SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
SCHEDULE 14A INFORMATION
------------------
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
CHECK THE APPROPRIATE BOX:
[ ] PRELIMINARY PROXY STATEMENT
[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 REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] NO FEE REQUIRED
[ ] FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14A-6(I)(1) AND 0-11.
(1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:
(3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED
PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE AMOUNT ON WHICH
THE FILING FEE IS CALCULATED AND STATE HOW IT WAS DETERMINED):
(4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
(5) TOTAL FEE PAID:
[ ] FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS.
[ ] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY EXCHANGE ACT RULE
0-11(A)(2) AND IDENTIFY THE FILING FOR WHICH THE OFFSETTING FEE WAS PAID
PREVIOUSLY. IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT NUMBER,
OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
(1) AMOUNT PREVIOUSLY PAID:
(2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:
(3) FILING PARTY:
(4) DATE FILED:
<PAGE>
TECHNISOURCE, INC.
1901 CYPRESS CREEK ROAD, SUITE 200
FORT LAUDERDALE, FLORIDA 33309
April 30, 2000
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 Wednesday, May 31, 2000, at 10:00
am 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 procedures set forth
in the Proxy Statement.
We look forward to seeing you on May 31.
Yours truly,
Joseph W. Collard
Chairman
<PAGE>
TECHNISOURCE, INC.
1901 CYPRESS CREEK ROAD, SUITE 200
FORT LAUDERDALE, FLORIDA 33309
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON WEDNESDAY, MAY 31, 2000
---------------
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 Wednesday, May
31, 2000, at 10:00 a.m., for the following purposes:
1. To elect seven directors of the company to serve until the
2001 Annual Meeting of Shareholders;
2. To consider and vote on a proposal to amend the Technisource,
Inc. Long-Term Incentive Plan to increase from 1,590,000 to
2,090,000 the number of shares of the Company's Stock that may
be issued thereunder.
3. To ratify the appointment of KPMG LLP as the Company's
independent certified public accountants for the fiscal year
ending December 31, 2000; and
4. To transact such other business as may properly come before
the Annual Meeting or any adjournment or postponements
thereof.
The Board of directors has fixed the close of business on April 3, 2000, 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
Chairman
Fort Lauderdale, Florida
April 30, 2000
<PAGE>
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 31, 2000
---------------
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 10:00 a.m. on Wednesday, May 31, 2000 at the 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 30, 2000. 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 200,
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 the execution of proxies. The Company
may reimburse such persons for their expenses in so doing.
1
<PAGE>
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting, the Company's shareholders will consider and act
upon the following matters:
1. To elect seven directors of the Company to serve until the
2001 Annual Meeting of Shareholders;
2. To consider and vote on a proposal to amend the Technisource,
Inc. Long-Term Incentive Plan to increase from 1,590,000 to
2,090,000 the number of shares of the Company's Common Stock
that may be issued thereunder.
3. To ratify the appointment of KPMG LLP as the Company's
independent certified public accountants for the fiscal year
ending December 31, 2000;
4. To transact such other business as may properly come before
the Annual 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, (b) to consider and vote on a proposal to amend the Technisource, Inc.
Long-Term Incentive Plan to increase from 1,590,000 to 2,090,000 the number of
shares of the Company's Common Stock that may be issued thereunder, and (c) in
favor of the appointment of KPMG LLP as the Company's independent certified
public accountants for the fiscal year ending December 31, 2000. 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 April 3, 2000, 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 10,354,000 shares of Common Stock issued and outstanding and 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 consider and vote on a proposal to amend the Technisource,
Inc.
2
<PAGE>
Long-Term Incentive Plan to increase from 1,590,000 to 2,090,00 the number of
shares of the Company's Stock that may be issued thereunder and a proposal to
ratify the appointment of KPMG LLP as the Company's independent certified public
accountants for the year ending December 31, 2000. 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.
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.
3
<PAGE>
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 April 3, 2000 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 10,354,000 shares outstanding
on April 3, 2000. 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
------------------------------------
NAME OF BENEFICIAL OWNER TOTAL SHARES
BENEFICIALLY PERCENTAGE
OWNED
----------------- ----------------
<S> <C> <C>
Joseph W. Collard (l) 3,493,990 33.7%
James F. Robertson (2) 3,315,530 32.0%
Paul Cozza (3) 303,158 2.9%
Thomas E. Hoshko 100,000 1.0%
John A. Morton (4) 12,121 *
C. Shelton James (5) 5,000 *
Paul J. Kinyon (6) 5,000 *
H. Scott Barrett (7) 5,000 *
----------------- ----------------
All Executive Officers and Directors as a group (7 persons) (8) 7,239,799 69.9%
================= ================
</TABLE>
* 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 12,121 options to purchase shares of the Company's common
stock, which are currently exercisable.
5) Consists of 5,000 options to purchase shares of the Company's common
stock, which are currently exercisable.
6) Consists of 5,000 options to purchase shares of the Company's common
stock, which are currently exercisable
7) Consists of 5,000 options to purchase shares of the Company's common
stock, which are currently exercisable.
8) Includes 245,279 options to purchase shares of the Company s common
stock, which are currently exercisable.
PROPOSAL 1:
ELECTION OF DIRECTORS
At the Annual Meeting, seven directors are to be elected to hold office
until the 2001 Annual Meeting of Shareholders and until their successors have
been elected and qualified. The seven nominees for election as directors are
Joseph W. Collard, James F. Robertson, Thomas E. Hoshko, 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.
4
<PAGE>
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 2001 ANNUAL MEETING OF SHAREHOLDERS AND
UNTIL THEIR RESPECTIVE SUCCESSORS ARE DULY ELECTED AND QUALIFIED.
DIRECTORS AGE POSITION WITH THE COMPANY
- --------- --- -------------------------
Joseph W. Collard 43 Chief Executive Officer (2)
James F. Robertson 39 Executive Vice President and Chief
Operating Officer (1)
Thomas E. Hoshko 46 President
John A. Morton 52 Vice President of Finance and
Chief Financial Officer
H. Scott Barrett 39 Director (2)
C. Shelton James 60 Director (1) (2)
Paul J. Kinyon 42 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.
THOMAS E. HOSHKO joined the Company as its President on January 1, 2000 and
was elected as a director in April 2000. Prior to joining the Company, Mr.
Hoshko was the Senior Vice President of Mergers and Acquisitions with Modis
Professional Services, Inc. from 1996 to 1999 and was the President and Chief
Executive Officer of Computer Professionals, Inc. from 1986 to 1995. Mr. Hoshko
has over 20 years of experience in the IT services industry.
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
January 1998. Prior to joining the
5
<PAGE>
Company, Mr. Morton was employed as the chief financial officer of Tire Group
International, Inc. from 1995 to 1997, 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 the President of Family Products Holding Corporation.
Mr. Barrett previously held the position of 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 was the President and a director of Fundamental Management
Corporation until February 2000 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 1999 EXECUTIVE OFFICERS
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
Paul Cozza 37 Vice President of Sales and
Director of National Sales
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 14 years of sales experience.
THE BOARD OF DIRECTORS AND BOARD COMMITTEES
During the fiscal year ended December 31, 1999, the Board of Directors held
seven 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
6
<PAGE>
the financial affairs and accounting methods of the Company, including selection
and retention of the Company's independent certified public accountants. The
Audit Committee held four meetings during the year ended December 31, 1999.
Messrs. James, Robertson and Kinyon 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 establishes such compensation levels for the other
officers and employees of the Company. The Compensation Committee also
administers 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 held one meeting during the year ending December 31,
1999. 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).
Three Form 4 filings were not made on a timely basis by Mr. Collard. These
Form 4 filings were required as a result of one purchase of Common Stock made in
March 1999, three purchases of Common Stock made in September 1999 and four
purchases of Common Stock made in November 1999.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation during the fiscal years
ended December 31, 1999, 1998 and 1997, earned by the Company's Chief Executive
Officer and the three other highest paid executive officers of the Company
during 1999 (collectively the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
-------------------------------------------------
Annual Compensation Awards Payouts
-------------------------------- ------------------------ ---------------------
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name and Year Salary Bonus Compensation Awards Options/SARs Payouts Compensation
Principal (1)
Position
$ $ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph W. Collard 1999 170,400 - - - - - 500
President and CEO 1998 134,461 - - - - - 500
1997 104,000 - - - - - 13,665
James F. Robertson 1999 160,400 - - - - - 500
Executive Vice 1998 129,846 - - - - - 500
President and COO 1997 104,000 - - - - - 10,694
Paul Cozza 1999 175,150 143,378 - - 20,000 - -
VP and National 1998 175,000 56,250 - - 1,000 - 500
Sales Director 1997 175,349 143,000 - - - - 16,290
John A. Morton 1999 127,019 25,000 - - 50,000 - -
VP and CFO 1998 110,000 - - - 1,000 - 7,879
1997 14,061 - - - 18,182 - -
</TABLE>
(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.
8
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth option grants to the Named Executive Officers
during the year ended December 31, 1999:
<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 20,000 * 5.44 05/03/09 $ 87,376
John A. Morton 50,000 * 5.44 05/03/09 $218,440
</TABLE>
* Less than 1% of total options granted during the year ended December 31, 1999.
1) For 1999, all options awarded to the Named Executive Officers by the
Compensation Committee were long-term incentive awards granted on May
3, 1999. Each executive officer's options will vest ratably over 4
years. Like all options granted in 1999, 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 National Market on the
date of grant.
3) These values were calculated using the Black-Scholes stock
option-pricing model. The model, as applied, uses the grant date of May
3, 1999 and the fair market value on that date of $5.44 per share as
discussed above. The model also assumes (a) a risk-free rate of return
of 5.25% (which was the yield on a U.S. Treasury Strip zero coupon bond
with a maturity that approximates the term of the option), (b) a stock
price volatility of 88.88%, (c) a constant dividend yield of 0%, and
(d) an exercise date, on average, of 7 years after grant. The model was
not adjusted for non-transferability, risk of forfeiture, or vesting
restrictions. The actual value (if any) an executive officer receives
from a stock option will depend upon the amount by which the market
price of the Technisource, Inc. common stock exceeds the exercise price
of the option on the date of exercise. There can be no assurance that
the amount stated as "Grant Date Present Value" will actually be
realized.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
The following table provides information about the number of aggregated
option exercises during the last fiscal year and value of options held by the
Named Executive Officers at December 31, 1999:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE FISCAL YEAR-END AT FISCAL YEAR-END ($)(1)
EXERCISE REALIZED ----------------------------- -----------------------------
(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------- ----------- ------------- --------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Paul Cozza - - 218,158 21,000 $ 1,253,318 $ 8,865
John A. Morton - - 12,121 57,061 $ - $ 21,975
</TABLE>
(1) The option value is based on the difference between the fair market
value of the shares on December 31, 1999, which was $5.875 per share,
and the option exercise price per share, multiplied by the number of
shares of common Stock subject to the option.
401(K) PLAN
The Company maintains a 401(k) defined contribution plan (the "401(k)
Plan"). All employees of the Company 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 1999).
The Company may at its discretion match contributions made
9
<PAGE>
by employees to the 401(k) Plan. All amounts contributed by the employee
participants and earnings on these contributions are fully 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.
NONQUALIFIED DEFERRED COMPENSATION PLAN
Effective April 1, 1998, the Company established the Technisource, Inc.
Deferred Compensation Plan (the "Plan"). The Plan entitles the participants to a
death benefit. The death benefit is a multiple of the participants' annual
salary. The participants are guaranteed a minimum 5% return on all salary
deferrals. The multiple is dependent upon the percentage of salary deferral
elected by each participant. In addition, the Plan allows each participant to
defer up to 25% of their annual salary each year. The term of the Plan is ten
years.
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
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 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 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
10
<PAGE>
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 Thomas E. Hoshko
effective as of January 1, 2000. Under the agreement, Mr. Hoshko serves as
President of the Company for a three-year term, unless earlier terminated for
cause or upon the death or disability of Mr. Hoshko. The term of Mr. Hoshko's
employment will be automatically renewed for an additional one-year term unless
either Mr. Hoshko or the Company provides notice of their intention not to renew
the agreement. In the event Mr. Hoshko is terminated without cause, Mr. Hoshko
is entitled to receive as severance compensation his base salary and bonus
compensation 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. Hoshko will receive base annual compensation of $200,000 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. Hoshko is
eligible to receive an annual stock option grant in an amount to be determined
by the Board of Directors based upon Mr. Hoshko's and the Company's performance.
Mr. Hoshko's bonus compensation will be 5% of the growth in the Company's
earnings without including interest payments and taxes ("EBIT"). Mr. Hoshko 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 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 $75,000 for 1999. After 1999, 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.
11
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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 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 $125,000 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
All decisions regarding compensation of the Company's executive officers
are 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.
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As indicated above, the Company has entered into an employment agreement
with Mr. Collard dated as of January 1, 1998, with Mr. Collard serving as the
Company's Chief Executive Officer. As Chief Executive Officer, Mr. Collard's
bonus and stock option compensation is directly related to corporate
performance.
The Compensation Committee believes that the Company successfully weathered
a difficult year for the IT services industry in 1999 and that management was
successful in positioning the company to take advantage of future business
opportunities. The Compensation Committee determined to recommend that the
Company not change the current compensation levels for its executive officers,
including its Chief Executive Officer.
Compensation Committee:
Paul J. Kinyon
H. Scott Barrett
C. Shelton James
Joseph W. Collard
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PERFORMANCE GRAPH
The graph below compares the twelve 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 $100.00 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 TWELVE MONTH TOTAL RETURN TO STOCKHOLDERS
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
6/25/98 12/31/98 12/31/99
------------- ------------- -------------
<S> <C> <C> <C>
TSRC $100.00 $ 89.77 $ 53.41
NASDAQ Stock Market (US) $100.00 $119.32 $221.31
NASDAQ Computer & Data Processing Services $100.00 $121.98 $238.70
</TABLE>
If a shareholder invested $100.00 in Technisource common stock on the date
the Company's common stock commenced trading on the NASDAQ National Market (June
25, 1998), such shareholder's investment would have decreased to $53.41 by the
end of 1999. This compares with a $100.00 investment growing to $221.31 in the
NASDAQ Stock Market Index (US) and to $238.70 in the NASDAQ Computer & Data
Processing Services Index.
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PROPOSAL 2:
TO CONSIDER AND VOTE ON A PROPOSAL TO AMEND THE TECHNISOURCE, INC. LONG-TERM
INCENTIVE PLAN TO INCREASE FROM 1,590,000 TO 2,090,000 THE NUMBER OF SHARES OF
THE COMPANY'S STOCK THAT MAY BE ISSUED THEREUNDER.
On April 3, 2000, the Board of Directors adopted, subject to shareholder
approval, an amendment to the Technisource, Inc. Long-Term Incentive Plan (the
"Plan"), to increase from 1,590,000 to 2,090,000 the number of shares of the
Company's Common Stock that may be issued thereunder. As of March 31, 1999,
options to purchase 1,474,432 shares of Common Stock had been granted under the
Plan.
The purpose of the Plan is to promote the interests of the Company and its
shareholders, to promote the Company's success by providing an additional
incentive to employees to continue in the service of the Company, and to give
employees an interest similar to shareholders in the success of the Company.
GENERAL. The Plan is not subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), nor is it a qualified plan under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code").
The Plan was adopted effective January 1, 1998. In addition to the Plan, the
Company has written agreements with each of the Participants describing the
terms of the grants.
PURPOSE. The purpose of the Plan is to provide awards ("Awards")
consisting of grants of discretionary stock options, stock appreciation rights,
restricted stock and performance awards to key employees, consultants and other
persons who contribute materially to the success and profitability of the
Company. The grants will recognize and reward outstanding individual
performances and contributions and will give such persons a proprietary interest
in the Company, thus enhancing their personal interest in the Company's
continued success and progress. The Company expects that the Plan will also
assist the Company and its subsidiaries in attracting and retaining key persons.
ADMINISTRATION OF THE PLAN. The Plan is administered by a committee
(the "Committee") appointed by the Company's Board of Directors (the "Board")
and comprised of at least two directors of the Company who are "non-employee
directors" within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "1934 Act"), and "outside directors" within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and
the regulations thereunder.
The Committee has the authority under the Plan to select the
individuals to whom Awards will be granted, determine the type, size and terms
and conditions of Awards and construe and interpret the Plan. All decisions made
by the Committee pursuant to the provisions of the Plan shall be final and
binding on all persons and for all purposes. A majority of the Committee
constitutes a quorum for purposes of administering the Plan, and the acts of a
majority of the members present, or acts approved in writing by a majority of
the entire Committee without a meeting, shall be the acts of the Committee for
purposes of the Plan.
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<PAGE>
SECURITIES SUBJECT TO THE PLAN. The Board of Directors of the Company
recommends that the number of shares of Common Stock available for issuance be
increased to 2,090,000 shares. Currently, an aggregate of 1,590,000 shares of
Common Stock have been reserved for issuance under the Plan, subject to
adjustment to give effect to future changes in the number of outstanding shares
of common stock of the Company by virtue of a merger, consolidation,
recapitalization, reclassification, combination, stock dividend, stock split, or
other similar change. Shares issued pursuant to exercises of options granted
under the Plan shall be issued from the Company's authorized but unissued common
stock or from issued shares that have been reacquired by the Company.
ELIGIBILITY. The Committee may grant Awards to any employee,
non-employee director, consultant, advisor, or independent contractor of the
Company or of an Affiliate who is designated by the Committee as being eligible
to be granted one or more Awards under the Plan ("Participant").
AWARDS. Awards under the Plan may be in the form of grants of
discretionary stock options, formula stock options, IT Professional stock
options, stock appreciation rights, restricted stock and performance awards as
determined by the Committee in its sole and absolute discretion.
DISCRETIONARY STOCK OPTIONS. Participants in the Plan are eligible to
receive grants of stock options ("Discretionary Stock Options"), as determined
by the Committee in its sole and absolute discretion. Awards of Discretionary
Stock Options pursuant to the Plan may be in the form of incentive stock options
("ISO") or nonqualified stock options ("NSO"). An ISO is an award that qualifies
as an "incentive stock option" under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). Only Participants who are employees of the
Company are eligible to receive grants of incentive stock options. Discretionary
Stock options may be granted under the Plan on such terms and conditions not
inconsistent with the provisions of the Plan and in such form as the Committee
deems appropriate at the time of grant. Summarized below are certain provisions
of the Plan relating to the grant of Discretionary Stock Options.
EXERCISE PRICE. Except with respect to option grants to Ten
Percent Shareholders (as defined below), the exercise price of each share of the
Company's common stock subject to a Discretionary Stock Option that is an ISO
shall equal the exercise price designated by the Committee on the date the
option is granted, but shall not be less than the fair market value of the
Common Stock on the date the Discretionary Stock Option is granted. In general,
"fair market value" with respect to a particular date is defined as the average
of the high and low sale prices of the Common Stock as reported by the National
Association of Securities Dealers Automated Quotation System on that date. If
trading in the Common Stock or a price quotation does not occur on the date as
of which fair market value is being determined, the next preceding date on which
the Common Stock was traded or a price was quoted shall determine the fair
market value. If the Common Stock is not publicly traded on the date as of which
fair market value is being determined, the Board of Directors of the Company
shall determine the fair market value of the Common Stock as of that date, using
such factors as the Board of Directors considers relevant, such as the price at
which recent sales have been made, the book value of the Common Stock, and the
Company's current and projected earnings. An ISO granted to an individual who,
on the date of grant, owns stock equating more than 10% of the total combined
16
<PAGE>
voting power of all classes of stock of the Company or any parent or subsidiary
of the Company (a "Ten Percent Shareholder"), shall be granted at an exercise
price of 110% of the fair market value of the Company's common stock on the date
of grant. The exercise price with respect to shares of the Common Stock subject
to a Discretionary Stock Option that is a NSO will be determined by the
Committee on the date the Discretionary Stock Option is granted.
TIME OF EXERCISE. A Discretionary Stock Option shall be
exercisable in whole or in part by the Participant on the date or dates
specified by the Committee. The Committee may provide that a Discretionary Stock
Option becomes exercisable in installments over a period of years or upon the
attainment of stated goals. The Committee, in its sole and absolute discretion,
may accelerate the date or dates on which the Discretionary Stock Option becomes
exercisable at any time.
EXPIRATION OF OPTIONS. In general, each Discretionary Stock
Option that is an ISO shall expire on the earliest of (i) ten years from the
date of its grant, or such earlier date as may be set by the Committee in
establishing terms of the Discretionary Stock Option, (ii) in the case of a Ten
Percent Shareholder, five years from the date of grant, or such earlier date as
may be set by the Committee in establishing the terms of the Discretionary Stock
Option, (iii) one year after the date of the Participant's death, (iv) in the
case of total and permanent disability of Participant resulting in termination
of employment with the Company, one year after the Participant's last day of
employment, (v) in the event of termination of employment for any reason other
than death or disability, 3 months following the last day the Participant is
employed by the Company, or (vi) in the event a Participant is terminated "for
cause," any unexercised part of the Discretionary Stock Option shall expire
immediately upon the earlier of the occurrence of such event or the last day the
Participant is employed by the Company.
In general, each Discretionary Stock Option that is a NSO
shall expire on the date set by the Committee in establishing the terms of the
Discretionary Stock Option but may expire on the earliest of (i) one year after
the date of the Participant's death, (ii) in the case of total and permanent
disability of a Participant resulting in termination of employment with the
Company, one year after the Participant's last day of employment, (iii) in the
event of termination of employment for any reason other than death or
disability, 3 months following the last day the Participant is employed by the
Company, or (iv) in the event a Participant is terminated "for cause," any
unexercised part of the Discretionary Stock Option shall expire immediately upon
the earlier of the occurrence of such event or the last day the Participant is
employed by the Company.
In the event of a change of a control of the Company, the
Company's Board of Directors may vote to immediately terminate or accelerate the
exercisability of the Options. If the Options are terminated, the Company shall
pay the Option holders a cash payment equal to the difference between the
exercise price and the fair market value of the shares that would have been
subject to the terminated Option.
TRANSFERABILITY. Unless otherwise permitted by applicable laws
and approved in advance by the Committee, no Discretionary Stock Option granted
under the Plan is assignable or transferable by a Participant other than by will
or by the laws of descent and distribution.
17
<PAGE>
MAXIMUM OPTION GRANTS. The aggregate Fair Market Value
determined on the Date of Grant, of stock in the Company with respect to which
any ISO's under the Plan and all other plans of the Company or its Subsidiaries
(within the meaning of Section 422(b) of the Code) may be exercisable by any
individual for the first time in an calendar year shall not exceed $100,000.
METHOD OF EXERCISE. A Discretionary Stock Option granted under
this Plan shall be deemed exercised when the person entitled to exercise the
Discretionary Stock Option (a) delivers written notice to the Company of the
decision to exercise, (b) concurrently tenders to the Company full payment for
the Shares to be purchased pursuant to the exercise, and (c) complies with such
other reasonable requirements as the Committee may establish.
FORMULA STOCK OPTIONS. The Plan provides for automatic grants of NSO's
to non-employee Board members ("Formula Options"). Each non-employee Board
member shall receive a Formula Option to purchase five thousand (5,000) shares
of Common Stock upon his or her initial election and qualification as a
non-employee Board member, and, thereafter, shall be automatically granted a
Formula Option to purchase two thousand, five hundred (2,500) shares of Common
Stock upon re-election and qualification as a non-employee Board member.
Summarized below are certain provisions of the Plan relating to the grant of
Formula Options.
EXERCISE PRICE. The per share exercise price of the Formula
Option shall be equal to 100% of the fair market value of the shares of Common
Stock on the date of grant.
TIME OF EXERCISE. Each Formula Option becomes exercisable with
respect to 100 percent (100%) of the underlying shares on the first anniversary
of the date of grant.
EXPIRATION OF OPTION. If a non-employee Board member ceases to
serve as a director of the Company, each Formula Option shall expire on the
earliest of (i) one year after the date of the option holder's death, (ii) in
the case of total and permanent disability of an option holder resulting in
termination of service as a director of the Company, one year after the
Participant's last day of service as a director, or (iii) in the event of
termination of service as a director of the Company for any reason other than
death or disability, three months following the last day of the Participant's
service as a director of the Company.
TRANSFERABILITY. Unless otherwise permitted by applicable laws
and approved in advance by the Committee, no Formula Option granted under the
Plan is assignable or transferable by a Participant other than by will or by the
laws of descent and distribution.
METHOD OF EXERCISE. A Formula Option granted under the Plan
shall be deemed exercised when the person entitled to exercise the option (a)
delivers written notice to the Company of the decision to exercise, (b)
concurrently tenders to the Company full payment for the Shares to be purchased
pursuant to the exercise, and (c) complies with such other reasonable
requirements as the Committee may establish.
IT PROFESSIONAL OPTIONS. Consultants hired by the Company (an "IT
Professional") are eligible to receive grants of stock options ("IT Professional
Options"), as determined by the
18
<PAGE>
Committee in its sole and absolute discretion. Summarized below are certain
provisions of the Plan relating to the grant of IT Professional Options.
EXERCISE PRICE. The purchase price of the shares of Common
Stock subject to each IT Professional Option shall be equal to one hundred
percent (100%) of the fair market value as of the date of grant.
TIME OF EXERCISE. An IT Professional Option shall become
exercisable after 180 days, measured from the date of grant.
EXPIRATION OF OPTION. Each IT Professional Option shall
terminate not more than ten (10) years from the date of the grant, or at such
earlier time as the IT Professional Option agreement may provide. If an IT
professional's employment with the Company is terminated, all of such person's
unvested IT Professional Options shall immediately terminate. Vested options
shall terminate 90 days from the date of termination of employment.
TRANSFERABILITY. Unless otherwise permitted by applicable laws
and approved in advance by the Committee, no IT Professional Option granted
under the Plan is assignable or transferable by a Participant other than by will
or by the laws of descent and distribution.
METHOD OF EXERCISE. An IT Professional Option granted under
this Plan shall be deemed exercised when the person entitled to exercise the
option (a) delivers written notice to the Company of the decision to exercise,
(b) concurrently tenders to the Company full payment for the Shares to be
purchased pursuant to the exercise, and (c) complies with such other reasonable
requirements as the Committee may establish.
STOCK APPRECIATION RIGHTS. Participants in the Plan are eligible to
receive grants of stock appreciation rights ("SARs"), as determined by the
Committee in its sole and absolute discretion. Awards of SARs pursuant to the
Plan may be granted, if at all, either singly, in combination with another
Award, or in tandem with another Award. SARs may be granted under the Plan on
such terms and conditions not inconsistent with the provisions of the Plan and
in such form as the Committee deems appropriate at the time of grant. Summarized
below are certain provisions of the Plan relating to the grant of SARs.
EXERCISE PRICE. Upon the exercise of the right and at the
discretion of the Committee, the Plan permits grants to Participants of rights
to receive cash and/or shares equal in value to the excess, if any, of the then
per share fair market value over the specified base price per share, multiplied
by the number of shares as to which the right is being exercised. At the time of
the grant of an SAR, the Committee shall specify the base price of Common Stock
to be used in connection with the exercise of the SAR, provided that the
exercise price shall not be less than one hundred percent (100%) of the fair
market value of a share of Common Stock on the date of grant, unless approved by
the Board.
TIME OF EXERCISE. The Committee shall decide the time or times
when an SAR will be exercisable. An SAR may not be exercisable earlier than the
six (6) month period following the date of grant. The Committee, in its sole and
absolute discretion, may accelerate the exercisability of any SAR at any time.
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<PAGE>
TRANSFERABILITY. No SAR granted under the Plan is assignable
or transferable by a Participant other than by will or by the laws of descent
and distribution.
RESTRICTED STOCK. The Committee may grant to a Participant an Award of
Common Stock subject to future service and such other restrictions and
conditions as the Committee may determine ("Restricted Stock"). The Committee
will determine, when each Restricted Stock Award is made, the terms of the
Restricted Stock Award, including the price, if any, to be paid by the
Participant for the Restricted Stock, the restrictions placed on the shares and
the time or times when the restrictions will lapse. Summarized below are certain
provisions of the Plan relating to the grant of Restricted Stock.
TRANSFERABILITY. Restricted Stock shares granted under the
Plan may not be assigned, sold, transferred, pledged, or otherwise alienated or
hypothecated prior to the end of the applicable period of restriction
established by the Committee at the date of grant and, in no event, absent
Committee approval, prior to the six (6) month period from the date of the
Award.
OTHER RESTRICTIONS. The Committee may prescribe such other
restrictions, conditions, and terms applicable to Restricted Stock issued to a
Participant under the Plan that are neither inconsistent with nor prohibited by
the Plan or the Award.
RIGHTS OF HOLDERS OF RESTRICTED STOCK. Except for restrictions
on transfer and other restrictions imposed by the Committee, the Participant
shall be the owner of the restricted stock and shall have all the rights of a
shareholder, including the right to receive dividends or other distributions
paid with respect to such Restricted Stock and the right to vote such Restricted
Stock. If any dividends or distributions are paid in shares of stock, such
shares shall be subject to the same restrictions on transferability and
forfeitability as the Restricted Stock shares with respect to which they were
paid.
REMOVAL OF RESTRICTIONS. The Secretary of the Company shall
hold the certificate or certificates representing the Restricted Stock share
issued under the Plan, properly endorsed for transfer, on behalf of each
Participant who holds such shares, until such time as the Restricted Stock
shares are forfeited, resold to the Company, or the restrictions lapse.
PERFORMANCE AWARDS. Participants are eligible to receive cash or stock
awards subject to performance conditions specified by the Company ("Performance
Awards"). The performance conditions may include continuous service with the
Company, achievement of specific business objectives, increases in specified
indices, attaining growth rates, and other measurements of Company performance.
Settlement of Performance Awards may be in cash or shares of Common Stock, or
other property, in the discretion of the Committee. The Committee may also, in
its discretion, reduce the amount of a settlement otherwise to be made in
connection with such Performance Awards, but may not exercise discretion to
increase any such amount payable in respect of a Performance Award that is
subject to Code Section 162(m).
RESTRICTIONS ON RESALE. Any person that is not an "affiliate" of the
Company generally may reoffer or resell shares of Common Stock received upon
exercise of an option without restriction under the Securities Act. In contrast,
any person receiving shares of Common Stock upon exercise of an option who is an
"affiliate" of the Company generally may reoffer or resell
20
<PAGE>
such shares only pursuant to (i) a registration statement filed under the
Securities Act (the Company having no obligation to file such a registration
statement), (ii) an appropriate exemption from the registration requirements of
the Securities Act, or (iii) Rule 144 under the Securities Act.
DURATION OF PLAN. Awards may be granted under the Plan only during the
ten-year period immediately following the effective date of the Plan.
Accordingly, options may not be granted under the Plan after January 1, 2008.
AMENDMENT AND TERMINATION. The Plan may be amended by the Board subject
to the approval of the stockholders of the Company. The Plan shall terminate ten
(10) years from the earlier of the date of its adoption by the Board or the date
of its approval by the stockholders. The Plan may be terminated at an earlier
date by vote of the stockholders or the Board; provided, however, that any such
earlier termination shall not affect any Award agreements executed prior to the
effective date of such termination.
DESIGNATION OF BENEFICIARY. Each Participant shall designate a
beneficiary to receive, in the event of the Participant's death, any rights to
which the Participant may be entitled under the Plan. Designation of a
beneficiary by a Participant shall be made in writing and shall be filed with
the Committee. If no such beneficiary is designated or if the beneficiary so
designated does not survive the Participant, the estate of such Participant
shall be deemed to be his beneficiary. A Participant may, by written notice to
the Committee, change his beneficiary designation.
FEDERAL INCOME TAX CONSEQUENCES.
INCENTIVE STOCK OPTIONS. If an ISO is granted to a Participant
in accordance with the terms of the Plan, no income will be recognized by such
Participant at the time the ISO is granted.
Generally, upon exercise of an ISO granted under the Plan, a
Participant will not recognize any income and the Company will not be entitled
to a deduction for tax purposes. However, the difference between the purchase
price and the fair market value of the shares of stock received on the date of
exercise will be treated as a positive adjustment in determining alternative
minimum taxable income, which may subject the Participant to the alternative
minimum tax. The disposition of shares acquired upon exercise of an ISO under
the Plan will ordinarily result in long-term or short-term capital gain or loss
(depending on the applicable holding period). Generally, however, if the
Participant disposes of shares of stock acquired upon exercise of an ISO within
two years after the date of grant or within one year after the date of exercise
(a "disqualifying disposition"), the Participant will recognize ordinary income,
and the Company will be entitled to a deduction for tax purposes, in the amount
of the excess of the fair market value of the shares on the date of exercise
over the purchase price (or, in certain circumstances, the gain on sale, if
less). Any excess of the amount realized by the Participant on the disqualifying
disposition over the fair market value of the shares on the date of exercise of
such ISO will ordinarily constitute capital gain. In the case of a Participant
subject to the restrictions contained in Section 16(b), promulgated under the
Securities Exchange Act of 1934 ("Section 16(b)"), the relevant date in
measuring the Participant's ordinary income and the
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<PAGE>
Company's tax deduction in connection with any such disqualifying disposition
will normally be the later of (i) the date the six-month period after the date
of grant lapses, or (ii) the date of exercise of the ISO.
Delivery of shares upon exercise of an ISO granted under the
Plan is subject to any required withholding taxes. A person exercising an ISO
may, as a condition precedent to receiving the shares, be required to pay the
Company a cash amount equal to the amount of required withholdings.
NONQUALIFIED STOCK OPTIONS. A Participant who receives a grant
of a NSO in accordance with the terms of the Plan will recognize income at the
time the NSO is granted unless the NSO does not have a readily ascertainable
fair market value and the grant of the NSO does not constitute a transfer of the
underlying stock.
Upon exercise of a NSO granted under the Plan, a Participant
will recognize as ordinary income the excess of the fair market value of the
shares of stock received on the date of exercise over the NSO exercise price.
Upon the sale of the stock by the Participant, the difference between the amount
realized in the sale and the fair market value of the stock on the date the NSO
was exercised is generally recognized by the Participant as a capital gain or
loss. Upon the exercise of the NSO, the Company receives a deduction equal to
the amount included in income by the Participant. The Company will generally not
be allowed any deductions unless it makes any required withholdings with respect
to the income recognized by the Participant.
SARS. A Participant who receives a grant of an SAR in
accordance with the terms of the Plan will recognize as ordinary income the
value of the consideration received by the Participant upon exercise of the SAR.
The Company is entitled to a deduction in an amount equal to the amount included
in the Participant's income upon exercise of the SAR. The Company will generally
not be allowed any deductions unless it makes proper withholdings with respect
to the income recognized by the Participant.
RESTRICTED STOCK. A Participant who receives a grant of
Restricted Stock in accordance with the terms of the Plan will recognize as
ordinary income the excess of the fair market value of the shares over the
amount paid for such shares at the time the shares become transferable or are no
longer subject to forfeiture. However, the Participant may make an election
under Section 83(b) of the Code to be taxed in the year the restricted stock is
granted. The Company is entitled to a deduction in an amount equal to the amount
included in the Participant's income (i) when the shares become nonforfeitable,
(ii) when the Participant makes an election under Section 83(b) of the Code, or
(iii) when the Company cancels the restriction on the shares. The Company will
generally not be allowed any deductions unless it makes proper withholdings with
respect to the income recognized by the Participant.
PERFORMANCE AWARD. A Participant who receives a Performance
Award in accordance with the terms of the Plan will typically incur taxation
following satisfaction of the performance conditions specified by the Company
and receipt of cash or stock without any transfer or forfeiture restriction. The
Company is entitled to a deduction in an amount equal to the amount included in
the Participant's income. The Company will generally not be allowed
22
<PAGE>
any deductions unless it makes proper withholdings with respect to the income
recognized by the Participant.
The foregoing statements are intended to summarize the general
principles of current federal income tax law applicable to grants of awards
under the Plan. It is emphasized that, while the Company believes that the
foregoing statements are correct based on existing provisions of the Code and
the interpretations thereof, no assurance can be given that legislative,
administrative, or judicial changes or interpretations will not occur that would
modify such statements. Also, individual financial situations may vary and state
and local taxation may be significant.
OPTIONS GRANTED UNDER PLAN
<TABLE>
<CAPTION>
NUMBER OF
WEIGHTED AVERAGE OPTIONS AS OF
NAME POSITION EXERCISE PRICE 3/31/00
---------------------- --------------- ------------------- ---------------------
<S> <C> <C> <C> <C>
NAMED EXECUTIVE OFFICERS Joseph W. Collard CEO $ - -
James F. Robertson COO $ - -
John A. Morton CFO $ 6.18 69,182
Paul Cozza National Sales $ 5.45 21,000
ALL CURRENT EXECUTIVE OFFICERS All Executive Officers Various $ 5.92 240,182
ALL CURRENT BOARD OF DIRECTOR
MEMBERS Joseph W. Collard CEO $ - -
James F. Robertson COO $ - -
John A. Morton CFO $ 6.18 69,182
H. Scott Barrett Director $ 10.00 5,000
C. Shelton James Director $ 5.75 5,000
Paul Kinyon Director $ 5.75 5,000
ALL CURRENT BOARD OF DIRECTOR
MEMBERS All Directors $ 6.36 84,182
ALL EMPLOYEES, INCLUDING
NON-EXECUTIVE OFFICERS All Employees Various $ 7.09 1,001,092
DIRECTOR NOMINEE Thomas E. Hoshko President $ 5.88 150,000
</TABLE>
ADDRESS FOR ADDITIONAL INFORMATION. Additional information concerning
the Plan and its administration by the Committee may be obtained by contacting
Technisource, Inc., 1901 West Cypress Creek Road, Suite 200, Ft. Lauderdale,
Florida 33309, Attention: Secretary, telephone number (954) 493-8601.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE TECHNISOURCE, INC. LONG-TERM INCENTIVE PLAN.
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<PAGE>
PROPOSAL 3:
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, 1999.
KPMG LLP has advised the Company that the firm does not have any direct or
indirect financial interest in the Company or its subsidiaries, nor has such
firm had any such interest in connection with the Company or its subsidiaries
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, 2000. 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 A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF KPMG LLP AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS.
ANNUAL REPORT
The Company's 1999 Annual Report to Shareholders, including financial
statements for the year ended December 31, 1999, 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 2001
Annual Meeting of Shareholders must comply with the
24
<PAGE>
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, Suite 200, Fort Lauderdale, Florida
33309, Attention: Secretary, and must be received by the Company before December
15, 2000.
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.
25
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Typesetter: MG Date: 4/28/00 Time: 9:40 AM Proof: #2
Proxy received: 4/27/00 Time: 11:15 AM
Coordinator: Karen Lazar [ILLEGIBLE]
Etx.: 8360 Fax: 8310 ------------------------------------
Client: Dixie Newton Fax: 954-928-1316 WHEN THE PROXY IS OKAYED PLEASE SIGN
& DATE IT ABOVE
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
TECHNISOURCE, INC.
May 31, 2000
Please Detach and Mail in the Envelope Provided
- ------------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL AGENDA ITEMS.
A [X] Please mark your
votes as in this
example.
FOR all nominees WITHHOLD
listed at right AUTHORITY
(except as marked to to vote for nominees
the contrary below) listed at right
1. Election of Nominees: Joseph W. Collard (2) To consider and vote on a proposal
seven (7) [ ] [ ] James F. Robertson to amend the Technisource, Inc.
directors to Thomas E. Hoshko Long-Term Incentive Plan to Increase
serve until the 2001 Annual Meeting of Shareholders. John A. Morton from 1,690,000 to 2,090,000 the
C. Shelton James number of shares of the Company's
Paul J. Kinyon Common Stock that may be issuable
H. Scott Barreti thereunder.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
(3) To ratify the appointment of KPMG
LLP as independent accountants of
the fiscal year 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
(4) Upon any and all other business
which may properly come before the
Annual Meeting.
This Proxy, which is solicited on behalf
of the Board of Directors, will be voted
FOR the matters described in paragraphs
(1), (2) and (3) unless the shareholder
specifies otherwise, (in which case it
will be voted as specified).
SIGNATURE: _____________________________ DATED: __________, 2000 SIGNATURE: _____________________________ DATED: __________, 2000
NOTE: Please sign exactly as name or names appears hereon. 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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Typesetter: MG Date: 5/1/00 Time: 9:00 AM Proof: #2
Proxy received: 4/27/00 Time: 11:15 AM
Coordinator: Karen Lazar [ILLEGIBLE] - 5/1/00
Etx.: 8360 Fax: 8310 ------------------------------------
Client: Dixie Newton Fax: 954-928-1316 WHEN THE PROXY IS OKAYED PLEASE SIGN
& DATE IT ABOVE
- ------------------------------------------------------------------------------------------------------------------------------------
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 on be held May 31, 2000, and at any
adjournment or postponement 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, FOR PROPOSAL 2 AND FOR PROPOSAL 3.
PLEASE MARK, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
