<PAGE>
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
ACSYS, 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:
Common Stock
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>
ACSYS, INC.
2000 PENNSYLVANIA AVENUE, N.W.
SUITE 7650
WASHINGTON, D.C. 20006
May 8, 1998
Dear Shareholders:
The directors and officers of ACSYS, Inc. cordially invite you to attend its
first annual meeting of shareholders. We hope you will join us for the meeting
at 10:00 a.m. on Friday, May 29, 1998, at the offices of Nelson Mullins Riley
& Scarborough, L.L.P., Suite 1400, 999 Peachtree Street, N.E., Atlanta,
Georgia 30309. At the Meeting, holders of record of the Company's Common Stock
at the close of business on May 6, 1998 will be requested to consider and vote
upon:
1. The election of nine directors of the Company.
2. The transaction of any other business that may properly come before the
Meeting.
All shareholders are invited to attend the Meeting in person. Please
consider the attached materials carefully and then sign and date the enclosed
proxy and mail it at your earliest convenience in the return envelope
provided. If you attend the Meeting in person you may, if you wish, vote
personally on all matters brought before the Meeting even if you have
previously returned your proxy.
Sincerely,
/s/ Timothy Mann, Jr.
Timothy Mann, Jr.
Chief Executive Officer
<PAGE>
ACSYS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FRIDAY, MAY 29, 1998
Notice is hereby given that the annual meeting of shareholders (the
"Meeting") of ACSYS, Inc. (the "Company") will be held on Friday, May 29, 1998
at 10:00 a.m. E.D.T. at the offices of Nelson Mullins Riley & Scarborough,
L.L.P., Suite 1400, 999 Peachtree Street, N.E., Atlanta, Georgia 30309,
Atlanta, Georgia for the following purposes:
(1) To Elect Nine Directors. The shareholders will consider and vote upon
the election of nine directors of the Company to serve until the next
annual meeting of the shareholders of the Company or until their
successors are duly elected and qualified.
(2) To Consider and Vote Upon Any Other Business. The shareholders will
consider and vote upon the transaction of any other business that may
properly come before the Meeting.
Shareholders of record at the close of business on May 6, 1998 are entitled
to be present and to vote at the Meeting or any adjourned meeting. These proxy
materials are being mailed to shareholders on or about May 8, 1998.
IMPORTANT--EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE AND SIGN
THE ENCLOSED PROXY, WHICH IS BEING SOLICITED BY THE COMPANY, AND RETURN IT
PROMPTLY IN THE ACCOMPANYING POSTAGE-PREPAID ENVELOPE. YOU MAY REVOKE YOUR
PROXY AT ANY TIME BEFORE THE MEETING, AND IF YOU ATTEND THE MEETING, YOU MAY
ELECT TO VOTE YOUR SHARES IN PERSON.
<PAGE>
THE COMPANY
ACSYS, Inc. (the "Company") is one of the leading providers of accounting
and finance temporary staffing and permanent placement services in the United
States. Since its formation as a Georgia corporation in March 1997, the
Company has acquired eight accounting and finance specialty professional
staffing businesses. The Company operates 18 offices serving the Atlanta,
Charlotte, Central New Jersey, Orlando, Philadelphia, Tampa, Washington, D.C.
and Richmond, Virginia metropolitan markets. The Company's goal is to build a
national specialty professional staffing business with offices in major United
States metropolitan markets. The Company's clients include Fortune 1000
companies, middle market companies, governmental agencies and nonprofit
organizations. In February 1998 the Company completed its initial public
offering of 2,842,500 shares of Common Stock at a price of $8.50 per share,
realizing net cash proceeds of approximately $20.1 million after deducting
underwriting discounts and offering expenses. (The foregoing amounts exclude
the sale of 320,000 shares by selling shareholders in the offering and include
the underwriters' exercise of their over-allotment option to purchase 412,500
shares.) The Company maintains its principal executive offices at 2000
Pennsylvania Avenue, N.W., Suite 7650, Washington, D.C. 20006, and its
telephone number is (202) 872-0303.
THE MEETING
TIME, DATE AND PLACE
The Meeting will be held at 10:00 a.m., E.D.T., on May 29, 1998, at the
offices of Nelson Mullins Riley & Scarborough, L.L.P., Suite 1400, 999
Peachtree Street, N.E., Atlanta, Georgia 30309.
PURPOSE OF THE MEETING
The purpose of the Meeting is to consider and vote upon: (1) the election of
nine directors of the Company to serve until the next annual meeting of the
shareholders of the Company or until their successors are duly elected and
qualified; and (2) the transaction of any other business that may properly
come before the Meeting.
RECORD DATE AND RULES FOR VOTING
Only shareholders of record at the close of business on May 6, 1998 (the
"Record Date") are entitled to be present and to vote at the Meeting or any
adjournment of the Meeting. As of the Record Date, the Company had 11,428,683
shares of Common Stock outstanding and entitled to vote at the Meeting. Each
share of the Company's Common Stock entitles the holder to one vote with
respect to all matters to come before the Meeting, and all of such shares vote
as a single class. Shares represented by duly executed proxies will be voted
in accordance with shareholders' instructions. If a shareholder signs the
proxy but does not fill in a vote, his or her shares will be voted in
accordance with the Directors' recommendations. The Company's management knows
of no other matters to be presented or considered at the Meeting, but if any
other business is brought before the meeting, shares will be voted at the
Directors' discretion. The proxies named will have the authority to vote for
any person for election as a director in lieu of either person nominated if
the nominee is unable to serve. It is not contemplated that any nominee will
be unable to serve.
The presence in person or by proxy of shareholders owning more than one-half
of the shares outstanding and entitled to vote constitutes a quorum. In
determining whether a quorum exists at the Meeting for purposes of all matters
to be voted on, all votes "for" and all votes to "withhold authority" will be
counted, and shares will be counted for quorum purposes if they are
represented at the Meeting for any purpose other than solely to object to
holding the meeting or transacting business at the Meeting. Assuming that a
quorum is present, abstentions and broker non-votes will have no effect on the
voting.
Assuming that a quorum is present, the vote required for election of
directors is a plurality of the votes cast by the shares entitled to vote in
the election. For any other matter coming before the Meeting, the matter will
be
1
<PAGE>
deemed to be approved if the votes cast in favor of the action exceed the
votes cast opposing the action. Shareholders do not have cumulative voting
rights. If the Meeting is adjourned, the proxy may also be used at any later
meetings, for the purposes stated in the Notice of Meeting.
A proxy may be revoked, at any time before it is voted, at the option of the
person signing it by providing written notice to such effect to the Secretary
of the Company, delivering a later dated proxy, or by voting in person at the
Meeting.
If any beneficial owner of Common Stock holds such stock in "street name"
and wishes to vote such owner's shares at the Meeting, such owner must obtain
from the relevant nominee holding Common Stock a properly executed "legal
proxy" identifying the beneficial owner as a holder of Common Stock,
authorizing the beneficial owner to act on behalf of the nominee-record owner
at the Meeting and identifying the number of shares that the beneficial owner
is authorized to vote.
SOLICITATION OF PROXIES; COSTS
The enclosed proxy is solicited by the Company for use at the Meeting. The
Company will solicit proxies principally by mailing these materials to the
shareholders, but the Directors, officers and employees of the Company may, on
the Company's behalf, solicit proxies by telephone or in person. The Company
will pay all of the costs of the solicitation, principally the costs of
preparing, printing and mailing these materials. Arrangements also will be
made with custodians, nominees and fiduciaries for the forwarding of proxy
solicitation materials to beneficial owners of shares of Common Stock held of
record by such custodians, nominees and fiduciaries, and the Company will
reimburse such custodians, nominees and fiduciaries for their reasonable out-
of-pocket expenses incurred in connection therewith.
2
<PAGE>
MANAGEMENT OF THE COMPANY
The nominees for director and the executive officers of the Company and
their ages and positions as of the Record Date are as follows:
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
David C. Cooper............ 42 Chairman of the Board
Timothy Mann, Jr........... 32 Chief Executive Officer and Director
Edward S. Baumsteim........ 43 President, Chief Operating Officer and Director
Beth Monroe-Chase.......... 46 Chief Development Officer, Executive Vice
President and Director
Barry M. Abelson........... 51 Director
John R. Ficquette.......... 43 Director
Paul J. Klaassen........... 40 Director
William Porter Payne....... 50 Director
Harry J. Sauer............. 46 Director
Lester E. Gallagher, III... 42 Chief Financial Officer
</TABLE>
BIOGRAPHICAL INFORMATION FOR EXECUTIVE OFFICERS AND DIRECTORS
David C. Cooper has served as the Chairman of the Board of Directors of the
Company since its formation and Division President--Atlanta since September
1997. Mr. Cooper founded David C. Cooper & Associates, Inc. and DCCA
Professional Temporaries, Inc. in 1980 and served as their president until May
1997. Mr. Cooper received his Bachelor of Business Administration degree in
Accounting from the University of Georgia. Mr. Cooper is a past president of
the American Association of Accounting and Finance, a national network of
independently owned accounting and finance permanent placement and temporary
staffing businesses.
Timothy Mann, Jr. has served as Chief Executive Officer of the Company since
October 1997 and a Director since its formation. Prior to his becoming Chief
Executive Officer, Mr. Mann served the Company in various roles. From 1992
until 1997, Mr. Mann was an attorney engaged in the private practice of law,
most recently with Alston & Bird LLP in Atlanta, Georgia. Mr. Mann has
extensive staffing industry experience, having served as issuer's counsel in a
number of staffing industry public equity offerings and as buyer's counsel in
a number of staffing industry mergers and acquisitions. Mr. Mann's experience
also includes service in the audit division of Arthur Andersen LLP. Mr. Mann
received his J.D. cum laude from the University of Georgia and his Bachelor of
Science degree in Accounting from the University of Florida.
Edward S. Baumstein has served as the Chief Operating Officer and a Director
of the Company since September 1997 and as President of the Company since
October 1997. Mr. Baumstein served as the president and chief executive
officer of AcSys Resources, Inc. from 1994 until September 1997 and had served
in various positions since he joined AcSys Resources in 1983. Prior to joining
AcSys Resources, Mr. Baumstein was with Price Waterhouse. He received his
B.B.A. in Accounting from Temple University and is a certified public
accountant.
Beth Monroe-Chase has served as a Director of the Company since its
formation. She served as Chief Operating Officer from the Company's formation
until September 1997, when she became the Company's Chief Development Officer
and Executive Vice President. Ms. Monroe-Chase was one of the founders of
Infinity Enterprises, Inc. (d/b/a Don Richard Associates of Washington) and
from 1994 until the formation of the Company served as its president. Ms.
Monroe-Chase served as the director of sales from 1992 to 1994 and as managing
director from 1993 to 1994 for the predecessor of Don Richard Associates of
Washington (which also operated under that name). Her previous staffing
industry experience includes service as an area manager for Staff Builders and
as a regional manager with TeleSec Staffing.
3
<PAGE>
Barry M. Abelson has served as a Director of the Company since the
completion of the Company's initial public offering in February 1998. He has
been a partner in the law firm of Pepper Hamilton LLP, Philadelphia,
Pennsylvania since May 1992 and has served as Chairman of its Executive
Committee since February 1995. Mr. Abelson is also a director of Intelligent
Electronics, Inc. and XLConnect Solutions, Inc. Mr. Abelson received his
Bachelor of Arts degree in Sociology from Dartmouth College and his J.D.
degree from the University of Pennsylvania.
John R. Ficquette has served as a Director of the Company since September
1997. Mr. Ficquette was a shareholder and officer of C.P.A. Staffing, Inc.
from 1990 until its acquisition by AcSys Resources in August 1997. His
responsibilities at C.P.A. Staffing included client development, training,
system development and administration. Mr. Ficquette received his Bachelor of
Science Degree in Business Administration from the University of Alabama.
Paul J. Klaassen has served as a Director of the Company since February
1998. He is the co-founder and has served as Chairman of the Board and Chief
Executive Officer of Sunrise Assisted Living, Inc. and its predecessor
entities since 1981. He also served as President of Sunrise Assisted Living,
Inc. and its predecessor entities from 1981 through July 1997. Mr. Klaassen is
the founding Chairman of the Assisted Living Facilities Association of
America, the largest assisted living industry trade association. He serves on
the editorial advisory boards of Contemporary Long Term Care, Retirement
Housing Report, Assisted Living Today and Assisted Living Briefing magazines.
William Porter Payne has served as a Director of the Company since the
completion of the Company's initial public offering in February 1998. He has
served as Vice Chairman of NationsBank Corporation since January 1997 and was
President and Chief Executive Officer of the Atlanta Committee for the Olympic
Games from 1991 to 1997. Mr. Payne is also a director of Anheuser-Busch
Companies, Inc., Cousins Properties, Inc. and Jefferson-Pilot Corporation. Mr.
Payne received his Bachelor of Arts in Political Science and J.D. degrees from
the University of Georgia.
Harry J. Sauer has served as a Director of the Company and as the Division
President--Philadelphia since September 1997. Mr. Sauer has worked in the
staffing industry since 1977, when he co-founded AcSys Resources. He served in
various positions with AcSys Resources, most recently as chief operating
officer. Mr. Sauer received his Bachelor of Arts degree in Political Science
from American University and his M.B.A. from Boston College. Mr. Sauer has
served as the president of Hillel of Greater Philadelphia and as a board
member of several nonprofit organizations.
Lester E. Gallagher, III has served as the Company's Chief Financial Officer
since September 1997. From 1994 through the AcSys Resources acquisition, Mr.
Gallagher served as the chief financial officer of AcSys Resources. From 1990
to 1994, he was a manager with Coopers & Lybrand LLP. Mr. Gallagher received
his Bachelor of Science degree in Accounting from Villanova University and is
a certified public accountant.
BOARD ORGANIZATION
The number of directors on the Board of Directors is fixed at ten. One
current director is not standing for reelection, and the Board intends to
elect Mr. Robert M. Kwatnez, an officer and shareholder of Icon Search and
Consulting, Inc. ("Icon"), to fill the vacancy upon the closing of the
Company's acquisition of Icon (but in no event earlier than the adjournment of
the Meeting). Directors of the Company are elected at the annual meeting of
shareholders. Executive officers are appointed by the Board of Directors.
Directors and executive officers of the Company are elected or appointed to
serve until they resign or are removed or are otherwise disqualified to serve,
or until their successors are elected and qualified at the next annual meeting
of shareholders. During 1997, the Board of Directors held five meetings. Each
director attended at least 75% of the aggregate of all regular, annual and
special meetings of the Board of Directors.
4
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
In February 1998 after the Company completed its initial public offering,
the Board of Directors established a Compensation Committee and an Audit
Committee. The Board of Directors does not have a nominating committee because
nominating functions are performed by the Board of Directors as a group.
The Audit Committee was established to review the internal controls of the
Company, review the objectivity of its financial reporting and meet with
appropriate Company financial personnel and the Company's independent auditors
in connection with these reviews. The Audit Committee is also charged with
recommending to the Board the appointment of independent auditors to serve as
the Company's auditors for the following year. The members of the Audit
Committee are Messrs. Abelson, Klaassen, Payne and Mann.
The Compensation Committee was established to advise and make
recommendations to the Board with respect to salaries and bonuses to be paid
to executive officers and other employees of the Company. The Compensation
Committee also administers the Company's 1997 Stock Option Plan and its other
stock option plans. It also recommends to the Board of Directors adoption of
any compensation plans in which officers and directors of the Company are
eligible to participate. The members of the Compensation Committee are Messrs.
Abelson, Cooper, Klaassen and Payne.
DIRECTOR COMPENSATION
Directors who are employees of the Company do not receive additional
compensation for serving as directors. Each director who is not an employee of
the Company (an "Outside Director") receives $1,000 for each meeting of the
Board of Directors attended and for each meeting of a committee of the Board
of Directors (unless the committee meeting is held on the same day as a
meeting of the Board of Directors). All directors of the Company are
reimbursed for out-of-pocket expenses incurred in attending meetings of the
Board of Directors or its committees and for other expenses incurred in their
capacity as Directors.
The Company has adopted a policy of granting to each Outside Director, upon
his or her initial appointment to the Board of Directors, a stock option to
purchase 50,000 shares of Common Stock pursuant to the Option Plan. Pursuant
to this policy the Board granted options to purchase 50,000 shares of Common
Stock to each of Messrs. Abelson and Payne at the initial public offering
price of $8.50 per share and granted options to purchase 50,000 shares of
Common Stock to Mr. Klaassen at $13.00 per share. In addition, the Company has
adopted a policy of granting to each Outside Director, once each quarter
during the Outside Director's term as a director, options to purchase 4,000
shares, with a lifetime cap of 150,000 shares per Outside Director. The option
price will be equal to the fair market value at the date of each grant, and
each option will have a 10-year term. One third of the options will vest on
each of the first three anniversaries of the date of grant, provided that all
unvested options will vest upon a change in control of the Company (as defined
in the option agreement) or the death of the Outside Director.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The Company was incorporated in March 1997 and conducted no operations in
1996. The Company's most highly compensated executive officers in 1997 were
Messrs. Cooper, Mann, Baumstein, Gallagher and Mark E. Strassman and Ms.
Monroe-Chase (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
------------------------- ------------
SECURITIES
UNDERLYING ALL OTHER
OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) SARS (#) ($)
- --------------------------- ---- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
David C. Cooper,
Chairman of the Board of
Directors(1).............. 1997 $ 83,333 $ -- -- $--
Timothy Mann, Jr.,
Chief Executive
Officer(2)................ 1997 110,128 -- 135,198 --
Edward S. Baumstein,
President and Chief
Operating Officer(3)...... 1997 66,666 -- -- --
Mark E. Strassman,
former President(4)....... 1997 107,590 -- -- --
Beth Monroe-Chase,
Chief Development
Officer(5)................ 1997 107,590 -- -- --
Lester E. Gallagher, III,
Chief Financial
Officer(6)................ 1997 $ 41,666 $1,000 18,771 $400(7)
</TABLE>
- --------
(1) Reflects compensation paid by the Company to Mr. Cooper beginning on May
16, 1997, the date that the Company employed Mr. Cooper as its Chairman of
the Board of Directors.
(2) Reflects compensation paid by the Company to Mr. Mann in all capacities
beginning on March 12, 1997, the date that the Company employed Mr. Mann.
Mr. Mann served in various executive positions with the Company before
becoming its Chief Executive Officer in October 1997.
(3) Reflects compensation paid by the Company to Mr. Baumstein in all
capacities beginning on September 3, 1997, the date that the Company
employed Mr. Baumstein. Mr. Baumstein has served as Chief Operating
Officer since September 1997 and as President since October 1997.
(4) Reflects compensation paid by the Company to Mr. Strassman in all
capacities from May 16, 1997, the date that the Company employed Mr.
Strassman. Mr. Strassman served as the Company's President from May 1997
to October 1997 and no longer is an executive officer. See "Certain
Transactions--Acquisitions--Don Richard Associates of Washington."
(5) Reflects compensation paid by the Company to Ms. Monroe-Chase beginning on
May 16, 1997, the date that the Company employed Ms. Monroe-Chase, who
initially served as Chief Operating Officer and became Chief Development
Officer in September 1997.
(6) Reflects compensation paid by the Company to Mr. Gallagher beginning on
September 3, 1997, the date that the Company employed Mr. Gallagher as its
Chief Financial Officer.
(7) Matching contributions by the Company to Mr. Gallagher's account under the
Company's 401(k) pension plan.
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Each of Messrs. Cooper, Mann, Baumstein and Ms. Monroe-Chase entered into
employment agreements with the Company that provide for an annual base salary
of $200,000. Each executive officer (except Messrs.
6
<PAGE>
Mann and Gallagher) is also contractually entitled to a bonus to be agreed
upon and based upon certain performance criteria as set forth in his or her
agreement, although no executive bonuses were paid in or for 1997 other than
to Mr. Gallagher. Mr. Mann's agreement provides for an annual bonus equal to
2.0% of the year-to-year increase in the Company's earnings before interest,
taxes, depreciation and amortization, and the grant of stock options as
described under "--Option/SAR Grants in Last Fiscal Year." Mr. Gallagher's
agreement provides for an annual base salary of $125,000, such bonus as the
Board of Directors may determine up to an amount equal to 15% of his then-
current base salary (he received a $1,000 holiday bonus in 1997), and the
grant of stock options as described under "--Option/SAR Grants in Last Fiscal
Year." None of the Company's executive officers has received or is expected to
receive perquisites the value of which exceeds the lesser of $50,000 or 10% of
the salary and bonus of such executive.
Each employment agreement for the Named Executive Officers (other than Mr.
Strassman, who no longer serves as an executive officer) is for a term of
three years and continues thereafter for additional one year terms until
either the Company or the executive officer elects not to renew the agreement.
Each of these agreements provides that, in the event of a termination of
employment either (i) by the Company without cause (as defined in the
agreement) or (ii) by the employee following a change in control (as defined
in the agreement) or a breach by the Company of such executive's employment
agreement or a registration rights agreement, such executive officer will be
entitled to receive from the Company a lump sum severance payment equal to
three times the sum of his or her then-current annual salary plus the amount
of his or her bonus calculated using the results of the operations of the
Company for the twelve months prior to such termination. In such event, the
non-compete provisions discussed below would not apply to such executive
officer. If an executive officer resigns for any other reason, such executive
officer will be entitled to receive from the Company a lump sum severance
payment equal to his or her then current annual salary. If an executive is
terminated upon a determination by the Board of Directors that such executive
officer failed to meet performance expectations, then such executive officer
will be entitled to receive a lump sum severance payment equal to his or her
base salary for the greater of the remainder of the term of his or her
employment agreement or one year.
Each of the above employment agreements contains a covenant not to compete
with the Company for a period of two years immediately following termination
of employment and an obligation not to solicit any employees or customers of
the Company for a period of one year following termination of employment.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning the Company's 1997
grants of stock options to Timothy Mann, Jr. and Lester E. Gallagher, III, the
only Named Executive Officers who were granted stock options in 1997.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------
PERCENT OF POTENTIAL REALIZABLE VALUE AT
NUMBER OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS EXERCISR PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM(1)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ----------------------------------
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 0%($) 5%($) 10%($)
---- ------------ ------------ -------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Timothy Mann, Jr. ...... 135,198(2) 54.8% $8.00 2007 $ -- $ 680,202 $ 1,723,766
Lester E. Gallagher,
III.................... 18,771(3) 7.6% $2.66 2006 $ 100,237(4) $ 71,699 $ 171,730
</TABLE>
- --------
(1) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the Securities and Exchange Commission. There can
be no assurance provided to any executive officer or any other holder of
the Company's securities that the actual stock price appreciation over the
term will be at the assumed 5% and 10% levels or at any other defined
level. Unless the market price of the Common Stock appreciates over the
option term, no value will be realized from options granted to the Named
Executive Officers.
(2) Options were granted at the fair market value of the Common Stock on the
date of grant as determined by the Board. These stock options are fully
vested and have a 10-year term.
7
<PAGE>
(3) In January 1997 AcSys Resources, Inc. granted options to Mr. Gallagher
that were converted into options to purchase 18,771 shares of Common Stock
at a price of $2.66 per share in connection with the Company's acquisition
of AcSys Resources. These options are fully vested and expire in 2006.
(4) Based upon an assumed grant-date market value of $8.00 per share.
In addition to the options granted in 1997 to Messrs. Mann and Gallagher, in
1997 the Company also agreed in each of their respective employment agreements
to grant stock options to them upon the Company's initial public offering as
described below. On February 5, 1998, the effective date of the Company's
registration statement for its initial public offering (the "Offering Date"),
the Company granted to Mr. Mann options to purchase 113,357 shares of Common
Stock (an amount equal to 1% of the shares of Common Stock outstanding on the
date of the offering, assuming the underwriters' over-allotment option was
exercised in full, as in fact occurred), at an exercise price equal to the
initial public offering price of $8.50 per share. One-half of these options
vest on each of the first two anniversaries of the Offering Date, and the
options have a 10-year term. All of Mr. Mann's unvested options vest
immediately if he is terminated without cause or resigns for good reason or
upon a change in control (as such terms are defined in his employment
agreement). The Company also granted to Mr. Gallagher, upon the Offering Date,
options to purchase 66,229 shares of Common Stock at an exercise price equal
to the initial public offering price of $8.50 per share. One third of these
options vest on each of first, second and third anniversaries of the effective
date. All of Mr. Gallagher's unvested options vest immediately if he is
terminated without cause or resigns for good reason or upon a change in
control (as such terms are defined in his employment agreement).
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
The following table gives information with respect to options held by Mr.
Mann and Mr. Gallagher, the only Named Executive Officers who held unexercised
options at December 31, 1997. The Company has never issued any SARs, and none
of the Named Executive Officers exercised any stock options during 1997. There
was no market for the Common Stock until it began trading on the Nasdaq
National Market on February 6, 1998. The fiscal year-end market value of $8.50
per share is equal to the initial public offering price of $8.50 per share.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FISCAL AT FISCAL
YEAR-END (#) YEAR-END($)(1)
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
---- ------------- --------------
<S> <C> <C>
Timothy Mann, Jr................................... 135,198/0 $ 67,599/--
Lester E. Gallagher, III........................... 18,771/0 $109,623/--
</TABLE>
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(1) Based upon an assumed fiscal year-end market value of $8.50 per share.
1997 STOCK OPTION PLAN
The Board of Directors and the Company's shareholders approved the Company's
1997 Stock Option Plan (the "Option Plan"), which became effective in May
1997. The Company granted options to purchase 1,148,586 shares of Common Stock
to certain employees and executive officers on February 5, 1998, the effective
date of the Company's initial public offering, an exercise price equal to the
initial public offering price of $8.50 per share. Awards under the Option Plan
were granted by the Board of Directors but will in the future be granted by
the Compensation Committee. In addition, pursuant to the Company's policy of
granting options to Outside Directors as explained in "Management of the
Company--Director Compensation," the Company granted 100,000 options to two
directors at an exercise price equal to the initial public offering price of
$8.50 per share, and granted 50,000 options to a director who subsequently
joined the Board at an exercise price of $13.00, the closing price on the date
of the grant.
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Awards under the Option Plan may include incentive stock options ("ISOs")
and/or non-qualified stock options ("NQSOs"). The Compensation Committee
administers the Option Plan and generally has discretion to determine the
terms of an option grant, including the number of option shares, option price,
term, vesting schedule, the post-termination exercise period and whether the
grant will be an ISO or NQSO, subject to certain limitations in the Option
Plan. The maximum number of shares of Common Stock that currently may be
subject to outstanding options, determined immediately after the grant of any
option, is 2,000,000 shares. The Option Plan provides that the number of
shares of Common Stock available for issuance thereunder shall be
automatically increased on the first trading day of each calendar year by the
lesser of (i) three percent of the number of shares outstanding on the
preceding trading day or (ii) 500,000 shares. Shares of Common Stock which are
attributable to awards which have expired, terminated or been canceled or
forfeited during any calendar year are available for issuance or use in
connection with future awards during such calendar year. The Option Plan will
remain in effect until terminated by the Board of Directors. No ISO may be
granted after May 2007. The Option Plan may be amended by the Board of
Directors without the consent of the shareholders of the Company, except that
any amendment, although effective when made, will be subject to shareholder
approval within one year after approval by the Board of Directors if the
amendment increases the total number of shares issuable pursuant to ISOs or
changes the class of employees eligible to receive ISOs that may participate
in the Option Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors did not have a Compensation Committee until February
1998. The officers and employees of the Company who participated in
deliberations of the Board in 1997 concerning executive officer compensation
were (i) Edward S. Baumstein, David C. Cooper, John R. Ficquette, Timothy
Mann, Jr., Beth Monroe-Chase, Harry J. Sauer and Mark E. Strassman, each of
whom is currently a director of the Company; and Kevin W. Cole, Patricia J.
Homrich, Edward K. Turner and Stephen S. Tutwiler, each of whom was a director
for a portion of 1997.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview. The key components of executive officer compensation are salary,
bonus and stock option awards. Each of the Company's executive officers is a
party to an employment agreement (collectively, the "Executive Employment
Agreements") that are described above. With the exception of Mr. Mann, the
Company's Chief Executive Officer, the Company's executive officers were key
employees of the companies acquired by the Company (the "Acquired Companies"),
and their employment agreements were entered into in arm's-length negotiations
as part of the overall negotiation of the terms of the applicable acquisition.
The Company formed its Compensation Committee in February 1998 after the
Company's initial public offering. Each of the members of the Compensation
Committee other than Mr. Cooper is an Outside Director. No Outside Director is
or has been an officer or employee of the Company.
The members of the Compensation Committee hold primary responsibility for
determining executive officer compensation levels, subject to the terms of the
Executive Employment Agreements. The Compensation Committee has adopted a
compensation philosophy that is intended to align compensation with the
Company's overall business strategy. The philosophy guiding the executive
compensation program is designed to link executive compensation and
shareholder value. The goals of the program are:
. To compensate executive employees in a manner that aligns the employee's
interests with the interests of the shareholders;
. To encourage continuation of the Company's entrepreneurial spirit;
. To reward executives for successful long-term strategic management;
. To recognize outstanding performance; and
. To attract and retain highly qualified and motivated executives.
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<PAGE>
The Compensation Committee intends to continue to grant to certain of the
Company's executives and other key employees stock options at the current
market value, which options have no monetary value to the executives unless
and until the market price of the Common Stock increases above the exercise
price. (Executive officers who were owners of the Acquired Companies and
therefore already own a substantial number of shares of Common Stock have not
been granted options.) The mix of base salary, bonuses and stock option awards
reflects the Compensation Committee's intention to link executive compensation
to the Company's operational performance and the price of the Common Stock.
The Compensation Committee anticipates that future option grants will be based
on a subjective analysis of various performance criteria, primarily earnings
per share and operating profits, but will not directly be tied to any one
factor. Future bonus payments will be awarded in the discretion of the
Compensation Committee as it deems appropriate. The Compensation Committee
intends to continue to examine ways to more closely link its annual bonus and
long-term incentive plans to the Company's stock performance, with the
objective of creating plans that strengthen the relationship between
shareholder value and executive compensation.
CEO Compensation. Timothy Mann. Jr., the Company's Chief Executive Officer,
agreed in March 1997 to join the Company as its first officer and director.
Mr. Mann's agreement originally provided for him to serve as the Company's
Chief Financial Officer at an annual salary of $140,000, with an annual bonus
equal to 2.0% of the year-to-year increase in the Company's earnings before
interest, taxes, depreciation and amortization, and with the grant of stock
options as described under "--Option/SAR Grants in Last Fiscal Year." The
terms of Mr. Mann's initial employment agreement were negotiated at arm's-
length when the Company was in its formative stage, with all the risks
attendant to new venture. The Compensation Committee believes that the bonus
arrangement gives Mr. Mann an appropriate incentive to work to increase the
Company's earnings, which will ultimately benefit all of the Company's
shareholders. Similarly, the Company believes that the options granted to Mr.
Mann serve to link his compensation to the Company's operational performance
and the price of the Common Stock. The Board subsequently increased Mr. Mann's
salary to $200,000 upon his promotion to Chief Executive Officer in October
1997. The Board took into account Mr. Mann's increased responsibilities and
the salaries being paid to the Company's other executive officers.
This report is submitted by the members of the Compensation Committee.
David C. Cooper
Barry M. Abelson
Paul J. Klaassen
William Porter Payne
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers and
persons who own beneficially more than 10% of the Company's outstanding Common
Stock to file with the SEC initial reports of ownership and reports of changes
in their ownership of the Company's Common Stock. Directors, executive
officers and greater than 10% shareholders are required by SEC regulations to
furnish the Company with copies of the forms they file. To the Company's
knowledge, based solely on a review of the copies of such reports furnished to
the Company, its directors, executive officers and greater than 10%
shareholders complied with all applicable Section 16(a) filing requirements
since such persons became subject to such filing requirements when the Company
became a reporting company upon its initial public offering in February 1998.
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<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of April 27, 1998 by: (i) each of
the Company's directors and Named Executive Officers; (ii) all executive
officers and directors of the Company as a group; and (iii) each person known
by the Company to own beneficially more than 5% of the Common Stock. Each of
the holders listed below has sole voting power and investment power over the
shares beneficially owned. Each of the persons known by the Company to
beneficially own more than 5% of the Common Stock has an address in care of
the Company's principal offices.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(1)
---------------------------------
NAME NUMBER PERCENTAGE
---- ---------------- ----------------
<S> <C> <C>
David C. Cooper.............................. 1,573,714 13.8%
Timothy Mann, Jr.(2)......................... 135,198 1.2
Edward S. Baumstein.......................... 993,521 8.7
Beth Monroe-Chase............................ 651,143 5.7
Lester E. Gallagher, III(3).................. 18,771 *
Barry M. Abelson............................. 1,000 *
John R. Ficquette............................ 609,637 5.3
Paul J. Klaassen............................. 2,500 *
William Porter Payne......................... 2,000 *
Harry J. Sauer............................... 993,521 8.7
Mark E. Strassman............................ 581,143 5.1
Louis Boohaker............................... 609,637 5.3
All directors and executive officers as a
group (11 persons)(4)....................... 5,562,148 48.0%
</TABLE>
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* Less than 1%.
(1) Shares Beneficially Owned is calculated assuming 11,428,131 shares of
Common Stock were outstanding on the date stated above. This percentage
also includes Common Stock of which such individual has the right to
acquire beneficial ownership within sixty days of such date, including but
not limited to the exercise of an option; however, such Common Stock shall
not be deemed outstanding for the purpose of computing the percentage
owned by any other individual.
(2) Comprised of currently exercisable options held by Mr. Mann to purchase a
total of 135,198 shares of Common Stock.
(3) Comprised of currently exercisable options held by Mr. Gallagher to
purchase a total of 18,771 shares of Common Stock.
(4) Includes currently exercisable options to purchase a total of 153,969
shares of Common Stock.
11
<PAGE>
CERTAIN TRANSACTIONS
ACQUISITIONS
Since the Company's formation in March 1997, it has acquired eight
accounting and finance professional staffing companies. All of these companies
now operate as wholly owned subsidiaries of the Company. In certain of these
acquisitions persons who were previously shareholders of the companies, and
who are now executive officers, directors or holders of at least 5% of the
Company's outstanding Common Stock, received consideration from the Company in
connection with the applicable acquisition. These acquisitions are described
in more detail below:
David C. Cooper & Associates. The Company issued 1,573,714 shares of Common
Stock to David C. Cooper in connection with the mergers of wholly owned
subsidiaries of the Company with and into David C. Cooper & Associates, Inc.
and DCCA Professional Temporaries, Inc. in May 1997.
Don Richard Associates of Washington. The Company issued a total of
2,237,142 shares of Common Stock in connection with the merger of a wholly
owned subsidiary of the Company with and into Infinity Enterprises, Inc. d/b/a
Don Richard Associates of Washington in May 1997. The following directors,
executive officers and/or 5% shareholders received shares of Common Stock in
that merger: Mark E. Strassman--671,143 shares; and Beth Monroe-Chase--671,143
shares. Other Don Richard Associates of Washington shareholders who are not
directors, executive officers and/or 5% shareholders received the balance of
1,193,140 shares issued by the Company. In May 1997 the Company entered into a
three-year employment agreement with Mr. Strassman, a director of the Company,
under which Mr. Strassman served as the Company's President until October 1997
at an annual base salary of $200,000 (the employment agreement was otherwise
substantially similar to the employment agreements for the Named Executive
Officers). Mr. Strassman's employment agreement was subsequently modified to
provide that he would consult with the Company's senior management and to
provide that, upon its termination, Mr. Strassman would continue to be paid
the same compensation and benefits through November 2000 instead of receiving
a lump-sum severance payment. In December 1997 it was determined that Mr.
Strassman would no longer play an active role in the Company's management. As
a result, the Company recorded a nonrecurring expense of $512,000 (the present
value of the payments due to Mr. Strassman under his employment agreement) in
the quarter ended December 31, 1997.
AcSys Resources. The Company issued a total of 3,206,316 shares of Common
Stock in connection with the merger of a wholly owned subsidiary of the
Company with and into AcSys Resources, Inc. in September 1997. The following
directors, executive officers and/or 5% shareholders received shares of Common
Stock in that merger: Edward S. Baumstein--993,521 shares; Harry J. Sauer--
993,521 shares; John R. Ficquette--609,637 shares; and Louis Boohaker--609,637
shares. Other AcSys Resources shareholders who are not directors, executive
officers and/or 5% shareholders received the balance of 453,186 shares issued
by the Company.
Prior to their acquisition by the Company, certain companies incurred
indebtedness that was personally guaranteed by their shareholders. The Company
borrowed an aggregate of approximately $11.1 million under the Company's
credit facility to repay such indebtedness upon the acquisition of such
acquired companies. Obligations which are guaranteed by certain of the
Company's current shareholders having a principal balance of approximately
$1.1 million remain outstanding.
RENTAL OF AIRCRAFT FROM COMPANY OWNED BY MR. COOPER
The Company from time to time uses an aircraft owned by Atlantic Leasing
Corporation ("Atlantic"), a company that is wholly owned by David C. Cooper,
the Company's Chairman of the Board. The Company has used the aircraft for
business purposes, and until the completion of the Company's initial public
offering in February 1998, the Company paid Atlantic for the actual operating
costs associated with the Company's use of the aircraft. Since that date the
Company has paid Atlantic a amount equal to the regular commercial coach fare
12
<PAGE>
for each person on the flight. The Company paid Atlantic a total of $28,144 in
1997 and has paid $55,685 to date in 1998 for such use. The Company
anticipates that it will continue this arrangement in the future.
COMPANY POLICY
All transactions with the Company's shareholders, officers and directors or
their affiliates, if any, are subject to the approval of a majority of the
independent and disinterested Outside Directors and will be conducted on terms
no less favorable than could be obtained from unaffiliated third parties on an
arm's-length basis.
ELECTION OF DIRECTORS OF THE COMPANY
At the Meeting, nine Directors are to be elected to serve for a term
expiring at the 1999 annual meeting of shareholders. The persons named below
have been nominated by the Board of Directors for election as directors. All
of these nominees are currently serving as directors of the Company.
Management has made inquiries and believes that each of the nominees will be
willing and able to serve if elected. If any nominee at the time of the
election is unable or unwilling to serve or is otherwise unavailable for
election, discretionary authority is reserved to vote for a substitute chosen
by the Board of Directors of the Company. The proposed nominees are not being
nominated pursuant to any arrangement or understanding with any person.
The Board of Directors of the Company recommends that shareholders vote
"for" the election of each of the following persons as directors of the
Company:
Barry M. Abelson
Edward S. Baumsteim
Beth Monroe-Chase
David C. Cooper
John R. Ficquette
Paul J. Klaassen
Timothy Mann, Jr.
William Porter Payne
Harry J. Sauer
Certain biographical information concerning the nominees is provided under
"Management of the Company."
SHAREHOLDER PROPOSALS
The Company's Bylaws provide procedures for shareholders to bring business
before the Meeting and to nominate directors for election at the meeting. Such
procedures include the shareholder providing advance notice to the Company of
such business or nomination. A shareholder must also follow certain procedures
that are fully set forth in Rule 14a-8 of the General Rules and Regulations
adopted by the Securities and Exchange Commission under the Securities
Exchange Act of 1934. Among other requirements of the Rule is a requirement
that a proposal for consideration at the next meeting must be received at the
Company's principal office not later than January 7, 1999. Unless the
procedures set forth in the Bylaws and the referenced Rule are followed, no
business may be brought before the Meeting, and no person shall be eligible
for election as a director of the Company.
13
<PAGE>
INDEPENDENT AUDITORS
The Company has selected Arthur Andersen LLP, independent auditors, as the
Company's principal accounting firm. A representative of Arthur Andersen is
expected to be present at the meeting and will be available to respond to
appropriate questions. The representative will also have an opportunity to
make a statement if he or she desires to do so. Approval of the Company's
accounting firm is not a matter required to be submitted to the shareholders.
* * * * * *
The Company's 1997 annual report on Form 10-K, as amended, is being mailed
to shareholders along with these proxy materials. The Company will furnish to
each person whose proxy is solicited, on the written request of such person, a
copy of the exhibits to such report upon request. Such request should be
directed to Jerri Davis, Assistant Secretary, ACSYS, Inc., Five Concourse
Parkway, Suite 2650, Atlanta, Georgia 30328.
14
<PAGE>
ACSYS, INC.
2000 Pennsylvania Avenue, N.W., Suite 7650,Washington, D.C. 20006
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS, MAY 29, 1998
The undersigned hereby appoints Lester E. Gallagher, III and Jerri Davis, and
each of them, proxies, with full power of substitution, for and in the name or
names of the undersigned, to vote all shares of Common Stock of ACSYS, Inc. held
of record by the undersigned at the Annual Meeting of Shareholders to be held on
Friday, May 29, 1998 , at 10:00 a.m., E.D.T., at the offices of Nelson Mullins
Riley & Scarborough, L.L.P., Suite 1400, 999 Peachtree Street, N.E., Atlanta,
Georgia 30309; and at any adjournment thereof, upon the matter described in the
accompanying Notice of Annual Meeting and Proxy Statement, receipt of which is
hereby acknowledged, and upon any other business that may properly come before,
and matters incident to the conduct of, the meeting or any adjournment thereof.
Said persons are directed to vote on the matter described in the Notice of
Annual Meeting and Proxy Statement as follows, and otherwise in their discretion
upon such other business as may properly come before, and matters incident to
the conduct of, the meeting and any adjournment thereof:
<TABLE>
<S> <C>
1. Proposal to elect the nominees listed to the NOMINEES: Barry M. Abelson, Edward S. Baumsteim, Beth Monroe-Chase,
right: David C. Cooper, John R. Ficquette, Paul J. Klaassen, Timothy Mann, Jr.,
William Porter Payne, Harry J. Sauer
[_] FOR: nominees listed at right (except as [_] WITHHOLD authority to vote for all nominees
indicated to the contrary below)
</TABLE>
INSTRUCTIONS: To withhold authority to vote for an individual nominee, write
the applicable name in the space provided below:
- --------------------------------------------------------------------------------
(Continued and to be signed on the reverse side)
<PAGE>
Please sign and date this proxy as your name appears below and return
immediately in the enclosed envelope, whether or not you plan to attend the
Annual Meeting.
THIS PROXY WILL BE VOTED AS DIRECTED OR,
IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE STATED PROPOSAL.
-------------------------------------
Signature of Shareholder
-------------------------------------
Signature if held jointly
Dated:___________________________, 1998
IMPORTANT: If shares are jointly owned, both owners should sign. If signing as
attorney, executor, administrator, trustee, guardian or other person signing in
a representative capacity, please give your full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
