<PAGE>
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12
TMP WORLDWIDE INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
-1-
<PAGE>
TMP WORLDWIDE INC.
1633 BROADWAY
NEW YORK, NEW YORK 10019
212-977-4200
April 27, 1998
Dear Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held at 11:00 a.m. on Wednesday, May 27, 1998, at the
offices of Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New York
10103.
At the meeting you will be asked to elect five directors of the
Company and to approve an amendment to the Company's 1996 Stock Option Plan
which would increase the number of shares available for grant thereunder. In
addition, we will be pleased to report on the affairs of the Company and a
discussion period will be provided for questions and comments of general
interest to stockholders.
We look forward to greeting personally those stockholders who are
able to be present at the meeting; however, whether or not you plan to be with
us at the meeting, it is important that your shares be represented.
Accordingly, you are requested to sign and date the enclosed proxy and mail it
in the envelope provided at your earliest convenience.
Thank you for your cooperation.
Very truly yours,
/s/Andrew J. McKelvey
Andrew J. McKelvey
Chairman of the Board
of Directors and CEO
<PAGE>
TMP WORLDWIDE INC.
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------
New York, New York
April 27, 1998
Notice is hereby given that the Annual Meeting of Stockholders of TMP
Worldwide Inc. will be held on Wednesday, May 27, 1998 at 11:00 a.m. at the
offices of Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New York
10103 for the following purposes:
(1) To elect five directors to serve for the ensuing year;
(2) To consider and vote upon a proposal to amend the Company's
1996 Stock Option Plan to increase the number of shares which
may be granted thereunder; and
(3) To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
Stockholders of record at the close of business on April 9, 1998 will
be entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.
All stockholders are cordially invited to attend the Annual Meeting
in person. Stockholders who are unable to attend the Annual Meeting in person
are requested to complete and date the enclosed form of proxy and return it
promptly in the envelope provided. No postage is required if mailed in the
United States. Stockholders who attend the Annual Meeting may revoke their
proxy and vote their shares in person.
THOMAS G. COLLISON
Secretary
<PAGE>
TMP WORLDWIDE INC.
1633 BROADWAY
NEW YORK, NEW YORK 10019
------------------
PROXY STATEMENT
------------------
GENERAL INFORMATION
Proxy Solicitation
This Proxy Statement is furnished to the holders of Common Stock, par
value $.001 per share (the "Common Stock"), and Class B Common Stock, par
value $.001 per share (the "Class B Common Stock"), of TMP Worldwide Inc. (the
"Company") in connection with the solicitation by the Board of Directors of
the Company of proxies for use at the Annual Meeting of Stockholders to be
held on Wednesday, May 27, 1998, or at any adjournment thereof, pursuant to
the accompanying Notice of Annual Meeting of Stockholders. The purposes of the
meeting and the matters to be acted upon are set forth in the accompanying
Notice of Annual Meeting of Stockholders. The Board of Directors is not
currently aware of any other matters which will come before the meeting.
Proxies for use at the meeting are being solicited by the Board of
Directors of the Company. Proxies will be mailed to stockholders on or about
April 27, 1998 and will be solicited chiefly by mail. The Company will make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to the beneficial owners of the
shares and will reimburse them for their expenses in so doing. Should it
appear desirable to do so in order to ensure adequate representation of shares
at the meeting, officers, agents and employees of the Company may communicate
with stockholders, banks, brokerage houses and others by telephone, facsimile
or in person to request that proxies be furnished. All expenses incurred in
connection with this solicitation will be borne by the Company. The Company
has no present plans to hire special employees or paid solicitors to assist in
obtaining proxies, but reserves the option of doing so if it should appear
that a quorum otherwise might not be obtained.
Revocability and Voting of Proxy
A form of proxy for use at the Annual Meeting of Stockholders and a
return envelope for the proxy are enclosed. Stockholders may revoke the
authority granted by their execution of proxies at any time before their
effective exercise by filing with the Secretary of the Company a written
notice of revocation or a duly executed
-1-
<PAGE>
proxy bearing a later date, or by voting in person at the meeting. Shares of
the Company's Common Stock and Class B Common Stock represented by executed
and unrevoked proxies will be voted in accordance with the choice or
instructions specified thereon. If no specifications are given, the proxies
intend to vote the shares represented thereby to approve Proposal Nos. 1 and 2
as set forth in the accompanying Notice of Annual Meeting of Stockholders and
in accordance with their best judgment on any other matters which may properly
come before the meeting.
Record Date and Voting Rights
Only stockholders of record at the close of business on April 9, 1998
are entitled to notice of and to vote at the Annual Meeting or any and all
adjournments thereof. On April 9, 1998, there were 12,536,545 shares of Common
Stock outstanding, each of which is entitled to one vote on each of the
matters to be presented at the Annual Meeting, and 13,587,541 shares of Class
B Common Stock outstanding, each of which is entitled to ten votes on each of
the matters to be presented at the Annual Meeting. Andrew J. McKelvey holds
all of the Class B Common Stock giving him in excess of 91% of the combined
voting power of the Company; other than Husic Capital Management, no other
stockholder of the Company has in excess of 1% of the combined voting power of
the Company. It is expected that Mr. McKelvey will vote for Proposal Nos. 1
and 2. The holders of a majority of the outstanding shares of Common Stock and
Class B Common Stock, present in person or by proxy and entitled to vote, will
constitute a quorum at the Annual Meeting. Abstentions and broker non-votes
will be counted for purposes of determining the presence or absence of a
quorum. "Broker non-votes" are shares held by brokers or nominees which are
present in person or represented by proxy, but which are not voted on a
particular matter because instructions have not been received from the
beneficial owner. Under applicable Delaware law, the effect of broker
non-votes on a particular matter depends on whether the matter is one as to
which the broker or nominee has discretionary voting authority under the
applicable rule of the New York Stock Exchange. The effect of broker non-votes
on the specific items to be brought before the Annual Meeting of Stockholders
is discussed under each item.
-2-
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of March 20, 1998
(except as otherwise noted in the footnotes), regarding the beneficial
ownership determined in accordance with the rules of the Securities and
Exchange Commission (the "SEC"), which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power
and/or investment power with respect to those securities, of the Company's
Common Stock by: (i) each person known by the Company to own beneficially more
than five percent of the Company's outstanding Common Stock; (ii) each
director and nominee for director of the Company; (iii) each executive officer
named in the Summary Compensation Table (see "Executive Compensation"); and
(iv) all directors and executive officers of the Company as a group. Except as
otherwise specified, the named beneficial owner has the sole voting and
investment power over the shares listed.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership of Percentage of
Common Stock/Class B Percentage of Class B
Name of Beneficial Owner Common Stock Common Stock Common Stock
- ------------------------ ----------------------- ------------- -------------
<S> <C> <C> <C>
Andrew J. McKelvey.................. 13,589,877(1) * 100%
Thomas G. Collison.................. 124,695 * --
James J. Treacy(2).................. 303,141 2.4% --
Jeffrey C. Taylor(3)................ 131,325 * --
Paul M. Camara...................... 128,380 * --
George R. Eisele.................... 84,788 * --
John R. Gaulding(4)................. 21,250 * --
Michael Kaufman(5).................. 5,625 * --
John Swann(6)....................... 8,438 * --
The Capital Group Companies,
Inc.(7)............................. 814,500 6.5% --
Husic Capital Management(8)......... 1,507,275 12.0% --
Provident Investment Counsel(9)..... 1,014,677 8.1% --
Putnam Investments, Inc.(10)........ 636,366 5.1% --
All directors and executive officers
as a group (13 persons)(11)......... 14,416,924 6.6% 100%
</TABLE>
- -------------------
* Less than 1%
-3-
<PAGE>
(1) Includes 13,587,541 shares of Class B Common Stock which are
convertible, on a share for share basis, into Common Stock. Each
share of Class B Common Stock has ten votes per share. Also includes
2,000 shares of Common Stock owned by Mr. McKelvey's wife and 100
shares of Common Stock owned by Mr. McKelvey's daughter. Mr. McKelvey
disclaims beneficial ownership of the shares owned by his wife.
(2) Includes 300 shares of Common Stock owned by Mr. Treacy's daughters.
(3) Includes 5,906 shares of Common Stock, subject to options, which are
exercisable within 60 days of March 20, 1998.
(4) Includes 11,250 shares of Common Stock, subject to options, which are
exercisable within 60 days of March 20, 1998.
(5) Consists of 5,625 shares of Common Stock, subject to options, which
are exercisable within 60 days of March 20, 1998.
(6) Consists of 8,438 shares of Common Stock, subject to options, which
are exercisable within 60 days of March 20, 1998.
(7) Based on information set forth in Schedule 13G dated February 10,
1998, filed by the beneficial owner. The 13G states that such
beneficial owner has sole voting power with respect to 542,500 of
such shares and sole dispositive power with respect to all of the
shares. The address of such beneficial owner is 333 South Hope
Street, Los Angeles, CA 90071.
(8) Based on information set forth in an amended Schedule 13G dated
January 23, 1998, filed by the beneficial owner. The amended 13G
states that such beneficial owner shares voting power with respect to
1,064,700 of such shares and has shared dispositive power with
respect to all of the shares. The address of such beneficial owner is
333 California Street, Suite 2900, San Francisco, CA 94104.
(9) Based on information set forth in an amended Schedule 13G dated
February 2, 1998, filed by the beneficial owner. The amended 13G
states that such beneficial owner has sole voting power with respect
to 949,777 of such shares and has sole dispositive power with respect
to all of the shares. The address of such beneficial owner is 300
North Lake Avenue, Pasadena, CA 91101.
(10) Based on information set forth in Schedule 13G dated January 16,
1998, filed by the beneficial owner. The 13G states that the voting
power with respect to such shares is exercised by the beneficial
owner's trustees and that such beneficial owner shares dispositive
power with respect to such shares. The address of such beneficial
owner is One Post Office Square, Boston MA 02109.
-4-
<PAGE>
(11) Includes 32,767 shares subject to options which are exercisable
within 60 days of March 20, 1998. Does not include 247,315 shares of
Common Stock issuable pursuant to options which are not exercisable
within 60 days of March 20, 1998.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
Five directors (constituting the entire Board) are to be elected at
the Annual Meeting. Unless otherwise specified, the enclosed proxy will be
voted in favor of the persons named below to serve until the next annual
meeting of stockholders and until their successors shall have been duly
elected and shall qualify. In the event any of these nominees shall be unable
to serve as a director, the shares represented by the proxy will be voted for
the person, if any, who is designated by the Board of Directors to replace the
nominee. All nominees have consented to be named and have indicated their
intent to serve if elected. The Board of Directors has no reason to believe
that any of the nominees will be unable to serve or that any vacancy on the
Board of Directors will occur.
The nominees, their ages, the year in which each first became a
director and their principal occupations or employment during the past five
years are:
<TABLE>
<CAPTION>
Year First Principal Occupation
Nominee Age Became Director During the Past Five Years
- ------- --- --------------- --------------------------
<S> <C> <C> <C>
Andrew J. McKelvey 63 1967 Chairman of the Board, CEO and a director since
founding the Company in 1967. Mr. McKelvey has
a B.A. from Westminster College. Mr. McKelvey
was a member of the Board of Directors of the
Yellow Pages Publishers Association and the
Association of Directory Marketing from 1994
through September 1996.
George R. Eisele 61 1987 Director of the Company since September 1987
and Executive Vice President of TMP Worldwide
Direct, the Company's direct marketing
division, since 1989.
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
John R. Gaulding 52 1996 Director of the Company since January 1996.
Mr. Gaulding is a private investor and business
consultant in the fields of strategy and
organization. He was Chairman and Chief Executive
Officer of National Insurance Group, a publicly
traded financial information services company,
from April through July 11, 1996, the date of
such company's sale and Corporate Vice President
of ADP, Inc. For six years prior thereto, he was
President and Chief Executive Officer of ADP
Claims Solutions Group. From 1985 to 1990, Mr.
Gaulding was President and Chief Executive
officer of Pacific Bell Directory, the yellow
page publishing unit of Pacific Telesis Group.
Mr. Gaulding served as Co-Chairman of the Yellow
Pages Publishers Association from 1987 to 1990.
He holds a B.S. from the University of California
at Los Angeles and an M.B.A. from the University
of Southern California.
Michael Kaufman 52 1997 Director of the Company since October 1997.
Mr. Kaufman is President of Consumer Markets
Group for Pacific Bell since August 1997. Prior
thereto, from May 1997, Mr. Kaufman was the
President and CEO of Pacific Bell Communications,
a subsidiary of SBC Communications Inc., and from
1993 through April 1997, he was the regional
president for the Central and West Texas market
area of Southwestern Bell Telephone. Mr. Kaufman
holds a B.A. and an M.B.A. from the University of
Wisconsin.
John Swann 61 1996 Director of the Company since September 1996. In 1995,
Mr. Swann founded Cactus Digital Imaging Systems, Ltd.,
Canada's largest supplier of electronically
produced large format color prints.
</TABLE>
All directors hold office until the next meeting of the stockholders
of the Company and until their successors are elected and qualified.
The Board of Directors has a Compensation Committee charged with
recommending to the Board the compensation for the Company's executives and
administering the Company's stock option and benefit plans. The Compensation
Committee is currently composed of Messrs. Gaulding and Swann. During 1997,
the Compensation Committee did not meet but acted eight times by unanimous
consent
-6-
<PAGE>
in lieu of a meeting. The Board of Directors also has an Audit Committee
charged with recommending to the Board the appointment of independent auditors
of the Company, as well as discussing and reviewing, with the independent
auditors, the scope of the annual audit and results thereof. The Audit
Committee is currently composed of Messrs. Gaulding and Swann. During 1997,
the Audit Committee met twice. The Board of Directors also has a Strategy
Committee charged with recommending to the Board strategic plans. The Strategy
Committee is currently composed of Messrs. Gaulding and Swann. During 1997,
the Strategy Committee did not meet. Each Committee member attended at least
75% of the meetings of such Committee held when he was a member.
During the fiscal year ended December 31, 1997, the Board of
Directors held two meetings and acted twenty-one times by unanimous written
consent in lieu of a meeting. Each director attended at least 75% of the
meetings of the Board of Directors held when he was a Director.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's executive officers and directors, and
persons who beneficially own more than ten percent of the Company's Common
Stock, to file initial reports of ownership and reports of changes in
ownership with the SEC and the National Association of Securities Dealers,
Inc. Executive officers, directors and greater than ten percent beneficial
owners are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms they file. Based upon on a review of the copies of
such forms furnished to the Company and written representations from the
Company's executive officers and directors, the Company believes that during
fiscal 1997 all Section 16(a) filing requirements applicable to its executive
officers, directors and greater than ten percent beneficial owners were
complied with.
Vote Required
The five nominees receiving the highest number of affirmative votes
of the shares present in person or represented by proxy and entitled to vote
for them, a quorum being present, shall be elected as directors. Only votes
cast for a nominee will be counted, except that the accompanying proxy will be
voted for all nominees in the absence of instruction to the contrary.
Abstentions, broker non-votes and instructions on the accompanying proxy card
to withhold authority to vote for one or more nominees will result in the
respective nominees receiving fewer votes. However, the number of votes
otherwise received by the nominee will not be reduced by such action.
THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 1-ELECTION OF DIRECTORS"
TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS
A VOTE "FOR" APPROVAL THEREOF.
-7-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning all cash and
non-cash compensation paid or to be paid by the Company as well as certain
other compensation awarded, earned by and paid, during the fiscal years
indicated, to the Chief Executive Officer and each of the four other most
highly compensated executive officers of the Company for such periods in all
capacities in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
----------------------------------------------- ----------------------
Awards
------
Other All
Annual Securities Other
Name and Principal Compen- Underlying Compen-
Position Year Salary Bonus sation Options/SARs sation
-------------- ---- ------ ----- ------ ------------ ------
<S> <C> <C> <C> <C> <C> <C>
Andrew J. McKelvey,
Chairman of the Board
and CEO....................... 1997 $1,500,031 -- $23,111(1) - -
1996 696,416 $210,000 2,730(2) - -
1995 558,731 710,000 2,730(2) - -
James J. Treacy,
Chief Operating Officer and
Executive Vice President-
Finance and Strategy.......... 1997 211,531 50,000 3,200(2) 71,666 -
1996 199,231 154,954 2,730(2) - -
1995 180,000 197,500 2,730(2) - -
Jeffrey C. Taylor,
Executive Vice President-
Interactive................... 1997 217,196 100,000 20,000(3) 41,125 -
1996 195,025 75,000 170,000(4) 11,250 -
1995 201,089 6,250 50,000(5) - -
Thomas G. Collison,
Vice Chairman and Secretary... 1997 207,031 50,320 3,200(2) 18,334 -
1996 212,573 40,000 2,730(2) - -
1995 205,418 62,000 2,730(2) - -
Paul M. Camara
Executive Vice President -
Creative/Sales/Marketing...... 1997 225,030 52,680 3,200(2) 24,250 -
1996 225,000 6,081 3,000(2) - -
1995 225,000 35,566 3,000(2) - -
</TABLE>
(1) $3,200 represents matching contributions made to the Company's 401(k)
Plan and $19,911 represents lease payments for an automobile.
(2) Represents matching contributions made to the Company's 401(k) Plan.
(3) $3,200 represents matching contributions made to the Company's 401(k)
Plan and $16,800 represents lease payments for an automobile.
(4) $150,000 of such compensation includes payments made to Mr. Taylor in
connection with the sale by a corporation of which Mr. Taylor was a
principal of certain assets to the Company and $20,000 of such
compensation represents the fair market value of 142,740 shares of Common
Stock of the Company issued as compensation by the Company to Mr. Taylor
in January 1996.
(5) Consists of payments made to Mr. Taylor in connection with the sale by a
corporation of which Mr. Taylor was a principal of certain assets to the
Company.
-8-
<PAGE>
Stock Options
The following table sets forth certain summary information concerning
individual grants of stock options made during the year ended December 31,
1997 to each of the Company's executive officers named in the Summary
Compensation Table.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term(2)
----------------------------------------- ------------------
Number of % of Total Exercise
Securities Options or Base
Underlying Granted to Price
Options Employees Per Expiration
Name Granted in 1997(1) Share Date 5% 10%
---- ------- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Andrew J. McKelvey................. 0 - - - - -
James J. Treacy.................... 66,666 5.5% $12.875 1/06/07 $1,638,650 $3,118,707
5,000 .9% $15.00 12/12/07 112,300 223,280
Jeffrey C. Taylor................. 26,125 2.2% $12.875 1/06/07 642,152 1,222,156
15,000 2.8% $15.00 12/12/07 336,900 669,841
Thomas G. Collison................. 13,334 1.1% $12.875 1/06/07 327,750 623,779
5,000 .9% $15.00 12/12/07 112,300 223,905
Paul M. Camara..................... 18,750 1.6% $12.875 1/06/07 460,875 877,145
5,500 1.0% $15.00 12/12/07 123,530 245,608
</TABLE>
- --------------------
(1) Based on 1,203,737 options granted in January 1997 and
530,000 options granted in December 1997, as the case may be.
(2) These amounts represent assumed rates of appreciation in the
price of the Company's Common Stock during the term of the
option in accordance with rates specified in applicable
federal securities regulations. Actual gains, if any, or
stock option exercises, will depend on the future price of
the Common Stock and overall stock market conditions. The
Company's stock price, as reported by the Nasdaq National
Market on December 31, 1997, was $23.00 per share.
The following table sets forth at December 31, 1997 the number of
securities underlying unexercised options and the value of unexercised options
held by each of the executive officers named in the Summary Compensation
Table:
-9-
<PAGE>
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at Year End Options at Year End(1)
----------------------------- -----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Andrew J. McKelvey................... - - - -
James J. Treacy...................... 0 71,666 0 $714,993
Jeffrey C. Taylor.................... 5,906 46,469 96,563 471,890
Thomas G. Collison................... 0 18,334 0 175,007
Paul M. Camara....................... 0 24,250 0 233,844
</TABLE>
- ------------------------
(1) Computed based upon the difference between the Stock Option
exercise price and the closing price of the Company's Common
Stock on December 31, 1997 ($23.00).
Employment Agreements
The Company has entered into an employment agreement with Andrew J.
McKelvey, effective as of November 15, 1996, for a term ending on November 14,
2001. The agreement provides for automatic renewal for successive one year
terms unless either party notifies the other to the contrary at least 90 days
prior to the expiration of the then current term. The agreement also provides
that Mr. McKelvey will serve as Chairman of the Board and President of the
Company and will be nominated for election as a director during all periods of
his employment. Under the agreement, Mr. McKelvey is entitled to a base salary
of $1,500,000 per year and mandatory bonuses of $375,000 per quarter. Mr.
McKelvey has waived his bonus for the quarters which commenced February 15,
1997, May 15, 1997, August 15, 1997 and November 15, 1997. Under the
agreement, Mr. McKelvey may terminate his employment upon 90 days' prior
written notice for any reason. The agreement also provides that in the event
Mr. McKelvey's employment is terminated by the Company prior to its expiration
for reasons other than for "cause," the Company shall pay Mr. McKelvey his
base salary and mandatory bonuses for the remaining term of the agreement at
the times they would have been payable had he remained employed. The agreement
further provides that in the event of Mr. McKelvey's voluntary resignation,
termination of his employment by the Company for cause or nonrenewal of the
agreement, Mr. McKelvey shall not be entitled to any severance, and in the
event of his disability or death he or his estate shall be paid his base
salary and mandatory bonuses for a period of 180 days after any such
termination at the times they would have been payable had he remained
employed. The agreement also contains confidentiality provisions, whereby Mr.
McKelvey agrees not to disclose any confidential information regarding the
Company and its affiliates.
The Company has entered into an employment agreement with James J.
Treacy, effective as of November 18, 1996, for an indefinite term on an
at-will basis. The agreement provides that either party may terminate the
agreement for any reason. Pursuant to the agreement, Mr. Treacy will serve as
Executive Vice President - Finance and Strategy of the Company for a base
salary of $200,000 and an annual minimum bonus of at least $35,000. The
agreement provides that in the event Mr. Treacy is
-10-
<PAGE>
terminated for "cause" or voluntarily resigns, he shall not be entitled to any
severance, and in the event Mr. Treacy is terminated by reason of his death,
disability or for other reasons, he or his estate shall be entitled to his
base salary and minimum annual bonus for a period of one year after the
effective date of his termination payable at the times they would have been
payable had he remained employed, less income earned by him from the
performance of any personal services during such period. The agreement
contains confidentiality provisions, whereby Mr. Treacy agrees not to disclose
any confidential information regarding the Company and its affiliates, as well
as nonsolicitation provisions which prohibit Mr. Treacy from soliciting any
active or prospective accounts of the Company or its affiliates for a period
of one year following termination. In addition to his then current title, Mr.
Treacy was also named as the Company's Chief Operating Officer in February
1998.
The Company's subsidiary, TMP Interactive Inc., entered into an
amended and restated employment agreement with Jeffrey C. Taylor, effective as
of September 11, 1996, for a term ending November 9, 1998. That agreement
provides for automatic renewal for successive one year terms unless either
party notifies the other to the contrary at least 60 days prior to its
expiration. The agreement provides that Mr. Taylor will serve as Chief
Executive Officer of TMP Interactive Inc. and provides Mr. Taylor with a base
salary of $125,000 per year and annual bonuses of at least $50,000 per year
based on formulae mutually agreed to by the parties. Under the agreement, Mr.
Taylor may terminate his employment upon written notice for certain material
alterations in his responsibilities, duties, and authorities or upon 60 days'
prior written notice for any reason. The agreement provides that in the event
Mr. Taylor's employment is terminated by TMP Interactive Inc. prior to its
expiration for reasons other than cause or is terminated by Mr. Taylor for
certain material alterations in his responsibilities, duties and authorities,
TMP Interactive Inc. shall pay Mr. Taylor his base salary and a minimum
$50,000 annual bonus for the remaining term of the agreement at the times they
would have been payable had he remained employed, less the consideration paid
or earned by Mr. Taylor from other employment during such period. The
agreement also provides that in the event of Mr. Taylor's voluntary
resignation, termination of his employment by TMP Interactive Inc. for "cause"
or non-renewal of the agreement, Mr. Taylor shall not be entitled to any
severance, and in the event of his disability or death he or his estate shall
be paid his base salary and certain other benefits for a period of 90 days at
the times they would have been payable had he remained employed. The agreement
contains confidentiality provisions, whereby Mr. Taylor agrees not to disclose
any confidential information regarding TMP Interactive Inc. and its
affiliates, as well as non-competition provisions. The non-competition
covenants generally survive the termination or expiration of Mr. Taylor's
employment for two years, provided that in certain circumstances TMP
Interactive Inc. must pay Mr. Taylor one-half of his base salary and one-half
of his $50,000 minimum annual bonus for the duration of the non-competition
obligation. Mr. Taylor's agreement also prohibits him from soliciting or
servicing customers or prospective customers of TMP Interactive Inc. and its
affiliates for a period of two years following the termination or expiration
of his employment.
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<PAGE>
Stock Option Awards
In January 1996, the Company's Board of Directors adopted the 1996
Stock Option Plan (the "Stock Option Plan"), which, as amended, provides for
the issuance of incentive stock options within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), and non-statutory
stock options, to purchase an aggregate of up to 1,800,000 shares of the
Common Stock of the Company. The Stock Option Plan permits the grant of
options to officers, employees and consultants of the Company and its
affiliates. On December 12, 1997, options to purchase an aggregate of 530,000
shares were granted, subject to stockholder approval to amend the aggregate
number of options which may be granted under the Stock Option Plan, at a per
share exercise price of $15.00. See "Proposal No. 2 - Amendment to the Stock
Option Plan" for information concerning the Stock Option Plan and the proposed
amendment to the Stock Option Plan.
Compensation of Directors
Prior to the Company's initial public offering in December 1996, Mr.
Gaulding, a non-employee director, received a director's fee of $20,000 per
quarter plus reimbursement of expenses in connection with his duties as a
director. Prior to the initial public offering, Mr. Swann and Mr. Pallu (a
former director who resigned as of December 31, 1997), were provided with
reimbursement of expenses incurred in connection with their respective duties
as a director. As of the Company's initial public offering, Messrs. Gaulding,
Swann, Pallu and Kaufman (who became a director in October 1997) each receive
$15,000 per year for services rendered as directors, plus a per meeting fee of
$5,000 for each meeting of the board of directors or a committee of the board
of directors attended in person after the fifth such meeting attended in
person, plus reimbursement of expenses incurred in connection with their
duties as directors.
The Company has adopted a Stock Option Plan for Non-Employee
Directors (the "Directors' Plan"), pursuant to which options to acquire a
maximum aggregate of 180,000 shares of Common Stock may be granted to
non-employee directors. Options granted under the Directors' Plan do not
qualify as incentive stock options within the meaning of Section 422 of the
Code. Pursuant to the Directors' Plan, each of Messrs. Gaulding, Kaufman and
Swann, its non-employee directors, was granted an option to purchase 11,250
shares of Common Stock at a purchase price per share equal to the fair market
value of the Common Stock on the date of such Director's election ($6.65 in
the case of Mr. Gaulding, $23.63 in the case of Mr. Kaufman and $14.00 in the
case of Mr. Swann). The options have a ten-year term and become exercisable as
determined by the Committee. The options may be exercised by payment in cash,
check or shares of Common Stock.
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Compensation Committee Report to Stockholders
The report of the Compensation Committee (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, as amended (the "Securities Act") or under
the Exchange Act, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
The Compensation Committee of the Board of Directors was formed in
September, 1996 and consists of Messrs. Gaulding and Swann, each of whom is an
independent non-employee director. The Compensation Committee is charged with
recommending to the Board of Directors the compensation for the Company's
executives and administering the Company's stock option and benefit plans.
Compensation Philosophy
The Company believes that executive compensation should be closely
related to increased stockholder value. One of the Company's strengths
contributing to its successes is a strong management team, many of whom have
been with the Company for a number of years. The Committee believes that low
executive turnover has been instrumental to the Company's success, and that
the Company's compensation program has played a major role in limiting
executive turnover. The compensation program is designed to enable the Company
to attract, retain and reward capable employees who can contribute to the
continued success of the Company, principally by linking compensation with the
attainment of key business objectives. Equity participation and a strong
alignment to stockholders' interests are key elements of the Company's
compensation philosophy. Accordingly, the Company's executive compensation
program is designed to provide competitive compensation, support the Company's
strategic business goals and reflect the Company's performance.
The compensation program reflects the following principles:
o Compensation should encourage increased stockholder value.
o Compensation programs should support the short- and long-term
strategic business goals and objectives of the Company.
o Compensation programs should reflect and promote the
Company's values and reward individuals for outstanding
contributions toward business goals.
o Compensation programs should enable the Company to attract
and retain highly qualified professionals.
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<PAGE>
Pay Mix and Measurement
The Company's executive compensation is comprised of two components,
base salary and incentives, each of which is intended to serve the overall
compensation philosophy.
Base Salary
The Company's salary levels are intended to be consistent with
competitive pay practices and level of responsibility, with salary increases
reflecting competitive trends, the overall financial performance and resources
of the Company, general economic conditions as well as a number of factors
relating to the particular individual, including the performance of the
individual executive, and level of experience, ability and knowledge of the
job.
Incentives
Incentives consist of stock options and cash awards paid to
the Company's senior and middle management executives. Incentives awarded to
Mr. McKelvey are discussed under "Chief Executive Officer 1997 Compensation."
Cash incentive payments and stock option awards in 1997 to Mr. Treacy were
based on successful completion of a financing and expense control objectives
as set forth in the Company's 1996 annual plan. Mr. Taylor's bonus was based
on internet billings growth and internet traffic alliances. Mr. Collison's
bonus was based on objectives for completing acquisitions and management of
the relationship with the Company's primary lender. Mr. Camara's bonus was
based on new business goals. In 1997, other key executives were granted stock
options based on revenue, divisional or regional profit, client retention or
other preset objectives related to performance as set forth in the Company's
1996 annual plan.
The Committee strongly believes that the pay program should provide
employees with an opportunity to increase their ownership and potentially gain
financially from Company stock price increases. By this approach, the best
interests of stockholders, executives and employees will be closely aligned.
Therefore, executives and other employees are eligible to receive stock
options, giving them the right to purchase shares of Common Stock of the
Company at a specified price in the future. The grant of options is based
primarily on a key employee's potential contribution to the Company's growth
and profitability, based on the Committee's discretionary evaluation. Options
are granted at the prevailing market value of the Company's Common Stock and
will only have value if the Company's stock price increases. Generally, grants
of options vest over a period of time and executives must be employed by the
Company for such options to vest.
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<PAGE>
Chief Executive Officer 1997 Compensation
Pursuant to his employment agreement, the base salary for Andrew J.
McKelvey, the Company's CEO and Chairman of the Board, was $1,500,031 during
the Company's fiscal year ended December 31, 1997. Such base salary represents
a 120.5% increase over the previous year's salary. In 1997, Mr. McKelvey
prospectively waived his bonus. The employment agreement was entered into by
the Company as a recognition of Mr. McKelvey's services to the Company as well
as an acknowledgement of his stature in the industry.
The aggregate compensation paid to Mr. McKelvey was deemed
appropriate by the Compensation Committee considering the overall performance
of the Company and Mr. McKelvey.
Tax Effects
Section 162(m) of the Code generally limits to $1,000,000 the annual
income tax deduction for certain "non-performance based" compensation paid to
the chief executive officer or any of the four other highest paid offices of a
publicly held corporation. "Performance-based compensation" is not subject to
the deduction limitation if certain requirements are met. Based on the
transition rules set forth in the Code and the regulations promulgated
thereunder, compensation payable to Mr. McKelvey under his employment
agreement should be exempt from the non-deductibility provisions of Section
162(m) through the 1999 calendar year.
The Compensation Committee believes that linking executive
compensation to corporate performance results in a better alignment of
compensation with corporate business goals and stockholder value. The
Committee believes its compensation practices are directly tied to stockholder
returns and linked to the achievement of annual and longer-term financial and
operational results of the Company on behalf of the Company's stockholders. In
view of the Company's performance and achievement of goals and competitive
conditions, the Compensation Committee believes that compensation levels
during 1997 adequately reflect the Company's compensation goals and policies.
COMPENSATION COMMITTEE
John R. Gaulding
John Swann
Compensation Committee Interlocks and Insider Participation
On September 16, 1996, the Company's Board of Directors established a
Compensation Committee, which currently consists of Messrs. Gaulding and Swann
to
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recommend compensation for the Company's executives and to administer the
Company's stock option and other benefit plans. Prior to September 16, 1996,
all matters concerning executive officer compensation were addressed by the
entire Board of Directors. In January 1996 Mr. Gaulding and, in September
1996, Mr. Swann received, respectively, stock options to purchase 11,250
shares of Common Stock at an exercise price of $6.65 per share and $14.00 per
share, equal to the fair market value on the date of grant.
CERTAIN TRANSACTIONS
The Company has made advances to Messrs. McKelvey and Collison and
David A. Hosokawa, a Vice Chairman. The total gross amounts advanced to
Messrs. McKelvey, Hosokawa and Collison were $4,515,870, $123,659 and $6,954
in 1993, respectively; $9,206,681, $5,100 and $44,839 in 1994, respectively;
$612,509, $1,813 and $0 in 1995, respectively; and $4,537,159, $10,503 and $0
in 1996, respectively. Mr. McKelvey repaid $1,306,458 in 1993, $5,487,160 in
1994, $2,271,040 in 1995 and $1,577,157 in 1996. Mr. Hosokawa repaid $27,758
in 1994 and $0 in 1993, 1995 and 1996. Mr. Collison repaid $23,791 in 1993,
$6,614 in 1994, $4,550 in 1995 and $3,868 in 1996. Messrs. McKelvey, Hosokawa
and Collison repaid their loans to the Company in full in 1997.
Messrs. McKelvey, Eisele, Paul Camara and Collison have approximately
69.4%, 10%, 5% and 5% interests, respectively, in International Drive, L.P.,
the lessor of the Company's 48,000 square foot office in Mt. Olive, New
Jersey. This lease runs through December 1998 and the Company's rent for this
space is $46,200 per month. Mr. McKelvey has an 80% interest in 12800
Riverside Drive Corporation, the lessor of the Company's 15,802 square foot
office in North Hollywood, California. The Company has a month to month lease
and the Company's rent for this space is $16,000 per month. Mr. McKelvey has a
49% interest in TMP Development Company Inc., the lessor of the Company's
11,915 square foot office in Holliston, Massachusetts. This lease is month to
month and the Company's rent for this space is currently $16,200 per month.
Mr. McKelvey has a 49% interest in TPH & AJM, a partnership, the lessor of the
office occupied by Telephone Directory Advertising, Inc., an entity in which
the Company has a 48.92% interest. This lease runs through May 1999 and
Telephone Directory Advertising, Inc.'s rent for this space is currently
$9,955 per month.
On January 1, 1996, Cala H.R.C. Ltd., the Company's Canadian
recruitment advertising subsidiary, entered into a management agreement with
Cala Services Inc., a recruitment advertising company owned by Mr. Swann,
pursuant to which Cala H.R.C. Ltd. provides management services in exchange
for a percentage of the billings of Cala Services Inc. which is agreed to from
time to time. The agreement has no stated term but is terminable by either
party on 30 days' notice. For the year ended December 31, 1997, Cala Services
Inc. paid approximately $280,000 to the Company for management services.
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<PAGE>
For the year ended December 31, 1997, Mr. Gaulding received $51,250
for consulting services.
Other than the advances, the Company believes that all transactions
with the aforementioned directors and executive officers were made on terms no
less favorable to the Company than would have been obtained from unaffiliated
third parties and were approved or ratified by the entire Board, including
disinterested directors.
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<PAGE>
The Company's Performance
The Stock Price Performance Graph below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act or under the
Exchange Act, except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
[PERFORMANCE GRAPH]
12/13/96 12/31/96 12/31/97
TMP WORLDWIDE INC. 100.00 91.07 164.29
SIC CODE INDEX 100.00 94.93 136.82
NASDAQ MARKET INDEX 100.00 99.77 122.04
The above Graph compares the performance of the Company from December
12, 1996, the date that the Company's Common Stock commenced trading on the
Nasdaq National Market, through December 31, 1997, against the performance of
the Nasdaq National Market Index and the Company's Peer Group (SIC Code Index)
for the same period. The companies included in the Company's Peer Group are
Ariely Advertising Ltd., Catalina Marketing Corp., Cordiant Plc, Digital
Generation Systems, Inc., Food Court Entertainment Network, Inc., Greenstone
Roberts Advertising, Inc., Grey Advertising, Inc., Healthworld Corp.,
Interpublic Group of Companies, Inc., Lamar Advertising Co., Leap Group, Inc.,
Metromail Corp., Obie Media Corp., Omnicom Group, Inc., Princeton Video Image,
Saatchi & Saatchi plc, True North Communications and WPP Group plc.
PROPOSAL NO. 2 - AMENDMENTS TO STOCK OPTION PLAN
On December 12, 1997, the Compensation Committee of the Board of
Directors unanimously adopted, subject to stockholder approval, an amendment
to the Company's 1996 Stock Option Plan (the "Stock Option Plan") which would
increase the aggregate number of shares of Common Stock which may be issued
under the Stock Option Plan from 1,800,000 to 3,000,000 shares, all of which
would be available for the grant of either "incentive stock options," as
defined in Section 422 of the Code, or options which do not qualify as
incentive stock options (non-statutory stock options). The primary features of
the Stock Option Plan are summarized below. The full text of the Stock Option
Plan and the proposed amendment thereto are set forth in
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Appendix A to this Proxy Statement and the following discussion is qualified
by reference thereto.
The Board of Directors believes that approval of the amendment will
serve the best interests of the Company and its stockholders by permitting the
Company to continue to utilize stock options as a means to attract and retain
key employees and consultants who are in a position to contribute materially
to the successful conduct of the business and affairs of the Company and, in
addition, to stimulate in such individuals an increased desire to render
greater service to the Company and its subsidiaries. In addition, the
availability of shares for grant under the Stock Option Plan is important in
that it provides the Company an alternative or additional means of
compensating key employees and consultants. As of December 11, 1997, there
were 424,001 shares available for future grants under the Stock Option Plan.
On December 12, 1997, options to purchase an aggregate 530,000 shares were
granted subject to stockholder approval to amend the Stock Option Plan.
The Stock Option Plan is currently administered by a Committee (the
"Committee") which consists of the Board of Directors or, at the option of the
Board, at least two non-employee directors, which has the authority to select
optionees, designate the number of shares to be covered by each option and,
subject to certain restrictions, specify other terms of the options. Options
may be granted from time to time through January 3, 2006, the termination date
of the Stock Option Plan, to present and future officers and employees of the
Company or an affiliate of the Company (an "Affiliate"), within the meaning of
Section 424(f) of the Code, and to consultants of the Company or an Affiliate
who are not employees. All employees are eligible to participate in the Stock
Option Plan and as of March 20, 1998, approximately 1,934 employees were
participating in the Stock Option Plan.
The Stock Option Plan, as currently in effect, permits the granting
of options to purchase up to an aggregate of 1,800,000 shares of Common Stock
of the Company. Under the Stock Option Plan, the Company may grant incentive
stock options and non-statutory options. Under the Stock Option Plan, the
exercise price for shares covered by an incentive stock option may not be less
than 100% of the fair market value (as defined in the Stock Option Plan) of
the Common Stock on the date of grant (110% in the case of a grant to an
employee who owns stock possessing more than 10% of the combined voting power
of all classes of stock of the Company or any affiliate entitled to vote (a
"10% Stockholder")). The exercise price for shares covered by a non-statutory
option may not be less than the par value of the Common Stock at the date of
grant. All options must expire no later than ten years (five years in the case
of an incentive stock option granted to a 10% Stockholder) from the date of
grant. The Committee has the discretion to determine the period required for
full exercisability of stock options. In no event, however, can the Committee
shorten such period to less than six months.
Any option outstanding after January 3, 2006 will remain in effect
until it is exercised, terminates or expires in accordance with its terms. The
Stock Option
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Plan provides that the term of an option shall be ten years from the date of
grant. The Stock Option Plan also provides that, following termination of
employment, (i) if an optionee's employment is terminated for any reason other
than the optionee's death, disability, retirement after age 65 or voluntary
retirement with the consent of the Company before age 65, the optionee has 90
days, or such longer period as the Committee may at its sole discretion
determine, to exercise his option to the extent exercisable on the date of
termination of employment, and (ii) if an optionee shall cease to be employed
by the Company as the result of his death, disability, retirement after age 65
or voluntary retirement with the consent of the Company before age 65, the
optionee has three years to exercise his option to the extent exercisable on
the date he ceased to be employed. The Stock Option Plan also provides that
options granted under the Stock Option Plan will be adjusted to reflect
changes in the Company's capitalization and to reflect certain mergers or
other combinations of the Company.
As of March 20, 1998, options to purchase an aggregate of 1,870,425
shares were outstanding under the Stock Option Plan (including 530,000 stock
options granted on December 12, 1997, subject to stockholder approval to amend
the Stock Option Plan). No current director or nominee for election as a
director received stock options under the Stock Option Plan. If the Proposal
is adopted, the stock options that would be granted to the Company's Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company are set forth below in the following table:
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STOCK OPTIONS TO BE GRANTED IF THE TMP 1996
EMPLOYEE STOCK OPTION PLAN IS AMENDED
Exercise Price Per
Name and Position Stock Option Number of Options
- ----------------- ------------------ -----------------
Andrew J. McKelvey, -- 0
Chairman of the Board and CEO
James J. Treacy, Chief (1) 5,000
Operating Officer and
Executive Vice President
- - Finance and Strategy
Jeffrey C. Taylor, (1) 15,000
Executive Vice President
- -Interactive
Thomas G. Collison, Vice (1) 5,000
Chairman and Secretary
Paul M. Camara, (1) 5,500
Executive Vice President -
Creative/Sales/Marketing
Executive Group (1) 41,769
Non-Executive Director -- 0
Group
Non-Executive Officer (1) 488,231
Employee Group
- ----------------
(1) The exercise price per stock option is $15.00, the closing price of
the Company's Common Stock on December 12, 1997, the date of grant.
The options are exercisable in equal annual installments of 25%
commencing December 31, 1998.
Federal Income Tax Consequences
Following is a summary of the salient Federal income tax consequences
associated with options granted under the Stock Option Plan.
An optionee will not realize taxable income upon the grant of an
option. In general, the holder of a non-statutory option will recognize
ordinary income when the option is exercised equal to the excess of the value
of the stock over the exercise
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price (i.e., the option spread), and the Company receives a corresponding
deduction in the same amount subject to the deduction limitations of Section
162(m) of the Code, as discussed below. If the optionee is subject to the
six-month restrictions on sale of Common Stock under Section 16(b) of the
Exchange Act, the optionee generally recognizes ordinary income on the date
the restrictions lapse, unless an early income recognition election is made.
Upon a later sale of the stock, the optionee will realize capital gain or loss
equal to the difference between the selling price and the value of the stock
at the time the option was exercised (or, if later, the time ordinary income
was recognized with respect to the exercise). If the stock acquired upon the
exercise of a non-statutory option has been held for more than one year at the
time of its disposition, such gain or loss will be long-term capital gain or
loss.
The holder of an incentive stock option does not realize taxable
income upon exercise of the option, although the option spread is an
adjustment to taxable income that may result in alternative minimum tax for
the optionee (the adjustment, if any, is also added to the basis of the stock
for purposes of determining adjusted gain or loss under the alternative
minimum tax when the stock is sold). If the stock acquired upon exercise of
the incentive stock option is sold or otherwise disposed of within two years
from the incentive stock option grant date or within one year from the
exercise date, then, in general, gain realized on the sale is treated as
ordinary income to the extent of the option spread at the exercise date, and
the Company receives a corresponding deduction in the same amount subject to
the deduction limitations of Section 162(m) of the Code. Any remaining gain is
treated as short-term or long-term capital gain, depending on the holding
period. If the stock is held for at least two years from the grant date and
one year from the exercise date, then gain or loss realized upon the sale will
be long-term capital gain or loss and the Company will not be entitled to a
deduction.
Section 162(m) of the Code generally limits to $1,000,000 the annual
income tax deduction for certain "non-performance based" compensation paid to
the chief executive officer or any of the four other highest paid offices of a
publicly-held corporation. "Performance-based compensation" is not subject to
the deduction limitation if certain requirements are met. Accordingly, the
Stock Option Plan has been designed to ensure that compensation resulting from
the exercise of stock options can be fully deductible to the Company.
Vote Required
The affirmative vote of the holders of a majority of the aggregate
voting power of the Company's shares of Common Stock and Class B Common Stock
present or represented at the meeting, a quorum being present, is required for
the adoption of this proposal. Broker non-votes with respect to this matter
will be treated as neither a vote "for" or a vote "against" the matter,
although they will be counted in determining if a quorum is present. However,
abstentions will be considered in determining the
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number of votes required to attain a majority of the shares present or
represented at the meeting and entitled to vote. Accordingly, an abstention
from voting by a stockholder present in person or by proxy at the meeting has
the same legal effect as a vote "against" the matter because it represents a
share present or represented at the meeting and entitled to vote, thereby
increasing the number of affirmative votes required to approve this proposal.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST
INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR"
APPROVAL THEREOF.
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RELATIONSHIP WITH INDEPENDENT AUDITORS
BDO Seidman, LLP have been the independent auditors for the Company
since November 15, 1992 and will serve in that capacity for the 1998 fiscal
year. A representative of BDO Seidman, LLP will be present at the Annual
Meeting and will have an opportunity to make a statement if he desires to do
so, and will respond to appropriate questions from stockholders.
STOCKHOLDER PROPOSALS
All stockholder proposals which are intended to be presented at the
1998 Annual Meeting of Stockholders of the Company must be received by the
Company no later than January 4, 1998 for inclusion in the Board of Directors'
proxy statement and form of proxy relating to that meeting.
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at
the Annual Meeting. However, if any other business properly comes before the
Annual Meeting, it is the intention of the persons named in the enclosed proxy
to vote on such matters in accordance with their best judgment.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend
the Annual Meeting, please sign the proxy and return it in the enclosed
envelope.
By Order of the Board of Directors
Thomas G. Collison
Secretary
Dated: April 27, 1998
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WILL BE SENT
WITHOUT CHARGE TO ANY STOCKHOLDER REQUESTING IT IN WRITING FROM: TMP WORLDWIDE
INC., ATTENTION: MYRON F. OLESNYCKYJ, ESQ., 1633 BROADWAY, 33rd FLOOR, NEW
YORK, NEW YORK 10019.
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Appendix A
Below is the text of the Company's 1996 Stock Option Plan as proposed
to be amended pursuant to Proposal No. 2. Proposed language to the 1996 Stock
Option Plan is set forth in bold print and the language to be deleted is set
forth in brackets.
TMP WORLDWIDE INC.
1996 STOCK OPTION PLAN
I. Purpose. The purpose of the TMP Worldwide Inc. 1996 Stock Option
Plan (the "Plan") is to enable TMP Worldwide Inc. (the "Company") and its
stockholders to secure the benefit of the incentives inherent in common stock
ownership by present and future officers and other employees and personnel of,
and consultants to, the Company and its affiliates. The Board of Directors of
the Company (the "Board") believes that the granting of options under the Plan
will foster the Company's ability to attract, retain and motivate individuals
who will be largely responsible for the continued profitability and growth of
the Company and its affiliates.
II. Stock Subject to the Plan. Subject to the provisions of Section
VI(a) hereof, the Company may issue and sell a total of 3,000,000 [1,800,000]
shares of its common stock, $.01 par value (the "Common Stock"), pursuant to
the Plan. Such shares may be either authorized and unissued or held by the
Company in its treasury. The maximum option grant which may be made in any
calendar year to any individual shall not cover more than 150,000 shares. New
options may be granted under the Plan with respect to shares of Common Stock
which are covered by the unexercised portion of an option which terminates or
expires by its terms, by cancellation or otherwise.
III. Administration. The Plan will be administered by a committee
(the "Committee") consisting of the Board, or at the option of the Board, at
least two directors appointed by and serving at the pleasure of the Board. If
the Board does not act as the Committee, the members of the Committee shall be
"non-employee directors" within the meaning and for the purposes of Rule
16b-3. Subject to the provisions of the Plan, the Committee, acting in its
sole and absolute discretion, will have full power and authority to grant
options under the Plan, to interpret the provisions of the Plan, to fix and
interpret the provisions of option agreements made under the Plan, to
supervise the administration of the Plan, and to take such other action as may
be necessary or desirable in order to carry out the provisions of the Plan. A
majority of the members of the Committee will constitute a quorum. The
Committee may act by the vote of a majority of its members present at a
meeting at which there is a quorum or by unanimous written consent. The
decision of the Committee as to any disputed question, including questions of
construction, interpretation and administration, will be final and conclusive
on all persons. The Committee will keep a record of its proceedings and acts
and will keep or cause to be kept such books and records as may be necessary
in connection with the proper administration of the Plan. The Company
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<PAGE>
shall indemnify and hold harmless each member of the Committee and any
employee or director of the Company or of an affiliate to whom any duty or
power relating to the administration or interpretation of the Plan is
delegated from and against any loss, cost, liability (including any sum paid
in settlement of a claim with the approval of the Board), damage and expense
(including legal and other expenses incident thereto) arising out of or
incurred in connection with the Plan, unless and except to the extent
attributable to such person's fraud or wilful misconduct.
IV. Eligibility. Options may be granted under the Plan to present and
future officers and other employees (including but not limited to directors
who are employees) or other personnel of the Company or an affiliate of the
Company within the meaning of Rule 405 under the Securities Act of 1933, as
amended (an "Affiliate"), and to consultants to the Company or an Affiliate
who are not employees. Options may not be granted to directors of the Company
or an Affiliate who are not also employees of or consultants to the Company
and/or an Affiliate. Subject to the provisions of the Plan, the Committee may
from time to time select the persons to whom options will be granted, and will
fix the number of shares covered by each such option and establish the terms
and conditions thereof (including, without limitation, the exercise price,
restrictions on the exercisability of the option and/or on the disposition of
the shares of Common Stock issued upon exercise thereof, and whether or not
the option is to be treated as an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (an "Incentive
Stock Option").
V. Terms and Conditions of Options. Each option granted under the
Plan will be evidenced by a written agreement in a form approved by the
Committee. Subject to the provisions hereof, each such option will be subject
to the terms and conditions set forth in this paragraph and such additional
terms and conditions not inconsistent with the Plan as the Committee deems
appropriate.
a. Option Exercise Price. In the case of an option which is
not treated as an Incentive Stock Option, the exercise price per
share may not be less than the par value of a share of Common Stock
on the date the Option is granted; and in the case of an Incentive
Stock Option, the exercise price per share may not be less than the
fair market value of a share of Common Stock on the date the option
is granted (110% in the case of an optionee who, at the time the
option is granted, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of an
affiliate (a "ten percent shareholder")). For purposes hereof, the
fair market value of a share of Common Stock on any date shall be
equal to the closing price per share as published by a national
securities exchange on which shares of the Common Stock are traded on
such date or, if there is no sale of Common Stock on such date, the
average of the bid and asked prices on such exchange at the close of
trading on such date, or if shares of the Common Stock are not listed
on a national securities exchange on such date, the closing price or,
if none, the average of the bid and asked prices in the over the
counter market at the close of trading on such date, or if the Common
Stock is not traded on a national securities exchange or the
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over the counter market, the fair market value of a share of the
Common Stock on such date as determined in good faith by the
Committee.
b. Option Period. The period during which an option may be
exercised will be fixed by the Committee and will not exceed ten
years from the date the option is granted (five years in the case of
an Incentive Stock Option granted to a "ten percent shareholder").
c. Exercise of Options.
(1) General. No option will become exercisable
unless the person to whom the option is granted remains in
the continuous employ or service of the Company or an
Affiliate for at least six months (or for such other period
as the Committee may designate) from the date the option is
granted. The Committee will determine and will set forth in
the option agreement any vesting or other restrictions on
the exercisability of the option, subject to earlier
termination of the option as may be required hereunder, and
any vesting or other restrictions on shares of Common Stock
acquired pursuant to the exercise of the option. All or part
of the exercisable portion of an option may be exercised at
any time during the option period. An option may be
exercised by transmitting to the Company, in a manner
prescribed or approved by the Committee, (1) a written
notice specifying the number of shares to be purchased, and
(2) payment of the exercise price, together with the amount,
if any, deemed necessary by the Company to enable the
Company or an Affiliate, as the case may be, to satisfy its
income tax withholding obligations with respect to such
exercise unless other arrangements acceptable to the Company
are made with respect to the satisfaction of such
withholding obligations. Subject to the provisions of
applicable law, the Company may agree to retain and withhold
a number of shares of Common Stock sufficient to reimburse
the Company for all or part of its withholding tax
obligation.
(2) Stock Registration Required. Notwithstanding
anything in the Plan to the contrary, no option may be
exercised unless and until a registration statement covering
the shares of Common Stock issuable upon exercise of options
granted hereunder has been filed with, and declared
effective by, the Securities and Exchange Commission under
the Securities Act of 1933, as amended. Nothing in this Plan
shall be deemed to obligate the Company to effect any such
registration.
d. Payment of Exercise Price. The purchase price of shares
of Common Stock acquired pursuant to the exercise of an option
granted under the Plan may be paid in cash and/or such other form of
payment as may be permitted under the option agreement, including,
without limitation, previously-owned shares of Common Stock. The
Committee may permit the
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payment of all or a portion of the purchase price in installments
(together with interest) over a period of not more than five years.
e. Rights as a Stockholder. No shares of Common Stock will
be issued in respect of the exercise of an option granted under the
Plan until full payment therefor has been made (and/or provided for
if all or a portion of the purchase price is being paid in
installments). The holder of an option will have no rights as a
stockholder with respect to any shares covered by an option until the
date a stock certificate for such shares is issued to him or her.
Except as otherwise specifically provided herein, no adjustments
shall be made for dividends or distributions of other rights for
which the record date is prior to the date such stock certificate is
issued.
f. Nontransferability of Options. No option shall be
assignable or transferrable except upon the optionee's death to a
beneficiary designated by the optionee in accordance with procedures
established by the Committee or, if no designated beneficiary shall
survive the optionee, pursuant to the optionee's will or by the
applicable laws of descent and distribution. During an optionee's
lifetime, options may be exercised only by the optionee or the
optionee's guardian or legal representative.
g. Termination of Employment or Other Service. If an
optionee ceases to be employed by or to perform services for the
Company and any Affiliate, then, unless terminated sooner under the
provisions hereof or under the provisions of the optionee's option
agreement, and unless determined otherwise by the Committee acting in
its sole discretion, (i) if such termination of employment or service
occurs by reason of the optionee's death, disability, retirement
after age 65 or voluntary retirement with the consent of the Company
before age 65, then the optionee's outstanding options will be fully
vested and may be exercised within three years from the date of the
termination of employment or service, and, at the end of such
three-year period, any unexercised outstanding options will
terminate; and (ii) if the optionee's employment or service is
terminated for any reason other than the optionee's death,
disability, retirement after age 65 or voluntary retirement with the
consent of the Company before age 65, then the optionee's outstanding
options, to the extent then otherwise vested and exercisable, may be
exercised within ninety days from the date of such termination of
employment or service and, at the end of such ninety-day period, any
unexercised vested and outstanding options will terminate, and the
optionee's nonvested outstanding options will terminate upon the
optionee's termination of employment or service. Solely for purposes
of the Plan, the transfer of an employee from the employ of the
Company to an Affiliate, or vice-versa, or from one Affiliate to
another shall not be deemed a termination of employment.
h. Other Provisions. The Committee may impose such other
conditions with respect to the exercise of options, including,
without limitation, any
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conditions relating to the application of federal or state
securities laws, as it may deem necessary or advisable. In the case
of an Incentive Stock Option, at the time the option is granted the
aggregate fair market value (determined at the time of grant) of the
shares of Common Stock with respect to which the Incentive Stock
Option is exercisable for the first time by the optionee during any
calendar year may not exceed $100,000.
VI. Capital Changes, Reorganization, Sale.
a. Adjustments Upon Changes in Capitalization. The aggregate
number and class of shares for which options may be granted under the
Plan, the maximum number of shares for which options may be granted
to any individual in any calendar year, the number and class of
shares covered by each outstanding option and the exercise price per
share shall all be adjusted proportionately or as otherwise
appropriate to reflect any increase or decrease in the number of
issued shares of Common Stock resulting from a split-up or
consolidation of shares or any like capital adjustment, or the
payment of any stock dividend, and/or to reflect a change in the
character or class of shares covered by the Plan arising from a
readjustment or recapitalization of the Company's capital stock.
b. Cash, Stock or Other Property for Stock. Except as
provided in Section VI(c) below or as otherwise expressly provided in
the optionee's option agreement, upon merger (other than a merger of
the Company in which the holders of Common Stock immediately prior to
the merger have the same proportionate ownership of common stock in
the surviving corporation immediately after the merger),
consolidation, acquisition of property or stock, separation,
reorganization (other than a mere reincorporation or the creation of
a holding company) or liquidation of the Company, as a result of
which the stockholders of the Company receive cash, stock or other
property in exchange for or in connection with their shares of Common
Stock, any option granted hereunder shall terminate, but the optionee
shall have the right immediately prior to any such merger,
consolidation, acquisition of property or stock, separation,
reorganization or liquidation to exercise his or her option in whole
or in part to the extent permitted by the option agreement, and, if
the Committee in its sole discretion shall determine, may exercise
the option whether or not the vesting requirements set forth in the
option agreement have been satisfied.
c. Conversion of Options on Stock for Stock Exchange. If the
stockholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their shares of Common
Stock in any transaction involving a merger (other than a merger of
the Company in which the holders of Common Stock immediately prior to
the merger have the same proportionate ownership of common stock in
the surviving corporation immediately after the merger),
consolidation, acquisition of property or stock,
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separation or reorganization (other than a mere reincorporation or
the creation of a holding company), all options granted hereunder
shall be converted into options to purchase shares of Exchange Stock
unless the Company and the corporation issuing the Exchange Stock,
in their sole discretion, determine that any or all such options
granted hereunder shall not be converted into options to purchase
shares of Exchange Stock but instead shall terminate in accordance
with the provisions of subparagraph (b) above. The amount and price
of converted options shall be determined by adjusting the amount and
price of the options granted hereunder in the same proportion as
used for determining the number of shares of Exchange Stock the
holders of the Common Stock receive in such merger, consolidation,
acquisition of property or stock, separation or reorganization. The
Committee shall determine in its sole discretion if the converted
options shall be fully vested whether or not the vesting
requirements set forth in the option agreement have been satisfied.
d. Fractional Shares. In the event of any adjustment in the
number of shares covered by any option pursuant to the provisions
hereof, any fractional shares resulting from such adjustment will be
disregarded, and each such option will cover only the number of full
shares resulting from the adjustment.
e. Determination of Board to be Final. All adjustments under
this Section VI shall be made by the Board, and its determination as
to what adjustments shall be made, and the extent thereof, shall be
final, binding and conclusive.
VII. Amendment and Termination. The Board may amend or terminate the
Plan, provided, however, that no such action may affect adversely any
outstanding option without the written consent of the optionee. Except as
otherwise provided in Section VI, any amendment which would increase the
aggregate number of shares of Common Stock as to which options may be granted
under the Plan, increase the number of shares with respect to which options
may be granted to any individual in any calendar year, materially increase the
benefits under the Plan, or modify the class of persons eligible to receive
options under the Plan shall be subject to the approval of the Company's
stockholders. The Committee may amend the terms of any stock option agreement
made hereunder at any time and from time to time (e.g., to accelerate vesting
upon a change of control), provided, however, that any amendment which would
adversely affect the rights of the optionee may not be made without the
optionee's prior written consent.
VIII. No Rights Conferred. Nothing contained herein will be deemed to
give any individual any right to receive an option under the Plan or to be
retained in the employ or service of the Company or any Affiliate.
IX. Governing Law. The Plan and each option agreement shall be
governed by the laws of the State of Delaware.
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X. Decisions and Determinations of Committee to be Final. Any
decision or determination made by the Board pursuant to the provisions hereof
and, except to the extent rights or powers under this Plan are reserved
specifically to the discretion of the Board, all decisions and determinations
of the Committee are final and binding.
XI. Term of the Plan. The Plan shall be effective as of the date on
which it is adopted by the Board, subject to the approval of the stockholders
of the Company within one year from the date of adoption by the Board. The
Plan will terminate on the date ten years after the date of adoption, unless
sooner terminated by the Board. The rights of optionees under options
outstanding at the time of the termination of the Plan shall not be affected
solely by reason of the termination of the Plan and shall continue in
accordance with the terms of the option (as then in effect or thereafter
amended) and the Plan.
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TMP WORLDWIDE INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby appoints Andrew J. McKelvey and Thomas Collison,
and each of them, with full power of substitution, as proxies to vote on behalf
of the undersigned all shares which the undersigned may be entitled to vote at
the Annual Meeting of Stockholders of the Company to be held at the offices of
Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New York 10103 at 11:00
A.M. on Wednesday, May 27, 1998, and at any adjournments thereof, with all
powers the undersigned would possess if personally present, upon the matters set
forth in the Notice of Annual Meeting and Proxy Statement, as directed on the
reverse side hereof.
Any proxy heretofore given by the undersigned with respect to such
shares is hereby revoked. Receipt of the Notice of Annual Meeting and Proxy
Statement is hereby acknowledged.
(To be Completed, Signed and Dated on Reverse Side)
TMP WORLDWIDE INC,
P.O. BOX 11281
NEW YORK, N.Y. 10203-0281
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1. ELECTION OF DIRECTORS
FOR all nominees WITHHOLD AUTHORITY to vote *EXCEPTIONS
listed below / / for all nominees listed below / / / /
Nominees: Andrew J. McKelvey, George R. Eisele, John R. Gaulding, Michael
Kaufman, John Swann
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided below.)
*Exceptions ____________________________________________________________________
2. APPROVAL OF AMENDMENT TO THE COMPANY'S 1996 STOCK OPTION PLAN.
FOR / / AGAINST / / ABSTAIN / /
3. Transaction of such other business as may properly come before the meeting
and any adjournment thereof.
Note: This proxy will be voted as specified. If no specification is made, it
will be voted FOR all nominees in proposal 1 and FOR proposal 2. The proxies are
authorized to vote in their discretion with respect to other matters which may
come before the meeting.
Change of Address and
or Comments Mark Here / /
NOTE: Please mark, date and sign
exactly as name appears hereon,
including designation as executor,
trustee, etc., if applicable. A
corporation must sign in its name by
the President or other authorized
officer. All co-owners must sign.
Dated: _______________________, 1998
____________________________________
(Signature)
____________________________________
(Signature if held jointly)
Please return the proxy card promptly Votes must be indicated (X) in Black
using the enclosed envelope. or Blue ink. /X/
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