SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
TECHNISOURCE, 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 the 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:
[ ] 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>
TECHNISOURCE, INC.
1901 CYPRESS CREEK ROAD, SUITE 202
FORT LAUDERDALE, FL 33309
(954) 493-8601
April 16, 1999
To Our Shareholders:
On behalf of the Board of Directors of Technisource, Inc. (the "Company"),
I cordially invite you to attend the Annual Meeting of Shareholders of the
Company (the "Annual Meeting") to be held at The Westin of Fort Lauderdale, 400
Corporate Drive, Fort Lauderdale, Florida on Thursday, May 6, 1999, at 11:00
a.m. local time. A Notice of the Annual Meeting, form of proxy, and a Proxy
Statement containing information about the matters to be acted upon at the
Annual Meeting are enclosed.
We urge you to attend the Annual Meeting. It is an excellent opportunity
for the Company's management to discuss the Company's progress with you in
person.
Whether in person or by proxy, it is important that your shares be
represented at the Annual Meeting. To ensure your participation in the Annual
Meeting, regardless of whether you intend to attend in person, please complete,
sign, date and return the enclosed proxy promptly. If you attend the Annual
Meeting, you may revoke your proxy at that time and vote in person, even if you
have previously returned your form of proxy, by following the procedures set
forth in the Proxy Statement.
We look forward to seeing you on May 6.
Yours truly,
Joseph W. Collard
President and
Chief Executive Officer
<PAGE>
TECHNISOURCE, INC.
1901 CYPRESS CREEK ROAD, SUITE 202
FORT LAUDERDALE, FLORIDA 33309
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, MAY 6, 1999
------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders ("Annual
Meeting") of Technisource, Inc. (the "Company") will be held at The Westin of
Fort Lauderdale, 400 Corporate Drive, Fort Lauderdale, Florida on Thursday, May
6, 1999, at 11:00 a.m., for the following purposes:
1. To elect six directors of the Company to serve until the 2000 Annual
Meeting of Shareholders;
2. To ratify the appointment of KPMG LLP as the Company's independent
certified public accountants for the fiscal year ending December 31,
1999; and
3. To transact such other business as may properly come before the Meeting
or any adjournment or postponements thereof.
The Board of Directors has fixed the close of business on March 19, 1999,
as the record date for determining those shareholders entitled to notice of, and
to vote at, the Annual Meeting and any adjournments or postponements thereof.
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. THOSE
SHAREHOLDERS WHO ARE UNABLE TO ATTEND ARE RESPECTFULLY URGED TO EXECUTE AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO EXECUTE
A PROXY CARD MAY NEVERTHELESS ATTEND THE ANNUAL MEETING, REVOKE THEIR PROXY, AND
VOTE THEIR SHARES IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS,
JOSEPH W. COLLARD
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Fort Lauderdale, Florida
April 16, 1999
<PAGE>
TECHNISOURCE, INC.
1901 CYPRESS CREEK ROAD, SUITE 202
FORT LAUDERDALE, FLORIDA 33309
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 6, 1999
----------------
PROXY STATEMENT
----------------
TIME, DATE, AND PLACE OF ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Technisource, Inc. (the "Company") of proxies from the
holders of the Company's Common Stock, par value $.01 per share (the "Common
Stock"), for use at the Annual Meeting of Shareholders of the Company to be held
at 11:00 a.m. on Thursday, May 6, 1999, at The Westin of Fort Lauderdale, 400
Corporate Drive, Fort Lauderdale, FL 33309, and at any adjournments or
postponements thereof (the "Annual Meeting"), pursuant to the enclosed Notice of
Annual Meeting.
The approximate date this Proxy Statement and the enclosed form of proxy
are first being sent to shareholders is April 16, 1999. Shareholders should
review the information provided herein in conjunction with the Company's Annual
Report to Shareholders, which accompanies this Proxy Statement. The Company's
principal executive offices are located at 1901 Cypress Creek Road, Suite 202,
Fort Lauderdale, Florida 33309, and its telephone number is (954) 493-8601.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective until
written notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling, and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders, and the enclosed proxy will be borne
by the Company. In addition to the use of mail, employees of the Company may
solicit proxies personally and by telephone. The Company's employees will
receive no compensation for soliciting proxies other than their regular
salaries. The Company may request banks, brokers, and other custodians,
nominees, and fiduciaries to forward copies of the proxy material to their
principals and to request authority for
1
<PAGE>
the execution of proxies. The Company may reimburse such persons for their
expenses in so doing.
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting, the Company's shareholders will consider and act
upon the following matters:
1. To elect six directors of the Company to serve until the 2000 Annual
Meeting of Shareholders;
2. To ratify the appointment of KPMG LLP as the Company's independent
certified public accountants for the fiscal year ending December 31,
1999; and
3. To transact such other business as may properly come before the Meeting
or any adjournment or postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth herein)
will be voted (a) for the election of the respective nominees for director named
below, and (b) in favor of the appointment of KPMG LLP as the Company's
independent certified public accountants. In the event a shareholder specifies a
different choice by means of the enclosed proxy, such shareholder's shares will
be voted in accordance with the specification so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on March 19, 1999, as
the record date (the "Record Date") for determining shareholders of the Company
entitled to notice of and to vote at the Annual Meeting. As of the Record Date,
there were 10,385,000 shares of Common Stock issued and outstanding, all of
which are entitled to be voted at the Annual Meeting. Each share of Common Stock
is entitled to one vote on each matter submitted to shareholders for approval at
the Annual Meeting.
The attendance, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum. Directors will be elected by plurality of the
votes cast by the shares of Common Stock represented in person or by proxy at
the Annual Meeting. The affirmative votes of the holders of a majority of the
shares of Common Stock represented in person or by proxy at the Annual Meeting
will be required to ratify the appointment of KPMG LLP as the Company's
independent certified public accountants for the year ending December 31, 1999,
and any other matter that may be submitted to a vote of the shareholders. If
less than a majority of the outstanding shares entitled to vote are represented
at the Annual Meeting, a majority of the shares so represented may adjourn the
Annual Meeting to another date, time or place, and notice need not be given of
the new date, time or place if the new date, time or place is announced at the
Meeting before adjournment is taken.
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<PAGE>
Prior to the Annual Meeting, the Company will select one or more inspectors
of election for the Meeting. Such inspector(s) shall determine the number of
shares of Common Stock represented at the Meeting, the existence of a quorum,
and the validity and effect of proxies, and shall receive, count, and tabulate
ballots and votes, and determine the results thereof. Abstentions will be
considered as shares present and entitled to vote at the Annual Meeting and will
be counted as votes cast at the Annual Meeting, but will not be counted as votes
cast for or against any given matter.
A broker or nominee holding shares registered in its name, or in the name
of its nominee, which are beneficially owned by another person and for which it
has not received instructions as to voting from the beneficial owner, may have
discretion to vote the beneficial owner's shares with respect to the election of
directors and other matters addressed at the Annual Meeting. Any such shares
that are not represented at the Annual Meeting, either in person or by proxy,
will not be considered to have cast votes on any matters addressed at the Annual
Meeting.
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to
beneficial ownership of the Common Stock as of March 19, 1999, by: (i) each
person known to the Company to beneficially own more than 5% of the Common
Stock; (ii) the Company's Named Executive Officers (as defined below); and (iii)
all directors and executive officers of the Company as a group. The calculation
of the Percentage of Outstanding Shares is based on 10,385,000 shares
outstanding on March 19, 1999. Except as otherwise indicated, each shareholder
named has sole voting and investment power with respect to such shareholder's
shares.
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL OWNERSHIP
OF COMMON STOCK
------------------------------------------
TOTAL SHARES PERCENTAGE
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED OUTSTANDING
<S> <C> <C>
Joseph W. Collard(1)......................... 3,458,090 33.3%
James F. Robertson(2)........................ 3,315,530 31.9%
Paul Cozza(3)................................ 303,158 2.9%
John A. Morton(4)............................ 6,060 *
C. Shelton James............................. 0 *
Paul J. Kinyon............................... 0 *
H. Scott Barrett ............................ 0 *
All Executive Officers and Directors
as a group (7 persons)(5)................... 7,082,838 66.8%
5% SHAREHOLDER:
Wall Street Associates....................... 556,900 5.36%
1200 Prospect St., Suite 100
Lavolla, CA 92037
<FN>
- ---------------------------
* Less than 1%.
(1) Consists of shares owned by J.W.C. Limited Partnership, of which Mr. Collard
is the indirect beneficial owner.
(2) Consists of shares owned by J.F.R. Limited Partnership, of which Mr.
Robertson is the indirect beneficial owner.
(3) Includes 218,158 options to purchase shares of the Company's common stock,
which are currently exercisable.
(4) Consists of 6,060 options to purchase shares of the Company's common stock,
which are currently exercisable.
(5) Includes 224,218 options to purchase shares of the Company's common stock,
which are currently exercisable.
</FN>
</TABLE>
3
<PAGE>
PROPOSAL 1:
ELECTION OF DIRECTORS
At the Annual Meeting, six directors are to be elected to hold office until
the 2000 Annual Meeting of Shareholders and until their successors have been
elected and qualified. The six nominees for election as directors are Joseph W.
Collard, James F. Robertson, John A. Morton, H. Scott Barrett, C. Shelton James
and Paul J. Kinyon. Each nominee is currently a member of the Board of
Directors. Information concerning each of the nominees is set forth below. The
persons named in the enclosed proxy card have advised that, unless otherwise
directed on the proxy card, they intend to vote FOR the election of the
nominees. Should any nominee become unable or unwilling to accept nomination or
election for any reason, votes will be cast for a substitute nominee designated
by the Board of Directors, which has no reason to believe the nominees named
will be unable or unwilling to serve if elected.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES AS
DIRECTORS TO SERVE UNTIL THE COMPANY'S 2000 ANNUAL MEETING OF SHAREHOLDERS AND
UNTIL THEIR RESPECTIVE SUCCESSORS ARE DULY ELECTED AND QUALIFIED.
1998 DIRECTORS AGE POSITION WITH THE COMPANY
- -------------- --- -------------------------
Joseph W. Collard 41 President and Chief Executive Officer(2)
James F. Robertson 38 Executive Vice President and Chief
Operating Officer(1)
John A. Morton 51 Vice President of Finance and Chief
Financial Officer
H. Scott Barrett 38 Director(2)
C. Shelton James 59 Director(1)(2)
Paul J. Kinyon 41 Director(1)(2)
- --------------------
(1) Member of Audit Committee
(2) Member of Compensation Committee
JOSEPH W. COLLARD, a founder of the Company, has served as its President
and Chief Executive Officer and as a director since the formation of the Company
in March 1987. From 1981 to 1987, he served as a computer consultant on a number
of projects for, among others, AlliedSignal, Lear Siegler, Mannesmann Demag
A.G., General Electric, IBM and Martin Marrieta. Mr. Collard has over 15 years
of experience in the IT services industry.
JAMES F. ROBERTSON, a founder of the Company, serves as its Executive Vice
President and Chief Operating Officer and has served as a director since the
formation of the Company in March 1987. Prior to 1987, he worked as a software
engineer and consultant on a number of projects for, among others, AlliedSignal,
General Dynamics, Honeywell, Lear Siegler and United Technologies.
4
<PAGE>
JOHN A. MORTON joined the Company as its Vice President of Finance and
Chief Financial Officer in November 1997 and was elected as a director in April
1998. Prior to joining the Company, Mr. Morton was employed as the chief
financial officer of Tire Group International, Inc. since 1995, as the chief
financial officer of Advanced Promotions Technologies, Inc. between 1991 and
1995, and as the controller at Office Depot, Inc. from 1987 to 1991. Mr. Morton
is a certified public accountant.
H. SCOTT BARRETT is senior vice president and chief information officer of
Republic Industries, Inc., owner of National Car Rental Systems, Inc., Alamo
Rent A Car, Inc. and CarTemps USA.
C. SHELTON JAMES is the president and a director of Fundamental Management
Corporation and has previously held numerous positions with Gould, Inc.,
including the position of President of the Gould Computer Systems Division.
PAUL J. KINYON is a vice president at AEGON USA Realty Advisors, Inc. He
holds an MBA in finance from the University of Chicago.
OTHER 1998 EXECUTIVE OFFICERS
NAME AGE POSITION WITH THE COMPANY
Paul Cozza 36 Vice President of Sales and National Sales Director
PAUL COZZA joined the Company in 1990 and currently serves as its Vice
President of Sales and Director of National Sales. He has served the Company as
a recruiting professional, an account manager and a regional manager of the
Company's Midwest region. Mr. Cozza has over 13 years of sales experience.
THE BOARD OF DIRECTORS AND BOARD COMMITTEES
Between the date of the Company's initial public offering and December 31,
1998, the Board of Directors held two meetings. During such period, all
directors attended at least 75% of the meetings of the Company's Board of
Directors and committees of which they were a member. In addition to attending
meetings, directors discharge their responsibilities through review of Company
reports to directors and correspondence and telephone conferences with the
Company's executive officers, key employees, and others regarding matters of
interest to the Company.
AUDIT COMMITTEE
The Audit Committee reviews the scope and results of the annual audit of the
Company's consolidated financial statements conducted by the Company's
independent certified public accountants, the scope of other services provided
by the Company's independent certified public accountants, proposed changes in
the Company's financial accounting standards and principles, and the Company's
policies and procedures with respect to its internal accounting, auditing and
financial controls. The Audit Committee also examines and considers other
matters relating to the financial affairs and accounting methods of the Company,
including selection and retention of the Company's independent certified public
accountants. The Audit Committee did not hold any meetings during the year ended
December 31, 1998. Messrs. James, Robertson and Kinyon
5
<PAGE>
currently serve as members of the committee. Mr. James serves as Chairman of the
Audit Committee.
COMPENSATION COMMITTEE
The Compensation Committee is responsible for recommending to the Board of
Directors the salaries, bonuses and other compensation for the Company's
executive officers and will establish such compensation levels for the other
officers and employees of the Company. The Compensation Committee also will
administer the Technisource Long-Term Incentive Plan (the "Incentive Plan"),
including, among other things, determining the amount, exercise price and
vesting schedule of stock options awarded under the Incentive Plan. The
Compensation Committee did not hold any meetings during the year ending December
31, 1998. Messrs. Kinyon, Barrett, Collard and James currently serve as members
of the Compensation Committee. Mr. Kinyon serves as Chairman of the Compensation
Committee.
COMPENSATION OF DIRECTORS
Each non-employee director of the Company is entitled to receive a fee of
$1,500 for attendance at each meeting of the Board of Directors. In addition,
each non-employee director is entitled to receive $500 for attendance at each
meeting of a committee of the Board of Directors.
Each non-employee director of the Company is entitled to receive an option
to purchase 5,000 shares of Common Stock upon their appointment to the Board of
Directors and is entitled to receive an option to purchase 2,500 shares of
Common Stock annually thereafter, so long as they continue to serve on the Board
of Directors.
All directors are reimbursed for travel expenses incurred in connection
with the performance of their duties as directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and persons who
beneficially own more than ten percent of a registered class of the Company's
equity securities, to file with the Securities and Exchange Commission (the
"Commission") initial reports of beneficial ownership and reports of changes in
beneficial ownership of the Company's Common Stock. The rules promulgated by the
Commission under Section 16(a) of the Exchange Act require those persons to
furnish the Company with copies of all reports filed with the Commission
pursuant to Section 16(a).
Form 3 filings were not made on a timely basis by certain entities
formed for the benefit of Mr. Collard and Mr. Robertson with respect to the
shares of the Company's common stock beneficially owned by them.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation during the fiscal years
ended December 31, 1998, 1997 and 1996, earned by the Company's Chief Executive
Officer and the three other highest paid executive officers of the Company
during 1998 (collectively the "Named Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------- -------------------------- ---------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) OPTIONS/SARS PAYOUTS COMPENSATION(1)
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph W. Collard 1998 134,461 - - - - - 500
President and CEO 1997 104,000 - - - - - 13,665
1996 359,000 - - - - - -
James F. Robertson 1998 129,846 - - - - - -
Executive Vice 1997 104,000 - - - - - 10,694
President and COO 1996 340,982 - - - - - -
Paul Cozza 1998 175,000 56,250 - - 304,158 - 500
V. P. and National 1997 175,349 143,000 - - 303,158 - 16,290
Sales Director 1996 252,977 - - - - - -
John A. Morton 1998 110,000 - - - 19,182 - 7,879
V.P. and CFO 1997 14,061 - - - 18,182 - -
1996 - - - - - - -
<FN>
(1) Consists of life insurance premiums paid by the Company, the Company's
reimbursement of certain personal expenses and matching contributions
to the Company's 401(k) Plan.
</FN>
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth option grants to the Named Executive
Officers during the year ended December 31, 1998:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
NUMBER OF SECURITIES % OF TOTAL OPTIONS EXERCISE OR GRANT DATE
UNDERLYING OPTIONS GRANTED TO EMPLOYEES BASE PRICE EXPIRATION PRESENT
NAME GRANTED (#)(1) IN FISCAL YEAR ($/SHARE)2 DATE VALUE ($)(3)
<S> <C> <C> <C> <C> <C>
Paul Cozza................ 1,000 * 5.75 10/8/08 $2,594.20
John A. Morton............ 1,000 * 5.75 10/8/08 $2,594.20
<FN>
* Less than 1% of total options granted during the year ended December 31,
1998.
(1) For 1998, all options awarded to the named executive officers by the
Compensation and Organization Committee were long-tem incentive awards
granted on October 8, 1998. Each executive officer's options will vest in 5
years. Like all options granted in 1998, vesting is accelerated upon death
or permanent disability. Generally, all of the executive officers' options
will expire 10 years from the date of grant or earlier if employment
terminates.
(2) The exercise price per share is the fair market value of the common stock
on the date of grant. This is the closing price of the Technisource, Inc.
common stock on the NASDAQ Exchange on the date of grant.
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<PAGE>
(3) These values were calculated using the Black-Scholes stock option-pricing
model. The model, as applied, uses the grant date of October 8, 1998 and
the fair market value on that date of $5.75 per share as discussed above.
The model also assumes (a) a risk-free rate of return of 5.79% (which was
the yield on a U.S. Treasury Strip zero coupon bond with a maturity that
approximates the term of the option), (b) a stock price volatility of 35%,
(c) a constant dividend yield of 0%, and (d) an exercise date, on average,
of 6 years after grant.
</FN>
</TABLE>
THE MODEL WAS NOT ADJUSTED FOR NON-TRANSFERABILITY, RISK OF FORFEITURE, OR
VESTING RESTRICTIONS. THE ACTUAL VALUE (IF ANY) AN EXECUTIVE OFFICER RECEIVES
FROM A STOCK OPTION WILL DEPEND UPON THE AMOUNT BY WHICH THE MARKET PRICE OF THE
TECHNISOURCE, INC. COMMON STOCK EXCEEDS THE EXERCISE PRICE OF THE OPTION ON THE
DATE OF EXERCISE. THERE CAN BE NO ASSURANCE THAT THE AMOUNT STATED AS "GRANT
DATE PRESENT VALUE" WILL ACTUALLY BE REALIZED.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
The following table provides information about the number of aggregated
option exercises during the last fiscal year and value of options held by the
Named Executive Officers at December 31, 1998:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED ON VALUE OPTIONS AT IN-THE-MONEY OPTIONS
EXERCISE REALIZED FISCAL YEAR-END AT FISCAL YEAR-END ($)(1)
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Paul Cozza......................... 85,000 828,325 218,158 1,000 $2,125,949 $4,125
John A. Morton..................... - - 6,060 13,122 $9,848 $21,323
<FN>
(1) The option value is based on the difference between the fair market value
of the shares on December 31, 1998, which was $9.875 per share, and the
option exercise price per share, multiplied by the number of shares of
Common Stock subject to the option.
</FN>
</TABLE>
401(K) PLAN
The Company maintains a 401(k) defined contribution plan (the "401(k)
Plan"). All employees of the Company who have completed three months of
employment are eligible to participate in the 401(k) Plan, pursuant to which
each participant may contribute up to 15.0% of eligible compensation (up to a
statutorily prescribed annual limit of $10,000 in 1998). The Company may at its
discretion match contributions made by employees to the 401(k) Plan. All amounts
contributed by the employee participants and earnings on these contributions are
full vested at all times. Employee participants may elect to invest their
contributions in various established funds.
LONG-TERM INCENTIVE PLAN
The Incentive Plan became effective January 1,1998. The Incentive Plan
provides for awards ("Awards") consisting of grants of discretionary stock
options, formula stock options, IT Professional stock options, stock
appreciation rights, restricted stock and performance awards to employees,
non-employee directors and other persons who perform services for the Company.
The Incentive Plan is administered by the Company's Compensation
Committee, consisting of at least two directors of the Company who are
"non-employee directors" within the meaning of Rule 16b-3 promulgated under
Section 16(b) of the Exchange Act and who are "outside directors" within the
meaning of Section 162(m) of the Code and the regulations promulgated under
Section 162(m) of the Code. The Compensation Committee is authorized to
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<PAGE>
select the individuals to whom Awards will be granted, determine the type, size
and terms and conditions of Awards, construe and interpret the Incentive Plan,
and provide for the acceleration of the date or dates on which an option becomes
exercisable. The Compensation Committee is authorized to delegate the Incentive
Plan administration responsibilities to one or more employees of the Company.
The maximum number of shares of Common Stock that may be made the
subject of Awards granted under the Incentive Plan is 1,590,000 . In the event
of any change in capitalization of the Company, however, the Compensation
Committee shall adjust the maximum number and class of shares with respect to
which Awards may be granted, the number and class of shares which are subject to
outstanding Awards and the purchase price therefor. In addition, if any Award
expires or terminates without having been exercised, the shares of Common Stock
subject to the Award again become available for grant under the Incentive Plan.
The Compensation Committee may grant Awards to any employee,
non-employee director, consultant, advisor, or independent contractor of the
Company ("Optionee"). The Compensation Committee is authorized to grant to
eligible persons options ("Options") to purchase a specified number of shares of
Common Stock at a stated price per share. An Option may be intended to qualify
as an incentive stock option ("ISO") pursuant to the Code, or may be intended to
be a nonqualified option ("NQO"). The term of an ISO cannot exceed 10 years, and
the exercise price of any ISO must be equal to or greater than the fair market
value of the shares of Common Stock on the date of the grant. Any ISO granted to
a holder of 10% or more of the combined voting power of the capital stock of the
Company must have an exercise price equal to or greater than 110% of the fair
market value of the Common Stock on the date of grant and may not have a term
exceeding five years from the grant date. The exercise price and the term of an
NQO shall be determined by the Compensation Committee on the date that the NQO
is granted.
Options shall become exercisable in whole or in part by the Optionee on
the date or dates specified by the Compensation Committee. The Compensation
Committee may provide that an Option becomes exercisable in installments over a
period of years or upon the attainment of stated goals. The Compensation
Committee, in its sole discretion, may accelerate the date or dates on which an
Option becomes exercisable.
Each Option shall expire on such date or dates, as the Compensation
Committee shall determine at the time the Option is granted. Upon termination of
an Optionee's employment with the Company (including by reason of the Optionee's
death), each unexercised Option (whether or not then exercisable) shall
terminate and be forfeited, except that any such Options which are then
exercisable shall remain exercisable for such period after termination of the
Optionee's employment as the Compensation Committee may have determined at the
time the Option was granted. If an Optionee's employment with the Company is
terminated for cause (as defined in the Incentive Plan), all of such person's
Options shall immediately terminate.
Payment for shares of Common Stock purchased upon exercise of an Option
must be made in full at the time of purchase. Payment may be made in cash or in
any other manner as may be authorized by the Compensation Committee. Each Option
shall be evidenced by a written agreement containing such terms and the
Compensation Committee shall establish conditions consistent with the Incentive
Plan as shall be established by the Compensation Committee.
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The Incentive Plan provides for automatic grants of NQO's to
non-employee directors ("Formula Options"). Each non-employee director will
receive: (i) a Formula Option to purchase 5,000 shares of Common Stock upon his
or her initial election and qualification as a member of the Board of Directors;
and (ii) a Formula Option to purchase 2,500 shares of Common Stock upon each
re-election and qualification as a member of the Board of Directors. The per
share exercise price of the Formula Option is equal to 100% of the fair market
value of the shares of Common Stock on the date of grant. Each Formula Option
becomes exercisable with respect to 100% of the underlying shares on the first
anniversary of the date of grant. If a non-employee director ceases to serve as
a director of the Company, each Formula Option shall expire on such date or
dates, as the Compensation Committee shall determine at the time the Option is
granted. Payment for shares of Common Stock purchased upon exercise of a Formula
Option must be made in full at the time of purchase. Payment may be made in cash
or in any other manner as may be authorized by the Compensation Committee. Each
Formula Option shall be evidenced by a written agreement containing such terms
and the Compensation Committee shall establish conditions consistent with the
Incentive Plan as. The Compensation Committee is authorized to grant to IT
professionals options to purchase a specified number of shares of Common Stock
at a stated price per share (an "IT Professional Option"). The purchase price of
the shares of Common Stock subject to each IT Professional Option shall be equal
to 100% of the fair market value as of the date of grant.
An IT Professional Option shall become exercisable upon the completion
of 6,120 hours of service for the Company as a IT Professional during the five
year period ending on the anniversary of the date of grant. If, however, the IT
Professional has not completed at least the applicable number of hours of
service for the Company as an IT Professional during the period ending on the
fifth anniversary of the date of grant, the IT Professional Option that would
have otherwise become exercisable in accordance with the preceding sentence
shall terminate.
Each IT Professional Option shall terminate not more than five years
from the date of the grant. If an IT professional's employment with the Company
is terminated for cause (as defined in the Incentive Plan), all of such person's
IT Professional Options shall immediately terminate. Payment for shares of
Common Stock purchased upon exercise of an IT Professional Option must be made
in full at the time of purchase.
Payment may be made in cash or in any other manner as may be authorized
by the Compensation Committee. Each IT Professional Option shall be evidenced by
a written agreement containing such terms and conditions consistent with the
Incentive Plan as shall be established by the Compensation Committee.
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Joseph W. Collard
effective as of January 1, 1998. Under the agreement, Mr. Collard serves as
President and Chief Executive Officer of the Company for a term expiring on
January 1, 2003, unless earlier terminated for cause, upon the death or
disability of Mr. Collard, or, at the election of Mr. Collard, upon a change in
control of the Company. In the event Mr. Collard is terminated without cause or
upon a change in control of the Company, in both cases as defined in the
agreement, Mr. Collard is entitled to receive as severance compensation his base
salary, bonus compensation and annual
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stock options until the later to occur of the date 36 months after such
termination and January 1, 2003. The agreement provides that Mr. Collard
receives base annual compensation of $170,000 for each year during the term of
the agreement, subject to an annual increase in an amount to be determined by
the Board of Directors. Under the agreement, Mr. Collard also receives an annual
bonus in an amount to be determined by the Board of Directors, based upon Mr.
Collard's and the Company's performance. The agreement also provides that the
Company will provide Mr. Collard with the use of an automobile. Mr. Collard is
prohibited from competing with the Company during the term of the agreement and
for one year after termination thereof.
The Company entered into an employment agreement with James F.
Robertson effective as of January 1, 1998. Under the agreement, Mr. Robertson
serves as Executive Vice President and Chief Operating Officer of the Company
for a term expiring on January 1, 2003, unless earlier terminated for cause,
upon the death or disability of Mr. Robertson, or, at the election of Mr.
Robertson, upon a change in control of the Company. In the event Mr. Robertson
is terminated without cause or upon a change in control of the Company, in both
cases as defined in the agreement, Mr. Robertson is entitled to receive as
severance compensation his base salary, bonus compensation and annual stock
options until the later to occur of the date 36 months after such termination
and January 1, 2003. The agreement provides that Mr. Robertson receives base
annual compensation of $160,000 for each year during the term of the agreement,
subject to an annual increase in an amount to be determined by the Board of
Directors. Under the agreement, Mr. Robertson also receives an annual bonus in
an amount to be determined by the Board of Directors based upon Mr. Robertson's
and the Company's performance. The agreement also provides that the Company will
provide Mr. Robertson with the use of an automobile. Mr. Robertson is prohibited
from competing with the Company during the term of the agreement and for one
year after termination thereof.
The Company entered into an employment agreement with Paul Cozza
effective as of January 1, 1998. Under the agreement, Mr. Cozza serves as Vice
President of Sales and Director of National Sales of the Company for a
three-year term, unless earlier terminated for cause or upon the death or
disability of Mr. Cozza. The term of Mr. Cozza's employment will be
automatically renewed for an additional one-year term unless either Mr. Cozza or
the Company provides notice of their intention not to renew the agreement. In
the event Mr. Cozza is terminated without cause, Mr. Cozza is entitled to
receive as severance compensation his base salary, bonus compensation, and
annual stock options until the later to occur of the date twelve months after
such termination and the end of the term of the agreement. The agreement
provides that Mr. Cozza will receive base annual compensation of $175,000 for
each year during the term of the agreement, subject to an annual increase in an
amount to be determined by the Board of Directors. Under the agreement, Mr.
Cozza is eligible to receive an annual stock option grant in an amount to be
determined by the Board of Directors based upon Mr. Cozza's and the Company's
performance. Mr. Cozza received a bonus of $143,378 for 1998. After 1998, Mr.
Cozza's bonus will be determined by the Board of Directors based upon Mr.
Cozza's and the Company's performance. Mr. Cozza is prohibited from competing
with the Company during the term of the agreement and for two years after
termination thereof.
The Company entered into an employment agreement with John A. Morton
effective as of November 11, 1997. Under the agreement, Mr. Morton serves as
Vice President of Finance and Chief Financial Officer of the Company for a
three-year term, unless earlier terminated for cause or upon the death or
disability of Mr. Morton. The term of Mr. Morton's employment will
11
<PAGE>
be automatically renewed for an additional one-year term unless either Mr.
Morton or the Company provides notice of their intention not to renew the
agreement. In the event Mr. Morton is terminated without cause, Mr. Morton is
entitled to receive as severance compensation his base salary, bonus
compensation, and annual stock options until the later to occur of the date
twelve months after such termination and the end of the term of the agreement.
The agreement provides that Mr. Morton will receive base annual compensation of
$110,000 for each year during the term of the agreement, subject to an annual
increase in an amount to be determined by the Board of Directors. Under the
agreement, Mr. Morton is eligible to receive an annual bonus and an annual stock
option grant in amounts to be determined by the Board of Directors based upon
Mr. Morton's and the Company's performance. Mr. Morton is prohibited from
competing with the Company during the term of the agreement and for two years
after termination thereof. Mr. Morton has received an option to purchase shares
of Common Stock at an exercise price equal to $8.25 per share, based on an
assumed initial public offering price of $11.00 per share. These options vest
over a three-year period beginning November 11, 1997 and expire on November 11,
2007.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to the Company's initial public offering of common stock on June 30,
1998, at which time the Board of Directors established the Compensation
Committee, Joseph Collard, the Company's President and Chief Executive Officer,
and James Robertson, the Company's Executive Vice President and Chief Operating
Officer, had responsibility for all decisions with respect to executive officer
compensation. Following June 30, 1998, all decisions regarding compensation of
the Company's executive officers have been subject to the authority of the
Compensation Committee. Mr. Collard is a member of the Compensation Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for recommending to the Board of
Directors the salaries, bonuses and other compensation for the Company's
executive officers and will establish such compensation levels for the other
officers and employees of the Company. The Compensation Committee is also
responsible for administering the Technisource Long-Term Incentive Plan,
including, among other things, determining the amount, exercise price and
vesting schedule of stock options awarded under the Incentive Plan.
In determining the compensation of the Company's executive officers, the
Compensation Committee takes into account all factors that it considers
relevant, including business conditions in general and the Company's performance
during the year in light of such conditions, the market compensation for
executives of similar background and experience, and the performance of the
specific executive officer under consideration and the business area of the
Company for which such executive officer is responsible. The structure of each
executive compensation package is weighted towards incentive forms of
compensation so that such executive's interests are aligned with the interests
of the shareholders of the Company. The Compensation Committee believes that
granting stock options provides an additional incentive to executive officers to
continue in the service of the Company and gives them an interest similar to
shareholders in the success of the Company.
12
<PAGE>
As indicated above, the Company has entered into an employement ageement
with Mr. Collard dated as of January 1, 1998, with Mr. Collard serving as the
Company's President and Chief Executive Officer. As President and Chief
Executive Officer, Mr. Collard's bonus and stock option compensation is directly
related to corporate performance. All of Mr. Collard's compensation for the year
ended December 31, 1998 was determined by the Board of Directors prior to the
establishment of the Compensation Committee. The factors that Board of Directors
considered in determining Mr. Collard's compensation were as follows. Mr.
Collard is a co-founder of the Company and has been primarily responsible for
the management of the Company in its successful effort to achieve year to year
earnings and revenue growth. In addition, Mr. Collard was instrumental in the
success of the Company's initial public offering of common stock.
Compensation Committee:
Paul J. Kinyon
H. Scott Barrett
C. Shelton James
Joseph W. Collard
13
<PAGE>
PERFORMANCE GRAPH
The graph below compares the six month total return to shareholders
(stock price appreciation/depreciation) for Technisource, Inc. common stock with
the comparable returns of two indexes: the NASDAQ Stock Market (US) and the
NASDAQ Computer & Data Processing Services Stocks. The graph assumes that
shareholders invested $100 in Technisource common stock and in each of the
indexes on June 25, 1998. Points on the graph represent the performance as of
the last business day of each of the years indicated.
COMPARISON OF SIX MONTH TOTAL RETURN TO STOCKHOLDERS
[GRAPHIC OMITTED]
6/25/98 12/31/98
TSRC $100 $ 89.77
NASDAQ Stock Market (US) $100 $119.32
NASDAQ Computer & Data Processing Services $100 $121.98
If a shareholder invested $100 in Technisource common stock on the date
of the Company's common stock commenced trading on the Nasdaq National Market
(June 25, 1998), such shareholder's investment would have decreased to $89.77 by
the end of 1998. This compares with a $100 investment growing to $119.32 in the
NASDAQ Stock Market Index (US) and to $121.98 in the NASDAQ Computer & Data
Processing Services Index.
14
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PROPOSAL 2:
RATIFY THE APPOINTMENT OF THE COMPANY'S INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
The firm of KPMG LLP, certified public accountants, served as the Company's
independent certified public accountants for the year ended December 31, 1998.
KPMG LLP has advised the Company that the firm does not have any direct or
indirect financial interest in the Company or its subsidiary, nor has such firm
had any such interest in connection with the Company or its subsidiary during
the past year, other than in its capacity as the Company's independent certified
public accountants. The Board of Directors has appointed KPMG LLP as the
Company's independent certified public accountants for the fiscal year ending
December 31, 1999. Although the Board is not required to do so, it is submitting
its selection of the Company's independent certified public accountants for
ratification at the Annual Meeting, in order to ascertain the views of its
shareholders. The Board will not be bound by the vote of the shareholders;
however, if the selection is not ratified, the Board will reconsider its
selection. Representatives of KPMG LLP will be present at the Annual Meeting.
These representatives will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions from
shareholders.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS VOTE
"FOR" RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY'S INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS.
ANNUAL REPORT
The Company's 1998 Annual Report to Shareholders, including financial
statements for the year ended December 31, 1998, is being distributed to all
shareholders of the Company together with this Proxy Statement, in satisfaction
of the requirements of the Securities and Exchange Commission. Additional copies
of such report are available free of charge upon request. To obtain such
additional copies, please contact the Company's Investor Relations Department at
(954) 493-8601.
SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 under the Exchange Act, shareholders of the Company
may present proper proposals for inclusion in the Company's Proxy Statement and
for consideration at the next annual meeting by submitting their proposals to
the Company in a timely manner. Any shareholder of the Company who wishes to
present a proposal for inclusion in the Proxy Statement for action at the 2000
Annual Meeting of Shareholders must comply with the Company's Bylaws and the
rules and regulations of the Securities and Exchange Commission then in effect.
Such proposal must have been mailed to the Company at its offices at 1901
Cypress Creek Road, Fort Lauderdale, Florida 33309, Attention: Secretary, and
must be received by the Company before December 15, 1999.
15
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any other matters to come before the
Meeting. If, however, any other matters properly come before the Annual Meeting,
it is the intention of the persons named in the enclosed form of proxy to vote
said proxy in accordance with their judgment.
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<PAGE>
PROXY TECHNISOURCE, INC. PROXY
(Solicited on behalf of the Board of Directors)
The undersigned holder of common stock of Technisource, Inc. revoking all
proxies heretofore given hereby constitutes and appoints Joseph W. Collard and
James F. Robertson, and each of them Proxies, with full power of substitution,
for and in the name, place and stead of the undersigned, to vote all of the
undersigned's shares of said stock, according to the number of votes and with
all the powers the undersigned would possess if personally present, at the
Annual Meeting of Shareholders of Technisource, Inc,. to be held at The Westin
of Fort Lauderdale, 400 Corporate Drive, Fort Lauderdale, Florida 33334 to be
held May 6, 1999, and at any adjournments or postponements thereof.
The undersigned hereby acknowledges receipt of the Notice of Meeting and Proxy
Statement relating to the meeting and hereby revokes any proxy or proxies
heretofore given.
Each properly executed Proxy will be voted in accordance with the specifications
made on the reverse side of this Proxy and in the discretion of the Proxies on
any other matters which may properly come before the meeting. Where no choice is
specified, this Proxy will be voted FOR all listed nominees to serve as
directors and FOR proposal 2.
PLEASE MARK, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE
Please date, sign and mail your proxy card back as soon as possible!
Annual Meeting of Shareholders
TECHNISOURCE, INC.
May 6, 1999
Please Detach and Mail in the Envelope Provided
[X] Please mark your votes as in this example
[ ] FOR all nominees listed at right (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY to vote for nominees listed at right
(1) Election of six (6) directors to serve until the 2000 Annual Meeting of
Shareholders.
FOR except withhold from the following nominee(s):
<PAGE>
Nominees: Joseph W. Collard, James F. Robertson, John A. Morton, C. Shelton
James, Paul J. Kinyon, H. Scott Barrett
(2) To ratify the appointment of KPMG LLP as independent accountants for the
fiscal year 1999. For [] Against [] Abstain []
(3) Upon any and all other business which may properly come before the Annual
Meeting. For [] Against [] Abstain []
This Proxy, which is solicited on behalf of the Board of Directors, will be
voted FOR the matters described in paragraphs (1) and (2) unless the shareholder
specifies otherwise, (in which case it will be voted as specified).
SIGNATURE
DATED:
1999
SIGNATURE
DATED:
1999
NOTE: Please sign exactly as name or names appear herein. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. 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 partner.
