SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
KELLY SERVICES, INC.
(Name of Registrant as Specified in Its Charter)
KELLY SERVICES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: ______
______________________________________________________________________
(2) Aggregate number of securities to which transactions applies: ________
______________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:* _________________________________
______________________________________________________________________
(4) Proposed maximum aggregate value of transaction: _____________________
______________________________________________________________________
[ ] 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: _________________________________________________________
________________
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
[ Kelly Logotype ]
KELLY SERVICES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 17, 1995
To the Stockholders of
Kelly Services, Inc.
Notice is hereby given that the Annual Meeting of Stockholders of
Kelly Services, Inc., a Delaware corporation, will be held at the offices
of the Company, 999 West Big Beaver Road, Troy, Michigan 48084-4782, on
May 17, 1995 at 11 o'clock in the forenoon, Eastern Daylight Time, for the
following purposes:
1. To elect Directors as set forth in the accompanying Proxy
Statement.
2. To consider and act upon a proposal to ratify a Non-employee
Director Stock Award Plan.
3. To consider and act upon a proposal for approval of standards for
performance-based, annual incentive awards for certain executive
officers under the Company's Short-Term Incentive Plan.
4. To ratify the appointment of Price Waterhouse LLP as independent
accountants.
5. To transact any other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only holders of the Company's Class B common stock of record at the
close of business on March 20, 1995 will be entitled to notice of and to
vote at the meeting.
TO ENSURE A QUORUM, IT IS IMPORTANT THAT YOUR PROXY BE MAILED
PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE.
By Order of the Board of Directors
April 13, 1995
999 West Big Beaver Road Eugene L. Hartwig
Troy, Michigan 48084-4782 Secretary
<PAGE>
KELLY SERVICES, INC.
999 West Big Beaver Road
Troy, Michigan 48084-4782
April 13, 1995
PROXY STATEMENT
1995 ANNUAL MEETING OF STOCKHOLDERS
This statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Kelly Services, Inc.
(hereinafter called the "Company") for use at the Annual Meeting of
Stockholders of the Company to be held at the corporate offices of the
Company in Troy, Michigan on May 17, 1995 for the purposes set forth in
the accompanying Notice of Annual Meeting of Stockholders. The approximate
date on which this Proxy Statement and enclosed form of proxy are first
being sent to stockholders of the Company is April 13, 1995. If the
enclosed form of proxy is executed and returned by the stockholder, it may
nevertheless be revoked by the person giving it by written notice of
revocation to the Secretary of the Company, by submitting a later dated
proxy or appearing in person at the meeting any time prior to the exercise
of the powers conferred thereby.
If a proxy in the accompanying form is properly executed, returned
to the Company and not revoked, the shares represented by the proxy will
be voted in accordance with the instructions set forth thereon. If no
instructions are given with respect to the matters to be acted upon, the
shares represented by the proxy will be voted FOR the election of the
directors, designated Proposal 1 on the proxy, FOR the proposal to ratify
a Non-employee Director Stock Award Plan, designated Proposal 2, FOR the
proposal to approve standards for performance-based, annual incentive
awards for certain executive officers under the Company's Short-Term
Incentive Plan, designated Proposal 3, FOR the proposal to ratify the
selection of independent accountants, designated Proposal 4 on the proxy,
and on any other matters that properly come before the Annual Meeting in
the manner as set forth on the proxy. Abstentions (including broker
non-votes) are not counted as votes cast in the tabulation of votes on any
matter submitted to stockholders.
Stockholders on the record date will be entitled to one vote for
each share held.
At the close of business on March 20, 1995, the outstanding number
of voting securities (exclusive of treasury shares) was 3,601,127 shares
of the Class B common stock, having a par value of $1.00. Class B common
stock is the only class of the Company's securities with voting rights.
SECURITIES BENEFICIALLY OWNED BY
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
Under regulations of the Securities and Exchange Commission, persons
who have power to vote or dispose of common stock of the Company, either
alone or jointly with others, are deemed to be beneficial owners of the
common stock.
Set forth in the following table are the beneficial holdings on
March 1, 1995, on the basis described above, of each person known by the
Company to own beneficially more than five percent of the Class B common
stock:
<TABLE>
<CAPTION>
Number of Shares Percent
Name and Address of and Nature of of
Beneficial Owners Beneficial Ownership (a) Class
<S> <C> <C>
W. R. Kelly..................... 2,189,840(b) 60.8
999 W. Big Beaver Road
Troy, Michigan 48084
T. E. Adderley.................. 1,024,726(c) 28.4
999 W. Big Beaver Road
Troy, Michigan 48084
NBD Bancorp, Inc................ 192,494(d) 5.3
611 Woodward Avenue
Detroit, Michigan 48226
<FN>
(a) Nature of beneficial ownership of securities is direct unless
otherwise indicated by footnote. Beneficial ownership as shown in the
table arises from sole voting power and sole investment power unless
indicated by footnote.
(b) All shares directly held. Because of his substantial stockholdings,
Mr. Kelly may be deemed to be a "control person" of the Company under
applicable regulations of the Securities and Exchange Commission.
(c) Includes 952,100 shares directly held; 71,825 shares in an irrevocable
trust, of which he is beneficiary; 625 shares held in five separate
trusts of which he is co-trustee with sole or shared voting and
investment power, in which he has no equity interest; and 176 shares
owned by Mr. Adderley's wife, in which he disclaims beneficial
interest.
(d) Based upon a report filed by NBD Bancorp, Inc. with the Securities and
Exchange Commission on Schedule 13G upon which the company relies for
the information presented. The report indicates that the number of
shares of common stock owned by the reporting person are: 120,919,
sole voting power; 71,825, shared voting power; 108,106, sole
dispositive power; and 84,263, shared dispositive power.
</TABLE>
Set forth in the following table are the beneficial holdings of the
Class A and Class B common stock on March 1, 1995, on the basis described
above, of each director and the nominees for election, and all directors
and officers as a group.
<TABLE>
<CAPTION>
Class A Common Stock Class B Common Stock
----------------------------- ------------------------------
Number of Shares Percent Number of Shares Percent
Directors and and Nature of of and Nature of of
Nominees Beneficial Ownership Class Beneficial Ownership Class
------------- -------------------- ------- -------------------- -------
<S> <C> <C> <C> <C>
W. R. Kelly......... 14,771,761(a) 43.0 2,189,840(d) 60.8
T. E. Adderley...... 3,254,654(b)(c) 9.5 1,024,726(e) 28.4
C. V. Fricke........ 3,692 * 781 *
H. E. Guenther...... 2,702 * 875 *
V. G. Istock........ 1,475 * 875 *
B. J. White......... 0 0
All Directors and
Executive Officers
as a group......... 18,231,564(c) 53.1 3,218,664 89.4
<FN>
* Less than 1%
(a) All shares directly held except 568,324 shares owned by Mr. Kelly's
wife, in which he disclaims beneficial interest.
(b) Includes 660,103 shares directly held; 310,612 shares in an
irrevocable trust, of which he is beneficiary; 2,227,092 shares held
in eleven separate trusts of which he is co-trustee with sole or
shared investment power, in which he has no equity interest; 49,209
shares held by Mr. Adderley and his wife as custodian for certain of
his minor children under the Michigan Uniform Gifts to Minors Act, in
which he has no equity interest; 1,138 shares owned by Mr. Adderley's
wife, in which he disclaims beneficial interest.
(c) Includes shares which the individuals have a right to acquire through
the exercise of stock options within 60 days.
(d) See footnote (b) to first table.
(e) See footnote (c) to first table.
</TABLE>
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than
ten percent of a registered class of the Company's equity securities, to
file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of Common Stock of the
Company. Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no
other reports were required, during the two fiscal years ended January 1,
1995 all Section 16(a) filing requirements applicable to its executive
officers, directors and greater than ten-percent beneficial owners have
been met, except with respect to Director W.R. Kelly who filed a late Form
4 for December 1994 relating to a gift of 200 shares of the Company's
Class A common stock. A Form 4 reporting the gift was filed in March 1995.
BOARD OF DIRECTORS
The business, property and affairs of the Company are managed by the
Board of Directors, which establishes broad corporate policies and
performance objectives, but is not involved in the day-to-day operating
details. Regular meetings of the Board of Directors are held in each
quarter and special meetings are scheduled when required. The Board held
four meetings during the last fiscal year.
The Board of Directors has a standing Audit Committee, composed of
Messrs. Fricke, Guenther and Istock, which held four meetings in 1994. The
Audit Committee's purpose is to review the scope of the work and fees of
the independent accountants and to review with the independent accountants
their report or opinion on the Company's financial statements.
During 1994 the Board of Directors did not have a nominating
committee. The Compensation Committee whose functions are described in the
Compensation Committee Report on page 4 of this proxy statement held six
meetings in 1994 and is composed of Messrs. Fricke and Guenther.
COMPENSATION OF DIRECTORS
Directors of the Company who are not salaried officers are paid an
annual retainer fee of $21,000, a fee of $1,000 for each meeting of the
Board of Directors attended and a fee of $800 for each meeting of a
committee of the Board of Directors attended.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Fricke and Mr. Guenther served on the Compensation Committee
during 1994.
Mr. Adderley, the Company's President and Chief Executive Officer,
serves on the board of directors of NBD Bancorp, Inc. and is a member of
its Compensation Committee. Mr. Istock, a director of the Company, is
Chairman and Chief Executive Officer and a director of NBD Bancorp, Inc.
COMPENSATION COMMITTEE REPORT
COVERING EXECUTIVE COMPENSATION
The Company's compensation program for executives is administered by
the Compensation Committee of the Board of Directors consisting of Messrs.
Fricke and Guenther, both of whom are non-officer directors. The Committee
has responsibility for review and final approval of all adjustments in
salary and short-term incentive awards for executives of the Company,
including, with respect to 1994, administering the Kelly Services, Inc.
Short-Term Incentive Plan. The Committee also administers the Kelly
Services, Inc. Performance Incentive Plan (the Company's long-term
incentive plan) and makes recommendations with respect to granting awards
under such plan subject to review and approval by a majority of the full
complement of those members of the Board of Directors who are
"disinterested persons" as that term is used in Rule 16b-3 of the
Securities and Exchange Commission.
COMPENSATION PRINCIPLES
The philosophy underlying the Company's executive compensation
program has the following goals: (a) to align key executive and management
employees with the Company's strategic and financial objectives; (b) to
attract, retain and motivate a management team of high quality; (c) to
create incentives which motivate employees to achieve continual growth and
increasing profitability of the Company; and (d) to promote appreciation
of the common interests of stockholders, executives and key management
employees.
Total compensation is directly related to the successful achievement
of the Company's performance objectives. Short-term objectives are
established on an annual basis, the achievement of which is rewarded
annually. Long-term objectives will be tied to a two-to-five-year
performance period, the achievement of which will be rewarded accordingly.
All compensation, other than stock options and restricted stock awards,
whether in the form of salary, short-term incentive awards or grants of
performance shares, or cash equivalents, will be based on successful
accomplishment of periodically established objectives reflecting the
Company's strategic business and financial plans.
Performance objectives, which are identified as short or long-term,
provide standards for the measurement of Company, unit and individual
performance. Some performance objectives are Company-wide; others will
vary, depending on individual responsibilities, groups of employees or
particular projects and plans.
The Company has reviewed the nondeductability of executive
compensation in excess of $1 million as required under Section 162(m) of
the Internal Revenue Code. It will be submitting for stockholder approval
at the Annual Meeting of Stockholders on May 17, 1995 a proposal setting
forth performance-based, annual incentive criteria under the Company's
Short-Term Incentive Plan to preserve the Company's tax deduction for plan
awards made to its Chief Executive Officer and those executives of or
above the rank of executive vice president whose annual compensation may
in the future exceed $1 million.
The following is a discussion of the major elements of the Company's
executive compensation program along with a description of the decisions
and actions taken by the Committee with regard to 1994 compensation of Mr.
Adderley as the Company's Chief Executive Officer.
ANNUAL COMPENSATION
Annual cash compensation for executive officers consists of base
salaries and, for 1994, short-term incentive awards earned under the
Company's Short-Term Incentive Plan. Base salaries for executive officers
are targeted to be competitive with the marketplace identified by national
surveys of executive compensation in which the Company periodically
participates and which are recognized and credible within the professional
field of compensation management. Because the Company competes for
executive-level personnel beyond the temporary help industry, the
companies included in the surveys referred to above are not the same as
those included in the Industry Index presented in the performance graph in
the Company's Proxy Statement. Base salaries are targeted to correspond
generally with the median of the range of salaries in the surveys
consulted.
Competitive assessments incorporate benchmarking against companies,
not in the temporary help industry, having similar revenue and other
relevant factors. Individual performance is also a factor in determining
base salary. The Committee is responsible for reviewing and approving the
annual salary increase budget for all officers.
For 1994, Mr. Adderley received a 9.26 percent salary increase from
$540,000 to $590,000 to bring his base salary more in line with the median
base salaries of chief executive officers of other companies of comparable
size.
Annual incentive awards for executive officers paid under the
Short-Term Incentive Plan required that the Company achieve a certain
level of pre-tax earnings as established by the Committee at its March
1994 meeting. Because the Company exceeded the threshold pre-tax earnings
objective established for 1994, the Committee approved short-term
incentive awards based upon a percentage of the individual executive's
target award combined with an assessment of unit and individual officer
performance.
In Mr. Adderley's case, his award, which was based entirely on the
Company's financial performance, was 150 percent of his target award of
$354,000, or $531,000. In 1994, the corporate pre-tax earnings performance
objective established under the Short-Term Incentive Plan was exceeded by
more than 50 percent, resulting in his award being the maximum 150 percent
of target.
Awards for other executive officers, including the four executive
officers named in the accompanying table ("Named Executives"), were
determined based on the Company's pre-tax earnings results combined with
an assessment of their individual and unit performance.
LONG-TERM COMPENSATION
The long-term incentive compensation for executive officers consists
of cash and stock-based awards made under the Company's Performance
Incentive Plan. Non-Qualified Stock Options, Incentive Stock Options and
Restricted Stock Awards, in the case of certain senior executives, are
currently the only type of awards outstanding under the Performance
Incentive Plan.
During 1994, a review of compensation components for chief executive
officers in companies of similar size indicated that Mr. Adderley's
compensation was substantially below competitive levels. As a result, the
Committee during 1994 recommended that Mr. Adderley be awarded a
Non-Qualified Stock Option to purchase 18,000 shares of Class A common
stock and an Incentive Stock Option to purchase 4,000 shares of Class A
common stock to bring his compensation package more in line with
competitive practice.
The decision to grant stock options is considered periodically by
the Committee during each year. Grants may be given to new hires,
employees promoted to new positions and other key managers and executives
as deemed appropriate by the Committee. Grant size is determined based on
a targeted guideline of option shares for each management level that is
generally competitive with the median level of grants awarded by companies
of similar size. Decisions regarding the size of individual grants take
into consideration the number of outstanding, unexercised shares available
to the individual compared to the targeted guideline of the number of
shares for the respective management level of the employee.
In 1994, Mr. Adderley and the other members of the Company's
Managing Committee, who together constitute the 12 most senior officers of
the Company, were awarded Restricted Shares of the Company's Class A
common stock under the 1992 Performance Incentive Plan. The Restricted
Share awards, which vest in three equal annual installments beginning in
May 1995, are intended to secure the long-term commitment of high quality
executives to remain with the Company, incentivized by the prospect of
increasing the value of their stock holdings through increased
profitability and growth of the Company. The award in Mr. Adderley's case
was for 14,000 shares.
CONCLUSION
The Committee believes that the Company's executive compensation
program, providing as it does for competitive base salaries along with
short and long-term incentive compensation opportunities, is an important
factor in motivating senior officers as well as maintaining an appropriate
focus on increasing stockholder value.
HAROLD E. GUENTHER
CEDRIC V. FRICKE
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth all compensation paid or accrued for
services rendered to the Company and its subsidiaries for the last three
fiscal years by the Chief Executive Officer and the four highest-paid
executive officers of the Company:
<TABLE>
<CAPTION>
Long-Term
Compensation
---------------------------
Annual Compensation Awards
--------------------- ---------------------------
Restricted Securities
Name and Stock Underlying All Other
Principal Position Year Salary Bonus Award(s)($)(1) Options (#) Compensation(2)
------------------- ---- ------ ----- -------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
T. E. Adderley 1994 $590,000 $531,000 $381,500 22,000 $112,320
President and Chief 1993 540,000 190,000 31,000 98,219
Executive Officer.......... 1992 510,000 63,750 0 94,800
R. G. Barranco 1994 $323,334 $206,000 $163,500 12,000 $ 25,400
Executive Vice President, 1993 265,000 100,000 14,000 19,606
Operations................. 1992 185,000 53,450 2,250 11,990
R. E. Thompson 1994 $323,334 $206,000 $163,500 12,000 $ 24,380
Executive Vice President, 1993 265,000 83,000 14,000 18,480
Administration............. 1992 250,000 25,000 0 17,070
R. F. Stoner 1994 $230,000 $125,000 $ 81,750 0 $ 17,760
Senior Vice President and 1993 211,000 66,000 11,500 14,940
Chief Financial Officer.... 1992 200,000 20,000 0 14,070
C. R. Fryar 1994 $220,000 $ 97,000 $ 81,750 7,000 $ 16,440
Senior Vice President and 1993 195,000 54,000 11,500 14,283
General Manager, 1992 185,000 27,550 2,000 12,882
Metro Markets Division.....
<FN>
________________
(1) Restricted Shares of the Company's Class A common stock, which vest in
three equal annual installments beginning in May 1995, were awarded in
May 1994. The above amounts represent the fair market value of the
entire award for each executive officer at the grant date. The number
of shares awarded were: T.E. Adderley, 14,000 shares; R.G. Barranco,
6,000 shares; R.E. Thompson, 6,000 shares; R.F. Stoner, 3,000; C.R.
Fryar, 3,000 shares.
(2) Represents company contributions to non-qualified defined
contribution/deferred compensation plan for officers and certain other
management employees known as the Management Retirement Plan. The
amount reported above for Mr. Adderley includes contributions of
$65,520, $57,295 and $55,299 for 1994, 1993 and 1992, respectively,
made because he would have earned a greater benefit had he remained
under a defined benefit Retirement Plan which was terminated December
31, 1988.
</TABLE>
OPTION GRANTS IN 1994
The following table shows all grants of stock options to the
officers named in the Summary Compensation Table above in 1994. The
exercise price of all such options was the fair market value on the date
of grant except that the option for 4,000 shares granted to Mr. Adderley
at $29.98 was at 110% of the fair market value of $27.25 on the date of
the grant. With respect to this option for 4,000 shares awarded to
Mr. Adderley, fifty (50%) percent are exercisable one year after the date
grant with an additional twenty-five (25%) percent exercisable on each of
the next two anniversary dates of the grant. Of the remaining options
awarded, twenty (20%) percent are exercisable one year after the grant
date with an additional twenty (20%) percent exercisable on each of the
next four anniversary dates. Upon exercise of an option, an officer
purchases all or a portion of the shares covered by the option by paying
the exercise price multiplied by the number of shares as to which the
option is exercised, either in cash or by surrendering common shares
already owned by the officer.
<TABLE>
<CAPTION>
Individual Grants
- -----------------------------------------------------------------------
Potential Realizable Value at
Number of Assumed Annual Rates of Stock
Securities % of Total Price Appreciation for Option Term
Underlying Options -----------------------------------
Options Granted to
Granted Employees Exercise or Expiration
Name (#) in Fiscal Year Base Price Date 0% 5% 10%
---- --------- -------------- ----------- ---------- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
T. E. Adderley.... 4,000 $29.98 12/28/99 0 $ 57,649 $162,817
18,000 27.25 12/28/04 308,472 781,730
22,000 8.63 $366,121 $944,547
R. G. Barranco.... 4,000 $27.25 12/28/04 0 $ 68,549 $173,717
8,000 27.25 12/28/04 137,099 347,435
12,000 4.71 $205,648 $521,252
R. E. Thompson.... 4,000 $27.25 12/28/04 0 $ 68,549 $173,717
8,000 27.25 12/28/04 137,099 347,435
12,000 4.71 $205,648 $521,252
R. F. Stoner...... 0
C. R. Fryar....... 4,000 $27.25 12/28/04 0 $ 68,549 $173,717
3,000 27.25 12/28/04 51,412 130,288
7,000 2.75 $119,961 $304,005
</TABLE>
The dollar amounts under the 5% and 10% columns in the table above
are the result of calculations required by the Securities and Exchange
Commission's rules and therefore are not intended to forecast possible
future appreciation of the stock price of the Company. As shown in the 0%
column above, no gain to the named officers or all employees is possible
without appreciation in the price of the Company's common stock, which
will benefit all shareowners. For example, in order for any of the named
officers to realize the potential values set forth in the 5% and 10%
columns in the table above with respect to the exercise price of $27.25
(the fair market value on the date of the grant), the price per share of
the Company's Class A common stock would be approximately $44.39 and
$70.68, respectively, as of the expiration date of their options.
OPTION EXERCISES DURING 1994 AND YEAR-END OPTION VALUES
The following table shows stock option exercises during 1994 by each
of the officers named in the Summary Compensation Table and the value of
unexercised options at December 31, 1994:
<TABLE>
<CAPTION>
Number of
Securities Underlying
Unexercised Options Value of Unexercised In-the-Money
at Year End (#) Options at Year End
Shares Acquired -------------------------- ---------------------------------
Name on Exercise (#) Value Realized Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
T. E. Adderley.... 0 0 6,500 46,500 $ 38 $ 113
R. G. Barranco.... 1,563 $ 5,400 7,488 23,200 $10,718 $8,000
R. E. Thompson.... 0 0 5,300 23,200 $13,625 $8,000
R. F. Stoner...... 2,500 $22,250 2,300 9,200 $ 2,000 $8,000
C. R. Fryar....... 0 0 4,800 16,200 $13,625 $8,000
</TABLE>
PERFORMANCE GRAPH
The following is a line graph comparing the cumulative total return
(assuming reinvestment of dividends) of the Company's Class A common
stock, with that of the cumulative total return of the NASDAQ Stock Index,
and an Industry Index for the five years ended December 31, 1994. The
Industry Index consists of other U.S. temporary help service companies
selected by the Company (ADIA, CDI, Manpower, Olsten and Robert Half)
which have stock market capitalizations of more than $100,000,000. The
following is based on an investment of $100, on January 1, 1990 in the
Company's Class A common stock, the NASDAQ Stock Index, and the Industry
Index, with dividends reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Kelly Services, NASDAQ Index, and Industry Index
[EDGAR NOTE: The performance graph required by Item 402(l) of
Regulation S-K appears in this position of the paper document.
A copy of the performance graph on paper is being submitted to
the Branch Chief in the Division of Corporation Finance. A
table containing the data used to create the performance
graph's data points is provided below.]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Kelly Services........ 100 85 84 118 96 97
NASDAQ Index.......... 100 85 136 159 181 177
Industry Index........ 100 69 93 105 132 189
</TABLE>
MATTERS TO BE BROUGHT BEFORE THE MEETING
ELECTION OF DIRECTORS
PROPOSAL 1
The Board of Directors is divided into three classes with each class
elected for a three year term. Under the Certificate of Incorporation, the
Board of Directors shall consist of no fewer than five (5) and no more
than seven (7) members, the exact number of directors to be determined
from time to time by the Board of Directors. The Board of Directors has
fixed the number of Directors constituting the whole Board at six (6).
The Board of Directors recommends that the three (3) nominees named
below be elected to serve as Directors. Messrs. Adderley and Guenther will
serve for a three (3) year term ending at the annual meeting of
stockholders held after the close of the fiscal year ended December 29,
1997. Mr. White will serve for a one (1) year term ending at the annual
meeting of stockholders held after the close of the fiscal year ended
December 31, 1995. Such term is the final year of the three year term of
the class to which he is being elected.
The shares represented by the enclosed form of proxy, when properly
executed by a stockholder of record, will be voted at the Annual Meeting,
or any adjournment thereof, as designated thereon if unrevoked at the time
of the meeting. If a nominee is unavailable for election for any reason on
the date of the election of the directors (which event is not
anticipated), the persons named in the enclosed form of proxy may vote for
the election of a person designated by a majority of the proxy attorneys
present at the meeting. The directors will be elected by a majority of the
votes cast by holders of Class B common stock who are present in person,
or represented by proxy, and entitled to vote at the meeting.
<PAGE>
The name and age of the nominees and for each person whose term of
office as a director will continue after the meeting as of March 1, 1995,
their present occupations or employment during the past five years and
other data regarding them, based upon information received from the
respective individuals, are hereinafter set forth:
<TABLE>
<CAPTION>
Year of Year First
Expiration of Principal Elected as
Name and Age Elective Term Occupation Director
Nominees for Election as Director to be Elected for a Three-Year Term
<S> <C> <C> <C>
T. E. Adderley(a)(b) ... 1995 President and Chief Executive Officer of the 1962
Age 61 Company; Director of Detroit Edison Company;
Director of NBD Bancorp, Inc.
H. E. Guenther ......... 1995 Senior Vice President, Kemper Financial 1985
Age 67 Services, Inc.
<CAPTION>
Nominee for Election as Director to be Elected for a One-Year Term
<S> <C> <C> <C>
B. J. White ............ Dean and Professor of Business Administration
Age 47 of the University of Michigan School of
Business Administration; Director of Equity
Residential Property Trust; Director of
Falcon Building Products, Inc.; Director of
Three-D Departments, Inc.; Director of Union
Pump Co., Inc.
<CAPTION>
Directors Continuing in Office
<S> <C> <C> <C>
W. R. Kelly ............ 1996 Chairman of the Board of the Company 1952
Age 89
C. V. Fricke ........... 1997 Professor Emeritus, University of 1978
Age 66 Michigan-Dearborn
V. G. Istock ........... 1997 Chairman and Chief Executive Officer of NBD 1991
Age 54 Bancorp, Inc. and NBD Bank; Director of NBD
Bancorp, Inc.; Director of Handleman Company
<FN>
(a) Mr. Adderley is a director and executive officer of all subsidiaries
of the Company.
(b) Mr. Adderley is the son of Mr. Kelly.
</TABLE>
APPROVAL OF NON-EMPLOYEE DIRECTOR STOCK AWARD PLAN
PROPOSAL 2
The Company has adopted, effective February 15, 1995, subject to
ratification by stockholders, a Non-employee Director Stock Award Plan
(the "Plan"). The purpose of the Plan is to enhance the Company's ability
to attract and retain the services of well-qualified Directors who are not
officers or employees of the Company or any of its subsidiaries and to
more closely align the personal interest of non-employee Directors with
those of the Company's stockholders. The proposed plan will create a
non-discretionary formula for the awarding of grants of the Company's
Class A common stock. Stockholder approval of the Plan will enable the
Company to remain competitive with a number of companies using stock as a
method of non-employee director compensation, and will comply with
requirements of applicable federal securities law.
The full text of the Plan is set forth as Exhibit A to this Proxy
Statement. The following is a summary of the material features of the
Plan, and is qualified in its entirety by reference to the Plan as set
forth in Exhibit A.
The operation of the Plan is automatic, and awards are granted
pursuant to a formula set forth in the Plan. Following stockholder
ratification, on the first business day after each annual meeting of
stockholders, each non-employee Director who was elected at the meeting or
whose term continued thereafter as a Director will be granted a number of
shares of the Company's Class A common stock having a fair market value on
the date of grant equal to fifty percent of the non-employee Director's
annual retainer then in effect, exclusive of meeting or committee fees.
The Board of Directors retains the power to establish and change
Director's fees. The shares awarded under the Plan will be in addition to,
and not in lieu of, the non-employee Director's annual retainer fee,
meeting fees or other compensation payable as a result of his or her
service on the Company's Board of Directors.
The shares granted to non-employee Directors under the Plan will not
be transferable for a period of six months after the date of grant, except
in the event of the death of the recipient. All rights to receive common
stock under the Plan will terminate immediately in the event a
non-employee Director ceases to serve as a Director.
The total number of shares of common stock which may be granted
under the Plan each year may not exceed one-quarter of one percent of the
total number of shares outstanding as of the first day of the year in
which the shares are granted, subject to adjustments for stock dividends,
stock splits, recapitalizations, mergers, consolidations, reorganizations
or similar capital adjustments.
The Plan will remain in effect until terminated by action of the
Board of Directors. The Board of Directors may amend the Plan at any time,
except that the provisions of the Plan regarding the amount, price or
timing of the awards to non-employee Directors may not be amended more
than once every six months, other than to comport with changes in the
Internal Revenue Code, the Employee Retirement Income Security Act or the
rules issued thereunder. In addition, the Board may not make any amendment
for which stockholder approval is required to comply with Rule 16b-3 under
the Securities and Exchange Act of 1934 or other applicable law, unless
such compliance, if discretionary, is no longer desired. Rule 16b-3
currently requires stockholder approval of amendments which would (i)
materially increase the benefits accruing to participants under the Plan,
(ii) materially increase the number of securities issuable under the Plan,
or (iii) materially modify the requirements as to eligibility for
participation in the Plan.
The table below sets forth the dollar value and number of shares
which would have been awarded to non-employee Directors in 1994 if the
Plan had been in effect:
NEW PLAN BENEFITS
NON-EMPLOYEE DIRECTOR STOCK AWARD PLAN
<TABLE>
<CAPTION>
Dollar Number
Value ($) of Shares
<S> <C> <C>
Non-employee Director Group (3 persons)..... $31,500 1,167
</TABLE>
Currently, there are 4 non-employee Directors or nominees who would
be eligible to participate in the Plan. The current annual retainer is
$21,000, which is the same amount as was payable on the first business day
after the 1994 Annual Meeting. Assuming a stock price of $35.00 which was
the mean between the highest and lowest sales prices of the Company's
Class A common stock on March 29, 1995, one half of the retainer, or
$10,500, divided by $35.00 would result in a grant of 300 shares to each
non-employee Director.
The proposal to approve the Plan will be carried if it receives the
affirmative vote of the holders of a majority of the Company's Class B
common stock present in person or by proxy and entitled to vote at the
annual meeting.
APPROVAL OF STANDARDS FOR
PERFORMANCE-BASED, ANNUAL, INCENTIVE AWARDS
FOR CERTAIN EXECUTIVE OFFICERS UNDER THE
COMPANY'S SHORT-TERM INCENTIVE PLAN
PROPOSAL 3
Background for Proposal. Section 162(m) of the Tax Code, as amended
in 1993, establishes a limit of $1 million per year on the tax
deductibility of annual compensation paid to the chief executive officer
and the next four highest paid executive officers of a public company,
unless such compensation is "performance-based" and certain conditions are
met. These conditions include that an award under an incentive plan be
objectively determinable based upon a performance standard and that the
nature of the standard be approved by the company's stockholders.
In 1993 the Board of Directors replaced the Company's former
Executive Bonus Plan with an annual cash award plan, the Short-Term
Incentive Plan ("STIP"), designed to provide incentive to certain officers
and other management-level employees based upon their contributions to the
Company's growth and profitability.
Although the STIP requires that at least one of the performance
goals established by the Compensation Committee each year be a
quantitatively measured Company performance objective, the Plan also gives
the Committee discretion to establish other goals, the achievement of
which may require subjective assessments by the Committee. The Board of
Directors believes that this flexibility generally afforded the
Compensation Committee under the STIP is beneficial and in the best
interests of the Company and its shareholders and therefore should be
retained.
However, given the requirements of Section 162(m), in the first
quarter of this year, the Compensation Committee took action to require
that awards made to executive officers of the Company at or above the rank
of executive vice president (the "Senior Executive Officers") be based
entirely on an objective performance criterion and subject to the other
parameters described in this proposal. The Board believes that, if these
criteria are approved by the stockholders as proposed, the full amount of
any STIP awards to Senior Executive Officers will qualify for the
"performance-based" exclusion from Section 162(m)'s cap on compensation
deductibility.
Proposed STIP Incentive Criteria for Senior Executive Officers. As
the STIP is proposed to be administered with respect to the Senior
Executive Officers, the Compensation Committee, during the first quarter
of each year, will establish a STIP target award, expressed as a
percentage of the annual cash salary for that year, not to exceed 70
percent, for each Senior Executive Officer. At the same time the Committee
will establish a Company performance objective for such year expressed
either as a certain dollar amount of the Company's pre-tax earnings for
the year or the equivalent of such amount in earnings per share. It will
also establish an award payout schedule ranging from zero percent to a
maximum of 150 percent of the Senior Executive Officers' target awards
based upon the specific dollar amount by which actual pre-tax earnings are
either less than or greater than the performance objective. In no event,
however, shall any award under the STIP exceed $1,500,000. The Committee
retains the right in its discretion to reduce a Senior Executive Officer's
award if it believes that individual performance does not warrant the
award calculated pursuant to the payout schedule, but will have no
discretion to increase any award so calculated.
Executives Covered by Proposed Criteria. The total compensation of
any person other than a Senior Executive Officer who may receive an award
under the STIP is not expected for the foreseeable future to exceed the
deduction limit of Section 162(m). Accordingly, to maintain maximum
flexibility in administering the Plan, the proposed STIP performance-based
criteria described above will be applied only with respect to the Senior
Executive Officers, i.e., currently, Mr. Adderley, the Company's CEO, and
Messrs. Barranco and Thompson, the two Executive Vice Presidents. Other
executive officers of the Company, including those named in the Summary
Compensation Table, would become subject to the proposed performance-based
criteria for STIP awards when and if promoted to the rank of Senior
Executive Officer.
1995 and Future Awards to Senior Executive Officers. Consistent with
the criteria described above, the Compensation Committee, in the first
quarter, established a 1995 pre-tax earnings performance objective, the
percentage of 1995 salary each Senior Executive Officer may receive under
the STIP if that performance objective is achieved (the target award) and
a schedule of possible STIP payouts for 1995 performance ranging from
zero, if a specified pre-tax earnings threshold is not achieved, to up to
150 percent of each Senior Executive Officer's target award salary
percentage, depending on the extent to which actual pre-tax earnings are
less or more than the target amount. Due to the nature of the performance
criteria, the actual amount (if any) that a Senior Executive Officer will
receive for 1995 performance (or for performance in any later year) is not
now determinable.
Term of Criteria. The term of the proposed performance-based annual
incentive criteria under the STIP, assuming approval by stockholders, will
be five years, 1995 through 1999, unless sooner terminated or amended by
the Board. Any amendment that would materially change the "class of
employees" covered, the "performance measure," or the "maximum award"
payable would be subject to stockholder approval.
Effect of Non-Approval. If the proposal is not approved by
stockholders, no awards that would not qualify for tax deductibility will
be paid under the STIP to Senior Executive Officers.
Required Vote. The proposal to approve the performance-based annual
incentive criteria will be carried if it receives the affirmative vote of
the holders of a majority of the Company's Class B common stock present in
person or by proxy and entitled to vote at the annual meeting.
The Board of Directors recommends a vote "FOR" approval of the
proposed performance-based, annual incentive criteria for Senior Executive
Officers.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
PROPOSAL 4
The Board of Directors of the Company has appointed the firm of
Price Waterhouse LLP as independent accountants of the Company for the
current fiscal year ending December 31, 1995, subject to ratification by
the stockholders. This firm has served as independent accountants for the
Company for many years and is considered to be well qualified by the Board
of Directors. As in prior years, a representative of that firm will be
present at the Annual Meeting and will have the opportunity to make a
statement and to respond to appropriate questions.
It is recommended by the Board of Directors that the proposal to
ratify the appointment of Price Waterhouse LLP as independent accountants
for the year 1995 be approved. If stockholders fail to approve this
proposal, the Board will reconsider the appointment of Price Waterhouse
LLP as independent accountants for the year 1995.
The proposal to ratify the appointment of Price Waterhouse LLP will
be carried if it receives the affirmative vote of the holders of a
majority of the Company's Class B common stock present in person or by
proxy and entitled to vote at the annual meeting.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the next
Annual Meeting must be received by the Secretary, Kelly Services, Inc.,
999 West Big Beaver Road, Troy, Michigan 48084, no later than December 8,
1995.
OTHER MATTERS
At the date of this proxy statement the Company knows of no matters,
other than the matters described herein, that will be presented for
consideration at the meeting. If any other matters do properly come before
the meeting, all proxies signed and returned by holders of the Class B
common stock, if not limited to the contrary, will be voted thereon in
accordance with the best judgment of the persons voting the proxies.
A copy of the Company's printed annual report as of January 1, 1995,
the close of the Company's latest fiscal year, has been mailed to each
stockholder of record. The expense of preparing, printing, assembling and
mailing the accompanying form of proxy and the material used in the
solicitation of proxies will be paid by the Company. In addition, the
Company may reimburse brokers or nominees for their expenses in
transmitting proxies and proxy material to principals.
It is important that the proxies be returned promptly. Therefore,
stockholders are urged to execute and return the enclosed form of proxy in
the enclosed postage prepaid envelope.
By Order of the Board of Directors
Eugene L. Hartwig
Secretary
<PAGE>
EXHIBIT A
KELLY SERVICES, INC.
NON-EMPLOYEE DIRECTOR
STOCK AWARD PLAN
1. Establishment. Kelly Services, Inc. ("Kelly") hereby establishes
the Kelly Services, Inc. Non-employee Director Stock Award Plan (the
"Plan"), as set forth in this document.
2. Purpose. The purpose of the Plan is to enhance Kelly's ability to
attract and retain the services of well-qualified directors who are not
officers or employees of Kelly or any of its subsidiaries ("Non-employee
Directors") by providing them with an opportunity to participate in the
growth of Kelly and to align the personal interests of Non-employee
Directors with those of Kelly's stockholders.
3. Duration Of The Plan. The Plan shall become effective upon
approval of Kelly's Board of Directors, subject to ratification by Kelly's
Class B common stockholders by an affirmative vote of a majority of
Class B common stock voting at that meeting, so long as a quorum is
present, within one year of the Board of Director's approval. The Plan
shall remain in effect until terminated by action of the Board of
Directors.
4. Shares Issuable Under The Plan. Subject to adjustment as provided
in Paragraph 5, the total number of shares of Kelly Class A common stock,
par value $1.00 ("Class A common stock") which may be granted under the
Plan in each year during which the Plan is in effect shall be the
aggregate number of shares payable to the Non-employee Directors under the
formula set forth in Paragraph 6 of the Plan, not to exceed one-quarter of
one percent of the total number of outstanding Class A common stock as of
the first day of that year. Shares to be issued under the Plan may be
authorized and unissued shares or authorized and issued shares of Class A
common stock which have been reacquired by Kelly and held as treasury
shares.
5. Capital Adjustments. The aggregate number and class of shares
subject to and authorized by the Plan shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Class A
common stock resulting from the payment of a stock dividend, stock split,
recapitalization, merger, consolidation, reorganization of shares or any
similar capital adjustment or other increase or decrease in the number of
outstanding Class A common stock effected without receipt of consideration
by Kelly.
6. Grants of Class A Common Stock. On the business day next
following the date of the Annual Meeting of the Stockholders of Kelly held
during each year during which the Plan is in effect (the "Date of Grant"),
each non-employee Director who was elected at that meeting or whose term
continued thereafter as a Director at such meeting shall be granted a
number of shares of Class A common stock which has a fair market value on
the Date of Grant equal to 50% of the Non-employee Director's annual
retainer fee then in effect, exclusive of meeting or committee fees. The
fair market value of the stock shall be determined using the mean between
the highest and lowest sales prices of a share of Class A common stock as
reported on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") on the Date of Grant. If NASDAQ is not open on
the Date of Grant, the shares will be valued at their fair market value as
of the next preceding day on which NASDAQ is open. Fractional shares
resulting from this formula shall be rounded, up or down, to the nearest
whole share. The shares granted pursuant to this Plan shall be in addition
to, and not in lieu of, the Non-employee Director's annual retainer fee,
meeting fees, or other compensation payable to each Non-employee Director
as a result of his or her service on Kelly's Board of Directors.
7. Transferability. The shares of Class A common stock granted to
each Non-employee Director are not transferable by the Non-employee
Director for a period of six months after the Date of Grant, except in the
event of the death of the recipient.
8. Rights Of the Stockholder. A Non-employee Director shall have no
rights as a stockholder with respect to any shares of Class A common stock
granted under the terms of this Plan until the Non-employee Director shall
have become the holder of record of any such shares, and no adjustment
shall be made for dividends in cash or other property or distribution of
other rights with respect to any such shares of Class A common stock for
which the record date is prior to the date on which the Non-employee
Director shall have become the holder of record of any such shares.
9. Termination of Service As A Non-employee Director. In the event a
Non-employee Director ceases to serve on the Board of Directors, all
rights to receive Class A common stock hereunder shall terminate
immediately.
10. Amendment Of Plan. The Board of Directors may terminate, amend
or modify the Plan at any time and from time to time; provided, however,
that the provisions set forth in the Plan regarding the amount, price or
timing of the grants of Class A common stock to Non-employee Directors may
not be amended more than once every six months, other than to comport with
changes in the Internal Revenue Code, the Employee Retirement Income
Security Act or the rules thereunder. Further, the Board of Directors
shall not, without the requisite affirmative approval of stockholders of
Kelly, make any amendment which requires stockholder approval under any
applicable law, including Rule 16b-3 under the Securities Exchange Act of
1934, unless such compliance, if discretionary, is no longer desired.
11. Compliance With Rule 16b-3. It is intended that the Plan be
applied and administered in compliance with Rule 16b-3 under the
Securities and Exchange Act of 1934. If any provision of the Plan would be
in violation of Rule 16b-3 if applied as written, such provision shall not
have effect as written and shall be given effect so as to comply with Rule
16b-3, as determined by the Board of Directors.
12. Securities Law Restrictions. Kelly may impose such other
restrictions on any shares of Class A common stock granted pursuant to
this Plan as it may deem advisable including, but not limited to,
restrictions intended to achieve compliance with the Securities Act of
1933, as amended, with the requirements of any stock exchange upon which
the Class A common stock is then listed, and with any Blue Sky or state
securities law applicable to such Class A common stock.
13. Governing Law. All determinations made and actions taken
pursuant to the Plan shall be governed by the laws of the State of
Delaware and construed in accordance therewith to the extent not preempted
by the laws of the United States.
<PAGE>
[ Back Cover ]
[ Kelly Logotype ]
NOTICE OF 1995
ANNUAL MEETING
OF STOCKHOLDERS
AND
PROXY STATEMENT
<PAGE>
[ Form of Proxy -- Front ]
KELLY SERVICES, INC.
999 West Big Beaver Road
Troy, Michigan 48084
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 17, 1996
The undersigned hereby appoints as Proxies, William R. Kelly, Terence E.
Adderley, and Eugene L. Hartwig, each with the power to appoint his
substitute and hereby authorizes them to represent and to vote, as
designated on the reverse side, all shares of Class B Common Stock of Kelly
Services, Inc. (the "Company") held of record by the undersigned on March
20, 1995 at the Annual Meeting of Stockholders to be held on May 17, 1995
and any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL
BE VOTED FOR SUCH PROPOSAL.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES OF
AMERICA.
- --------------------------------------------------------------------------
Please sign this Proxy exactly as your name appears on the books of the
Company. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, the
signature should be that of an authorized officer who should state his or
her title.
- --------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_______________________________ _______________________________
_______________________________ _______________________________
_______________________________ _______________________________
<PAGE>
[ Form of Proxy -- Back ]
<TABLE>
<S> <C>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE With- For All
For hold Except For Against Abstain
1.) Election of Directors. / / / / / / 2.) Approve the adoption of the Non-Employee / / / / / /
Director Stock Award Plan.
T. E. Adderley, H. E. Guenther
and B. J. White 3.) Approve standards for performance-based / / / / / /
annual incentive awards for certain
NOTE: If you do not wish your shares voted "FOR" executives under the Short-Term Incentive
a particular Nominee, mark the "For All Except" Plan.
box and strike a line through that particular
nominees name. Your shares will be voted for the 4.) Ratify the appointment of Price Warehouse / / / / / /
remaining nominees. LLP as independent accountants.
- ------------------------------------------------ 5.) In their discretion, the proxies are authorized to vote upon any other
business that may properly come before the meeting.
REGISTRATION
- ------------------------------------------------ Mark box at right if you wish only one Annual Report to be / /
mailed to your household.
Please be sure to sign and date this Proxy.
Date _________ Mark box at right if comments or address change have been noted / /
on the reverse side of this card.
______________________ _______________________
Stockholder sign here Co-owner sign here RECORD DATE SHARES:
</TABLE>
