or does not comply with
such other state, federal, or foreign laws, rules, or regulations, or the
requirements of any stock exchange upon which the Stock may then be listed, as
the Company or the Committee deems applicable and, in the opinion of legal
counsel for the Company, there is no exemption from the requirements of such
laws, rules, regulations, or requirements available for the offer, issuance, and
sale of such shares. Furthermore, all Stock acquired pursuant to the Plan shall
be subject to the Company's policies concerning compliance with securities laws
and regulations, as such policies may be amended from time to time. The terms
and conditions of options granted hereunder to, and the purchase of shares by,
persons subject to section 16 of the Exchange Act shall comply with any
applicable provisions of Rule 16b-3. As to such persons, the Plan shall be
deemed to contain, and such options shall contain, and the shares issued upon
exercise thereof shall be subject to, such additional conditions and
restrictions as may be required from time to time by Rule 16b-3 to qualify for
the maximum exemption from section 16 of the Exchange Act with respect to Plan
transactions.
19. NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the
Plan shall be construed to prevent the Company or any subsidiary from taking any
corporate action that is deemed by the Company or such subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any option granted under the Plan. No employee,
beneficiary, or other person shall have any claim against the Company or any
subsidiary as a result of any such action.
20. MISCELLANEOUS PROVISIONS.
20.1 PARENT AND SUBSIDIARY CORPORATIONS. For all purposes of
the Plan, a corporation shall be considered to be a parent or
subsidiary corporation of the Company only if such corporation is a
parent or subsidiary corporation of the Company within the meaning of
sections 424(e) and 424(f) of the Code.
20.2 NOT A CONTRACT OF EMPLOYMENT. The adoption and
maintenance of the Plan shall not be deemed to be a contract between
the Company or any Participating Company and any person or to be
consideration for the employment of any person. Participation in the
Plan at any given time shall not be deemed to create the right to
participate in the Plan or in any other arrangement permitting an
employee of the Company or any Participating Company to purchase Stock
at a discount in the future. The rights and obligations under any
participant's terms of employment with the Company or any Participating
Company shall not be affected by participation in the Plan. Nothing
herein contained shall be deemed to give any person the right to be
retained
A-8
<PAGE> 37
in the employ of the Company or any Participating Company or to
restrict the right of the Company or any Participating Company to
discharge any person at any time, nor shall the Plan be deemed to give
the Company or any Participating Company the right to require any
person to remain in the employ of the Company or such Participating
Company or to restrict any person's right to terminate his employment
at any time. The Plan shall not afford any participant any additional
right to compensation as a result of the termination of such
participant's employment for any reason whatsoever.
20.3 COMPLIANCE WITH APPLICABLE LAWS. The Company's obligation
to offer, issue, sell, or deliver Stock under the Plan is at all times
subject to all approvals of and compliance with any governmental
authorities (whether domestic or foreign) required in connection with
the authorization, offer, issuance, sale, or delivery of Stock as well
as all federal, state, local, and foreign laws. Without limiting the
scope of the preceding sentence, and notwithstanding any other
provision in the Plan, the Company shall not be obligated to grant
options or to offer, issue, sell, or deliver Stock under the Plan to
any employee who is a citizen or resident of a jurisdiction the laws of
which, for reasons of its public policy, prohibit the Company from
taking any such action with respect to such employee.
A-9
<PAGE> 38
APPENDIX B
METAMOR WORLDWIDE, INC.
LONG-TERM INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
This Metamor Worldwide, Inc. Long-Term Incentive Plan hereby
amends and restates the CORESTAFF, Inc. 1995 Long-Term Incentive Plan (the
"Plan") and is intended to promote the interests of Metamor Worldwide, Inc.
(formerly CORESTAFF, Inc.), a Delaware corporation (the "Company"), by
encouraging employees of the Company, its subsidiaries and affiliated entities,
qualified consultants and non-employee directors of the Company to acquire or
increase their equity interest in the Company and to provide a means whereby
these persons may develop a sense of proprietorship and personal involvement in
the development and financial success of the Company, and to encourage them to
remain with and devote their best efforts to the business of the Company thereby
advancing the interests of the Company and its stockholders. The Plan is also
contemplated to enhance the ability of the Company, its subsidiaries and
affiliated entities to attract and retain the services of individuals who are
essential for the growth and profitability of the Company.
2. DEFINITIONS.
As used in the Plan, the following terms shall have the
meanings set forth below:
"Affiliate" shall mean (i) any entity that, directly or
through one or more intermediaries, is controlled by the Company, and
(ii) any entity in which the Company has a significant equity interest,
as determined by the Committee.
"Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock, Performance Award, Phantom Shares, Bonus Shares or
Cash Award.
"Award Agreement" shall mean any written agreement, contract,
or other instrument or document evidencing any Award, which may, but
need not, be executed or acknowledged by a participant.
"Board" shall mean the Board of Directors of the Company.
"Bonus Shares" shall mean an award of Shares granted pursuant
to Section 6.5 of the Plan.
"Cash Award" shall mean an award payable in cash granted
pursuant to Section 6.7 of the Plan.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the rules and regulations thereunder.
"Committee" shall mean a committee appointed from time to time
by the Board to administer the Plan as provided in Paragraph 3 and
constituted so as to permit the Plan to comply
B-1
<PAGE> 39
with Rule 16b-3, as currently in effect or as hereafter
modified, promulgated under the Securities Exchange Act of
1934, as amended.
"Employee" shall mean any employee of the Company or an
Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Fair Market Value" shall mean, with respect to Shares on any
day, the closing price of a Share on such day as reported on the Nasdaq
National Market, or if the Shares are not listed on the Nasdaq National
Market, on the principal United States securities exchange registered
under the Exchange Act on which such stock is listed.
"Incentive Stock Option" or "ISO" shall mean an option granted
under Section 6.1 of the Plan that is intended to qualify as an
"incentive stock option" under Section 422 of the Code or any successor
provision thereto.
"Non-employee Director" shall mean a director of the Company
who is not otherwise an employee of the Company or any Affiliate.
"Non-Qualified Stock Option" or "NQO" shall mean an option
granted under Sections 6.1 or 6.8 of the Plan that is not intended to
be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.
"Participant" shall mean any individual granted an Award under
the Plan.
"Performance Award" shall mean any right granted under Section
6.4 of the Plan.
"Person" shall mean individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization,
government or political subdivision thereof or other entity.
"Phantom Shares" shall mean an Award of the right to receive
Shares or cash or a combination thereof issued at the end of a
Restricted Period which is granted pursuant to Section 6.6 of the Plan.
"Qualified Consultant" shall mean those certain individuals
providing consulting services to the corporate executive office of the
Company and designated by the Committee.
"Restricted Period" shall mean the period established by the
Committee with respect to an Award during which the Award either
remains subject to forfeiture or is not exercisable by the Participant.
"Restricted Stock" shall mean any Share, prior to the lapse of
restrictions thereon, granted under Section 6.3 of the Plan.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC
under the Exchange Act, or any successor rule or regulation thereto as
in effect from time to time.
B-2
<PAGE> 40
"SEC" shall mean the Securities and Exchange Commission, or
any successor thereto.
"Shares" or "Common Shares" or "Common Stock" shall mean the
common stock of the Company, $0.01 par value, and such other securities
or property as may become the subject of Awards of the Plan.
"Stock Appreciation Right" or "Right" shall mean any right to
receive the appreciation of Shares granted under Section 6.2 of the
Plan.
"Substitute Award" shall mean Awards granted in assumption of,
or in substitution for, outstanding awards previously granted by (i) a
company acquired by the Company or one or more of its Affiliates, or
(ii) a company with which the Company or one or more of its Affiliates
combines.
3. ADMINISTRATION.
The Plan shall be administered by the Committee, which
Committee shall consist of at least two members. All members of the Committee
shall be Non-employee Directors within the meaning of Rule 16b-3, which has been
adopted by the SEC under the Exchange Act or such Rule or its equivalent as then
in effect, and "outside directors" as defined in Section 162(m) of the Code and
regulations promulgated thereunder. A majority of the Committee shall constitute
a quorum, and the acts of the members of the Committee who are present at any
meeting thereof at which a quorum is present, or acts unanimously approved by
the members of the Committee in writing, shall be the acts of the Committee.
Subject to the terms of the Plan and applicable law, and in addition to other
express powers and authorizations conferred on the Committee by the Plan, the
Committee shall have full power and authority to: (i) designate Participants;
(ii) determine the type or types of Awards to be granted to an eligible
Employee; (iii) determine the number of Shares to be covered by, or with respect
to which payments, rights, or other matters are to be calculated in connection
with, Awards; (iv) determine the terms and conditions of any Award; (v)
determine whether, to what extent, and under what circumstances Awards may be
settled or exercised in cash, Shares, other securities, other Awards or other
property, or canceled, forfeited, or suspended and the method or methods by
which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi)
determine whether, to what extent, and under what circumstances, cash, Shares,
other securities, other Awards, other property, and other amounts payable with
respect to an Award shall be deferred either automatically or at the election of
the holder thereof or of the Committee; (vii) interpret and administer the Plan
and any instrument or agreement relating to, or Award made under, the Plan;
(viii) establish, amend, suspend, or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and (ix) make any other determination and take any other action
that the Committee deems necessary or desirable for the administration of the
Plan. Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive and binding upon all Persons,
including the Company, and any Affiliate, any Participant, any holder or
beneficiary of any Award, any stockholder, any Qualified Consultant and any
Employee.
4. SHARES AVAILABLE FOR AWARDS.
4.1 SHARES AVAILABLE. Subject to adjustment as provided
in Section 4.3, the number of Shares with respect to which Awards may
be granted under the Plan shall be 5,000,000. If, after the effective
date of the Plan, any Shares covered by an Award granted under the
Plan, or to
B-3
<PAGE> 41
which such an Award relates, are forfeited, or if an Award otherwise
terminates or is canceled without the delivery of Shares or of other
consideration, then the Shares covered by such Award, or to which such
Award relates, or the number of Shares otherwise counted against the
aggregate number of Shares with respect to which Awards may be granted,
to the extent of any such forfeiture, termination or cancellation,
shall again be, or shall become, to the extent permissible under Rule
16b-3, Shares with respect to which Awards may be granted.
4.2 SOURCES OF SHARES DELIVERABLE UNDER AWARDS. Any Shares
delivered pursuant to an Award may consist, in whole or in part, of
authorized and unissued Shares or of treasury Shares.
4.3 ADJUSTMENTS. In the event that the Committee
determines that any dividend or other distribution (whether in the form
of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the
Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits
or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and type of Shares (or other
securities or property) with respect to which Awards may be granted,
(ii) the number and type of Shares (or other securities or property)
subject to outstanding Awards, and (iii) the grant or exercise price
with respect to any Award or, if deemed appropriate, make provision for
a cash payment to the holder of an outstanding award; provided, in each
case, that with respect to Awards of Incentive Stock Options and Awards
intended to qualify as performance-based compensation under Section
162(m)(4)(C) of the Code, no such adjustment shall be authorized to the
extent that such authority would cause the Plan to violate Section
422(b)(1) of the Code or would cause such Award to fail to so qualify
under Section 162(m) of the Code, as the case may be, or any successor
provisions thereto; and provided further, that the number of Shares
subject to any Award denominated in Shares shall always be a whole
number.
5. ELIGIBILITY.
Other than Awards granted to Non-employee Directors pursuant
to Section 6.8 of the Plan, any Employee shall be eligible to be designated a
Participant. However, no Employee may receive Options and/or Stock Appreciation
Rights during the term of the Plan that, in the aggregate, are with respect to
more than 33-1/3% of all Shares that may be made subject to Awards under the
Plan.
6. AWARDS.
6.1 OPTIONS. Subject to the provisions of the Plan, the
Committee shall have the authority to determine the Employees and
Qualified Consultants to whom Options shall be granted, the number of
Shares to be covered by each Option, the purchase price therefor and
the conditions and limitations applicable to the exercise of the
Option, including the following terms and conditions and such
additional terms and conditions, as the Committee shall determine, that
are not inconsistent with the provisions of the Plan.
(i) Exercise Price. The purchase price per Share
purchasable under an Option shall be determined by the Committee at the
time each Option is granted.
B-4
<PAGE> 42
(ii) Time and Method of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part, and the method or methods by which, and the form or
forms (which may include, without limitation, cash, Shares, outstanding
Awards, Shares that would otherwise be acquired upon exercise of the
Option, other securities or other property, or any combination thereof,
having a Fair Market Value on the exercise date equal to the relevant
exercise price) in which payment of the exercise price with respect
hereto may be made or deemed to have been made.
(iii) Incentive Stock Options. The terms of any Incentive
Stock Option granted under the Plan shall comply in all respects with
the provisions of Section 422 of the Code, or any successor provision,
and any regulations promulgated thereunder. Incentive Stock Options may
be granted only to employees of the Company and its subsidiaries,
within the meaning of Section 424(f) of the Code.
6.2 STOCK APPRECIATION RIGHTS. Subject to the provisions
of the Plan, the Committee shall have the authority to determine the
Employees and Qualified Consultants to whom Stock Appreciation Rights
shall be granted, the number of Shares to be covered by each Stock
Appreciation Right Award, the grant price thereof and the conditions
and limitations applicable to the exercise thereof. A Stock
Appreciation Right may be granted in tandem with another Award, in
addition to another Award, or freestanding and unrelated to another
Award. A Stock Appreciation Right granted in tandem with or in addition
to another Award may be granted either at the same time as such other
Award or at a later time.
(i) Grant Price. The grant price of a Stock Appreciation
Right shall be determined by the Committee on the date of grant.
(ii) Other Terms and Conditions. Subject to the terms of
the Plan and any applicable Award Agreement, the Committee shall
determine, at or after the grant of a Stock Appreciation Right, the
term, methods of exercise, methods of settlement, and any other terms
and conditions of any Stock Appreciation Right. Any such determination
by the Committee may be changed by the Committee from time to time and
may govern the exercise of Stock Appreciation Rights granted or
exercised prior to such determination as well as Stock Appreciation
Rights granted or exercised thereafter. The Committee may impose such
conditions or restrictions on the exercise of any Stock Appreciation
Right as it shall deem appropriate.
6.3 RESTRICTED STOCK. Subject to the provisions of the
Plan, the Committee shall have the authority to determine the Employees
and Qualified Consultants to whom Restricted Stock shall be granted,
the number of Shares of Restricted Stock to be granted to each such
Participant, the duration of the Restricted Period during which, and
the conditions, including the performance criteria, if any, under
which, the Restricted Stock may be forfeited to the Company, and the
other terms and conditions of such Awards.
(i) Dividends. Dividends paid on Restricted Stock may be
paid directly to the Participant, may be subject to risk of forfeiture
and/or transfer restrictions during any period established by the
Committee or sequestered and held in a bookkeeping cash account (with
or without interest) or reinvested on an immediate or deferred basis in
additional shares of Common Stock, which credit or shares may be
subject to the same restrictions as the underlying Award or such other
restrictions, all as determined by the Committee in its discretion.
B-5
<PAGE> 43
(ii) Registration. Any Restricted Stock may be evidenced
in such manner as the Committee shall deem appropriate, including,
without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is
issued in respect of Restricted Stock granted under the Plan, such
certificate shall be registered in the name of the Participant and
shall bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such Restricted Stock.
(iii) Forfeiture and Restrictions Lapse. Except as
otherwise determined by the Committee or the terms of the Award that
granted the Restricted Stock, upon termination of a Participant's
employment (as determined under criteria established by the Committee)
for any reason during the applicable Restricted Period, all Restricted
Stock shall be forfeited by the Participant and re-acquired by the
Company. The Committee may, when it finds that a waiver would be in the
best interests of the Company and not cause such Award, if it is
intended to qualify as performance-based compensation under Section
162(m) of the Code, to fail to so qualify under Section 162(m) of the
Code, waive in whole or in part any or all remaining restrictions with
respect to such Participant's Restricted Stock. Unrestricted Shares,
evidenced in such manner as the Committee shall deem appropriate, shall
be issued to the holder of Restricted Stock promptly after the
applicable restrictions have lapsed or otherwise been satisfied.
(iv) Transfer Restrictions. During the Restricted Period,
Restricted Stock will be subject to the limitations on transfer as
provided in Section 6.9(iii).
6.4 PERFORMANCE AWARDS. The Committee shall have the
authority to determine the Employees and Qualified Consultants who
shall receive a Performance Award, which shall be denominated as an
amount of cash or Shares at the time of grant and confer on the
Participant the right to receive payment of such Award, in whole or in
part, upon the achievement of such performance goals during such
performance periods as the Committee shall establish with respect to
the Award.
(i) Terms and Conditions. Subject to the terms of the
Plan and any applicable Award Agreement, the Committee shall determine
the performance goals to be achieved during any performance period, the
length of any performance period, the amount of any Performance Award
and the amount of any payment or transfer to be made pursuant to any
Performance Award.
(ii) Payment of Performance Awards. Performance Awards may
be paid (in cash and/or in Shares, in the sole discretion of the
Committee) in a lump sum or in installments following the close of the
performance period, in accordance with procedures established by the
Committee with respect to such Award.
6.5 BONUS SHARES. The Committee shall have the authority,
in its discretion, to grant Bonus Shares to eligible Employees and
Qualified Consultants. Each Bonus Share shall constitute a transfer of
an unrestricted Share to the Participant, without other payment
therefor, as additional compensation for the Participant's services to
the Company.
6.6 PHANTOM SHARES. The Committee shall have the
authority to grant Awards of Phantom Shares to eligible Employees and
Qualified Consultants upon such terms and conditions as the Committee
may determine.
B-6
<PAGE> 44
(i) Terms and Conditions. Each Phantom Share Award shall
constitute an agreement by the Company to issue or transfer a specified
number of Shares or pay an amount of cash equal to the value of a
specified number of Shares, or a combination thereof to the Participant
in the future, subject to the fulfillment during the Restricted Period
of such conditions, including performance objectives, if any, as the
Committee may specify at the date of grant. During the Restricted
Period, the Participant shall not have any rights of ownership in the
Phantom Shares and shall not have any right to vote such shares.
(ii) Dividends. Any Phantom Share Award may provide that
any or all dividends or other distributions paid on Shares during the
Restricted Period be credited in a cash bookkeeping account (without
interest) or that equivalent additional Phantom Shares be awarded,
which account or shares may be subject to the same restrictions as the
underlying Award or such other restrictions as the Committee may
determine.
6.7 CASH AWARDS. The Committee shall have the authority
to determine the Employees and Qualified Consultants to whom Cash
Awards shall be granted, the amount, and the terms or conditions, if
any, as additional compensation for the Employee's and Qualified
Consultant's services to the Company or its Affiliates. A Cash Award
may be granted (simultaneously or subsequently) separately or in tandem
with another Award and may entitle a Participant to receive a specified
amount of cash from the Company upon such other Award becoming taxable
to the Participant, which cash amount may be based on a formula
relating to the anticipated taxable income associated with such other
Award and the payment of the Cash Award.
6.8 GRANTING OF OPTIONS TO NON-EMPLOYEE DIRECTORS. Each
Non-employee Director who serves in such capacity on the effective date
of the Plan shall receive, as of such date and without the exercise of
the discretion of any person or persons, a Non-Qualified Stock Option
exercisable for 1,000 Shares. Each Non-employee Director who is elected
or appointed to the Board for the first time after the effective date
of the Plan shall receive, as of the date of his or her election or
appointment and without the exercise of the discretion of any person or
persons, a Non-Qualified Stock Option exercisable for 1,000 Shares
(subject to adjustment in the same manner as provided in Section 7
hereof with respect to Shares subject to Options then outstanding). As
of the date of the annual meeting of the stockholders of the Company in
each year that the Plan is in effect, each Non-employee Director who is
in office immediately after such meeting and who is not then entitled
to receive an Option pursuant to the preceding provisions of this
Section 6.8 shall receive, without the exercise of the discretion of
any person or persons, a Non-Qualified Stock Option exercisable for
1,000 Shares (subject to adjustment in the same manner as provided in
Section 7 hereof with respect to shares of Stock subject to Options
then outstanding).
The following provisions are applicable to Options granted pursuant to
this Section 6.8:
(i) Subject to the following provisions, an Option
granted pursuant to Section 6.8 shall become exercisable for 33-1/3% of
the Shares covered thereby on the first anniversary of the date of
grant, and thereafter, for an additional 33-1/3% of the Shares covered
thereby on each of the second and third anniversaries of the grant
thereof.
(ii) The purchase price of a Share covered under an Option
granted under this Section 6.8 shall be the Fair Market Value of a
Share on the date of grant.
B-7
<PAGE> 45
(iii) To the extent that the right to exercise an Option
has accrued and is in effect, the Option may be exercised in full at
one time or in part from time to time by giving written notice, signed
by the optionee exercising the Option, to the Company, stating the
number of Shares with respect to which the Option is being exercised,
accompanied by payment in full for such Shares, which payment may be in
whole or in part in Shares of the Company already owned by said
optionee, valued at Fair Market Value; provided, however, that (i) no
Option shall be exercisable after ten (10) years from the date on which
it was granted, and (ii) there shall be no such exercise at any one
time for fewer than one hundred (100) Shares or for all of the
remaining Shares then purchasable by the optionee exercising the
Option, if fewer than one hundred (100) Shares.
(iv) Each Option shall expire ten (10) years from the date
of grant thereof, subject to earlier termination as follows: Options,
to the extent exercisable as of the date a Non-employee Director
optionee ceases to serve as a director of the Company, must be
exercised within three (3) months of such date unless such event
results from death, disability or retirement, in which case all
outstanding Options held by such Non-employee Director may be exercised
in full by the optionee, the optionee's legal representative, heir or
devisee, as the case may be, within two (2) years from the date of
death, disability or retirement; provided, however, that no such event
shall extend the normal expiration date of such Options. Options not
exercisable on termination as provided above shall be automatically
canceled on termination.
(v) Upon exercise of the Option, delivery of a
certificate for fully paid and nonassessable Shares shall be made at
the corporate office of the Company to the optionee exercising the
Option either at such time during ordinary business hours after fifteen
(15) days but not more than thirty (30) days from the date of receipt
of the notice by the Company as shall be designated in such notice, or
at such time, place and manner as may be agreed upon by the Company and
the optionee exercising this Option.
(vi) In the event that the number of Shares available for
grants under the Plan is insufficient to make all grants provided for
in this Section 6.8 hereby made on the applicable date, then all
Non-employee Directors who are entitled to a grant on such date shall
share ratably in the number of Shares then available for grant under
the Plan and shall have no right to receive a grant with respect to the
deficiencies in the number of available Shares and the grants under
this Section 6.8 shall terminate.
6.9 GENERAL.
(i) Awards May be Granted Separately or Together. Awards
to Employees and Qualified Consultants may, in the discretion of the
Committee, be granted either alone or in addition to, in tandem with,
or in substitution for any other Award granted under the Plan or any
award granted under any other plan of the Company or any Affiliate.
Awards granted in addition to or in tandem with other Awards or awards
granted under any other plan of the Company or any Affiliate may be
granted either at the same time as or at a different time from the
grant of such other Awards or awards.
(ii) Forms of Payment by Company Under Awards. Subject to
the terms of the Plan and of any applicable Award Agreement, payments
or transfers to be made by the Company or an Affiliate upon the grant,
exercise or payment of an Award may be made in such form or forms as
the Committee shall determine, including, without limitation, cash,
Shares, other securities, other
B-8
<PAGE> 46
Awards or other property, or any combination thereof, and may be made
in a single payment or transfer, in installments, or on a deferred
basis, in each case in accordance with rules and procedures established
by the Committee. Such rules and procedures may include, without
limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments.
(iii) Limits on Transfer of Awards. Each Award, and each
right under any Award, shall be exercisable during the Participant's
lifetime only by the Participant, or, if permissible under applicable
law, by the Participant's guardian or legal representative or by a
transferee receiving such Award pursuant to a qualified domestic
relations order (a "QDRO") as determined by the Committee. No Award and
no right under any such Award may be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by a Participant
otherwise than by will or by the laws of descent and distribution (or,
in the case of Restricted Stock, to the Company) or pursuant to a QDRO
and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against
the Company or any Affiliate. Notwithstanding the foregoing, to the
extent approved by the Committee, an Award may be transferred to
immediate family members.
(iv) Term of Awards. The term of each Award (other than
pursuant to Section 6.8) shall be for such period as may be determined
by the Committee; provided, that in no event shall the term of any
Award exceed a period of ten (10) years from the date of its grant.
(v) Share Certificates. All certificates for Shares or
other securities of the Company or any Affiliate delivered under the
Plan pursuant to any Award or the exercise thereof shall be subject to
such stop transfer orders and other restrictions as the Committee may
deem advisable under the Plan or the rules, regulations and other
requirements of the SEC, any stock exchange upon which such Shares or
other securities are then listed, and any applicable Federal or state
laws, and the Committee may cause a legend or legends to be placed on
any such certificates to make appropriate reference to such
restrictions.
(vi) Consideration for Grants. Awards may be granted for
no cash consideration or for such consideration as the Committee
determines including, without limitation, such minimal cash
consideration as may be required by applicable law.
(vii) Delivery of Shares or other Securities and Payment by
Participant of Consideration. No Shares or other securities shall be
delivered pursuant to any Award until payment in full of any amount
required to be paid pursuant to the Plan or the applicable Award
Agreement is received by the Company. Such payment may be made by such
method or methods and in such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other
securities, other Awards or other property, withholding of Shares,
cashless exercise with simultaneous sale, or any combination thereof;
provided that the combined value, as determined by the Committee, of
all cash and cash equivalents and the Fair Market Value of any such
Shares or other property so tendered to the Company, as of the date of
such tender, is at least equal to the full amount required to be paid
pursuant to the Plan or the applicable Award Agreement to the Company.
B-9
<PAGE> 47
(viii) Performance Criteria and Payment Limits.
The Committee shall establish performance goals applicable to those
Awards (other than Options and Rights) the payment of which is intended
by the Committee to qualify as "performance-based compensation" as
described in Section 162(m)(4)(C) of the Code. The Committee shall
establish the performance goals prior to the earlier to occur of (i) 90
days after the commencement of the period of service to which the
performance goal relates and (ii) the lapse of 25% of the period of
service (as scheduled in good faith at the time the goal is
established), and in any event while the outcome of the performance
goal is substantially uncertain. Until changed by the Committee, the
performance goals shall be based upon the attainment of such target
levels of net income, cash flows, acquisitions, total capitalization,
total or comparative shareholder return, assets, costs reductions and
savings, return on equity, profit margin or sales, and/or earnings per
share as may be specified by the Committee. Which factor or factors to
be used with respect to any grant, and the weight to be accorded
thereto if more than one factor is used, shall be determined by the
Committee at the time of grant. The maximum amount of compensation that
may be paid to any Participant with respect to any single Performance
Award or Cash Award in any calendar year shall be $1.5 million. With
respect to any Restricted Stock Award, Phantom Stock Award, or Cash
Award granted in tandem with, and expressed as a percentage of, a
Share-denominated Award, which is intended to qualify as
"performance-based compensation", the maximum payment to any
Participant with respect to such Award in any calendar year shall be an
amount (in cash and/or in Shares) equal to the Fair Market Value of the
number of Shares subject to such Award.
7. AMENDMENT AND TERMINATION.
Except to the extent prohibited by applicable law and unless
otherwise expressly provided in an Award Agreement or in the Plan:
7.1 AMENDMENTS TO THE PLAN. The Board may amend, alter,
suspend, discontinue, or terminate the Plan without the consent of any
shareholder, Participant, other holder or beneficiary of an Award, or
other Person.
7.2 AMENDMENTS TO AWARDS. The Committee may waive any
conditions or rights under, amend any terms of, or alter any Award
theretofore granted (other than Awards granted under Section 6.8,
provided no change, other than pursuant to Section 7.3, in any Award
shall reduce the benefit to Participant without the consent of such
Participant. Notwithstanding the foregoing, with respect to any Award
intended to qualify as performance-based compensation under Section
162(m) of the Code, no adjustment shall be authorized to the extent
such adjustment would cause the Award to fail to so qualify.
7.3 ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN
UNUSUAL OR NONRECURRING EVENTS. The Committee is hereby authorized to
make adjustments in the terms and conditions of, and the criteria
included in, Awards, in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4.3 of
the Plan) affecting the Company, any Affiliate, or the financial
statements of the Company or any Affiliate, or of changes in applicable
laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan. Notwithstanding the foregoing,
with respect to any Award intended to qualify as performance-based
compensation under Section 162(m) of the Code, no adjustment shall be
authorized to the extent such adjustment would cause the Award to fail
to so qualify. The Committee is hereby
B-10
<PAGE> 48
further authorized to amend the terms and conditions of, and the
criteria in, Section 8 of the Plan for any Award (including, without
limitation, the terms and conditions for the vesting of Awards and a
Change of Control) in order to continue to enhance the ability of the
Company to attract and retain the services of individuals who are
essential for growth and profitability of the Company.
8. CHANGE IN CONTROL.
Notwithstanding any other provision of this Plan to the
contrary, in the event of a Change in Control of the Company, all outstanding
Awards granted more than six (6) months prior to the date of the Change in
Control automatically shall become fully vested on such Change in Control, all
restrictions, if any, with respect to such Awards shall lapse, and all
performance criteria, if any, with respect to such Awards shall be deemed to
have been met in full. For purposes of this Plan, a "Change in Control" shall be
deemed to occur:
(i) if any person, other than Golder, Thoma & Cressey
Fund III Limited Partnership, Michael T. Willis, or their affiliates
(as such term is used in sections 13(d) and 14(d)(2) of the Exchange
Act), is or becomes the "beneficial owner" (as defined in Rule 13d-3 of
the Exchange Act), directly or indirectly, of securities of the Company
representing twenty-five percent (25%) or more of the combined voting
power of the Company's then outstanding securities,
(ii) upon the first purchase of the Company's Common Stock
pursuant to a tender or exchange offer (other than a tender or exchange
offer made by the Company which is supported by the Board),
(iii) upon the approval by the Company's stockholders
(which stockholder approval does not include Golder, Thoma & Cressey
Fund III Limited Partnership and Michael T. Willis) of a merger or
consolidation, a sale or disposition of all or substantially all of the
Company's assets or a plan of liquidation or dissolution of the
Company, or
(iv) if, during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board
cease for any reason to constitute at least a majority thereof, unless
the election or nomination for the election by the Company's
stockholders of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at
the beginning of the period.
9. GENERAL PROVISIONS.
9.1 NO RIGHTS TO AWARDS. No Employee, Qualified
Consultant, Participant or other Person shall have any claim to be
granted any Award, and there is no obligation for uniformity of
treatment of Employees, Qualified Consultants, Participants, or holders
or beneficiaries of Awards. The terms and conditions of Awards need not
be the same with respect to each recipient.
9.2 WITHHOLDING. The Company or any Affiliate is
authorized to withhold from any Award, from any payment due or transfer
made under any Award or under the Plan or from any compensation or
other amount owing to a Participant the amount (in cash, Shares, other
securities, Shares that would otherwise be issued pursuant to such
Award, other Awards or other
B-11
<PAGE> 49
property) of any applicable taxes payable in respect of an Award, its
exercise, the lapse of restrictions thereon, or any payment or transfer
under an Award or under the Plan and to take such other action as may
be necessary in the opinion of the Company to satisfy all obligations
for the payment of such taxes. With respect to any Person who is an
"insider" for purposes of Section 16(b) of the Exchange Act, the
Company may provide for automatic withholding from any Award payable in
Shares the appropriate number of Shares required to satisfy the
Company's withholding obligations, except to the extent the Award has a
tandem Cash Award, in which event withholding shall be made first from
such Cash Award.
9.3 NO RIGHT TO EMPLOYMENT. The grant of an Award shall
not be construed as giving a Participant the right to be retained in
the employ of the Company or any Affiliate. Further, the Company or an
Affiliate may at any time dismiss a Participant from employment, free
from any liability or any claim under the Plan, unless otherwise
expressly provided in the Plan or in any Award Agreement.
9.4 GOVERNING LAW. The validity, construction and effect
of the Plan and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Delaware and
applicable Federal law.
9.5 SEVERABILITY. If any provision of the Plan or any
Award is or becomes or is deemed to be invalid, illegal or
unenforceable in any jurisdiction or as to any Person or Award, or
would disqualify the Plan or any Award under any law deemed applicable
by the Committee, such provision shall be construed or deemed amended
to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision
shall be stricken as to such jurisdiction, Person or Award and the
remainder of the Plan and any such Award shall remain in full force and
effect.
9.6 OTHER LAWS. The Committee may refuse to issue or
transfer any Shares or other consideration under an Award if, acting in
its sole discretion, it determines that the issuance or transfer of
such Shares or such other consideration might violate any applicable
law or regulation or entitle the Company to recover the same under
Section 16(b) of the Exchange Act, and any payment tendered to the
Company by a Participant, other holder or beneficiary in connection
with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.
9.7 NO TRUST OR FUND CREATED. Neither the Plan nor the
Award shall create or be construed to create a trust or separate fund
of any kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person. To the extent that any
Person acquires a right to receive payments from the Company or any
Affiliate pursuant to an Award, such right shall be no greater than the
right of any general unsecured creditor of the Company or any
Affiliate.
9.8 NO FRACTIONAL SHARES. No fractional Shares shall be
issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine whether cash, other securities, or other
property shall be paid or transferred in lieu of any fractional Shares
or whether such fractional Shares or any rights thereto shall be
canceled, terminated, or otherwise eliminated.
B-12
<PAGE> 50
9.9 HEADINGS. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any
provisions thereof.
9.10 RULE 16b-3 COMPLIANCE. It is intended that the Plan
and any grant of an Award made to a person subject to Section 16 of the
Exchange Act meet all of the requirements of Rule 16b-3 so that any
transaction under the Plan involving a grant, Award or other
acquisition from the Company or disposition to the Company is exempt
from Section 16(b) of the 1934 Act. If any provision of the Plan or any
such Award would result in any such transaction not being exempt from
Section 16(b) of the Exchange Act, such provision or Award shall be
construed or deemed amended so that such transaction will be exempt
from Section 16(b) of the Exchange Act.
9.11 SECTION 162(m). It is intended that the Plan comply fully
with and meet all the requirements of Section 162(m) of the Code so
that all Awards hereunder and, if determined by the Committee,
Restricted Stock Awards, shall constitute "performance based"
compensation within the meaning of such section. If any provision of
the Plan would disqualify the Plan or would not otherwise permit the
Plan to comply with Section 162(m) as so intended, such provision shall
be construed or deemed amended to conform to the requirements or
provisions of Section 162(m); provided that no such construction or
amendment shall have an adverse effect on the economic value to a
Participant of any Award previously granted hereunder.
10. EFFECTIVE DATE OF THE PLAN.
The Plan shall be effective as of the date of its approval by
the Board, provided the Plan is subsequently approved by the stockholders of the
Company within twelve (12) months thereafter.
11. TERM OF THE PLAN.
No Award shall be granted under the Plan ten (10) years after
approval by the Board. However, unless otherwise expressly provided in the Plan
or in an applicable Award Agreement, any Award theretofore granted may, and the
authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under any such Award shall extend beyond such date.
B-13
<PAGE> 51
APPENDIX C
METAMOR WORLDWIDE, INC.
EXECUTIVE INCENTIVE PLAN
1. ESTABLISHMENT.
1.1 ESTABLISHMENT OF THE PLAN. Metamor Worldwide, Inc.
("Company"), a Delaware corporation, hereby establishes this incentive plan for
executives. The Plan, including any amendments which may be made from time to
time, shall be known as the Metamor Worldwide, Inc. Executive Incentive Plan
("Plan").
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to
provide its participants with incentive awards to the extent they have
contributed to the Company's success, through an ongoing program designed to
reinforce the Company's financial and operating objectives.
1.3 EFFECTIVE DATE OF THE PLAN. The Plan shall be
effective as of January 1, 1998, subject to the final approval of the Plan by
the Company's stockholders.
2. DEFINITIONS AND CONSTRUCTION.
2.1 DEFINITIONS. Whenever used as a capitalized term in
the Plan, the following terms shall have the respective meanings set forth
below, unless otherwise expressly provided:
(i) "EIP Award" means the annual incentive plan award
approved by the Compensation Committee for an eligible participant for
a particular Plan Year.
(ii) "EIP Award Guidelines" mean the standards, targets,
performance measurement and evaluation criteria and guidelines to be
used to determine EIP Awards for a particular Plan Year.
(iii) "Beneficiary" means the person, persons or trust
designated by a Participant as provided in Section 8.2.
(iv) "Code" means the Internal Revenue Code of 1986, as
amended, and the regulations issued thereunder, as the same may be
amended from time to time.
(v) "Company" means Metamor Worldwide, Inc., or any
successor thereto.
(vi) "Committee" means the Compensation Committee of the
Board of Directors. The Compensation Committee shall be comprised
solely of two or more "outside directors" (within the meaning of
Section 162(m) of the Code) designated by the Board of Directors, and
shall serve at the pleasure of the Board.
(vii) "Employee" means an individual who is an employee of
the Company.
(viii) "Participant" means an Employee of the Company who has
been designated as a Participant under the Plan, as provided in Section
3.1.
C-1
<PAGE> 52
(ix) "Plan" means the "Metamor Worldwide, Inc. Executive
Incentive Plan" as set forth in this document, and as it may be amended
from time to time.
(x) "Plan Year" means the 12 month period beginning on the
first day of the Company's fiscal year and ending on the last day of
such fiscal year.
2.2 GENDER AND NUMBER; HEADINGS. Except when otherwise
indicated by the context, any masculine terminology when used in this Plan shall
also include the feminine gender, and the definition of any term in the singular
shall also include the plural. Headings of Articles and Sections herein are
included solely for convenience, and if there is any conflict between such
headings and the text of the Plan, the text shall control.
3. PARTICIPATION.
3.1 PARTICIPATION. Eligibility for participation is
limited to the Chief Executive Officer, Corporate Officers, and other key
management employees. The Compensation Committee shall designate the Employees
of the Company who are to be the Participants under this Plan. Such designations
may be based on participation criteria established by the Compensation Committee
from time to time. The designation of participants shall be made for each Plan
Year, and the participants designated for a particular Plan Year may be
identified by reference to the subject Plan Year (e.g., the participants
designated for the 1998 Plan Year may be referred to as "1998 Participants").
The Compensation Committee may establish such procedures as it deems appropriate
for notifying each participant of his status as a participant under the Plan.
4. ADMINISTRATION OF THE PLAN.
4.1 ANNUAL EIP GUIDELINES. For each Plan Year, the
Compensation Committee shall establish the EIP Guidelines for that Plan Year.
Such EIP Guidelines for the particular Plan Year shall consist of such
performance targets, performance ranges, performance measurements and evaluation
criteria and guidelines as the Compensation Committee determines to be
applicable in awarding EIP Awards for the relevant Plan Year, all of which shall
collectively be known as the "EIP Award Guidelines" for that Plan Year. The EIP
Award Guidelines established for a particular Plan Year may include any of the
following elements, as determined in the sole discretion of the Compensation
Committee.
(i) An incentive award target for each participant,
expressed as a percent of base salary, for purposes of determining the
dollar amount which shall be available for EIP Awards and other
benefits under the Plan for the Plan Year;
(ii) Financial, strategic, project, and/or individual
performance goals for each participant;
(iii) Performance measurement and goal weighting criteria
and guidelines for each participant, where applicable;
C-2
<PAGE> 53
(iv) Individual target, minimum, and maximum incentive
opportunities for participants or groups of participants, including
accompanying performance ranges, where applicable;
(v) Guidelines and requirements for the development and
approval of performance measures and objectives; and
(vi) Such other standards, criteria, measurements,
requirements and guidelines as the Compensation Committee may from time
to time determine shall be applicable with respect to the subject Plan
Year.
The EIP Guidelines so established for each Plan Year shall be communicated to
participants and such other Company personnel as the Compensation Committee
deems necessary to assist in the maintenance of the Plan for such Plan Year. The
EIP Guidelines for each Plan Year (including the EIP Award Guidelines included
therein) shall be maintained with the records of the Plan for reference
purposes.
4.2 CONDITIONS. Notwithstanding any other provision of
this Plan to the contrary, any EIP Awards and other benefits paid to
Participants under this Plan shall be subject to the following conditions:
(i) All EIP Guidelines or other performance measures,
goals, standards, formulas, or criteria relating to Participants
("Performance measures") for a Plan Year shall be established by the
Compensation Committee in writing within 90 days of the beginning of
the Plan Year provided that the outcome of the performance measures is
substantially uncertain at the time established by the Compensation
Committee. Performance measures may be based on one or more of the
following business criteria, and may be related to Corporate,
divisional, or subsidiary performance:
earnings before interest and taxes (EBIT),
sales,
sales growth,
operating profit,
net income,
economic profit,
earnings per share,
return on equity,
cash flow,
earnings multiple,
cash flow multiple,
total shareholder return,
stock price.
(ii) The award and payment of any EIP Award or other
benefit under this Plan to a Participant with respect to a Plan Year
shall be contingent upon the attainment of the applicable performance
measures. The Compensation Committee shall certify in writing prior to
the payment of any such EIP Award that such applicable performance
measures relating to the EIP Award were satisfied. Approved minutes of
a meeting of the Compensation Committee may be used for this purpose.
C-3
<PAGE> 54
(iii) The maximum EIP Award or other benefit that may be
paid to any Participant under the Plan for any Plan Year is $2,500,000.
(iv) The Committee has the authority to reduce the amount
of or eliminate any incentive otherwise payable under the EIP
Guidelines, although it does not have the authority to increase the
amount of an incentive award as determined pursuant to the EIP
Guidelines.
(v) All EIP Awards or other benefits to Participants under
the Plan shall be further subject to such other conditions,
restrictions, and requirements as the Compensation Committee may
determine to be necessary to carry out the purposes of this Section 4.
4.3 COMPENSATION COMMITTEE. The Plan shall be administered
by the Compensation Committee. The Compensation Committee shall have the full
power, authority and discretion to administer the Plan and construe, interpret
and apply its provisions. Without limiting the generality thereof, the
Compensation Committee shall have the following powers, duties and authorities
as regards its administration and activities as regards the Plan:
(i) To establish EIP Guidelines for each Plan Year;
(ii) To approve EIP Awards or other benefit payments for
participants for each Plan Year;
(iii) To establish, maintain, and interpret such rules,
regulations and requirements as it deems necessary or advisable as
regards the administration and maintenance of the Plan, including the
amendment and modification of such rules, regulations and requirements;
(iv) To resolve all questions relating to the eligibility
of participants;
(v) To resolve all questions relating to a Participant's
right to receive any EIP Award payment or other benefits under the
Plan;
(vi) To determine the time, manner and form of payment with
respect to any EIP Award payments or other benefits under the Plan;
(vii) To engage any administrative, legal, consulting,
clerical or other services it deems appropriate in administering the
Plan;
(viii) To construe and interpret the Plan, and any
administrative rules relating thereto, as necessary and to carry out
the purposes of the Plan;
(ix) To resolve any questions or make any determinations
relating to the administration of the Plan;
(x) To compile and maintain all records it determines to
be necessary, appropriate and convenient in connection with the
administration of the Plan;
(xi) To delegate or appoint such other parties as it
determines to be necessary to carry out a general or specific function
as regards the administration of the Plan; and
C-4
<PAGE> 55
(xii) To take all such other actions, and to make such
determinations, as are necessary to administer the Plan and carry out
its purposes.
All actions taken or determinations made by the Compensation Committee as
regards the Plan shall be final, binding and conclusive upon all parties
4.4 EXPENSES. Any expenses relating to the administration
of this Plan shall be borne by the Company.
4.5 INDEMNIFICATION AND EXCULPATION. The members of the
Compensation Committee, its agents or representatives, and Employees of the
Company shall be indemnified and held harmless by the Company against and from
any and all loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by them in connection with or resulting from any claim,
action, suit, or proceeding to which they may be a party or in which they may be
involved by reason of any action taken or failure to act under this Plan and
against and from any and all amounts paid by them in settlement (with the
Company's written approval) or paid by them in satisfaction of a judgment in any
such action, suit, or proceeding. The foregoing provision shall not be
applicable to any person if the loss, cost, liability, or expense is due to such
person's gross negligence or willful misconduct.
5. EIP AWARDS AND PAYMENT OF AWARDS.
5.1 ELIGIBILITY FOR EIP AWARD PAYMENTS. To be eligible to
receive any EIP Award payment as may be approved for the participant for a
particular Plan Year, as provided in Section 5.1, such participant must satisfy
one of the following eligibility conditions:
(i) He must be employed by the Company on the first and
last day of the Plan Year and experience no break in service; or
(ii) He must have retired, died or incurred a long-term
disability (rendering the Employee unable to perform the duties
associated with their position within the Company) during the Plan Year
if he is not employed as an Employee on the last day of the Plan Year;
Unless the Compensation Committee otherwise specifically provides, a participant
who does not meet one of the foregoing employment eligibility conditions for a
particular Plan Year shall not be eligible to receive payment of an EIP Award
for such Plan Year.
5.2 TIME AND FORM OF PAYMENT. All EIP Awards for a
particular Plan Year shall be paid to or with respect to the eligible
participants for such Plan Year at such time or times as the Compensation
Committee may determine by applying the EIP Guidelines after the close of the
Plan Year, upon the availability of audited financial statements. Normally, all
EIP Award payments shall be in a single lump sum; however, the Compensation
Committee may from time to time direct the payment of any EIP Award in a
different payment form or a stream of payments upon written notification to Plan
participants. The Compensation Committee shall designate whether an EIP Award is
to be paid in cash, other forms of property or benefit, or any combination
thereof.
5.3 VOLUNTARY DEFERRAL OF AWARD. A Participant may elect
to defer payment of his EIP Award if deferral of an award under the Plan is
permitted pursuant to the terms of a deferred compensation program of the
Company existing at the time the election to defer is permitted to be made, and
if the Participant complies with the terms of such program.
C-5
<PAGE> 56
5.4 DEATH OF PARTICIPANT. In the event a participant who
is eligible to receive an EIP Award dies before payment thereof is made to him,
the payment of such EIP Award shall be made to his designated Beneficiary at the
same time and in the same form as other participants.
6. FUNDING OF THE PLAN.
6.1 FUNDING. All amounts paid under this Plan shall be
paid from the general assets of the Company. EIP Award payments and other
benefit payments under this Plan shall be reflected on the accounting records of
the Company, but neither this Plan nor the maintenance of such accounting
records shall be construed to create, or require the creation of, a trust,
custodial account, or escrow account with respect to any participant. No
participant shall have any right, title, or interest whatsoever in or to any
investment reserves, accounts, or funds, that the Employees may purchase,
establish, or accumulate to aid in providing the unfunded EIP Award payments or
other benefits described in the Plan.
Nothing contained in this Plan, and no action taken pursuant to its provisions,
shall create, or be construed to create, a trust or fiduciary relationship of
any kind between an Employer, the Compensation Committee and a participant or
any other person. Participants shall not acquire any interest under the Plan
greater than that of an unsecured general creditor of an Employer.
7. MERGER; AMENDMENT; TERMINATION.
7.1 MERGER, CONSOLIDATION, OR ACQUISITION. In the event of
a merger, consolidation, or acquisition where the Company is not the surviving
organization, unless the successor or acquiring organization shall elect to
continue and carry on the Plan, this Plan shall terminate with respect to the
Company, and no additional benefits shall accrue for the participants of the
Company. Unpaid EIP Award payments or other benefits shall continue to be paid
as scheduled unless the Company or acquiring organization elects to accelerate
payment.
7.2 TERMINATION. The Compensation Committee may terminate
this Plan at any time, for any reason, and in any manner. In the event of the
termination of the Plan, no further EIP Award payments or other benefits shall
accrue under this Plan, and amounts which are then payable with respect to a
prior Plan Year shall continue to be an obligation of the Company and shall be
paid as scheduled. No EIP Award payments or other payments shall be made with
respect to the Plan Year in which the Plan is terminated, unless otherwise
provided by the Compensation Committee.
8. SPECIAL PROVISIONS.
8.1 NONALIENATION. No EIP Award or other benefit payable
at any time under the Plan shall be subject in any manner to alienation, sale,
transfer, assignment, pledge, attachment, garnishment, or encumbrance of any
kind, and shall not be subject to or reached by any legal or equitable process
(including execution, garnishment, attachment, pledge, or bankruptcy) in
satisfaction of any debt, liability, or obligation, prior to receipt. Any
attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any
such benefit, whether presently or thereafter payable, shall be void.
Notwithstanding the foregoing provisions of this Section 8.1, no EIP Award or
other benefit amount payable under the Plan shall be payable until and unless
any and all amounts representing debts or other obligations owed to the Company
by the participant with respect to whom such amount would otherwise be payable
shall have been fully paid.
C-6
<PAGE> 57
8.2 BENEFICIARY DESIGNATION. A participant may designate a
Beneficiary who upon his death is to receive a EIP Award payment that otherwise
would have been paid to him under the Plan. All Beneficiary designations shall
be in writing and on a form approved by the Compensation Committee for such
purpose, and any such designation shall only be effective if and when delivered
to the Compensation Committee or its representative during the lifetime of the
participant. Absent any specific Beneficiary designation with respect to this
Plan, a Participant's designated Beneficiary for purposes of this Plan shall be
the same person or persons as designated as his beneficiary to receive life
insurance proceeds under the employer's group term life insurance coverage for
such participant. In the event there is not a Beneficiary designated on file for
the participant, such Participant's Beneficiary shall be deemed to be the
Participant's surviving spouse, or if there is no such spouse, the Participant's
estate.
8.3 EFFECT ON OTHER BENEFIT PLANS. EIP Awards or other
benefit amounts paid under this Plan shall only be considered as compensation
under the Employee benefit plans of the Company as determined and provided under
the provisions of such plans.
8.4 COMPANY-EMPLOYEE RELATIONSHIP. The establishment of
this Plan shall not be construed as conferring any legal or other rights upon
any Employee or any person for a continuation of employment, nor shall it
interfere with the rights of the Company to discharge any Employee or otherwise
act with relation to the Employee. The Company may take any action (including
discharge) with respect to any Employee or other person and may treat such
person without regard to the effect which such action or treatment might have
upon such person as a Participant under this Plan.
8.5 INCOMPETENCE. Every person receiving or claiming a EIP
Award or other benefit payments under the Plan shall be conclusively presumed to
be mentally competent until the date on which the Compensation Committee
receives a written notice, in a form and manner acceptable to the Compensation
Committee, that such person is incompetent, and that a guardian, conservator, or
other person legally vested with care of such person or person's estate has been
appointed; provided, however, that if the Compensation Committee shall find that
any person to whom a EIP Award or other benefit payment is payable under the
Plan is unable to care for such person's affairs because of incompetence, any
payment due (unless a prior claim therefore shall have been made by a duly
appointed legal representative) may be paid in a manner as approved by the
Compensation Committee. Any such payment so made shall be a complete discharge
of any liability therefore under the Plan.
8.6 BINDING ON THE COMPANY, PARTICIPANTS AND THEIR
SUCCESSORS. This Plan shall be binding upon and inure to the benefit of the
Company, its successors and assigns and the participants, their heirs,
executors, administrators and legal representatives.
8.7 STATUS UNDER ERISA. This Plan is not maintained as and
is not intended to be an "Employee benefit plan" under the Employee Retirement
Income Security Act of 1974, as amended.
8.8 TAX LIABILITY. The Company may withhold from any
payment thereunder any taxes required to be withheld and such sum as the Company
may reasonably estimate to be necessary to cover any taxes for which the Company
may be liable and which may be assessed with regard to such payment.
8.9 SEVERABILITY. In the event any provision of this Plan
shall be held invalid or illegal for any reason, any illegality or invalidity
shall not affect the remaining parts of this Plan, but
C-7
<PAGE> 58
this Plan shall be construed and enforced as if the illegal or invalid provision
had never been inserted, and the Company shall have the privilege and
opportunity to correct and remedy such questions of illegality or invalidity by
amendment as provided in this Plan.
8.10 APPLICABLE LAW. This Plan shall be governed by,
construed, and administered in accordance with the laws of the State of Texas,
except to the extent such laws are preempted by the laws of the United States.
C-8
<PAGE> 59
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
METAMOR WORLDWIDE, INC.
This proxy is solicited on behalf of the board of directors. PLEASE MARK YOUR |
VOTES AS IN THIS |
The undersigned appoints Michael T. Willis, Edward L. Pierce and Peter T. Dameris as Proxies, EXAMPLE |____
with the power of substitution, and authorizes them to represent and to vote at the Annual
Meeting of Stockholders to be held May 19, 1998, or any adjournment thereof, all the shares
of common stock of Metamor Worldwide, Inc. held of record by the undersigned on April 8, 1998,
as designated below.
- ------------------------------------------------------------------------------------------------------------------------------------
FOR all
nominees listed
at right except
authority withheld WITHHOLD FOR AGAINST ABSTAIN
as to the AUTHORITY to 2. To approve an amendment
persons named vote for all to the Employee Stock [ ] [ ] [ ]
1. Election below, if any nominees NOMINEES: Charles H. Corros Purchase Plan:
of [ ] [ ]
Directors Donald J. Edwards 3. To approve an amendment
to the Long-Term [ ] [ ] [ ]
Austin P. Young Incentive Plan:
(INSTRUCTION: To withhold authority to vote for any nominee, 4. To approve an Executive
write that nominee's name in the space provided below.) Incentive Plan: [ ] [ ] [ ]
5. To ratify the appointment
_____________________________________________________________ of Ernst & Young LLP as
the Company's Independent [ ] [ ] [ ]
- ---------------------------------------------------------------------------- auditors for the fiscal
year ending December 31,
1998:
6. The Proxies are
authorized to vote in
their best judgment upon [ ] [ ] [ ]
such other business as
may properly be brought
before the meeting or any
adjournment(s) thereof.
- ----------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 60
This Proxy when properly executed, will be voted in the manner directed by
the undersigned stockholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR EACH OF THE PROPOSALS.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. If acting as attorney, executor, trustee, or in any
other representative capacity, sign name and title.
Dated _____________________, 1998
_________________________________
Signature
_________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE ENCLOSED
ENVELOPE.
-----------
SEE REVERSE
SIDE
-----------
