<PAGE>
================================================================================
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 Section 240.14a-11(c) or Section 240.14a-12
Hall, Kinion & Associates, 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)(4) 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:
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(4) Date Filed:
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Notes:
<PAGE>
[HALL KINION LOGO APPEARS HERE]
HALL, KINION & ASSOCIATES, INC.
19925 STEVENS CREEK BOULEVARD, SUITE 180
CUPERTINO, CALIFORNIA 95014
April 16, 1998
TO THE STOCKHOLDERS OF
HALL, KINION & ASSOCIATES, INC.
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders
(including any adjournments or reschedulings thereof, the "Annual Meeting") of
Hall, Kinion & Associates, Inc. (the "Company") which will be held at the
Santa Clara Marriott, 2700 Mission College Boulevard, Santa Clara, California,
on Friday, May 15, 1998, at 9:00 a.m.
Details of the business to be conducted at the Annual Meeting are given in
the attached Proxy Statement and Notice of Annual Meeting of Stockholders.
It is important that your shares be represented and voted at the Annual
Meeting. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. Returning the proxy does NOT deprive you of
your right to attend the Annual Meeting. If you decide to attend the Annual
Meeting and wish to change your proxy vote, you may do so automatically by
voting in person at the Annual Meeting.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company. We
look forward to seeing you at the Annual Meeting.
Sincerely,
Brenda C. Hall
Chief Executive Officer
and Chairman of the Board
<PAGE>
[HALL KINION LOGO APPEARS HERE]
HALL, KINION & ASSOCIATES, INC.
19925 STEVENS CREEK BOULEVARD, SUITE 180
CUPERTINO, CALIFORNIA 95014
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 15, 1998
The annual meeting of the stockholders (including any adjournments or
rescheduling thereof, the "Annual Meeting") of Hall, Kinion & Associates, Inc.
(the "Company"), will be held on Friday, May 15, 1998, at 9:00 a.m. Pacific
time at the Santa Clara Marriott, 2700 Mission College Boulevard, Santa Clara,
California, for the following purposes:
1. To consider a proposal to ratify the appointment of Deloitte & Touche
LLP as the independent accountants of the Company for the fiscal year
ending December 27, 1998; and
2. To transact such other business as may properly come before the Annual
Meeting.
Stockholders of record at the close of business on April 1, 1998 are
entitled to notice of, and to vote at, the Annual Meeting and any adjournments
or reschedulings thereof. For ten days prior to the Annual Meeting, a complete
list of the stockholders entitled to vote at the meeting will be available for
examination by any stockholder for any purpose relating to the Annual Meeting
during ordinary business hours at the principal office of the Company.
By order of the Board of Directors,
MARTIN A. KROPELNICKI
Secretary
Cupertino, California
April 16, 1998
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE
ANNUAL MEETING. IF YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO
CHANGE YOUR PROXY VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT
THE ANNUAL MEETING.
<PAGE>
HALL, KINION & ASSOCIATES, INC.
19925 STEVENS CREEK BOULEVARD, SUITE 180
CUPERTINO, CALIFORNIA 95014
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
The accompanying proxy is solicited by the Board of Directors of Hall,
Kinion & Associates, Inc., a Delaware corporation (the "Company"), for use at
the annual meeting of stockholders (including any adjournments or
reschedulings thereof, the "Annual Meeting") to be held Friday, May 15, 1998,
for the purposes set forth in the accompanying Notice of Annual Meeting. The
date of this Proxy Statement is April 16, 1998, the approximate date on which
this Proxy Statement and the accompanying form of proxy were first sent or
given to stockholders.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying notice of Annual Meeting of Stockholders.
Each proposal is described in more detail in this Proxy Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
The Company's Common Stock is the only type of security entitled to vote at
the Annual Meeting. On April 1, 1998, the record date for determination of
stockholders entitled to vote at the Annual Meeting, there were 9,403,814
shares of Common Stock outstanding. Each stockholder of record on April 1,
1998, is entitled to one vote for each share of Common Stock held by each
stockholder on April 1, 1998. Shares of Common Stock may not be voted
cumulatively. All votes will be tabulated by the inspector of election
appointed for the meeting, who will separately tabulate affirmative and
negative votes, abstentions, and broker non-votes.
QUORUM REQUIRED
The Company's bylaws provide that the holders of a majority of the Company's
Common Stock issued and outstanding and entitled to vote at the Annual
Meeting, present in person or represented by proxy, shall constitute a quorum
for the transaction of business at the Annual Meeting. Abstentions and broker
non-votes will be counted as present for the purpose of determining the
presence of a quorum.
VOTES REQUIRED
PROPOSAL 1. Ratification of the appointment of Deloitte & Touche LLP as the
Company's independent public accountants for the fiscal year ending December
27, 1998, requires the affirmative vote of a majority of those shares present
in person, or represented by proxy, and cast whether affirmatively or
negatively at the Annual Meeting. Abstentions and broker non-votes will not be
counted as having been voted on the proposal.
GENERAL INFORMATION
Annual Report. An annual report for the fiscal year ended December 28, 1997
is enclosed with this Proxy Statement.
Voting Securities. Only stockholders of record as of the close of business
on April 1, 1998 will be entitled to vote at the Annual Meeting and any
adjournment thereof. As of that date, there were 9,403,814 shares of Common
Stock of the Company, par value $0.001 per share, issued and outstanding.
Stockholders may vote in
1
<PAGE>
person or by proxy. Each holder of shares of Common Stock is entitled to one
vote for each share of stock held on the proposals presented in this Proxy
Statement. Shares of Common Stock may not be voted cumulatively. The Company's
bylaws provide that a majority of all of the shares of the stock entitled to
vote, whether present in person or represented by proxy, shall constitute a
quorum for the transaction of business at the Annual Meeting. All votes will
be tabulated by the inspector of elections appointed for the Annual Meeting,
who will separately tabulate affirmative and negative votes, abstentions and
broker non-votes.
Solicitation of Proxies. The cost of soliciting proxies, including the
preparation, assembly, printing and mailing of this Proxy Statement, the proxy
and any additional soliciting material furnished to stockholders, will be
borne by the Company. In addition to soliciting stockholders by mail through
its regular employees, the Company will request banks and brokers, and other
custodians, nominees and fiduciaries, to solicit their customers who have
stock of the Company registered in the names of such persons and will
reimburse them for their reasonable, out-of-pocket costs. The Company may use
the services of its officers, directors, and others to solicit proxies,
personally or by telephone, without additional compensation. Except as
described above, the Company does not presently intend to solicit proxies
other than by mail.
Voting of Proxies. All valid proxies received prior to the Annual Meeting
will be voted. All shares represented by a proxy will be voted, and where a
stockholder specifies by means of the proxy a choice with respect to any
matter to be acted upon, the shares will be voted in accordance with the
specification so made. If no choice is indicated on the proxy, the shares will
be voted in favor of the proposal. A stockholder giving a proxy has the power
to revoke his or her proxy, at any time prior to the time it is voted, by
delivery to the Secretary of the Company of a written instrument revoking the
proxy or a duly executed proxy with a later date, or by attending the Annual
Meeting and voting in person. A majority of the shares of Common Stock of the
Company present at the Annual Meeting, in person or by proxy, whether or not
constituting a quorum, may vote to, or the Company's Board in its discretion
may, adjourn the Annual Meeting from time to time without further notice,
including for the purpose of soliciting additional proxies. Proxies containing
a vote against the proposals presented in this Proxy Statement will not be
used to vote in favor of any such adjournment.
PROPOSAL NO. 1--RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected Deloitte & Touche LLP as
independent accountants to audit the financial statements of the Company for
the fiscal year ending December 27, 1998. Deloitte & Touche LLP has acted in
such capacity since its appointment during the fiscal year ended December
1992. A representative of Deloitte & Touche LLP is expected to be present at
the Annual Meeting with the opportunity to make a statement if the
representative desires to do so, and is expected to be available to respond to
appropriate questions.
VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION
The affirmative vote of a majority of the votes cast at the Annual Meeting,
at which a quorum representing a majority of all outstanding shares of Common
Stock of the Company is present and voting, either in person or by proxy, is
required for approval of this proposal. Abstentions and broker non-votes will
each be counted as present for purposes of determining the presence of a
quorum, but will not be counted as having been voted on the proposal. THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPOINTMENT OF
DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE FISCAL
YEAR ENDING DECEMBER 27, 1998.
2
<PAGE>
DIRECTORS
The Company has a classified Board of Directors that currently consists of
two Class II directors (Paul H. Bartlett and Todd J. Kinion), and two Class
III directors (Brenda C. Hall and Jon H. Rowberry), who have been elected to
serve until the Annual Meetings of Stockholders to be held in 1999 and 2000,
respectively, and until their respective successors are duly elected and
qualified. At each Annual Meeting of Stockholders, directors are elected for a
full term of three years to succeed any directors whose terms expire on the
Annual Meeting of Stockholders date. No directors are being nominated for
election to the Board of Directors at this time.
The table below sets forth, for the current directors, certain information
with respect to age and background.
<TABLE>
<CAPTION>
DIRECTOR
NAME POSITION WITH THE COMPANY AGE SINCE
- ---- ------------------------- --- --------
<S> <C> <C> <C>
Class II directors whose terms expire at the 1999 Annual Meeting of Stockholders:
Paul H. Bartlett.................................................................. President and Director 37 1996
Todd J. Kinion.................................................................... Director 36 1991
Class III directors whose terms expire at the 2000 Annual Meeting of Stockholders:
Brenda C. Hall.................................................................... Chief Executive Officer 45 1991
and Chairman of the Board
Jon H. Rowberry................................................................... Director 51 1996
</TABLE>
Brenda C. Hall co-founded the Company and has been a director since the
Company's incorporation in 1991. From December 1992 to the present, Ms. Hall
has served as Chief Executive Officer of the Company. Ms. Hall also served as
President and Assistant Secretary of the Company from December 1991 to October
1996 and from December 1991 to September 1996, respectively. From August 1981
to June 1987, Ms. Hall was general manager of a Snelling & Snelling franchise,
a personnel services company.
Paul H. Bartlett has been a director of the Company since January 1996 and
joined the Company in October 1996 as President. Prior to joining the Company,
Mr. Bartlett was affiliated with the Sprout Group, a venture capital firm,
from February 1991 until October 1996, having served as a general partner
before joining the Company. Mr. Bartlett received an A.B. degree in economics
from Princeton University and an M.B.A. degree from the Stanford Graduate
School of Business.
Todd J. Kinion co-founded the Company and has been a director of the Company
since the Company's incorporation in 1991. Since August 1996, Mr. Kinion has
been a private investor. Mr. Kinion served as Vice President, Recruitment
Services of the Company from December 1995 to August 1996. Prior to that time,
Mr. Kinion served as Chief Financial Officer and Treasurer of the Company from
December 1991 to December 1995. Mr. Kinion also served as Secretary from
December 1991 to February 1997. Mr. Kinion holds a B.A. degree in political
science from the University of California at Santa Barbara.
Jon H. Rowberry has been a director of the Company since August 1996. Mr.
Rowberry currently serves as President and Chief Executive Officer of Franklin
Covey, a provider of time management products and training. Prior to assuming
his current positions, Mr. Rowberry was Chief Financial Officer of Franklin
Covey from August 1995 to August 1996. From 1985 to 1995, Mr. Rowberry was
employed in several executive positions with Adia S.A. and Adia Services,
Inc., providers of personnel services. Mr. Rowberry currently serves on the
board of directors of Franklin Covey. Mr. Rowberry holds a B.S. degree in
accounting from Brigham Young University.
Meetings of the Board of Directors
During the fiscal year ended December 28, 1997, the Board of Directors held
ten (10) meetings. No director serving on the Board during 1997 attended fewer
than 75% of the aggregate of such meetings of the Board and the Committees of
the Board on which he or she served.
3
<PAGE>
The Company does not have a standing Nominating Committee, but does have an
Audit Committee and a Compensation Committee.
The Audit Committee's function is to review with the Company's independent
accountants and management the annual financial statements and independent
accountants' opinion, review the scope and results of the examination of the
Company's financial statements by the independent accountants, approve all
professional services and related fees performed by the independent
accountants, recommend the retention of the independent accountants to the
Board, subject to ratification by the stockholders, and periodically review
the Company's accounting policies and internal accounting and financial
controls. The members of the Audit Committee were Ms. Kathleen LaPorte, a
former director, and Mr. Rowberry. During the fiscal year ended December 28,
1997, the Audit Committee held two (2) meetings.
The Compensation Committee's function is to review and approve salary levels
and stock option grants. The members of the Compensation Committee are Messrs.
Kinion and Rowberry. During the fiscal year ended December 28, 1997, the
Compensation Committee held four (4) meetings. For additional information
concerning the Compensation Committee, see "EXECUTIVE COMPENSATION AND OTHER
MATTERS--Compensation Committee Interlocks and Insider Participation in
Compensation Decisions" and "COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION."
MANAGEMENT
EXECUTIVE OFFICERS
The executive officers of the Company as of March 31, 1998 are as follows:
<TABLE>
<CAPTION>
NAME POSITION WITH THE COMPANY AGE
---- ------------------------- ---
<S> <C> <C>
Brenda C. Hall.............. Chief Executive Officer and Chairman of the 45
Board
Paul H. Bartlett............ President and Director 37
Martin A. Kropelnicki....... Vice President, Chief Financial Officer and 31
Secretary
Rita S. Hazell.............. Senior Vice President, R&D Contract 31
Services
Craig J. Silverman.......... Vice President, Permanent Placement 37
Mordecai Levine............. Vice President, IS Contract Services 38
</TABLE>
Brenda C. Hall co-founded the Company and has been a director since the
Company's incorporation in 1991. From December 1992 to the present, Ms. Hall
has served as Chief Executive Officer of the Company. Ms. Hall also served as
President and Assistant Secretary of the Company from December 1991 to October
1996 and from December 1991 to September 1996, respectively. From August 1981
to June 1987, Ms. Hall was general manager of a Snelling & Snelling franchise,
a personnel services company.
Paul H. Bartlett has been a director of the Company since January 1996 and
joined the Company in October 1996 as President. Prior to joining the Company,
Mr. Bartlett was affiliated with the Sprout Group, a venture capital firm,
from February 1991 until October 1996, having served as a general partner
before joining the Company. Mr. Bartlett received an A.B. degree in economics
from Princeton University and an M.B.A. degree from the Stanford Graduate
School of Business.
Martin A. Kropelnicki joined the Company in January 1997 as Vice President,
Chief Financial Officer and Secretary. Prior to joining the Company, Mr.
Kropelnicki was a Director at Deloitte & Touche Consulting Group-ICS, a
consulting firm, from February 1996 to February 1997. From June 1989 to
February 1996, Mr. Kropelnicki held various positions, most recently as a
Director in the financial organization at Pacific Gas & Electric Company, a
natural gas and electric utility. Mr. Kropelnicki holds a B.A. degree and an
M.A. degree in business economics from San Jose State University.
4
<PAGE>
Rita S. Hazell has served as Senior Vice President, R&D Contract Services
since April 1996. Prior to assuming her current position, Ms. Hazell served in
a variety of positions, including Director, R&D Contract Services and Manager,
R&D Contract Services, since joining the Company in September 1993. From
November 1987 to September 1993, Ms. Hazell served as a manager for Oxford &
Associates, Inc., a technical contract services firm.
Craig J. Silverman joined the Company in April 1996 as Vice President,
Permanent Placement. Prior to joining the Company, Mr. Silverman served as
Vice President, Sales at Strategic Mapping, Inc., a software development
company, from September 1989 to February 1996.
Mordecai Levine joined the Company in December 1996 as Vice President, IS
Contract Services. Since March 1994, Mr. Levine has served as Chief Operating
Officer of TeamAlliance. From January 1991 to February 1994, Mr. Levine served
as President of Berkeley Software, Inc., a software development company. Mr.
Levine received a B.A. degree in economics from Brandeis University and an
M.B.A. degree from the University of Chicago Graduate School of Business.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of March 31, 1998
except where noted, with respect to the beneficial ownership of the Company's
Common Stock by (i) all persons known by the Company to be the beneficial
owners of more than 5% of the outstanding Common Stock of the Company, (ii)
each director and director-nominee of the Company, (iii) each person named in
the Summary Compensation Table, and (iv) all executive officers and directors
of the Company as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER PERCENTAGE
BENEFICIAL OWNERS(1) OF SHARES OF CLASS
-------------------- --------- ----------
<S> <C> <C>
Brenda C. Hall (2)........................................ 2,681,295 28.5%
Chief Executive Officer and Chairman of the Board
19925 Stevens Creek Boulevard, Suite 180
Cupertino, CA 95014
Todd J. Kinion............................................ 1,587,984 16.9
36 Playa Boulevard
La Selva Beach, CA 95076
Entities affiliated with the Sprout Group (3)............. 551,004 5.9
c/o Sprout Group
3000 Sand Hill Road
Bldg. 4, Suite 270
Menlo Park, CA 94025-7114
Paul H. Bartlett (4)...................................... 974,209 10.4
Martin A. Kropelnicki (5)................................. 145,000 1.5
Mordecai Levine (6)....................................... 92,000 1.3
Rita S. Hazell............................................ 31,000 *
Jon H. Rowberry (7)....................................... 25,000 *
c/o Franklin Covey
2200 West Parkway Blvd.
Salt Lake City, UT 84119
Executive officers and directors as a group (8 persons) 6,165,992 65.6
(8)......................................................
</TABLE>
- --------
* Less than 1%
5
<PAGE>
(1) Percentage of beneficial ownership is calculated assuming 9,403,814 shares
of Common Stock were outstanding on March 31, 1998. This percentage also
includes Common Stock of which such individual or entity has the right to
acquire beneficial ownership within 60 days of March 31, 1998, including
but not limited to the exercise of an option; however, such Common Stock
shall not be deemed outstanding for the purpose of computing the percentage
owned by any other individual or entity. Except as indicated in the
footnotes to this table, the Company believes that the persons named in the
table have sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them, subject to community
property laws, where applicable.
(2) Includes 28,550 shares held by Ms. Hall's spouse, Virgil Hall, and 66,666
shares held by her daughters.
(3) Includes 493,699, 50,469, 6,836 shares of Common Stock held by Sprout
Growth II, L.P. ("Sprout II"), DLJ Capital Corporation ("DLJ") and Sprout
CEO Fund, L.P. ("Sprout CEO"), respectively. DLJ is the general partner of
Sprout CEO.
(4) Includes 974,000 shares subject to stock options that are currently
exercisable or will become exercisable within 60 days of March 31, 1998.
(5) Represents shares subject to stock options that are currently exercisable
or will become exercisable within 60 days of March 31, 1998.
(6) Includes 22,726 shares subject to stock options that are currently
exercisable or will become exercisable within 60 days of March 31, 1998.
(7) Includes 25,000 shares subject to stock options that are currently
exercisable or will become exercisable within 60 days of March 31, 1998.
(8) Includes 1,216,726 shares subject to stock options that are currently
exercisable or will become exercisable within 60 days of March 31, 1998.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth information concerning the compensation of
the Chief Executive Officer of the Company and the four other most highly
compensated executive officers of the Company as of December 28, 1997 whose
total salary and bonus for the year ended December 28, 1997 exceeded $100,000,
in all cases for services rendered in all capacities to the Company during the
fiscal years ended 1997 and 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION (1) AWARDS
------------------------------------ ------------
OTHER
ANNUAL SECURITIES
SALARY COMPENSATION UNDERLYING
NAME AND PRINCIPAL POSITION YEAR ($)(2) BONUS ($) ($) OPTIONS (#)
--------------------------- ---- -------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Brenda C. Hall.............. 1997 $269,459 0 0 0
Chief Executive Officer and 1996 313,231 $ 60,000 0 0
Chairman of the Board
Paul H. Bartlett (3)........ 1997 240,000 50,000 0 0
President and Director 1996 51,846 26,000 0 974,000
Martin A. Kropelnicki(4).... 1997 130,192 51,666 0 175,000
Vice President, Chief 1996 -- -- -- --
Financial Officer and
Secretary
Mordecai Levine (5)......... 1997 125,000 114,702 $132,600(6) 0
Vice President, IS Contract 1996 10,417 0 0 92,000
Services
Rita Hazell (7)............. 1997 123,220 145,494 0 40,000
Senior Vice President, R&D 1996 85,500 109,229 0 0
Contract Services
</TABLE>
- --------
(1) The aggregate amount of all other compensation in the form of perquisites
and other personal benefits does not exceed the lesser of either $50,000
or 10% of the total annual salary and bonus for each officer.
(2) Salary includes amounts deferred under the Company's 401(k) Plan.
(3) Mr. Bartlett joined the Company as President in October 1996.
(4) Mr. Kropelnicki joined the Company as Vice President, Chief Financial
Officer and Secretary in February 1997.
(5) Mr. Levine joined the Company as Vice President, IS Contract Services in
December 1996.
(6) Represents payment of the exercise price for Mr. Levine's exercise of an
option for 26,000 shares of the Company's Common Stock, pursuant to the
terms of Mr. Levine's employment agreement. See "Employment and Change in
Control Arrangements."
(7) Ms. Hazell joined the Company in September 1993 and has served as Vice
President, R&D Contract Services since April 1996.
7
<PAGE>
The following table provides the specified information concerning grants of
options to purchase the Company's Common Stock made during the fiscal year
ended December 28, 1997 to the persons named in the Summary Compensation
Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION FOR OPTION
UNDERLYING EMPLOYEES IN EXERCISE TERM (2)
OPTIONS FISCAL PRICE EXPIRATION ------------------------------
NAME GRANTED (#)(1) YEAR ($/SH) DATE 5% ($) 10% ($)
---- -------------- ------------ -------- ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Brenda C. Hall.......... 0 -- -- -- -- --
Paul H. Bartlett........ 0 -- -- -- -- --
Martin A. Kropelnicki... 175,000(3) 29.6% $10.00 02/18/07 $ 1,100,566 $ 2,789,049
Mordecai Levine......... 0 -- -- -- -- --
Rita Hazell............. 40,000(4) 6.8 21.875 09/12/07 550,283 1,394,525
</TABLE>
- --------
(1) All options were granted at an exercise price equal to the fair market
value of the Common Stock on the date of grant. The exercise price may be
paid in cash, in shares of Common Stock valued at fair market value on the
exercise date or through a cashless exercise procedure involving a same-
day sale of the purchased shares. The Company may also finance the option
exercise by loaning the optionee sufficient funds to exercise the option
and pay any withholding taxes incurred upon exercise.
(2) Potential gains are net of exercise price, but before taxes associated
with the exercise. These amounts represent hypothetical gains assuming
rates of appreciation specified by the Securities and Exchange Commission,
and do not represent the Company's estimate or projection of future Common
Stock prices. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Company, overall market
conditions and the optionees' continued employment through the vesting
period. The amounts reflected in this table may not be achieved.
(3) The options are exercisable for 135,000 option shares on December 28,
1997, subject to certain repurchase rights of the Company. With respect to
the first option for 50,000 option shares, Mr. Kropelnicki becomes vested
in 10,000 of the option shares on February 18, 1998 and an additional
833.33 option shares upon the completion of each of the next 48 months of
service thereafter; and with respect to the second option for 125,000
option shares, he becomes vested in 25,000 of the option shares on
February 18, 1998 and an additional 2,083.33 option shares upon the
completion of each of the next 48 months of service thereafter.
(4) Ms. Hazell becomes vested in 8,000 option shares on September 12, 1998,
and 666.66 option shares upon the completion of each of the next 48 months
of service thereafter.
8
<PAGE>
The following table provides the specified information concerning exercises
of options to purchase the Company's Common Stock during the fiscal year ended
December 28, 1997, and unexercised options held as of December 28, 1997, by
the persons named in the Summary Compensation Table:
AGGREGATE 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
SHARES OPTIONS AT 12/28/97 (#) 12/28/97 ($)(1)
ACQUIRED ON VALUE -------------------------- -------------------------
NAME EXERCISE (#) REALIZED ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Brenda C. Hall.......... -- -- -- -- -- --
Paul H. Bartlett........ -- -- 974,000(3) 0 $14,975,250 0
Martin A. Kropelnicki... -- -- 135,000(4) 40,000 1,265,625 $375,000
Mordecai Levine......... 26,000 $296,400 34,000 32,000(5) 485,350 456,800
Rita Hazell............. 10,000 199,500 26,000 64,000 495,950 457,800
</TABLE>
- --------
(1) Based on the closing price of $19.375 on the last trading day prior to the
Sunday of December 28, 1997, less exercise price.
(2) Market price on date of exercise, less exercise price.
(3) The option is immediately exercisable, subject to certain repurchase
rights of the Company. Mr. Bartlett is 50% vested in such option shares
and will vest in the balance of the option shares in a series of 24
monthly installments commencing January 1, 1998. See "Employment and
Change in Control Arrangements."
(4) The options are exercisable for 135,000 option shares on December 28,
1997, subject to certain repurchase rights of the Company. With respect to
the first option for 50,000 option shares, Mr. Kropelnicki becomes vested
in 10,000 of the option shares on February 18, 1998 and an additional
833.33 option shares upon the completion of each of the next 48 months of
service thereafter; and with respect to the second option for 125,000
option shares, he becomes vested in 25,000 of the option shares on
February 18, 1998 and an additional 2,083.33 option shares upon the
completion of each of the next 48 months of service thereafter.
(5) The 32,000 option shares become vested in a series of 48 equal monthly
installments upon the completion of each month of service from December 2,
1997.
EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
In March 1997, the Company entered into an employment agreement with Brenda
C. Hall, which provides for a base salary of $260,000. Ms. Hall is also
eligible for an annual bonus subject to a maximum limitation of 75% of her
annual base salary. Either the Company or Ms. Hall may terminate Ms. Hall's
employment with the Company at any time by giving the other party 30 days
prior written notice. If Ms. Hall is terminated other than for cause or is
constructively discharged, and provided that she does not engage in certain
competitive activities, Ms. Hall will receive her base salary for an
additional 24 months from the date of termination, and the Company will pay
for her COBRA continuation coverage until the date that is the earlier of 12
months after her termination or the date on which her COBRA eligibility
ceases. The employment agreement is for an unspecified term and terminates
when all obligations of the parties thereto have been satisfied.
In October 1996, the Company entered into an employment agreement with Paul
H. Bartlett. The employment agreement is for an unspecified term and
terminates when all obligations of the parties thereto have been satisfied.
Under the agreement, Mr. Bartlett will be employed as the Company's President,
reporting to its Chief Executive Officer. The agreement provides for an annual
base salary of $240,000. Mr. Bartlett is also eligible for an annual bonus,
subject to a maximum limitation of 75% of his annual base salary. In addition,
the Company granted to Mr. Bartlett an immediately exercisable stock option to
purchase 974,000 shares of Common Stock at an exercise price of $4.00 per
share, subject to certain repurchase rights of the Company. Mr. Bartlett is
50% vested in such shares and will vest in the balance of the shares in a
series of 24 monthly
9
<PAGE>
installments commencing January 1, 1998. In addition, all unvested option
shares automatically vest upon the occurrence of certain events, including a
merger of the Company after which 50% or less of the surviving corporation's
voting securities are owned by the Company's stockholders, a sale by the
Company of all or substantially all of its assets, or a constructive discharge
of Mr. Bartlett. Either the Company or Mr. Bartlett may terminate Mr.
Bartlett's employment with the Company at any time by giving the other party
30 days prior written notice. If Mr. Bartlett is terminated other than for
cause or disability, or if Mr. Bartlett is constructively discharged, Mr.
Bartlett will receive his salary for an additional 12 months from the date of
termination, provided he does not engage in certain competitive activities.
Under the employment agreement, the Company will nominate Mr. Bartlett for
election as a member of its Board of Directors as long as he remains employed,
and Brenda C. Hall has agreed to cause her shares of the Company's stock to be
voted in favor of Mr. Bartlett's election.
In December 1996, the Company entered into an employment agreement with
Mordecai Levine in connection with the Team Alliance Acquisition which
provides for a base salary of $125,000. For the period ending on the first,
second and third anniversary of Mr. Levine's employment with the Company, he
is eligible to receive a monthly bonus based upon gross margin dollars
generated by the IS Contract Services. In addition, the Company granted to Mr.
Levine stock options to purchase 92,000 shares of the Company's Common Stock
at an exercise price of $5.10 per share subject to certain repurchase rights
of the Company. Mr. Levine is currently vested in 52,000 of such shares, and
he will vest in an additional 8,000 shares on December 2, 1997, with the
balance of the shares vesting in a series of 48 equal monthly installments
commencing December 2, 1997. Upon Mr. Levine's exercise of such options, the
Company has agreed to pay to him an amount equal to the aggregate exercise
price of such options. Either the Company or Mr. Levine may terminate Mr.
Levine's employment with the Company at any time and for any reason by giving
the other party written notice. If Mr. Levine voluntarily terminates
employment with the Company for good cause or is terminated other than for
cause, he will receive his salary and bonus for an additional six months from
the date of termination. The employment agreement terminates upon the earlier
of the satisfaction of all of the obligations thereunder or December 2, 2000.
The terms of the Company's 1997 Stock Option Plan (the "1997 Plan") provide
that in the event the Company is acquired by merger, consolidation or asset
sale, each option outstanding at the time under the 1997 Plan will terminate
to the extent not assumed by the acquiring entity. In addition, the plan
administrator generally has the discretion to accelerate the vesting of
options.
COMPENSATION OF DIRECTORS
Under the automatic option grant program of the Company's 1997 Stock Option
Plan, each individual who first joins the Board of Directors of the Company as
a non-employee director after August 12, 1997 will receive at that time, an
automatic option grant for 20,000 shares of Common Stock. The optionee will
vest in the automatic option grant in a series of four annual installments
over the optionee's period of Board service, beginning one year from the grant
date. Each option will have an exercise price equal to the fair market value
of the Common Stock on the automatic option grant date and a maximum term of
ten years, subject to earlier termination following the optionee's cessation
of Board service.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Messrs. Kinion and Rowberry served as members of the Board of Directors'
Compensation Committee during 1997. Mr. Rowberry was not at any time during
1997 or at any other time an officer or employee of the Company. Mr. Kinion
was a former officer of the Company, but was not an officer or employee during
1997. No executive officer of the Company served as a member of the board of
directors or compensation committee of any entity that had one or more
executive officers serving as a member of the Company's Board of Directors or
Compensation Committee.
10
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In August 1996, the Company granted to Rita S. Hazell, Senior Vice
President, R&D Contract Services, a loan in the principal amount of $100,000
plus interest at 6.74%. Such loan is secured by a deed of trust in favor of
the Company on the real property purchased partially with such borrowed funds.
The outstanding balance on the loan as of March 31, 1998 is $75,000. The
principal amount of the loan and any accrued interest thereon will be forgiven
by the Company ratably over four years so long as Ms. Hazell remains employed
by the Company. In August 1997, principal in the amount of $25,000 and
interest in the amount of $6,740 were forgiven.
In October 1996, the Company entered into a settlement agreement and general
release with Todd J. Kinion, a former officer and a current director of the
Company, which obligates the Company to make monthly payments of $9,033 to him
until the earlier of February 29, 1998 or the occurrence of certain events. A
lump sum payment of $11,239, representing full payment of all unpaid bonus
obligations and business expense reimbursements, was made to Mr. Kinion in
connection with the settlement agreement.
Maryanne Gaines, the sister of Brenda Hall, the Company's Chief Executive
Officer and a director, was employed by the Company during 1997 as Director of
Operations--Special Projects. In exchange for services rendered to the Company
in such capacity, Ms. Gaines received $66,951 in compensation, which was paid
to her pursuant to the standard payroll practices of the Company less
withholdings and applicable deductions.
The Company has entered into indemnification agreements with each of its
officers and directors containing provisions that may require the Company,
among other things, to indemnify such officers and directors against certain
liabilities that may arise by reason of their status or service as officers or
directors (other than liabilities arising from willful misconduct of a
culpable nature), to advance their expenses incurred as a result of any
proceeding against them as to which they could be indemnified and to obtain
directors' and officers' liability insurance if available on reasonable terms.
The Company maintains an insurance policy covering officers and directors
under which the insurer has agreed to pay the amount of any claim made against
the officers or directors of the Company for wrongful acts that such officers
or directors may otherwise be required to pay or for which the Company is
required to indemnify such officers and directors, subject to certain
exclusions.
See "Employment and Change in Control Arrangements" for descriptions of
agreements regarding the employment of Ms. Hall, Mr. Bartlett and Mr. Levine.
11
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors was comprised of two
members during 1997, Messrs. Kinion and Rowberry. Mr. Rowberry was not at any
time during 1997 or at any other time a current or former officer or employee
of the Company. Mr. Kinion was a former officer of the Company, but was not an
officer or employee during 1997. The Compensation Committee is responsible for
setting and administering policies governing compensation of the Company's
executive officers, including the Company's 1997 Stock Option Plan. In
addition, the Compensation Committee reviews compensation levels of other
management level employees, evaluates the performance of management and
reviews other compensation-related issues.
COMPENSATION PHILOSOPHY
The Company applies a consistent compensation philosophy for all of its
employees, including its executive officers. The Company's compensation policy
is designed to enable the Company to attract, retain and reward executive
officers who are likely to contribute to the long-term success of the Company.
The Compensation Committee also believes that a strong correlation should
exist between executive compensation, business objectives and overall Company
performance.
In preparing the performance graph for this Proxy Statement, the Company has
selected the Standard & Poor's 500 Index ("S&P 500 Index"). The companies that
the Company uses for comparison of salary and compensation information are not
necessarily those included in the S&P 500 Index, because they were determined
not to be competitive with the Company for executive talent or because
compensation information was not available.
COMPONENTS OF COMPENSATION
There are three components of the Company's executive compensation program
that support the goal of aligning compensation with the value created for the
Company's stockholders while providing incentives to further the Company's
strategic objectives.
Salary
The Compensation Committee strives to offer salaries to its executive
officers that are competitive with salaries offered by companies of similar
size and capitalization in a similar industry. Base salaries are reviewed on
an annual basis and are subject to adjustment based upon the individual's
contribution to the Company and changes in salary levels offered by comparable
companies. In determining executive officers' salaries, the Compensation
Committee considers information provided by the Company's Chief Executive
Officer with respect to individual officer responsibilities and performance,
as well as salary surveys and similar data available from independent sources.
Bonuses
For fiscal 1997, annual incentive bonuses for the Chief Executive Officer
and the other Named Executive Officers were based upon the following three
components: (i) the Company's targeted net income, (ii) earnings per share
estimates for fiscal 1997 and (iii) individual performance. The Compensation
Committee reviews performance goals and, based on the components described
above, each executive officer's employment arrangement sets forth certain
target thresholds. In addition, target thresholds are set on an annual basis.
The actual performances of the Company and the executive officer is evaluated
to determine the percentage used to calculate the bonus at the end of the
year, with the size of the bonus varying between 0% and 100% of the target
award. Target awards for each executive officer in fiscal 1997 were set in
relation to such officer's base salary.
Equity Incentives
The Compensation Committee believes that employee equity ownership is highly
motivating, provides a major incentive to employees in building stockholder
value and serves to align the interests of employees with
12
<PAGE>
the interests of the Company's stockholders. In determining the amount of
equity compensation to be awarded to executive officers in any fiscal year,
the Compensation Committee considers the position of the officer, the current
stock ownership of the officer, the number of shares that continue to be
subject to vesting under outstanding options and the expected future
contribution of the officer to the Company's performance, giving primary
weight to the officer's position and his expected future contributions. In
addition, the Compensation Committee compares the stock ownership and options
held by each officer with the other officers' equity positions and the
officer's experience and value to the Company.
Option grants during 1997 are described under the heading "EXECUTIVE
COMPENSATION AND OTHER MATTERS" in the table entitled "Option Grants in Last
Fiscal Year." In 1997, Ms. Hall, Mr. Bartlett and Mr. Levine were not granted
any options to purchase shares of the Company's Common Stock.
CEO Compensation
The annual base salary for Ms. Hall, the Company's Chief Executive Officer,
was established in March 1997 pursuant to an employment agreement with the
Company. Ms. Hall's base salary is intended to be competitive with that paid
to executives at comparable companies in the same industry and to reflect her
personal performance for the Company. The factors that the Compensation
Committee considered in setting her annual base salary were (i) corporate
performance including the Company's initial public offering of its Common
Stock, (ii) earnings per share and net income and (iii) individual
performance. In addition, the Compensation Committee believes that an
important portion of her compensation should be based on Company performance.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Company has considered Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), and related regulations that restrict the
deductibility for federal income tax purposes of compensation paid to the
chief executive officer and each of the four other most highly compensated
executive officers at the end of any fiscal year to the extent such
compensation exceeds $1,000,000 for any of such officer in any year, other
than compensation that qualifies for an exception under the Code or
regulations. The Compensation Committee does not believe that other components
of the Company's compensation will be likely to exceed $1,000,000 annually for
any executive officer in the foreseeable future and, therefore, concluded that
no further action with respect to qualifying such compensation for federal
income tax deductibility was necessary at this time. In the future, the
Compensation Committee will continue to evaluate the advisability of
qualifying its executive compensation for such deductibility. The Compensation
Committee's policy is to qualify its executive compensation for deductibility
under applicable tax laws as practicable.
COMPENSATION COMMITTEE
Todd J. Kinion
Jon H. Rowberry
13
<PAGE>
COMPARISON OF STOCKHOLDER RETURN
Set forth below is a line graph comparing the annual percentage change in
the cumulative total return on the Company's Common Stock with the cumulative
total return of a peer group comprised of comparable companies in the same
industry traded on the Nasdaq Stock Market ("Peer Group Index") and the
Standard & Poor's 500 Stock Index ("S&P 500 Index") for the period commencing
on August 5, 1997 (1) and ending on December 28, 1997. Stockholder returns
over the indicated period are based on historical data and the Company
cautions that the stock price performance shown in the graph is not indicative
of, nor intended to forecast, the potential future performance of the
Company's Common Stock.
COMPARISON OF CUMULATIVE TOTAL RETURN FROM AUGUST 5, 1997 THROUGH DECEMBER 28,
1997 (2):
HALL, KINION & ASSOCIATES, INC., PEER GROUP INDEX AND S&P 500 INDEX
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
AUGUST 5, AUGUST 29, SEPTEMBER 30, OCTOBER 31, NOVEMBER 28, DEC. 28,
1997 1997 1997 1997 1997 1997
--------- ---------- ------------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Hall Kinion............. 100 21.375 21.125 15.625 17.875 21.875
Peer Group Index........ 100 23.210 25.302 24.509 23.574 22.530
S&P 500 Index........... 100 899.470 947.280 914.620 955.400 953.350
</TABLE>
- --------
(1) The Company's initial public offering occurred on August 8, 1997. For
purposes of this presentation, the Company has assumed that its initial
offering price of $15.00 would have been the closing sales price on the
day prior to commencement of trading.
(2) Assumes that $100.00 was invested on August 5, 1997 in the Company's
Common Stock at the Company's initial offering price of $15.00 and at the
closing sales price for each index on that date and that all cash
dividends were reinvested. No cash dividends have been declared on the
Company's Common Stock.
14
<PAGE>
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended or the
Securities Exchange Act of 1934, as amended, that might incorporate this Proxy
Statement or future filings made by the Company under those statutes, the
Compensation Committee Report and the Stock Performance Graph are not deemed
filed with the Securities and Exchange Commission and shall not be deemed
incorporated by reference into any of those prior filings or into any future
filings made by the Company under those statutes.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The members of the Board of Directors, the executive officers of the Company
and persons who hold more than 10% of the Company's outstanding Common Stock
are subject to the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended, which require them to file reports with
respect to their ownership of the Company's Common Stock and their
transactions in such Common Stock. Based upon (i) the copies of Section 16(a)
reports that the Company received from such persons for the 1997 fiscal year
transactions in the Common Stock and their Common Stock holdings and (ii) the
written representations received from one or more of such persons that no
annual Form 5 reports were required to be filed by them for the 1997 fiscal
year, the Company believes that all reporting requirements under Section 16(a)
for such fiscal year were met in a timely manner by its executive officers,
Board members and greater than ten-percent stockholders, except for two late
filings for Ms. Hazell for two transactions.
STOCKHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
Proposals of stockholders intended to be presented at the next Annual
Meeting of the Stockholders of the Company must be received by the Company at
its offices at 19925 Stevens Creek Boulevard, Suite 180, Cupertino, California
95014, not later than December 15, 1998, and satisfy the conditions
established by the Securities and Exchange Commission for stockholder
proposals to be included in the Company's proxy statement for that meeting.
TRANSACTION OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the meeting
is as set forth above. If any other matter or matters are properly brought
before the meeting, or any adjournment thereof, it is the intention of the
persons named in the accompanying form of proxy to vote the proxy on such
matters in accordance with their best judgment.
By Order of the Board of Directors
Martin A. Kropelnicki
Secretary
April 16, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE
ANNUAL MEETING. IF YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO
CHANGE YOUR PROXY VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT
THE ANNUAL MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING.
15
<PAGE>
HALL KINION & ASSOCIATES, INC.
ANNUAL MEETING OF STOCKHOLDERS, MAY 15, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
HALL, KINION & ASSOCIATES, INC.
The undersigned revokes all previous proxies, acknowledges receipt of
the Notice of the Annual Meeting of Stockholders to be held on May 15, 1998 and
the Proxy Statement and appoints Paul H. Bartlett and Martin A. Kropelnicki, and
each of them, the Proxy of the undersigned, with full power of substitution, to
vote all shares of Common Stock, of Hall, Kinion & Associates, Inc. (the
"Company") which the undersigned is entitled to vote, either on his or her own
behalf or on behalf of any entity or entities, at the Annual Meeting of
Stockholders to be held at the Santa Clara Marriott, 2700 Mission College Blvd.,
Santa Clara, California on Friday, May 15, 1998, at 9:00 a.m. local time and at
any adjournment or postponement thereof (the "Annual Meeting"), with the same
force and effect as the undersigned might or could do if personally present
thereat. The shares represented by this Proxy shall be voted in the manner set
forth on the reverse side.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
X Please mark votes as in this example.
The Board of Directors recommends a vote FOR the proposals. This Proxy, when
properly executed, will be voted as specified below. This Proxy will be voted
FOR the proposals if no specification is made.
1. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent accountants for the fiscal year ending December 27, 1998.
FOR [_] AGAINST [_] ABSTAIN [_]
2. To transact such other business as may properly come before the Annual
Meeting and at any adjournment or postponement thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW
Please sign your name
Signature:______________________________
Date:___________________________________
Signature:______________________________
Date:___________________________________
