<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-12
LABOR READY, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
LABOR READY, INC.
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
[LOGO]
Tacoma, Washington
September 15, 2000
Dear Shareholders:
It is a pleasure to invite you to your Company's 2000 Annual Meeting of
Shareholders, to be held at the La Quinta Inn, 1425 East 27th Street, Tacoma,
Washington, on Wednesday, October 25, 2000, at 10:00 a.m. (Pacific Daylight
Time).
The matters to be acted upon are described in the accompanying Notice of
Annual Meeting and Proxy Statement.
I look forward to seeing our shareholders at the meeting. We will report on
Labor Ready's operations and respond to any questions you may have.
YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND, IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED. PLEASE SIGN, DATE, AND MAIL THE
ENCLOSED PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE PREPAID ENVELOPE
IN ORDER TO ENSURE THAT YOUR VOTE IS COUNTED. IF YOU ATTEND THE MEETING, YOU
WILL, OF COURSE, HAVE THE RIGHT TO VOTE YOUR SHARES IN PERSON.
Very truly yours,
[LOGO]
Robert J. Sullivan
Chairman of the Board
<PAGE>
LABOR READY, INC.
1016 SOUTH 28TH STREET
TACOMA, WASHINGTON 98409
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, OCTOBER 25, 2000
---------------------
To the Shareholders:
The annual meeting of the Shareholders of Labor Ready, Inc., a Washington
corporation, will be held at the La Quinta Inn, 1425 East 27th Street, Tacoma,
Washington, on Wednesday, October 25, 2000, at 10:00 a.m. (Pacific Daylight
Time) for the following purposes:
1. to elect the directors to serve until the next Annual Meeting of
Shareholders, and until their respective successors are elected and
qualified; and
2. to ratify the selection of Arthur Andersen LLP as Labor Ready, Inc.'s
independent public auditors for the fiscal year ending December 31, 2000.
Only shareholders of record at the close of business on September 1, 2000,
will be entitled to notice of, and to vote at, the annual meeting and any
adjournments thereof.
By Order of the Board of Directors
[SIG]
Ronald L. Junck
Secretary
Tacoma, Washington
September 15, 2000
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO DATE AND
SIGN THE ENCLOSED PROXY CARD AND RETURN IT AS PROMPTLY AS POSSIBLE IN THE
ENCLOSED STAMPED AND ADDRESSED ENVELOPE IN ORDER THAT THE PRESENCE OF A QUORUM
MAY BE ASSURED. THE GIVING OF SUCH PROXY DOES NOT AFFECT YOUR RIGHT TO REVOKE IT
LATER OR VOTE YOUR SHARES IN PERSON IN THE EVENT THAT YOU SHOULD ATTEND THE
MEETING.
<PAGE>
LABOR READY, INC.
1016 SOUTH 28TH STREET
TACOMA, WASHINGTON 98409
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, OCTOBER 25, 2000
------------------------
The Board of Directors of Labor Ready, Inc., a Washington corporation, is
soliciting your proxy to vote your shares at the 2000 Annual Meeting of
Shareholders of the Company to be held at 10:00 a.m. (Pacific Daylight Time) on
Wednesday, October 25, 2000, at the La Quinta Inn, 1425 East 27th Street,
Tacoma, Washington, and at any adjournment thereof. This proxy statement
contains the required information under the rules of the Securities and Exchange
Commission and is designed to assist you in voting your shares.
REVOCATION OF PROXIES. If you execute a proxy, you will retain the right to
revoke it at any time before it is voted. You may revoke or change your proxy
before it is voted by: (i) sending a written revocation to the Corporate
Secretary of the Company at 1016 South 28th Street, Tacoma, Washington 98409;
(ii) submitting a proxy with a later date; (iii) delivering a written request in
person to return the executed proxy; or (iv) attending the annual meeting and
voting at the annual meeting. Your right to revoke your proxy is not limited by
or subject to compliance with a specified formal procedure, but you should give
written notice to the Secretary of the Company at or before the annual meeting
so that the number of shares represented by proxy can be recomputed.
VOTING OF PROXIES. If you properly execute and return the enclosed proxy
card, the individuals named on the proxy card (your proxies) will vote your
shares in the manner you indicate. We urge you to specify your choices by
marking the appropriate box on the enclosed proxy card; if you sign and return
the proxy card without indicating your instructions, your shares will be voted
FOR THE ELECTION OF DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS AND FOR
PROPOSAL 2, and with respect to any other business that may come before the
meeting, as recommended by the Board of Directors. You may vote for, against, or
abstain from voting on, any matter that may properly come before the meeting.
QUORUM. A quorum is necessary to hold a valid meeting. If shareholders
entitled to cast at least a majority of all the votes entitled to be cast at the
annual meeting are present in person or by proxy, a quorum will exist. Shares
represented by proxies containing an abstention as to any matter will be treated
as shares that are present and entitled to vote for purposes of determining a
quorum. Similarly, shares held by brokers or nominees for the accounts of others
as to which voting instructions have not been given ("Broker Non-Votes") will be
treated as shares that are present and entitled to vote for purposes of
determining a quorum.
EFFECT OF ABSTENTIONS AND BROKER NON-VOTES. Election of directors requires
the affirmative vote of the shares represented at the annual meeting.
Abstentions and Broker Non-Votes will have no effect in the election of
directors.
RECORD DATE. Shareholders of record at the close of business on
September 1, 2000 are entitled to vote at the annual meeting. On September 1,
2000, the Company had 41,842,048 shares of common stock outstanding, and there
were no shares of preferred stock outstanding. The preferred stock was
repurchased from the shareholders with a redemption date of August 28, 2000.
Each share of common stock entitles the holder thereof to one vote.
<PAGE>
DISCRETIONARY AUTHORITY. If any nominee for director is unable to serve or
for good cause will not serve, or if any matters not specified in this proxy
statement come before the meeting, eligible shares will be voted as specified by
the named proxies pursuant to discretionary authority granted in the proxy. At
the time this proxy statement was printed, we were not aware of any other
matters to be voted on.
SOLICITATION OF PROXIES. Proxies may be solicited by officers, directors
and regular supervisory and executive employees of the Company, none of whom
will receive any additional compensation for their services.
MAILING AND FORWARDING OF PROXY MATERIALS. On or about September 15, 2000,
we mailed this proxy statement and the enclosed proxy card to shareholders. We
will arrange with brokerage firms and other custodians, nominees and fiduciaries
to forward proxy solicitation material to certain beneficial owners of the
common stock and will reimburse such brokerage firms, custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses that they incur as a result of
forwarding the proxy materials.
EXECUTIVE OFFICES. The principal executive office of the Company is 1016
South 28th Street, Tacoma, Washington 98409. The phone number for the Company is
(253) 383-9101.
PROPOSAL 1. ELECTION OF DIRECTORS
The Company's directors are elected each year at the annual meeting of
shareholders to serve until they resign or are removed, or are otherwise
disqualified to serve, or until their successors are elected and qualified. The
Company's Board of Directors currently consists of seven directors. The Board of
Directors has nominated the following persons for election as directors, all of
whom are currently directors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH
OF THE NOMINEES. The nominees are as follows:
ROBERT J. SULLIVAN, age 70, has served as Chairman of the Board of the
Company since July 3, 2000 and as a director since November 1994. Prior to
joining the Company he served as a financial consultant of the Company from
July 1993 to June 1994. Additionally, Mr. Sullivan has an extensive career of
over 35 years in financial management, with Price Waterhouse & Co. and as a
member of executive management with companies listed on NYSE and AMEX.
RICHARD L. KING, age 51, has served as Director since July 2000 and as Chief
Executive Officer and President since May 2000. Prior to joining Labor Ready,
Mr. King was Chief Operating Officer and President of Albertson's, Inc.
Mr. King held various positions during his 33 year tenure at Albertson's,
including Group Vice President of Merchandising, Senior Vice President and
Regional Manager. In 1996, Mr. King was promoted to President and COO and served
in that capacity until June 1999 when Albertson's merged with American Stores.
During his tenure at Albertson's, King had responsibility for a $16 billion
operation, with more than 100,000 employees and nearly 1,000 stores.
JOSEPH P. SAMBATARO, JR., age 50 has served as a Director of the Company
since January 2000. In August 1997, Mr. Sambataro joined the Company as
Executive Vice President, Treasurer, Chief Financial Officer and Assistant
Secretary. Prior to joining the Company, he served as the Managing Partner of
the Seattle office of BDO Seidman, LLP, an accounting and consulting firm, from
1990 to 1997. In 1985, Mr. Sambataro was co-founder, and served as Director and
Officer of Ecova Corporation, an on-site toxic waste remediation company until
1989. From 1972 until 1985 Mr. Sambataro was a Partner with KPMG Peat Marwick in
the New York, Miami and Seattle offices.
THOMAS E. MCCHESNEY, age 54, has served as a director of the Company since
July 1995. In September 1996, Mr. McChesney became associated with Blackwell
Donaldson and Company, as director of investment banking. Mr. McChesney is also
a director of USOL Holdings, Inc. and Nations Express, Inc. Previously,
Mr. McChesney was an officer and director of Paulson Investment Co. and Paulson
Capital Corporation from March 1977 to June 1995.
2
<PAGE>
RICHARD W. GASTEN, age 62, has served as a Director of the Company since
August 1996. Mr. Gasten has also served as a Director of Labour Ready Temporary
Services, Ltd., the Company's Canadian subsidiary and as a consultant to the
Company since September 1995. In June 1997, Mr. Gasten was appointed to the
position of Vice President and Secretary of the Canadian subsidiary. With this
appointment, the consulting agreement with Mr. Gasten terminated. Mr. Gasten has
over 25 years experience as a member of executive management with Western
Capital Trust Company, Vancouver, B.C., Unity Bank of Canada and The Bank of
Nova Scotia.
CARL W. SCHAFER, age 64, has served as a Director of the Company since
September of 1999. Mr. Schafer currently serves as President of The Atlantic
Foundation. Prior to his work with The Atlantic Foundation, Mr. Schafer's
experience includes the U.S. Bureau of the Budget, Financial Vice President and
Treasurer of Princeton University, Chairman of the investment advisory committee
for the Howard Hughes Medical Institute and Principal of Rockefeller &
Co., Inc. He also serves on various boards including the Paine Webber and
Guardian Groups of mutual funds.
INDEMNIFICATION OF DIRECTORS
The Washington Business Corporation Act (the "Washington Business Act")
provides that a company may indemnify its directors and officers as to certain
liabilities. The Company's Articles of Incorporation and Bylaws provide for the
indemnification of its directors and officers to the fullest extent permitted by
law. The effect of such provisions is to indemnify the directors and officers of
the Company against all costs, expenses and liabilities incurred by them in
connection with any action, suit or proceeding in which they are involved by
reason of their affiliation with the Company, to the fullest extent permitted by
law.
MEETINGS AND COMMITTEES OF THE BOARD
COMPENSATION COMMITTEE. The Board of Directors appointed a Compensation
Committee to review and recommend executive compensation. The Compensation
Committee, which currently consists of Messrs. McChesney, who chairs the
committee, Sullivan and Schafer, met four times during fiscal year 1999.
AUDIT COMMITTEE. The Board of Directors appointed an Audit Committee
currently consisting of Messrs. Sullivan, who chairs the committee, McChesney
and Schafer to consider the adequacy of the internal controls and the
objectivity of financial reporting. The Audit Committee recommends to the Board
the appointment of the independent public accountants, subject to ratification
by the shareholders at the annual meeting. The Audit Committee met four times
during fiscal year 1999.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of each class of equity securities of the Company as of September 1,
2000 for (i) each person known to the Company to own beneficially 5% or more of
any such class, (ii) each director of the Company, (iii) each executive officer
of the Company named in the Summary Compensation Table and (iv) all officers and
directors of the Company as a group. Except as otherwise noted, the named
beneficial owner has sole voting and investment power.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL
OWNERSHIP
NAME & ADDRESS (NUMBER OF PERCENT
OF BENEFICIAL OWNER TITLE OF CLASS SHARES)(1) OF CLASS
------------------- --------------- ---------- --------
<S> <C> <C> <C>
Robert J. Sullivan(1).................... Common Stock 102,785 *
Richard L. King.......................... Common Stock 4,000 *
Joseph P. Sambataro, Jr.(1).............. Common Stock 262,869 *
Ronald L. Junck(1)....................... Common Stock 479,394 1.2%
Todd A. Welstad(1)....................... Common Stock 174,935 *
Thomas E. Gilbert(1)..................... Common Stock 35,288 *
Richard W. Gasten(1)..................... Common Stock 41,956 *
Thomas E. McChesney(1)................... Common Stock 164,466 *
Carl W. Schafer(1)....................... Common Stock 4,000 *
Wallace R. Weitz & Company(2)............ Common Stock 4,630,500 11.1%
1125 South 103rd Street, Suite 600
Omaha, NE 68124-6008
Glenn A. Welstad(3)...................... Common Stock 4,066,168 9.7%
P.O. Box 1317
Tacoma, WA 98401-1317
Wanger Asset Management, L.P.(4)(5)...... Common Stock 3,485,500 8.3%
227 West Monroe Street, Suite 3000
Chicago, IL 60606
All Officers and Directors as Group (10 Common Stock 1,288,443 3.1%
Individuals)(1)..........................
</TABLE>
------------------------
* Less than 1%.
(1) Beneficial ownership is calculated in accordance with Rule 13d-3(d)(1) of
the Securities Exchange Act of 1934, as amended and includes shares of
common stock issuable upon exercise of options, warrants, and other
securities convertible into, or exchangeable for, common stock currently
exercisable or exercisable within 60 days of September 1, 2000.
(2) As reported in the Schedule 13G filed by Wallace R. Weitz & Company on
September 6, 2000.
(3) Effective June 30, 2000, Mr. Welstad resigned as Chairman of the Board and
effective May 16, 2000, he resigned as Chief Executive Officer and
President.
(4) Shared voting power.
(5) As reported in the Schedule 13G filed by Wanger Asset Management, L.P. on
February 11, 2000.
4
<PAGE>
PROPOSAL 2. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors has
appointed Arthur Andersen LLP to serve as the independent auditors of the
Company for the calendar year ending December 31, 2000. Representatives of
Arthur Andersen will be present at the annual meeting to make a statement if
they desire to do so and respond to appropriate questions by shareholders. The
affirmative vote of a majority of the shares represented at the meeting is
required for the ratification of the Board's selection of Arthur Andersen LLP as
the Company's independent auditors for the calendar year ending December 31,
2000. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS OF THE COMPANY.
EXECUTIVE OFFICERS
The names, ages and positions of the non-director executive officers of the
Company are listed below along with their business experience during the past
five years. No family relationships exist among any of the directors or
executive officers of the Company.
RONALD L. JUNCK, age 52, has served as Secretary and a Director of the
Company since November 1995. In February 1998, Mr. Junck joined the Company as
Executive Vice President and General Counsel. From 1974 until 1998, Mr. Junck
practiced law in Phoenix, Arizona, specializing in business law and commercial
transactions and serving as the Company's outside counsel. As an attorney, he
has extensive trial experience in a variety of commercial cases and has lectured
widely at a number of colleges and universities.
TODD A. WELSTAD, age 31, has served as Chief Information Officer of the
Company since August 1997. Mr. Welstad joined the Company in January 1994 as a
Branch Manager and in August 1994 was promoted to Systems Analyst in the MIS
Department. From October 1994 until August 1997, Mr. Welstad served as Director
of the MIS Department. From February 1989 to December 1994, Mr. Welstad was
employed as a Technical Supervisor at Micro-Rel, a division of Medtronics.
STEVEN C. COOPER, age 38, has served as Vice President of Finance since
August 2000. Mr. Cooper joined the Company in April 1999 as Corporate
Controller. Prior to joining the Company, Mr. Cooper's most recent position was
with the international consulting and accounting firm of Arthur Andersen as a
Senior Manager in Business Process Consulting from 1998 to 1999. From 1993 to
1998, Mr. Cooper worked for Albertson's as the Director of Corporate Internal
Controls. He was a Senior Manager with Deloitte & Touche from 1985-1993.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation earned by the Chief
Executive Officer and the next four most highly compensated executive officers
of the Company for the last completed fiscal year.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------ ALL OTHER COMPENSATION
ANNUAL SECURITIES ------------------------------------
COMPENSATION UNDERLYING
-------------------- OPTIONS/ MATCHING 401(K) SPLIT DOLLAR LIFE
NAME AND POSITION YEAR SALARY($) SARS(#) CONTRIBUTIONS INSURANCE($)
----------------- -------- --------- ---------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Glenn A. Welstad........................ 1999 519,231 30,000 2,500 176,526
Chairman of the Board, Chief Executive 1998 497,380 45,000 2,500 166,000
Officer and President(2) 1997 452,958 -- 2,375 --
Joseph P. Sambataro, Jr................. 1999 207,692 30,000 2,500 --
Director, Executive Vice President 1998 192,692 45,000 1,731 --
Chief Financial Officer, Treasurer 1997 53,328 405,000 -- --
and Assistant Secretary
Ronald L. Junck......................... 1999 207,692 30,000 -- --
Director, Executive Vice President, 1998 73,077 382,500 -- --
General Counsel and Secretary 1997 -- -- -- --
Todd A. Welstad......................... 1999 193,143 30,000 1,932 --
Chief Information Officer 1998 137,769 45,000 1,378 --
1997 104,808 146,757 1,048 --
Thomas E. Gilbert....................... 1999 193,786 30,000 2,500 --
Regional Vice President 1998 168,000 9,554 2,500 --
1997 153,577 35,438 1,487 --
</TABLE>
------------------------
(1) None of the named executives received compensation reportable under the
Restricted Stock Awards or Long-Term Incentive Plan Payouts columns.
(2) Effective June 30, 2000, Mr. Welstad resigned as Chairman of the Board and
effective May 16, 2000, he resigned as Chief Executive Officer and
President.
6
<PAGE>
OPTION GRANTS DURING 1999 FISCAL YEAR
The following table provides information related to options granted to the
executive officers named in the Summary Compensation Table during 1999.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
--------------------------------------------------------- POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
----------------- ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS EXERCISE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM(1)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME GRANTED(2) FISCAL YEAR ($/SH)(3) DATE 5% 10%
---- ----------------- ------------ --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Glenn Welstad............... 30,000 1.4% 17.33 3/1/04 143,700 317,400
Chairman of the Board,
Chief Executive Officer
and President(4)
Joseph P. Sambataro, Jr..... 30,000 1.4% 17.33 3/1/04 143,700 317,400
Director, Executive Vice
President, Chief Financial
Officer, Treasurer and
Assistant Secretary
Ronald L. Junck............. 30,000 1.4% 17.33 3/1/04 143,700 317,400
Director, Executive Vice
President, General Counsel
and Secretary
Todd A. Welstad............. 30,000 1.4% 17.33 3/1/04 143,700 317,400
Chief Information Officer
Thomas E. Gilbert........... 30,000 1.4% 17.33 3/1/04 143,700 317,400
Regional Vice President
</TABLE>
------------------------
(1) The potential realizable value portion of the table illustrates value that
might be realized upon exercise of the options immediately prior to the
expiration of their term, assuming the specified compounded rates of
appreciation on the Company's common stock over the term of the options.
These numbers do not take into account certain provisions of the options
providing for cancellation of the option following termination of
employment.
(2) Options to acquire shares of common stock. The options vest 25% annually
over the next four years.
(3) The option exercise price may be paid in shares of common stock owned by the
executive officer, in cash, or in any other form of valid consideration or a
combination of any of the foregoing, as determined by the Compensation
Committee in its discretion.
(4) Effective June 30, 2000, Mr. Welstad resigned as Chairman of the Board and
effective May 16, 2000, he resigned as Chief Executive Officer and
President.
7
<PAGE>
OPTION EXERCISES DURING 1999 AND YEAR END OPTION VALUES
The following table provides information related to options exercised by the
named executive officers during 1999 and the number and value of options held at
year-end. The Company does not have any outstanding stock appreciation rights
("SARs").
AGGREGATE OPTION/SAR EXERCISES IN 1999
AND YEAR-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
DECEMBER 31, 1999(#) DECEMBER 31, 1999($)(1)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Glenn Welstad................ -- -- 11,250 63,750 $ 844 $ 2,531
Chairman of the Board,
Chief Executive Officer and
President(2)
Joseph P. Sambataro, Jr...... 45,750 $1,557,942 97,121 164,998 $724,479 $855,748
Director, Executive Vice
President, Chief Financial
Officer, Treasurer and
Assistant Secretary
Ronald L. Junck.............. -- -- 188,608 233,342 $569,520 $500,104
Director, Executive Vice
President, General Counsel
and Secretary
Todd A. Welstad.............. 30,375 -- 93,572 128,693 $440,351 $277,927
Chief Information Officer
Thomas E. Gilbert............ -- $ 427,651 5,062 51,510 $ 33,404 $121,559
Regional Vice President
</TABLE>
------------------------
(1) The closing price for the Company's common stock as reported by the New York
Stock Exchange on December 31, 1999, was $12.13.
(2) Effective June 30, 2000, Mr. Welstad resigned as Chairman of the Board and
effective May 16, 2000, he resigned as Chief Executive Officer and
President.
COMPENSATION OF DIRECTORS
Each nonemployee director receives an annual retainer of $20,000, $1,000 for
attending each regular or special Board of Directors meeting, and $500 for
attending each assigned committee meeting. The Board of Directors met four times
in fiscal year 1999. The 1996 Stock Option and Incentive Plan provides for the
annual grant to directors of the Company of a nonqualified option for 2,000
shares on the first business day of each January, vesting after 6 months of
service as a director, and exercisable at the fair market value of the Company's
common stock. In addition, the Board of Directors may grant a nonqualified
option to a director upon his or her initial election or appointment to the
Board of Directors.
8
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION(*)
The Company's executive compensation is determined by a compensation
committee comprised of three members of the Board of Directors,
Messrs. McChesney, Sullivan and Schafer. The philosophy of the Company's
executive compensation program is that compensation of executive officers should
be directly and materially linked both to the operating performance of the
Company and to the interests of Shareholders.
Annual cash compensation, together with stock options, is designed to
attract and retain qualified executives and to ensure that such executives have
a continuing stake in the long term success of the Company. The Board of
Directors approved guidelines for annual grants of stock options to management
and administrative personnel. Under the plan as approved, each of the executive
officers of the Company receives a grant of options each year, subject to
approval by the Compensation Committee.
With respect to other executive officers, the Compensation Committee sets
salary based on recommendations of the CEO, unless the officer's salary is
established by written contract. With respect to officers that have recently
joined the Company, the recommendations are based on the CEO's negotiations with
the officer as necessary to attract such persons to become officers of the
Company. The Compensation Committee reviews the salaries for officers with
comparable duties of companies of comparable revenue size in the Pacific
Northwest. Annual salary increases are typically modest, except to reflect
changes in responsibilities.
Members of the Compensation Committee
Thomas E. McChesney, Chair
Robert J. Sullivan
Carl W. Schafer
EMPLOYMENT AGREEMENTS:
In May of 2000, the Company entered into an employment agreement with
Richard King, the Company's Chief Executive Officer and President, which
provides for annual compensation of $475,000, subject to annual increases on the
anniversary date of the agreement at the discretion of the compensation
committee. In addition, the employment agreement provides for a bonus, as
determined by the compensation committee, based on Mr. King's performance, and
the overall performance of the Company. The agreement provides Mr. King with
options to purchase 350,000 shares of the Company's common stock at its fair
market value at date of grant of $10.00. Under this plan, 62,500 options vest
annually to 2004 and the remaining 100,000 shares vest in November of 2004. The
agreement expires in 2005.
In February 1998, the Company entered into an employment agreement with
Ronald L. Junck, the Company's Executive Vice President, General Counsel and
Secretary, which provides for annual compensation of $250,000 in 2000, subject
to annual increases on the anniversary date of the agreement at the discretion
of the Board of Directors. In addition, the employment agreement provides for a
bonus, as determined by the compensation committee, based on Mr. Junck's
performance, and the overall performance of the Company. The agreement provides
Mr. Junck with options to purchase 337,500 shares of the Company's common stock
at its fair market value at date of grant of $9.22. Under this plan, 42,188
options vest semi-annually to 2001. The agreement expires in 2002.
------------------------
* The report of the Compensation Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under either the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended (together, the "Acts"),
except to the extent that the Company specifically incorporates such report by
reference; and further, such report shall not otherwise be deemed filed under
the Acts.
9
<PAGE>
In August 1997, the Company entered into an employment agreement with Joseph
P. Sambataro, Jr., the Company's Executive Vice President, Chief Financial
Officer, Treasurer, and Assistant Secretary, which provides for annual
compensation of $250,000 in 2000, subject to annual increases on the anniversary
date of the agreement at the discretion of the Board of Directors. In addition,
the employment agreement provides for a bonus, as determined by the compensation
committee, based on Mr. Sambataro's performance, and the overall performance of
the Company. The agreement provides Mr. Sambataro with options to purchase
405,000 shares of the Company's common stock at its fair market value at date of
grant of $3.70. Under this plan, 101,250 of the options vest on the date of
grant and 50,625 options vest semi-annually to 2000. The agreement expires in
2001.
RELATED PARTY TRANSACTION
On June 21, 2000, a $3.5 million unauthorized loan was issued to, then
Chairman of Board, Glenn Welstad. The loan was repaid on June 27, 2000 with
interest of $5,542 (9.5% annual interest rate).
10
<PAGE>
PERFORMANCE GRAPH
The following graph depicts the Company's stock price performance from
December 30, 1994 through December 31, 1999, relative to the performance of the
Dow Jones Composite, and a peer group of companies in the temporary labor
industry. All indices shown in the graph have been reset to a base of 100 as of
December 30, 1994, and assume an investment of $100 on that date and the
reinvestment of dividends, if any, paid since that date. The lines represent
calendar year end index levels; if the Company's calendar year ended on a
Sunday, the preceding trading day was used.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LABOR READY, INC. PEER GROUP DOW JONES COMPOSITE
<S> <C> <C> <C>
12/30/94 $100 $100 $100
12/29/95 $263 $112 $136
12/31/96 $333 $126 $166
12/31/97 $712 $140 $217
12/31/98 $1,093 $124 $243
12/31/99 $1,010 $165 $277
</TABLE>
------------------------
* PEER GROUP INCLUDES KELLY SERVICES, INC., MANPOWER, INC., NORRELL
CORPORATION, OLSTEN CORPORATION, AND REMEDYTEMP, INC. NORRELL CORPORATION, A
PEER GROUP MEMBER, WAS ACQUIRED BY INTERIM SERVICES EFFECTIVE JULY 6, 1999.
SOURCE: CARL THOMPSON ASSOCIATES WWW.CTAONLINE.COM (800) 959-9677. DATA FROM
BLOOMBERG FINANCIAL MARKETS
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's officers and directors and certain other persons to file
timely certain reports regarding ownership of, and transactions in, the
Company's securities with the Securities and Exchange Commission. Copies of the
required filings must also be furnished to the Company. Based solely on its
review of such forms received by it or representations from certain reporting
persons, the Company believes that during 1999 all applicable Section 16(a)
filing requirements were met.
11
<PAGE>
PROPOSALS OF SHAREHOLDERS
The Company anticipates that the 2001 Annual Meeting will be held no later
than August 2001. Accordingly, a shareholder proposal to be presented at the
Company's 2001 Annual Meeting of Shareholders and included in the Company's
proxy statement relating to such meeting must be received by the Company at its
executive offices at 1016 South 28th Street, Tacoma, Washington 98409, no later
than March 1, 2001. Please send the proposal to the attention of the Company's
Corporate Secretary.
OTHER BUSINESS
We do not intend to bring any other business before the meeting, and so far
as we know, no matters are to be brought before the meeting except as specified
in the notice of the meeting. However, as to any other business which may
properly come before the meeting, it is intended that proxies, in the form
enclosed, will be voted in respect thereof, in accordance with the judgment of
the persons voting such proxies.
FORM 10-K REPORT AVAILABLE
A copy of the Company's annual report on Form 10-K, as filed with the
Securities and Exchange Commission, will be furnished without charge to
shareholders upon request to Chief Financial Officer, Labor Ready, Inc., 1016
South 28th Street, Tacoma, Washington 98409; telephone: (253) 383-9101.
LABOR READY, INC.
By Order of the Board of Directors
[SIG]
Ronald L. Junck
Secretary
Tacoma, Washington
September 15, 2000
12
<PAGE>
PROXY
FOR ANNUAL MEETING OF THE SHAREHOLDERS
LABOR READY, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Sullivan and Ronald L. Junck
(collectively, the "Proxies"), and each of them, with full power of
substitution, as proxies to vote the shares which the undersigned is entitled to
vote at the annual meeting of the Company to be held at 10:00 a.m. (Pacific
Daylight Time) on Wednesday, October 25, 2000, at the La Quinta Inn, 1425 East
27th Street, Tacoma, Washington, and at any adjournment thereof.
<TABLE>
<S> <C>
1. FOR Election of directors: / / Robert J. Sullivan, Richard
L. King, Thomas E. McChesney, Richard W. Gasten, Carl W.
Schafer, and Joseph P. Sambataro, Jr.
WITHHOLD AUTHORITY to vote for the following directors
(write in name):
------------------------------------------------------------
2. Proposal to ratify the selection of Arthur Andersen LLP as
the Company's independent auditors for the calendar year
ending December 31, 2000.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
</TABLE>
<PAGE>
This proxy when properly signed will be voted and will be voted in the
manner directed herein by the undersigned shareholder. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL DIRECTORS AND FOR PROPOSAL 2.
____________________________
Signature
____________________________
Signature, if held jointly
____________________________
Print Name(s)
Dated: _______________, 2000
IMPORTANT--PLEASE SIGN AND RETURN PROMPTLY. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by an authorized person.
