SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6
(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.15a-12
STAFFMARK, 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):
[ ] No fee required.
[X] $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-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 written preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
O-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
StaffMark, Inc.
302 East Millsap Road
Fayetteville, Arkansas 72703
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 2, 1997
To the Stockholders:
Notice is hereby given that the annual meeting of stockholders (the "Annual
Meeting") of StaffMark, Inc. ("StaffMark" or the "Company") will be held at the
Fayetteville Hilton, 70 N. East Street, Fayetteville, Arkansas on the 2nd day of
May, 1997, at 10:00 a.m., Central Standard Time, for the following purposes:
1. To elect ten directors to serve terms scheduled to end in
conjunction with the next annual meeting of stockholders or
until their successors are elected and qualify;
2. To approve the Company's Employee Stock Purchase Plan; and
3. To transact such other business as may properly come before
the meeting or any adjournments thereof.
All stockholders are cordially invited to attend the Annual
Meeting, however, only stockholders of record as of the close of business on
March 18, 1997 are entitled to receive notice of and to vote at the Annual
Meeting.
The Company's Proxy Statement and Annual Report are submitted herewith.
By Order of the Board of Directors
/s/ Terry C. Bellora
Terry C. Bellora
Secretary
Fayetteville, Arkansas
March 28, 1997
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE URGED TO
FILL IN, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
RETURN ENVELOPE. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE YOUR SHARES OF
COMMON STOCK PERSONALLY EVEN IF YOU HAVE PREVIOUSLY SUBMITTED A PROXY.
<PAGE>
StaffMark, Inc.
302 East Millsap Road
Fayetteville, Arkansas 72703
Proxy Statement for Annual Meeting of
Stockholders to be held May 2, 1997
SOLICITATION AND REVOCABILITY OF PROXIES
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of StaffMark, Inc., a Delaware corporation (the "Company" or
"StaffMark") for use only at the annual meeting of stockholders (the "Annual
Meeting") of StaffMark to be held at the Fayetteville Hilton, 70 N. East Street,
Fayetteville, Arkansas on the 2nd day of May, 1997, at 10:00 a.m., Central
Standard Time, and at any adjournments thereof. The approximate date on which
this Proxy Statement and accompanying Proxy will first be given or sent to
stockholders is March 28, 1997.
Each Proxy executed and returned by a stockholder may be revoked at any
time thereafter, by written notice to that effect to the Company, attention of
the Secretary, before the Annual Meeting, or to the Secretary or the Inspectors
of Election at the Annual Meeting, or by execution and return of a later-dated
Proxy, except as to any matter voted upon before such revocation.
Proxies in the accompanying form will be voted in accordance with the
specifications made and, where no specifications are given, such Proxies will be
voted:
FOR the election as directors of the nominees named herein; and
FOR the approval of the Company's Employee Stock Purchase Plan.
In the discretion of the proxy holders, the Proxies will also be voted FOR
or AGAINST such other matters as may properly come before the Annual Meeting.
Management of the Company is not aware of any other matters to be presented for
action at the Annual Meeting.
The cost of preparing, assembling and mailing the Notice of Annual Meeting
of Stockholders, Proxy Statement and form of proxy and the cost of soliciting
proxies will be paid by the Company. Proxies may be solicited in person or by
telephone by officers, directors and regular supervisory and executive employees
of the Company, none of whom will receive any additional compensation for their
services. The Company will pay brokers or other persons holding stock in their
names or the names of their nominees for the reasonable expenses of forwarding
soliciting material to their principals.
OUTSTANDING STOCK AND VOTING RIGHTS
At the Annual Meeting, each stockholder will be entitled to one vote for
each share of Common Stock, $.01 par value ("Common Stock"), owned of record at
the close of business on March 18, 1997. The outstanding stock of the Company as
of the record date totaled 13,600,836 shares of Common Stock. Votes may be cast
in person or by proxy. The stock transfer books of the Company will not be
closed.
1
<PAGE>
The enclosed form of proxy provides a method for stockholders to withhold
authority to vote for any one or more of the director nominees while still
granting authority to the proxy to vote for the remaining nominees. The names of
all nominees are listed on the proxy card. If you wish to grant the proxy
authority to vote for all nominees, check the box marked "FOR." If you wish to
withhold authority to vote for all nominees, check the box marked "WITHHOLD
AUTHORITY." If you wish your shares to be voted for some nominees and not for
one or more of the others, indicate the name(s) of the nominee(s) for whom you
are withholding the authority to vote by writing the name(s) of such nominee(s)
in the space provided on the form of proxy.
Although shares represented by proxies containing abstentions or indicating
broker non-votes will be considered as present at the meeting for purposes of
determining the presence of a quorum, abstentions and broker non-votes will not
otherwise be counted on any matters submitted to a vote at the meeting.
ELECTION OF DIRECTORS
The number of directors on the Board of Directors is currently fixed at
ten, and all of the directors' terms expire at the Annual Meeting. The following
sets forth information concerning each of the nominees for election to the Board
of Directors, including his or her name, age, principal occupation or employment
during at least the past five years and the period during which such person has
served as a director of the Company.
Nominees for Election to the Board of Directors
Name Age Experience
Jerry T. Brewer 56 Co-founded StaffMark in March 1996 and has
served since then as its Chairman of the
Board. Mr. Brewer also co-founded Brewer
Personnel Services, Inc. ("Brewer"), a
Founding Company (defined below), in July
1988, and currently serves as its Chairman
of the Board. From July 1988 to April
1995, Mr. Brewer served as President and Chief
Executive Officer of Brewer.
Clete T. Brewer 31 Co-founded StaffMark in March 1996 and has
served since then as its President and Chief
Executive Officer and a director. Mr. Brewer
also co-founded Brewer in July 1988, and has
served since April 1995 as President, Chief
Executive Officer and a director of Brewer.
From July 1988 to April 1995, Mr.Brewer served
as Vice President and a director of Brewer.
Mr. Brewer is the son of Jerry T. Brewer.
W. David Bartholomew 40 Executive Vice President - Southeastern
Operations and a director of the Company
since October 1996. Mr. Bartholomew has served
as Secretary/Treasurer and principal of HRA,
Inc. ("HRA"), a Founding Company, since 1993.
From 1991 through 1993, Mr. Bartholomew was
President of Cobble Personnel of Nashville.
2
<PAGE>
Steven E. Schulte 34 Executive Vice President - Administration and
a director of the Company since October 1996.
Mr. Schulte has been employed by Prostaff
Personnel Services, Inc.("Prostaff"), a
Founding Company, since August 1987, and has
served as Prostaff's President and Chief
Executive Officer since June 1992.
John H. Maxwell, Jr. 53 Executive Vice President - Medical Services
and a director of the Company since October
1996. Mr. Maxwell has served as the Chief
Executive Officer of Maxwell Staffing, Inc.
("Maxwell"), a Founding Company, since 1973.
Mr. Maxwell is a Certified Personnel
Consultant and a Certified International
Personnel Consultant.
Janice Blethen 53 Executive Vice President - Clinical Trials
Support Services and a director of the Company
since October 1996. Ms.Blethen has served as
Chief Executive Officer of Blethen
Temporaries, Inc. ("Blethen"), a Founding
Company, since its inception in 1975. Ms.
Blethen is a Certified Personnel Consultant.
William T. Gregory 54 Vice President and General Manager -
Carolina Region and a director of the Company
since October 1996. Mr. Gregory has served as
President of First Choice Staffing, Inc.
("First Choice"), a Founding Company, since
1985. Mr. Gregory is a Certified Personnel
Consultant.
William J. Lynch 54 Director of the Company since October 1996.
Mr.Lynch is a Managing Director of Capstone
Partners, LLC, a special situations venture
capital firm. From October 1989 to March 1996,
Mr. Lynch was a partner of the law firm of
Morgan, Lewis & Bockius LLP. Mr. Lynch also
serves as a director of Coach USA, Inc., a
publicly traded motorcoach services company.
R. Clayton McWhorter 63 Director of the Company since October
1996. Mr. McWhorter founded Clayton
Associates, LLC, in 1996 to provide venture
capital to start-up companies. Mr. McWhorter
is a member of the Board of Directors of
Columbia/HCA Healthcare Corporation
("Columbia/HCA") and served as its Chairman of
the Board from April 1995 to May 1996. Mr.
McWhorter served as Chairman, President and
Chief Executive Officer of Healthtrust, Inc.
from 1987 to April 1995 until its merger with
Columbia/HCA. From 1985 to 1987, Mr. McWhorter
served as President and Chief Operating
Officer of Hospital Corporation of America
(Columbia/HCA's predecessor). In addition
to Columbia/HCA, Mr. McWhorter is a director
of Suntrust Bank - Nashville, and Corrections
Corporation of America, all of which are
publicly traded companies. He is also a
director of Ingram Industries Inc.
3
<PAGE>
Charles A. Sanders, M.D. 65 Director of the Company since October 1996.
Dr. Sanders is retired from Glaxo, Inc. where
he served as Chief Executive Officer from 1989
through 1994 and Chairman from 1992 through
1995. Dr. Sanders currently serves as Chairman
of The Commonwealth Fund and Project HOPE and
serves on the Board of Trustees of The
University of North Carolina at Chapel Hill.
Dr. Sanders is a director of Vertex
Pharmaceuticals Incorporated and Magainin
Pharmaceuticals, Inc., both publicly traded
companies. Dr. Sanders is a former director of
Merrill Lynch & Co., Inc., Morton
International, Inc. and Reynolds Metals
Company.
Unless otherwise designated, the enclosed proxy will be voted for the
election of the foregoing nominees as directors. The Board of Directors does not
contemplate that any of the nominees will be unable to stand for election, but
should any nominee unexpectedly become unavailable for election, the persons
named as proxies shall have the authority to vote for the election of any other
nominee proposed by the Board of Directors. In the event of any director's
death, disqualification or inability to serve, the vacancy so arising will be
filled by the Board of Directors. THE BOARD OF DIRECTORS RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE ELECTION OF THE ABOVE NOMINEES AS DIRECTORS OF THE
COMPANY.
BOARD ORGANIZATION AND COMMITTEES
The Company completed initial public offering of its common stock on
October 2, 1996 (the "Offering"). During the fiscal year ended December 31,
1996, the Board of Directors held two meetings and each of the directors
attended both meetings, except for Mr. Schulte who attended one meeting.
The Board of Directors has established committees to perform certain of its
functions, including the Audit Committee, the Compensation Committee and the
Acquisition Committee. The functions of each of these committees, and its
members, are set forth below.
The Audit Committee reviews the internal controls of the Company, reviews
the objectivity of its financial reporting and meets with appropriate Company
financial personnel and the Company's independent certified public accountants
in connection with these reviews. The Audit Committee also recommends to the
Board the appointment of independent certified public accountants to serve as
auditors for the following year. During the fiscal year ended December 31, 1996
the Audit Committee met once and all members were in attendance. The Audit
Committee currently consists of Dr. Sanders, Mr. Lynch, and Mr. Jerry Brewer.
The Compensation Committee advises and makes recommendations to the Board
with respect to salaries and bonuses to be paid to officers and other employees
of the Company. The Compensation Committee also administers the Company's 1996
Stock Option Plan. During the fiscal year ended December 31, 1996, the
Compensation Committee met once and all members were in attendance. The
Compensation Committee currently consists of Mr. Lynch and Mr. McWhorter.
4
<PAGE>
The Acquisition Committee is authorized to negotiate and approve certain
acquisitions for the Company within parameters set by the Board. The Acquisition
Committee currently consists of Mr. Jerry Brewer; Mr. Clete Brewer; Mr. Schulte;
Ted Feldman, Chief Operating Officer; Terry C. Bellora, Chief Financial Officer;
and Robert H. Janes III, Executive Vice President - Mergers and Acquisitions.
The Acquisition Committee held no meetings during the fiscal year ended December
31, 1996.
DIRECTOR COMPENSATION
Directors who are employees of the Company do not receive additional
compensation for serving as directors. Each director who is not an employee of
the Company receives a fee of $2,000 for attendance at each Board of Directors
meeting and $500 for each committee meeting (unless held on the same day as a
Board of Directors meeting). Under the Company's 1996 Stock Option Plan, each
non-employee director automatically receives nonqualified stock options to
purchase 10,000 shares of Common Stock upon such person's initial election as a
director. Non-employee directors will, beginning with this first Annual Meeting,
receive annual grants of non-qualified stock options to purchase 2,000 shares of
Common Stock at the time of each Annual Meeting. All of such options have or
will have an exercise price equal to the fair market value of the Common Stock
on the date of grant, are or will be exercisable in equal yearly amounts over
three years except as limited by the rules and regulations of the Securities Act
of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and
will expire five years from the date of grant. All directors of the Company are
reimbursed for out-of-pocket expenses incurred in attending meetings of the
Board of Directors or committees thereof and for other expenses incurred in
their capacity as directors.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 1, 1997, information regarding
the beneficial ownership of the Common Stock of the Company by (i) each person
known to beneficially own more than 5% of the outstanding shares of Common
Stock, (ii) each of the Company's directors, (iii) each named executive officer
and each officer named in the Summary Compensation Table and (iv) all executive
officers and directors as a group. All persons listed have an address in care of
the Company's principal executive offices and have sole voting and investment
power with respect to their shares unless otherwise indicated.
Shares Beneficially Owned
Name Number Percent
Jerry T. Brewer(1).................... 672,944 5.1%
Clete T. Brewer....................... 1,069,584 8.0
Terry C. Bellora(2)........... 25,200 *
Chad J. Brewer(3)..................... 680,022 5.1
Ted Feldman(4)......................... 303,611 2.3
David Bartholomew(5)................... 282,437 2.1
Steven E. Schulte(6).................... 455,925 3.4
John H. Maxwell, Jr.(7)................. 714,059 5.3
Mary Sue Maxwell(8)...................... 714,059 5.3
Janice Blethen(9)........................ 476,477 3.6
William T. Gregory........................ 435,750 3.3
William J. Lynch(10)...................... 42,973 *
Clayton McWhorter(11)...................... 3,333 *
Charles A. Sanders, M.D.(11)............... 8,333 *
All directors and executive
officers as a group (15 persons) 4,792,593 35.6
*Less than 1%.
5
<PAGE>
(1) Includes 175,000 shares held by Mr. Brewer's spouse, as to which Mr.
Brewer disclaims beneficial ownership.
(2) Includes 25,000 shares subject to options which are currently exercisable.
(3) Includes 66,044 shares held by the Clete Brewer Irrevocable Trust for
the benefit of Chad J. Brewer and for which Chad J. Brewer is the trustee.
Chad J. Brewer is the son of Jerry T. Brewer and the brother of Clete T.
Brewer.
(4) Includes 1,000 shares held by Mr. Feldman's spouse, as to which Mr.
Feldman disclaims beneficial ownership.
(5) These shares are held by Bartfund I Limited Partnership, of which Mr.
Bartholomew is the general partner.
(6) Includes 437,025 shares held by the Steven E. Schulte Revocable Trust
for which Mr. Schulte is trustee.
(7) Includes 351,620 shares held by the John H. Maxwell, Jr. Revocable
Living Trust, of which Mr. Maxwell is the trustee, and includes 362,439
shares held by a trust for the benefit of Mr. Maxwell's spouse, as to which
Mr. Maxwell disclaims beneficial ownership. John H. Maxwell, Jr. is the
spouse of Mary Sue Maxwell.
(8) Includes 362,439 shares held by the Mary Sue Maxwell Revocable Living
Trust, of which Ms. Maxwell is the trustee, and includes 351,620 shares
held by a trust for the benefit of Ms. Maxwell's spouse, as to which Ms.
Maxwell disclaims beneficial ownership. Mary Sue Maxwell is the spouse of
John H. Maxwell, Jr.
(9) Includes 71,905 shares held by Blethen Family Investments Limited
Partnership, the general partner of which is a corporation controlled by Ms.
Blethen.
(10)Includes 3,033 shares for which Mr. Lynch is trustee under the UGMA
and 3,333 shares subject to options which are currently exercisable.
(11)Represents 3,333 shares subject to options which are currently
exercisable.
EXECUTIVE OFFICERS
The executive officers of the Company are Jerry T. Brewer, Chairman of the
Board; Clete T. Brewer, President and Chief Executive Officer; Terry C. Bellora,
Chief Financial Officer and Secretary; Ted Feldman, Chief Operating Officer;
Robert H. Janes III, Executive Vice President - Mergers and Acquisitions; W.
David Bartholomew, Executive Vice President - Southeastern Operations; Steven E.
Schulte, Executive Vice President - Administration; Donald A. Marr, Jr.,
Executive Vice President - Southwestern Operations; John H. Maxwell, Jr.,
Executive Vice President - Medical Services; Janice Blethen, Executive Vice
President - Clinical Trials Support Services; William T. Gregory, Vice President
and General Manager of Carolina Region; and Mary Sue Maxwell, Vice President and
General Manager of Oklahoma Region. Each of the executive officers, except those
shown below, serve as directors and are described above under the caption
"Election of Directors."
Name Age Experience
---- --- ----------
Terry C. Bellora 50 Chief Financial Officer and Secretary of
StaffMark since August 1996. Prior to joining
StaffMark, Mr. Bellora served as Chief
Financial Officer of Pace Industries, Inc.
("Pace")from 1986 to August 1996. Mr. Bellora
served as director of Pace from 1988 to 1993
and as an advisory director of Pace from 1993
to 1996. Mr. Bellora is a Certified Public
Accountant and was previously the audit
partner for Gaddy & Co., Certified Public
Accountants.
6
<PAGE>
Name Age Experience
---- --- ----------
Ted Feldman 43 Chief Operating Officer of the Company
since October 1996. Mr. Feldman founded HRA in
1991 and since its inception has served as its
President and Chief Executive Officer. From
1979 until 1992, Mr. Feldman served as
President of Nashville Trunk & Bag Co.
Robert H. Janes III 30 Co-founded StaffMark in March 1996 and has
served since then as its Executive Vice
President - Mergers and Acquisitions. Mr.
Janes has served as Vice President of Finance
of Brewer since April 1995. From 1988 to 1990
and 1992 to 1995, he was employed in the
corporate finance department of Stephens Inc.,
an investment banking firm. In 1992, Mr. Janes
obtained an MBA from The Wharton School.
Donald A. Marr, Jr. 32 Executive Vice President - Southwestern
Operations since October 1996. Mr. Marr
oversees the Company's Commercial and
Professional divisions in that region. He has
been employed by Brewer since 1990 and has
served as Brewer's Vice President of
Operations since 1994.
Mary Sue Maxwell 54 Vice President and General Manager -
Oklahoma Region of the Company since October
1996. Ms. Maxwell has served as President of
Maxwell since 1983.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or accrued by the
Company for services rendered during the years indicated to the Company's Chief
Executive Officer and to the Company's four most highly compensated executive
officers during the year ended December 31, 1996. The Company did not grant any
stock appreciation rights or make any long-term incentive plan payouts during
the periods shown.
Summary Compensation Table
Long Term
Annual Compensation Compensation
------------------- ------------
Securities
Name and Underlying All Other
Principal Position Year Salary($)(1) Bonus($) Options Compensation
- ------------------ ---- ------------ -------- ------- ------------
Clete T. Brewer, 1996 $40,869 N/A 10,000 $2,487
President,
Chief Executive
Officer and
Director
Terry C. Bellora, 1996 41,538 N/A 160,000 2,824
Chief Financial
Officer and
Secretary
Ted Feldman, 1996 39,769 N/A 10,000 1,025
Chief Operating
Officer
W. David 1996 34,615 N/A 10,000 1,025
Bartholomew,
Executive Vice
President
Southwest Operations;
Director
Steven E. Schulte, 1996 31,250 N/A 10,000 502
Executive Vice
President -
Administration;
Director
(1) For the period October 2, 1996, the completion of the Offering,
through fiscal year-end.
7
<PAGE>
The following table sets forth information concerning each grant of stock
options to the executives named in the preceding Summary Compensation Table
during the year ended December 31, 1996.
Option Grants in Fiscal 1996
----------------------------
INDIVIDUAL GRANTS
--------------------------------------------------------------------
Number of Percentage
Securities of Total Exercise Grant Date
Underlying Options Granted or Base Present
Options to Employees Price Expiration Value
Name Granted in Fiscal 1966 ($/Share)(1) Date ($)(2)
---- ------- --------------------------- ---- ------
Clete T. Brewer 10,000 1.1% $12.00 10/02/06 $ 72,800
Terry C. Bellora 160,000 18.4 $12.00 10/02/06 1,059,800
Ted Feldman 10,000 1.1 $12.00 10/02/06 72,800
W. David Bartholomew 10,000 1.1 $12.00 10/02/06 72,800
Steven E. Schulte 10,000 1.1 $12.00 10/02/06 72,800
(1) The exercise price per share for all options granted is equal to the
market price of the underlying Common Stock as of the date of the
initial public offering.
(2) The grant date present value was based on the Black-Scholes Option
Valuation Model, a widely recognized method of valuing options. The
following underlying assumptions were used to derive the present value
of these options: expected volatility of the Company's stock of
65.11%, based upon the actual monthly volatility in the industry for
the five years prior to the grant date; a risk-free rate of return of
6.43%, based on the yield of the five year U.S. treasury notes as of
the grant date; and exercise of the option five years after the grant
date. The actual value, if any, the named executive officers may
realize will depend on the excess of the stock price over the exercise
price on the date the option is exercised; consequently, there is no
assurance the value realized by the named executive officers will be
at or near the value estimated by the Black-Scholes Option Valuation
Model.
The following table sets forth information concerning the value of
unexercised options as of December 31, 1996, by the executives named in the
preceding Summary Compensation Table. None of the executive officers named in
the Summary Compensation Table exercised options during the year ended December
31, 1996.
Stock Option Exercises and Year End Values
------------------------------------------
Number Of Securities Underlying
Unexercised Options held at Value In-the-
December 31, 1996 Money at Market(1)
------------------------------- ------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
Clete T. Brewer 0 10,000 0 $ 5,000
Terry C. Bellora 25,000 135,000 $12,500 67,500
Ted Feldman 0 10,000 0 5,000
W. David Bartholomew 0 10,000 0 5,000
Steven E. Schulte 0 10,000 0 5,000
(1) Options are "in-the-money" if the closing market price of the
Company's Common Stock exceeds the exercise price of the options. The
value of the unexercised options represents the difference between the
exercise price of such options and the closing market price of the
Company's Common Stock on December 31, 1996.
8
<PAGE>
EMPLOYMENT AGREEMENTS; COVENANTS-NOT-TO-COMPETE
Messrs. Brewer, Feldman, Bartholomew and Schulte have entered into
employment agreements with the Company, or a subsidiary thereof, commencing on
the date of the closing of the Offering. Pursuant to such employment agreements,
each such officer is eligible for additional year-end bonus compensation to be
determined pursuant to an incentive bonus plan to be established by the Company.
Each employment agreement is for a term of five years, and unless terminated or
not renewed by the Company or not renewed by the employee, the term will
continue thereafter on a year-to-year basis on the same terms and conditions
existing at the time of renewal.
Each of the employment agreements for Messrs. Brewer, Feldman, Bartholomew
and Schulte provides that, in the event of a termination of employment by the
Company, except for specific instances of "cause" as defined in the employment
agreement, such employee shall be entitled to receive from the Company such
employee's then current salary for a period no longer than two years after the
Offering. Each employment agreement contains a covenant not to compete with the
Company for a period of two years immediately following the termination of his
employment.
Mr. Bellora has entered into an employment agreement with the Company
providing for an annual base salary, a bonus to be determined annually pursuant
to an incentive bonus plan to be established by the Company and options to
purchase 150,000 shares of Common Stock at the initial public offering price,
exercisable over a period of five years. Such options expire ten years after the
date of grant. The employment agreement is for a term of five years. The
agreement provides for the payment of two years' salary in the event of
termination without cause. In the event of a change in control of the Company,
he may elect to terminate his employment and receive the amount he would receive
pursuant to a termination without cause. Mr. Bellora's employment agreement
contains a covenant not to compete with the Company for a period equivalent to
the longer of two years immediately following termination of employment or, in
the case of a termination by the Company without cause in the absence of a
change in control, for a period of one year following termination of employment.
In the event of a change in control without 15 days notice, such non-competition
provisions would not apply.
REPORT OF THE COMPENSATION COMMITTEE
The following report of the Compensation Committee of the Board of
Directors of StaffMark shall not be deemed incorporated by reference by any
general statement incorporating this proxy statement by reference into any
filing under the Securities Act of 1933, as amended (the "Securities Act"), or
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
shall not be deemed filed under either of the Securities Act or the Exchange Act
except to the extent that StaffMark specifically incorporates this information
by reference.
Overview
The key components of executive officer compensation are salary, bonus and
stock option awards. Each of the Company's executive officers is a party to a
five-year employment agreement (collectively the "Executive Employment
Agreements") that was negotiated at arms-length and entered into prior to the
Company's Offering but not effective until the Offering was consummated. Prior
to the consummation of the Offering, compensation for each of the executive
officers of the Company was determined under separate arrangements as more fully
described below. Each Executive Employment Agreement provides for a minimum base
salary following the Offering (subject to increase by the Compensation
Committee) and the right to receive discretionary bonuses provided by the
Compensation Committee and the right to receive stock option grants at the
discretion of the Compensation Committee. The Compensation Committee believes
that the base salary levels provided for in the Executive Employment Agreements
are below the base salary levels paid to executives holding comparable positions
with other publicly held service companies.
9
<PAGE>
The members of the Compensation Committee hold primary responsibility for
determining executive officer compensation levels, subject to the terms of the
Executive Employment Agreements. The Compensation Committee is composed entirely
of independent outside directors of StaffMark, none of whom are or have been
officers or employees of StaffMark. The Compensation Committee has adopted a
compensation philosophy intended to align compensation with StaffMark's overall
business strategy. The philosophy guiding the executive compensation program is
designed to link executive compensation and stockholder value. The goals of the
program are:
* To compensate executive employees in a manner that aligns the
employees' interests with the interests of the stockholders;
* To encourage continuation of StaffMark's entrepreneurial spirit;
* To reward executives for successful long-term strategic management;
* To recognize outstanding performance; and
* To attract and retain highly qualified and motivated executives.
The strategy established by the Compensation Committee with respect to
executive compensation includes maintaining base salaries for executives at a
level somewhat below the industry average, while providing bonuses which, when
combined with base salary amounts, give StaffMark's executives the potential to
earn in excess of competitive industry compensation if certain subjective and
objective performance goals for StaffMark are achieved. The Compensation
Committee intends to continue to grant to StaffMark's executives and other key
employees stock options at the current market value, which options have no
monetary value to the executives unless and until the market price of
StaffMark's Common Stock increases. In this manner, StaffMark's executives will
be well compensated if StaffMark achieves its operating and performance goals.
On the other hand, in less successful years, an executive's pay may be below
competitive industry compensation. The mix of base salary, bonuses and stock
option awards reflects the Compensation Committee's intention to link executive
compensation to StaffMark's operational performance and the price of its Common
Stock. The Compensation Committee anticipates that future discretionary bonus
payments and option grants will be based on a subjective analysis of various
performance criteria, primarily earnings per share and operating profits, but
will not directly be tied to any one factor. The Compensation Committee intends
to continue to examine ways to more closely link its annual bonus and long-term
incentive plans to StaffMark's stock performance, with the objective of creating
plans that strengthen the relationship between stockholder value and executive
compensation.
1996 Compensation
Compensation paid during 1996 to Clete T. Brewer, StaffMark's President and
Chief Executive Officer, was comprised solely of base salary. Mr. Brewer's
compensation for the period from October 2, 1996, the date of consummation of
the Offering, through December 31, 1996 was in accordance with Mr. Brewer's
Executive Employment Agreement.
The cash compensation paid to StaffMark's other executive officers during
1996 who were officers of subsidiaries of StaffMark prior to their acquisition
by StaffMark was in accordance with arrangements approved by the respective
Boards of Directors of such subsidiaries. The cash compensation paid to
StaffMark's other executive officers during 1996 who were not officers of
subsidiaries of StaffMark was in accordance with arms-length negotiations
between StaffMark and such executive officers. The cash compensation to all of
StaffMark's other executive officers for the period from the Offering through
December 31, 1996 was in accordance with each such officer's Executive
Employment Agreement. Stock option grants were based on arms-length negotiations
with the respective grantees and were approved by the Board of Directors.
10
<PAGE>
This report is submitted by the members of the Compensation Committee.
STAFFMARK, INC.
COMPENSATION COMMITTEE
William J. Lynch
R. Clayton McWhorter
PERFORMANCE GRAPH
The following chart compares the cumulative total stockholder return on the
Company's Common Stock with the cumulative total return on the S&P 500 Index and
the common stock of eight companies in the temporary staffing industry, for the
period beginning September 27, 1996, (the date that trading first began on the
Nasdaq National Market), and ending December 31, 1996 (the last trading date in
the Company's 1996 fiscal year) assuming a $100 investment in each and assuming
the reinvestment of dividends. Although the Company's initial offering price was
$12.00, the closing price of $14.00 on the first day of trading was used as the
beginning price of the Common Stock. The Company paid no dividends during the
period. Companies in the self selected peer group are as follows: AccuStaff
Incorporated; Corestaff, Inc.; Norrell Corporation; Personnel Management, Inc.;
Personnel Group of America; RemedyTemp, Inc.; SOS Staffing Services, Inc.; and
Western Staff Services, Inc.
COMPARISON OF CUMULATIVE TOTAL RETURN
9/27/96 10/31/96 11/29/96 12/31/96
StaffMark, Inc. $100 $ 93 $ 90 $ 89
Peer Group $100 $ 98 $ 85 $ 87
Nasdaq Composite (US) $100 $ 99 $105 $105
Source: Carl Thompson Associates (303) 494-5472. Data from Bloomberg
Financial Markets.
11
<PAGE>
CERTAIN TRANSACTIONS; COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In connection with the formation of StaffMark, the Company issued 1,000
shares of Common Stock at $.01 per share and subsequently declared a stock
dividend of 1,355 shares of Common Stock for each share of Common Stock
outstanding. The shares were issued to various members of management including:
Jerry T. Brewer - 179,944 shares; Clete T. Brewer - 457,042 shares; Chad J.
Brewer - 252,978 shares; Donald A. Marr, Jr. - 34,010 shares; Robert H. Janes
III - 184,957 shares; and Janice Blethen - 25,068 shares. The Company also
issued 136,042 shares to Capstone Partners, LLC, a Delaware Limited Liability
Company, of which William J. Lynch is a member.
Simultaneously with the closing of the Offering, StaffMark acquired by
merger all of the issued and outstanding stock of Brewer, Prostaff and its
related entities, Maxwell and its related entities, HRA, First Choice and
Blethen and its related entities (each a "Founding Company" and collectively
"Founding Companies"), at which time each Founding Company became a wholly-owned
subsidiary of the Company (the "Mergers"). The aggregate consideration paid by
StaffMark in the Mergers was approximately $83.3 million, consisting of
approximately $15.9 million in cash and 5,618,249 shares of Common Stock. In
addition, in conjunction with the Mergers, certain of the Founding Companies
made distributions totaling approximately $5.3 million, representing S
Corporation earnings previously taxed to their respective stockholders. Also,
prior to the Mergers, certain of the Founding Companies made distributions of
certain assets with a net book value totaling approximately $349,000.
In connection with the Mergers and as consideration for their interests in
the Founding Companies, certain officers, directors, key employees and holders
of more than 5% of the outstanding shares of the Company, together with trusts
for which they act as trustees, received cash and shares of Common Stock of the
Company as follows:
Founding Company
Consideration
-------------
Shares of
Name Cash Common Stock
---- ---- ------------
(In thousands)
Jerry T. Brewer (1) $ 1,376 318,000
Clete T. Brewer (1)(2) 0 610,912
Chad J. Brewer (3) 600 361,000
Kay Brewer (3) 974 225,000
Ted Feldman (2) 1,009 302,611
W. David Bartholomew (1)(2) 1,210 282,437
Donald A. Marr, Jr. (2) 0 83,000
Steven E. Schulte (1)(2) 1,954 455,925
Edward E. Schulte (3) 2,045 477,130
Karla Schulte (3) 501 116,945
John H. Maxwell, Jr. (1)(2) 886 354,402
Mary Sue Maxwell (2) 913 365,221
Stephen H. Maxwell (3) 156 62,271
Stacey Maxwell Berry (3) 156 62,271
Jeffrey L. Maxwell (3) 156 62,271
Janice Blethen (1)(2) 1,626 451,410
Tracy Blethen (3) 32 7,350
William T. Gregory (1)(2) 1,453 435,750
Jeffery T. Gregory (3) 208 62,250
Sherry Gregory Barnes 208 62,250
Paige Gregory Gilliland 208 62,250
- ----------------------- ----- ------
Total $ 15,671 5,220,656
========= =========
(1) Director
(2) Officer
(3) Immediate family member of director or officer
12
<PAGE>
Prior to the Offering, certain of the Founding Companies incurred
indebtedness which was personally guaranteed by its stockholders or by entities
controlled by its stockholders. The Company repaid approximately $29.5 million
of indebtedness of the Founding Companies immediately following the consummation
of the Offering, of which approximately $14.5 million directly or indirectly
benefited persons who became officers, directors or greater than 5% stockholders
of the Company upon consummation of the Offering. In each case, such person was
either a direct obligor or a guarantor of such indebtedness. Further,
approximately $4.1 million of such indebtedness was incurred by the Founding
Companies in connection with S Corporation distributions to the stockholders of
the Founding Companies prior to the Mergers.
Leases of Facilities
In connection with the acquisition of Brewer, the Company assumed a lease
by Brewer of property in Fayetteville, Arkansas that is owned by Brewer
Investments, an Arkansas limited partnership whose partners are Jerry T. Brewer
and Kay Brewer. Jerry T. Brewer is the father of Clete T. Brewer and Chad J.
Brewer, Kay Brewer is the mother of Clete T. Brewer and Chad J. Brewer and each
is an officer, director and principal stockholder of Brewer. The property is now
the Company's headquarters. The total lease payments to Brewer Investments for
the twelve months ended December 31, 1996 approximated $225,000, and the lease
extends for five years. StaffMark is responsible for all real estate taxes,
insurance, utilities and maintenance.
In connection with the acquisition of Prostaff, the Company assumed leases
by Prostaff of property in Little Rock, Arkansas used by Prostaff in its
operations that are owned by an Arkansas limited liability company, one of whose
members is Steven E. Schulte. Rent for fiscal year 1996 approximated $127,200,
and StaffMark is responsible for all real estate taxes, insurance, utilities and
maintenance.
Prior to the Mergers, Maxwell distributed real estate owned by it to John
H. Maxwell, Jr. and Mary Sue Maxwell, with an aggregate carrying value of
approximately $221,000. Such real estate is leased to the Company at an annual
rent of $100,000. The lease has a three year term and a two year renewal option.
The Company believes that the rent payments to be made for leased
facilities with related parties will be on terms that are as favorable to the
Company as those that could be obtained from unaffiliated third parties.
Certain Loans
In October 1996, StaffMark advanced Donald A. Marr, Jr. the principal
amount of $80,000 due on October 2, 1999 pursuant to a promissory note that
accrues interest at six percent per annum.
First Choice has an unsecured demand note payable to William T. Gregory in
the principal amount of $61,000 as of December 31, 1996 with interest payable
semiannually at 8% per annum.
Other Transactions
In November 1995, Mr. Feldman and Mr. Bartholomew purchased an option held
by certain parties to acquire 30% of the common stock of HRA for $250,000. In
conjunction with this transaction, HRA advanced to each of Mr. Feldman and Mr.
Bartholomew the sum of $125,000. Such amounts were repaid prior to the
consummation of the Mergers. In addition, HRA entered into a Settlement
Agreement and Release with the holders of the option which released all claims
against HRA for the sum of $90,000.
13
<PAGE>
PROPOSAL TO APPROVE THE STAFFMARK, INC.
EMPLOYEE STOCK PURCHASE PLAN
In order to encourage employee ownership of the Company, on March 13, 1997,
the Board of Directors of the Company (the "Board") adopted the StaffMark, Inc.
Employee Stock Purchase Plan (the "Plan"), subject to stockholder approval. The
Board reserved 300,000 shares of the Company Common Stock for the Plan, subject
to adjustment in the event of stock splits, stock dividends, recapitalization,
or other changes in the outstanding Common Stock. The Plan provides eligible
employees of the Company with a means to purchase, through payroll deductions,
shares of Common Stock at a discount, consistent with the provisions of the
Internal Revenue Code of 1986, as amended (the "Code").
Eligible Participants
Regular full or part-time employees of the Company are eligible to
participate in the Plan, on a purely voluntary basis, if they meet certain
conditions. To be eligible, an employee's customary employment must be greater
than both 20 hours per week and five months per calendar year. The employee must
also have completed one year of continuous service with the Company. An employee
who owns five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company will not be eligible to participate in
the Plan. Temporary employees will not be eligible to participate in the Plan.
Approximately 2,000 employees would have been eligible to participate as of
March 1, 1997.
Material Features of the Plan
Eligible employees participate in the Plan through exercising options to
purchase Common Stock. Options may be granted for each purchase period to
eligible employees. Each quarter will be a purchase period unless otherwise
established by the committee administering the Plan (the "Committee"). Common
Stock will be purchased through a participant's payroll deductions at a stated
dollar amount not less than $10 per pay period (or $20 if the pay period is
every month), as determined by the participant, at a price that shall be an
amount equal to the lower of 85% of the fair market value of the Common Stock as
of the first or the last trading day of each purchase period. The fair market
value of the Common Stock will be determined by reference to the Common Stock
price on the Nasdaq National Market on each relevant date. No employee will be
permitted to purchase Common Stock under the Plan at a rate which exceeds
$25,000 of the fair market value of such stock (determined at the beginning of
each purchase period) for each calendar year.
Each eligible employee who elects to participate in the Plan will, without
any action on his or her part, be automatically deemed to have exercised his or
her option on the last day of each purchase period if he or she is then
employed, to the extent that the amount withheld through payroll deduction
throughout the purchase period is sufficient to purchase, at the option price,
one or more whole shares of Common Stock. All funds received or held by the
Company under the Plan are general assets of the Company, free of any trust or
other restriction, and may be used for any corporate purpose. No interest on
such funds will be credited to or paid to any participant under the Plan.
An option granted under the Plan shall not be transferable by an employee
other than by will or by the laws of descent and distribution and is exercisable
during his or her lifetime only by the employee.
A participant may voluntarily suspend his or her payroll deductions at any
time, but will not be permitted to resume the payroll deductions again until the
January 1 or July 1 following the six-month period after the date of suspension
of payroll deductions. A participant may change the rate of his or her payroll
deductions on any January 1 or July 1. If a participant terminates his or her
employment with the Company, his or her participation in the Plan will be
automatically terminated as of the date of termination of employment, and the
shares held in his or her stockholder account will either be sold as directed by
the terminated participant, or distributed to the terminated participant, in
which case, the Common Stock purchased through the Plan as of the date of
termination will be distributed to the participant, together with cash equal to
the sum of fair market value of any fractional shares owned by the participant
and amounts withheld through payroll deduction that had not been applied to
purchase Common Stock under the Plan.
14
<PAGE>
Plan Restrictions Concerning Resales of Shares and Distribution of Share
Certificates
A participant may not sell his or her shares or obtain stock certificate
evidencing shares acquired under the Plan during the first 12-consecutive-month
period of participation in the Plan. Thereafter, a participant may order the
sale of his or her shares under the Plan or acquire his or her stock certificate
as of the first day of any calendar quarter if he or she provides three months'
advance notice to the Committee. A participant who sells shares acquired under
the Plan or obtains a stock certificate evidencing shares acquired under the
Plan, as described above, will be subject to a 12-month suspension period during
which the participant may not participate in the Plan.
New Plan Benefits
It is not possible to determine how many eligible employees will
participate in the Plan in the future or the level of such participation.
Tax Treatment
The Plan is intended to qualify as an employee stock purchase plan within
the meaning of Section 423 of the Code. Under the Code, an employee who elects
to participate in the Plan will not realize income at the time the offering
commences or when the shares are actually purchased under the Plan. If an
employee disposes of such shares after two years from the date the offering of
such shares commences under the Plan and after one year from the actual date of
purchase of such shares under the Plan (collectively, the "Holding Period"), the
employee will be required to include in income, as capital gain for the year in
which such disposition occurs, an amount equal to the lesser of (i) the excess
of the fair market value of such shares at the time of disposition over the
purchase price and (ii) the excess of the fair market value of such shares at
the time the offering commenced over the purchase price.
If any employee disposes of the shares purchased under the Plan during the
Holding Period, the employee will be required to include in income, as
compensation for the year in which such disposition occurs, an amount equal to
the excess, if any, of the fair market value of such shares on the date of
purchase over the purchase price. The employee's basis in such shares disposed
of will be increased by an amount equal to the amount includable in his or her
income as compensation, and any gain or loss computed with reference to such
adjusted basis which is recognized at the time of disposition will be capital
gain or loss, either short-term or long-term, depending on the length of the
Holding Period for such shares. In the event of a disposition during the Holding
Period, the Company (or the subsidiary by which the employee is employed) will
be entitled to a deduction from income equal to the amount the employee is
required to include in income as a result of such disposition.
An employee who is a nonresident of the United States will generally not be
subject to the U.S. federal income tax with respect to the shares of Common
Stock purchased under the Plan.
15
<PAGE>
Plan Administration and Termination
The Plan provides for administration of the Plan by the Committee appointed
by the Board. The Board may terminate, suspend or amend the Plan in any respect
at any time, except that the approval of the Company's stockholders is required
for any amendment to increase the number of shares available for purchase under
the Plan. Unless earlier terminated, the Plan will continue in effect until June
30, 2007, except that if at the end of any purchase period the aggregate funds
available for purchase of Common Stock would purchase a greater number of shares
than is available for purchase, the number of shares that would otherwise be
purchased by each participant at the end of the purchase period will be
proportionately reduced in order to eliminate the excess. The Plan would then
automatically terminate after such purchase period.
Adoption of this proposal requires approval by a majority of the votes cast
at the Annual Meeting. Any shares not voted (whether by abstention, broker
non-vote, or otherwise) therefore would not have any impact on this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE APPROVAL OF
THE ADOPTION OF THE STAFFMARK, INC. EMPLOYEE STOCK PURCHASE PLAN.
OTHER COMPENSATION PLANS
In June 1996, the Board of Directors and the Company's stockholders
approved the Company's 1996 Stock Option Plan (the "Option Plan"). The purpose
of the Option Plan is to provide directors, officers, key employees and
consultants with additional incentives by increasing their ownership interests
in the Company. Directors, officers and other key employees of the Company and
its subsidiaries are eligible to participate in the Option Plan. In addition,
awards may be granted to consultants providing valuable services to the Company.
Awards under the Option Plan are granted by the Compensation Committee of the
Board of Directors and may include incentive stock options ("ISOs") and/or
non-qualified stock options ("NQSOs").
The Compensation Committee of the Board of Directors administers the Option
Plan. The Compensation Committee generally has discretion to determine the terms
of an option grant, including the number of option shares, option price, term,
vesting schedule, the post-termination exercise period, and whether the grant
will be an ISO or NQSO. Notwithstanding this discretion: (i) the number of
shares subject to options granted to any individual in any calendar year may not
exceed 500,000 shares; (ii) the option price per share of Common Stock may not
be less than 100% of the fair market value of such share at the time of grant or
110% of the fair market value of such shares if the option is intended to be an
ISO and is granted to a stockholder owning more than 10% of the combined voting
power of all classes of the Company stock or of its parent or subsidiary on the
date of the grant of the option; and (iii) the term of any option may not exceed
10 years or five years if the option is intended to be an ISO and is granted to
a stockholder owning more than 10% of the total combined voting power of all
classes of stock on the date of the grant of the option. In addition, unless
otherwise specified by the Compensation Committee, all outstanding options vest
upon a "change in control" of the Company (as defined by the Option Plan), and
all options will terminate three months following any termination of employment.
The Option Plan also provides for automatic option grants to directors who
are not otherwise employed by the Company or its subsidiaries. Upon commencement
of service (or upon agreeing to serve in the case of the initial non-employee
directors), a non-employee director will receive an NQSO to purchase 10,000
shares of Common Stock, and a continuing non-employee director will receive
annual options to purchase 2,000 shares of Common Stock. Options granted to
non-employee directors become exercisable one-third on the date of grant and
one-third on each of the next two anniversaries of the date of grant.
Non-employee directors' options have a term of five years from the date of
grant.
16
<PAGE>
The maximum number of shares of Common Stock that may be subject to
outstanding options, determined immediately after the grant of any option, is
the greater of 1,500,000 or 12% of the aggregate number of shares of the
Company's Common Stock outstanding; provided, however, that options to purchase
no more than 1,500,000 shares of Common Stock may be granted as ISOs as of the
preceding January 1, less, in each case, the number of shares subject to
previously outstanding awards under the Option Plan. Shares of Common Stock
which are attributable to awards which have expired, terminated or been
cancelled or forfeited during any calendar year are available for issuance or
use in connection with future awards during such calendar year.
The Option Plan will remain in effect until terminated by the Board of
Directors. No ISO may be granted more than 10 years after the adoption of the
Option Plan by the Board or approval of the Plan by the stockholders, whichever
is earlier. The Option Plan may be amended by the Board of Directors without the
consent of the stockholders of the Company, except that any amendment, although
effective when made, will be subject to stockholder approval within one year
after approval by the Board of Directors if required by any federal or state law
or regulation or by the rules of any stock exchange or automated quotation
system on which the Common Stock may then be listed or quoted.
The Omnibus Budget Reconciliation Act of 1993 added Section 162(m) to the
Internal Revenue Code of 1986, as amended, which generally disallows a public
company's tax deduction for compensation to the chief executive officer and the
four other most highly compensated executive officers in excess of $1 million in
any tax year beginning on or after January 1, 1994. Compensation that qualifies
as "performance-based compensation" is excluded from the $1 million
deductibility cap, and therefore remains fully deductible by the company that
pays it. The Company intends that options granted with an exercise price at
least equal to 100% of fair market value of the underlying stock at the date of
grant will qualify as such "performance-based compensation," although other
awards under the Option Plan may not so qualify. Until final regulations are
adopted and other guidance made available by the Internal Revenue Service, there
can be no assurance that any awards under the Option Plan will qualify as
"performance-based compensation" that is fully deductible by the Company under
Section 162(m).
SECTION 16 REQUIREMENTS
Section 16(a) of the Exchange Act requires StaffMark's officers and
directors, and persons who own more than 10% of a registered class of
StaffMark's equity securities, to file initial reports of ownership and reports
of changes in ownership with the Securities and Exchange Commission (the "SEC")
and the Nasdaq National Market. Such persons are required by SEC regulation to
furnish StaffMark with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of other such forms received by it
with respect to 1996, or written representations from certain reporting persons,
StaffMark believes that all other filing requirements applicable to its
officers, directors and persons who own more than 10% of a registered class of
StaffMark's equity securities have been complied with, except for the purchase
of 5,000 shares of the Company's Common Stock by Charles A. Sanders, M.D., a
director of the Company, on October 24, 1996. That transaction was reported on
Form 5 on February 12, 1997.
17
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP as the Company's
independent public accountants and auditors, a position that firm has held since
the Company's Offering of securities to the public in September, 1996.
Representatives of Arthur Andersen LLP are expected to be present at the Annual
Meeting with the opportunity to make a statement if they desire to do so and to
respond to appropriate questions.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any stockholder proposal to be presented at the 1997 Annual Meeting should
be directed to Terry C. Bellora, Secretary of the Company, 302 East Millsap
Road, Fayetteville, Arkansas 72703, and must be received by the Company on or
before November 28, 1997. Any such proposal must comply with the requirements of
Rule 14a-8 under the Securities Exchange Act of 1934.
ADDITIONAL INFORMATION AVAILABLE
Upon written request, the Company will furnish, without charge, a copy of
the Company's most recent Annual Report on Form 10-K, as filed with the
statements and schedules thereto. The written request should be sent to Terry C.
Bellora, Secretary of the Company, 302 East Millsap Road, Fayetteville, Arkansas
72703.
OTHER MATTERS
The Board of Directors does not intend to present and does not have any
reason to believe that others will present any items of business at the Annual
Meeting other than as stated in the Notice of Annual Meeting of Stockholders.
If, however, other matters are properly brought before the meeting, it is the
intention of the persons named in the accompanying Proxy to vote the shares
represented thereby in accordance with their best judgment, and discretionary
authority to do so is included in the Proxy.
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE URGED TO SIGN, DATE AND
RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO
ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
/s/ Terry C. Bellora
Terry C. Bellora
Secretary
Fayetteville, Arkansas
March 28, 1997
18
<PAGE>
APPENDIX A
STAFFMARK, INC.
302 EAST MILLSAP ROAD
FAYETTEVILLE, ARKANSAS 72703
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
KNOW ALL MEN BY THESE PRESENTS that I, the undersigned stockholder of
StaffMark, Inc., a Delaware corporation, do hereby nominate, constitute, and
appoint Jerry T. Brewer and Clete T. Brewer, or any one or more of them, my true
and lawful attorney(s) with full power of substitution for me and in my name,
place and stead, to vote all of the Common Stock, par value $.01 per share, of
the Company, standing in my name on its books on March 18, 1997, at the Annual
Meeting of its Stockholders to be held on May 2, 1997 at the Fayetteville
Hilton, 70 N. East Street, Fayetteville, Arkansas, at 10:00 a.m., local time, or
at any adjournment thereof.
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED SELF-ADDRESSED ENVELOPE
<PAGE>
1. Election of the following nominees as directors: Jerry T. Brewer, Clete
T. Brewer, W. David Bartholomew, Steven E. Schulte, John H. Maxwell, Jr.,
Janice Blethen, William T. Gregory, William J. Lynch, R. Clayton
McWhorter, and Charles A. Sanders, M.D.
____ FOR all nominees listed ____ WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees
contrary)
(INSTRUCTION: To withhold authority to vote for any individual
nominees(s),write that nominee's name(s) on the space provided below.)
2. Approval of the Company's Employee Stock Purchase Plan
____ FOR ____ AGAINST ____ ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. Please sign exactly as your name appears
hereon. When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, or guardian, please give full title
as such. If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in partnership name by
authorized person. Make sure that the name on your stock certificate(s) is
exactly as you indicate below.
__________________________________
Signature
__________________________________
Signature if jointly held
DATE:______________________, 1997
