<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
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, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of AHL Services, Inc. to be held on May 9, 2000 at the JW Marriott, 3300 Lenox
Road, N.E., Atlanta, Georgia 30326. 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 9, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of AHL
Services, Inc. will be held at the JW Marriott, 3300 Lenox Road, N.E., Atlanta,
Georgia 30326, on May 9, 2000 at 9:00 a.m., local time, for the following
purposes:
(1) To elect a director to serve until the 2003 Annual Meeting of
Shareholders;
(2) To ratify the appointment of Arthur Andersen LLP as independent
public accountants; and
(3) 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 AHL Services, Inc. at the
close of business on March 17, 2000 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 17, 2000 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, 2000
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.
ATLANTA, GEORGIA 30326
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 9, 2000
The 2000 Annual Meeting of Shareholders of AHL Services, Inc. will be held
on May 9, 2000, at the JW Marriott, 3300 Lenox Road, N.E., Atlanta, Georgia
30326, beginning promptly at 9:00 a.m. local time. The enclosed form of proxy is
solicited by our board of directors. It is anticipated that this Proxy Statement
and the accompanying proxy will first be mailed to holders of our common stock
on or about March 31, 2000.
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 we 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 one director and (2) the
ratification of the appointment of Arthur Andersen LLP as our independent public
accountants. 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 17, 2000. This is
referred to as the "Record Date". 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 named nominee and for the ratification of the appointment
of the independent public accountants.
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.
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.
<PAGE> 5
As of March 17, 2000, 16,474,292 shares of our common stock were issued and
outstanding. A majority of our outstanding shares as of the Record Date, equal
to 8,237,147 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 our 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 NOMINEE FOR ELECTION OF DIRECTOR RECEIVE TO BE ELECTED?
The nominee receiving the highest number of affirmative votes will be
elected as a director. This number is called a plurality.
WHAT HAPPENS IF THE 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 one nominee.
HOW MANY VOTES MUST THE RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT
PUBLIC ACCOUNTANTS RECEIVE TO PASS?
The ratification of the appointment of the independent public accountants
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 Director. You may vote "FOR" or you may "WITHHOLD AUTHORITY"
on voting for the nominee. 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 nominee for
director.
2
<PAGE> 6
Ratification of the Independent Public Accountants. You may vote "FOR" or
you may "WITHHOLD AUTHORITY" on voting for the ratification of the appointment
of the independent public accountants. 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 public accountants.
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 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?
We will announce preliminary voting results at the meeting and will publish
the final results in our quarterly report on Form 10-Q for the second quarter of
2000. The report is filed with the Securities and Exchange Commission, and you
can get a copy by contacting our Corporate Secretary at (404) 267-2222, the
Securities and Exchange Commission 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 DIRECTOR
Under our Articles of Incorporation and Bylaws, the board of directors
determines the number of directors. Our Bylaws divide the board of directors
into three classes with the directors in each class serving a term of three
years.
There is one director, Frank A. Argenbright, Jr., whose term expires at the
annual meeting. Mr. Argenbright has been nominated to stand for re-election as a
director at the annual meeting to serve until the 2003 annual shareholders'
meeting. In addition to Mr. Argenbright, there are four other directors
continuing to serve on the board, whose terms expire in 2001 and 2002.
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 of directors has no reason to believe that the
nominee for the office of director will be unavailable for election as a
director. However, if at the time of the annual meeting the 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 of directors to elect a substitute
nominee recommended by the board of directors. In no event, however, can a proxy
be voted to elect more than one director.
The following list sets forth the incumbent directors and the name of the
nominee for reelection to the board of directors to serve until the annual
meeting of shareholders in 2003, or until his successor is duly elected and
qualified. This list also contains, as to the nominees and incumbent directors,
certain information that has been furnished by the respective individuals.
NOMINEE FOR ELECTION -- TERM EXPIRING 2003
Frank A. Argenbright, Jr. founded AHL Services in 1979 and has been its
Chairman since that time. He has been Co-Chief Executive Officer since 1994.
From 1979 to 1994, he was Chief Executive Officer. Mr. Argenbright is 52 years
old.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR FRANK A.
ARGENBRIGHT, JR. TO HOLD OFFICE UNTIL THE ANNUAL MEETING OF SHAREHOLDERS IN 2003
OR UNTIL HIS SUCCESSOR IS ELECTED AND QUALIFIED.
3
<PAGE> 7
INCUMBENT DIRECTORS -- TERM EXPIRING 2001
Edwin R. Mellett has been Vice Chairman and Co-Chief Executive Officer of
AHL Services since December 1994 and served on AHL Services' 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 61 years old.
Hamish Leslie Melville has been a director of AHL Services since completion
of our initial public offering in March 1997. Mr. Melville has been a Managing
Director Senior Advisor 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 of Capel Cure Myers Capital Management from 1988 to 1991 and Chief
Executive of Enskilda Securities from 1982 to 1987. Mr. Melville is Chairman of
Northern Recruitment Group PLC and 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 55 years
old.
INCUMBENT DIRECTORS -- TERM EXPIRING 2002
Edwin C. "Skip" Gage has been a director of AHL Services since July 1998.
He served as President of AHL Services' Marketing Support Services division in a
consultant capacity from July 1998 to November 1999. 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 1968 to
1992, most recently as President and Chief Executive Officer. Mr. Gage is a
member of the board of directors of SuperValu Inc. Mr. Gage is 59 years old.
Robert F. McCullough has been a director of AHL Services since completion
of our 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 57 years old.
MEETINGS OF THE BOARD OF DIRECTORS
During 1999, the board of directors held four regular meetings. All of the
directors attended all of the board meetings and committee meetings (of
committees on which they were a member) in 1999.
COMMITTEES OF THE BOARD OF DIRECTORS
Audit Committee. The board of directors has established an Audit Committee
that consists of Messrs. McCullough and Melville. Mr. McCullough is chairman of
the Audit Committee. During 1999, the Audit Committee held two meetings. The
Audit Committee is responsible for:
- recommending to the board the firm to be employed as our independent
public accountants;
- meeting with our independent public accountants at least annually to
review with the independent auditor our financial statements and internal
accounting controls and review the plans and results of the audit
engagement;
- approving the professional services provided by the independent auditor;
- reviewing the independence of the independent auditor;
- considering the range of audit and non-audit fees; and
- reviewing the adequacy of our internal accounting controls.
4
<PAGE> 8
Compensation Committee. The board of directors has established a
Compensation Committee that consists of Messrs. McCullough and Melville. Mr.
Melville is chairman of the Compensation Committee. During 1999, the
Compensation Committee held three meetings. The Compensation Committee is
responsible for:
- reviewing, approving, recommending and reporting to the Co-Chief
Executive Officers and the board of directors matters regarding the
compensation of our Co-Chief Executive Officers and other key executives
and compensation levels or plans affecting the compensation of our other
employees; and
- administering our 1997 Stock Incentive Plan.
We do not have a nominating committee.
COMPENSATION OF DIRECTORS
We pay our 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, 1999, we granted to each
independent director options to purchase 5,000 shares of common stock at an
exercise price of $25.375 per share.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has audited the accounts of AHL Services, Inc. and its
subsidiaries for 1999 and has been appointed by the board of directors to
continue in that capacity for our year ending December 31, 2000, 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 of directors will appoint other independent public
accountants 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 OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF THE INDEPENDENT PUBLIC ACCOUNTANTS.
5
<PAGE> 9
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, 2000 for:
- directors of AHL Services;
- the Co-Chief Executive Officers and each of our four most highly
compensated executive officers (collectively the "Named Executive
Officers");
- our directors and executive officers as a group; and
- each person who is a shareholder holding more than a 5% interest in our
common stock.
Unless otherwise indicated, the business address of each person listed is:
c/o AHL Services, Inc., Atlanta Financial Center, 3353 Peachtree Road, N.E.,
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.............................. 7,898,938(4) 87,500 47.9%
Edwin R. Mellett...................................... -- 480,000 2.9
Ronald F. Clarke...................................... -- -- *
Thomas J. Marano...................................... -- 249,299 1.5
Ernest Patterson...................................... -- 87,500 *
David L. Gamsey....................................... -- 78,251 *
Edwin C. "Skip" Gage.................................. 216,742(5) -- 1.3
Robert F. McCullough.................................. 1,000(6) 7,500 *
Hamish Leslie Melville................................ 14,725 7,500 *
All executive officers & directors as a group (9
persons)............................................ 8,131,405 997,550 54.7
OTHER FIVE PERCENT SHAREHOLDERS:
Tapir Investments (Bahamas) Ltd.(7)................... 1,600,000 -- 9.6
Brown Investment Advisory & Trust Company and its
wholly owned subsidiary, Brown Advisory
Incorporated(8)..................................... 888,876 -- 5.3
</TABLE>
- ---------------
* Less than 1.0%.
(1) Unless otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, we believe 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 filed with the SEC.
(2) Represents shares that can be acquired through stock option exercises on or
prior to May 1, 2000.
(3) Based on an aggregate of 16,674,292 shares of common stock issued and
outstanding as of March 1, 2000. 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) 668,660 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) 193,000 shares owned by a charitable
trust, of which Mr. Argenbright is sole trustee and (c) 532,500 shares owned
by Mr. Argenbright's spouse.
6
<PAGE> 10
(5) The shares are 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 shares are owned by Mr. McCullough's spouse.
(7) The address of Tapir Investments (Bahamas) Ltd. is Sandringham House, 83
Shirley Street, P.O. Box N-3247, Nassau, New Providence, The Bahamas. This
information is based on information set forth in a Schedule 13D dated April
2, 1999 that has been filed with the SEC.
(8) Brown Investment Advisory & Trust Company has sole voting and dispositive
power over 364,601 shares. Brown Advisory Incorporated has sole voting and
dispositive power over 499,525 shares. The address of the companies is 19
South Street, Baltimore, Maryland 21202. This information is based on
information set forth in a Schedule 13G dated February 14, 2000 that has
been filed with the SEC.
7
<PAGE> 11
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the last three fiscal years,
compensation information for our Named Executive Officers whose salary and bonus
compensation for the year ended December 31, 1999 exceeded $100,000.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
- ------------------------------------------------------------------------------------------------------------
SECURITIES
NAME AND UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION ($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Frank A. Argenbright, Jr. ................ 1999 $ --(1) $100,000 100,000 $ --
Chairman and Co-Chief Executive Officer 1998 250,000 -- 50,000 --
1997 354,615 -- 150,000 6,500(2)
Edwin R. Mellett.......................... 1999 430,000 100,000 175,000 --
Vice-Chairman and Co-Chief Executive 1998 350,000 175,000 300,000 --
Officer 1997 217,307 200,000 157,500 --
Ronald F. Clarke(3)....................... 1999 216,667 100,000 350,000 --
President and Chief Operating Officer, 1998 -- -- -- --
United States Outsourced Services 1997 -- -- -- --
Thomas J. Marano.......................... 1999 350,000 125,000 70,000 --
President and Chief Operating Officer, 1998 300,000 140,000 25,000 --
Marketing Services 1997 273,077 165,000 56,250 --
Ernest Patterson(4)....................... 1999 350,000 -- 70,000 --
Chief Executive, European Operations 1998 300,000 75,000 50,000 --
1997 162,900 82,000 150,000 --
David L. Gamsey........................... 1999 240,000 50,000 50,000 --
Chief Financial Officer 1998 200,000 85,000 25,000 --
1997 169,038 100,000 52,500 --
</TABLE>
- ---------------
(1) Mr. Argenbright believed that it was in the best interest of AHL Services'
shareholders for him not to draw a salary in 1999. Effective January 1,
2000, Mr. Argenbright began to receive an annual salary of $350,000.
(2) Represents life insurance premiums paid by AHL Services.
(3) Joined AHL Services in May 1999
(4) Joined AHL Services in June 1997.
8
<PAGE> 12
OPTION GRANTS TABLE
The following table sets forth information regarding option grants during
fiscal 1999 to each of the Named Executive Officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE OF ASSUMED
SECURITIES OPTIONS ANNUAL RATE OF STOCK
UNDERLYING GRANTED TO EXERCISE PRICE APPRECIATION
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION FOR OPTION TERM
NAME GRANTED(1) FISCAL 1999 SHARE(2) DATE 5% ($)(2) 10% ($)(2)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Frank A. Argenbright, Jr.... 75,000 5.6% $25.3750 05/13/09 $1,196,963 $3,033,091
25,000 1.9 20.6875 10/28/09 325,283 842,264
Edwin R. Mellett............ 150,000 11.3 25.3750 05/13/09 2,393,926 6,066,182
25,000 1.9 20.6875 10/28/09 325,283 842,264
Ronald F. Clarke............ 250,000 18.8 30.4375 05/03/09 4,785,888 12,127,384
100,000 7.5 20.6875 10/28/09 1,301,133 3,297,055
Thomas J. Marano............ 50,000 3.8 25.3750 05/13/09 797,975 2,022,061
20,000 1.5 20.6875 10/28/09 260,226 659,411
Ernest Patterson............ 50,000 3.8 25.3750 05/13/09 797,975 2,022,061
20,000 1.5 20.6875 10/28/09 260,226 659,411
David L. Gamsey............. 35,000 2.6 25.3750 05/13/09 558,583 1,415,442
15,000 1.1 20.6875 10/28/09 195,170 494,558
</TABLE>
- ---------------
(1) Options granted in 1999 were made under the 1997 Stock Incentive Plan. These
options are:
- granted at an exercise price equal to 100% of the fair market value of
the common stock on the date of the grant;
- expire ten years from the date of the grant, unless otherwise earlier
terminated in certain events related to termination of employment; and
- vest in 25% increments on the anniversary date of the grant, subject to
the terms and conditions of the Plan.
(2) We are required by the Securities and Exchange Commission to use a 5% and
10% assumed rate of appreciation over the ten-year option term. This does
not represent our estimate or projection of the future common stock price.
If our common stock does not appreciate, the Named Executive Officers will
receive no benefit from the options.
9
<PAGE> 13
FISCAL YEAR-END OPTION VALUE
The following table sets forth certain information with respect to option
exercises during fiscal 1999 by the Named Executive Officers and the status of
their options at December 31, 1999.
<TABLE>
<CAPTION>
VALUE OF
NO. OF SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS
SHARES OPTIONS AT FISCAL AT YEAR-END ($)(2)
ACQUIRED ON VALUE YEAR-END (#)
NAME EXERCISED (#) REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Frank A. Argenbright, Jr. .... -- -- 87,500 193,750 $ 225,000 $229,688
Edwin R. Mellett.............. -- -- 480,000 475,000 4,389,951 229,688
Ronald A. Clarke.............. -- -- -- 350,000 -- 18,750
Thomas J. Marano.............. 3,201 $ 58,817 248,049 168,750 2,432,689 676,875
Ernest Patterson.............. -- -- 87,500 182,500 440,625 444,375
David L. Gamsey............... 6,499 $109,264 77,751 115,750 580,698 317,064
</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, 1999 ($20.875) 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.
NONCOMPETITION AND EMPLOYMENT CONTRACTS
We have entered into employment agreements with Messrs. Mellett, Marano and
Gamsey. The agreement with Mr. Mellett expires on December 31, 2000, and the
agreements with Messrs. Marano and Gamsey expire on December 31, 2002. Each
agreement also may be terminated by us 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 us prior to its expiration date,
except for cause or upon the employee's death or disability, we 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 our financial
performance and achievement of personal objectives established for each employee
by the board of directors.
We also have employment agreements with Mr. Clarke and Mr. Patterson. Each
agreement is indefinite in length but provides that in the event the employee is
terminated by us without cause, the employee will be entitled to receive 12
months' salary. The agreements provide for an annual base salary of $350,000 for
each of Messrs. Clarke and Patterson, and for an annual bonus of up to 50% of
base salary, based upon our financial performance and achievement of personal
objectives established for each employee by the board of directors. Mr. Clarke,
who joined AHL Services in May 1999, was guaranteed a bonus of $100,000 for
1999. Mr. Clarke's agreement granted him options to purchase 250,000 shares of
common stock in 1999 and grants him options to purchase 100,000 shares of common
stock in each of 2000, 2001 and 2002, all exercisable 25% per year over four
years, at exercise prices per share equal to the closing price of the common
stock on the date of each such grant. Mr. Patterson's agreement granted him
options to purchase 150,000 shares of common stock in 1997, exercisable 25% per
year over four years, at an exercise price of $15.00 per share. As a condition
to employment, each employee also agreed to one year noncompetition and
nonsolicitation provisions.
10
<PAGE> 14
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. McCullough and Melville, our
independent directors. Neither Mr. McCullough nor Mr. Melville has engaged in
related party transactions with AHL Services.
CERTAIN TRANSACTIONS
We have adopted a policy prohibiting loans, other than travel advances in
the ordinary course of business, to our executive officers, directors and
principal shareholders unless such loans first are approved by the Compensation
Committee. Prior to approving any such loan, the Compensation Committee must
determine that such loans are in our best interest. Any loans made will bear
interest at a rate and be on such terms as determined by the Compensation
Committee to be fair to AHL Services.
From January 1, 1999 until September 24, 1999 we purchased uniforms for
approximately $2.3 million from ASAP Uniform Company, Inc., a company that was
20% owned by AHL Services. On September 24, 1999, we sold our 20% interest in
ASAP Uniform Company. During 1999, we purchased access control services for
approximately $925,000 from Premium Services Management, Inc., a company that is
49% owned by AHL Services.
We perform services for Gage Marketing Group, LLC ("GMG"). GMG is
controlled by Mr. Gage, a member of our board of directors. We performed
services for GMG's Sweepstakes Division in 1999, for which we recognized total
revenues of $1.3 million. At December 31, 1999, approximately $306,000 was due
to AHL Services from GMG's Sweepstakes Division. We provided the services of
certain of our employees to GMG in connection with GMG's international
operation, for which we were paid approximately $180,000 in 1999.
Any future transactions between AHL Services 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.
Our 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 performance. Our 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 our pay for performance approach, it is our
objective to set the base salary at the market base salary level of our
peers in the industry. Base salaries are adjusted annually. Changes in
responsibilities are also taken into account in the review process.
- Annual Incentive Compensation. We award discretionary year-end bonuses.
These bonuses reflect the contribution of the individual as well as the
performance of the operating unit and AHL Services 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 goals as well as each individual meeting personal
objectives relative to operational enhancements.
- Long-Term Incentive Compensation. We use 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, we adopted the 1997 Stock Incentive
Plan. Under this Plan, stock options may be granted by the Compensation
Committee. In May and October 1999, the Compensation Committee granted
stock options to all of AHL Services' executive officers.
Frank A. Argenbright, Jr. has been our Chairman and Chief Executive Officer
since its founding in 1979 and Co-Chief Executive Officer since December 1994.
He beneficially owns approximately 47.9% of our common stock. Edwin R. Mellett
has been Vice Chairman and Co-Chief Executive Officer since December 1994 and
beneficially owns approximately 2.9% of our common stock. The Compensation
Committee believes that Messrs. Argenbright and Mellett are responsible for much
of our success. Messrs. Argenbright and Mellett have hired and developed an
outstanding management group and have furnished leadership in all areas of the
business.
12
<PAGE> 16
In fiscal year 1999, Mr. Argenbright did not receive a base salary, but did
receive an annual cash bonus. Mr. Argenbright believed that it was in the best
interest of our shareholders for him not to draw a salary in 1999. Effective
January 1, 2000, Mr. Argenbright began to receive an annual salary. In fiscal
years 1998 and 1997, Mr. Argenbright received a base salary, but did not receive
an annual cash bonus. In determining Mr. Mellett's bonus levels for 1999, the
Compensation Committee considered his significant role in AHL Services' 1999
accomplishments, including the performance measures referred to above.
COMPENSATION COMMITTEE
Hamish Leslie Melville, Chairman
Robert F. McCullough
March 31, 2000
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 WE SPECIFICALLY INCORPORATE 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 performance of our
common stock to The Nasdaq Stock Market and the index of Nasdaq Non-Financial
Stocks. The stock price performance graph assumes an investment of $100 in our
common stock 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 our common stock
did not start trading publicly until March 27, 1997. We believe 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, 1999, is not necessarily indicative of future
results.
(PERFORMANCE GRAPH)
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 WE
SPECIFICALLY INCORPORATE 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, requires
our executive officers and directors and persons who beneficially own more than
ten percent of our common stock to file with the Securities and Exchange
Commission certain reports, and to furnish copies thereof to us, with respect to
each such person's beneficial ownership of our equity securities. Based solely
upon a review of the copies of such reports furnished to us and certain
representations of such persons, we believe that all filings were timely, except
that Mr. Clarke filed the information required on Form 3 with respect to his
initial beneficial ownership of common stock approximately nine months late.
ANNUAL REPORT TO SHAREHOLDERS
The Annual Report of AHL Services for the year ended December 31, 1999,
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
WE WILL PROVIDE WITHOUT CHARGE, AT THE WRITTEN REQUEST OF ANY HOLDER OF OUR
COMMON STOCK OF RECORD AS OF THE CLOSE OF BUSINESS ON MARCH 17, 2000, A COPY OF
OUR ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULES, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
EXCEPT EXHIBITS THERETO. We will provide copies of the exhibits, should they be
requested by eligible shareholders, and we may impose a reasonable fee for
providing such exhibits. Request for copies of our Annual Report on Form 10-K
should be mailed to:
AHL Services, Inc.
3353 Peachtree Road, NE
Atlanta, Georgia 30326
Attention: Corporate Secretary
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at our 2001 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 us in writing on or before December 1, 2001.
Any shareholder proposals intended to be presented from the floor at our 2001
Annual Meeting of Shareholders must be submitted to us in writing on or before
February 15, 2001 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 AHL Services. 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 of our employees. We 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 our common stock.
By Order of the Board of Directors,
/s/ DAVID L. GAMSEY
David L. Gamsey
Secretary
Atlanta, Georgia
March 31, 2000
16
<PAGE> 20
AHL SERVICES, INC.
PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 9, 2000
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 Tuesday, May 9, 2000, at 9:00 A.M., local
time, at the JW Marriott, 3300 Lenox Road, N.E., Atlanta, Georgia 30326.
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 one (1) director to serve until the 2003 Annual Meeting of
Shareholders:
<TABLE>
<S> <C>
[ ] FOR the nominee listed [ ] WITHHOLD AUTHORITY to vote for the nominee listed
To serve until the 2003 Annual Meeting of Shareholders:
Frank A. Argenbright, Jr.
</TABLE>
2. To ratify appointment of Arthur Andersen LLP as our independent public
accountants:
<TABLE>
<S> <C>
[ ] FOR the ratification of Arthur Andersen LLP [ ] WITHHOLD AUTHORITY to vote for ratification of the
appointment of Arthur Andersen LLP
</TABLE>
(Continued and to be signed on the other side)
(Continued from other side)
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, THE
PROXY WILL BE VOTED FOR THE ABOVE-STATED PROPOSALS.
Date:
--------------------------------,
2000
--------------------------------
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 9, 2000.
IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF
YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.
