<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
THE OLSTEN CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
THE OLSTEN CORPORATION
- --------------------------------------------------------------------------------
(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 0-11:1
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
- ---------------
1Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
[LOGO]
April 1, 1994
DEAR SHAREHOLDER:
You are cordially invited to attend the Annual Meeting of Shareholders of
The Olsten Corporation to be held on April 29, 1994 at 10:00 a.m. at The Olsten
Building, One Merrick Avenue, Westbury, New York.
The accompanying Notice and Proxy Statement describe the matters to be
voted upon at the Annual Meeting. Holders of Common Stock and Class B Common
Stock will be entitled to one vote and ten votes, respectively, at the Annual
Meeting for each share held of record at the close of business on March 15,
1994, but will vote as separate classes in the election of Directors.
At the Annual Meeting shareholders will have an opportunity to inquire
about the affairs of the Company that may be of interest to shareholders
generally.
We would appreciate your signing, dating and returning the enclosed proxy
in the envelope provided for that purpose so that your shares may be represented
and voted at the Annual Meeting in the event you do not attend. If you attend
the Annual Meeting, you may withdraw your proxy and vote in person.
Thank you and we look forward to greeting you personally if you are able to
be present.
Sincerely,
FRANK N. LIGUORI
Chairman and Chief Executive
Officer
<PAGE> 3
[LOGO]
THE OLSTEN BUILDING
ONE MERRICK AVENUE
WESTBURY, NEW YORK 11590
------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 29, 1994
------------------------------
TO THE SHAREHOLDERS OF THE OLSTEN CORPORATION:
You are cordially invited to attend the Annual Meeting of Shareholders of
The Olsten Corporation, a Delaware corporation (the "Company"), which will be
held at the executive offices of the Company, The Olsten Building, One Merrick
Avenue, Westbury, New York 11590, on April 29, 1994, at 10 o'clock in the
forenoon, New York time, for the following purposes:
1. To elect eight Directors of the Company, two by the holders of
Common Stock voting separately as a class and six by the holders of Class B
Common Stock voting separately as a class, to serve until the next Annual
Meeting of Shareholders and until their successors are elected and qualify;
2. To consider and vote upon a proposal to approve the Company's 1994
Stock Incentive Plan;
3. To consider and vote upon a proposal to approve an amendment to the
Company's 1984 Non-Qualified Stock Option Plan;
4. To consider and vote upon a proposal to approve an incentive award
under the Company's Incentive Restricted Stock Plan;
5. To consider and vote upon a proposal to approve the Company's
Executive Officer Bonus Plan;
6. To consider and vote upon a proposal to ratify and approve the
appointment by the Board of Directors of Coopers & Lybrand as independent
auditors for the Company for its 1994 fiscal year; and
7. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The stock transfer books of the Company will not be closed but only
shareholders of record at the close of business on March 15, 1994 will be
entitled to notice of and to vote at such meeting or any adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Laurin L. Laderoute, Jr.
Secretary
Dated: April 1, 1994
Westbury, New York
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WE DO HOPE
YOU WILL ATTEND, BUT IF YOU DO NOT INTEND TO BE PRESENT IN PERSON, PLEASE MARK,
SIGN, DATE AND RETURN THE ACCOMPANYING PROXY PROMPTLY. A STAMPED REPLY ENVELOPE
IS ENCLOSED FOR THAT PURPOSE.
<PAGE> 4
[LOGO]
THE OLSTEN BUILDING
ONE MERRICK AVENUE
WESTBURY, NEW YORK 11590
------------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 29, 1994
------------------------------
This Proxy Statement is furnished to shareholders of The Olsten
Corporation, a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders to be held at the executive offices of the
Company, The Olsten Building, One Merrick Avenue, Westbury, New York 11590, on
April 29, 1994, at 10:00 o'clock in the forenoon, New York time, including any
adjournments thereof, for the purposes set forth in the accompanying Notice of
Meeting. Only shareholders of record at the close of business on March 15, 1994
will be entitled to vote at such meeting. This Proxy Statement and the
accompanying proxy are first being sent or given to shareholders on or about
April 1, 1994.
A shareholder who returns the accompanying proxy may revoke it at any time
before it is voted by giving notice in writing to the Company, by granting a
subsequent proxy or by appearing in person and voting at the meeting. Any
shareholder attending the meeting and entitled to vote may vote in person
whether or not said shareholder has previously submitted a proxy. Where no
instructions are indicated, proxies will be voted for the nominees for Directors
set forth herein and in favor of the other proposals described herein.
Proxies marked as abstentions will have the effect of a negative vote.
Broker non-votes will be considered as present at the meeting but not entitled
to vote with respect to the particular matter and will therefore have no effect
on the vote. Votes are counted by employees of Mellon Securities Trust Company,
the Company's independent transfer agent and registrar.
At the close of business on March 15, 1994, the record date for the
determination of shareholders entitled to vote at the Annual Meeting, the
Company had outstanding 30,820,174 shares of its Common Stock, par value $.10
per share ("Common Stock"), and 9,728,064 shares of its Class B Common Stock,
par value $.10 per share ("Class B Common Stock"). The holders of such Common
Stock and Class B Common Stock are entitled to one vote and ten votes,
respectively, for each share held on such record date, but with respect to the
election of Directors, holders of Common Stock voting separately as a class are
entitled to elect two Directors and holders of Class B Common Stock voting
separately as a class are entitled to elect six Directors.
No person has been authorized to give any information or to make any
representation other than those contained in this Proxy Statement and, if given
or made, such information or representation must not be relied upon as having
been authorized by the Company.
A copy of the 1993 Annual Report to Shareholders, containing the financial
statements of the Company and a report with respect thereto by Coopers &
Lybrand, independent auditors, is also being mailed to you herewith. The Annual
Report is not deemed a part of the soliciting material for the proxy.
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 15, 1994, the amount and nature
of beneficial ownership of the Company's Common Stock and Class B Common Stock
by each Director and nominee for Director; each beneficial owner of more than
five percent of the Common Stock or Class B Common Stock of the Company known by
management; named executive officers of the Company; and all executive officers
and Directors as a group.
Since each share of Class B Common Stock may be converted into one share of
Common Stock, the beneficial ownership rules under the Securities Exchange Act
of 1934 require that all shares of Common Stock issuable upon the conversion of
Class B Common Stock by any shareholder be included in determining the number of
shares and percentage of Common Stock held by such shareholder. The effect of
the assumption that such shareholder has converted into Common Stock the shares
of Class B Common Stock of which such shareholder is the beneficial owner is
also reflected in the following table. For a more complete description of the
method used to determine such beneficial ownership, see footnote (2) to the
following table.
<TABLE>
<CAPTION>
AMOUNT OF SHARES AND NATURE PERCENT OF CLASS IF
OF BENEFICIAL OWNERSHIP(1)(2) MORE THAN 1.0%(2)
-------------------------------------------- ----------------------------
COMMON COMMON
STOCK STOCK
(IF CLASS B (IF CLASS B
COMMON CLASS COMMON
CLASS B STOCK B STOCK
NAME AND ADDRESS COMMON COMMON DEEMED COMMON COMMON DEEMED
OF BENEFICIAL OWNER STOCK STOCK CONVERTED) STOCK STOCK CONVERTED)
- ------------------------ --------- ------------- ------------- ------ ------ -----------
<S> <C> <C> <C> <C> <C> <C>
Miriam Olsten 74,375 5,588,966(3) 5,663,341(3) -- 57.5% 15.6%
P.O. Box 326
Old Westbury, NY
Stuart Olsten 99,375(4) 2,389,935(4) 2,489,310(4) -- 24.5% 7.5%
One Merrick Avenue
Westbury, NY
Cheryl Ashburn 90,000(5) 1,117,561(5) 1,207,561(5) -- 11.5% 3.8%
One Merrick Avenue
Westbury, NY
Andrew N. Heine 19,453(6) 2,123,372(6) 2,142,825(6) -- 21.8% 6.5%
315 East 62nd Street
New York, NY
Robert Riedinger 2,179,247(7) 2,179,247(7) -- 22.4% 6.6%
6065 Roswell Road N.E.
Atlanta, GA
Frank N. Liguori 804,028(8) 6 804,034(8) 2.6% -- 2.6%
Allan Tod Gittleson 34,798(9) --
John M. May 14,000(10) --
Richard J. Sharoff 1,741(11) --
Raymond S. Troubh 49,806(12) 49,806(12) -- --
Robert A. Fusco 42,000(13) --
Richard A. Piske, III 10,516(14) --
Gerald J. Kapalko 15,671(15) --
(table continued on next page)
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
AMOUNT OF SHARES AND NATURE PERCENT OF CLASS IF
OF BENEFICIAL OWNERSHIP(1)(2) MORE THAN 1.0%(2)
-------------------------------------------- ----------------------------
COMMON COMMON
STOCK STOCK
(IF CLASS B (IF CLASS B
COMMON CLASS COMMON
CLASS B STOCK B STOCK
NAME AND ADDRESS COMMON COMMON DEEMED COMMON COMMON DEEMED
OF BENEFICIAL OWNER STOCK STOCK CONVERTED) STOCK STOCK CONVERTED)
- ------------------------ --------- ------------- ------------- ------ ------ -----------
<S> <C> <C> <C> <C> <C> <C>
Firstar Corporation 1,562,757(16) 5.1%
777 E. Wisconsin Avenue
Milwaukee, WI
IDS Financial
Corporation 2,009,500(17) 6.5%
IDS Tower 10
Minneapolis, MN
All executive officers
and 1,128,459(18) 9,090,399(19) 10,218,858(18)(19) 3.6% 93.1% 25.5%
Directors as a group
(13 persons)
</TABLE>
- ---------------
(1) Unless otherwise indicated, the shareholders identified in this table have
sole voting and investment power with respect to the shares beneficially
owned by them.
(2) Each named person and all executive officers and Directors as a group are
deemed to be the beneficial owners of securities that may be acquired within
60 days through the exercise of options or exchange or conversion rights.
Accordingly, the number of shares and percentage set forth opposite each
shareholder's name in the above table under the columns captioned "Common
Stock" include shares of Common Stock issuable upon exercise of presently
exercisable stock options under the Company's stock option plans, and the
columns captioned "Common Stock (if Class B Common Stock Deemed Converted)"
relating to such shareholders reflect the effect of the right to convert
beneficially owned shares of Class B Common Stock into Common Stock, both
with respect to the number of shares of Common Stock deemed to be
beneficially owned and the adjusted percentage of outstanding Common Stock
resulting from such right of conversion. However, the shares of Common Stock
so issuable upon such exercise, exchange or conversion by any such
shareholder are not included in calculating the number of shares or
percentage of Common Stock beneficially owned by any other shareholder.
(3) Mrs. Olsten owns of record 139,886 shares of Class B Common Stock. She has
sole voting and investment power with respect to 4,200,000 shares of Class B
Common Stock held under four trusts and has sole voting and investment power
with respect to 1,249,080 shares of Class B Common Stock held under a trust
for the benefit of one of her children, of which she is a trustee, and as to
which shares she disclaims beneficial ownership.
(4) Mr. Olsten owns of record 9,375 shares of Common Stock and has shared voting
and investment power as a trustee with respect to 30,000 shares of Common
Stock owned by a trust for the benefit of his son and with respect to 60,000
shares of Common Stock owned by two trusts for the benefit of his niece and
nephew, as to which shares he disclaims beneficial ownership. Mr. Olsten
owns of record 1,251,208 shares of Class B Common Stock and has shared
voting and investment power as a trustee with respect to 1,061,686 shares of
Class B Common Stock owned by a trust for his benefit and with respect to
55,875 shares of Class B Common Stock owned by a trust for the benefit of
his descendants, as to which shares he disclaims beneficial ownership. His
holding includes 21,166 shares of Class B Common Stock issuable upon
exercise of Class B Common Stock warrants held by him.
(footnotes continued on next page)
3
<PAGE> 7
(5) Mrs. Ashburn has shared voting and investment power as a trustee with
respect to 60,000 shares of Common Stock owned by two trusts for the
benefit of her two children and with respect to 30,000 shares of Common
Stock held by a trust for the benefit of her nephew, as to which shares she
disclaims beneficial ownership. Mrs. Ashburn has shared voting and
investment power as a trustee with respect to 1,061,686 shares of Class B
Common Stock owned by a trust for her benefit and with respect to 55,875
shares of Class B Common Stock owned by a trust for the benefit of her
descendants, as to which shares she disclaims beneficial ownership.
(6) Includes 10,500 shares of Common Stock that may be purchased pursuant to
currently exercisable stock options and 3,500 shares of Common Stock as to
which Mr. Heine has an indirect beneficial interest. In addition, Mr. Heine
has shared voting and investment power as a trustee with respect to
1,061,686 shares of Class B Common Stock owned by a trust for the benefit
of Stuart Olsten and as a trustee with respect to 1,061,686 shares of Class
B Common Stock owned by a trust for the benefit of Cheryl Ashburn, as to
which shares Mr. Heine disclaims beneficial ownership.
(7) Mr. Riedinger has shared voting and investment power as a trustee with
respect to 1,061,686 shares of Class B Common Stock owned by a trust for
the benefit of Stuart Olsten, 1,061,686 shares of Class B Common Stock
owned by a trust for the benefit of Cheryl Ashburn and 55,875 shares of
Class B Common Stock owned by a trust for the benefit of descendants of
Mrs. Ashburn, as to which shares Mr. Riedinger disclaims beneficial
ownership.
(8) Includes 150,000 shares that may be purchased pursuant to presently
exercisable stock options.
(9) Includes 9,000 shares that may be purchased pursuant to presently
exercisable stock options. Mr. Gittleson is the indirect beneficial owner
of 20,798 shares, which are owned by his wife.
(10) Includes 9,000 shares that may be purchased pursuant to presently
exercisable stock options.
(11) Includes 1,350 shares held in custodial accounts for Mr. Sharoff's two
children.
(12) Includes 13,406 shares that may be purchased pursuant to presently
exercisable stock options.
(13) Includes 12,000 shares that may be purchased pursuant to presently
exercisable stock options.
(14) Includes 5,203 shares that may be purchased pursuant to presently
exercisable stock options.
(15) Includes 4,125 shares that may be purchased pursuant to presently
exercisable stock options and includes 400 shares owned by Mr. Kapalko's
two children.
(16) Based on Amendment No. 1 to Schedule 13G dated February 11, 1994 and filed
with the Securities and Exchange Commission, Firstar Corporation held sole
voting power as to 1,377,452 of such shares and sole dispositive power as
to 1,450,902 of such shares.
(17) Based on a Schedule 13G dated December 31, 1993 and filed with the
Securities and Exchange Commission, IDS Financial Corporation (and its
parent holding company, American Express Company) held shared voting power
as to 337,000 of such shares and shared dispositive power as to 2,009,500
of such shares.
(18) Includes 927,027 shares of Common Stock owned by executive officers and
Directors and 201,432 shares of Common Stock that may be purchased pursuant
to presently exercisable stock options.
(19) Includes 9,055,827 shares of Class B Common Stock owned by executive
officers and Directors and 34,572 shares of Class B Common Stock that may
be purchased pursuant to presently exercisable stock options or acquired
upon exercise of Class B Common Stock warrants.
4
<PAGE> 8
PROPOSAL 1
ELECTION OF DIRECTORS
The eight persons named below, all of whom are presently Directors of the
Company except for Mr. Sharoff, have been nominated for election as Directors of
the Company. Two Directors are to be elected by the holders of Common Stock
voting separately as a class, and six Directors are to be elected by the holders
of Class B Common Stock voting separately as a class, with the Directors, in
each separate class vote, to be elected by a plurality of the votes cast. All
Directors will serve until the next Annual Meeting of Shareholders and until
their successors are elected and qualify. If no contrary instructions are
indicated, it is intended that the accompanying proxy will be voted for the
election of the respective Directors hereinafter shown as nominees for each
respective class of stock. The Company does not expect that any of the nominees
will be unavailable for election, but if that should occur before the meeting,
the proxies may be voted for a substitute nominee or nominees.
NOMINEES FOR ELECTION BY HOLDERS OF COMMON STOCK
ALLAN TOD GITTLESON
Mr. Gittleson, age 77 and a Director of the Company since 1983, has been
President of Hofstra Health Dome Incorporated, a total health program center
owned by Hofstra University, for more than five years.
JOHN M. MAY
Mr. May, age 66 and a Director of the Company since 1989, has been an
independent management consultant for more than five years. He is a director of
North Atlantic Industries, Inc.
NOMINEES FOR ELECTION BY HOLDERS OF CLASS B COMMON STOCK
ANDREW N. HEINE
Mr. Heine, age 65 and a Director of the Company since 1969, has been an
attorney in independent private practice since January 1990. From October 1987
to January 1990, he was counsel to the law firm of Curtis, Mallet-Prevost, Colt
& Mosle. He is a director of Citizens Utilities Company.
FRANK N. LIGUORI
Mr. Liguori, age 47 and a Director of the Company since 1986, has been
Chairman of the Board of the Company since February 1992 and its Chief Executive
Officer since April 1990. He was Vice Chairman from April 1990 to February 1992,
President of the Company from January 1986 to April 1990 and its Chief Operating
Officer from April 1983 to April 1990. He joined the Company in 1971.
MIRIAM OLSTEN
Mrs. Olsten, age 69 and a Director of the Company since July 1993, is a
significant shareholder of the Company. She is the mother of Stuart Olsten, a
Director and President of the Company.
5
<PAGE> 9
STUART OLSTEN
Mr. Olsten, age 41 and a Director of the Company since 1986, has been
President of the Company since April 1990. He was Executive Vice President of
the Company from November 1987 to April 1990. He joined the Company in 1975. He
is the son of Miriam Olsten, a Director of the Company.
RICHARD J. SHAROFF
Mr. Sharoff, age 47, has been President and Chief Executive Officer of
Haifoods, Inc., a holding company in the food and beverage industries, since
January 1992. From July 1989 to December 1991, he was President and Chief
Executive Officer of Langley Ventures, Inc., a company engaged in acquisitions
in the food industry. From August 1986 to June 1989 he was President and Chief
Operating Officer of Vie De France, a public company operating through
subsidiaries in the wholesale bakery and food service industries.
RAYMOND S. TROUBH
Mr. Troubh, age 67 and a Director of the Company since July 1993, has been
a financial consultant for more than five years. He is a director of ADT
Limited, American Maize-Products Company, Applied Power Inc., ARIAD
Pharmaceuticals, Inc., Becton Dickinson and Company, Benson Eyecare Corporation,
Foundation Health Corporation, General American Investors Company, Manville
Corporation, Riverwood International Corporation, Time Warner, Inc. and
Wheeling-Pittsburgh Corporation.
------------------------------------
The Board held eight meetings during the past fiscal year. Each outside
member of the Board was paid $4,000 in Directors' fees for each regular meeting
of the Board attended. For services provided to the Company in connection with
the acquisition of Lifetime Corporation, the Company paid to Messrs. Gittleson,
Heine and May additional Directors' fees of $6,000, $20,000 and $20,000,
respectively. The Board has a standing compensation committee and standing audit
committee, each comprised of Messrs. Gittleson, Heine, May and Troubh. The
compensation committee and the audit committee held five meetings and two
meetings, respectively, in 1993. Each Director who was a committee member was
paid $2,000 for each such meeting. The compensation committee reviews and
approves senior executive compensation and determines compensation of the Chief
Executive Officer. The audit committee reviews the Company's financial results
and the scope and results of audits of the Company by its independent public
accountants. The Board has no nominating committee.
In 1993, options to purchase 3,000 shares of Common Stock at a per share
exercise price of $26.00 were granted to each of Messrs. Gittleson, Heine, May
and Troubh and Mrs. Olsten, under the Company's Non-Qualified Stock Option Plan
for Non-Employee Directors and Consultants. All such options will become vested
and fully exercisable in six months from the date of grant, which was December
7, 1993. In 1993, a grant of 5,000 shares of Common Stock was made to each of
Messrs. Gittleson, Heine and May. Such shares fully vested in January 1994.
The Company paid to Mr. Heine $21,468 for legal services he provided to the
Company in 1993.
Section 16(a) of the Securities Exchange Act of 1934 requires certain
persons, including the Company's Directors and executive officers, to file
reports with the Securities and Exchange Commission regarding beneficial
ownership of equity securities of the Company. During 1993, Allan Tod Gittleson,
a Director of the Company, filed one late report in November covering two
purchases of the Company's equity securities in September, and Anthony H.
Reeves, a former Director of the Company, filed two late reports in November,
one report covering two sales of the Company's securities in September and the
other report covering twelve sales of the Company's securities in October.
6
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation of the Company's Chief Executive Officer and the other
four most highly compensated executive officers (the "Named Officers") for
services as executive officers of the Company for the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------
AWARDS
-------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
----------------------- STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) AWARDS($)(2) OPTIONS(#) COMPENSATION($)(3)
- --------------------------- ----- ------------ -------- ------------ ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Frank N. Liguori 1993 $621,154 $500,000 $6,751,563 $ 95,445
Chairman and Chief 1992 476,923 380,000 696,875 65,650
Executive Officer 1991 461,539 220,000 45,399
Stuart Olsten 1993 $299,519 $150,000 $ 164,250 $ 36,455
President 1992 265,044 110,000 30,989
1991 230,769 85,000 21,737
Robert A. Fusco 1993 $302,390 $150,000 $ 821,250 29,000 $ 33,542
Executive Vice President 1992 225,000 73,000 28,932
and President, Olsten
Kimberly QualityCare(4)
Richard A. Piske, III 1993 $220,433 $100,000 $ 136,875 14,500 $ 28,705
Executive Vice President
and President, Olsten
Staffing Services(5)
Gerald J. Kapalko 1993 $183,846 $ 51,000 $ 164,250 9,500 $ 18,988
Executive Vice
President(6)
</TABLE>
- ------------------------------
(1) With regard to Mr. Liguori, see also the award reported in the Long-Term
Incentive Plan Awards Table.
(2) The number and value of the aggregate restricted (unvested) share holdings
of the Named Officers at December 31, 1993 are as follows:
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
RESTRICTED RESTRICTED
NAME SHARES SHARES
--------------------------------------------------- ------------- ----------
<S> <C> <C>
F. N. Liguori...................................... 217,500 $6,389,063
S. Olsten.......................................... 6,000 176,250
R. A. Fusco........................................ 30,000 881,250
R. A. Piske........................................ 5,000 146,875
G. J. Kapalko...................................... 6,000 176,250
</TABLE>
As to Mr. Liguori, 250,000 restricted shares were awarded to him in 1993.
137,500 of such shares vested upon grant, and the balance (112,500 shares)
vest in increments of 33 1/3% each year for three years, beginning in 1994.
37,500 restricted shares were awarded to Mr. Liguori in 1992, and these
shares vest in increments of 20% each year for five years, beginning in
1993. As to each of Messrs. Olsten, Fusco, Piske and Kapalko, 6,000
restricted shares, 30,000 restricted shares, 5,000 restricted shares and
6,000 restricted shares, respectively, were awarded in 1993, and these
shares vest in increments of 20% each year for five years, beginning in
1994.
7
<PAGE> 11
Dividends are paid on the restricted shares if and to the extent paid on the
Company's Common Stock generally.
(3) Represents profit sharing and matching contributions contributed by the
Company for the Named Officers to the Company's Non-Qualified Retirement
Plan for Selected Management Employees.
(4) Mr. Fusco became an executive officer in 1992.
(5) Mr. Piske became an executive officer during 1993.
(6) Mr. Kapalko became an executive officer during 1993.
STOCK OPTIONS
The following table contains information concerning the grant of stock
options to the Named Officers during the Company's last fiscal year.
OPTIONS GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
--------------------------------------------------------- ANNUAL RATES
NUMBER OF OF STOCK
SECURITIES % OF TOTAL PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE FOR OPTION TERM(2)
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION -------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ---------------------------- ------------- ----------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Frank N. Liguori............
Stuart Olsten...............
Robert A. Fusco............. 9,000 2.6% $25.42 1/13/98 $ 63,180 $139,680
20,000 5.7% 25.75 12/17/98 142,200 314,400
Richard A. Piske, III....... 7,500 2.2% 25.42 1/13/98 52,650 116,400
7,000 2.0% 25.75 12/17/98 49,770 110,040
Gerald J. Kapalko........... 4,500 1.3% 25.42 1/13/98 31,590 69,840
5,000 1.4% 25.75 12/17/98 35,550 78,600
</TABLE>
- ---------------
(1) The options were granted at an exercise price equal to the fair market value
of the Company's Common Stock on the date of grant. The options have a five
year term and become exercisable over a four year period in increments of
25% per year beginning with the first anniversary of the date of grant.
(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission and are not
intended to forecast possible future appreciation of the Company's stock
price.
8
<PAGE> 12
The following table sets forth information with respect to the Named
Officers concerning the exercise of options during the last fiscal year and
unexercised options held as of the end of that year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
SHARES YEAR END(#) AT FISCAL YEAR END($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Frank N. Liguori......... 140,625 84,375 $ 2,863,828 $ 1,721,297
Stuart Olsten............
Robert A. Fusco.......... 9,750 35,000 193,039 220,978
Richard A. Piske, III.... 1,078 $ 18,784 3,328 17,829 54,335 109,392
Gerald J. Kapalko........ 3,000 46,875 3,000 13,250 56,010 102,841
</TABLE>
LONG-TERM INCENTIVE PLAN AWARD
The following table sets forth information with respect to a long-term
incentive award made to Mr. Liguori during 1993.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF PERFORMANCE
SHARES, OR OTHER ESTIMATED FUTURE PAYOUTS UNDER
UNITS PERIOD UNTIL NON-STOCK PRICE-BASED PLANS
OR OTHER MATURATION --------------------------------
NAME RIGHTS OR PAYOUT THRESHOLD TARGET MAXIMUM
- ------------------------------------ --------- ------------ --------- ------- -------
<S> <C> <C> <C> <C> <C>
Frank N. Liguori.................... (1) 1994-1996(2) (1) 150,000(1) 200,000(1)
</TABLE>
- ------------------------------
(1) In November 1993, the Compensation Committee awarded (the "Incentive Award")
to Mr. Liguori the right to receive shares of Common Stock pursuant to the
Company's Incentive Restricted Stock Plan, subject to shareholder approval.
The number of shares deliverable pursuant to the Incentive Award is
determined with reference to, and the right to receive such shares is
generally conditioned upon, the attainment of target levels of net income by
the Company for the 1994, 1995 and 1996 fiscal years (the "Measuring
Period"). If during the Measuring Period the Company achieves aggregate net
income of (i) $240 million, Grantee will receive 150,000 shares of Common
Stock or (ii) $255 million or more, Grantee will receive 200,000 shares. At
a level of net income aggregating more than $180 million and less than $255
million, Grantee will receive a number of shares to be determined by a
sliding scale, but no shares will be issuable if net income of the Company
for the Measuring Period aggregates less than $180 million.
(2) Shares issuable under the Incentive Award are issued and vest in three equal
installments on January 4 of 1997, 1998 and 1999, so long as Mr. Liguori
remains employed by the Company on each of such dates. However, if more than
150,000 shares are issuable, the shares issuable in excess of such number
will be issued and granted, and will immediately vest, on January 4, 1997.
If Mr. Liguori dies or becomes permanently disabled while employed by the
Company during the Measuring Period, he will be issued and granted the
maximum number of shares to which he would be entitled for the year in which
death or disability occurs and for any prior years in the Measuring Period,
so long as projected net income for such year equals or exceeds the net
income target for that year. In determining the number of shares to be
issued, net income will be projected for the current year and will be
compared to target levels for that year
9
<PAGE> 13
($60 million in 1994, $80 million in 1995 and $100 million in 1996 (each an
"Annual Target Level")), and enhanced target levels for that year ($65
million in 1994, $85 million in 1995 and $105 million in 1996 (each an
"Annual Enhanced Level")), and the net income during any remaining years in
the Measuring Period will be assumed to reach the same target level, either
the Annual Target Level or the Annual Enhanced Level, reached during the
current year. If Mr. Liguori dies or becomes disabled during a year in which
the Company's net income is projected to be less than the Annual Target
Level for that year, no shares will be issued with respect to that year. If
Mr. Liguori dies or becomes permanently disabled while employed by the
Company after the Measuring Period, all unissued shares to which he would
have been entitled will be immediately issued. If during the Measuring
Period, there is a change of control (as defined in the 1994 Stock Incentive
Plan -- See Proposal 2) or Mr. Liguori is removed from his current positions
with the Company or is terminated without cause, then the Company's
aggregate net income for the Measuring Period will be deemed to be $255
million, and 200,000 shares will be issued immediately. If any of such
events occurs after the Measuring Period, all unissued shares to which Mr.
Liguori would have been entitled will be immediately issued.
RETIREMENT PLAN
The following table shows the estimated annual retirement benefit payable
on a straight life annuity basis at normal retirement date to participants in
the Company's Supplemental Executive Retirement Plan for key employees
designated by the Company ("SERP"), which is a non-contributory, non-qualified
defined benefit plan. Amounts shown include Social Security benefits and the
annuitized value of accumulations of profit sharing contributions made by the
Company on behalf of a participant.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ANNUAL BENEFITS FOR YEARS OF SERVICE
FINAL FIVE YEAR -----------------------------------------------
AVERAGE EARNINGS 10 YEARS 15 YEARS 20 YEARS 25 YEARS
- ------------------------------------------------ -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 100,000...................................... $ 24,000 $ 36,000 $ 48,000 $ 60,000
150,000...................................... 36,000 54,000 72,000 90,000
250,000...................................... 60,000 90,000 120,000 150,000
350,000...................................... 84,000 126,000 168,000 210,000
450,000...................................... 108,000 162,000 216,000 270,000
550,000...................................... 132,000 198,000 264,000 330,000
650,000...................................... 156,000 234,000 312,000 390,000
750,000...................................... 180,000 270,000 360,000 450,000
850,000...................................... 204,000 306,000 408,000 510,000
950,000...................................... 228,000 342,000 456,000 570,000
1,050,000...................................... 252,000 378,000 504,000 630,000
1,150,000...................................... 276,000 414,000 552,000 690,000
1,250,000...................................... 300,000 450,000 600,000 750,000
1,350,000...................................... 324,000 486,000 648,000 810,000
</TABLE>
The SERP benefit objective is to provide a participant who has spent a 25
year career with the Company with retirement income at age 65 equal to 60% of
the average of his or her covered compensation (salary, bonuses and incentive
compensation) over the five years prior to retirement. Proportionately decreased
10
<PAGE> 14
benefits may be payable at early retirement. The SERP benefit is reduced both by
the value of Social Security benefits and by the annuitized value of
accumulations of profit sharing contributions made on behalf of a participant by
the Company. The current credited years of service for Messrs. Liguori, Olsten,
Fusco, Piske and Kapalko are 22, 18, 8, 13, and 15, respectively.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Frank N. Liguori is employed by the Company as Chairman of the Board and
Chief Executive Officer, for a term expiring March 31, 1999, unless otherwise
extended, pursuant to an employment agreement which provides for an initial
annual base salary of $750,000.
The employment agreement provides that if Mr. Liguori's employment is
terminated by the Company for any reason other than for disability or for cause,
or if Mr. Liguori voluntarily terminates his employment within one year after
(a) a Change of Control (as defined in the 1994 Stock Incentive Plan -- See
Proposal 2), (b) a substantial change in his responsibilities or (c) a
determination not to renew the employment agreement, Mr. Liguori will be
entitled to receive a cash lump sum equal to (x) his then current base salary,
plus the highest bonus paid to him during the term of the employment agreement
(not to exceed 100% of his then current base salary) plus the annualized value
of benefits provided under the Company's benefit programs multiplied by (y) the
number of full and partial years in the period from the date of termination to
the twenty-fourth month following the date on which his employment would
otherwise have terminated. The Company may elect to withhold up to $1 million of
such amount for a two-year period after termination of employment during which
Mr. Liguori may not compete with the Company's businesses, with his right to
receive such amount being conditioned upon his compliance with such restriction.
If Mr. Liguori's employment is terminated by the Company due to disability,
he is entitled to receive, for a period of three years from termination, a
monthly sum equal to 1/12 of his then current base salary (less any benefits
paid under any disability policies maintained by the Company).
If any payment to Mr. Liguori (under the employment agreement or otherwise)
is, upon a Change of Control, subject to the excise tax imposed by Section 4999
of the Code, Mr. Liguori will be entitled to receive an additional "gross-up
payment" in an amount sufficient to make Mr. Liguori whole for such excise tax.
Upon a Change of Control, all outstanding stock options granted to Mr.
Liguori under the 1994 Stock Incentive Plan, the 1984 Non-Qualified Stock Option
Plan and the 1984 Incentive Stock Option Plan will become fully exercisable and
vested, and all shares of Common Stock to which he is entitled pursuant to the
restricted stock award described below (see Proposal 4) will be immediately
issued to him.
11
<PAGE> 15
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company has, with the direction and supervision of the Compensation
Committee of the Board of Directors, established and put into practice
compensation policies, plans and programs, whose goals are twofold: to attract
and retain qualified executives and to seek to enhance the Company's
profitability by uniting senior management's interests with those of the
Company's shareholders.
BASE SALARY
Compensation for each of the Named Officers, as well as other senior
executives, consists of a base salary and annual and longer-term incentive
compensation. In the setting of base salaries, consideration is given to
national and local salary surveys and review of salaries paid to senior
executives with comparable qualifications, experience and responsibilities at
other companies. Annual and longer-term incentive compensation is tied to the
Company's and the executive's success in achieving significant financial and
non-financial goals.
Each fiscal year, the Committee fixes the base salary of the Chief
Executive Officer and the President. In the case of the Chief Executive Officer
and beginning in 1994, his base salary cannot be set lower than the minimum base
salary provided for in the Chief Executive Officer's employment agreement with
the Company. The Chief Executive Officer recommends the base salaries of the
other Named Officers and the other senior executives for review and approval by
the Committee.
INCENTIVE COMPENSATION
In evaluating the performance and setting the incentive compensation of the
Chief Executive Officer, the Committee developed a bonus incentive predicated on
the attainment of specific levels of pre-tax income for the Company. Likewise,
the Committee developed a bonus incentive predicated on the attainment of
pre-tax income levels for Staffing Services in setting the incentive
compensation of the President. The Chief Executive Officer recommends the
incentive compensation of the Company's senior executives, including the other
Named Officers, and the Committee reviews and approves the final compensation
for these executives.
STOCK OPTIONS AND GRANTS
At the end of each fiscal year, the Committee considers the desirability of
granting senior executives, including the Named Officers, awards under the
Company's stock plans. The Committee believes that its past grants of stock
options and restricted stock awards have successfully focused the Company's
senior management on building profitability and shareholder value.
In determining the amount and nature of awards under such plans to be
granted to the senior management group, including the Named Officers other than
the Chief Executive Officer, the Committee reviews with the Chief Executive
Officer awards recommended by him, taking into account the respective scope of
accountability, strategic and operational goals, and anticipated performance
requirements and contributions of each member of the senior management group.
The award to the Chief Executive Officer is established separately and is based,
among other things, on the Committee's analysis of his past and expected future
contributions to the Company's achievement of its long-term performance goals.
CEO COMPENSATION
Based on the Committee's assessment of the criteria outlined above, the
Chief Executive Officer was awarded a base salary increase of 26% for fiscal
year 1993 and received a bonus incentive award of 83% of his 1993 salary. On the
basis of the Committee's evaluation of the Chief Executive's contributions
toward the
12
<PAGE> 16
achievement of the Company's long-term performance goals, the Committee in 1993
awarded the Chief Executive Officer 37,500 restricted shares of the Company's
Common Stock, which vested upon grant, and 112,500 restricted shares of the
Company's Common Stock, which vest in increments of 33 1/3% each year for three
years, beginning in 1994. In recognition of the major role of the Chief
Executive Officer in strategic initiatives accomplished by the Company in 1993,
including the acquisition of Lifetime Corporation and the prepayment of its
double digit coupon debt and sale of its non-core operations, the sale of $125
million of 4 7/8% Convertible Subordinated Debentures due 2003, the structuring
of a new $200 million credit facility for the Company and, in general, the fine
operating performance of the Company, the Committee made a special award to the
Chief Executive Officer of 100,000 restricted shares of the Company's Common
Stock, which vested immediately.
The Committee also approved a long-term incentive award for the Chief
Executive Officer of up to 150,000 (up to 200,000 in certain instances)
restricted shares of the Company's Common Stock based upon the Company's
achieving certain aggregate net income levels in 1994, 1995 and 1996, such
shares to be granted in 1997, 1998 and 1999.
DEDUCTIBILITY OF COMPENSATION
Beginning in 1994, Section 162(m) of the Internal Revenue Code of 1986 will
generally limit to $1 million per person the Company's federal income tax
deduction for compensation paid in any year to its Chief Executive Officer and
each of its four other highest paid executive officers to the extent such
compensation is not "performance based" within the meaning of Section 162(m).
The Committee will in general seek to qualify compensation paid to its executive
officers for deductibility under Section 162(m) in order to decrease the
after-tax cost of such compensation to the Company, although there may be
circumstances in which it is not possible, or not in the Company's best
interests, to do so.
The foregoing report has been furnished by:
<TABLE>
<S> <C>
Allan Tod Gittleson John M. May
Andrew N. Heine Raymond S. Troubh
</TABLE>
13
<PAGE> 17
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total return on
the Company's Common Stock against the cumulative total return of the American
Stock Exchange (AMEX) Market Value Index and a Peer Group Index for the period
of five years commencing December 31, 1988 and ending December 31, 1993.
The Peer Group Index is comprised of the following publicly traded
companies: Adia Services, Inc.; Kelly Services, Inc.; Robert Half International
Inc.; Staff Builders, Inc.; Uniforce Temporary Personnel, Inc; and Volt
Information Sciences, Inc. Lifetime Corporation, which was included in last
year's performance graph, merged into the Company in July 1993 and is not
included in this year's performance graph.
The line graph assumes that $100 was invested on December 31, 1988 in each
of the Company's Common Stock, the AMEX Market Value Index and the Peer Group
Index and that all dividends were reinvested. Media General Financial Services
furnished the data for the graph.
<TABLE>
<CAPTION>
Measurement Period The Olsten AMEX Market Peer Group
(Fiscal Year Covered) Corporation Value Index Index
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 94.10 127.52 118.95
1990 67.29 108.14 94.23
1991 140.00 133.19 83.92
1992 234.24 135.02 123.00
1993 260.14 160.41 122.97
</TABLE>
PROPOSAL 2
ADOPTION OF THE OLSTEN CORPORATION
1994 STOCK INCENTIVE PLAN
GENERAL
On February 14, 1994, the Company's Board of Directors (the "Board")
adopted, subject to approval by the shareholders, the 1994 Stock Incentive Plan
(the "1994 Plan") under which an aggregate of 2,000,000 shares of Common Stock
are reserved for issuance upon exercise of options granted thereunder (subject
to adjustment as provided below).
14
<PAGE> 18
A copy of the 1994 Plan is attached as Exhibit A to this Proxy Statement.
The material features of the 1994 Plan are described below, but this description
is only a summary and is qualified in its entirety by reference to the actual
text of the 1994 Plan.
PURPOSE
The purpose of the 1994 Plan is to enable the Company and Related Companies
(as defined below) to attract and retain employees who contribute to the
Company's success by their ability, ingenuity and industry, and to enable such
employees to participate in the long-term success and growth of the Company by
giving them an equity interest in the Company. For purposes of the 1994 Plan, a
"Related Company" means any corporation, partnership, joint venture or other
entity in which the Company owns, directly or indirectly, at least a 20%
beneficial ownership interest.
TYPES OF AWARDS
Awards under the 1994 Plan may be in the form of (i) incentive stock
options ("Incentive Stock Options") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") or any successor
provision thereto, and (ii) options that do not qualify as Incentive Stock
Options ("Non-Qualified Stock Options", and together with Incentive Stock
Options, "Stock Options").
ADMINISTRATION
The 1994 Plan is administered by a committee of the Board (the "Committee")
consisting of not less than two "disinterested persons" (as such term is defined
in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), who, to the extent required to satisfy the exception for
performance-based compensation under Section 162(m) of the Code, are also
"outside directors" (within the meaning of Section 162(m) of the Code).
Subject to the express provisions of the 1994 Plan, the Committee has the
power to select the eligible employees to whom Stock Options are to be granted
under the 1994 Plan, and to determine the terms and conditions of each Stock
Option granted thereunder. The Committee's authority shall include, but not be
limited to, the authority to determine the number of shares of Common Stock to
be covered by each award; provided, however, that no more than 100,000 shares
(subject to adjustment as described below) may be awarded to any employee in any
calendar year. The Committee also has authority to adopt and revise rules,
guidelines and practices governing the 1994 Plan, to interpret the terms and
provisions of the 1994 Plan and any award granted thereunder, and to otherwise
supervise the administration of the 1994 Plan.
STOCK SUBJECT TO 1994 PLAN
To the extent that a Stock Option terminates without having been exercised,
the shares subject to such award will again be available for distribution in
connection with future awards under the 1994 Plan.
In the event of any merger, reorganization, consolidation, sale of
substantially all assets, recapitalization, Common Stock dividend, Common Stock
split, spin-off, split-up, split-off, distribution of assets or other change in
corporate structure affecting the Common Stock, a substitution or adjustment, as
may be determined to be appropriate by the Committee in its sole discretion,
will be made in the aggregate number of shares reserved for issuance under the
1994 Plan, the number of shares available for any individual awards, the number
of shares subject to outstanding awards and the exercise price to be paid by
optionees with respect to outstanding awards; provided, however, that no such
adjustment may increase the aggregate value of any outstanding award.
15
<PAGE> 19
ELIGIBILITY
Officers and other key employees of the Company or a Related Company are
eligible to be granted awards under the 1994 Plan; provided, however, that, to
the extent required under Section 422 of the Code, Incentive Stock Options may
be granted only to officers and other key employees of the Company or any
subsidiary corporation in which the Company owns, directly or indirectly, stock
having 50% or more of the total combined voting power of all classes of stock. A
director of the Company or a Related Company who is not also an employee of the
Company or a Related Company is not eligible to be granted awards under the 1994
Plan. The participants under the 1994 Plan will be selected from time to time by
the Committee, in its sole discretion, from among those eligible.
TERMS OF STOCK OPTIONS
OPTION PRICE. The option price per share of Common Stock purchasable under
a Stock Option is determined by the Committee; provided, however, that the
option price of Non-Qualified Stock Options cannot be less than 85%, and the
option price of Incentive Stock Options cannot be less than 100%, of the fair
market value of the Common Stock on the date of award of each such Stock Option.
On March 30, 1994, the closing sale price of the Common Stock, which is the
security underlying the Stock Options, as reported on the American Stock
Exchange (the "AMEX"), was $32 3/8 per share.
OPTION TERM. The term of each Stock Option will be five years from the
date of grant thereof, subject to earlier termination as provided below.
EXERCISABILITY. Except as otherwise provided by the Committee at the time
of grant or as provided as described below under "Change of Control", Stock
Options vest and are first exercisable in annual installments of 25% of the
shares originally subject thereto, commencing on the first anniversary of the
date of grant of the Stock Option, and an additional 25% of such shares each
year thereafter. The Committee may accelerate an exercise date of any Stock
Option or otherwise waive the installment exercise provisions at any time
(including at time of grant) in whole or in part. Except as described below, a
Stock Option is not exercisable unless the optionee is an employee of the
Company or a Related Company at the time of exercise.
METHOD OF EXERCISE. Stock Options may be exercised in whole or in part at
any time during the option term by giving written notice of exercise to the
Company specifying the number of shares to be purchased, accompanied by payment
of the option price. Payment of the option price may be made in cash or cash
equivalents or, if permitted by the Committee (either in the option agreement or
at the time of exercise), by delivery of shares of Common Stock already owned by
the optionee or withholding of shares subject to awards under the 1994 Plan (in
each case, such shares having a fair market value on the date of exercise equal
to the aggregate option price), or in any other manner permitted by law and as
determined by the Committee, or any combination of the foregoing.
NO SHAREHOLDER RIGHTS. An optionee will have neither rights to dividends
nor other rights of a shareholder with respect to shares subject to a Stock
Option until the optionee has given written notice of exercise and has paid for
such shares.
NON-TRANSFERABILITY. No Stock Option is transferable by the optionee other
than by will or by the laws of descent and distribution. During the optionee's
lifetime, all Stock Options are exercisable only by the optionee.
TERMINATION OF EMPLOYMENT, RETIREMENT AND DISABILITY. If an optionee
ceases to be an employee of the Company or a Related Company for any reason
other than death, retirement or permanent disability, any
16
<PAGE> 20
Stock Option held by such optionee under the 1994 Plan will terminate
immediately upon such termination of employment.
If an optionee ceases to be an employee of the Company or a Related Company
by reason of retirement (on or after attaining the age of 65 or such earlier age
as the Committee may determine) or permanent disability, any Stock Option held
by such optionee may be exercised, to the extent exercisable on the day
preceding the date of such cessation of employment, at any time within three
months (one year in the case of permanent disability) after such cessation of
employment, at the end of which period the Stock Option will terminate.
Notwithstanding the foregoing, the Committee in its sole discretion may provide,
at the time of grant or otherwise, for different rules to apply to the
exercisability of Stock Options held by any optionee at the time of such
optionee's cessation of employment. In no event may a Stock Option be exercised
after the expiration of the term thereof.
DEATH OF THE OPTIONEE. If an optionee dies while an employee of the
Company or a Related Company, or within three months after the optionee has
ceased to be an employee by reason of retirement, or within one year after the
optionee has ceased to be an employee by reason of such optionee's permanent
disability, such Stock Option may be exercised, to the extent exercisable on the
day preceding the date of such cessation of employment, by the estate of such
deceased optionee, or by a person or persons who acquire the right to exercise
such option by bequest or inheritance or by reason of the death of such
optionee, at any time within one year after such optionee's death, or within
such shorter period of time as prescribed in the option agreement, at the end of
which period such Stock Option will terminate. In no event may a Stock Option be
exercised after the expiration of the term thereof.
TAX WITHHOLDING
Each employee must pay to the Company or make arrangements satisfactory to
the Committee regarding payment of any federal, state, local or other
withholding tax obligation to satisfy the Company's withholding tax obligation
in respect of the exercise of a Stock Option. The obligations of the Company
under the 1994 Plan shall be conditional on such payment or arrangements, and
the Company (and, where applicable, any Related Company), shall to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the employee.
If permitted by the Committee, payment may be made by (i) having the
Company withhold shares of Common Stock (at its fair market value) otherwise
deliverable to the employee with respect to the award, or (ii) delivering to the
Company shares of Common Stock (at its fair market value) already owned by the
employee.
CHANGE OF CONTROL
In the event of a Change of Control (as defined below), unless otherwise
determined by the Committee at the time of grant or by amendment (with the
holder's consent) of such grant, all outstanding Stock Options awarded under the
1994 Plan will become fully exercisable and vested.
A "Change of Control" will be deemed to occur on the date any of the
following events occur:
(a) any person or persons acting together which would constitute a
"group" for purposes of Section 13(d) of the Exchange Act (other than the
Company, any subsidiary, members of the Olsten family (defined as Miriam
Olsten, any lineal descendant of William and Miriam Olsten, any spouse of
any such lineal descendant, a trust established principally for the benefit
of any of the foregoing, and the executor, administrator or personal
representative of the estate of any of the foregoing) and the
17
<PAGE> 21
"permitted transferees" of such members of the Olsten family as defined in
the Company's Restated Certificate of Incorporation) beneficially own (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, at
least 25% of the total voting power of all classes of capital stock of the
Company entitled to vote generally in the election of the Board of
Directors of the Company;
(b) either (i) Current Directors (as herein defined) cease for any
reason to constitute at least a majority of the members of the Board (for
these purposes, a "Current Director" means any member of the Board as of
the effective date of the 1994 Plan, and any successor of a Current
Director whose election, or nomination for election by the Company's
shareholders, was approved by at least two-thirds of the Current Directors
then on the Board) or (ii) at any meeting of the shareholders of the
Company called for the purpose of electing directors, a majority of the
persons nominated by the Board for election as directors fail to be
elected;
(c) the shareholders of the Company approve (i) a plan of complete
liquidation of the Company, or (ii) an agreement providing for the merger
or consolidation of the Company (A) in which the Company is not the
continuing or surviving corporation (other than a consolidation or merger
with a wholly-owned subsidiary of the Company in which all shares of Common
Stock and Class B Common Stock outstanding immediately prior to the
effectiveness thereof are changed into or exchanged for the same
consideration) or (B) pursuant to which the Common Stock and Class B Common
are converted into cash, securities or other property, except a
consolidation or merger of the Company in which the holders of the Common
Stock and Class B Common Stock immediately prior to the consolidation or
merger have, directly or indirectly, at least a majority of the common
stock of the continuing or surviving corporation immediately after such
consolidation or merger or in which the Board immediately prior to the
merger or consolidation would, immediately after the merger or
consolidation, constitute a majority of the board of directors of the
continuing or surviving corporation; or
(d) the shareholders of the Company approve an agreement (or
agreements) providing for the sale or other disposition (in one transaction
or a series of transactions) of all or substantially all of the assets of
the Company.
AMENDMENTS AND TERMINATION
The 1994 Plan will terminate on February 14, 2004, and no Stock Option
shall be awarded under the 1994 Plan after such date. The Board may discontinue
the 1994 Plan at any time and may amend it from time to time. No amendment or
discontinuation of the 1994 Plan may adversely affect any award previously
granted without the optionee's written consent. Amendments may be made without
shareholder approval except as required to satisfy Rule 16b-3 under the Exchange
Act (or any successor rule), Section 162(m) of the Code or, with respect to
Incentive Stock Options, Section 422 of the Code.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE 1994 PLAN
The following is a summary of certain Federal income tax aspects of awards
made under the 1994 Plan, based upon the laws in effect on the date hereof.
Incentive Stock Options
Generally, no taxable income is recognized by the optionee upon the grant
of an Incentive Stock Option or upon the exercise of an Incentive Stock Option
either during the period of the optionee's employment with the Company or one of
its subsidiaries (as defined in Section 424(f) of the Code) or within the period
ending three months (12 months, in the event of permanent and total disability
or death of the optionee) after
18
<PAGE> 22
termination of such employment. However, the exercise of an Incentive Stock
Option may result in an alternative minimum tax liability to an optionee since
the excess of the fair market value of the optioned stock at the date of
exercise over the exercise price must be included in alternative minimum taxable
income.
If the optionee holds shares acquired upon the exercise of an Incentive
Stock Option for at least two years from the date of grant of the option and for
at least one year from the date of exercise (the "ISO Holding Period"), any gain
on a subsequent sale of such shares will be considered as long-term capital gain
to an optionee. The gain recognized upon the sale of the shares is equal to the
excess of the selling price of the shares over the exercise price. However, if
the optionee sells the shares prior to expiration of the ISO Holding Period (a
"Disqualifying Disposition"), generally (a) the optionee will recognize ordinary
income in an amount equal to the lesser of (i) the fair market value of the
shares on the date of exercise, less the exercise price or (ii) the amount
realized on the date of sale, less the exercise price, and (b) if the selling
price of the shares exceeds the fair market value on the date of exercise, the
excess will be taxable to the optionee as short-term or long-term capital gain
(depending on whether the shares were held for more than one year). Currently,
long-term capital gain is taxable to individuals at a maximum Federal income tax
rate of 28%, while items of ordinary income are taxable to individuals at the
maximum rate of 39.6%.
No deduction will be allowed to the Company for Federal income tax
purposes, with respect to Incentive Stock Options, unless the optionee sells the
shares in a Disqualifying Disposition. In the case of a Disqualifying
Disposition, the Company will, subject to possible limitations imposed by
Section 162(m) of the Code (see discussion below), be entitled to deduct the
amount of ordinary income recognized by the optionee.
Non-Qualified Stock Options
In general, with respect to Non-Qualified Stock Options: (i) no income is
recognized by the optionee at the time the option is granted; (ii) upon exercise
of the option, the optionee recognizes ordinary income in an amount equal to the
difference between the exercise price and the fair market value of the shares on
the date of exercise; and (iii) at disposition, any appreciation after the date
of exercise is treated as long-term or short-term capital gain, depending on
whether the shares are held for more than one year by the optionee.
Generally, the Company will, subject to possible limitations imposed by
Section 162(m) of the Code (see discussion below), be entitled to a tax
deduction equal to the amount of ordinary income recognized by the optionee at
the date of exercise, to the extent such income is considered reasonable
compensation. Treasury Regulations make the deduction to the Company dependent
on the Company fulfilling certain Federal income tax withholding requirements
with respect to such compensation income.
$1 Million Limitation on Deductible Compensation
Pursuant to the Omnibus Budget Reconciliation Act of 1993, Section 162(m)
of the Code generally limits the Company's deduction with respect to
compensation paid to each of its "covered employees" (generally defined as the
chief executive officer and four highest compensated officers of the corporation
other than the chief executive officer) to $1 million per year, effective for
taxable years of the Company beginning after 1993. This deduction limit,
however, does not apply to certain "performance-based compensation," including
stock options that are granted at an exercise price which is not less than fair
market value. Although some uncertainty still exists as to the application of
Section 162(m), the Company intends that Stock Options granted under the 1994
Plan at not less than fair market value of the Common Stock subject to the
option at the time of grant will qualify as "performance-based compensation."
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The foregoing is based upon Federal tax laws and regulations as presently
in effect and does not purport to be a complete description of the Federal
income tax aspects of the 1994 Plan. Also, the specific state and local tax
consequences to each optionee under the 1994 Plan may vary, depending upon the
laws of the various states and localities and the individual circumstances of
each optionee.
OPTIONS TO BE GRANTED
The Company has not yet made any determinations regarding the grant of any
Stock Options under the 1994 Plan.
REQUIRED VOTE
In voting on approval of the 1994 Plan, the shares of Common Stock and
Class B Common Stock shall vote together as one class with each share of Common
Stock entitled to one vote and each share of Class B Common Stock entitled to
ten votes. Approval of the 1994 Plan requires the affirmative vote by the
holders of a majority of the votes represented by the shares of Common Stock and
Class B Common Stock, voting as a single class, present in person or by proxy at
the Meeting. Unless marked to the contrary, proxies received will be voted FOR
approval of the 1994 Plan.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE APPROVAL
OF THE 1994 PLAN.
PROPOSAL 3
ADOPTION OF AMENDMENT TO THE OLSTEN CORPORATION
1984 NON-QUALIFIED STOCK OPTION PLAN
GENERAL
On February 14, 1994, the Board adopted, subject to approval by the
shareholders, an amendment to the 1984 Non-Qualified Stock Option Plan (the
"1984 Plan") to provide that payment of the option price of any options granted
under the 1984 Plan (a "1984 Option") may include cash or cash equivalents or,
if permitted by the Option Committee (as defined below), by delivery of shares
of Common Stock already owned by the optionee, or withholding of shares subject
to awards under the 1984 Plan (in each case, such shares having a fair market
value on the date of exercise equal to the aggregate option price), or in any
other manner permitted by law and as determined by the Option Committee, or any
combination of the foregoing. The 1984 Plan currently provides that the option
price of all 1984 Options shall be paid in full in cash or by check at the time
of exercise. Although the 1984 Plan terminated in February 1994 (i.e., no
further awards may be made), there remain outstanding 1984 Options previously
awarded which are exercisable at various times through May 10, 1995. The
amendment to the 1984 Plan is being proposed in order to conform the available
methods of exercise of outstanding 1984 Options under the 1984 Plan to those
provided for in the 1994 Plan. As of March 30, 1994, there were outstanding
options to purchase 187,500 shares of Common Stock under the 1984 Plan at an
option price of $8.93 per share.
The full text of the 1984 Plan, including Section 10 thereof as proposed to
be amended, is set forth as Exhibit B to this Proxy Statement. The material
features of the 1984 Plan are described below, but this description is only a
summary and is qualified in its entirety by reference to the actual text of the
1984 Plan.
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PURPOSE
The purpose of the 1984 Plan is to encourage ownership of stock of the
Company by officers and other key employees of the Company and it subsidiaries
and to provide additional incentive for them to promote the success of the
business.
NUMBER OF SHARES
The 1984 Plan authorizes the granting of non-qualified stock options to
purchase a maximum of 632,812 shares of Common Stock, after giving effect to
adjustments for Common Stock splits. As stated above, no further awards may be
made under the 1984 Plan.
STOCK SUBJECT TO 1984 PLAN
In the event of any Common Stock dividend, Common Stock split-up, share
combination, exchange of shares, recapitalization, merger, consolidation,
acquisition or disposition of property or shares, reorganization, liquidation,
or other similar changes or transactions, of or by the Company, an adjustment,
as may be determined to be appropriate by the Option Committee in its sole
discretion, will be made in the aggregate number and class of shares available
for issuance under the 1984 Plan.
ADMINISTRATION
The 1984 Plan is administered by the Stock Option Committee (the "Option
Committee") consisting of not less than three members of the Board who are
"disinterested persons." Subject to certain limits, the Option Committee has the
power to administer the 1984 Plan in its sole and absolute discretion.
TERMS OF OPTIONS
OPTION PRICE. The option price shall be at least 85% of the fair market
value of the Common Stock on the date of award of each 1984 Option.
On March 30, 1994, the closing sale price of the Common Stock, which is the
security underlying the 1984 Options, as reported on the AMEX, was $32 3/8 per
share.
OPTION TERM. The term of each 1984 Option is five years from the date of
grant thereof, subject to earlier termination as provided below.
EXERCISABILITY. No 1984 Option may be exercised prior to the expiration of
one year from the date of grant. Except as otherwise provided, each 1984 Option
may be exercised as to not more than 20% of the shares originally subject
thereto at any time after one year from the date the 1984 Option is granted, as
to not more than 40% of the shares originally subject thereto at any time after
two years from the date the 1984 Option is granted, as to not more than 60% of
the shares subject thereto at any time after three years from the date the 1984
Option is granted, as to not more than 80% of the shares subject thereto at any
time after four years from the date the 1984 Option is granted and as to 100% of
the shares subject thereto at five years from the date of grant. The Option
Committee may accelerate the exercise date of any 1984 Option. Except as
described below, a 1984 Option shall not be exercisable unless the optionee is
an employee of the Company or a subsidiary at the time of exercise.
METHOD OF EXERCISE. Currently, the 1984 Plan provides that the option
price of a 1984 Option shall be paid in full in cash or by check at the time of
exercise. If the proposed amendment is adopted, payment of the option price may
instead be made in cash or cash equivalents or, if permitted by the Option
Committee
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(either in the option agreement or at the time of exercise), by delivery of
shares of Common Stock already owned by the optionee, or withholding of shares
subject to awards under the 1984 Plan (in each case, such shares having a fair
market value on the date of exercise equal to the aggregate option price), or in
any other manner permitted by law and as determined by the Option Committee, or
any combination of the foregoing. 1984 Options may be exercised in whole or in
part at any time during the option term by giving written notice of exercise to
the Company specifying the number of shares to be purchased, accompanied by
payment of the option price.
NO SHAREHOLDER RIGHTS. An optionee will have neither rights to dividends
nor other rights of a shareholder with respect to shares subject to a 1984
Option until the optionee has given written notice of exercise and has paid for
such shares.
NON-TRANSFERABILITY. No 1984 Option is transferable by the optionee other
than by will or by the laws of descent and distribution. During the optionee's
lifetime, all 1984 Options are exercisable only by the optionee.
TERMINATION OF EMPLOYMENT, RETIREMENT AND DISABILITY. If an optionee
ceases to be an employee of the Company for any reason other than death,
retirement or permanent disability, any 1984 Option held by such optionee under
the 1984 Plan shall forthwith terminate. If an optionee ceases to be an employee
of the Company by reason of retirement on or after attaining the age of 65 (or
such earlier age as the Board may determine) or permanent disability, whether or
not such cessation of employment occurs prior to the expiration of any period of
employment required by such optionee's option agreement, such 1984 Option,
except as otherwise provided in such optionee's option agreement or unless the
Option Committee, in its sole discretion, shall otherwise determine, may be
exercised, to the extent exercisable on the day next preceding the date of such
cessation of employment, at any time within three months after such cessation,
at the end of which period the 1984 Option shall terminate, except that in the
case of an employee who is permanently disabled, the three month period shall be
one year. In no event may a 1984 Option be exercised after the expiration of the
term thereof.
DEATH OF THE OPTIONEE. If an optionee dies while an employee of the
Company or a subsidiary, or within three months after such optionee has ceased
to be such an employee (provided such cessation was due to retirement or
permanent disability), such 1984 Option may be exercised, to the extent
exercisable on the day next preceding the date of such cessation of employment,
by the estate of such deceased optionee, or by a person or persons who acquire
the right to exercise such option by bequest or inheritance or by reason of the
death of such optionee, at any time within one year after such optionee's death,
or within such shorter period of time as shall be prescribed in the option
agreement, at the end of which period such option shall terminate. In no event
may a 1984 Option be exercised after the expiration of the term thereof.
AMENDMENTS AND TERMINATION
The 1984 Plan terminated on February 14, 1994. No amendment or termination
of the 1984 Plan may adversely affect any award previously granted without the
employee's written consent.
CHANGE OF CONTROL
On February 14, 1994, the Board amended the 1984 Plan to conform the change
of control provision in the 1984 Plan to that of the 1994 Plan. See "Change of
Control" in Proposal 2 above.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE 1984 PLAN
The Federal income tax consequences to the Company and optionees with
respect to the issuance and exercise of 1984 Options are the same as those
relating to the issuance and exercise of Non-Qualified Stock Options pursuant to
the 1994 Plan. For a discussion of the income tax consequences with respect to
1984 Options, see "Certain Federal Income Tax Consequences of the 1994 Plan,"
above.
REQUIRED VOTE
In voting on approval of the amendment to the 1984 Plan, the shares of
Common Stock and Class B Common Stock shall vote together as one class with each
share of Common Stock entitled to one vote and each share of Class B Common
Stock entitled to ten votes. Approval of the amendment to the 1984 Plan requires
the affirmative vote by the holders of a majority of the votes represented by
the shares of Common Stock and Class B Common Stock, voting as a single class,
present in person or by proxy at the Meeting. Unless marked to the contrary,
proxies received will be voted FOR the approval of the amendment to the 1984
Plan.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE APPROVAL
OF THE AMENDMENT TO THE 1984 PLAN.
PROPOSAL 4
APPROVAL OF INCENTIVE AWARD UNDER
THE OLSTEN CORPORATION
INCENTIVE RESTRICTED STOCK PLAN
GENERAL
On November 8, 1993, the Compensation Committee of the Board awarded (the
"Incentive Award") to Frank N. Liguori ("Grantee") the right to receive shares
of Common Stock pursuant to the Company's Incentive Restricted Stock Plan which
was adopted on May 17, 1990, which right is subject to shareholder approval. The
number of shares deliverable pursuant to the Incentive Award is determined by,
and the right to receive such shares is generally conditioned upon, the
attainment, as certified in writing by the Compensation Committee, of target
levels of net income by the Company for its 1994, 1995 and 1996 fiscal years
(the "Measuring Period").
NUMBER OF SHARES SUBJECT TO AWARD
If during the Measuring Period the Company achieves aggregate net income of
(i) $240 million, Grantee will receive 150,000 shares of Common Stock, or (ii)
$255 million or more, Grantee will receive 200,000 shares. At a level of net
income aggregating more than $180 million but less than $255 million, Grantee
will receive a number of shares to be determined by a sliding scale, but no
shares will be issuable if net income of the Company for the Measuring Period
aggregates less than $180 million. For purposes of the Incentive Award, net
income is net income of the Company, excluding the effects of any extraordinary
charges and material acquisitions or transactions. All share amounts will be
appropriately adjusted to give effect to any Common Stock dividend, Common Stock
split-up, share combination, exchange of shares, recapitalization or other
similar changes of or by the Company.
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GRANT OF SHARES
Except as described below, shares issuable to Grantee will be issued and
granted, and will immediately vest in three equal installments on January 4,
1997, January 4, 1998, and January 4, 1999, so long as Grantee remains employed
by the Company on each of such dates. However, if more than 150,000 shares are
issuable, the shares issuable in excess of such number will be issued and
granted, and will immediately vest, on January 4, 1997.
If Grantee dies or becomes permanently disabled during the Measuring
Period, he or his estate will be issued and granted the maximum number of shares
to which he would be entitled for the year in which death or disability occurs
and for any prior years in the Measuring Period, so long as projected net income
for such year equals or exceeds the net income target for that year. In
determining the number of shares to be issued, net income will be projected for
the current year and will be compared to target levels for such year ($60
million in 1994, $80 million in 1995, and $100 million in 1996 (each an "Annual
Target Level")) and enhanced target levels for such year ($65 million in 1994,
$85 million in 1995, and $105 million in 1996, (each an "Annual Enhanced
Level")), and the net income during any remaining years in the Measuring Period
will be assumed to reach the target level reached during the current year,
(i.e., either the Annual Target Level or the Annual Enhanced Level). If Grantee
dies or becomes disabled during a year in which the Company's net income is
projected to be less than the Annual Target Level for that year, no shares will
be issued with respect to that year. If Grantee dies or becomes permanently
disabled after the Measuring Period, all unissued shares to which he would have
been entitled will be immediately granted and issued.
CHANGE OF CONTROL AND TERMINATION OF EMPLOYMENT
In the event that, during the Measuring Period (i) there is a Change of
Control (as defined in the 1994 Plan), (ii) Grantee is relieved of his current
positions with the Company without cause, or (iii) Grantee's employment is
terminated without cause, the Company's aggregate net income for the Measuring
Period will be deemed to be $255 million and the Company will immediately issue
and grant Grantee 200,000 shares of Common Stock, the maximum number of shares
which he is entitled to receive.
In the event that, after the Measuring Period expires but before Grantee
has received all of the shares to which he is entitled, (i) there is a Change of
Control, (ii) Grantee is relieved of his current positions with the Company
without cause, or (iii) Grantee's employment is terminated without cause, the
Company will accelerate the issuance of all such shares.
In the event that the grant of shares pursuant to an Incentive Award to
Grantee is, upon a Change of Control, subject to the excise tax imposed by
Section 4999 of the Code, Grantee will be entitled, pursuant to his employment
agreement, to receive an additional gross-up payment in an amount sufficient to
make Grantee whole for such excise tax.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES WITH RESPECT TO THE INCENTIVE AWARD
The following is a summary of certain Federal income tax aspects with
respect to the Incentive Award based upon the laws in effect on the date hereof.
Generally, no taxable income is recognized by the Grantee upon the awarding
of the Incentive Award. Upon receipt of shares of Common Stock pursuant to the
Incentive Award, the Grantee will recognize ordinary income on the dates on
which such shares of Common Stock are distributed to the Grantee equal to the
fair market value of such shares on such dates. Such shares will have a tax
basis equal to such fair market value and the capital gain holding periods for
such shares will commence on such dates.
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The Company will generally be entitled to a deduction in the amount taxable
as ordinary income to the Grantee to the extent such income is considered
reasonable compensation, subject to the limitation imposed by Section 162(m) of
the Code. The Company intends that compensation paid to the Grantee pursuant to
the Incentive Award will qualify as "performance-based compensation" under
Section 162(m) of the Code, and, consequently, will generally not be subject to
the $1 million deduction limit thereunder. For a discussion of the $1 million
limitation on deductible compensation under Section 162(m) of the Code, see
"Certain Federal Income Tax Consequences of the 1994 Plan." Treasury Regulations
also make the deduction to the Company dependent on the Company fulfilling
Federal income tax withholding requirements with respect to such compensation
income.
The foregoing is based upon Federal tax laws and regulations as presently
in effect and does not purport to be a complete description of the Federal
income tax aspects of the Incentive Award. Also, the specific state and local
tax consequences to the Grantee and the Company may vary, depending upon the
laws of the various states and localities and the individual circumstances of
the Grantee.
REQUIRED VOTE
In voting on approval of the Incentive Award, the shares of Common Stock
and Class B Common Stock shall vote together as one class with each share of
Common Stock entitled to one vote and each share of Class B Common Stock
entitled to ten votes. Approval of the Incentive Award requires the affirmative
vote by the holders of a majority of the votes represented by the shares of
Common Stock and Class B Common Stock, voting as a single class, present in
person or by proxy at the Meeting. Unless marked to the contrary, proxies
received will be voted FOR the approval of the Incentive Award.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE APPROVAL
OF THE INCENTIVE AWARD.
PROPOSAL 5
ADOPTION OF THE OLSTEN CORPORATION
EXECUTIVE OFFICER BONUS PLAN
GENERAL
The Company has established, subject to shareholder approval, the Executive
Officer Bonus Plan (the "Executive Bonus Plan") pursuant to which the executive
officers of the Company (each an "Executive", and collectively the "Executives")
may be entitled to receive annual bonus compensation, contingent upon the
attainment of certain performance goals.
A copy of the Executive Bonus Plan is attached as Exhibit C to this Proxy
Statement. The material features of the Executive Bonus Plan are described
below, but this description is only a summary and is qualified in its entirety
by reference to the actual text of the Executive Bonus Plan.
PURPOSE
The purpose of the Executive Bonus Plan is to provide Executives with an
opportunity to earn annual bonus compensation (an "Award") as an incentive and
reward for their leadership, ability and exceptional services.
ADMINISTRATION
The Executive Bonus Plan is administered by a committee of the Board (the
"Board Committee") consisting of not less than two persons who, to the extent
required to satisfy the exception for performance-
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based compensation under Section 162(m) of the Code, will be "outside directors"
within the meaning of such section.
Subject to the express provisions of the Executive Bonus Plan, the Board
Committee has the authority to (i) establish performance goals for the granting
of Awards for each fiscal year of the Company (a "Plan Year"), (ii) determine
the Executives to whom Awards are to be made for each Plan Year, (iii) determine
whether the performance goals for any Plan Year have been achieved, (iv)
authorize payment of Awards under the Executive Bonus Plan, (v) adopt, alter and
repeal such administrative rules, guidelines and practices governing the
Executive Bonus Plan as it deems advisable, and (vi) interpret the terms and
provisions of the Executive Bonus Plan.
DETERMINATION OF AWARDS
The amount of any Award granted to an Executive for a Plan Year will be an
amount not greater than the lesser of 200% of such Executive's annual base
salary or $2.5 million, which amount will be determined based on the achievement
of one or more performance goals established by the Board Committee with respect
to such Executive. Such performance goals will be established based on the
attainment of specified levels of net income for the Plan Year or attainment of
specified percentage increases in net income for the Plan Year over net income
for the prior fiscal year. Not later than the day immediately preceding the
first day of such Plan Year (or such later date as may be permitted pursuant to
Section 162(m) of the Code) (the "Determination Date"), the Board Committee will
establish (i) the Executives who will be eligible for an Award for such Plan
Year, (ii) the Executive's annual base salary for purposes of determining the
amount of such Executive's Award for such Plan Year, (iii) the performance goals
for such Plan Year, and (iv) the corresponding Award amounts payable under the
Executive Bonus Plan upon achievement of such performance goals. For purposes of
the Executive Bonus Plan, "net income" means the net income or net operating
profits of the Company or any division or subsidiary of the Company for a Plan
Year, excluding the effects of any extraordinary charges and material
acquisitions or transactions.
The following performance goals for the granting of an Award to the Chief
Executive Officer of the Company (the "CEO") have been established by the Board
Committee for the 1994 Plan Year: If net income of the Company for the 1994 Plan
Year is (i) $46 million or less, the CEO will not receive an Award under the CEO
Bonus Plan, (ii) $50 million, the CEO will receive 25% of his annual base salary
as an Award, (iii) $55 million, the CEO will receive 50% of his salary, (iv) $60
million, the CEO will receive 75% of his salary, (v) $62.5 million, the CEO will
receive 82% of his salary, (vi) $65 million, the CEO will receive 90% of his
salary, (vii) $67.5 million, the CEO will receive 95% of his salary, and (viii)
$70 million, the CEO will receive 100% of his salary. Any Award granted to the
CEO with respect to net income which falls between the above-mentioned
performance goals will be computed in proportion to such established performance
goals.
PAYMENT OF AWARD
An Award (if any) to any Executive for a Plan Year will be paid in a single
lump sum in cash as soon as practicable after the end of the Plan Year,
provided, however, that the Board Committee shall have first certified in
writing, (i) that a performance goal with respect to such Executive for such
Plan Year was satisfied and the level of such goal attained, and (ii) the amount
of each such Executive's Award. If an Executive dies after the end of a Plan
Year but before receiving payment of any Award, the amount will be paid to a
designated beneficiary or, if no beneficiary has been designated, to the
Executive's estate. Notwithstanding the foregoing, the Board Committee may
determine, by separate employment agreement with any Executive or otherwise,
that all or a portion of an Executive's Award for a Plan Year will be payable to
such Executive upon
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his death, disability, or termination of employment with the Company, or upon a
change of control of the Company, during the Plan Year.
EFFECTIVE DATE OF THE EXECUTIVE BONUS PLAN
The effective date of the Executive Bonus Plan is January 3, 1994.
NON-TRANSFERABILITY
No Awards or rights under the Executive Bonus Plan may be transferred or
assigned other than by will or by the laws of descent and distribution.
AMENDMENTS AND TERMINATION
The Board may terminate the Executive Bonus Plan and may amend it from time
to time, provided, however, that no termination or amendment of the Executive
Bonus Plan will adversely affect the rights of an Executive or a beneficiary to
a previously certified Award. Amendments to the Executive Bonus Plan may be made
without shareholder approval except as required to satisfy Section 162(m) of the
Code.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE EXECUTIVE BONUS PLAN
The following is a summary of certain Federal income tax aspects with
respect to the Executive Bonus Plan based upon the laws in effect on the date
hereof.
Upon payment of an Award to an Executive for any Plan Year pursuant to the
Executive Bonus Plan, such Executive will recognize ordinary income in the
amount of such Award on the date such compensation is paid.
The Company will generally be entitled to a deduction in the amount taxable
as ordinary income to an Executive to the extent such income is considered
reasonable compensation, subject to the limitation imposed by Section 162(m) of
the Code. The Company intends that compensation paid to an Executive pursuant to
the Executive Bonus Plan will generally qualify as "performance-based
compensation" under Section 162(m) of the Code and, consequently, should
generally not be subject to the $1 million deduction limit thereunder. For a
discussion of the $1 million limitation on deductible compensation under Section
162(m) of the Code, see "Certain Federal Income Tax Consequences of the 1994
Plan."
The foregoing is based upon Federal tax laws and regulations as presently
in effect and does not purport to be a complete description of the Federal
income tax aspects of the Executive Bonus Plan. Also, the specific state and
local tax consequences to an Executive and the Company may vary, depending upon
the laws of the various states and localities and the individual circumstances
of the Executive.
REQUIRED VOTE
In voting on approval of the Executive Bonus Plan, the shares of Common
Stock and Class B Common Stock shall vote together as one class with each share
of Common Stock entitled to one vote and each share of Class B Common Stock
entitled to ten votes. Approval of the Executive Bonus Plan requires the
affirmative vote by the holders of a majority of the votes represented by the
shares of Common Stock and Class B Common Stock, voting as a single class,
present in person or by proxy at the Meeting. Unless marked to the contrary,
proxies received will be voted FOR the approval of the Executive Bonus Plan.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE APPROVAL
OF THE EXECUTIVE BONUS PLAN.
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PROPOSAL 6
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Coopers & Lybrand as auditors of the
Company for the 1994 fiscal year, subject to ratification and approval by the
shareholders. In voting on such ratification and approval, the shares of Common
Stock and Class B Common Stock shall vote together as one class with each share
of Common Stock entitled to one vote and each share of Class B Common Stock
entitled to ten votes.
Coopers & Lybrand has audited the accounts of the Company since 1967. The
Company has been advised that a representative of Coopers & Lybrand will be
present at the meeting and will have an opportunity to make a statement and to
answer appropriate questions posed by shareholders.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION
AND APPROVAL OF COOPERS & LYBRAND.
------------------------------------
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the next annual
meeting must be received by the Company by December 1, 1994, for inclusion in
the proxy statement and form of proxy.
GENERAL
A COPY OF THE ANNUAL REPORT ON FORM 10-K FILED BY THE COMPANY WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR ITS LAST FISCAL YEAR IS AVAILABLE WITHOUT
CHARGE TO SHAREHOLDERS UPON WRITTEN REQUEST TO LAURIN L. LADEROUTE, JR.,
SECRETARY, THE OLSTEN CORPORATION, ONE MERRICK AVENUE, WESTBURY, NEW YORK 11590.
The cost of solicitation of proxies will be borne by the Company. The Board
of Directors may use the services of individual Directors, as well as officers
and others, to solicit personally or by telephone. Arrangements may also be made
with brokerage houses and other custodians, nominees and fiduciaries to forward
solicitation material to the beneficial owners of the stock held of record by
such persons and the Company may reimburse them for reasonable out-of-pocket
expenses incurred by them in doing so.
The Board of Directors knows of no other matters that may come before the
meeting. If any other matters should be brought before the meeting for action,
it is the intention of the persons named in the proxy to vote in accordance with
their discretion pursuant to authority conferred by the proxy.
By Order of the Board of Directors
LAURIN L. LADEROUTE, JR.
Secretary
Dated: April 1, 1994
Westbury, New York
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EXHIBIT A
THE OLSTEN CORPORATION
1994 STOCK INCENTIVE PLAN
SECTION 1. Purpose.
The purpose of The Olsten Corporation 1994 Stock Incentive Plan (the
"Plan") is to enable The Olsten Corporation (the "Company") and Related
Companies (as defined below) to attract and retain employees who contribute to
the Company's success by their ability, ingenuity and industry, and to enable
such employees to participate in the long-term success and growth of the Company
by giving them an equity interest in the Company. For purposes of the Plan, a
"Related Company" means any corporation, partnership, joint venture or other
entity in which the Company owns, directly or indirectly, at least a 20%
beneficial ownership interest.
SECTION 2. Types of Awards.
Awards under the Plan may be in the form of (i) incentive stock options
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (hereinafter, including applicable regulations
thereunder, the "Code") or any successor provision thereto, and (ii) options
that do not qualify as Incentive Stock Options ("Non-Qualified Stock
Options")(collectively, "Stock Options").
SECTION 3. Administration.
3.1 The Plan shall be administered by a committee (the "Committee") of the
Company's Board of Directors (the "Board") consisting of not less than two
"disinterested persons" (as such term is defined in Rule 16b-3 under the
Securities Exchange Act of 1934 (the "Exchange Act") or any successor rule) who,
to the extent required to satisfy the exception for performance-based
compensation under Section 162(m) of the Code, are also "outside directors"
(within the meaning of Section 162(m) of the Code). The members of the Committee
shall serve at the pleasure of the Board.
3.2 The Committee shall have the authority to grant awards to eligible
employees under the Plan; to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall deem advisable; to
interpret the terms and provisions of the Plan and any award granted under the
Plan; and to otherwise supervise the administration of the Plan. Subject to the
terms of the Plan, the Committee's authority shall include, but not be limited
to, the authority:
(a) to determine whether and to what extent any award will be granted
hereunder;
(b) to select the employees to whom awards will be granted;
(c) to determine the number of shares of the common stock, par value
$.10 per share, of the Company (the "Common Stock") to be covered by each
award granted hereunder; provided, however, that no more than 100,000
shares (subject to adjustment as provided in Section 4.3 herein) may be
awarded under the Plan to any employee in any calendar year;
(d) to determine the form and the terms and conditions of any award
granted hereunder, including, but not limited to, any restrictions based on
performance and such other factors as the Committee may determine, and to
determine whether the terms and conditions of the award are satisfied;
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(e) to determine pursuant to a formula or otherwise the fair market
value of the Common Stock on a given date; provided, however, that if the
Committee fails to make such a determination, fair market value shall mean
the closing sale price of the Common Stock on the American Stock Exchange
(or on any other national stock exchange on which the Common Stock may be
listed) on a given date;
(f) to amend the terms of any award, prospectively or retroactively;
provided, however, that no amendment shall impair the rights of the award
holder without his or her consent; and
(g) to substitute new Stock Options for previously granted Stock
Options, or for options granted under other plans, in each case including
previously granted options having higher option prices.
3.3 All determinations made by the Committee pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Company and
Plan participants.
SECTION 4. Stock Subject to Plan.
4.1 The total number of shares of Common Stock reserved and available for
distribution under the Plan shall be 2,000,000 (subject to adjustment as
provided below). Such shares may consist of authorized but unissued shares or
treasury shares.
4.2 To the extent an option terminates without having been exercised, the
shares subject to such award shall again be available for distribution in
connection with future awards under the Plan.
4.3 In the event of any merger, reorganization, consolidation, sale of
substantially all assets, recapitalization, Common Stock dividend, Common Stock
split, spin-off, split-up, split-off, distribution of assets or other change in
corporation structure affecting the Common Stock, a substitution or adjustment,
as may be determined to be appropriate by the Committee in its sole discretion,
shall be made in the aggregate number of shares reserved for issuance under the
Plan, the number of shares available for any individual awards, the number of
shares subject to outstanding awards and the exercise price to be paid employees
with respect to outstanding awards; provided, however, that no such adjustment
shall increase the aggregate value of any outstanding award.
SECTION 5. Eligibility
Officers and other key employees of the Company or a Related Company are
eligible to be granted awards under the Plan; provided, however, that, to the
extent required under Section 422 of the Code, Incentive Stock Options may be
granted only to officers and other key employees of the Company or any
subsidiary corporation in which the Company owns, directly or indirectly, stock
having 50% or more of the total combined voting power of all classes of stock,
within the meaning of Section 424(f) of the Code. A director of the Company or a
Related Company who is not also an employee of the Company or a Related Company
will not be eligible to be granted awards under the Plan. The participant under
the Plan shall be selected from time to time by the Committee, in its sole
discretion, from among those eligible.
SECTION 6. Terms of Stock Options.
6.1 Option Price. The option price per share of Common Stock purchasable
under a Stock Option shall be determined by the Committee; provided, however,
that the option price of Non-Qualified Stock Options shall not be less than 85%,
and the option price of Incentive Stock Options shall not be less than 100%, of
the fair market value of the Common Stock on the date of award of each such
Stock Option.
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6.2 Option Term. The term of each Stock Option shall be five years from
the date of grant thereof, subject to earlier termination as provided in
Sections 6.7 and 6.8 hereof.
6.3 Exercisability. Except as otherwise provided by the Committee at the
time of grant, or as provided in Section 9 hereof, Stock Options shall vest and
be first exercisable in annual installments of 25% of the shares originally
subject thereto, commencing on the first anniversary of the date of grant of the
Stock Option, and an additional 25% of such shares each year thereafter. The
Committee may accelerate an exercise date of any Stock Option or otherwise waive
the installment exercise provisions at any time (including at time of grant) in
whole or in part. Except as provided in Sections 6.7 and 6.8, a Stock Option
shall not be exercisable unless the optionee is an employee of the Company or a
Related Company at the time of exercise.
6.4 Method of Exercise. Stock Options may be exercised in whole or in
part at any time during the option term by giving written notice of exercise to
the Company specifying the number of shares to be purchased, accompanied by
payment of the option price. Payment of the option price shall be made in cash
or cash equivalents or, if permitted by the Committee (either in the option
agreement or at the time of exercise), by delivery of shares of Common Stock
already owned by the optionee or withholding of shares subject to awards
hereunder (in each case, such shares having a fair market value on the date of
exercise equal to the aggregate option price), or in any other manner permitted
by law and as determined by the Committee, or any combination of the foregoing.
6.5 No Shareholder Rights. An optionee shall have neither rights to
dividends or other rights of a shareholder with respect to shares subject to a
Stock Option until the optionee has given written notice of exercise and has
paid for such shares.
6.6 Non-transferability. No Stock Option shall be transferable by the
optionee other than by will or by the laws of descent and distribution. During
the optionee's lifetime, all Stock Options shall be exercisable only by the
optionee.
6.7 Termination of Employment, Retirement and Disability. If an optionee
ceases to be an employee of the Company or a Related Company for any reason
other than death, retirement or permanent disability, any Stock Option held by
such optionee under the Plan shall terminate immediately upon such termination
of employment. If an optionee ceases to be an employee of the Company or a
Related Company by reason of retirement (on or after attaining the age of 65 or
such earlier age as the Committee may determine) or permanent disability, any
Stock Option held by such optionee may be exercised, to the extent exercisable
on the day preceding the date of such cessation of employment, at any time
within three months (one year in the case of permanent disability) after such
cessation of employment, at the end of which period the Stock Option shall
terminate. Notwithstanding the foregoing, the Committee in its sole discretion
may provide, at the time of grant or otherwise, for different rules to apply to
the exercisability of Stock Options held by an optionee at the time of such
optionee's cessation of employment. In no event shall a Stock Option be
exercised after the expiration of the term thereof.
6.8 Death of the Optionee. If an optionee dies while an employee of the
Company or a Related Company, or within three months after the optionee has
ceased to be an employee by reason of retirement, or within one year after the
optionee has ceased to be an employee by reason of such optionee's permanent
disability, such Stock Option may be exercised, to the extent exercisable on the
day preceding the date of such cessation of employment, by the estate of such
deceased optionee, or by a person or persons who acquire the right to exercise
such option by bequest or inheritance or by reason of the death of such
optionee, at any time within one year after such optionee's death, or within
such shorter period of time as shall be prescribed in the option agreement, at
the end of which period such Stock Option shall terminate. In no event shall a
Stock Option be exercised after the expiration of the term thereof.
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SECTION 7. Tax Withholding.
7.1 Each employee shall, no later than the date as of which the value of
an award first becomes includible in the employee's gross income for applicable
tax purposes, pay to the Company, or make arrangements satisfactory to the
Committee regarding payment of, any federal, state, local or other taxes of any
kind required by law to be withheld with respect to the award. The obligations
of the Company under the Plan shall be conditional on such payment or
arrangements, and the Company (and, where applicable, any Related Company),
shall to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the employee.
7.2 To the extent permitted by the Committee, and subject to such terms
and conditions as the Committee may provide, an employee may elect to have the
withholding tax obligation, or any additional tax obligation with respect to any
awards hereunder, satisfied by (i) having the Company withhold shares of Common
Stock (at its fair market value) otherwise deliverable to the employee with
respect to the award, or (ii) delivering to the Company shares of Common Stock
(at its fair market value) already owned by the employee.
SECTION 8. Amendments and Termination.
The Plan shall terminate on February 14, 2004, and no Stock Option shall be
awarded under the Plan after such date. The Board may discontinue the Plan at
any time and may amend it from time to time. No amendment or discontinuation of
the Plan shall adversely affect any award previously granted without the
employee's written consent. Amendments may be made without shareholder approval
except as required to satisfy Rule 16b-3 under the Exchange Act (or any
successor rule), Section 162(m) of the Code or, with respect to Incentive Stock
Options, Section 422 of the Code.
SECTION 9. Change of Control.
9.1 In the event of a Change of Control, unless otherwise determined by
the Committee at the time of grant or by amendment (with the holder's consent)
of such grant, all outstanding Stock Options awarded under the Plan shall become
fully exercisable and vested.
9.2 A "Change of Control" shall be deemed to occur on the date that any of
the following events occur:
(a) any person or persons acting together which would constitute a
"group" for purposes of Section 13(d) of the Exchange Act (other than the
Company, any subsidiary, members of the Olsten family (defined as Miriam
Olsten, any lineal descendant of William and Miriam Olsten, any spouse of
any such lineal descendant, a trust established principally for the benefit
of any of the foregoing, and the executor, administrator or personal
representative of the estate of any of the foregoing) and the "permitted
transferees" of such members of the Olsten family as defined in the
Company's Restated Certificate of Incorporation) shall beneficially own (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, at
least 25% of the total voting power of all classes of capital stock of the
Company entitled to vote generally in the election of the Board;
(b) either (i) Current Directors (as herein defined) shall cease for
any reason to constitute at least a majority of the members of the Board
(for these purposes, a "Current Director" shall mean any member of the
Board as of the effective date of the Plan, and any successor of a Current
Director whose election, or nomination for election by the Company's
shareholders, was approved by at least two-thirds of the Current Directors
then on the Board) or (ii) at any meeting of the shareholders of the
Company
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called for the purpose of electing directors, a majority of the persons
nominated by the Board for election as directors shall fail to be elected;
(c) the shareholders of the Company approve (i) a plan of complete
liquidation of the Company, or (ii) an agreement providing for the merger
or consolidation of the Company (A) in which the Company is not the
continuing or surviving corporation (other than a consolidation or merger
with a wholly owned subsidiary of the Company in which all shares of Common
Stock and the Company's Class B Common Stock, par value $.10 per share
("Class B Common Stock") outstanding immediately prior to the effectiveness
thereof are changed into or exchanged for the same consideration) or (B)
pursuant to which the Common Stock and Class B Common Stock are converted
into cash, securities or other property, except a consolidation or merger
of the Company in which the holders of the Common Stock and Class B Common
Stock immediately prior to the consolidation or merger have, directly or
indirectly, at least a majority of the common stock of the continuing or
surviving corporation immediately after such consolidation or merger or in
which the Board immediately prior to the merger or consolidation would,
immediately after the merger or consolidation, constitute a majority of the
board of the directors of the continuing or surviving corporation; or
(d) the shareholders of the Company approve an agreement (or
agreements) providing for the sale or other disposition (in one transaction
or a series of transactions) of all or substantially all of the assets of
the Company.
SECTION 10. General Provisions.
10.1 Each award under the Plan shall be subject to the requirement that,
if at any time the Committee shall determine that (i) the listing, registration
or qualification of the Common Stock subject or related thereto upon any
securities exchange or under any state or federal law, or (ii) the consent or
approval of any government regulatory body or (iii) an agreement by the
recipient of an award with respect to the disposition of Common Stock is
necessary or desirable (in connection with any requirement or interpretation of
any federal or state securities law, rule or regulation) as a condition of, or
in connection with, the granting of such award or the issuance, purchase or
delivery of Common Stock thereunder, such award shall not be granted or
exercised, in whole or in part, unless such listing, registration,
qualification, consent, approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Committee.
10.2 Nothing set forth in this Plan shall prevent the Board from adopting
other or additional compensation arrangements. Neither the adoption of the Plan
nor any award hereunder shall confer upon any employee of the Company, or of a
Related Company, any right to continued employment.
10.3 Determinations by the Committee under the Plan relating to the form,
amount and terms and conditions of awards need not be uniform, and may be made
selectively among persons who receive or are eligible to receive awards under
the Plan, whether or not such persons are similarly situated.
10.4 With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successor under the Exchange Act. To the extent
that any provision of the Plan or action by the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
10.5 No member of the Board or the Committee, nor any officer or employee
of the Company acting on behalf of the Board or the Committee, shall be
personally liable for any action, determination or interpretation taken or made
with respect to the Plan, and all members of the Board or the Committee and all
officers or
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employees of the Company acting on their behalf shall, to the extent permitted
by law, be fully indemnified and protected by the Company in respect of any such
action, determination or interpretation.
SECTION 11. Effective Date of Plan.
The Plan shall become effective on February 14, 1994, the date of adoption
by the Board, subject to approval by the shareholders of the Company at a
meeting duly called and held within twelve months following the effective date
of the Plan.
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EXHIBIT B
THE OLSTEN CORPORATION
1984 NON-QUALIFIED STOCK OPTION PLAN
1. Purpose of the Plan. This Non-Qualified Stock Option Plan (hereinafter
called the "Plan") is intended to encourage ownership of stock of The Olsten
Corporation (hereinafter called the "Corporation") by officers and other key
employees of the Corporation and its subsidiaries and to provide additional
incentive for them to promote the success of the business. The options that will
be granted pursuant to this Plan are intended not to qualify as "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code, as
amended (hereinafter called the "Code").
2. Scope of the Plan. An aggregate of 100,000 shares of the Corporation's
Common Stock, par value $.10 per share (hereinafter called the "Common Stock"),
shall be available and reserved for issue under the Plan subject, however, to
the provisions of Section 13 hereof. If an option should expire or terminate for
any reason without having been exercised in full, the unpurchased shares which
were subject thereto shall, unless the Plan shall have terminated, become
available for other options under the Plan. Common Stock shall not be issued in
respect of an option granted under the Plan unless the exercise of such option
and the issuance and delivery of shares of Common Stock pursuant thereto shall
comply with all relevant provisions of law, including the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the rules and regulations thereunder, and the requirements of the
American Stock Exchange or any other national stock exchange upon which the
Common Stock may then be listed, and shall be further subject to the approval of
the Corporation's counsel with respect to such compliance.
3. Administration of the Plan. The Plan shall be administered by a Stock
Option Committee (hereinafter called the "Committee") of not less than three
members of the Board of Directors (hereinafter called the "Board") of the
Corporation. Members of the Committee shall be "disinterested persons" as such
term is used in Rule 16b-3 under the Exchange Act.
Without limiting the generality of the foregoing, the Committee shall have
full and final authority in its discretion, but subject to the express
provisions of the Plan, to grant options under the Plan; to determine the fair
market value of the Common Stock covered by each option and the officers and
other key employees of the Corporation and its subsidiaries to whom, and the
time or times at which, options shall be granted; to determine the number of
shares to be covered by each option and the consideration to flow to the
Corporation for each option; to interpret the Plan; to prescribe, amend, and
rescind rules and regulations relating to the Plan; to determine the terms and
provisions of each option granted under the Plan (which need not be identical);
to accelerate any exercise date of any option; to waive restrictions imposed
with respect to the transferability of stock acquired on exercise of options
granted under the Plan; to authorize any person to execute on behalf of the
Corporation an option agreement with respect to an option granted by the
Committee; and to make all other determinations deemed necessary or advisable
for the administration of the Plan.
4. Employees to Whom Options May Be Granted. Options may be granted by
the Committee to officers and other key employees of the Corporation or of one
or more of its present or future subsidiary corporations, as defined in Section
424(f) of the Code (herein called "subsidiaries"), who may also be directors of
the Corporation.
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5. Number of Shares to be Covered by Options Granted to Individual
Employees. The number of shares of the Common Stock covered by an option that
may be granted to any individual employee shall be solely within the discretion
of the Committee.
6. Option Prices. The purchase price of the shares of the Common Stock
which shall be covered by each option shall be at least 85% of the fair market
value of the Common Stock on the date the option is granted. For the purposes of
the Plan the fair market value of the Common Stock on any date shall be the
closing price of the Common Stock on the American Stock Exchange (or on any
other national stock exchange on which the Common Stock may be listed).
7. Term of Options. The term of each option shall be five years from the
date of granting thereof, but shall be subject to earlier termination as
hereinafter provided.
8. Non-transferability of Options. An option shall not be transferable
otherwise than by will or the laws of descent and distribution, and an option
may be exercised, during the lifetime of the holder of an option, only by such
holder.
9. Exercise of Options. No option granted under the Plan may be exercised
prior to the expiration of one year from the date such option is granted. Except
as hereinafter provided in Sections 11, 12, and 18, each option may be exercised
as to not more than 20% of the shares originally subject thereto at any time
after one year from the date the option is granted, as to not more than 40% of
the shares originally subject thereto at any time after two years from the date
the option is granted, as to not more than 60% of the shares subject thereto at
any time after three years from the date the option is granted, as to not more
than 80% of the shares subject thereto at any time after four years from the
date the option is granted and as to 100% of the shares subject thereto at five
years from the date of grant. However, no option shall be exercisable after the
expiration of the term thereof as provided in Section 7; and, except as provided
in Sections 11 and 12, an option shall not be exercisable unless the holder
thereof shall, at the time of exercise, be an employee of the Corporation or a
subsidiary.
Except as provided in Sections 11 and 12 hereof, an option may not be
exercised at any time unless the holder thereof shall have been in the
continuous employ of the Corporation or of one or more of its subsidiaries from
the date of the granting of the option to the date of its exercise. An optionee
shall have neither rights to dividends nor other rights of a shareholder with
respect to shares subject to an option until the optionee has given written
notice of exercise and has paid for such shares.
10. Method of Exercise. Options may be exercised in whole or in part at
any time during the option term by giving written notice of exercise to the
Corporation specifying the number of shares to be purchased, accompanied by
payment of the option price. Payment of the option price shall be made in cash
or cash equivalents or, if permitted by the Committee (either in the option
agreement or at the time of exercise), by delivery of shares of Common Stock
already owned by the optionee, or withholding of shares subject to awards
hereunder (in each case, such shares having a fair market value on the date of
exercise equal to the aggregate option price), or in any other manner permitted
by law determined by the Committee, or any combination of the foregoing.
11. Exercise upon Cessation of Employment. If a holder of an option
ceases to be an employee of the Corporation or a subsidiary for any reason other
than death, retirement or permanent disability, any option held by him under the
Plan shall forthwith terminate. If, however, a holder of an option ceases to be
such an employee by reason of retirement on or after attaining the age of 65 (or
such earlier age as the Board may determine) or permanent disability, whether or
not such cessation of employment occurs prior to the expiration of any period of
employment required by his option agreement, such option, except as otherwise
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provided in the option agreement or unless the Committee, in its sole
discretion, shall otherwise determine, may be exercised, to the extent the
holder would have been entitled under Section 9 hereof to exercise the option on
the day next preceding the date of such cessation of employment, at any time
within three months after such cessation, at the end of which period the option
shall terminate, except that in the case of an employee who is permanently
disabled the three month period shall be one year. In any event, an option may
not be exercised after the expiration of the term thereof.
Option agreements may contain such provisions as the Committee shall
approve with reference to the effect of approved leaves of absence. Nothing in
the Plan or in any option agreement shall confer upon any employee any right to
continue in the employ of the Corporation or of any of its subsidiaries or
interfere in any way with the right of the Corporation or any such subsidiary to
terminate such employee's employment at any time or to change the conditions of
such employee's employment.
12. Exercise upon Death. If the holder of an option granted under the
Plan dies while an employee of the Corporation or a subsidiary, or within three
months after he has ceased to be such an employee (provided such cessation was
due to retirement or permanent disability), such option may be exercised, to the
extent the holder would have been entitled under Section 9 hereof to exercise
the option on the day next preceding the date of such cessation of employment,
by the estate of such deceased holder, or by a person or persons who acquire the
right to exercise such option by bequest or inheritance or by reason of the
death of such holder, at any time within one year after his death, or within
such shorter period of time as shall be prescribed in the option agreement, at
the end of which period such option shall terminate. Such period shall in no
event extend the date of exercise of the option beyond the term thereof as
provided in Section 7.
13. Adjustments upon Changes in Capitalization. Options granted hereunder
shall contain such uniform provisions as the Committee shall, in its sole
judgment, determine for adjustment of the number and class of shares covered
thereby, or of the option prices, or both, to reflect a stock dividend, stock
split-up, share combination, exchange of shares, recapitalization, merger,
consolidation, acquisition or disposition of property or shares, reorganization,
liquidation, or other similar changes or transactions, of or by the Corporation.
In any event, the aggregate number and class of shares available for issuance
under the Plan shall be appropriately adjusted and all of the provisions of the
Plan with respect to the number and class of shares so available shall likewise
be adjusted.
14. Effectiveness of the Plan. The Plan shall become effective on
February 15, 1984, the date of adoption by the Board, subject to approval by the
holders of Common Stock at a meeting of shareholders of the Corporation duly
called and held within twelve months following the effective date of the Plan.
15. Time of Granting Options. The date of grant of an option under the
Plan shall, for all purposes, be the date on which the Committee makes the
determination granting such option; and no grant shall be deemed effective under
the Plan prior to such date. Notice of the determination shall be given to each
employee to whom an option is so granted within a reasonable time after the date
of such grant.
16. Termination and Amendment of the Plan. The Plan shall terminate on
February 14, 1994. Prior thereto, the Board may terminate the Plan at any time;
provided, however, that any such termination shall not affect any options then
outstanding under the Plan.
The Board from time to time may make such modifications or amendments of
the Plan and, with the consent of the holder of an option, of the terms and
conditions of his option, as it shall deem advisable, but may not, without
further approval of the shareholders of the Corporation (a) increase the maximum
number of shares which shall be available and reserved for issue under the Plan,
or (b) change the employees or class of employees eligible to receive options.
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Neither the termination nor any modification or amendment of the Plan
shall, without the consent of the holder of an option theretofore granted under
the Plan, materially adversely affect the rights of such holder with respect to
such option.
17. Withholding by Corporation. The Corporation shall withhold all
appropriate income taxes upon the exercise of an option by a holder when
required pursuant to Section 3402 of the Code or any other applicable provision.
18. Change of Control; Acceleration of Exercise of Options. In the event
of a Change of Control, unless otherwise determined by the Committee at the time
of grant or by amendment (with the holder's consent) of such grant, all
outstanding options awarded under the Plan shall become fully exercisable and
vested. A "Change of Control" shall be deemed to occur on the date that any of
the following events occur: (A) any person or persons acting together which
would constitute a "group" for purposes of Section 13(d) of the Exchange Act
(other than the Corporation, any subsidiary, members of the Olsten family
(defined as Miriam Olsten, any lineal descendant of William and Mirian Olsten,
any spouse of any such lineal descendant, a trust established principally for
the benefit of any of the foregoing, and the executor, administrator or personal
representative of the estate of any of the foregoing) and the "permitted
transferees" of such members of the Olsten family as defined in the
Corporation's Restated Certificate of Incorporation) shall beneficially own (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, at least 25%
of the total voting power of all classes of capital stock of the Corporation
entitled to vote generally in the election of the Board; (B) either (i) Current
Directors (as herein defined) shall cease for any reason to constitute at least
a majority of the members of the Board (for these purposes, a "Current Director"
shall mean any member of the Board as of February 14, 1994, and any successor of
a Current Director whose election, or nomination for election by the
Corporation's shareholders, was approved by at least two-thirds of the Current
Directors then on the Board) or (ii) at any meeting of the shareholders of the
Corporation called for the purpose of electing directors, a majority of the
persons nominated by the Board for election as directors shall fail to be
elected; (C) the shareholders of the Corporation approve (i) a plan of complete
liquidation of the Corporation, or (ii) an agreement providing for the merger or
consolidation of the Corporation (a) in which the Corporation is not the
continuing or surviving corporation (other than a consolidation or merger with a
wholly owned subsidiary of the Corporation in which all shares of Common Stock
and the Corporation's Class B Common Stock, par value $.10 per share ("Class B
Common Stock") outstanding immediately prior to the effectiveness thereof are
changed into or exchanged for the same consideration) or (b) pursuant to which
the Common Stock and Class B Common Stock are converted into cash, securities or
other property, except a consolidation or merger of the Corporation in which the
holders of the Common Stock and Class B Common Stock immediately prior to the
consolidation or merger have, directly or indirectly, at least a majority of the
common stock of the continuing or surviving corporation immediately after such
consolidation or merger or in which the Board immediately prior to the merger or
consolidation would, immediately after the merger or consolidation, constitute a
majority of the board of directors of the continuing or surviving corporation;
or (D) the shareholders of the Corporation approve an agreement (or agreements)
providing for the sale or other disposition (in one transaction or a series of
transactions) of all or substantially all of the assets of the Corporation.
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EXHIBIT C
THE OLSTEN CORPORATION
EXECUTIVE OFFICER BONUS PLAN
SECTION 1. Purpose.
The Olsten Corporation (the "Company") hereby establishes, subject to
shareholder approval, this Executive Officer Bonus Plan (the "Plan") in order to
provide the Company's executive officers with an opportunity to earn annual
bonus compensation, contingent on the achievement of certain performance goals,
as an incentive and reward for their leadership, ability and exceptional
services.
SECTION 2. Definitions.
2.1 "Award" means the amount of bonus compensation to which an Eligible
Employee is entitled for each Plan Year as determined by the Committee pursuant
to Section 4 of the Plan.
2.2 "Code" means the Internal Revenue Code of 1986, as amended, including
applicable regulations thereunder.
2.3 "Committee" means a committee of the Company's Board of Directors (the
"Board") consisting of not less than two persons who, to the extent required to
satisfy the exception for performance-based compensation under Section 162(m) of
the Code are "outside directors" within the meaning of such section. The members
of the Committee shall serve at the pleasure of the Board.
2.4 "Determination Date" means the day immediately preceding the first day
of a Plan Year or such later date by which the Committee may establish
performance goals for a Plan Year without causing an Award to be treated as
other than performance-based compensation within the meaning of Section 162(m)
of the Code.
2.5 "Eligible Employee" means any executive officer of the Company.
2.6 "Net Income" as used in this Plan means the net income or net operating
profits of the Company or any division or subsidiary of the Company for a Plan
Year, excluding the effects of any extraordinary charges and material
acquisitions or transactions.
2.7 "Plan Year" means a fiscal year of the Company.
SECTION 3. Administration.
The Plan shall be administered by the Committee. The Committee shall have
the authority to establish performance goals for the awarding of Awards for each
Plan Year; to determine the Eligible Employees to whom Awards are to be made for
each Plan Year; to determine whether performance goals for each Plan Year have
been achieved; to authorize payment of Awards under the Plan; to adopt, alter
and repeal such administrative rules, guidelines and practices governing the
Plan as it shall deem advisable; and to interpret the terms and provisions of
the Plan. All determinations made by the Committee with respect to the Plan and
Awards thereunder shall be final and binding on all persons, including the
Company and all Eligible Employees.
C-1
<PAGE> 43
SECTION 4. Determination of Awards.
The amount of an Award for any Plan Year shall be an amount not greater
than the lesser of 200% of such Eligible Employee's annual base salary or $2.5
million, which amount shall be determined based on the achievement of one or
more performance goals established by the Committee with respect to such
Eligible Employee. Such performance goals shall be established by the Committee
based on the attainment of specified levels of Net Income for the Plan Year or
specified percentage increases in Net Income for the Plan Year over the Net
Income for the prior fiscal year. No later than the Determination Date, the
Committee shall establish (i) the Eligible Employees who shall be eligible for
an Award for such Plan Year, (ii) the Eligible Employee's annual base salary for
purposes of determining the amount of such Eligible Employee's Award for such
Plan Year, (iii) the performance goals for such Plan Year, and (iv) the
corresponding Award amounts payable under the Plan upon achievement of such
performance goals.
SECTION 5. Payment of Award.
An Award (if any) to any Eligible Employee for a Plan Year shall be paid in
a single lump sum in cash as soon as practicable after the end of the Plan Year,
provided, however, that the Committee shall have first certified in writing (i)
that a performance goal with respect to such Eligible Employee for such Plan
Year was satisfied and the level of such goal attained, and (ii) the amount of
each such Eligible Employee's Award. If an Eligible Employee dies after the end
of a Plan Year but before receiving payment of any Award, the amount of such
Award shall be paid to a designated beneficiary or, if no beneficiary has been
designated, to the Eligible Employee's estate, in the form of a lump sum payment
in cash as soon as practicable after the Award for the Plan Year has been
determined and certified in accordance with this Section 5. Notwithstanding the
foregoing, the Committee may determine, by separate employment agreement with
any Eligible Employee or otherwise, that all or a portion of an Award for a Plan
Year shall be payable to the Eligible Employee upon the Eligible Employee's
death, disability or termination of employment with the Company, or upon a
change of control of the Company, during the Plan Year.
SECTION 6. Non-transferability.
No Award or rights under this Plan may be transferred or assigned other
than by will or by the laws of descent and distribution.
SECTION 7. Amendments and Termination.
The Board may terminate the Plan at any time and may amend it from time to
time, provided, however, that no termination or amendment of the Plan shall
adversely affect the rights of an Eligible Employee or a beneficiary to a
previously certified Award. Amendments to the Plan may be made without
shareholder approval except as required to satisfy Section 162(m) of the Code.
SECTION 8. General Provisions.
8.1 Nothing set forth in this Plan shall prevent the Board from adopting
other or additional compensation arrangements. Neither the adoption of the Plan
nor any Award hereunder shall confer upon an Eligible Employee any right to
continued employment.
8.2 No member of the Board or the Committee, nor any officer or employee of
the Company acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination or interpretation taken or made with
respect to the Plan, and all members of the Board or the Committee and all
officers or
C-2
<PAGE> 44
employees of the Company acting on their behalf shall, to the extent permitted
by law, be fully indemnified and protected by the Company in respect of any such
action, determination or interpretation.
SECTION 9. Effective Date of Plan.
The Plan shall become effective on January 3, 1994, subject to approval by
the shareholders of the Company at a meeting duly called and held within twelve
months following the effective date of the Plan.
C-3
<PAGE> 45
CLASS B COMMON STOCK
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
OF THE OLSTEN CORPORATION
LOGO HERE
One Merrick Avenue
Westbury, New York 11590
The undersigned hereby appoints Frank N. Liguori, Stuart Olsten and Laurin
L. Laderoute, Jr., jointly and severally, proxies, with full power of
substitution to represent the undersigned and vote all shares of Class B Common
Stock of The Olsten Corporation (the "Company") which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Company to be
held at The Olsten Building, One Merrick Avenue, Westbury, New York on Friday,
April 29, 1994 at 10:00 a.m., and at any adjournments thereof, upon the
following matters and upon such other matters as may properly come before the
meeting:
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER. IF NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS
1, 2, 3, 4, 5 AND 6 AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES ON ANY
OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.
CONTINUED, AND TO BE VOTED, SIGNED AND DATED ON THE REVERSE SIDE.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3, 4, 5
AND 6.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3, 4, 5 AND 6.
1. Election of Directors:
FOR all nominees WITHHOLD
(except as AUTHORITY
marked) for all nominees
/ / / /
Nominees to be elected by holders of Class B Common Stock: Andrew N. Heine,
Frank N. Liguori, Miriam Olsten, Stuart Olsten, Richard J. Sharoff and Raymond
S. Troubh
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
2. Approve 1994 Stock Incentive Plan.
FOR AGAINST ABSTAIN
/ / / / / /
3. Approve amendment to 1984 Non-Qualified Stock Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
4. Approve Incentive Award under Incentive Restricted Stock Plan.
FOR AGAINST ABSTAIN
/ / / / / /
5. Approve Executive Officer Bonus Plan.
FOR AGAINST ABSTAIN
/ / / / / /
6. Approve Coopers & Lybrand as independent auditors for 1994.
FOR AGAINST ABSTAIN
/ / / / / /
7. In their discretion, upon such other matters as may properly come before the
meeting.
Please mark, date and sign as your name appears hereon and return in the
enclosed envelope. If acting as executor, administrator, trustee, etc. please
so indicate when signing. If the signer is a corporation, please sign the full
corporate name by duly authorized officer. If shares are held jointly, each
shareholder should sign. If a partnership, please sign in partnership name by
authorized person.
Dated: , 1994
----------------------------------
- -------------------------------------------------
(Signature)
- -------------------------------------------------
(Signature, if held jointly)
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA PROCESSING EQUIPMENT WILL RECORD
YOUR VOTES"
<PAGE> 46
COMMON STOCK
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
OF THE OLSTEN CORPORATION
LOGO HERE
One Merrick Avenue
Westbury, New York 11590
The undersigned hereby appoints Frank N. Liguori, Stuart Olsten and Laurin
L. Laderoute, Jr., jointly and severally, proxies, with full power of
substitution to represent the undersigned and vote all shares of Common Stock
of The Olsten Corporation (the "Company") which the undersigned is entitled to
vote at the Annual Meeting of Shareholders of the Company to be held at The
Olsten Building, One Merrick Avenue, Westbury, New York on Friday, April 29,
1994 at 10:00 a.m., and at any adjournments thereof, upon the following matters
and upon such other matters as may properly come before the meeting:
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER. IF NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS
1, 2, 3, 4, 5 AND 6 AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES ON ANY
OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.
CONTINUED, AND TO BE VOTED, SIGNED AND DATED ON THE REVERSE SIDE.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3, 4, 5
AND 6.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3, 4, 5 AND 6.
1. Election of Directors:
FOR all nominees WITHHOLD
(except as AUTHORITY
marked) for all nominees
/ / / /
Nominees to be elected by holders of Common Stock: Allan Tod Gittleson and John
M. May
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
2. Approve 1994 Stock Incentive Plan.
FOR AGAINST ABSTAIN
/ / / / / /
3. Approve amendment to 1984 Non-Qualified Stock Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
4. Approve Incentive Award under Incentive Restricted Stock Plan.
FOR AGAINST ABSTAIN
/ / / / / /
5. Approve Executive Officer Bonus Plan.
FOR AGAINST ABSTAIN
/ / / / / /
6. Approve Coopers & Lybrand as independent auditors for 1994.
FOR AGAINST ABSTAIN
/ / / / / /
7. In their discretion, upon such other matters as may properly come before the
meeting.
Please mark, date and sign as your name appears hereon and return in the
enclosed envelope. If acting as executor, administrator, trustee, etc. please
so indicate when signing. If the signer is a corporation, please sign the full
corporate name by duly authorized officer. If shares are held jointly, each
shareholder should sign. If a partnership, please sign in partnership name by
authorized person.
Dated: , 1994
----------------------------------
- -------------------------------------------------
(Signature)
- -------------------------------------------------
(Signature, if held jointly)
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA PROCESSING EQUIPMENT WILL RECORD
YOUR VOTES"
