<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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
SYKES ENTERPRISES, INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
(SYKES ENTERPRISES, INC. LOGO)
100 NORTH TAMPA STREET
SUITE 3900
TAMPA, FLORIDA 33602
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 2000
---------------------
To the Shareholders of Sykes Enterprises, Incorporated:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of Sykes Enterprises, Incorporated (the "Company") will be held at the
Hyatt Regency, 211 North Tampa Street, Tampa, Florida, on Thursday, April 27,
2000 at 10:00 a.m., Eastern Standard Time, for the following purposes:
1. To elect three directors to hold office until the 2003 Annual
Meeting of Shareholders;
2. To approve the adoption of the Company's 2000 Stock Option Plan;
and
3. To transact any other business as may properly come before the
Annual Meeting.
Only shareholders of record as of the close of business on March 14, 2000
will be entitled to vote at the Annual Meeting or any adjournment or
postponement of the Annual Meeting. Information relating to the matters to be
considered and voted on at the Annual Meeting is set forth in the proxy
statement accompanying this Notice.
By Order of the Board of Directors,
/s/ Martin A. Traber
--------------------
Martin A. Traber
Secretary
March 29, 2000
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE VOTE ON THE
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING BY COMPLETING THE ENCLOSED PROXY
AND MAILING IT PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE> 3
(Sykes Logo)
100 NORTH TAMPA STREET
SUITE 3900
TAMPA, FLORIDA 33602
---------------------
PROXY STATEMENT
FOR
2000 ANNUAL MEETING OF SHAREHOLDERS
---------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Sykes Enterprises, Incorporated
(the "Company") for the Annual Meeting of Shareholders (the "Annual Meeting") to
be held at the Hyatt Regency, 211 North Tampa Street, Tampa, Florida, on
Thursday, April 27, 2000 at 10:00 a.m., Eastern Standard Time, or any
adjournment or postponement of the Annual Meeting.
If the accompanying proxy form ("Proxy") is completed, signed, dated,
returned to the Company, and not revoked, the shares represented by the Proxy
will be voted at the Annual Meeting as directed by the shareholder on the Proxy.
The giving of the Proxy does not affect the right to vote in person if the
shareholder attends the Annual Meeting. The shareholder may revoke the Proxy at
any time prior to the voting of the shares represented by the Proxy.
This Proxy Statement and the annual report to shareholders of the Company
for the year ended December 31, 1999 are first being mailed on or about March
29, 2000 to shareholders entitled to vote at the Annual Meeting.
SHAREHOLDERS ENTITLED TO VOTE
The record date for the Annual Meeting is March 14, 2000. Only shareholders
of record as of the close of business on the record date are entitled to notice
of the Annual Meeting and to vote at the Annual Meeting. As of the record date,
41,582,342 shares of common stock and 491,666 exchangeable shares were
outstanding and entitled to vote at the Annual Meeting. An aggregate of
42,074,008 shares are entitled to vote at the Annual Meeting. Each share of
common stock and each exchangeable share is entitled to one vote on all matters
submitted to a vote of shareholders. The exchangeable shares will be voted by
Firstar Bank Milwaukee, N.A. ("Firstar") as trustee for the holders of the
exchangeable shares.
In connection the Company's acquisition of Oracle Service Networks
Corporation in 1998, former shareholders of Oracle were issued exchangeable
shares as consideration for their Oracle common stock. Each exchangeable share
can be exchanged for one share of Sykes common stock at any time. Exchangeable
shares are entitled to the same rights, benefits, and privileges, including
voting rights, as the Sykes common stock. The voting rights of the exchangeable
shares are held through a voting trust, pursuant to which the Company issued to
Firstar one share of Special Preferred Voting Stock. The share of Special
Preferred Voting Stock is entitled to the number of votes equal to the number of
outstanding exchangeable shares. Holders of
<PAGE> 4
exchangeable shares are entitled to instruct Firstar as to the voting of the
number of votes represented by the holder's exchangeable shares, and Firstar
will exercise each vote attached to the Special Preferred Voting Stock only as
directed by the holders of the exchangeable shares. If a holder of exchangeable
shares does not instruct Firstar how to vote, Firstar will not exercise those
votes. A holder of exchangeable shares may attend the Annual Meeting and vote
such holder's number of votes in person. A holder of exchangeable shares also
may instruct Firstar to give a proxy to such holder entitling the holder to vote
such holder's number of votes in person or to grant to the Company's management
a proxy to vote such votes. Firstar has furnished this Proxy Statement, the
notice of the Annual Meeting, the annual report to shareholders of the Company
for the year ended December 31, 1999, and other related materials to the record
holders of exchangeable shares.
The common stock and exchangeable shares (through the voting trust
described above) vote together as a single class. Votes cast by proxy or in
person at the Annual Meeting will be tabulated by the inspector of elections
appointed for the Annual Meeting, who will also determine whether a quorum is
present for the transaction of business. The Company's Bylaws provide that a
quorum is present if the holders of a majority of the issued and outstanding
shares of common stock entitled to vote at the meeting are present in person or
represented by proxy. Abstentions will be counted as shares that are present and
entitled to vote for purposes of determining whether a quorum is present. Shares
held by nominees for beneficial owners will also be counted for purposes of
determining whether a quorum is present if the nominee has the discretion to
vote on at least one of the matters presented, even though the nominee may not
exercise discretionary voting power with respect to other matters and even
though voting instructions have not been received from the beneficial owner (a
"broker non-vote"). Abstentions and broker non-votes are not counted in
determining whether a proposal has been approved.
Under Florida law, if a quorum exists, directors are elected by a plurality
of the votes cast by the shares entitled to vote in the election. The proposal
to approve the adoption of the Company's 2000 Stock Option Plan will be adopted
if a majority of the total votes present or represented and entitled to vote at
the Annual Meeting vote in favor of such proposal.
Shareholders are requested to vote by completing the enclosed Proxy and
returning it signed and dated in the enclosed postage-paid envelope.
Shareholders are urged to indicate their votes in the spaces provided on the
Proxy. Proxies solicited by the Board of Directors of the Company will be voted
in accordance with the directions given in the Proxy. Where no instructions are
indicated, signed Proxies will be voted FOR each of the proposals listed in the
Notice of Annual Meeting of Shareholders. Returning your completed Proxy will
not prevent you from voting in person at the Annual Meeting should you be
present and wish to do so.
Any shareholder giving a Proxy has the power to revoke it at any time
before it is exercised by:
- filing with the Secretary of the Company written notice of revocation,
- submitting a duly executed Proxy bearing a later date than the previous
Proxy, or
- appearing at the Annual Meeting and giving the Secretary notice of his or
her intention to vote in person.
Proxies solicited by this Proxy Statement may be exercised only at the
Annual Meeting and any adjournment of the Annual Meeting and will not be used
for any other meeting. Proxies solicited by this Proxy Statement will be
returned to the Board of Directors and will be tabulated by an inspector of
elections designated by the Board of Directors who will not be employed by the
Company or any of its affiliates.
2
<PAGE> 5
The cost of solicitation of Proxies by mail on behalf of the Board of
Directors will be borne by the Company. Proxies also may be solicited by
personal interview or by telephone by directors, officers, and other employees
of the Company without additional compensation. The Company also has made
arrangements with brokerage firms, banks, nominees, and other fiduciaries to
forward proxy solicitation materials for shares of common stock held of record
to the beneficial owners of such shares. The Company will reimburse such record
holders for their reasonable out-of-pocket expenses.
PROPOSAL 1:
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THE FOLLOWING NOMINEES FOR ELECTION AS
DIRECTORS AND URGES EACH SHAREHOLDER TO VOTE "FOR" THE NOMINEES. EXECUTED
PROXIES IN THE ACCOMPANYING FORM WILL BE VOTED AT THE ANNUAL MEETING IN FAVOR OF
THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED BELOW, UNLESS AUTHORITY TO DO SO
IS WITHHELD.
The Company's Board of Directors is divided into three classes (designated
"CLASS I," "CLASS II," and "CLASS III"), as nearly equal as possible, with each
class serving a three-year term expiring at the third annual meeting of
shareholders after their election. The term of the current CLASS III directors
expires at the 2000 Annual Meeting of Shareholders. Accordingly, three CLASS III
directors will be elected at the Annual Meeting to serve until their terms
expire at the 2003 Annual Meeting of Shareholders (in each case, until their
respective successors are elected and qualified). In the event any such nominee
is unable to serve, the persons designated as proxies will cast votes for such
other person in their discretion as a substitute nominee. The Board of Directors
has no reason to believe that the nominees named below will be unavailable, or
if elected, will decline to serve.
NOMINEES FOR DIRECTORS
CLASS III -- TERM EXPIRES AT THE 2003 ANNUAL MEETING
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ---- --- ------------------------------------------
<S> <C> <C>
John H. Sykes.............................. 63 John H. Sykes has been Chairman of the
Board of Directors and Chief Executive
Officer of the Company since its inception
in 1977. He also served as President of the
Company from inception until December 1998,
at which time Mr. David L. Grimes joined
the Company as President.
Furman P. Bodenheimer, Jr.................. 70 Furman P. Bodenheimer, Jr. was elected to
the Company's Board of Directors in 1991
and is a member of the Compensation
Committee and the Stock Option Committee.
Mr. Bodenheimer has been President and
Chief Executive Officer of Zickgraf
Enterprises, Inc. and Nantahala Lumber in
Franklin, North Carolina for more than the
past five years.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ---- --- ------------------------------------------
<S> <C> <C>
David L. Grimes............................ 52 David L. Grimes joined the Company in
December 1998. He has served as President
since December 1998 and as President and
Chief Operating Officer since February
1999. From 1986 through 1998, Mr. Grimes
held various positions with AT&T, most
recently as Regional Vice President for the
AT&T Growth Markets Segment where he was
responsible for the marketing and sales of
long distance, local services, wireless,
data, and e-commerce in a fourteen-state
area. While with AT&T, he also served as
the Chief Operating Officer of a United
Technologies and AT&T joint venture.
</TABLE>
DIRECTORS WHOSE TERMS OF OFFICE CONTINUE
CLASS II -- TERM EXPIRES AT THE 2001 ANNUAL MEETING
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ---- --- ------------------------------------------
<S> <C> <C>
H. Parks Helms............................. 64 H. Parks Helms has served as a director of
the Company since its inception in 1977 and
is chairman of the Audit Committee. Mr.
Helms is President and Managing Partner of
the law firm of Helms, Cannon, Henderson &
Porter, P.A. in Charlotte, North Carolina
and has been with the firm for more than
the past five years. Mr. Helms has held
numerous political appointments and elected
positions, including as a member of the
North Carolina House of Representatives. He
currently is Chairman of the Mecklenburg
County, North Carolina Board of County
Commissioners.
Adelaide A. (Alex) Sink.................... 51 Adelaide A. (Alex) Sink was elected to the
Company's Board of Directors in June 1997
and is a member of the Audit Committee. Ms.
Sink is the President of the Florida
Banking Group for Bank of America. She has
held that position for more than the past
five years, except for a five-month period
in 1998 when she served as President of
NationsBank Private Client Group
nationwide. Ms. Sink serves on several
community and statewide volunteer boards in
Florida.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ---- --- ------------------------------------------
<S> <C> <C>
Linda McClintock-Greco, M.D................ 45 Linda McClintock-Greco, M.D. was elected to
the Company's Board of Directors in May
1998 and is a member of the Compensation
Committee, the Stock Option Committee, and
the Nominating Committee. Since 1998, Dr.
McClintock-Greco has been the President and
Chief Executive Officer of Greco & Assoc.
Consulting, Inc., a healthcare consulting
firm, and in that capacity serves as the
Vice President of Medical Affairs for
Entrusted Healthcare Management Services
for the state of Florida. Until 1998, she
served as Chief Executive Officer and Chief
Medical Officer of Tampa General
HealthPlan, Inc. (HealthEase), and had
spent the past 11 years in the health care
industry as both a private practitioner in
Texas and a managed care executive serving
as the Regional Medical Director with
Humana Health Care Plan. Dr.
McClintock-Greco serves on the Board of
Directors of the Florida Association of
Managed Care Organizations (FAMCO)
currently acting as Treasurer. Dr.
McClintock-Greco also serves on the board
of several charitable organizations.
</TABLE>
DIRECTORS WHOSE TERMS OF OFFICE CONTINUE
CLASS I -- TERM EXPIRES AT THE 2002 ANNUAL MEETING
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ---- --- ------------------------------------------
<S> <C> <C>
Gordon H. Loetz............................ 50 Gordon H. Loetz was elected to the
Company's Board of Directors in 1993 and
currently serves as Vice Chairman of the
Board of Directors. In February 1999, Mr.
Loetz became a director and President of
Sykes Financial Services, Inc., a wholly
owned subsidiary of the Company. From
November 1997 through February 1999, Mr.
Loetz served as the Company's Executive
Vice President and Chief Operating Officer.
Prior to November 1997, Mr. Loetz served as
President of CFS Insurance Agency, Inc. In
addition, Mr. Loetz founded Comprehensive
Financial Services, a financial investment
advisory company.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ---- --- ------------------------------------------
<S> <C> <C>
Ernest J. Milani........................... 70 Ernest J. Milani was elected to the
Company's Board of Directors of the Company
in April 1996 and is a member of the
Compensation Committee, the Stock Option
Committee, and the Nominating Committee.
Until 1996, Mr. Milani held various
positions with CDI Corporation, a
publicly-held provider of engineering and
technical services, most recently as
President of CDI Corporation Northeast and
CDI Technical Services Ltd., both of which
are subsidiaries of CDI Corporation.
Iain A. Macdonald.......................... 55 Iain A. Macdonald was elected to the Board
of Directors of the Company in March 1998
and is a member of the Audit Committee and
the Nominating Committee. Prior to joining
the Company's board, Mr. Macdonald served
as a director of McQueen International Ltd.
from 1996 until its acquisition by the
Company. Until 1995, Mr. Macdonald was
Chairman of ComputerGroup plc, a supplier
of personal computers, networks, and
related services. Mr. Macdonald also serves
on the Board of Directors of Frederick's
Dairies, Ltd., Signs & Labels, Ltd., and
Warthog Software, plc.
</TABLE>
PROPOSAL 2:
APPROVAL OF THE 2000 STOCK OPTION PLAN
THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF THE 2000 STOCK OPTION
PLAN (THE "2000 PLAN") AND URGES EACH SHAREHOLDER TO VOTE "FOR" THE APPROVAL OF
THE 2000 PLAN. EXECUTED AND UNMARKED PROXIES IN THE ACCOMPANYING FORM WILL BE
VOTED AT THE ANNUAL MEETING IN FAVOR OF THE APPROVAL OF THE 2000 PLAN.
GENERAL
The Company currently maintains the 1996 Employee Stock Option Plan under
which stock options may be granted to employees of the Company. As of December
31, 1999, 257,250 shares remained eligible for option grants under the 1996
Employee Stock Option Plan. The Board of Directors adopted, subject to
shareholder approval, the 2000 Plan to allow for additional option awards to be
made to employees of the Company.
The Board of Directors has adopted the 2000 Plan subject to shareholder
approval, and the 2000 Plan will become effective when shareholder approval is
obtained. The material terms of the 2000 Plan are summarized
6
<PAGE> 9
below and are qualified in their entirety by the terms of the 2000 Plan, which
is included as an exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1999.
The purposes of shareholder approval of the 2000 Plan are: (i) to permit
the options to purchase shares of common stock granted under the 2000 Plan to
qualify for incentive stock option treatment pursuant to Section 422 of the
Internal Revenue Code of 1986 (the "Code"); (ii) to satisfy the
performance-based compensation exception to the $1 million limit under Section
162(m) of the Code; and (iii) to satisfy the applicable requirements of The
Nasdaq Stock Market.
The 2000 Plan authorizes the granting of options to purchase shares of
common stock to employees of the Company. Incentive stock option treatment
permits employees to defer the recognition of income until the employee
exercises the options and sells the underlying shares.
Pursuant to Section 162(m) of the Code, the Company may not deduct
compensation in excess of $1 million paid to its Chief Executive Officer and the
four next most highly compensated executive officers of the Company. The 2000
Plan is designed to comply with Section 162(m) so that the grant of options will
be excluded from the calculation of annual compensation for purposes of Section
162(m) and will be fully deductible by the Company.
PURPOSE
The purpose of the 2000 Plan is to enable the Company and its subsidiaries
to compete successfully in attracting, motivating and retaining employees with
outstanding abilities by making it possible for them to purchase shares of
common stock on terms that will give them a direct and continuing interest in
the future success of the Company and its subsidiaries. The purpose of the Plan
is the same as the purpose of the Company's 1996 Employee Stock Option Plan,
which currently is in effect.
SHARES SUBJECT TO OPTIONS
The 2000 Plan permits options to be granted to purchase up to 4,000,000
shares of common stock. Options granted under the 2000 Plan will be either
incentive stock options meeting the applicable statutory requirements of the
Code or nonqualified options, which do not satisfy such requirements. Options
granted under the 2000 Plan will be evidenced by a written stock option
agreement.
As of the date of this Proxy Statement, no options have been granted to
employees under the 2000 Plan. At this time, the Company does not know which
employees, if any, will receive grants under the 2000 Plan or the number of
shares that will be covered by any such grants. Such determinations will be made
from time to time by the Stock Option Committee. To the extent that options
granted under the 2000 Plan expire or terminate without having been exercised in
full, the common stock subject to those expired or terminated options will
become available for further options under the 2000 Plan. Provision is made
under the 2000 Plan for appropriate adjustment in the number of shares of common
stock covered by the 2000 Plan, and by each option granted thereunder and the
related option price, in the event of any change in the common stock by reason
of a stock dividend, merger, reorganization, stock split, recapitalization,
combination, exchange of shares or otherwise.
ADMINISTRATION AND DURATION OF THE 2000 PLAN
The 2000 Plan is administered by the Stock Option Committee of the
Company's Board of Directors. If at any time the Committee shall not be in
existence, the Board of Directors shall administer the 2000 Plan.
7
<PAGE> 10
The Board may delegate to another committee of the Board or to one or more
senior officers of the Company any or all of the authority and responsibility of
the Stock Option Committee with respect to the 2000 Plan, other than with
respect to participants who are subject to Section 16 of the Securities Exchange
Act of 1934. The Stock Option Committee has full power and authority to
interpret and administer the 2000 Plan and any instrument or agreement relating
to, or made under, the 2000 Plan, establish, amend, suspend, or waive such rules
and regulations and appoint such agents as it shall deem appropriate for the
proper administration of the 2000 Plan. The Stock Option Committee make any
other determination and take any other action that the Committee deems necessary
or desirable for the administration of the 2000 Plan.
The Stock Option Committee will establish the number of shares of common
stock subject to options granted under the 2000 Plan, the employees to whom
stock options are granted, and the terms of the stock options granted, subject
to the terms and conditions set forth in the 2000 Plan. The 2000 Plan will
terminate on March 2, 2010, unless sooner terminated by the Board. Upon such
termination, the outstanding options granted pursuant to the 2000 Plan will
remain in effect until their exercise or expiration. The Board may at any time
terminate the 2000 Plan or amend the 2000 Plan as it shall deem advisable,
including any amendment deemed by the Board to be necessary or advisable to
assure conformity of the 2000 Plan and any incentive stock options granted
thereunder to the requirements of Section 422 of the Code, to assure conformity
with any requirements of other applicable state or federal laws or regulations.
ELIGIBILITY AND EXTENT OF PARTICIPATION
Employees eligible to receive options pursuant to the 2000 Plan are persons
who are regularly employed on a salary basis by the Company or any subsidiary of
the Company, including officers or directors of the Company or any subsidiary.
No incentive stock option shall be granted to any employee who immediately after
such option is granted, owns capital stock of the Company possessing more than
10% of the total combined voting power or value of all classes of capital stock
of the Company unless the option price at the time such incentive stock option
is granted is at least 110% of the fair market value of the shares subject to
the incentive stock option and such incentive stock option is not exercisable by
its terms after the expiration of five years from the date of its grant.
Directors who are not also employees of the Company or a subsidiary of the
Company are not eligible to participate under the 2000 Plan.
An incentive stock option shall be granted under the 2000 Plan to an
optionee only if the aggregate fair market value (determined as of the date the
option is granted) of the common stock for which options are exercisable for the
first time by such optionee during any calendar year does not exceed $100,000.
No participant in the 2000 Plan is eligible to receive, at the time of grant,
options to purchase more than 100,000 shares of common stock under the 2000 Plan
during any calendar year.
OPTION PRICE
Except for options granted to shareholders owning 10% or more of the voting
power of all classes of the Company's capital stock, the per share option price
of an incentive stock option granted or to be granted pursuant to the 2000 Plan,
as determined by the Committee, shall be an amount not less than 100% of the
fair market value of the common stock on the date that the option is granted.
For purposes of the 2000 Plan, the "fair market value" of a share of common
stock is defined as the average closing price of the common stock on an
established national or regional stock exchange or automated quotation system,
including, without limitation, the Nasdaq National Market, during the ten
trading days immediately preceding the date that the option is granted.
8
<PAGE> 11
OPTION PERIOD
The term of each option granted pursuant to the 2000 Plan shall be as
determined by the Committee, but in no event shall the term of an option exceed
a period of ten years from the date of its grant. In certain circumstances
involving mergers, reorganizations, transactions involving the sale or transfer
of substantially all of the assets of the Company or the acquisition of more
than 50% of the common stock by any person or group of related persons without
the prior approval of the Board, the Committee has the authority to accelerate
the vesting of options that have been granted under the 2000 Plan to be
immediately exercisable in full.
METHOD OF PAYMENT
Payment of the option price may be made in cash or by check, or by delivery
of shares of common stock equivalent in fair market value to the option price,
or by a combination of cash and shares of common stock, at the election of the
optionee and subject to the terms of the applicable stock option agreement. In
the event an optionee exercises an option by surrendering shares of common stock
as payment of the exercise price, the 2000 Plan permits the Committee to grant a
replacement option equal to the number of shares surrendered as payment.
METHOD OF EXERCISE AND PAYMENT TERMS
Subject to the terms of each stock option agreement, options granted under
the 2000 Plan may be exercised in whole or in part. Upon exercise of an option,
the employee must pay in full the option price for the shares of common stock
being purchased.
LIMITATIONS ON TRANSFERABILITY AND EFFECT OF DEATH OR TERMINATION OF EMPLOYMENT
Except as otherwise provided by the Committee, options granted under the
2000 Plan are not transferable other than by will or by the laws of descent and
distribution. Except as otherwise provided by the Committee, during the lifetime
of an optionee, his or her option shall be exercisable only by him or her and
only while continuously employed by the Company or one of its subsidiaries, or,
if after termination of employment, either within (i) one month after
termination of employment, other than by reason of the optionee's death,
retirement with the consent of the Company or such subsidiary as the case may
be, or permanent disability, or (ii) three months after termination of
employment if the optionee dies, retires with the appropriate consent or is
permanently disabled as described above, but only if and to the extent the
option was exercisable on the last day of such employment. If an optionee dies
within a period during which a stock option could have been exercised by the
optionee, the stock option may be exercised after his or her death by those
entitled to exercise such option under the optionee's will or the laws of
descent and distribution, but only if and to the extent such stock option was
exercisable immediately prior to his or her death. In the discretion of the
Committee, the one month and three month periods referenced above may be
extended for a period of up to one year. However, no option may be exercised
after the expiration of such option.
FEDERAL INCOME TAX CONSIDERATIONS
Incentive Stock Options. Under current federal income tax regulations, no
taxable income is recognized by an optionee and no tax deduction is available to
the Company upon the grant or the exercise of an option that qualifies as an
incentive stock option under Section 422 of the Code (but the spread between the
exercise price and the fair market value of the underlying shares on the date of
exercise generally will constitute a tax preference item for purposes of the
alternative minimum tax). The optionee generally will be entitled to long-
9
<PAGE> 12
term capital gain treatment upon the sale of shares acquired pursuant to the
exercise of an incentive stock option if the shares have been held for more than
two years from the date of grant of the option and for more than one year after
exercise, and the Company will not be entitled to any deduction for federal
income tax purposes. If the optionee disposes of the stock before the expiration
of either of these holding periods (a "disqualifying disposition"), the gain
realized on disposition will be compensation income to the optionee to the
extent the fair market value of the underlying stock on the date of exercise(or,
if less, the amount realized on disposition of the underlying stock) exceeds the
applicable exercise price and a corresponding deduction will be allowed to the
Company.
Nonqualified Stock Options. Under current federal income tax regulations,
no taxable income is realized by an optionee and no tax deduction is available
to the Company upon the grant of a non-qualified stock option. The exercise of a
non-qualified option will result in the recognition of ordinary income by the
optionee at the time of exercise in an amount equal to the excess of the fair
market value of the common stock acquired at such time over the exercise price
for the option. The Company will generally be entitled to a deduction in the
same amount and at the same time as ordinary income is recognized by the
optionee. A subsequent disposition of the common stock by the optionee will
typically give rise to capital gain or loss to the extent the amount realized
from the sale differs from the optionee's tax basis, which is usually the fair
market value of the common stock acquired on the date of exercise. This capital
gain or loss will be a long-term gain or loss if the common stock sold had been
held for more than one year after the date of exercise.
BOARD OF DIRECTORS
GENERAL
During 1999, the Board of Directors held seven meetings. The Board of
Directors also took certain actions by unanimous written consent in lieu of a
meeting, as permitted by Florida law. During 1999, the Audit Committee held
three meetings, the Compensation Committee held one meeting, and the Stock
Option Committee held one meeting. In addition, the Board of Directors formed a
Nominating Committee during 1999, which held two meetings. Each of the directors
attended at least 75% of the meetings of the Board of Directors and the
committees on which they served during 1999.
DIRECTOR COMPENSATION
Directors who are executive officers of the Company receive no compensation
for service as members of either the Board of Directors or any committees of the
Board. Directors who are not employees of the Company receive (subsequent to the
Annual Meeting) an annual fee of $10,000, payable in cash or shares of common
stock based on the fair market value of the common stock on the date of payment
at the election of each director, plus $1,250 per Board and committee meeting
attended, and $500 per telephone conference meeting that last at least one hour.
Chairpersons of committees receive $2,000 per committee meeting attended.
Directors who are not employees of the Company also receive options to purchase
7,500 shares of common stock at their election and annually thereafter under the
Company's 1996 Non-Employee Director Stock Option Plan. Directors also receive
an ad hoc fee of $1,000 per day for extra tasks requested by the Chairman of the
Board.
During 1999, Mr. Milani provided technical consulting services to the
Company as requested by the Company on a per diem compensation basis. Mr.
Milani's per diem compensation for these consulting services
10
<PAGE> 13
during 1999 was approximately $12,000. In addition, Mr. Macdonald received
approximately $16,000 during 1999 for consulting services to the Company.
COMMITTEES OF THE BOARD
The Board of Directors has established the following committees whose
responsibilities are summarized as follows:
Audit Committee. The Audit Committee is comprised of Mr. Helms, Mr.
Macdonald, and Ms. Sink and is responsible for reviewing the independence,
qualifications, and activities of the Company's independent certified
accountants and the Company's financial policies, control procedures, and
accounting staff. The Audit Committee recommends to the Board the appointment of
the independent certified public accountants and reviews and approves the
Company's financial statements. The Audit Committee is also responsible for the
review of transactions between the Company and any Company officer, director, or
entity in which a Company officer or director has a material interest.
Compensation Committee. The Compensation Committee is comprised of Mr.
Bodenheimer, Dr. Greco, and Mr. Milani and is responsible for establishing the
compensation of the Company's senior management, including salaries, bonuses,
termination arrangements, and other executive officer benefits. The Compensation
Committee also administers the Company's 1997 Management Stock Incentive Plan.
Stock Option Committee. The Stock Option Committee is comprised of Mr.
Bodenheimer, Dr. Greco, and Mr. Milani and is responsible for granting stock
options under the 1996 Employee Stock Option Plan and the 2000 Plan.
Nominating Committee. The Nominating Committee is comprised of Dr. Greco,
Mr. Macdonald, and Mr. Milani. The Nominating Committee is responsible for
reviewing the structure and membership of the Board of Directors and identifying
and recommending candidates for membership to the Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Mr. Bodenheimer, Dr. Greco,
and Mr. Milani.
During 1999, Mr. Milani provided technical consulting services to the
Company as requested by the Company on a per diem compensation basis. Mr.
Milani's per diem compensation for these consulting services during 1999 was
approximately $12,000. In addition, Mr. Macdonald received approximately $16,000
during 1999 for consulting services to the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
During the year ended December 31, 1999, the executive officers and
directors of the Company filed with the Securities and Exchange Commission (the
"Commission") on a timely basis all required reports relating to transactions
involving equity securities of the Company beneficially owned by them, except as
follows: (i) John H. Sykes failed to timely file a Form 5 for gifts of common
stock during 1999, and the report has been filed; (ii) H. Parks Helms did not
timely file reports for his purchase of 5,000 shares of Sykes common stock on
April 30, 1999, his purchase of 600 shares of Sykes common stock in May 1998,
and his wife's purchase of 600 shares of Sykes common stock in May 1998, and
reports for these transactions were filed subsequently; and (iii) Ernest J.
Milani did not timely file a report for his exercise of options for 7,500 shares
of Sykes common stock and his sale of those shares on March 4, 1999, and a
report for this transaction was
11
<PAGE> 14
filed subsequently. The Company has relied solely on the written representation
of its executive officers and directors and copies of the reports they have
filed with the Commission in providing this information.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of common stock as of the Record Date with respect to (i) each of the
Company's directors, (ii) each of the Company's executive officers named in the
Summary Compensation Table below, (iii) all directors and executive officers of
the Company as a group, and (iv) each person known by the Company to own
beneficially more than 5% of the common stock. Except as otherwise indicated,
each of the shareholders listed below has sole voting and investment power over
the shares beneficially owned.
<TABLE>
<CAPTION>
BENEFICIALLY OWNED
--------------------
NAME SHARES PERCENT
---- ---------- -------
<S> <C> <C>
John H. Sykes(1)............................................ 17,487,250 41.6%
David L. Grimes(2).......................................... 41,667 *
Scott J. Bendert(3)......................................... 88,150 *
Gerry L. Rogers(4).......................................... 25,000 *
James E. Lamar(5)........................................... -- --
H. Parks Helms(6)........................................... 30,833 *
Gordon H. Loetz(7).......................................... 79,390 *
Ernest J. Milani(8)......................................... 19,523 *
R. James Stroker(9)......................................... 19,157 *
Furman P. Bodenheimer, Jr.(10).............................. 55,207 *
Adelaide A. Sink(11)........................................ 13,785 *
Iain A. Macdonald(12)....................................... 8,335 *
Linda McClintock-Greco(13).................................. 6,108 *
All directors and executive officers as a group (13)
persons................................................... 17,874,405 42.5%
</TABLE>
- ---------------
* Less than 1.0%
(1) Includes the following shares over which Mr. Sykes retains voting and
investment power: (i) 17,215,750 shares owned by Mr. Sykes through Jopar
Investments Limited Partnership, a North Carolina limited partnership in
which Mr. Sykes is the sole limited partner and the sole shareholder of the
limited partnership's sole general partner; and (ii) 271,600 shares owned
by various trusts for the benefit of Mr. Sykes' children. Excludes 7,950
shares owned by Mr. Sykes' wife, as to which Mr. Sykes disclaims beneficial
ownership. Mr. Sykes' business address is 100 North Tampa Street, Suite
3900, Tampa, Florida 33602.
(2) Includes 41,667 shares of Sykes common stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Excludes 208,333 shares of Sykes common stock issuable upon the exercise of
non-exercisable stock options.
(3) Includes 72,500 shares of Sykes common stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Excludes 145,000 shares of Sykes common stock issuable upon the exercise of
non-exercisable stock options.
(4) Includes 25,000 shares of Sykes common stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Excludes 125,000 shares of Sykes common stock issuable upon the exercise of
non-exercisable stock options.
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<PAGE> 15
(5) Excludes 180,000 shares of Sykes common stock issuable upon the exercise of
non-exercisable stock options.
(6) Includes 17,500 shares of Sykes common stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Includes 600 shares of Sykes common stock owned by Mr. Helms' wife in an
IRA in which Mr. Helms is the beneficiary.
(7) Includes 79,167 shares of Sykes common stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Excludes 33,333 shares of Sykes common stock issuable upon the exercise of
non-exercisable stock options.
(8) Includes 17,500 shares of Sykes common stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
(9) Includes 17,950 shares of Sykes common stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
(10) Includes 25,000 shares of Sykes common stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
(11) Includes 8,335 shares of Sykes common stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Excludes 6,665 shares of Sykes common stock issuable upon the exercise of
non-exercisable stock options.
(12) Includes 8,335 shares of Sykes common stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Excludes 6,665 shares of Sykes common stock issuable upon the exercise of
non-exercisable stock options.
(13) Includes 5,000 shares of Sykes common stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Excludes 5,000 shares of Sykes common stock issuable upon the exercise of
non-exercisable stock options.
EXECUTIVE COMPENSATION
The following table sets forth certain information for the years ended
December 31, 1999, 1998, and 1997 concerning compensation paid to or earned by
the Company's Chief Executive Officer and each of the Company's four other most
highly compensated executive officers who earned more than $100,000 for the year
ended December 31, 1999.
13
<PAGE> 16
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION(2)
- --------------------------- ---- -------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
John H. Sykes............. 1999 $478,423 -- -- -- $32,201
Chairman of the Board... 1998 301,499 -- -- -- 27,495
and Chief Executive..... 1997 300,000 -- -- -- 27,495
Officer
David L. Grimes(3)........ 1999 $389,814 -- -- -- $68,472
President and Chief..... 1998 1,096 -- -- 250,000 --
Operating Officer
Scott J. Bendert(4)....... 1999 $209,137 $100,000 -- -- $ 8,763
Group Executive and..... 1998 155,558 -- -- 185,000 8,589
Senior Vice President-.. 1997 123,846 43,750 -- -- 6,435
Performance Management
and Administration
Gerry L. Rogers (5)....... 1999 $160,567 -- -- -- $34,124
Group Executive and
Senior Vice President -
the Americas
James E. Lamar(6)......... 1999 $116,185 -- -- -- $17,546
Group Executive and
Senior Vice President -
International
</TABLE>
- ---------------
(1) Does not include the value of the perquisites provided to certain of the
named executive officers which in the aggregate did not exceed the lesser of
$50,000 or 10% of such officer's salary and bonus.
(2) Represents contributions to the Sykes Enterprises, Incorporated Employees'
Savings Plan and Trust, excess group term life insurance, and relocation
expenses.
(3) Mr. Grimes joined the Company as President in December 1998 and assumed the
additional position of Chief Operating Officer in February 1999.
(4) Mr. Bendert joined the Company in 1993 as Chief Financial Officer and was
named Group Executive and Senior Vice President -- Performance Management
and Administration in March 2000.
(5) Mr. Rogers joined the Company as Group Vice President, North America in
February 1999, and was named Group Executive and Senior Vice
President -- the Americas in March 2000.
(6) Mr. Lamar joined the Company as Vice President and Managing Director of EMEA
in May 1999, and was named Group Executive and Senior Vice
President -- International in March 2000.
The following table sets forth information with respect to grants of stock
options during 1999 to the executive officers named in the Summary Compensation
Table.
14
<PAGE> 17
OPTIONS GRANTED LAST YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
--------------------------------------------------------------------- -----------------------
NUMBER OF PERCENTAGE OF
SECURITIES TOTAL OPTIONS MARKET PRICE
UNDERLYING GRANTED TO EXERCISE OR OF UNDERLYING
OPTIONS EMPLOYEES IN BASE PRICE SECURITY ON EXPIRATION
GRANTED(#) 1999 ($/SHARE) DATE OF GRANT DATE 5%($) 10%($)
---------- ------------- ----------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
John H. Sykes.............. -- -- -- -- -- -- --
David L. Grimes............ -- -- -- -- -- -- --
Scott J. Bendert........... -- -- -- -- -- -- --
Gerry L. Rogers(1)......... 75,000 7.4% $30.756 $29.810 02/01/09 $1,335,071 $3,492,230
Gerry L. Rogers(2)......... 75,000 7.4% $30.756 $29.810 02/01/09 $1,335,071 $3,492,230
James E. Lamar(1).......... 80,000 7.9% $29.213 $33.500 05/24/09 $2,028,430 $4,614,222
James E. Lamar(2).......... 80,000 7.9% $29.213 $33.500 05/24/09 $2,028,430 $4,614,222
</TABLE>
- ---------------
(1) Options granted under the Company's 1997 Management Stock Incentive Plan,
all of which vest and become exercisable nine years after the date of grant,
subject to accelerated vesting and exercisability upon the satisfaction of
certain performance objectives.
(2) Options granted under the Company's 1996 Employee Stock Option Plan, which
vest and become exercisable in one-third increments each year beginning one
year after the date of grant.
The following table sets forth information with respect to the aggregate
stock option exercises by the executive officers named in the Summary
Compensation Table during 1999 and the year-end value of unexercised options
held by such executive officers.
AGGREGATE OPTION EXERCISES IN LAST YEAR AND YEAR-END VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT YEAR END(#) AT YEAR END(1)
ACQUIRED ON --------------------------- ---------------------------
EXERCISE(#) VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John H. Sykes............. -- -- -- -- $ -- $ --
David L. Grimes........... -- -- 41,667 208,333 $ 682,814 $3,414,036
Scott J. Bendert.......... 12,500 $182,038 52,500 165,000 $1,643,438 $3,939,375
Gerry L. Rogers........... -- -- -- 175,000 $ -- $3,189,375
James E. Lamar............ -- -- -- 160,000 $ -- $3,402,000
</TABLE>
- ---------------
(1) Based upon the closing sale price of $43.875 per share of common stock on
December 31, 1999, as reported in the Nasdaq National Market.
EMPLOYMENT AGREEMENTS
John H. Sykes. On March 6, 2000, the Company entered into an employment
agreement with John H. Sykes, the Company's Chairman of the Board and Chief
Executive Officer. The employment agreement provides for an initial term of five
years and automatically renews for successive two-year terms, unless terminated
by either party. Mr. Sykes' initial base salary is $550,000 for the first year
of the term, with the base salary increasing as determined by the Board of
Directors. The annual base salary, however, shall be
15
<PAGE> 18
increased at least 30% subsequent to the initial five year term and at least 15%
subsequent to each two-year automatic renewal term. Mr. Sykes is also entitled
to a performance bonus up to 100% of his base salary based on the Company's
achievement of specified levels of income before income taxes as determined by
the Compensation Committee and to participate in such bonus programs and other
benefit plans as are generally made available to other executive officers of the
Company.
If the agreement is terminated by the Company for any reason other than for
cause (as defined therein), the Company shall pay Mr. Sykes a one-time severance
payment equal to three times the total of the full amount of Mr. Sykes' annual
base salary in effect at the time of such termination plus Mr. Sykes' average
annual bonus and other compensation for the prior three years. Severance is
payable if termination is a result of death or disability. Severance also is
payable upon: (i) a change of control, (ii) a good faith determination by Mr.
Sykes that the Company has breached the employment agreement, (iii) a material
adverse change in working conditions or status, (iv) a significant relocation of
Mr. Sykes' principal office, (v) a significant increase in travel requirements,
or (vi) an impairment of Mr. Sykes' health to an extent that makes the continued
performance of his duties hereunder hazardous to his physical or mental health
or his life. During the two-year period following termination of employment, Mr.
Sykes shall not, in any area in which the Company's business is then conducted,
directly or indirectly compete with the Company.
A "change of control" shall be deemed to have occurred if, (i) any person
(other than Mr. Sykes) beneficially owns 20% or more of the outstanding shares
of voting capital stock; (ii) the sale or transfer of greater than 50% of the
book value of the Company's assets; (iii) the merger, consolidation, share
exchange, or reorganization of the Company as a result of which the holders of
all of the shares of capital stock of the Company as a group would receive less
than 50% of the voting power of the capital stock of the surviving corporation;
(iv) the adoption of a plan of liquidation or the approval of the dissolution of
the Company; (v) the commencement of a tender offer which, if successful, would
result in a change of control; or (vi) a determination by the Board of
Directors, in view of then current circumstances or impending events, that a
change of control has occurred or is imminent.
Upon termination for any reason, including cause, benefits continue during
the lifetime of Mr. Sykes and the lifetime of his spouse if he is married at the
time of his death. Benefits include all employee benefit plans and programs in
which Mr. Sykes was entitled to participate immediately before termination. Mr.
Sykes also will be entitled to an office at the Company's headquarters or
reimbursement for any fees and lease payments incurred in connection with an
off-site office. The Company also shall reimburse Mr. Sykes for a secretary and
one-third of the costs for health, dental, life, and disability insurance for
the secretary. Mr. Sykes also will be entitled to continued use of the aircraft
leased or owned by the company at a fee equal to the price of a first-class
ticket.
David L. Grimes. Mr. Grimes joined the Company as President in December
1998, and also became the Chief Operating Officer in February 1999. On March 6,
2000, the Company entered into a new five-year employment agreement with Mr.
Grimes to set forth certain additional terms to apply if Mr. Grimes is appointed
by the Board of Directors as Chairman or Chief Executive Officer of the Company.
Mr. Grimes annual base salary is $425,000, which increases to $525,000 if he is
appointed Chairman or Chief Executive Officer. Upon termination, the agreement
provides for a one or two-year non-compete period at the Company's election in
return for the Company paying, under certain circumstances, amounts totaling up
to $425,000 per year for such one or two-year period. Mr. Grimes is prohibited
from directly or indirectly competing with the Company during such one or
two-year period in any area in which the Company's business is conducted. Mr.
Grimes is also entitled to a performance bonus of up to 50% of his base salary
(or up to 75% of his base salary if he is appointed Chairman or Chief Executive
Officer) based upon his achievement of
16
<PAGE> 19
specified goals and to participate in such bonus programs and other benefit
plans as are generally made available to other executive officers of the
Company.
Scott J. Bendert. On March 1, 2000, the Company entered into a two-year
employment agreement with Scott J. Bendert as Group Executive and Senior Vice
President - Performance Management and Administration. Mr. Bendert's annual base
salary is $225,000. If the agreement is terminated for any reason other than
death, disability, or cause (as defined therein), the Company shall pay Mr.
Bendert a non-compete payment equal to $4,326.92 per week in consideration of
Mr. Bendert's agreement to refrain from competing directly or indirectly with
the Company for a period of one year in any area in which the Company's business
is then conducted. In addition, the Company shall pay to Mr. Bendert a severance
payment equal to $4,326.92 per week for the remaining term of the agreement. The
agreement provides that if it is terminated by the Company for cause or by Mr.
Bendert, during a period of one year following termination of employment, Mr.
Bendert will not, in any area in which the Company's business is then conducted,
directly or indirectly compete with the Company, and the Company shall not be
required to pay the severance payment or the non-compete payment. Mr. Bendert
also is entitled to a performance bonus up to 50% of his base salary based upon
the Company's achievement of specified goals as determined by the Compensation
Committee, and to participate in such bonus programs and other benefit plans as
are generally made available to other executive officers of the Company.
W. Michael Kipphut. On March 1, 2000, the Company entered into a two-year
employment agreement with W. Michael Kipphut as Vice President and Chief
Financial Officer. Mr. Kipphut's annual base salary is $200,000. If the
agreement is terminated for any reason other than death, disability, or cause
(as defined therein), the Company shall pay Mr. Kipphut a non-compete payment
equal to $3,846.15 per week in consideration of Mr. Kipphut's agreement to
refrain from competing directly or indirectly with the Company for a period of
one year in any area in which the Company's business is then conducted. The
agreement provides that if it is terminated by the Company for cause or by Mr.
Kipphut, during a period of one year following termination of employment, Mr.
Kipphut will not, in any area in which the Company's business is then conducted,
directly or indirectly compete with the Company, and the Company shall not be
required to pay the non-compete payment. Mr. Kipphut also is entitled to a
performance bonus up to 100% of his base salary based upon the Company's
achievement of specified goals as determined by the Compensation Committee, and
to participate in such bonus programs and other benefit plans as are generally
made available to other executive officers of the Company.
James E. Lamar. On March 1, 2000, the Company entered into an employment
agreement with James E. Lamar as Group Executive and Senior Vice President -
International. The term of the agreement expires on May 24, 2002. Mr. Lamar's
annual base salary is $211,681. If the agreement is terminated for any reason
other than death, disability, or cause (as defined therein), the Company shall
pay Mr. Lamar a non-compete payment equal to $2,035 per week in consideration of
Mr. Lamar's agreement to refrain from competing directly or indirectly with the
Company for a period of one year in any area in which the Company's business is
then conducted. In addition, the Company shall pay to Mr. Lamar a severance
payment equal to $2,035 per week for the remaining term of the agreement. The
agreement provides that if it is terminated by the Company for cause or by Mr.
Lamar, during a period of one year following termination of employment, Mr.
Lamar will not, in any area in which the Company's business is then conducted,
directly or indirectly compete with the Company, and the Company shall not be
required to pay the severance payment or the non-compete payment. Mr. Lamar also
is entitled to a performance bonus up to 50% of his base salary based upon the
Company's achievement of specified goals as determined by the Compensation
Committee, and to
17
<PAGE> 20
participate in such bonus programs and other benefit plans as are generally made
available to other executive officers of the Company.
Gerry L. Rogers. On March 1, 2000, the Company entered into a two-year
employment agreement with Gerry L. Rogers as Group Executive and Senior Vice
President - the Americas. Mr. Rogers' annual base salary is $193,857. If the
agreement is terminated for any reason other than death, disability, or cause
(as defined therein), the Company shall pay Mr. Rogers a non-compete payment
equal to $1,800 per week in consideration of Mr. Rogers' agreement to refrain
from competing directly or indirectly with the Company for a period of one year
in any area in which the Company's business is then conducted. In addition, the
Company shall pay to Mr. Rogers a severance payment equal to $1,800 per week for
the remaining term of the agreement. The agreement provides that if it is
terminated by the Company for cause or by Mr. Rogers, during a period of one
year following termination of employment, Mr. Rogers will not, in any area in
which the Company's business is then conducted, directly or indirectly compete
with the Company, and the Company shall not be required to pay the severance
payment or the non-compete payment. Mr. Rogers also is entitled to a performance
bonus up to 50% of his base salary based upon the Company's achievement of
specified goals as determined by the Compensation Committee, and to participate
in such bonus programs and other benefit plans as are generally made available
to other executive officers of the Company.
Dale W. Saville. On March 1, 2000, the Company entered into a two-year
employment agreement with Dale W. Saville as Senior Vice President and Chief
Technology Officer. Mr. Saville's annual base salary is $158,596. If the
agreement is terminated for any reason other than death, disability, or cause
(as defined therein), the Company shall pay Mr. Saville a non-compete payment
equal to $1,520 per week in consideration of Mr. Saville's agreement to refrain
from competing directly or indirectly with the Company for a period of one year
in any area in which the Company's business is then conducted. In addition, the
Company shall pay to Mr. Saville a severance payment equal to $1,520 per week
for the remaining term of the agreement. The agreement provides that if it is
terminated by the Company for cause or by Mr. Saville, during a period of one
year following termination of employment, Mr. Saville will not, in any area in
which the Company's business is then conducted, directly or indirectly compete
with the Company, and the Company shall not be required to pay the severance
payment or the non-compete payment. Mr. Saville also is entitled to a
performance bonus up to 50% of his base salary based upon the Company's
achievement of specified goals as determined by the Compensation Committee, and
to participate in such bonus programs and other benefit plans as are generally
made available to other executive officers of the Company.
Charles E. Sykes. On March 1, 2000, the Company entered into a two-year
employment agreement with Charles E. Sykes as Senior Vice President Marketing
and Global Alliances. Mr. Sykes' annual base salary is $143,155. If the
agreement is terminated for any reason other than death, disability, or cause
(as defined therein), the Company shall pay Mr. Sykes a non-compete payment
equal to $1,350 per week in consideration of Mr. Sykes' agreement to refrain
from competing directly or indirectly with the Company for a period of one year
in any area in which the Company's business is then conducted. In addition, the
Company shall pay to Mr. Sykes a severance payment equal to $1,350 per week for
the remaining term of the agreement. The agreement provides that if it is
terminated by the Company for cause or by Mr. Sykes, during a period of one year
following termination of employment, Mr. Sykes will not, in any area in which
the Company's business is then conducted, directly or indirectly compete with
the Company, and the Company shall not be required to pay the severance payment
or the non-compete payment. Mr. Sykes also is entitled to a performance bonus up
to 50% of his base salary based upon the Company's achievement of specified
goals as determined by the Compensation Committee, and to participate in such
bonus programs and other benefit plans as are generally made available to other
executive officers of the Company.
18
<PAGE> 21
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION
Under rules of the Commission, the Company is required to provide certain
information concerning compensation provided to the Company's Chief Executive
Officer and its other executive officers. The disclosure requirements for the
executive officers include the use of tables and a report of the Committee
responsible for compensation decisions for the named executive officers
explaining the rationale and considerations that led to those compensation
decisions. Therefore, the Compensation Committee of the Board of Directors has
prepared the following report for inclusion in this Proxy Statement.
COMPENSATION COMMITTEE ROLE
The Compensation Committee of the Board of Directors and the Stock Option
Committee are responsible for separate aspects of the Company's compensation
program for its executive officers, including the named executive officers. The
Compensation Committee is responsible for making recommendations to the Board of
Directors concerning the salaries of executive officers. The Compensation
Committee is also responsible for overseeing other forms of cash compensation
and benefits to other senior officers. The Compensation Committee's
responsibilities include reviewing salaries, benefits and other compensation of
senior officers, and making recommendations to the full Board of Directors with
respect to these matters. The Compensation Committee also is responsible for
making stock option grants under the 1997 Management Stock Incentive Plan to
executive officers of the Company. The Stock Option Committee is responsible for
making stock option grants under the Company's other stock option plans to
executive officers of the Company.
COMPENSATION PHILOSOPHY
The Company's compensation is designed to maintain executive compensation
programs and policies that enable the Company to attract and retain the services
of highly qualified executives. In addition to base salaries, executive
compensation programs and policies consisting of discretionary cash bonuses and
periodic grants of stock options are designed to reward and provide incentives
for individual contributions as well as overall Company performance.
The Compensation Committee monitors the operation of the Company's
executive compensation policies. The Company has retained independent
compensation consultants to assess the effectiveness of the Company's executive
compensation programs by comparing the Company's compensation programs to
various other companies with similar growth characteristics to those of the
Company. Key elements of the Company's compensation program consists of base
salary, discretionary annual cash bonuses, and periodic grants of stock options.
The Company's policies with respect to these elements, including the basis for
the compensation awarded the Company's chief executive officer, are discussed
below. While the elements of compensation described below are considered
separately, the Compensation Committee takes into account the full compensation
package offered by the Company to the individual, including health care and
other insurance benefits and contributions made by the Company under the
Company's 401(k) Plan and Deferred Compensation Plan.
Base Salaries. The Company has established competitive annual base
salaries for all executive officers, including the named executive officers. The
annual base salaries for each of the Company's executive officers, including the
Company's chief executive officer, reflect both the recommendations of the
Company's
19
<PAGE> 22
compensation consultants and the subjective judgment of the Compensation
Committee based on the consideration of the executive officer's position with
the Company, the executive officer's tenure, the Company's needs, and the
executive officer's individual performance, achievements, and contributions to
the growth of the Company.
Mr. Sykes' annual base salary for 1999, as the Company's Chief Executive
Officer, was $550,000. The Compensation Committee recommended, and the Board
approved, this annual base salary based on the Compensation Committee's
discussions with outside consultants, the factors noted above, and Mr. Sykes'
prior experience and managerial expertise, his knowledge of the Company's
operations, and the industry in which it operates.
Annual Bonus. The Company's executive officers are eligible for an annual
cash bonus under the Company's Bonus Program. The Bonus Program provides for the
discretionary payment of annual incentive awards to key employees, including
executive officers of the Company, pursuant to a formula related to the
Company's operating goals and personal performance goals. Payments under the
Bonus Program are discretionary and are subject to certain limitations. Mr.
Sykes received no bonus payments in 1999.
Stock Options. Under the Company's 1996 Employee Stock Option Plan, the
1997 Management Stock Incentive Plan, and the 2000 Plan (the "Plans"), stock
options may be granted to key employees, including executive officers of the
Company. The Plans are administered by the Stock Option Committee and the
Compensation Committee in accordance with Rule 16b-3 of the Securities Exchange
Act of 1934, as amended. The Stock Option Committee recommended that a certain
number of stock options under the Plans be made available for issuance by the
Chief Executive Officer for hiring and retention purposes within certain
parameters at various levels of management.
The principal factors considered in determining the granting of stock
options to executive officers of the Company were the executive officer's tenure
with the Company, his or her total cash compensation for the prior year, the
executive officer's acceptance of additional responsibilities and his or her
contributions toward the Company's attainment of strategic goals. During 1999,
all stock options granted to executive officers of the Company under the Plans
were made at fair market value on the date of grant (as calculated under the
Plans) and were not exercisable for a vesting period of one to nine years
following the date of grant.
During the year ended December 31, 1999, no options to purchase shares of
common stock under the Plans were granted to Mr. Sykes.
SECTION 162(m) LIMITATIONS
Under Section 162(m) of the Internal Revenue Code, a tax deduction by
corporate taxpayers, such as the Company, is limited with respect to the
compensation of certain executive officers, unless such compensation is based
upon performance objectives meeting certain regulatory criteria or is otherwise
excluded from the limitation. Based upon the Compensation Committee's commitment
to link compensation with performance as described in this report, the
Compensation Committee currently intends to qualify compensation paid to the
Company's executive officers for deductibility by the Company under Section
162(m).
COMPENSATION COMMITTEE
FURMAN P. BODENHEIMER
LINDA MCCLINTOCK-GRECO
ERNEST J. MILANI
March 1, 2000
20
<PAGE> 23
The report of the Compensation Committee shall not be deemed incorporated
by reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934 (together, the "Acts"), except to the extent
that the Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.
STOCK PRICE PERFORMANCE GRAPH
The following graph presents a comparison of the cumulative total
shareholder return on the common stock with the cumulative total return on the
Nasdaq Stock Market (U.S.) Index and the Nasdaq Computer and Data Processing
Index since the Company's initial public offering on April 29, 1996. This graph
assumes that $100 was invested on April 29, 1996 in the Company's common stock,
the Nasdaq Stock Market (U.S.) Index, and the Nasdaq Computer and Data
Processing Index.
COMPARISON OF 44 MONTH CUMULATIVE TOTAL RETURN*
AMONG SYKES ENTERPRISES, INCORPORATED,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ COMPUTER & DATA PROCESSING INDEX
<TABLE>
<CAPTION>
Sykes Enterprises, Nasdaq Stock Nasdaq Computer and
Incorporated Market (U.S.) Index Data Processing Index
------------------ ------------------- ---------------------
<S> <C> <C> <C>
4/29/96 $100.00 $100.00 $100.00
12/31/96 $312.50 $109.00 $106.00
12/31/97 $243.75 $133.22 $129.69
12/31/98 $381.25 $187.11 $232.05
12/31/99 $548.44 $338.58 $489.31
</TABLE>
- ---------------
* $100 invested on 4/30/96 in stock or index including reinvestment of
dividends. Fiscal year ending December 31.
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<PAGE> 24
There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the graph
above. The Company does not make or endorse any predictions as to the future
stock performance.
The stock price performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Acts, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under the Acts.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has appointed Ernst & Young, LLP as its principal independent
public accountant for 2000. A representative of Ernst & Young, LLP will be
present at the Annual Meeting. The representative of Ernst & Young, LLP will be
available to respond to appropriate questions and may make a statement if he so
desires.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
The deadline for submission of shareholder proposals pursuant to Rule 14a-8
under the Securities Exchange Act of 1934, as amended ("Rule 14a-8"), for
inclusion in the Company's proxy statement for its 2001 Annual Meeting of
Shareholders is November 30, 2000. Notice to the Company of a shareholder
proposal submitted other than pursuant to Rule 14-8 will be considered untimely,
and the persons named in proxies solicited by the Board of Directors of the
Company for its 2000 Annual Meeting may exercise discretionary voting power with
respect to any such proposal, if received by the Company after February 13,
2001.
OTHER MATTERS
Management knows of no matter to be brought before the Annual Meeting which
is not referred to in the Notice of Annual Meeting. If any other matters
properly come before the Annual Meeting, it is intended that the shares
represented by Proxy will be voted with respect thereto in accordance with the
judgment of the persons voting them.
By Order of the Board of Directors,
/s/ Martin A. Traber
---------------------------
Martin A. Traber, Secretary
22
<PAGE> 25
SYKES ENTERPRISES, INCORPORATED
ANNUAL MEETING OF SHAREHOLDERS, APRIL 27, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned shareholder of Sykes Enterprises, Incorporated (the
"Company") hereby appoints John M. Sykes and Scott J. Bendert as Proxies, each
with the power to appoint a substitute, and hereby authorizes them to vote all
such shares of the Company as to which the undersigned is entitled to vote at
the Annual Meeting of Shareholders of the Company and at all adjournments
thereof, to be held at the Hyatt Regency, 211 N. Tampa Street, Tampa, Florida on
Thursday, April 27, 2000 at 10:00 a.m. Eastern Standard Time, in accordance with
the following instructions.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS SPECIFIED. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED IN ITEM 1 AND FOR ITEM 2.
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
SYKES ENTERPRISES, INCORPORATED 2000 ANNUAL MEETING
1. ELECTION OF DIRECTORS: 1. Furman P. Bodenheimer, Jr. 2. David L. Grimes
3. John H. Sykes
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
listed to the left (except) to vote for all nominees
as specified below). listed to the left.
(Instructions: To withhold authority to vote
for any indicated nominee, write the
number(s) of the nominee(s) in the box
provided to the right.) [ ]
2. To approve the adoption of the Company's 2000 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before this Meeting or any adjournments or
postponements thereof.
Check appropriate box Date______________ NO. OF SHARES
Indicate changes below: [ ]
Address Change? [ ] Name Change? [ ] SIGNATURE(S) IN BOX
Please sign exactly as
your name appears on
the Proxy. When shares
are held by joint
tenants, both should
sign. When signing as
attorney, executor,
administrator, trustee
or partner, please
give full title as
such. If a
corporation, please
sign in full corporate
name by president or
by other authorized
officer. If a
partnership, please
sign in partnership
name by authorized
person.
