<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
OLSTEN CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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 2, 1996
DEAR SHAREHOLDER:
You are cordially invited to attend the Annual Meeting of Shareholders of
Olsten Corporation to be held on April 26, 1996 at 9:30 a.m. at our world
headquarters located at 175 Broad Hollow Road, Melville, 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 14,
1996, 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
175 BROAD HOLLOW ROAD
MELVILLE, NEW YORK 11747-8905
------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1996
------------------------------
TO THE SHAREHOLDERS OF OLSTEN CORPORATION:
You are cordially invited to attend the Annual Meeting of Shareholders of
Olsten Corporation, a Delaware corporation (the "Company"), which will be held
at the executive offices of the Company, 175 Broad Hollow Road, Melville, New
York 11747-8905, on April 26, 1996, at 9:30 o'clock in the forenoon, New York
time, for the following purposes:
1. To elect nine Directors of the Company, three 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 a performance award
under the Company's Incentive Restricted Stock Plan;
3. To consider and vote upon a proposal to approve an incentive award
under the Company's Incentive Restricted Stock Plan;
4. To consider and vote upon a proposal to ratify and approve the
appointment by the Board of Directors of Coopers & Lybrand L.L.P. as
independent auditors for the Company for its 1996 fiscal year; and
5. 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 14, 1996 are 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 2, 1996
Melville, 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
175 BROAD HOLLOW ROAD
MELVILLE, NEW YORK 11747-8905
------------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1996
------------------------------
This Proxy Statement is furnished to shareholders of 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, 175 Broad
Hollow Road, Melville, New York 11747-8905, on April 26, 1996, at 9:30 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 14, 1996 are 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 2, 1996.
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 have no effect on the
vote. Votes are counted by employees of Chemical Mellon Shareholder Services,
L.L.C., the Company's independent transfer agent and registrar.
At the close of business on March 14, 1996, the record date for the
determination of shareholders entitled to vote at the Annual Meeting, the
Company had outstanding 50,629,465 shares of its Common Stock, par value $.10
per share ("Common Stock"), and 13,832,943 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 three 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 1995 Annual Report to Shareholders, containing the financial
statements of the Company and a report with respect thereto by Coopers & Lybrand
L.L.P., 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 14, 1996, 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 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 STOCK COMMON STOCK
(IF CLASS B CLASS (IF CLASS B
CLASS B COMMON STOCK B COMMON 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 120,562(3) 8,441,309(3) 8,561,871(3) -- 61.0% 14.5%
P.O. Box 326
Old Westbury, NY
Stuart Olsten 158,437(4) 3,566,545(4) 3,724,982(4) -- 25.7% 6.9%
175 Broad Hollow Road
Melville, NY
Cheryl Olsten 135,000(5) 1,647,410(5) 1,782,410(5) -- 11.9% 3.4%
175 Broad Hollow Road
Melville, NY
Andrew N. Heine 11,629(6) 3,127,610(6) 3,139,239(6) -- 22.6% 5.8%
114 West 47th Street
New York, NY
Robert Riedinger 3,211,215(7) 3,211,215(7) 23.2% 6.0%
6065 Roswell Road N.E.
Atlanta, GA
Frank N. Liguori 826,354 9 826,363 1.6% -- 1.6%
Stuart R. Levine 1,080 --
John M. May 30,000(8) --
Richard J. Sharoff 6,822(9) --
Raymond S. Troubh 63,600(10) 58,209(10) 121,809(10) -- -- --
Josh S. Weston 750 --
Robert A. Fusco 103,125(11) --
Richard A. Piske, III 30,187(12) --
Anthony J. Puglisi 14,250(13) --
RCM Capital Management 4,070,437(14) 8.0%
Four Embarcadero Center
San Francisco, CA
T. Rowe Price Associates,
Inc. 2,879,380(15) 5.7%
100 East Pratt Street
Baltimore, MD
All executive officers and 1,431,716(16) 13,629,877(17) 15,061,593(16)(17) 2.8% 97.8% 23.4%
Directors as a group
(15 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.
(footnotes continued on next page)
2
<PAGE> 6
(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 267,238 shares of Class B Common Stock. She has
sole voting and investment power with respect to 6,300,451 shares of Class
B Common Stock held under six trusts and has sole voting and investment
power with respect to 1,873,620 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. Her holding
includes 9,000 shares of Common Stock that may be purchased pursuant to
presently exercisable stock options.
(4) Mr. Olsten owns of record 14,062 shares of Common Stock and has shared
voting and investment power as a trustee with respect to 45,000 shares of
Common Stock owned by a trust for the benefit of his son and with respect
to 90,000 shares of Common Stock owned by two trusts for the benefit of his
niece and nephew, as to which shares he disclaims beneficial ownership. His
holding includes 9,375 shares of Common Stock that may be purchased
pursuant to presently exercisable stock options. Mr. Olsten owns of record
1,876,812 shares of Class B Common Stock and has shared voting and
investment power as a trustee with respect to 1,563,805 shares of Class B
Common Stock owned by a trust for his benefit and with respect to 83,605
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 42,323 shares of Class B Common Stock issuable upon
exercise of Class B Common Stock warrants held by him.
(5) Ms. Olsten has shared voting and investment power as a trustee with respect
to 90,000 shares of Common Stock owned by two trusts for the benefit of her
two children and with respect to 45,000 shares of Common Stock held by a
trust for the benefit of her nephew, as to which shares she disclaims
beneficial ownership. Ms. Olsten has shared voting and investment power as
a trustee with respect to 1,563,805 shares of Class B Common Stock owned by
a trust for her benefit and with respect to 83,605 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 4,500 shares of Common Stock that may be purchased pursuant to
presently exercisable stock options, 5,250 shares of Common Stock as to
which Mr. Heine has an indirect beneficial interest and 1,200 shares owned
by Mr. Heine's wife, as to which shares he disclaims beneficial ownership.
Mr. Heine has shared voting and investment power as a trustee with respect
to 1,563,805 shares of Class B Common Stock owned by a trust for the
benefit of Stuart Olsten and as a trustee with respect to 1,563,805 shares
of Class B Common Stock owned by a trust for the benefit of Cheryl Olsten,
as to which shares Mr. Heine disclaims beneficial ownership.
(footnotes continued on next page)
3
<PAGE> 7
(7) Mr. Riedinger has shared voting and investment power as a trustee with
respect to 1,563,805 shares of Class B Common Stock owned by a trust for
the benefit of Stuart Olsten, 1,563,805 shares of Class B Common Stock
owned by a trust for the benefit of Cheryl Olsten and 83,605 shares of
Class B Common Stock owned by a trust for the benefit of descendants of Ms.
Olsten, as to which shares Mr. Riedinger disclaims beneficial ownership.
(8) Includes 18,000 shares that may be purchased pursuant to presently
exercisable stock options.
(9) Includes 2,025 shares held in custodial accounts for Mr. Sharoff's two
children and 4,500 shares that may be purchased pursuant to presently
exercisable stock options.
(10) Includes 9,000 shares of Common Stock and 58,209 shares of Class B Common
Stock that may be purchased pursuant to presently exercisable stock
options.
(11) Includes 41,250 shares that may be purchased pursuant to presently
exercisable stock options.
(12) Includes 19,312 shares that may be purchased pursuant to presently
exercisable stock options.
(13) Includes 3,000 shares that may be purchased pursuant to presently
exercisable stock options.
(14) Based on a Schedule 13G dated February 5, 1996 and filed with the
Securities and Exchange Commission. RCM Capital Management held sole voting
power as to 3,017,287 of such shares, sole dispositive power as to
4,055,437 of such shares and shared dispositive power as to 15,000 of such
shares. These share amounts have been adjusted for the Company's
three-for-two stock split declared on February 16, 1996.
(15) Based on a Schedule 13G dated February 14, 1996 and filed with the
Securities and Exchange Commission. T. Rowe Price Associates, Inc. held
sole voting power as to 57,355 of such shares and sole dispositive power as
to 2,879,380 of such shares. These share amounts have been adjusted for the
Company's three-for-two stock split declared on February 16, 1996.
(16) Includes 1,290,940 shares of Common Stock owned by executive officers and
Directors and 140,776 shares of Common Stock that may be purchased pursuant
to presently exercisable stock options.
(17) Includes 13,529,345 shares of Class B Common Stock owned by executive
officers and Directors and 100,532 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.
PROPOSAL 1
ELECTION OF DIRECTORS
The nine persons named below, all of whom are presently Directors of the
Company, have been nominated for election as Directors of the Company. Three
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.
4
<PAGE> 8
NOMINEES FOR ELECTION BY HOLDERS OF COMMON STOCK
JOHN M. MAY
Mr. May, age 68 and a Director of the Company since 1989, has been an
independent management consultant for more than five years. He is a director of
NAI Technologies, Inc.
RAYMOND S. TROUBH
Mr. Troubh, age 69 and a Director of the Company since 1993, has been a
financial consultant for more than five years. He is a director of ADT Limited,
America West Airlines, Inc., Applied Power Inc., ARIAD Pharmaceuticals, Inc.,
Becton Dickinson and Company, Benson Eyecare Corporation, Diamond Offshore
Drillings, Inc., Foundation Health Corporation, General American Investors
Company, Manville Corporation, Petrie Stores Corp., Riverwood International
Corporation, Time Warner, Inc., Triarc Companies, Inc. and WHX Corporation.
JOSH S. WESTON
Mr. Weston, age 67 and a Director of the Company since 1995, has been
Chairman and Chief Executive Officer of Automatic Data Processing, Inc., a
provider of computerized transaction processing, data communication and
information services, since 1982. He is a director of Automatic Data Processing,
Inc., Public Service Enterprise Group Company and Shared Medical Systems, Inc.
NOMINEES FOR ELECTION BY HOLDERS OF CLASS B COMMON STOCK
ANDREW N. HEINE
Mr. Heine, age 67 and a Director of the Company since 1969, has been of
counsel to the law firm of Gordon Altman Butowsky Weitzen Shalov & Wein since
August 1995. For more than five years prior thereto he was an attorney in
independent private practice. He is a director of Citizens Utilities Company and
FPA Corporation.
STUART R. LEVINE
Mr. Levine, age 48 and a Director of the Company since 1995, has been Chief
Executive Officer of Dale Carnegie & Associates, Inc., a global provider of
corporate training in leadership and personal development, since September 1992.
He was Chief Operating Officer of Dale Carnegie & Associates, Inc. from
September 1989 to September 1992.
FRANK N. LIGUORI
Mr. Liguori, age 49 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 71 and a Director of the Company since 1993, is a
significant shareholder of the Company. She is the mother of Stuart Olsten, a
Director and Vice Chairman and President of the Company.
5
<PAGE> 9
STUART OLSTEN
Mr. Olsten, age 43 and a Director of the Company since 1986, has been Vice
Chairman of the Company since August 1994 and President of the Company since
April 1990. He was Chief Operating Officer of the Company from April 1990
through July 1993 and 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 49 and a Director of the Company since 1994, has been
Chairman and Chief Executive Officer of Superior Pasta, L.L.C., a developmental
stage company in the food industry, since January 1996. From July 1995 to
December 1995 he was a consultant to the food industry. From January 1992 to
June 1995, he was President and Chief Executive Officer of Haifoods, Inc., a
holding company in the food and beverage industries. 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.
------------------------------------
The Board held eight meetings during the past fiscal year. Each outside
member of the Board is paid an annual retainer of $30,000, payable in monthly
installments, and $1,500 for each meeting of the Board attended. The Board has a
standing compensation committee, comprised of Messrs. Heine, May, Troubh and
Weston, and a standing audit committee, comprised of Messrs. Heine, Levine, May
and Sharoff. The compensation committee and the audit committee held two
meetings and three meetings, respectively, in 1995. Each Director who was a
committee member was paid $1,000 for each such meeting attended. 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 1995, options to purchase 4,500 shares of Common Stock at a per share
exercise price of $26.25 were granted to each of Messrs. Heine, Levine, May,
Sharoff, Troubh and Weston and Mrs. Olsten, under the Company's 1990
Non-Qualified Stock Option Plan for Non-Employee Directors and Consultants, as
amended and restated. All such options will become vested and fully exercisable
in six months from the date of grant, which was December 7, 1995. All share
amounts and prices have been adjusted for the Company's three-for-two stock
split declared on February 16, 1996.
Directors who are not employees of the Company are covered by a Retirement
Plan for Outside Directors and Consultants pursuant to which retirement benefits
are payable to a Director who has served for at least five years. For a Director
who has served 20 or more years, the retirement benefit is 100% of the sum of
all Board retainer and committee fees paid to such Director during the
three-year period immediately preceding his or her departure from the Board,
which sum is to be paid in 20 equal, quarterly installments following the
Director's departure from the Board. For a Director who has served 15 to 19
years, 10 to 14 years and 5 to 9 years, the applicable percentage of the sum of
the three-year Board retainer and committee fees to which the Director is
entitled is 75%, 50% and 25%, respectively. A Director may elect to receive
distribution of his or her retirement benefit in a lump sum equal to the present
value of the retirement benefit instead of in quarterly installments.
In 1995 the Company had sales of temporary personnel to Automatic Data
Processing, Inc. of approximately $535,000, and the Company purchased payroll
processing services from Automatic Data Processing, Inc. of approximately
$262,000. Mr. Weston, a Director of the Company, is Chairman and Chief Executive
Officer of Automatic Data Processing, Inc.
6
<PAGE> 10
Section 16(a) of the Exchange Act requires certain persons, including the
Company's Directors and executive officers, to file reports with the Securities
and Exchange Commission regarding beneficial ownership of equity securities of
the Company. In January 1996 Richard J. Sharoff, a Director of the Company,
filed one late report covering the transfer of the Company's equity securities
by him in November 1995.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Heine, May, Troubh and Weston serve as members of the Compensation
Committee. Since August 1995, Mr. Heine has been of counsel to the law firm of
Gordon Altman Butowsky Weitzen Shalov & Wein. Mr. Heine's compensation from the
firm is based in part on fees generated by clients originated by Mr. Heine, of
which the Company is one.
------------------------------------
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation of the Company's Chief Executive Officer and the other
four most highly compensated executive officers (the "Named Officers") for
services as executive officers of the Company for the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS
--------------------------------------- --------------------------
OTHER RESTRICTED SECURITIES
NAME AND ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS($)(1) OPTIONS(#)(2) COMPENSATION($)(3)
- --------------------------- ----- --------- ---------- --------------- ------------ ------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Frank N. Liguori 1995 $900,000 $1,175,000 $ 1,411,000(4) $175,380
Chairman and Chief 1994 761,538 900,000 121,534
Executive Officer 1993 621,154 500,000 $6,751,563 95,445
Stuart Olsten 1995 540,865 500,000 37,500 126,467
Vice Chairman and 1994 412,500 270,000 37,500 51,630
President 1993 299,519 150,000 164,250 36,455
Robert A. Fusco 1995 514,904 300,000 37,500 73,883
Executive Vice President 1994 401,923 270,000 37,500 45,572
and President, Olsten 1993 302,390 150,000 821,250 43,500 33,542
Kimberly Quality Care
Richard A. Piske, III 1995 365,835 220,000 30,000 55,469
Executive Vice President 1994 301,539 190,506 22,500 43,675
and President, Olsten 1993 220,433 100,000 136,875 21,750 28,705
Staffing Services
Anthony J. Puglisi 1995 260,288 125,000 22,500 33,909
Senior Vice President-- 1994 213,654 80,000 12,000 24,744
Finance and Treasurer 1993 121,154 30,000 164,250 4,500
</TABLE>
7
<PAGE> 11
- ---------------
(1) The number and value of the aggregate restricted (unvested) share holdings
of the Named Officers at December 31, 1995 are as follows:
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
RESTRICTED RESTRICTED
NAME SHARES SHARES
--------------------------------------------------- ------------- ----------
<S> <C> <C>
F. N. Liguori...................................... 78,750 $2,073,750
S. Olsten.......................................... 5,400 142,200
R. A. Fusco........................................ 27,000 711,000
R. A. Piske........................................ 4,500 118,500
A. J. Puglisi...................................... 5,400 142,200
</TABLE>
As to Mr. Liguori, 375,000 restricted shares were awarded to him in 1993.
206,250 of such shares vested upon grant, and the balance (168,750 shares)
vest in increments of 33 1/3% each year for three years, beginning in 1994.
56,250 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 Puglisi, 9,000
restricted shares, 45,000 restricted shares, 7,500 restricted shares and
9,000 restricted shares, respectively, were awarded in 1993, and these
shares vest in increments of 20% each year for five years, beginning in
1994. Dividends are paid on the restricted shares if and to the extent paid
on the Company's Common Stock generally.
In addition, and not already reflected in this footnote, a long-term
incentive award was made to Mr. Liguori in November 1993 of up to 300,000
restricted shares of Common Stock based on the Company's achieving certain
aggregate net income target levels in 1994, 1995 and 1996, such shares to be
issued in installments in 1997, 1998 and 1999. See also the performance
award to Mr. Liguori described in Proposal 2.
With regard to Messrs. Fusco and Piske, see also the award reported in the
Long-Term Incentive Plans -- Awards in Last Fiscal Year table.
All share amounts in this footnote have been adjusted for the three-for-two
stock split declared on February 16, 1996.
(2) Option amounts have been adjusted for the three-for-two stock split declared
on February 16, 1996.
(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) Amount reimbursed for payment of taxes.
8
<PAGE> 12
STOCK OPTIONS
The following table contains information concerning the grant of stock
options to the Named Officers during the Company's last fiscal year. Option
amounts and exercise prices have been adjusted for the three-for-two stock split
declared on February 16, 1996.
OPTION 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.............. 37,500 5.9% $24.83 12/20/05 $585,750 $1,484,250
Robert A. Fusco............ 37,500 5.9 24.83 12/20/05 585,750 1,484,250
Richard A. Piske, III...... 30,000 4.7 24.83 12/20/05 468,600 1,187,400
Anthony J. Puglisi......... 22,500 3.5 24.83 12/20/05 351,450 890,550
</TABLE>
- ---------------
(1) The options were granted at an exercise price equal to the fair market value
of the Company's Common Stock on the date of grant. The options have a ten
year term and become exercisable over a four year period in increments of
25% per year beginning with the first anniversary of the date of grant.
(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission and are not
intended to forecast possible future appreciation of the Company's stock
price.
The following table sets forth information with respect to the Named
Officers concerning the exercise of options during the last fiscal year and
unexercised options held as of the end of that year. Share and option amounts
have been adjusted for the three-for-two stock split declared on February 16,
1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
SHARES YEAR END(#) AT FISCAL YEAR END($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Frank N. Liguori......... 295,312 $4,344,797
Stuart Olsten............ 9,375 65,625 $ 53,125 $ 215,625
Robert A. Fusco.......... 5,625 115,313 37,875 87,375 365,000 416,485
Richard A. Piske, III.... 3,375 45,664 19,875 57,750 188,308 241,550
Anthony J. Puglisi....... 5,250 33,750 37,625 105,375
</TABLE>
9
<PAGE> 13
LONG-TERM INCENTIVE PLAN AWARD
The following table sets forth information with respect to a long-term
incentive award made to Messrs. Fusco and Piske during 1995.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
PERFORMANCE
NUMBER OF OR OTHER ESTIMATED FUTURE PAYOUTS UNDER
SHARES, UNITS PERIOD UNTIL NON-STOCK PRICE-BASED PLANS
OR OTHER MATURATION -------------------------------
NAME RIGHTS OR PAYOUT THRESHOLD TARGET MAXIMUM
- --------------------------------------- ------------- ------------ --------- ------- -------
<S> <C> <C> <C> <C> <C>
Robert A. Fusco........................ (2) 1996-1998 60,000 97,500 112,500
Richard A. Piske, III.................. (3) 1996-1998 37,500 60,000 75,000
</TABLE>
- ---------------
(1) In December 1995, the Compensation Committee awarded (the "Incentive
Award"), subject to shareholder approval, to Mr. Fusco and Mr. Piske (each a
"Grantee") the right to receive shares of Common Stock pursuant to the
Company's Incentive Restricted Stock Plan. 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 pre-tax profits for the 1996, 1997 and 1998 fiscal years
(the "Measuring Period") by the respective operating division for which each
of the Grantees is responsible (each, a "Division"). See Proposal 3 for a
more complete description of the Incentive Award.
(2) If during the Measuring Period, Mr. Fusco's Division (HealthCare) achieves
aggregate net income of (i) $285 million, Mr. Fusco will receive 60,000
shares, (ii) $312 million, Mr. Fusco will receive 97,500 shares, or (iii)
$320 million, Mr. Fusco will receive 112,500 shares. At a level of pre-tax
profits aggregating more than the threshold level but less than the maximum
level, Mr. Fusco will receive a number of shares determined on a sliding
scale.
(3) If during the Measuring Period, Mr. Piske's Division (Staffing Services
(U.S. and Canadian Branch Systems)) achieves aggregate net income of (i)
$185 million, Mr. Piske will receive 37,500 shares, (ii) $215 million, Mr.
Piske will receive 60,000 shares, or (iii) $225 million, Mr. Piske will
receive 75,000 shares. At a level of pre-tax profits aggregating more than
the threshold level but less than the maximum level, Mr. Piske will receive
a number of shares determined on a sliding scale.
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>
$ 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
</TABLE>
(continued on next page)
10
<PAGE> 14
<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>
$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
1,450,000................................... 348,000 522,000 696,000 870,000
1,550,000................................... 372,000 558,000 744,000 930,000
1,650,000................................... 396,000 594,000 792,000 990,000
1,750,000................................... 420,000 630,000 840,000 1,050,000
1,850,000................................... 444,000 666,000 888,000 1,110,000
1,950,000................................... 468,000 702,000 936,000 1,170,000
2,050,000................................... 492,000 738,000 984,000 1,230,000
2,150,000................................... 516,000 774,000 1,032,000 1,290,000
2,250,000................................... 540,000 810,000 1,080,000 1,350,000
2,350,000................................... 564,000 846,000 1,128,000 1,410,000
2,450,000................................... 588,000 882,000 1,176,000 1,470,000
2,550,000................................... 612,000 918,000 1,224,000 1,530,000
</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
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 Puglisi are 24, 20, 10, 15, and 2, 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 such term is used in the description of the
Performance Award to Mr. Liguori -- 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 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).
Upon a Change of Control, all outstanding stock options granted to Mr.
Liguori under the 1994 Stock Incentive Plan will become fully exercisable and
vested. In addition, pursuant to the long-term incentive restricted stock award
to Mr. Liguori in November 1993 (the "1993 Incentive Award") and the performance
award (the "Performance Award") to Mr. Liguori under the Company's Incentive
Restricted Stock Plan
11
<PAGE> 15
(assuming shareholder approval of such Performance Award -- See Proposal 2), in
the event that (i) there is a Change of Control, (ii) Mr. Liguori is relieved of
his current positions with the Company without cause, or (iii) Mr. Liguori's
employment is terminated without cause, the Company's aggregate net income for
the measuring period in each such award will be deemed to exceed the maximum
performance target thereunder and the Company will immediately issue and grant
to Mr. Liguori 300,000 shares of Common Stock under the 1993 Incentive Award and
150,000 shares of Common Stock under the Performance Award, the maximum number
of shares which he is entitled to receive thereunder. In the event that, after
the performance period under the 1993 Incentive Award and the Performance Award
but before Mr. Liguori has received all of the shares to which he is entitled,
(i) there is a Change of Control, (ii) Mr. Liguori is relieved of his current
positions with the Company without cause, or (iii) Mr. Liguori's employment is
terminated without cause, the Company will accelerate the issuance of all such
shares. Share amounts have been adjusted for the three-for-two stock split
declared on February 16, 1996.
Under Mr. Liguori's employment agreement, 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 Internal Revenue Code
of 1986, as amended, 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.
The Company has entered into change in control agreements with each of
Messrs. Robert Fusco, Richard Piske and Anthony Puglisi. The agreements are for
a term in effect through August 9, 1997 and are automatically extended for
successive one-year terms thereafter unless the Company provides one-year's
prior notice that it does not wish to extend the term. In addition, if a Change
in Control (defined substantially the same as with respect to Mr. Liguori,
above) occurs during the term of the agreement, the agreement continues in
effect for a period of 36 months beyond the month in which the Change in Control
occurs.
If a Change in Control occurs and the executive's employment is terminated
during the term of the agreement for any reason except termination by the
Company for "cause," termination by the executive other than for "good reason"
or termination because of death, retirement or disability, the executive will
generally be entitled to receive a cash lump sum equal to 2.99 times the average
of the annual compensation payable to the executive by the Company for the five
calendar years preceding the calendar year in which a Change in Control occurs.
In addition, all outstanding stock options granted to the executive will become
fully exercisable and vested, and for the 36 month period after the date of the
executive's termination of employment, the Company will, upon request from the
executive, arrange to provide the executive with health, life, disability and/or
accident benefits substantially similar to those the executive received
immediately prior to the termination unless and until the executive receives
such benefits from a subsequent employer.
In addition, with respect to Messrs. Fusco and Piske (each, a "Grantee"),
pursuant to the Executive Officer Incentive Stock Award (the "Incentive
Award -- See Proposal 3), in the event that there is a Change of Control during
the 1996 to 1998 measuring period, the cumulative pre-tax profits for the
division of each Grantee will be deemed to be the maximum target level of
pre-tax profits and the Company will immediately issue and grant Grantee the
maximum number of shares he is entitled to receive under the Incentive Award;
provided, however, that if the grant of shares to a Grantee under the Incentive
Award (and any payments payable under any other plan, program, arrangement or
agreement maintained by the Company or an affiliate) would constitute an "excess
parachute payment" (as described in Section 280G of the Code), the number of
shares granted to Grantee will be reduced (by the minimum possible amount) so as
not to trigger the golden parachute provisions of the Code. In the event that
there is a Change of Control after the measuring period expires but before a
Grantee has received all of the shares to which he is entitled under the
Incentive Award, the Company will accelerate the issuance of all shares to the
Grantee.
12
<PAGE> 16
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 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 Vice Chairman and President. Beginning in 1994, the
Chief Executive Officer's base salary cannot be set lower than the minimum base
salary provided for in his 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 and the Vice Chairman and President, the Committee
approved a bonus incentive predicated on the attainment of specific levels of
net income for the Company. The Committee also approved bonus incentives
predicated on the achievement of certain profit targets in setting the incentive
compensation for the Presidents of Olsten Kimberly QualityCare and Olsten
Staffing Services. The Committee also considered the overall performance of
these executives in making the final determination of their bonus incentives.
The Chief Executive Officer recommends the incentive compensation of the
Company's other senior executives, including the other Named Officer, 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. 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 and the Vice Chairman and President, 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 Committee approved a long-term
incentive award of restricted shares of the Company's Common Stock for the
Presidents of Olsten Kimberly QualityCare and Olsten Staffing Services and
another senior executive based on the attainment of certain levels of pre-tax
profits in 1996, 1997 and 1998 by the divisions for which such individuals are
responsible, such shares to be granted in 1999, 2000 and 2001. Awards to the
Chief Executive Officer and the Vice Chairman and President are established
separately and are based, among other things, on the Committee's analysis of
their respective past and expected future contributions to the Company's
achievement of its long-term performance goals.
13
<PAGE> 17
CEO COMPENSATION
Based on the Committee's assessment of the Company's business and financial
performance and the Chief Executive Officer's individual contributions to such
performance, the Committee in 1995 increased the Chief Executive Officer's base
salary from $900,000 to $1,000,000. Under the Company's Executive Officer Bonus
Plan, which was approved by shareholders at the 1994 Annual Meeting, and based
on his attainment of performance goals previously established for the 1995 plan
year, the Chief Executive Officer was awarded bonus compensation in 1995 of
$1,175,000, which was 117.5% of his current base salary.
The Company received a tax benefit from the Chief Executive Officer's
exercise in 1995 of non-qualified stock options that had been granted to him in
1990. The Committee authorized payment of $1,411,000 to the Chief Executive
Officer to partially compensate him for his tax obligations in connection with
that exercise. The Committee also approved a performance award for the Chief
Executive Officer of up to 150,000 restricted shares of the Company's Common
Stock (as adjusted for the three-for-two stock split declared on February 16,
1996) based upon the Company's achieving certain net income levels in 1996 and
its two prior fiscal years, 1994 and 1995, such shares to be granted in 1997.
DEDUCTIBILITY OF COMPENSATION
Beginning in 1994, Section 162(m) of the Internal Revenue Code of 1986
generally limits 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 such
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>
Andrew N. Heine, Chairman Raymond S. Troubh
John M. May Josh S. Weston
</TABLE>
14
<PAGE> 18
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 S&P MidCap
400 Index and a Peer Group Index for the period of five years commencing
December 29, 1990 and ending December 29, 1995.
The Peer Group Index is comprised of the following publicly traded
companies: Kelly Services, Inc.; Manpower Inc.; Robert Half International Inc.;
Staff Builders, Inc.; Uniforce Services, Inc; and Volt Information Sciences,
Inc. Adia Services, Inc., which was included in last year's performance graph,
is not included in this year's performance graph because its shares are no
longer publicly traded. Manpower Inc. has been added to this year's performance
graph.
The line graph assumes that $100 was invested on December 29, 1990 in each
of the Company's Common Stock, the S&P MidCap 400 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 Olsten Cor- S&P MidCap Peer Group
(Fiscal Year Covered) poration 400 Index Index
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 208.04 150.10 88.45
1992 348.09 168.01 114.90
1993 386.59 190.85 120.93
1994 420.99 184.01 168.38
1995 528.69 236.74 193.67
</TABLE>
------------------------
15
<PAGE> 19
PROPOSAL 2
APPROVAL OF PERFORMANCE AWARD UNDER
THE COMPANY'S INCENTIVE RESTRICTED STOCK PLAN
GENERAL
On December 21, 1995, the Compensation Committee of the Board awarded (the
"Performance Award") to Frank N. Liguori ("Grantee"), subject to shareholder
approval, the right to receive shares of Common Stock pursuant to the Company's
Incentive Restricted Stock Plan which was adopted on May 17, 1990. The number of
shares deliverable pursuant to the Performance 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
aggregate net income by the Company for its 1996 fiscal year (the "Performance
Period") and its two prior fiscal years.
Share numbers in the following description of the Performance Award have
been adjusted for the three-for-two stock split declared on February 16, 1996.
NUMBER OF SHARES SUBJECT TO AWARD
The number, if any, of shares awardable to Grantee under the Performance
Award is determined by reference to whether net income of the Company during the
Performance Period, when combined with net income of the Company for each of its
1994 and 1995 fiscal years ($71 million and $90 million, respectively) (the
Performance Period and the 1994 and 1995 fiscal years being defined as the
"Measuring Period"), exceeds certain net income targets. If during the Measuring
Period, the Company achieves (as certified in writing by the Compensation
Committee) aggregate net income of (i) $240 million (the "Performance Target"),
Grantee will receive 75,000 shares of Common Stock, or (ii) $270 million or more
(the "Enhanced Performance Target"), Grantee will receive 150,000 shares of
Common Stock. At a level of net income aggregating more than $240 million but
less than $270 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 $240 million. For purposes of the
Performance 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.
GRANT OF SHARES
Except as described below, shares issuable to Grantee will be issued and
granted, and will immediately vest on January 4, 1997.
If Grantee dies or becomes permanently disabled during the Performance
Period, he or his estate will be issued and granted either the minimum or the
maximum number of shares, as the case may be, to which he would be entitled for
the Performance Period, so long as projected net income for the Measuring Period
equals or exceeds the Performance Target or the Enhanced Performance Target. If
Grantee dies or becomes disabled during the Performance Period and the Company's
net income is projected to be less than the Performance Target, the Performance
Award will not be granted. If Grantee dies or becomes permanently disabled after
the Performance Period, all unissued shares to which he would have been entitled
will be immediately granted and issued.
16
<PAGE> 20
CHANGE OF CONTROL AND TERMINATION OF EMPLOYMENT
In the event that, during the Performance Period (i) there is a Change of
Control (as defined below), (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 exceed the Enhanced Performance Target and the Company will
immediately issue and grant Grantee 150,000 shares of Common Stock under the
Performance Award, the maximum number of shares which he is entitled to receive.
In the event that, after the Performance 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 position 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 the Performance Award to
Grantee is, upon a Change of Control, subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (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.
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 Securities Exchange Act of
1934 (the "Exchange Act") (other than the Company, any subsidiary of the
Company, 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 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
November 8, 1993, 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
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
17
<PAGE> 21
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.
TRANSFER OF PERFORMANCE AWARD
The Performance Award is not assignable or transferable by Grantee, other
than by will or by the laws of descent and distribution.
WITHHOLDING
Grantee must pay to the Company, or make arrangements for the payment of,
any federal, state or local taxes required by law to be withheld with respect to
the Performance Award.
AMENDMENT OR TERMINATION OF PERFORMANCE AWARD
The Compensation Committee may at any time terminate or amend the
Performance Award, provided that such termination or amendment shall not,
without Grantee's consent, adversely affect Grantee's rights under the
Performance Award. Amendments may be made without the approval of the
shareholders of the Company except as required to satisfy Rule 16b-3 (or any
successor rule) under the Exchange Act or Section 162(m) of the Code.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PERFORMANCE AWARD
The following is a summary of certain Federal income tax aspects with
respect to the Performance Award based upon the laws in effect on the date
hereof.
Generally, no taxable income is recognized by Grantee upon the awarding of
the Performance Award. Upon issuance of shares of Common Stock pursuant to the
Performance Award, Grantee will recognize ordinary income equal to the fair
market value of such shares on the date of issuance. 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 date.
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 limitations imposed by Section 162(m) of
the Code and, in the case of payment upon a Change of Control, Section 280G of
the Code. Section 162(m) of the Code generally limits to $1 million per year the
Company's deduction with respect to compensation paid to its chief executive
officer and each of its four other highest compensated officers. This deduction
limit does not apply to certain "performance-based compensation" which, among
other things, is paid on account of the attainment of one or more
pre-established, objective performance goals. The Company intends that
compensation paid to Grantee pursuant to the Performance Award will generally
qualify as "performance-based compensation" under Section 162(m) of the Code,
and, consequently, should not be subject to the $1 million deduction limit
thereunder. If the Performance Award becomes payable upon a Change of Control,
Section 280G of the Code would disallow a deduction to the Company, and the
Grantee would be subject to a non-deductible 20% excise tax under Section 4999
of the Code, to the extent such payment constitutes an "excess parachute
payment" (as described in Section 280G of the Code).
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 Performance Award. Also, the specific state and local
tax consequences to Grantee and the Company may vary, depending upon the laws of
the various states and localities and the individual circumstances of the
Grantee.
18
<PAGE> 22
REQUIRED VOTE
In voting on approval of the Performance 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 Performance 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 Performance Award.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS OF THE COMPANY VOTE
FOR APPROVAL OF THE PERFORMANCE AWARD.
PROPOSAL 3
APPROVAL OF EXECUTIVE OFFICER INCENTIVE STOCK AWARD UNDER
THE COMPANY'S INCENTIVE RESTRICTED STOCK PLAN
GENERAL
On December 21, 1995, the Compensation Committee of the Board awarded (the
"Incentive Award"), subject to shareholder approval, to three executive officers
of the Company, Robert A. Fusco, Richard A. Piske, III and Gerald J. Kapalko
(each, a "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. The
number of shares deliverable to a Grantee pursuant to the Incentive Award is
determined by, and the right to receive such shares is generally conditioned
upon, the attainment of certain levels of pre-tax profits during the 1996, 1997
and 1998 fiscal years (the "Measuring Period") with respect to the respective
operating division for which each of the Grantees is responsible: HealthCare
("HealthCare"), Staffing Services (U.S. and Canadian Branch System) ("Staffing
Services"), and License and Latin America ("License and Latin America") (each, a
"Division").
Share numbers in the following description of the Incentive Award have been
adjusted for the three-for-two stock split declared on February 16, 1996.
NUMBER OF SHARES SUBJECT TO AWARD
The target levels of pre-tax profits for each Division and the
corresponding number of shares awardable to each Grantee under the Incentive
Award are set forth in the following table:
<TABLE>
<CAPTION>
CUMULATIVE
PRE-TAX RESTRICTED
PROFITS (IN SHARES
GRANTEE DIVISION MILLIONS) GRANTED
---------------------------------- ----------- ----------
<S> <C> <C> <C>
Robert A. Fusco................... HealthCare $ 285 60,000
295 75,000
312 97,500
320 112,500
Richard A. Piske, III............. Staffing Services 185 37,500
200 45,000
215 60,000
225 75,000
Gerald J. Kapalko................. License and Latin America 34 10,500
36 15,000
40 22,500
45 30,000
</TABLE>
19
<PAGE> 23
At a level of pre-tax profits aggregating more than the minimum but less
than the maximum level of target pre-tax profits set forth above, each Grantee
will receive a number of shares to be determined by a sliding scale, but no
shares will be issuable to a Grantee if pre-tax profits of his Division for the
Measuring Period aggregate less than the minimum level of target pre-tax
profits.
For purposes of the Incentive Award, the determination of pre-tax profits
for a Division excludes 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.
GRANT OF SHARES
Except as described below, shares issuable to a Grantee will be issued and
granted, and will immediately vest in the following installments, provided that
the Grantee remains employed by the Company on each of the respective dates: 50%
of the total shares on January 4, 1999; 30% on January 4, 2000; and 20% on
January 4, 2001.
If a Grantee dies or become 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 pre-tax
profits for the Division for such year equal or exceed the pre-tax profits
target for that year as set forth below. In determining the number of shares to
be issued, pre-tax profits of Grantee's Division will be projected for the year
of death or disability and will be compared to target levels of pre-tax profits
for such year (the "Annual Target Level") and enhanced target levels of pre-tax
profits for such year (the "Annual Enhanced Level") and the Division's pre-tax
profits during any remaining years in the Measuring Period will be assumed to
reach the target level reached during the year of death or disability (i.e.,
either the Annual Target Level or the Annual Enhanced Level). If a Grantee dies
or becomes disabled during a year in which his Division's pre-tax profits are
projected to be less than the Annual Target Level for that year, no shares will
be issued with respect to that year.
The following are the Annual Target Level and Annual Enhanced Level of
pre-tax profits for each of the Divisions:
<TABLE>
<CAPTION>
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
ANNUAL TARGET LEVELS (IN MILLIONS)
HealthCare.................................................. $88 $104 $120
Staffing Services........................................... 60 72 83
License and Latin America................................... 11 13 16
ANNUAL ENHANCED LEVELS (IN MILLIONS)
HealthCare.................................................. 90 107 123
Staffing Services........................................... 63 75 87
License and Latin America................................... 12 15 18
</TABLE>
If a Grantee dies or becomes permanently disabled after the Measuring
Period, all unissued shares to which he would have been entitled will be
immediately vested and issued.
20
<PAGE> 24
CHANGE OF CONTROL
With respect to each Grantee, in the event that, during the Measuring
Period there is a Change of Control (as defined below) the cumulative pre-tax
profits for the Division of such Grantee for the Measuring Period will be deemed
to be the maximum target level of pre-tax profits and the Company will
immediately issue and grant Grantee the maximum number of shares he is entitled
to receive under the Incentive Award; provided, however, in the event that the
grant of shares to a Grantee under the Incentive Award (and any payments payable
under any other plan, program, arrangement or agreement maintained by the
Company or an affiliate) would constitute an "excess parachute payment" (as
described in Section 280G of the Code), the number of shares granted to Grantee
will be reduced (by the minimum possible amount) so as not to trigger the golden
parachute provisions of the Code.
In the event that, after the Measuring Period expires but before a Grantee
has received all of the shares to which he is entitled, there is a Change of
Control, the Company will accelerate the issuance of all shares to such Grantee.
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 of the Company, 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)
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
August 10, 1994, 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
21
<PAGE> 25
(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.
TRANSFER OF INCENTIVE AWARD
The Incentive Award is not assignable or transferable by Grantee, other
than by will or by the laws of descent and distribution.
WITHHOLDING
Grantee must pay to the Company, or make arrangements for the payment of,
any federal, state or local taxes required by law to be withheld with respect to
the Incentive Award.
AMENDMENT OR TERMINATION OF INCENTIVE AWARD
The Compensation Committee may at any time terminate or amend the Incentive
Award, provided that such termination or amendment shall not, without Grantee's
consent, adversely affect Grantee's rights under the Incentive Award. Amendments
may be made without the approval of the shareholders of the Company except as
required to satisfy Rule 16b-3 (or any successor rule) under the Exchange Act or
Section 162(m) of the Code.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE INCENTIVE STOCK 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 a Grantee upon the awarding
of the Incentive Award. Upon issuance of shares of Common Stock pursuant to the
Incentive Award, a Grantee will recognize ordinary income equal to the fair
market value of such shares on such dates of issuance. 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.
The Company will generally be entitled to a deduction in the amount taxable
as ordinary income to a 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 a Grantee pursuant to
the Incentive Award will generally qualify as "performance-based compensation"
under Section 162(m) of the Code, and, consequently, should not be subject to
the $1 million deduction limit thereunder. For a brief discussion of the $1
million limitation on deductible compensation under Section 162(m) of the Code,
see "Certain Federal Income Tax Consequences of the Performance Award."
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 a Grantee and the Company may vary, depending upon the laws
of the various states and localities and the individual circumstances of such
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
22
<PAGE> 26
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 OF THE COMPANY VOTE
FOR APPROVAL OF THE INCENTIVE AWARD.
AWARD BENEFITS
AWARD BENEFITS TABLE
The following table sets forth the maximum number of shares awardable as a
Performance Award and an Incentive Award, as described above, under the
Company's Incentive Restricted Stock Plan, and the dollar value of such shares.
The amount of shares shown as awardable as a Performance Award and as an
Incentive Award assumes the attainment by the Company and each Division,
respectively, of the maximum target level of net income of the Company and
pre-tax profits of each such Division.
<TABLE>
<CAPTION>
NUMBER OF SHARES DOLLAR
NAME AND POSITION TO BE GRANTED(1) VALUE(2)
- --------------------------------------------------------------- ------------------ -----------
<S> <C> <C>
Frank N. Liguori............................................... 150,000 $ 4,837,500
Chairman and CEO
Stuart Olsten.................................................. 0 0
President and Vice Chairman(3)
Robert A. Fusco................................................ 112,500 3,628,125
Executive Vice President and President,
Olsten Kimberly QualityCare
Richard A. Piske, III.......................................... 75,000 2,418,750
Executive Vice President and President,
Olsten Staffing Services
Anthony J. Puglisi............................................. 0 0
Senior Vice President -- Finance and Treasurer(3)
Executive Officers as a Group(4)............................... 367,500 11,851,875
Non-Executive Director Group(3)................................ 0 0
Non-Executive Officer Employee Group(3)........................ 0 0
</TABLE>
- ---------------
(1) Represents the maximum number of shares awardable as a Performance Award or
Incentive Award assuming the attainment by the Company or the respective
Division, as the case may be, of the maximum target level of net income of
the Company and pre-tax profits of each Division.
(2) The dollar values shown are based on the closing price of the Company's
Common Stock on the New York Stock Exchange on March 29, 1996.
(3) Not eligible to receive a Performance Award or an Incentive Award.
(4) Includes a maximum award of 30,000 shares to Gerald J. Kapalko, Executive
Vice President of the Company, under the Incentive Award.
23
<PAGE> 27
PROPOSAL 4
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Coopers & Lybrand L.L.P. as auditors
of the Company for the 1996 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 L.L.P. has audited the accounts of the Company since
1967. The Company has been advised that a representative of Coopers & Lybrand
L.L.P 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 L.L.P.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the next annual
meeting must be received by the Company by December 2, 1996, 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, OLSTEN CORPORATION, 175 BROAD HOLLOW ROAD, MELVILLE, NEW YORK
11747-8905.
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 2, 1996
Melville, New York
24
<PAGE> 28
CLASS B COMMON STOCK
[LOGO] PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
OF OLSTEN CORPORATION
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 Olsten Corporation (the "Company") which the undersigned is entitled to
vote at the Annual Meeting of Shareholders of the Company to be held at 175
Broad Hollow Road, Melville, New York on Friday, April 26, 1996 at 9:30 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 AND 4 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.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 29
If no direction is given, this proxy will be voted FOR Proposals 1, 2, 3 and 4.
PLEASE MARK YOUR VOTES AS
INDICATED IN THIS EXAMPLE /X/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 AND 4.
1. Election of Directors:
FOR WITHHOLD
all nominees AUTHORITY
(except as marked) for all nominees
/ / / /
Nominees to be elected by holders of Class B Common Stock: Andrew N. Heine,
Stuart R. Levine, Frank N. Liguori, Miriam Olsten, Stuart Olsten and Richard J.
Sharoff
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
_______________________________________________________________________________
2. Approve Performance Award under Incentive Restricted Stock Plan.
FOR AGAINST ABSTAIN
/ / / / / /
3. Approve Incentive Award under Incentive Restricted Stock Plan.
FOR AGAINST ABSTAIN
/ / / / / /
4. Approve Coopers & Lybrand L.L.P. as independent auditors for 1996.
FOR AGAINST ABSTAIN
/ / / / / /
5. 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: _________________________________________________________________, 1996
_____________________________________________________________________________
(Signature)
_____________________________________________________________________________
(Signature, if held jointly)
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 30
COMMON STOCK
[LOGO] PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
OF OLSTEN CORPORATION
The undersigned hereby appoints Frank N. Liguori, Stuart Olsten and
Laurin L. Laderoute, Jr., jointly and severally, proxies, will full power of
substitution to represent the undersigned and vote all shares of Common Stock
of Olsten Corporation (the "Company") which the undersigned is entitled
to vote at the Annual Meeting of Shareholders of the Company to be held at 175
Broad Hollow Road, Melville, New York on Friday, April 26, 1996 at 9:30 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 AND 4 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.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 31
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4
PLEASE MARK YOUR VOTES AS
INDICATED IN THIS EXAMPLE /X/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 AND 4.
1. Election of Directors:
FOR WITHHOLD
all nominees AUTHORITY
(except as marked) for all nominees
/ / / /
Nominees to be elected by holders of Common Stock: John M. May, Raymond S.
Troubh and Josh S. Weston
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
_______________________________________________________________________________
2. Approve Performance Award under Incentive Restricted Stock Plan.
FOR AGAINST ABSTAIN
/ / / / / /
3. Approve Incentive Award under Incentive Restricted Stock Plan.
FOR AGAINST ABSTAIN
/ / / / / /
4. Approve Coopers & Lybrand L.L.P. as independent auditors for 1996.
FOR AGAINST ABSTAIN
/ / / / / /
5. 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: _________________________________________________________________, 1996
_____________________________________________________________________________
(Signature)
_____________________________________________________________________________
(Signature, if held jointly)
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 32
APPENDIX
Olsten Corporation
175 Broad Hollow Road
Melville, New York 11747
December 21, 1995
Mr. Frank N. Liguori
2 Talisman Court
Dix Hills, New York 11745
Dear Frank:
In accordance with the action of the Compensation Committee
(the "Committee") of the Board of Directors (the "Board") of Olsten Corporation
(the "Company") taken on December 21, 1995, the Company will issue and grant to
you shares of the Company's Common Stock, par value $.10 per share ("Common
Stock") under the Company's Incentive Restricted Stock Plan, adopted on May 17,
1990, as amended (the "Plan"), under the following terms and conditions (the
"Performance Award"). This Performance Award is subject to the approval of the
shareholders of the Company.
1. (a) If during the 1996 fiscal year (the "Performance Period"),
when combined with the 1994 and 1995 fiscal years (the "Performance Period" and
the 1994 and 1995 fiscal years herein defined as the "Measuring Period"), the
Company achieves net income aggregating (i) $240 million (the "Performance
Target"), the Company will issue and grant to you 50,000 shares of its Common
Stock, or (ii) $270 million or more (the "Enhanced Performance Target"), the
Company will issue and grant to you 100,000 shares of Common Stock.
(b) If the net income of the Company for the Measuring Period
aggregates more than $240 million but less than $270 million, the number of
shares of Common Stock to be granted and issued to you will be determined on a
scaled basis. If the Company's net income for the Measuring Period aggregates
less than $240 million, no shares will be issued and granted to you.
(c) As used herein, net income of the Company shall exclude
the effects of any extraordinary charges and material acquisitions or
transactions.
<PAGE> 33
(d) The shares of Common Stock awarded pursuant to this
Paragraph 1 shall vest and shall be issued and granted on January 4, 1997;
provided, however, that no shares shall be issued and granted to you pursuant to
this Performance Award until the Committee has certified in writing that the net
income target has been attained and the number of shares awardable.
(e) All share amounts referred to in Paragraphs 1(a) and 1(b)
above 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.
2. The issuance and grant to you of shares of the Company's
Common Stock as provided for in Paragraph 1 above are conditioned upon your
being, and having continuously been, employed by the Company on the date of such
issuance and grant except as follows:
(a) In the event of your death or permanent disability while
employed by the Company during the Performance Period, the Company's net income
for the Measuring Period will be projected and so long as such projected net
income equals or exceeds the Performance Target or the Enhanced Performance
Target, the Company will grant and issue to you, your estate or legal
representative, either the minimum or the maximum number of shares, as the case
may be, to which you would be entitled pursuant to the Performance Award based
on the attainment of such Performance Target or Enhanced Performance Target. If
you die or become permanently disabled during the Performance Period and the
Company's net income for the Measuring Period is projected to be less than the
Performance Target, no shares will be awarded.
(b) In the event of your death or permanent disability while
employed by the Company after the Performance Period but before you have been
issued and granted all of the shares of Common Stock to which you are entitled
pursuant to Paragraph 1, the Company will immediately accelerate the issuance
and grant of all such shares to which you are entitled.
(c) In the event that during the Performance Period, (i)
there is a Change in Control (as defined below), (ii) you are relieved of your
title as Chief Executive Officer or Chairman of the Board of the Company without
-2-
<PAGE> 34
cause or (iii) your employment with the Company is terminated without cause, the
Company's net income for the Measuring Period will be deemed to exceed the
Enhanced Performance Target and the Company will immediately issue and grant to
you 100,000 shares of Common Stock as provided for in Paragraph 1 above.
(d) In the event that after the Performance Period expires,
but before you have been issued and granted all of the shares to which you would
be entitled pursuant to Paragraph 1 above, (i) there is a Change in Control,
(ii) you are relieved of your title as Chief Executive Officer or Chairman of
the Board of the Company without cause or (iii) your employment with the Company
is terminated without cause, the Company will immediately accelerate the
issuance and grant to you of all shares to which you are entitled but had not
been issued and granted.
(e) For purposes of this Agreement, a "Change in Control"
shall be deemed to have occurred 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 Securities Exchange Act of 1934 (the "Exchange
Act") (other than the Company, any subsidiary of the Company, members of the
Olsten family (defined as Miriam Olsten, any lineal descendent 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"
means any member of the Board as of November 8, 1993 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
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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 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 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.
3. You represent that any and all shares you receive pursuant
hereto you will take for investment and not with a view to their distribution or
resale. Certificates evidencing such shares will be legended to reflect that
such shares are "restricted stock."
4. Nothing herein shall constitute an employment agreement
between you and the Company or shall diminish any right of the Company to
terminate your employment. Neither shall anything herein prevent the Board or
the Committee from awarding or adopting other or additional compensation
arrangements on your behalf.
5. This Performance Award and any rights hereunder may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution.
6. The Company may require that any shares granted hereunder
shall be subject to such conditions or representations as are necessary in order
to comply with the Securities Act of 1933, as amended, or any similar state or
federal legislation.
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<PAGE> 36
7. You shall pay to the Company, or make appropriate arrangements
satisfactory to the Committee for the payment of, any federal, state, local or
other taxes of any kind required by law to be withheld with respect to the
Performance Award.
8. 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 Performance Award, and all members of the Board or the
Committee and all officers or 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.
9. All obligations of the Company under this Performance Award
shall be binding on any successor to the Company.
10. The Committee may at any time terminate or amend this
Performance Award, provided, however, that no such termination or amendment may
adversely affect your rights hereunder without your consent. Amendments may be
made without approval of the Company's shareholders except as required to
satisfy Rule 16b-3 (or any successor rule) under the Exchange Act, or Section
162(m) of the Internal Revenue Code of 1986, as amended.
11. The validity, interpretation and performance of this
Performance Award shall be governed by the laws of the State of New York without
regard to the conflict of law provisions.
Very truly yours,
OLSTEN CORPORATION
By /s/ William P. Costantini
---------------------------
William P. Costantini
Senior Vice President
and General Counsel
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<PAGE> 37
APPENDIX
EXECUTIVE OFFICER INCENTIVE STOCK AWARD
UNDER THE 1990 INCENTIVE RESTRICTED STOCK PLAN
1. Purpose.
The purpose of this Executive Officer Incentive Stock Award ("Incentive
Award") under the Olsten Corporation 1990 Incentive Restricted Stock Plan (the
"Plan") is to enable Olsten Corporation (the "Company") to reward executive
officers of the Company identified herein (each a "Grantee") for achieving
certain target performance goals during the 1996, 1997 and 1998 fiscal years
(the "Measuring Period"), with respect to the respective operating divisions for
which each Grantee is responsible (each a "Division") and to enable such
officers to participate in the long-term success and growth of the Company by
giving them an equity interest in the Company.
This Incentive Award, and the grant and issuance of shares hereunder,
is subject to the approval of the shareholders of the Company.
2. Shares Subject to the Award.
(a) Upon the attainment by a Division of certain levels of pre-tax
profits ("Pre-Tax Profits") during the Measuring Period, the Grantee responsible
for such Division shall be entitled to a number of shares of Common Stock of the
Company, par value $.10 per share ("Common Stock"), as provided herein. The
Grantee, target levels of Pre-Tax Profits for each Division, and the
corresponding number of shares each Grantee may be awarded hereunder are set
forth in the following table:
<TABLE>
<CAPTION>
Cumulative Pre-
Tax Profits Restricted
Grantee Division (in millions) Shares Granted
- ------- -------- ------------- --------------
<S> <C> <C> <C>
Robert A. Fusco HealthCare $285 40,000
295 50,000
312 65,000
320 75,000
Richard A. Piske, III Staffing 185 25,000
Services 200 30,000
(U.S. and 215 40,000
Canadian 225 50,000
Branch
System)
</TABLE>
<PAGE> 38
<TABLE>
<S> <C> <C> <C>
Gerald J. Kapalko License and 34 7,000
Latin 36 10,000
America 40 15,000
45 20,000
</TABLE>
(b) At a level of net income aggregating more than the minimum but less
than the maximum level of Pre-Tax Profits set forth above, each Grantee will
receive a number of shares to be determined by a sliding scale, but no shares
will be issuable to a Grantee if the Pre-Tax Profits of his Division for the
Measuring Period aggregate less than the minimum level of Pre-Tax Profits.
(c) For purposes of this Incentive Award, the determination of Pre-Tax
Profits for a Division shall exclude the effects of any extraordinary charges
and material acquisitions or transactions.
(d) 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.
3. Grant of Shares.
(a) Except as otherwise provided below, shares issuable to a Grantee
will be issued and granted, and will immediately vest in the following
installments, provided, that the Grantee remains employed by the Company on each
of the respective dates: 50% of the total shares on January 4, 1999; 30% on
January 4, 2000; and 20% on January 4, 2001. Notwithstanding the foregoing, no
shares shall be issued and granted to a Grantee pursuant to this Incentive Award
until the Committee has certified in writing that the target Pre- Tax Profits
levels have been attained and the number of shares to be awarded thereby.
(b) If a 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 Pre-Tax Profits for the Division for such year equals or exceeds the
Pre-Tax Profits target for that year as set forth below. In determining the
number of shares to be issued, Pre-Tax Profits of the Grantee's Division will be
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<PAGE> 39
projected for the year of death or disability and will be compared to target
levels of Pre-Tax Profits for such year (the "Annual Target Level") and enhanced
target levels of Pre-Tax Profits for such year (the "Annual Enhanced Level") and
the Division's Pre-Tax Profits during any remaining years in the Measuring
Period will be assumed to reach the target level reached during the year of
death or disability (i.e, either the Annual Target Level or the Annual Enhanced
Level). If a Grantee dies or becomes disabled during a year in which his
Division's Pre-Tax Profits are projected to be less than the Annual Target Level
for that year, no shares will be issued with respect to that year.
The following are the Annual Target Level and Annual Enhanced Level of
Pre-Tax Profits (in millions) for each of the Divisions:
<TABLE>
<CAPTION>
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Annual Target Levels
HealthCare $88 $104 $120
Staffing Services 60 72 83
License and 11 13 16
Latin America
Annual Enhanced Levels
HealthCare $90 $107 $123
Staffing Services 63 75 87
License and 12 15 18
Latin America
</TABLE>
(c) If a Grantee dies or becomes permanently disabled after the
Measuring Period, all unissued shares to which he would have been entitled will
be immediately vested and issued.
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<PAGE> 40
4. Change of Control.
(a) In the event that during the Measuring Period there is a Change of
Control (as defined below), the cumulative Pre-Tax Profits for each Division for
the Measuring Period will be deemed to be the maximum level of Pre-Tax Profits
and the Company will immediately issue and grant each Grantee the maximum number
of shares he is entitled to receive under the Incentive Award.
(b) In the event that, after the Measuring Period expires but before a
Grantee has received all of the shares to which he is entitled, there is a
Change of Control, the Company will accelerate the issuance of all shares to
such Grantee to which he is entitled.
(c) Notwithstanding the foregoing, in the event that the grant of
shares under this Incentive Award (and any payments payable under any other
plan, program, arrangement or agreement maintained by the Company or an
affiliate) would constitute an "excess parachute payment" (within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code")), the
number of shares granted to a Grantee shall be reduced (by the minimum possible
amount) until such Grantee's total "parachute payments" (within the meaning of
Section 280G of the Code) equal $1.00 less than three times Grantee's "base
amount" (within the meaning of Section 280G of the Code). In the event that a
Grantee and the Company are unable to agree as to the amount of the reduction
described above, if any, the Grantee shall select a law firm or accounting firm
from among those regularly consulted by the Company ("Tax Counsel") and such Tax
Counsel shall, at the Company's expense, determine the amount of such reduction
and such determination shall be final and binding upon the Grantee and the
Company.
(d) A "Change of Control" will be deemed to occur on the date any of
the following events occur:
(i) 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
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<PAGE> 41
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) 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;
(ii) either (x) 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 August 10, 1994, 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 (y) 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;
(iii) the shareholders of the Company approve (x) a
plan of complete liquidation of the Company, or (y) 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
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<PAGE> 42
merger or consolidation, constitute a majority of the board
of directors of the continuing or surviving corporation; or
(iv) 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.
5. Nontransferability of Shares.
This Incentive Award and any rights hereunder may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution.
6. Termination of Employment.
Nothing herein shall constitute an employment agreement between the
Company and a Grantee nor diminish any right of the Company to terminate
Grantee's employment. Neither shall anything herein prevent the Board or the
Committee from awarding or adopting other or additional compensation
arrangements on behalf of any Grantee. Absent an event contemplated by Section
4(a) or 4(b) above, if Grantee voluntarily terminates his employment with the
Company at any time after the date hereof and before January 4, 2001, or if the
Company terminates Grantee's employment because of fraud or gross neglect of
duties, for a period of one year following such termination of employment and
within the United States and Canada, Grantee will not, directly or indirectly,
own, manage, operate, control, be employed by, participate in, provide
consulting services to, or be connected in any manner with the ownership,
management, operation or control of any businesses similar to the type of
businesses principally conducted by the Company, except Grantee may own for
investment purposes up to 1% of the capital stock of any company whose stock is
publicly traded.
7. Securities Restrictions.
The Company may require that any shares granted hereunder shall be
subject to such conditions or representations as are necessary in order to
comply with the Securities Act of 1933, as amended, or any similar state or
federal legislation.
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<PAGE> 43
8. Withholding.
Each Grantee shall pay to the Company, or make appropriate arrangements
satisfactory to the Committee for the payment of, any federal, state, local or
other taxes of any kind required by law to be withheld with respect to the
Incentive Award.
9. Indemnification.
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 an Incentive Award, and all members of the Board or the Committee and
all officers or 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.
10. Successors.
All obligations of the Company under this Incentive Award shall be
binding on any successor to the Company.
11. Amendment and Termination.
The Committee may at any time terminate or amend this Incentive Award,
provided, however, that no such termination or amendment may adversely affect a
Grantee's rights hereunder without the Grantee's consent. Amendments may be made
without approval of the Company's shareholders except as required to satisfy
Rule 16b-3 (or any successor rule) under the Exchange Act, or Section 162(m) of
the Code.
12. Governing Law.
The validity, interpretation and performance of this Incentive Award
shall be governed by the laws of the State of New York without regard to the
conflict of law provisions.
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