<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
AHL SERVICES, 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:
<PAGE> 2
(AHL SERVICES, INC. LOGO)
March 31, 1999
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of Shareholders
of AHL Services, Inc. to be held on May 13, 1999 at the Crowne Plaza, Atlanta
Airport, 1325 Virginia Avenue, Atlanta, Georgia 30344. The meeting will begin
promptly at 9:00 a.m., local time, and we hope that it will be possible for you
to attend.
The items of business are listed in the following Notice of Annual Meeting
and are more fully addressed in the Proxy Statement provided herewith.
Please date, sign, and return your proxy card in the enclosed envelope at
your convenience to assure that your shares will be represented and voted at the
Annual Meeting even if you cannot attend. If you attend the Annual Meeting, you
may vote your shares in person even though you have previously signed and
returned your proxy.
On behalf of your Board of Directors, thank you for your continued support
and interest in AHL Services, Inc.
Sincerely,
/s/ FRANK A. ARGENBRIGHT, JR.
Frank A. Argenbright, Jr.
Chairman of the Board and
Co-Chief Executive Officer
<PAGE> 3
(AHL SERVICES, INC. LOGO)
AHL SERVICES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 13, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of AHL
Services, Inc. will be held at the Crown Plaza, Atlanta Airport, 1325 Virginia
Avenue, Atlanta, Georgia 30344, on May 13, 1999 at 9:00 a.m., local time, for
the following purposes:
(i) To elect two directors to serve until the 2002 Annual Meeting of
Shareholders;
(ii) To consider and act upon a proposal to amend and restate the
Company's Employee Stock Purchase Plan USA (the "Stock Purchase Plan")
primarily to (a) qualify the Stock Purchase Plan as an "employee stock
purchase plan" within the meaning of Section 423 of the Internal Revenue
Code of 1986, as amended, and (b) permit employees to purchase common stock
at ninety percent (90%) of the market price;
(iii) To ratify the appointment of Arthur Andersen LLP as independent
auditors; and
(iv) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only the holders of record of common stock of the Company at the close of
business on March 23, 1999 are entitled to notice of and to vote at the Annual
Meeting of Shareholders and any adjournment thereof. A list of shareholders as
of the close of business on March 23, 1999 will be available at the Annual
Meeting of Shareholders for examination by any shareholder, his or her agent, or
his or her attorney.
Your attention is directed to the Proxy Statement provided with this
Notice.
By Order of the Board of Directors,
/s/ DAVID L. GAMSEY
David L. Gamsey
Chief Financial Officer
and Secretary
Atlanta, Georgia
March 31, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE,
WHICH DOES NOT REQUIRE ANY POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND
THE MEETING, YOU MAY REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE> 4
AHL SERVICES, INC.
3353 PEACHTREE ROAD, N.E.
SUITE 1120
ATLANTA, GEORGIA 30326
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 13, 1999
The 1999 Annual Meeting of Shareholders (the "Annual Meeting") of AHL
Services, Inc. (the "Company") will be held on May 13, 1999, at the Crowne
Plaza, Atlanta Airport, 1325 Virginia Avenue, Atlanta, Georgia 30344, beginning
promptly at 9:00 a.m. local time. The enclosed form of proxy is solicited by the
Board of Directors of the Company. It is anticipated that this Proxy Statement
and the accompanying proxy will first be mailed to holders of common stock of
the Company on or about April 2, 1999.
ABOUT THE MEETING
WHY AM I RECEIVING THIS PROXY STATEMENT AND PROXY CARD?
You are receiving a Proxy Statement and proxy card because you own shares
of common stock in AHL Services, Inc. This Proxy Statement describes issues on
which the Company would like you, as a shareholder, to vote. It also gives you
information on these issues so that you can make an informed decision.
When you sign the proxy card, you appoint David L. Gamsey and Edwin R.
Mellett as your representatives at the meeting. Mr. Gamsey and Mr. Mellett will
vote your shares, as you have instructed them on the proxy card, at the meeting.
This way, your shares will be voted whether or not you attend the Annual
Meeting. Even if you plan to attend the meeting, it is a good idea to complete,
sign and return your proxy card in advance of the meeting in case your plans
change.
If an issue comes up for vote at the meeting that is not on the proxy card,
Mr. Gamsey and Mr. Mellett will vote your shares, under your proxy, in
accordance with their best judgment.
WHAT AM I VOTING ON?
You are being asked to vote on (1) the election of two directors, (2) the
Amended and Restated Employee Stock Purchase Plan USA (the "Stock Purchase
Plan"), and (3) the ratification of the appointment of Arthur Andersen LLP as
the Company's independent auditors. No cumulative voting rights are authorized
and dissenters' rights are not applicable to these matters.
WHO IS ENTITLED TO VOTE?
Shareholders as of the close of business on March 23, 1999 (the "Record
Date") are entitled to vote. Each share of common stock is entitled to one vote.
HOW DO I VOTE?
You may vote by mail. You do this by signing your proxy card and mailing
it in the enclosed, prepaid and addressed envelope. If you mark your voting
instructions on the proxy card, your shares will be voted as you instruct. If
you return a signed card but do not provide voting instructions, your shares
will be voted for the two named director nominees, for the Stock Purchase Plan
and for the ratification of the appointment of the independent auditors.
You may vote in person at the meeting. Written ballots will be passed out
to anyone who wants to vote at the meeting. If you hold your shares in "street
name" (through a broker or other nominee), you must request a legal proxy from
your stockbroker in order to vote at the meeting.
<PAGE> 5
HOW MANY VOTES DO YOU NEED TO HOLD THE MEETING?
Shares are counted as present at the meeting if the shareholder either is
present and votes in person at the meeting or has properly submitted a proxy
card.
As of March 23, 1999, 17,381,192 shares of the Company's common stock were
issued and outstanding. A majority of the Company's outstanding shares as of the
Record Date, equal to 8,690,597 shares, must be present at the meeting either in
person or by proxy in order to hold the meeting and conduct business. This is
called a quorum.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
It means that you have multiple accounts at the transfer agent and/or with
brokers. Please sign and return all proxy cards to ensure that all your shares
are voted. You may wish to consolidate as many of your transfer agent or
brokerage accounts as possible under the same name and address for better
customer service.
WHAT IF I CHANGE MY MIND AFTER I RETURN MY PROXY?
You may revoke your proxy and change your vote at any time before the polls
close at the meeting. You may do this by:
- sending written notice to the Corporate Secretary at 3353 Peachtree Road,
N.E., Suite 1120, Atlanta, Georgia 30326;
- signing another proxy with a later date; or
- voting again at the meeting.
WILL MY SHARES BE VOTED IF I DO NOT SIGN AND RETURN MY PROXY CARD?
If your shares are held in street name, your brokerage firm may vote your
shares under certain circumstances. These circumstances include certain
"routine" matters, such as the election of directors. Therefore, if you do not
vote your proxy, your brokerage firm may either vote your shares on routine
matters, or leave your shares unvoted. When a brokerage firm votes its
customers' unvoted shares on routine matters, these shares are counted for
purposes of establishing a quorum to conduct business at the meeting.
A brokerage firm cannot vote customers' shares on non-routine matters.
Therefore, if your shares are held in street name and you do not vote your
proxy, your shares will not be voted on non-routine matters and will not be
counted in determining the number of shares necessary for approval. Shares
represented by such "broker non-votes" will, however, be counted in determining
whether there is a quorum.
HOW MANY VOTES MUST THE NOMINEES FOR ELECTION OF DIRECTOR RECEIVE TO BE ELECTED?
The two nominees receiving the highest number of affirmative votes will be
elected as directors. This number is called a plurality.
WHAT HAPPENS IF EITHER NOMINEE IS UNABLE TO STAND FOR RE-ELECTION?
The Board of Directors may, by resolution, provide for a lesser number of
directors or designate a substitute nominee. In the latter event, shares
represented by proxies may be voted for a substitute nominee. Proxies cannot be
voted for more than two nominees.
HOW MANY VOTES MUST THE STOCK PURCHASE PLAN RECEIVE TO PASS?
In order to pass, the Stock Purchase Plan must receive a greater number of
votes cast in favor of the matter than the number of votes cast opposing the
matter.
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<PAGE> 6
HOW MANY VOTES MUST THE RATIFICATION OF THE APPOINTMENT OF AUDITORS RECEIVE TO
PASS?
In order to pass, the ratification of the appointment of the independent
auditors must receive a greater number of votes cast in favor of the matter than
the number of votes cast opposing the matter.
HOW MAY I VOTE?
Election of Directors. You may vote "FOR" or you may "WITHHOLD AUTHORITY"
on voting for any of the nominees. A properly executed proxy marked "WITHHOLD
AUTHORITY" will not be voted, although it will be counted for purposes of
determining whether there is a quorum. If you just sign your proxy card with no
further instructions, your shares will be counted as a vote "FOR" the nominees
for director.
Stock Purchase Plan. You may vote "FOR" or you may "WITHHOLD AUTHORITY" on
voting for the Stock Purchase Plan. A properly executed proxy marked "WITHHOLD
AUTHORITY" will not be voted, although it will be counted for purposes of
determining whether there is a quorum. If you just sign your proxy card with no
further instructions, your shares will be counted as a vote "FOR" the Stock
Purchase Plan.
Ratification of the Auditors. You may vote "FOR" or you may "WITHHOLD
AUTHORITY" on voting for the ratification of the appointment of the independent
auditors. A properly executed proxy marked "WITHHOLD AUTHORITY" will not be
voted, although it will be counted for purposes of determining whether there is
a quorum. If you just sign your proxy card with no further instructions, your
shares will be counted as a vote "FOR" the ratification of the appointment of
the independent auditors.
IS MY VOTE CONFIDENTIAL?
Yes. Only the inspector of elections, the Corporate Trust Group at First
Union National Bank Shareholder Services, and certain employees will have access
to your proxy card. They will tabulate and certify the vote. All comments will
remain confidential, unless you ask that your name be disclosed.
WHERE DO I FIND THE VOTING RESULTS OF THE MEETING?
The Company will announce preliminary voting results at the meeting and
will publish the final results in its quarterly report on Form 10-Q for the
second quarter of 1999. The report is filed with the Securities and Exchange
Commission (the "SEC"), and you can get a copy by contacting the Corporate
Secretary at (404) 267-2222 or the SEC at (800) SEC-0330 for the location of the
nearest public reference room, or through the SEC's EDGAR system at www.sec.gov.
ELECTION OF DIRECTORS
Under our Articles of Incorporation and Bylaws, the Board of Directors
determines the number of directors on the Board. The Bylaws divide the Board
into three classes with the directors in each class serving a term of three
years.
There are two directors, Edwin C. "Skip" Gage and Robert F. McCullough,
whose terms expire at the Annual Meeting. Mr. Gage and Mr. McCullough have been
nominated to stand for reelection as directors at the Annual Meeting to serve
until the 2002 annual shareholders' meeting. In addition to Mr. Gage and Mr.
McCullough, there are three other directors continuing to serve on the Board,
whose terms expire in 2000 and 2001.
Except as otherwise provided herein, the proxy cannot be voted for the
election of a person to fill a directorship for which no nominee is named in
this Proxy Statement. The Board has no reason to believe that either nominee for
the office of director will be unavailable for election as a director. However,
if at the time of the Annual Meeting any nominee should be unable to serve or,
for good cause, will not serve, the persons named in the proxy will vote as
recommended by the Board to elect a substitute nominee recommended by the Board.
In no event, however, can a proxy be voted to elect more than two directors.
3
<PAGE> 7
The following list sets forth the incumbent directors and the name of the
nominees for reelection to the Board to serve until the annual meeting of
shareholders in 2002, or until their successors are duly elected and qualified.
Such list also contains, as to the nominees and incumbent directors, certain
information that has been furnished by the respective individuals.
NOMINEES FOR ELECTION -- TERM EXPIRING 1999
Edwin C. "Skip" Gage has been a director of the Company since July 1998. He
has been Chairman and Chief Executive Officer of Gage Marketing Group, LLC since
1992. Prior thereto, Mr. Gage served in various capacities at Carlson Companies
Inc. from 1977 to 1992, most recently as President and Chief Executive Officer.
Mr. Gage is a member of the board of directors of Fingerhut Companies Inc. and
SuperValu Inc. Mr. Gage is 58 years old.
Robert F. McCullough has been a director of the Company since consummation
of its initial public offering in March 1997. Mr. McCullough has been Chief
Financial Officer and a member of the board of directors of AMVESCAP PLC
(formerly AMVESCO PLC and INVESCO PLC) since April 1996. He was a partner of
Arthur Andersen LLP from 1987 until March 1996. Mr. McCullough is 56 years old.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EDWIN C. "SKIP" GAGE AND ROBERT
F. MCCULLOUGH TO HOLD OFFICE UNTIL THE ANNUAL MEETING OF SHAREHOLDERS IN 2002 OR
UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED.
INCUMBENT DIRECTOR -- TERM EXPIRING 2000
Frank A. Argenbright, Jr. founded the Company in 1979 and has been its
Chairman and Chief Executive Officer since that time. Mr. Argenbright graduated
from the Owner/President Management Program at Harvard Business School in 1991.
Mr. Argenbright is 51 years old.
INCUMBENT DIRECTORS -- TERM EXPIRING 2001
Edwin R. Mellett has been Vice Chairman and Co-Chief Executive Officer of
the Company since December 1994 and served on the Company's Advisory Board
during 1994. From 1993 to 1994, he was a consultant and private investor. From
1984 to 1992, Mr. Mellett was Senior Vice President of The Coca-Cola Company,
serving also as President of Coca-Cola Northern Europe from 1990 to 1992 and
President of Coca-Cola USA from 1986 to 1988. From 1972 to 1984, Mr. Mellett was
President of the Food Services Division of PepsiCo. Mr. Mellett is 60 years old.
Hamish Leslie Melville has been a director of the Company since
consummation of its initial public offering in March 1997. Mr. Melville has been
a Managing Director of Credit Suisse First Boston (Europe) Ltd. since June 1998
and, prior thereto, was Chairman of Scottish Woodlands Limited from 1992 to June
1998. He was Chairman of Dunedin Fund Managers Limited from 1992 to 1995,
Chairman and Chief Executive Officer of Capel Cure Myers Capital Management from
1988 to 1991 and Founder and Chief Executive of Enskilda Securities from 1982 to
1987. Mr. Melville is a director of Fleming Mercantile Investment Trust PLC,
Mithras Investment Trust PLC, Old Mutual South Africa Trust plc, Persimmon plc,
and the Scottish Investment Trust PLC. Mr. Melville is 54 years old.
MEETINGS OF THE BOARD OF DIRECTORS
During 1998, the Board held four regular meetings. All of the directors
attended at least 75% of all board and committee meetings in 1998.
COMMITTEES OF THE BOARD OF DIRECTORS
Audit Committee. The Board of Directors has established an Audit Committee
(the "Audit Committee") that consists of Messrs. McCullough and Melville. Mr.
McCullough is chairman of the Audit Committee. The Audit Committee is
responsible for (a) recommending to the Board the firm to be employed as
independent auditors of the Company, (b) meeting with the Company's independent
auditors at least
4
<PAGE> 8
annually to (i) review with the independent auditor the Company's financial
statements and internal accounting controls and (ii) to review the plans and
results of the audit engagement, (c) approving the professional services
provided by the independent auditor, (d) reviewing the independence of the
independent auditor, (e) considering the range of audit and non-audit fees and
(f) reviewing the adequacy of the Company's internal accounting controls. During
1998, the Audit Committee held two meetings.
Compensation Committee. The Board of Directors has established a
Compensation Committee (the "Compensation Committee") that consists of Messrs.
McCullough and Melville. Mr. Melville is chairman of the Compensation Committee.
The Compensation Committee is responsible for, among other things, (a)
reviewing, approving, recommending and reporting to the Co-Chief Executive
Officers and the Board of Directors matters regarding the compensation of the
Company's Co-Chief Executive Officers and other key executives and compensation
levels or plans affecting the compensation of the Company's other employees and
(b) administering the Company's 1997 Stock Incentive Plan. During 1998, the
Compensation Committee held three meetings.
The Company does not have a nominating committee.
COMPENSATION OF DIRECTORS
The Company pays its independent directors $10,000 annually plus $1,000 for
each board meeting attended and $500 for each committee meeting attended. In
addition, directors are reimbursed for expenses incurred in connection with
attendance at board and committee meetings. On May 14, 1998, the Company granted
to each independent director options to purchase 5,000 shares of common stock at
an exercise price of $33.25 per share. These options were canceled and 5,000 new
options to purchase shares of common stock were granted to each independent
director on October 9, 1998 at an exercise price of $21.75 per share. See
"Executive Compensation -- Repricing of Options."
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN USA
Subject to shareholder approval, the Company has amended and restated the
Employee Stock Purchase Plan USA, originally adopted on July 29, 1997, primarily
to qualify the Stock Purchase Plan as an "employee stock purchase plan" within
the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code"), and to permit employees to purchase common stock pursuant to the Stock
Purchase Plan at 90% of the market price. The purpose of the Stock Purchase Plan
is to encourage stock ownership by eligible employees in the belief that such
ownership will increase the employees' interest in the success of the Company
and will provide an additional incentive for employees to remain in the employ
of the Company and its subsidiaries.
The following description of the Amended and Restated Employee Stock
Purchase Plan USA is a summary only and does not purport to be complete. The
summary assumes adoption of the Amended and Restated Employee Stock Purchase
Plan USA by the shareholders. The summary is qualified in its entirety by
reference to the Amended and Restated Employee Stock Purchase Plan USA, which is
attached hereto as Annex A.
To be eligible to participate in the Stock Purchase Plan, an employee must
have been employed by the Company, or by a designated subsidiary corporation at
least 50% of the total combined voting power of which is owned (directly or
indirectly) by the Company, for at least three calendar months and must be
regularly scheduled to work more than 20 hours each week. In addition, an
employee may not own, immediately after the right to purchase stock under the
Stock Purchase Plan is granted, 5% or more of the total combined voting power or
value of all of the Company's common stock.
Eligible employees may elect to participate in the Stock Purchase Plan for
a calendar quarter (a "Purchase Period") by properly completing and filing an
election form at any time during a designated period immediately preceding the
Purchase Period. A participation election shall be in effect until it is revoked
by the participant. An eligible employee shall authorize the Company to withhold
a minimum of $10.00 per pay
5
<PAGE> 9
period of his or her compensation during the Purchase Period, subject to a
maximum of $25,000 during any calendar year.
The Stock Purchase Plan is administered by the Company (the "Plan
Administrator"), except that certain powers are expressly granted to the
Compensation Committee.
On or about the 21st day of each month during the Purchase Period, unless a
participating employee has withdrawn all of the contributions credited to the
account (the "Account") established for him or her by the Plan Administrator,
the employee's payroll deductions automatically will be used to exercise an
"option" granted to the participant under the Stock Purchase Plan to purchase
from the Company shares of common stock. The Company currently intends to
purchase such shares of common stock in the open market. The purchase price for
shares of common stock under the Stock Purchase Plan will be 90% of the closing
sale price per share of common stock on the Nasdaq Stock Market on the date of
purchase.
A participant may amend his or her payroll deduction election form during a
Purchase Period to reduce or stop his or her payroll deductions. A participant
also has the right at any time on or before the last day of the Purchase Period
to withdraw the shares of common stock, in whole shares, and the cash balance
(without interest) credited to his or her Account. Alternatively, a participant
may elect in a withdrawal to receive cash in lieu of the shares of common stock
in his or her Account, in which case the Plan Administrator will sell such
shares on the open market and distribute to the participant the proceeds
thereof, net of transaction costs.
The Stock Purchase Plan may be amended from time to time by the Company's
Co-Chief Executive Officers, subject to the approval of the Company's
shareholders to the extent such approval is required by Section 423 of the Code,
the laws of the State of Georgia or the rules of the Nasdaq Stock Market or any
stock exchange on which the common stock is listed. The benefits that will be
received under the Stock Purchase Plan by specific employees or groups of
employees cannot be determined.
The Board has unanimously approved the Amended and Restated Employee Stock
Purchase Plan USA and has determined that the Stock Purchase Plan is in the best
interests of the Company and its shareholders.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN USA.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has audited the accounts of the Company and its
subsidiaries for 1998 and has been appointed by the Board of Directors to
continue in that capacity for the Company's year ending December 31, 1999,
subject to ratification by the shareholders at the Annual Meeting. Should this
firm be unable to perform the requested services for any reason or not be
ratified by the shareholders, the Board will appoint other independent auditors
to serve for the remainder of the year. A representative of Arthur Andersen LLP
will be present at the Annual Meeting, will have the opportunity to make a
statement and will be available to respond to appropriate questions.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF THE INDEPENDENT AUDITORS.
6
<PAGE> 10
COMMON STOCK OWNERSHIP BY MANAGEMENT
AND PRINCIPAL SHAREHOLDERS
The following table sets forth the beneficial ownership of shares of common
stock as of March 1, 1999 for (1) directors of the Company, (2) the Co-Chief
Executive Officers and each of the three most highly compensated executive
officers of the Company (collectively the "Named Executive Officers"), (3) the
directors and executive officers of the Company as a group and (4) each person
who is a shareholder of the Company holding more than a 5% interest in the
Company.
Unless otherwise indicated, the business address of each person listed is:
c/o AHL Services, Inc., Atlanta Financial Center, 3353 Peachtree Road, N.E.,
Suite 1120, North Tower, Atlanta, Georgia 30326.
<TABLE>
<CAPTION>
NUMBER OPTIONS
OF SHARES EXERCISABLE PERCENT OF
BENEFICIALLY WITHIN OUTSTANDING
NAME OWNED(1) 60 DAYS(2) SHARES(3)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS:
Frank A. Argenbright, Jr............................... 7,900,000(4) 37,500 45.7%
Edwin R. Mellett....................................... -- 313,750 1.8
Thomas J. Marano....................................... -- 178,750 1.0
Ernest Patterson....................................... -- 37,500 *
David L. Gamsey........................................ -- 44,000 *
Edwin C. "Skip" Gage................................... 216,742(5) -- 1.2
Robert F. McCullough................................... 1,000 3,750 *
Hamish Leslie Melville................................. 14,725 3,750 *
All executive officers & directors as a group (8
persons)............................................. 8,132,467 619,000 50.4
OTHER FIVE PERCENT SHAREHOLDER:
Tapir Investments (Bahamas) Ltd.(6).................... 1,500,000 -- 8.6
</TABLE>
- ---------------
* Less than 1.0%.
(1) Unless otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, the Company believes that each of
the shareholders named in this table has sole voting and investment power
with respect to the shares indicated as beneficially owned. This table is
based upon information supplied by executive officers, directors and
principal shareholders, and Schedules 13D and 13G (if any) filed with the
SEC.
(2) Represents shares that can be acquired through stock option exercises on or
prior to May 31, 1999.
(3) Based on an aggregate of 17,381,192 shares of common stock issued and
outstanding as of March 1, 1999. Assumes that all options beneficially owned
by the person are exercised. The total number of shares outstanding used in
calculating this percentage assumes that none of the options beneficially
owned by other persons are exercised.
(4) Includes (a) 663,660 shares beneficially owned by Argenbright Partners,
L.P., of which a limited liability company managed by Mr. Argenbright and
his spouse is the general partner, (b) 241,800 shares owned by a charitable
trust, of which Mr. Argenbright is sole trustee and (c) 2,500 shares owned
by Mr. Argenbright's spouse.
(5) Represents shares held by Gage Marketing Group, LLC, of which Mr. Gage is
the Chairman and Chief Executive Officer. As such, Mr. Gage is deemed to
have sole voting and investment power over the shares.
(6) The address of Tapir Investments (Bahamas) Ltd. is Sandringham House, 83
Shirley Street, P.O. Box N-3247, Nassau, Bahamas. This information is based
on information from the Company and a Schedule 13D dated December 16, 1998
that has been filed with the SEC.
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<PAGE> 11
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the last three fiscal years,
compensation information for the Company's Named Executive Officers whose salary
and bonus compensation for the year ended December 31, 1998 exceeded $100,000.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
- -------------------------------------------------------------------------------------------------------------
OTHER SECURITIES
NAME AND ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(#)(1) COMPENSATION($)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Frank A. Argenbright, Jr.... 1998 $250,000 $ -- $ -- 50,000 $ --
Chairman and 1997 354,615 -- -- 150,000 6,500(3)
Co-Chief Executive 1996 600,000 -- 200,388(2) 12,000(3)
Officer
Edwin R. Mellett............ 1998 350,000 175,000 -- 300,000 --
Vice-Chairman and 1997 217,307 200,000 -- 157,500 --
Co-Chief Executive 1996 160,577 100,000 -- 322,500 --
Officer
Thomas J. Marano............ 1998 300,000 140,000 -- 25,000 --
President and Chief 1997 273,077 165,000 -- 56,250 --
Operating Officer -- 1996 250,000 125,000 -- 268,750 --
Argenbright Holdings
Limited
Ernest Patterson(4)......... 1998 300,000 75,000 -- 50,000 --
Chief Executive -- 1997 162,900 82,000 -- 150,000 --
The ADI Group Limited 1996 -- -- -- -- --
David L. Gamsey............. 1998 200,000 85,000 -- 25,000 --
Chief Financial Officer 1997 169,038 100,000 -- 52,500 --
1996 153,173 65,000 -- 107,500 --
</TABLE>
- ---------------
(1) The options reported granted in 1998 were originally granted on either May
14, 1998 or July 29, 1998 at an exercise price of $33.25 per share. The
options were canceled and new options were granted on October 9, 1998 with
an exercise price of $21.75 per share. See "-- Repricing of Options."
(2) Includes approximately $55,000 relating to club dues and initiation fees.
Effective January 1, 1997, other annual compensation was significantly
reduced as the Company revised its expense reimbursement policies.
(3) Represents life insurance premiums paid by the Company.
(4) Joined the Company in June 1997.
8
<PAGE> 12
OPTION GRANTS TABLE
The following table sets forth information regarding option grants during
fiscal 1998 to each of the Named Executive Officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE OF ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATE OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION
NAME GRANTED(1) FISCAL 1998 SHARE(2) DATE(2) 5%($)(3) 10%($)(3)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Frank A. Argenbright, Jr...... 50,000 5.9% $21.75 10/09/08 $ 683,979 $ 1,733,195
Edwin R. Mellett.............. 300,000 35.4 21.75 10/09/08 4,103,874 10,399,169
Thomas J. Marano.............. 25,000 3.0 21.75 10/09/08 341,989 866,597
Ernest Patterson.............. 50,000 5.9 21.75 10/09/08 683,979 1,733,195
David L. Gamsey............... 25,000 3.0 21.75 10/09/08 341,989 866,597
</TABLE>
- ---------------
(1) Options granted in 1998 were made under the 1997 Stock Incentive Plan (the
"Plan"). These options (a) are granted at an exercise price equal to 100% of
the fair market value of the common stock on the date of the grant, (b)
expire ten years from the date of the grant, unless otherwise earlier
terminated in certain events related to termination of employment, and (c)
vest in 25% increments on the anniversary date of the grant, subject to the
terms and conditions of the Plan.
(2) The options reported granted in 1998 were originally granted on either May
14, 1998 or July 29, 1998 at an exercise price of $33.25 per share. The
options were canceled and new options were granted on October 9, 1998 with
an exercise price of $21.75 per share. See "-- Repricing of Options."
(3) We are required by the SEC to use a 5% and 10% assumed rate of appreciation
over the ten-year option term. This does not represent the Company's
estimate or projection of the future common stock price. If the Company's
common stock does not appreciate, the Named Executive Officers will receive
no benefit from the options.
FISCAL YEAR-END OPTION VALUE
The following table sets forth certain information with respect to option
exercises during fiscal 1998 by the Named Executive Officers and the status of
their options at December 31, 1998.
<TABLE>
<CAPTION>
VALUE OF
NO. OF SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS
SHARES OPTIONS AT FISCAL AT YEAR-END($)(2)
ACQUIRED ON VALUE YEAR-END(#)
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Frank A. Argenbright,
Jr..................... -- -- 37,500 162,500 $ 501,563 $1,979,688
Edwin R. Mellett......... -- -- 311,875 468,125 6,908,231 5,536,719
Thomas J. Marano......... -- -- 177,500 172,500 3,673,438 3,076,563
Ernest Patterson......... -- -- 37,500 162,500 609,375 2,303,125
David L. Gamsey.......... 35,000 $718,688 43,500 106,500 825,938 1,674,063
</TABLE>
- ---------------
(1) This number is calculated by averaging the high and low market prices on the
date of exercise to get the "average market price," subtracting the option
exercise price from the average market price to get the "average value
realized per share," and multiplying the average value realized per share by
the number of options exercised. The amounts in this column may not
represent amounts actually realized by the Named Executive Officers.
(2) This number is calculated by subtracting the option exercise price from the
closing price of the common stock on December 31, 1998 ($31.25) to get the
"average value per option," and multiplying the average value per option by
the number of exercisable and unexercisable options. The amounts in this
column may not represent amounts actually realized by the Named Executive
Officers.
9
<PAGE> 13
REPRICING OF OPTIONS
The Company granted certain options to its employees to purchase its common
stock on May 14, 1998 and July 29, 1998. These options were canceled and new
options were granted on October 9, 1998.
The following table sets forth information concerning all repricings of
options to purchase the Company's common stock held by an executive officer of
the Company since March 27, 1997, the date of the Company's initial public
offering. See "Report on Executive Compensation" for further information.
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES LENGTH OF ORIGINAL
DATE UNDERLYING MARKET PRICE OF EXERCISE PRICE NEW OPTION TERM
OF OPTIONS STOCK AT TIME OF AT TIME OF EXERCISE REMAINING AT DATE
NAME REPRICING REPRICED(#) REPRICING($) REPRICING($) PRICE($) OF REPRICING
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Frank A. Argenbright,
Jr....................... 10/09/98 50,000 $21.75 $33.625 $21.75 9 years, 218 days
Edwin R. Mellett........... 10/09/98 100,000 21.75 33.625 21.75 9 years, 218 days
10/09/98 200,000 21.75 32.625 21.75 9 years, 293 days
Thomas J. Marano........... 10/09/98 25,000 21.75 33.625 21.75 9 years, 218 days
Ernest Patterson........... 10/09/98 50,000 21.75 33.625 21.75 9 years, 218 days
David L. Gamsey............ 10/09/98 25,000 21.75 33.625 21.75 9 years, 218 days
Robert F. McCullough....... 10/09/98 5,000 21.75 33.625 21.75 9 years, 218 days
Hamish Leslie Melville..... 10/09/98 5,000 21.75 33.625 21.75 9 years, 218 days
</TABLE>
NONCOMPETITION AND EMPLOYMENT CONTRACTS
The Company has entered into employment agreements with Messrs. Mellett,
Marano and Gamsey. The agreement with Mr. Mellett expires on December 1, 2000,
and the agreements with Messrs. Marano and Gamsey expire on December 1, 2002
(the "Expiration Date"). Each agreement also may be terminated by the Company
with or without cause or upon the employee's death or inability to perform his
duties on account of a disability for a period of three months during any
consecutive twelve-month period or by the employee. If any agreement is
terminated by the Company prior to the Expiration Date, except for cause or upon
the employee's death or disability, the Company must continue to pay the
employee's base salary and bonus for one year (six months with respect to Mr.
Gamsey) from the date of termination. The agreements provide for annual base
salaries of $430,000, $350,000 and $240,000 for Messrs. Mellett, Marano and
Gamsey, respectively, and for annual bonuses dependent upon the Company's
financial performance and achievement of personal objectives established for
each employee by the Board of Directors.
The Company also has an employment agreement with Mr. Patterson. The
agreement is indefinite in length but provides that in the event Mr. Patterson
is terminated without cause, he will be entitled to receive 12 months' salary.
The agreement provides for an annual base salary of approximately $350,000 and
for an annual bonus of up to 50% of base salary, based upon the Company's
financial performance and achievement of personal objectives established for Mr.
Patterson by the Board of Directors. The agreement also grants Mr. Patterson
options to purchase 150,000 shares of common stock, exercisable 25% per year
over four years, at an exercise price of $15.00 per share. As a condition to
employment, Mr. Patterson also agreed to one year noncompetition and
nonsolicitation provisions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. McCullough and Melville, the
Company's independent directors. Neither Mr. McCullough nor Mr. Melville has
engaged in related party transactions with the Company.
10
<PAGE> 14
CERTAIN TRANSACTIONS
The Company has adopted a policy, effective upon the consummation of the
initial public offering in March 1997, prohibiting loans (other than travel
advances in the ordinary course of business) to its executive officers,
directors and principal shareholders unless such loans first are approved by the
Compensation Committee, which must determine that such loans are in the best
interests of the Company. Any loans made will bear interest at a rate and be on
such terms as determined by the Compensation Committee to be fair to the
Company.
During 1998, the Company purchased uniforms for approximately $2.1 million
from ASAP Uniform Company, Inc., a company that is 20% owned by the Company, and
purchased access control services for approximately $1.3 million from Premium
Services Management, Inc., a company that is 49% owned by the Company.
The Company performs services for Gage Marketing Group, LLC ("GMG"). GMG is
controlled by Mr. Gage, a member of the Board of Directors. The Company
performed services for GMG's Sweepstakes Division in 1998, for which the Company
recognized total revenues of $1.1 million. At December 31, 1998, approximately
$401,000 was due to the Company from GMG's Sweepstakes Division. GMG also paid
approximately $71,000 to the Company in 1998 for rent of space and a phone
switch in one of the Company's facilities and for minor miscellaneous services.
Any future transactions between the Company and its officers, directors or
principal shareholders will be approved by a majority of the disinterested
members of the Board of Directors.
11
<PAGE> 15
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for ensuring that a proper system
of short and long-term compensation is in place to provide performance-oriented
incentives to management. Its report on compensation is as follows:
Each executive officer's compensation is determined annually by the
Compensation Committee. Senior management makes recommendations to the
Compensation Committee regarding each executive officer's compensation (except
the Co-Chief Executive Officers' compensation), including recommendations for
base salary for the succeeding year and discretionary cash bonuses and stock
incentive awards.
The Company's compensation philosophy is based on a pay for performance
approach. The compensation program seeks to reward individual action that
contributes to operating unit performance and Company performance. The Company's
goal is to be competitive with the marketplace on a total compensation basis,
including base salary and annual and long-term incentives:
- Base Salary. Each executive officer's base salary is based upon the
competitive market for the executive officer's services, including the
executive's specific responsibilities, experience and overall
performance. In keeping with the Company's pay for performance approach,
it is the objective of the Company to set the base salary at the market
base salary level of the Company's peers in its industry. Base salaries
are adjusted annually. Changes in responsibilities are also taken into
account in the review process.
- Annual Incentive Compensation. The Company awards discretionary year-end
bonuses. These bonuses reflect the contribution of the individual as well
as the performance of the operating unit and the Company as a whole.
Ranges of potential bonuses and performance measures are established
annually for each position.
The performance measures applicable to a particular position vary
according to the functions of the position. Performance measures
considered by the Compensation Committee include obtaining certain
profitability and revenue goals as well as each individual meeting
personal objectives relative to operational enhancements.
- Long-Term Incentive Compensation. The Company uses long-term incentive
compensation to compensate for achievement of performance measures which
extend beyond one year, while at the same time aligning management's
interests with that of the shareholders. The Compensation Committee
believes that stock-based awards are most appropriate for long-term
incentive compensation. In 1997, the Company adopted the 1997 Stock
Incentive Plan. Under this Plan, stock options may be granted by the
Compensation Committee. On May 14, 1998, the Compensation Committee
granted stock options to all of the Company's executive officers. The
stock options were canceled and new options were granted on October 9,
1998.
Frank A. Argenbright, Jr. has been the Chairman and Chief Executive Officer
of the Company since its founding in 1979 and Co-Chief Executive Officer since
December 1994 and beneficially owns approximately 45.7% of the Company's common
stock. Mr. Edwin R. Mellett has been Vice Chairman and Co-Chief Executive
Officer since December 1994. The Compensation Committee believes that Messrs.
Argenbright and Mellett are responsible for much of the Company's success. Mr.
Argenbright and Mellett have hired and developed an outstanding management group
and have furnished leadership in all areas of the Company's business.
Because he is the majority shareholder of the Company, Mr. Argenbright did
not receive an annual cash bonus in fiscal years 1998, 1997 and 1996. In
determining Mr. Mellett's bonus levels for 1998, the Compensation Committee
considered his significant role in the Company's 1998 accomplishments, including
the performance measures referred to above.
12
<PAGE> 16
The October 9, 1998 repricing of options described in the section above
titled "Executive Compensation -- Repricing of Options" reflects the consistent
application of the policy of the Compensation Committee regarding stock options.
The Compensation Committee and the Board believe that to provide maximum
incentive to employees, including senior executives, incentive options should be
granted at exercise prices equal to or not materially in excess of the market
price of the Company's common stock. As a result of this policy, options granted
by the Board and approved by the Compensation Committee on May 14, 1998 and July
29, 1998 were canceled and new options were granted on October 9, 1998. The
options were canceled and new options were granted in order to more accurately
reflect the market value of the Company's common stock, determined by reference
to the closing price of the stock as reported by the Nasdaq Stock Market on that
date.
COMPENSATION COMMITTEE
Hamish Leslie Melville, Chairman
Robert F. McCullough
March 31, 1999
THE FOREGOING REPORT SHOULD 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, OR UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (TOGETHER, THE "ACTS"), EXCEPT TO THE EXTENT
THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND
SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
13
<PAGE> 17
STOCK PRICE PERFORMANCE GRAPH
The following stock price performance graph compares the Company's
performance to The Nasdaq Stock Market and the index of Nasdaq Non-Financial
Stocks. The stock price performance graph assumes an investment of $100 in the
Company on March 27, 1997 and an investment of $100 in the two indexes on March
31, 1997, and further assumes the reinvestment of all dividends. The difference
in the initial start date is due to the fact that the Company's common stock did
not start trading publicly until March 27, 1997. The Company believes that the
net effect of this difference in start dates will not have a material effect on
the performance graph. Stock price performance, presented for the period from
March 31, 1997 through December 31, 1998, is not necessarily indicative of
future results.
(PERFORMANCE GRAPH)
<TABLE>
<CAPTION>
Nasdaq Non-
Measurement Period The Nasdaq Financial
(Fiscal Year Covered) AHL Stock Market Stocks
<S> <C> <C> <C>
Mar97 100.00 100.00 100.00
Jun97 155.00 118.30 118.50
Sep97 182.50 138.30 138.90
Dec97 246.25 129.70 125.80
Mar98 326.25 151.61 150.08
Jun98 393.75 155.82 154.99
Sep98 327.50 141.08 140.20
Dec98 312.50 182.55 184.37
</TABLE>
THE STOCK PRICE PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE ACTS EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED FILED UNDER SUCH ACT.
14
<PAGE> 18
OTHER MATTERS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires executive officers and directors of the Company and
persons who beneficially own more than ten percent of the Company's common stock
to file with the SEC certain reports, and to furnish copies thereof to the
Company, with respect to each such person's beneficial ownership of the
Company's equity securities. Based solely upon a review of the copies of such
reports furnished to the Company and certain representations of such persons,
the Company believes that all filings were timely.
ANNUAL REPORT TO SHAREHOLDERS
The Annual Report of the Company for the year ended December 31, 1998,
including audited financial statements, accompanies this Proxy Statement. The
Annual Report does not form any part of the material for the solicitation of
proxies.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE, AT THE WRITTEN REQUEST OF ANY
HOLDER OF COMMON STOCK OF RECORD AS OF THE CLOSE OF BUSINESS ON MARCH 23, 1999,
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL
STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, AS FILED WITH THE SEC, EXCEPT
EXHIBITS THERETO. The Company will provide copies of the exhibits, should they
be requested by eligible shareholders, and the Company may impose a reasonable
fee for providing such exhibits. Request for copies of the Company's Annual
Report on Form 10-K should be mailed to:
AHL Services, Inc.
3353 Peachtree Road, NE
Suite 1120
Atlanta, Georgia 30326
Attention: Corporate Secretary
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at the Company's 2000
Annual Meeting of Shareholders and eligible for inclusion in the Proxy Statement
and form of proxy to be distributed by the Board of Directors in connection with
such meeting must be submitted to the Company in writing on or before December
1, 1999. Any shareholder proposals intended to be presented from the floor at
the Company's 2000 Annual Meeting of Shareholders must be submitted to the
Company in writing on or before February 15, 2000 or the persons appointed as
proxies may exercise their discretionary voting authority with respect to the
shareholder proposal.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
Annual Meeting.
15
<PAGE> 19
EXPENSES OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company. In an
effort to have as large a representation at the meeting as possible, special
solicitation of proxies may, in certain instances, be made personally or by
telephone, telegraph or mail by one or more employees of the Company. The
Company also will reimburse brokers, banks, nominees and other fiduciaries for
postage and reasonable clerical expenses of forwarding the proxy material to
their principals who are beneficial owners of the Company's common stock.
By Order of the Board of Directors,
/s/ David L. Gamsey
David L. Gamsey
Secretary
Atlanta, Georgia
March 31, 1999
16
<PAGE> 20
ANNEX A
AHL SERVICES, INC.
AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN
USA
<PAGE> 21
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
------- ----
<S> <C> <C>
1. Background and Purpose...................................... A-2
1.1. Background........................................... A-2
1.2. Purpose.............................................. A-2
2. Definitions................................................. A-2
2.1. Account.............................................. A-2
2.2. AHL.................................................. A-2
2.3. Beneficiary.......................................... A-2
2.4. Board................................................ A-2
2.5. Code................................................. A-2
2.6. Committee............................................ A-2
2.7. Election Form........................................ A-2
2.8. Election Period...................................... A-2
2.9. Eligible Employee.................................... A-2
2.10. Participant.......................................... A-2
2.11. Participating Employer............................... A-3
2.12. Plan................................................. A-3
2.13. Plan Administrator................................... A-3
2.14. Purchase Period...................................... A-3
2.15. Purchase Price....................................... A-3
2.16. Rule 16b-3........................................... A-3
2.17. Stock................................................ A-3
2.18. Subsidiary........................................... A-3
3. Offerings................................................... A-3
4. Stock Available for Purchase................................ A-3
5. Administration.............................................. A-3
6. Participation............................................... A-4
7. Contributions............................................... A-4
7.1. Initial Contributions................................ A-4
7.2. Changes in Contributions and Withdrawals............. A-4
7.3. Account Credits, General Assets and Taxes............ A-4
7.4. Automatic Refunds.................................... A-4
8. Granting of Option.......................................... A-5
8.1. General Rule......................................... A-5
8.2. Statutory Limitations................................ A-5
8.3. Available Shares of Stock............................ A-5
9. Exercise of Option and Purchase of Stock.................... A-5
9.1. General Rule......................................... A-5
9.2. Automatic Refund..................................... A-5
10. Delivery.................................................... A-5
11. Designation of Beneficiary.................................. A-6
12. Transferability............................................. A-6
13. Securities Registration..................................... A-6
14. Compliance with Rule 16b-3.................................. A-6
15. Amendment or Termination.................................... A-6
16. Notices..................................................... A-7
17. Employment.................................................. A-7
18. Employment Transfers........................................ A-7
19. Construction................................................ A-7
</TABLE>
A-1
<PAGE> 22
AHL SERVICES, INC.
AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN
USA
1. Background and Purpose.
1.1. Background. The Board originally adopted the Plan on July 29, 1997.
The Plan as originally adopted was not intended to constitute an "employee stock
purchase plan" within the meaning of Code Section 423, and in addition, the Plan
as originally adopted did not provide for a discount on the purchase of Stock
under the Plan. AHL Services, Inc. intends that this amended and restated Plan
constitute an "employee stock purchase plan" within the meaning of Code Section
423. The effective date of this amended and restated Plan is April 1, 1999.
1.2. Purpose. The primary purpose of this Plan is to encourage Stock
ownership by each Eligible Employee in the belief that such ownership will
increase his or her interest in the success of AHL.
2. Definitions.
2.1. The term Account shall mean the separate bookkeeping account which
shall be established and maintained by the Plan Administrator for each
Participant for each Purchase Period to record the contributions made on his or
her behalf to purchase Stock under this Plan and the Stock purchased with such
contributions.
2.2. The term AHL shall mean AHL Services, Inc., a corporation incorporated
under the laws of the State of Georgia, and any successor to AHL.
2.3. The term Beneficiary shall mean the person designated as such in
accordance with Section 11.
2.4. The term Board shall mean the Board of Directors of AHL.
2.5. The term Code shall mean the Internal Revenue Code of 1986, as
amended.
2.6. The term Committee shall mean the Compensation Committee of the Board.
2.7. The term Election Form shall mean the form which an Eligible Employee
shall be required to properly complete in writing and timely file in order to
make any of the elections available to an Eligible Employee under this Plan.
2.8. The term Election Period shall mean a period which (a) shall be set by
the Committee, (b) shall come before a related Purchase Period and (c) shall
continue for no more than two calendar months.
2.9. The term Eligible Employee shall mean each employee of each
Participating Employer:
(a) who customarily is employed by his or her Participating Employer
more than 20 hours per week (within the meaning of Code Section
423(b)(4)(B)),
(b) who has completed at least three full calendar months of
employment with his or her Participating Employer, and
(c) who will not own (immediately after the grant of an option under
Section 8.1) stock possessing 5% or more of the total combined voting power
or value of all classes of stock of AHL based on the rules set forth in
Code Sections 423(b)(3) and 424. An employee of a company acquired by any
Participating Employer shall be able to utilize his or her tenure with the
acquired company in order to satisfy the above criteria.
2.10. The term Participant shall mean (a) for each Purchase Period an
Eligible Employee who has elected to purchase Stock in accordance with Section 6
during such Purchase Period and (b) for any period any person for whom Stock is
held pending delivery under Section 10.
A-2
<PAGE> 23
2.11. The term Participating Employer shall mean AHL and any Subsidiary of
AHL which is designated as such by the Committee.
2.12. The term Plan shall mean this AHL Services, Inc. Amended and Restated
Employee Stock Purchase Plan USA, as amended from time to time.
2.13. The term Plan Administrator shall mean AHL or AHL's delegate.
2.14. The term Purchase Period shall mean each calendar quarter.
2.15. The term Purchase Price shall mean on a particular date 90% of (a) if
shares of Stock are listed on a securities exchange or the Nasdaq National
Market, the closing price on the date in question (or if there were no trades on
such date, the next preceding date on which a trade or trades occurred); (b) if
shares of Stock are traded in any other over-the-counter market, the mean
between the lowest reported bid price and the highest reported asked price of
the Stock on the date in question (or if there were no trades on such date, the
next preceding date on which a trade or trades occurred), as such prices are
reported in a publication of general circulation selected by the Board and
regularly reporting the market price of the Stock in such market; or (c) if
shares of Stock are not then actively traded on an exchange or in the
over-the-counter market, the amount determined in good faith by the Board.
2.16. The term Rule 16b-3 shall mean Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended, or any successor to such rule.
2.17. The term Stock shall mean the $.01 par value common stock of AHL.
2.18. The term Subsidiary shall mean a corporation that is a subsidiary
corporation (within the meaning of Code Section 424(f)) of AHL.
3. Offerings.
Options to purchase shares of Stock shall be offered to Participants in
accordance with this Plan from time to time at the discretion of the Committee
or its delegate; provided, however, that there shall be no more than one
Election Period in effect at any time and no more than one Purchase Period in
effect at any time.
4. Stock Available for Purchase.
On April 1, 1999, there shall be 100,000 shares of Stock available for
purchase under this Plan minus the number of shares purchased under this Plan
before the amendment and restatement of this Plan effective on such date.
5. Administration.
The Committee or its delegate shall have the exclusive power to set the
Election Period, designate the Participating Employers and set the minimum cash
withdrawal under Section 7.2. Except for those powers expressly granted under
this Plan to the Committee, the Board or the Chief Executive Officers of AHL,
the Plan Administrator shall be responsible for the administration of this Plan
and shall have the power in connection with such administration to interpret
this Plan in its absolute discretion and to take such other action in connection
with such administration as the Plan Administrator deems necessary or equitable
under the circumstances. The Plan Administrator also shall have the power to
delegate the duty to perform such administrative functions as the Plan
Administrator deems appropriate under the circumstances. Any person to whom the
duty to perform an administrative function is delegated shall act on behalf of
and shall be responsible to the Plan Administrator for such function. Any action
or inaction by or on behalf of the Plan Administrator under this Plan shall be
final and binding on each Participating Employer, each Eligible Employee, each
Participant, and each other person directly or indirectly affected by such
action or inaction.
A-3
<PAGE> 24
6. Participation.
Each person who is an Eligible Employee on the last day of an Election
Period shall be a Participant in this Plan for the related Purchase Period if he
or she properly completes and files an Election Form with the Plan Administrator
on or before such date pursuant to which he or she elects to participate in this
Plan. An Election Form may require an Eligible Employee to provide such
information and to agree to take such action (in addition to the action required
under Section 7) as the Plan Administrator deems necessary or appropriate in
light of the purpose of this Plan or for the orderly administration of this
Plan.
7. Contributions.
7.1. Initial Contributions. Each Participant's Election Form shall specify
the contributions that he or she proposes to make for the related Purchase
Period. Contributions shall be exclusively by payroll deductions. Such
contributions shall be expressed as a specific whole dollar amount which the
Participant authorizes his or her Participating Employer to deduct from his or
her paycheck each pay day during the Purchase Period; provided
(a) the minimum payroll deduction for a Participant for each pay
period for purchases under this Plan shall be $10.00, and
(b) the maximum contribution which a Participant can make for
purchases under this Plan for any calendar year shall be $25,000.
7.2. Changes in Contributions and Withdrawals. A Participant shall have
the right to amend his or her Election Form after the end of an Election Period
to reduce or to stop his or her payroll deductions, and such amended election
shall be effective as soon as practicable after the Plan Administrator actually
delivers such amended Election Form to the appropriate Participating Employer's
payroll department. A Participant also shall have the right at any time on or
before the last day of a Purchase Period to withdraw the shares of Stock, in
whole shares, and the cash balance (without interest) credited to his or her
Account for such Purchase Period by delivering an amended Election Form to the
Plan Administrator on or before the last day of such Purchase Period.
A withdrawal shall be deducted from the Participant's Account as of the
date the Plan Administrator receives such amended Election Form, and the actual
withdrawal shall be effected by the Plan Administrator as soon as practicable
after such date. All withdrawals will be net of any costs associated with the
withdrawal. The amount of a minimum cash withdrawal shall be determined by the
Committee and shall equal the Participant's entire Account if the Account is
less than the minimum. If a Participant elects to withdraw shares of Stock
credited to his or her Account for a Purchase Period, the Participant must
withdraw all of the shares credited to his or her Account for the Purchase
Period, with fractional shares, net of transaction costs, to be distributed in
cash. Alternatively, a Participant may elect in a withdrawal to receive cash in
lieu of shares of Stock, in which event the Plan Administrator shall sell such
shares on the open market and distribute to the participant the proceeds
thereof, net of transaction costs. If a Participant elects to withdraw cash in
lieu of Stock, his or her Account need not be withdrawn in full, but the
withdrawal must meet the minimum cash withdrawal. If a Participant withdraws his
or her Account in full in a Purchase Period, no further payroll deductions shall
be made on the Participant's behalf for the remainder of the Purchase Period.
7.3. Account Credits, General Assets and Taxes. All payroll deductions
made for a Participant shall be credited to his or her Account as of the pay day
on which the deduction is made and shall be held by AHL or its agent as part of
the general assets of AHL and shall not be held in trust or otherwise segregated
from AHL's general assets. No interest shall be paid or accrued on any such
contributions. Each Participant's right to the payroll deductions credited to
his or her Account shall be that of a general and unsecured creditor of AHL.
Each Participating Employer shall have the right to make such provisions as it
deems necessary or appropriate to satisfy any applicable tax laws with respect
to purchases of Stock made under this Plan.
7.4. Automatic Refunds. The Stock (in whole shares) and cash credited to
the Account of an Eligible Employee automatically shall be refunded in full
(without interest) if his or her status as an Eligible Employee terminates for
any reason whatsoever during a Purchase Period. Such refunds shall be made as
soon
A-4
<PAGE> 25
as practicable after the Plan Administrator has actual notice of any such
termination. A person's status as a Participant under this Plan shall terminate
at the same time as his or her status as an Eligible Employee terminates.
8. Granting of Option.
8.1. General Rule. Subject to Sections 8.2 and 8.3, each Participant who
is an Eligible Employee on the 21st day of a calendar month in a Purchase Period
automatically shall be granted by operation of this Plan an option to purchase
the number of shares of Stock under this Plan determined by the Plan
Administrator by dividing the cash in his or her Account as of such day by the
Purchase Price on such day. Each such option shall be exercisable only in
accordance with the terms of this Plan.
8.2. Statutory Limitations. No option granted by operation of this Plan to
any Eligible Employee under Section 8.1 shall permit his or her rights to
purchase shares of stock under this Plan or under any other employee stock
purchase plan (within the meaning of Code Section 423) of AHL and any of its
subsidiaries (within the meaning of Code Section 424(f)) to accrue (within the
meaning of Code Section 423(b)(8)) at a rate that exceeds $25,000 of the fair
market value of such stock for any calendar year. Such fair market value shall
be determined as of the date the option is granted. Finally, no option granted
by operation of this Plan to any Eligible Employee under Section 8.1 shall
permit him or her to own (immediately after the option grant) stock possessing
5% or more of the total combined voting power or value of all classes of stock
of AHL based on the rules set forth in Code Sections 423(b)(3) and 424.
8.3. Available Shares of Stock. If the number of shares of Stock available
for purchase by Participants under this Plan is insufficient to cover the number
of shares that such Participants otherwise are scheduled to purchase under
Section 8 in a calendar month in a Purchase Period, then each Participant's
option to purchase shares of Stock in such month shall be reduced to equal the
number of shares of Stock (rounded down to the nearest whole number) that the
Plan Administrator shall determine by multiplying the number of shares of Stock
available for purchase as of such date by a fraction, the numerator of which
shall be the number of shares of Stock for which such Participant would have
been granted an option under Section 8.1 if sufficient shares were available for
purchase and the denominator of which shall be the total number of shares of
Stock for which options would have been granted to all Participants under
Section 8.1 who are scheduled under Section 9 to make purchases if sufficient
shares were available for such purchases.
9. Exercise of Option and Purchase of Stock.
9.1. General Rule. The option granted to a Participant pursuant to Section
8.1 shall be exercised (subject to Sections 8.2 and 8.3) automatically on the
date of grant of the option for the purchase of as many whole and fractional
shares of Stock subject to such option as the balance credited to his or her
Account as of that date will purchase at the Purchase Price for such date. Such
Stock shall be purchased on behalf of this Plan in whole and fractional shares
and shall be held in street name on behalf of this Plan with individual
Participant ownership recorded by the Plan Administrator as part of his or her
account records.
9.2. Automatic Refund. If a Participant's Account has a remaining balance
at the end of a Purchase Period, such balance automatically shall be refunded to
the Participant in cash (without interest) as soon as practicable following such
Purchase Period.
10. Delivery.
No stock certificate representing a fractional share of Stock credited to a
Participant's Account shall be delivered to a Participant. Cash that the Plan
Administrator deems representative of the value of a Participant's fractional
share shall be distributed (when a Participant requests on an Election Form a
distribution of all of the shares of Stock credited to his or her Account) in
lieu of such fractional share unless the Participant waives his or her right to
such cash payment, and the Plan Administrator shall have the right to charge a
Participant for registering Stock in the name of the Participant and any other
person. No Participant (or any person who makes a claim for, on behalf of, or in
place of a Participant) shall have any interest in any shares of Stock subject
to an option until such option has been exercised and such shares of Stock have
been
A-5
<PAGE> 26
credited to a brokerage account maintained for the benefit of such Participant
or the certificate for such shares has been delivered to such Participant.
11. Designation of Beneficiary.
A Participant may designate on his or her Election Form a Beneficiary (a)
who shall receive the cash balance credited to the Participant's Account and (b)
who shall receive the shares of Stock, if any, credited to the Participant's
Account if the Participant dies before either such shares of Stock have been
credited to a brokerage account maintained for the benefit of the Participant or
the certificate representing such shares of Stock has been delivered to the
Participant. Such designation may be revised in writing at any time by the
Participant by filing an amended Election Form, and his or her revised
designation shall be effective at such time as the Plan Administrator receives
such an amended Election Form. If a deceased Participant fails to designate a
Beneficiary, if no person so designated survives a Participant, or if after
checking his or her last known mailing address, the whereabouts of the person so
designated are unknown, then the Participant's estate shall be treated as his or
her designated Beneficiary under this Section 11.
12. Transferability.
Neither the balance credited to a Participant's Account nor any rights to
the exercise of an option or to receive shares of Stock under this Plan may be
assigned, encumbered, alienated, transferred, pledged, or otherwise disposed of
in any way by a Participant during his or her lifetime or by his or her
Beneficiary or by any other person during his or her lifetime, and any attempt
to do so shall be without effect. A Participant's right, if any, to transfer any
interest in this Plan at his or her death shall be determined exclusively under
Section 11.
13. Securities Registration.
If AHL shall deem it necessary to register under the Securities Act of
1933, as amended, or any other applicable securities laws any shares of Stock
with respect to which an option is exercised and such shares of Stock are
purchased under this Plan, or to qualify any such shares of Stock for an
exemption from any such laws, AHL shall take such action at its own expense
before delivery of the certificate representing such shares of Stock. If shares
of Stock are listed on any national stock exchange at the time an option to
purchase shares of Stock is exercised under this Plan, AHL, whenever required,
shall register shares of Stock for which such option is exercised under the
Securities Act of 1933, as amended, and shall make prompt application for the
listing on such national stock exchange of such shares, all at the expense of
AHL.
14. Compliance with Rule 16b-3.
The grant of options and the purchase of Stock under this amended and
restated Plan are intended to be exempt from Rule 16b-3 pursuant to Rule
16b-3(c). The sale of Stock by an Eligible Employee (including a sale by the
Plan Administrator on behalf of an Eligible Employee as permitted under Section
7.2), however, may not be exempt from Rule 16b-3, and each Eligible Employee
shall be solely responsible for the consequences of any sale of Stock that
subjects him or her to suit under Section 16(b) of the Securities Exchange Act
of 1934, as amended.
15. Amendment or Termination.
This amended and restated Plan may be amended from time to time by
consensus of the Chief Executive Officers of AHL (or, if there is only one
person serving as Chief Executive Officer of AHL, by such Chief Executive
Officer) acting on behalf of AHL, to the extent that the Chief Executive
Officers of AHL deems necessary or appropriate; provided, any such amendment
shall be subject to the approval of AHL's shareholders to the extent such
approval is required under Code Section 423, the laws of the State of Georgia or
the rules of the stock exchange in which the Stock is listed; and provided
further that no amendment shall be retroactive unless the Chief Executive
Officers of AHL in their discretion determine that such amendment is in the best
interest of AHL or such amendment is required by applicable law to be
retroactive. One Chief
A-6
<PAGE> 27
Executive Officer of AHL may delegate his or her authority under this Section 15
to another Chief Executive Officer of AHL. The Board may terminate this Plan and
any Purchase Period at any time (together with any related contribution
elections) or may terminate any Purchase Period (together with any related
contribution elections) at any time; provided, however, no such termination
shall be retroactive unless the Board determines that applicable law requires a
retroactive termination of this Plan.
16. Notices.
All Election Forms and other communications from a Participant to the Plan
Administration under, or in connection with, this Plan shall be deemed to have
been filed with the Plan Administrator when actually received in the form
specified by the Plan Administrator at the location, or by the person,
designated by the Plan Administrator for the receipt of any such Election Form
and communications.
17. Employment.
The right to elect to participate in this Plan shall not constitute an
offer of employment, and no election to participate in this Plan shall
constitute an employment agreement for an Eligible Employee. Any such right or
election shall have no bearing whatsoever on the employment relationship between
an Eligible Employee and a Participating Employer. No Eligible Employee shall be
induced to participate in this Plan, or shall participate in this Plan, with
expectation that such participation will lead to employment or continued
employment.
18. Employment Transfers.
No Eligible Employee's employment shall be treated as terminated under this
Plan as a result of a transfer directly between AHL and another Participating
Employer or between any other Participating Employers.
19. Construction.
AHL intends that this amended and restated Plan constitute an "employee
stock purchase plan" within the meaning of Code Section 423 and, further,
intends that any ambiguity in this Plan or any related offering be resolved to
effect such intent. If any options are granted under this amended and restated
Plan before the date the shareholders of AHL (acting at a duly called meeting of
such shareholders) are treated under Code Section 423(b)(2) as having approved
the adoption of this amended and restated Plan, such options shall be granted
subject to such shareholder approval, and if such shareholder approval is not
obtained within the time period provided under Code Section 423(b)(2), such
options will deemed to be granted under a plan that is not an "employee stock
purchase plan" within the meaning of Code Section 423. The headings to sections
in this Plan have been included for convenience of reference only. Except as
otherwise expressly indicated, all references in this Plan to sections shall be
to sections of this Plan. This Plan shall be interpreted and construed in
accordance with the laws of the State of Georgia.
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<PAGE> 28
AHL SERVICES, INC.
PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
ON MAY 13, 1999
The undersigned hereby appoints David L. Gamsey and Edwin R. Mellett and
each of them, proxies, with full power of substitution and resubstitution, for
and in the name of the undersigned, to vote all shares of common stock of AHL
Services, Inc. which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Shareholders or any adjournment of the meeting.
The Annual Meeting will be held on Thursday, May 13, 1999, at 9:00 a.m., local
time, at the Crowne Plaza, Atlanta Airport, 1325 Virginia Avenue, Atlanta,
Georgia 30344.
This appointment relates to the matters described in the accompanying Notice
of Annual Meeting of Shareholders and Proxy Statement upon any of the business
that may properly come before the meeting or adjournment of the meeting. By
signing this Proxy, the undersigned acknowledges receipt of the accompanying
Notice of Annual Meeting of Shareholders and Proxy Statement.
The proxies are directed to vote on the matters described in the Notice of
Annual Meeting of Shareholders and Proxy Statement as follows, and otherwise in
their discretion upon such other business as may properly come before the
meeting or any adjournment of the meeting.
1. To elect two (2) directors to serve until the 2002 Annual Meeting of
Shareholders:
<TABLE>
<S> <C>
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to vote for all nominees listed
(except as marked below to the contrary)
</TABLE>
To serve until the 2002 Annual Meeting of Shareholders:
Edwin C. "Skip" Gage
Robert F. McCullough
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.)
2. To approve the Amended and Restated Employee Stock Purchase Plan USA:
<TABLE>
<S> <C>
[ ] FOR the Plan [ ] WITHHOLD AUTHORITY to vote for the Plan
</TABLE>
(Continued and to be signed on other side)
(Continued from other side)
3. To ratify appointment of Arthur Andersen LLP as the Company's independent
public accountants:
<TABLE>
<S> <C>
[ ] FOR the ratification of Arthur Andersen LLP [ ] WITHHOLD AUTHORITYto vote for ratification of the
appointment of Arthur Andersen
LLP
</TABLE>
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, THE
PROXY WILL BE VOTED FOR THE ABOVE-STATED PROPOSALS.
Date:
--------------------------------,
1999
--------------------------------
Please sign exactly as your name
or names appear hereon. For more
than one owner as shown above,
each should sign. When signing
in a fiduciary or representative
capacity, please give full
title. If this proxy is
submitted by a corporation, it
should be executed in the full
corporate name by a duly
authorized officer; if a
partnership, please sign in
partnership name by authorized
person.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING ON MAY 13, 1999.
IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF
YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.
