<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:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
NORRELL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
PRELIMINARY COPY - SUBJECT TO COMPLETION
NORRELL CORPORATION
To Our Shareholders:
You are cordially invited to attend the 1998 Annual Meeting of
Shareholders to be held in the "C" Level auditorium at the administrative
offices of the Company, 3535 Piedmont Road, N.E., Atlanta, Georgia, on March 3,
1998, at 9:30 a.m. Eastern Standard Time.
The principal business of the meeting will be to amend the Company's
bylaws to provide that the Board of Directors shall have not fewer than three
nor more than fifteen members, as determined by the Board of Directors, to elect
four Class II directors and one Class III director, and to approve an increase
in the number of shares reserved for issuance under the Company's 1994 Stock
Incentive Plan.
We hope that you will be able to attend this meeting. Whether you plan
to attend or not, we would appreciate your completing, signing, dating and
returning the enclosed proxy card in the envelope provided at your earliest
convenience. If you choose to attend the meeting, you may, of course, revoke
your proxy and personally cast your votes. We look forward to seeing you there.
Sincerely yours,
C. Douglas Miller
Chairman, President and Chief Executive Officer
January 24, 1998
<PAGE> 3
PRELIMINARY COPY - SUBJECT TO COMPLETION
NORRELL CORPORATION
3535 PIEDMONT ROAD, N.E.
ATLANTA, GEORGIA 30305
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 1998 Annual Meeting of Shareholders of Norrell Corporation will be
held on March 3, 1998, at 9:30 a.m. (EST) at the principal administrative
offices of the Company, 3535 Piedmont Road, N.E., Atlanta, Georgia, in the "C"
Level auditorium.
The meeting is called for the following purposes:
1. To act upon a proposal to amend the Company's bylaws to provide that
the Company's Board of Directors shall have not fewer than three nor more than
fifteen members, the precise number to be fixed by resolution of the Board of
Directors from time to time.
2. To elect one Class III director for a two-year term expiring on the
date of the annual meeting of shareholders in 2000, and to elect four Class II
directors for a three-year term expiring on the date of the annual meeting of
shareholders in 2001.
3. To act upon a proposal to amend the Company's 1994 Stock Incentive
Plan to increase the number of shares reserved for issuance under such Plan.
4. To consider and act upon such other business as may properly come
before the meeting or any adjournment(s).
The Board of Directors has fixed the close of business on December 29,
1997, as the record date for the determination of shareholders entitled to
notice of and to vote at the meeting.
By order of the Board of Directors,
Mark H. Hain
Secretary
January 24, 1998
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO
SIGN, COMPLETE AND RETURN THE ENCLOSED PROXY SO THAT YOUR STOCK WILL BE
REPRESENTED.
<PAGE> 4
PRELIMINARY COPY - SUBJECT TO COMPLETION
NORRELL CORPORATION
3535 PIEDMONT ROAD, N.E.
ATLANTA, GEORGIA 30305
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Norrell
Corporation (the "Company") for use at the 1998 Annual Meeting of Shareholders
to be held on March 3, 1998, at 9:30 a.m. (EST), at the administrative offices
of the Company, 3535 Piedmont Road, N.E., Atlanta, Georgia. Any shareholder
giving a proxy has the power to revoke it at any time before it is voted by
filing with the Secretary either an instrument revoking the proxy or a duly
executed proxy bearing a later date. Proxies may also be revoked by any
shareholder present at the meeting who expresses a desire to vote his or her
shares in person. Proxies in the accompanying form which are properly executed
by shareholders, duly returned and not revoked will be voted. Such proxies will
be voted in accordance with the directions, if any, given by such shareholders,
and if directions are not given, will be voted in favor of the proposal to amend
the Company's bylaws to provide for not fewer than three nor more than fifteen
members of the Company's Board of Directors, the precise number to be fixed by
resolution of the Board of Directors from time to time; in favor of the proposal
to elect the four nominees for Class II directors and the nominee for Class III
director; in favor of the proposal to increase the number of shares reserved for
issuance under the Company's 1994 Stock Incentive Plan; and in accordance with
the best judgment of the proxy holders on any other matter that may properly
come before the meeting.
This proxy statement and proxy and the accompanying notice were first
mailed to shareholders on or about January 24, 1998.
All information in this Proxy Statement has been adjusted to reflect a
two-for-one stock split of the Common Stock effected on June 24, 1996.
VOTING RIGHTS AND PRINCIPAL SHAREHOLDERS
December 29, 1997, has been fixed as the record date for the
determination of shareholders entitled to notice of and to vote at the meeting
or any adjournment(s). As of the record date, the Company had outstanding and
entitled to vote at the meeting 27,113,142 shares of Common Stock, each share
being entitled to one vote (the "Common Stock"). The holders of a majority of
the shares entitled to be voted must be present or represented by proxy to
constitute a quorum. Shares as to which authority to vote is withheld,
abstentions and broker non-votes are counted in determining whether a quorum
exists.
With regard to Proposal 1, the Company's Articles of Incorporation
provide that the Company's bylaws may be amended by the affirmative vote of the
holders of a majority of the issued and outstanding shares of the Company
entitled to vote in the election of directors. Accordingly, shares not
represented at the meeting and shares with respect to which authority to vote in
favor of Proposal 1 is withheld will have the effect of negative votes.
With regard to Proposal 2, the Company's bylaws provide that directors
are elected by the affirmative vote of the holders of a majority of the shares
entitled to notice of and to vote in the election at a meeting at which a quorum
is present. Accordingly, shares not represented at the meeting and shares with
respect to which authority to vote for one or more nominees is withheld will
have the effect of negative votes.
With regard to Proposal 3, the affirmative vote of the majority of the
shares represented and entitled to vote on the subject matter at a meeting at
which a quorum is present shall be the act of the shareholders. Therefore,
abstentions with respect to Proposal 3 will have the effect of negative votes,
whereas broker non-votes will have no effect on the results of the voting.
Guy W. Millner, a Director of the Company, beneficially owns, with the
power to vote, approximately 35% of the outstanding shares of Common Stock. Mr.
Millner has indicated that he intends to vote in favor of the
1
<PAGE> 5
proposal to amend the Company's bylaws, in favor of the proposal to elect as
directors the nominees for Class II and Class III set forth below, and in favor
of the proposal to increase the number of shares reserved for issuance under the
Company's 1994 Stock Incentive Plan.
The following table sets forth stock ownership information concerning
those persons known by management of the Company to own beneficially more than
5% of the Common Stock, the directors of the Company, the executive officers
named in the Summary Compensation Table set forth under the heading "Executive
Compensation" below, and all directors and executive officers as a group. All
information is given as of December 31, 1997. An asterisk in the Percent of
Class column indicates beneficial ownership of less than 1% of the outstanding
Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP (2)(3) PERCENT OF CLASS
- ----------------------------------------- --------------------------- ----------------
<S> <C> <C>
Guy W. Millner (4) 9,509,767 (5) 35.02
MI Holdings, Inc. (6) 2,252,844 8.31
C. Douglas Miller 649,228 2.36
Larry J. Bryan 220,976 (7) *
Lucius E. Burch, III 118,400 (8) *
Kaaren Johnson-Street 4,400 *
Donald A. McMahon 34,400 *
Frank A. Metz, Jr. 12,400 *
Nancy Clark Reynolds 11,400 *
Carl E. Sanders 76,832 (9) *
Thomas A. Vadnais 158,732 *
James Ernest Riddle 10,485 *
Mark H. Hain 86,852 *
All current executive officers and directors as 11,841,263 41.97
a group (27 persons)
</TABLE>
(1) Addresses given only for beneficial owners of more than 5% of the
Common Stock.
(2) Treats Common Stock and all options exercisable within 60 days of
December 31, 1997, as beneficially owned and, unless otherwise
indicated, the shares shown are solely owned by the indicated
beneficial owner.
(3) Includes (i) shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days of December 31, 1997, as follows:
Mr. Miller, 343,679; Mr. Bryan, 59,116; Mr. Burch, 18,400; Ms.
Johnson-Street, 4,400; Mr. McMahon, 2,400; Mr. Metz, 10,400; Ms.
Reynolds, 11,400; Mr. Sanders, 33,732; Mr. Vadnais, 84,468; Mr. Hain,
50,000; and all executive officers and directors as a group, 936,977;
(ii) shares of Common Stock issuable upon the exercise of stock
purchase rights acquired under the Company's nonqualified deferred
compensation plan as follows: Mr. Millner, 30,146; Mr. Miller, 17,078;
Mr. Bryan, 28,623; Mr. Vadnais, 1,060; Mr. Riddle, 485; Mr. Hain,
8,064; and all executive officers and directors as a group, 154,243;
(iii) shares of Common Stock held in the Company's profit sharing plan
as follows: Mr. Millner, 90,272; Mr. Miller, 26,956; Mr. Bryan, 3,258;
and all executive officers and directors as a group, 158,262; and (iv)
shares of Common Stock held in the Company's Employee Stock Purchase
Plan as follows: Mr. Bryan, 1,410; Mr. Vadnais, 2,434; and all
executive officers and directors as a group, 11,056.
(4) 3535 Piedmont Road, N.E., Atlanta, Georgia 30305
(5) Of the indicated shares, 2,252,844 are held by MI Holdings, Inc., a
corporation of which Mr. Millner owns a majority of the voting stock.
(6) 3108 Piedmont Road, N.E., Suite 105, Atlanta, Georgia 30305
(7) Of the indicated shares, 50,793 are owned by Dorothy Bryan, Mr. Bryan's
wife. Mr. Bryan disclaims ownership of these shares.
(8) Of the indicated shares, 100,000 are held by Apache Venture Partners,
in which Mr. Burch has a 66.67% interest.
(9) Of the indicated shares, 9,000 are indirectly held by Mr. Sanders in
the Carl E. Sanders Retirement Plan Trust, of which Mr. Sanders is
trustee.
2
<PAGE> 6
PROPOSAL 1. AMENDMENT OF THE COMPANY'S BYLAWS
The bylaws of the Company currently provide that the Board of Directors
shall consist of not less than three nor more than ten members, the precise
number to be fixed by resolution of the shareholders from time to time. The
Board of Directors of the Company has determined that it is in the best interest
of the Company to provide for greater flexibility in the size of the Board in a
manner which also avoids the expense and management effort of a proxy
solicitation whenever a change in the size of the Board is determined to be
appropriate. The Board of Directors proposes to amend the bylaws to increase the
maximum size of the Company's Board of Directors to fifteen and allow the Board
of Directors to fix the precise number of directors, and, therefore, has adopted
a resolution approving such bylaw amendment. In addition, the Board of Directors
has adopted a resolution (subject to shareholder approval of the amendment of
the Company's bylaws) to add an additional director to Class III, and has
proposed an individual to fill the newly-created vacancy at the meeting of the
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE
COMPANY'S BYLAWS AS SET FORTH IN APPENDIX A.
PROPOSAL 2. ELECTION OF DIRECTORS
NOMINEES
The Board of Directors of the Company is divided into three classes of
directors with staggered terms of office. Upon the expiration of the term of
office for a class of directors, the nominees for that class are elected for a
term of three years to serve until the election and qualification of their
successors. At the Annual Meeting of Shareholders this year, four classII
nominees are in Class II and, subject to shareholder approval of Proposal 1, one
nominee is in Class III. The incumbent Class I and Class III directors have one
year and two years, respectively, remaining in their terms of office.
It is the intention of the persons named as proxies to vote their
proxies for the election of Mr. James Ernest Riddle as a Class III director and
for the election of Mr. Larry J. Bryan, Ms. Kaaren Johnson-Street, Mr. Frank A.
Metz, Jr. and Mr. Guy W. Millner as Class II directors. All of the Class II
nominees currently serve as directors. In the event any of the nominees refuses
or is unable to serve as a director (which is not anticipated), the persons
named as proxies reserve full discretion to vote for such other person or
persons as may be nominated.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
NOMINEES NAMED BELOW.
The following section sets forth the names, ages, occupations and
employment during the last five years of each of the nominees and the directors
continuing in Class I and Class III, the period during which each has served as
a director of the Company and other directorships held, all as of December 8,
1997.
NOMINEES FOR CLASS II
(TERM EXPIRING 2001)
LARRY J. BRYAN
Director since 1985 Age: 54
Mr. Bryan is and has been Executive Vice President of the Company since
1985. Mr. Bryan also served as Chief Financial Officer of the Company from 1985
until October 1995.
KAAREN JOHNSON-STREET
Director since 1996 Age: 51
Ms. Johnson-Street is the President of Kaaren Street Associates. She
was Vice President of Diversity Business Enterprise of Burger King Corporation
from 1994 to May 1996. From 1991 to 1994, she was President and Chief Executive
Officer of the Private Industry Council of Dade County d/b/a Jobs for Miami.
3
<PAGE> 7
FRANK A. METZ, JR.
Director since 1993 Age: 63
Mr. Metz was Chairman of Roosevelt Hospital in New York City from 1994
until May 1996. From 1989 until January 1993, Mr. Metz was Senior Vice President
and Chief Financial Officer of International Business Machines Corporation where
he worked for 38 years. Mr. Metz is a director of Solutia Inc. and Allegheny
Power Systems Company.
GUY W. MILLNER
Director since 1961 Age: 61
Mr. Millner served as Chairman since the Company was founded until
October, 1997. From November 1983 until October 15, 1993, Mr. Millner served as
President and Chief Executive Officer of the Company.
NOMINEE FOR CLASS III
(TERM EXPIRING 2000)
JAMES ERNEST RIDDLE
Director nominee Age: 56
Mr. Riddle is and since March 1997 has been Chief Operating Officer of
the Company and President of Norrell Services, Inc. Prior to joining the
Company, Mr. Riddle served as President of Ryder International for over a year,
after serving first as Senior Vice President, and then as Executive Vice
President, Marketing and Sales, with Ryder System, Inc. since January 1993. Mr.
Riddle was a Vice President, Marketing and Sales, for Xerox Corporation prior to
joining Ryder System, Inc. He is a director of Danka Business Systems PLC.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
CLASS I
(TERM EXPIRING 1999)
LUCIUS E. BURCH, III
Director since 1982 Age: 56
Mr. Burch has been Chairman of the investment firm of Massey Burch
Investment Group, Inc. for more than five years. Mr. Burch is also a director of
QMS, Inc., Physicians Resource Group, Inc., and Titan Holdings, Inc.
DONALD A. MCMAHON
Director since 1984 Age: 66
Mr. McMahon has been a private investor for more than five years and
currently serves on the Boards of Directors of Intelligent Systems Corp. and
Richton International.
C. DOUGLAS MILLER
Director since 1984 Age: 56
Mr. Miller is and has been Chief Executive Officer and President of the
Company since October 15, 1993. He joined Norrell Services, Inc., a subsidiary
of the Company, in 1979, and served as President and Chief Operating Officer of
the Company immediately prior to his election as President and Chief Executive
Officer. Mr. Miller is also Chairman of the Company's Board of Directors and a
director of American Business Products, Inc.
4
<PAGE> 8
CLASS III
(TERM EXPIRING 2000)
NANCY CLARK REYNOLDS
Director since 1989 Age: 70
Ms. Reynolds was the Vice Chairman of the consulting firm of Wexler,
Reynolds, Fuller, Harrison and Schule, Inc. from 1989 until she retired in 1993
and President of the same firm from 1983 to 1989. She serves as a director of
Wackenhut Corporation.
CARL E. SANDERS
Director since 1989 Age: 72
Mr. Sanders is the Chairman of the law firm of Troutman Sanders LLP,
Atlanta, Georgia. Prior to 1995, Mr. Sanders served as Chief Partner of Troutman
Sanders for more than five years. He serves as a director of Carmike Cinemas,
Inc., Matria Healthcare, Inc., Healthdyne Information Enterprises and Metromedia
International Group, Inc.
THOMAS A. VADNAIS
Director since 1994 Age: 50
Mr. Vadnais is Vice President - National Service Management of the
Company, and is also the President and Chief Operating Officer of Tascor
Incorporated, a subsidiary of the Company. From September 1992 until October 31,
1993, he served as Vice President - General Manager, Tascor Incorporated, when
he was elected President and Chief Operating Officer. Prior to September 1992,
Mr. Vadnais was a Vice President of Operations for the national distribution
division of International Business Machines Corporation, where he was employed
for 24 years.
MEETINGS AND COMMITTEES
During the past fiscal year, the Board of Directors met four (4) times.
The executive committee consists of Messrs. Miller, Bryan, Metz,
Millner, and Sanders and did not meet during the past fiscal year. The executive
committee functions with substantially all of the powers and duties of the Board
of Directors; however, the committee lacks authority to amend the Articles of
Incorporation or Bylaws of the Company, fill vacancies on the Board of
Directors, approve or propose to shareholders action for which shareholder
approval is required by law or approve mergers that do not require shareholder
approval. The Board of Directors does not have a nominating committee. No formal
procedure for shareholder recommendations regarding nominees to the Board of
Directors has been adopted. The executive committee would consider any such
shareholder recommendations if submitted in writing, addressed to the chairman
of the executive committee at the Company's principal administrative offices.
The audit committee consists of Mr. Burch, Ms. Johnson-Street, Mr.
Metz, and Ms. Reynolds. The audit committee met one (1) time during the past
fiscal year. The audit committee is responsible for reviewing the financial
statements of the Company, for evaluating the Company's internal control systems
and procedures, for coordinating and approving the activities of the Company's
external auditors, and for coordinating and approving the activities of the
Company's internal auditors.
The compensation and stock option committee consists of Ms.
Johnson-Street, Mr. McMahon, Ms. Reynolds, and Mr. Metz, and met one (1) time
during the past fiscal year. This committee is responsible for setting and
reviewing the compensation, including fringe benefits, of the executive officers
and directors of the Company and administering the Company's stock option and
benefit plans.
5
<PAGE> 9
DIRECTOR COMPENSATION
During fiscal 1997, nonmanagement directors other than Mr. Burch
received fees of $20,000, plus a fee of $1,000 for each board meeting and
committee meeting attended. Pursuant to the terms of a 1981 agreement, the
Company paid a consulting fee to Massey Burch Investment Group, Inc. of
approximately $3,309 per month during fiscal 1997, and Mr. Burch did not receive
any director's fees for fiscal 1997. The Company paid ordinary and necessary
travel expenses for directors to attend board and committee meetings. Directors
are also eligible to receive non-qualified stock options which are generally
exercisable ratably over four or five years at a price equal to the fair market
value of the Common Stock on the date of grant.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and certain officers and persons who own beneficially more
than 10% of a registered class of the Company's equity securities to file with
the Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. Certain officers, directors and greater than 10% shareholders
are required by SEC regulations to furnish the Company with copies of all such
forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, its officers, directors, and greater than 10%
shareholders complied during fiscal 1997 with all applicable Section 16(a)
filing requirements.
6
<PAGE> 10
EXECUTIVE COMPENSATION
This table discloses the compensation awarded or paid to, or earned by,
the Company's Chief Executive Officer and its four other most highly compensated
executive officers with respect to the 1997, 1996 and 1995 fiscal years
(together, these persons are sometimes referred to as the "Named Executives").
The Company has no outstanding stock appreciation rights ("SARs") and granted no
SARs during fiscal 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ------------
OTHER ANNUAL ALL OTHER
FISCAL SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
NAME AND POSITION YEAR ($) ($) (1) ($) (2) (#) ($)(3)
- ----------------- ------ ------ ------- ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
C. Douglas Miller 1997 550,000 440,000 23,099 --- 74,920
Chairman, President and 1996 482,698 550,000 59,338 174,000 31,117
Chief Executive Officer 1995 404,917 450,000 --- 250,000 28,166
James Ernest Riddle 1997 294,231 213,100 2,073 75,000 123,846
Chief Operating 1996 --- --- --- --- ---
Officer, and President, 1995 --- --- --- --- ---
Norrell Services, Inc.
Larry J. Bryan 1997 375,000 300,000 20,636 --- 65,856
Executive Vice 1996 324,511 375,000 --- 74,000 12,966
President 1995 263,490 300,000 --- 150,000 17,407
Thomas A. Vadnais 1997 282,692 160,000 14,908 20,000 27,465
Vice President, 1996 247,404 200,000 --- 0 13,391
National Service 1995 236,291 179,875 --- 40,000 13,310
Management, and
President and Chief
Operating Officer,
Tascor Incorporated
Mark H. Hain 1997 240,000 151,200 3,343 15,000 9,458
Vice President, 1996 222,212 130,000 --- 0 10,788
Secretary and General 1995 212,151 129,000 --- 70,000 12,480
Counsel
</TABLE>
(1) For fiscal 1995, includes supplemental cash bonuses paid under the
terms of the Company's Management Equity Plan as follows: Mr. Vadnais,
$12,375; Mr. Hain, $7,740. See "Stock Plans -- Management Equity Plan"
below.
(2) Includes $39,617 paid for membership dues for Mr. Miller in fiscal
1996. Perquisites and other personal benefits, securities, or property
in an aggregate amount less than the lesser of (a) $50,000, and (b) 10%
of the Named Executive's total annual salary and bonus are not
reflected in this table.
(3) For fiscal 1997, the amounts in this column represent (i) the Company's
matching contributions and discretionary profit sharing allocations to
the nonqualified deferred compensation plan accounts of the Named
Executives, (ii) $835 in premium payments made by the Company for life
insurance for Mr. Miller, (iii) $123,846 paid for Mr. Riddle's moving
expenses, and (iv) $49,572, $39,145, and $15,609, paid to Mr. Miller,
Mr. Bryan and Mr. Vadnais, respectively, as reimbursement of interest
on bank loans obtained for the payment of taxes with respect to the
exercise of certain non-qualified options to purchase
7
<PAGE> 11
the Company's common stock.
This table presents information regarding options granted during the
1997 fiscal year to purchase shares of the Company's Common Stock. In accordance
with rules of the SEC, the table shows the hypothetical "gains" or "option
spreads" that would exist for the respective options based on assumed rates of
annual compound stock price appreciation of 5% and 10% from the date the options
were granted over the full option term. There were no SARs outstanding during
fiscal 1997.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL 1997
Individual Grants
- ------------------------------------------------------------------------------------ Potential Realizable
% of Total Value at Assumed
Number of Options Annual Rates of
Securities Granted Stock Price
Underlying to Appreciation for
Options Employees Option Term
Granted in Exercise Expiration --------------------
Name (#) (1) Fiscal Year Price ($/Sh) Date 5%($) 10%($)
- -------------------- ------------- ------------ ------------ ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
C. Douglas Miller --- --- --- --- --- ---
James Ernest Riddle 75,000 9.95% $26.25 06/04/02 543,929 1,201,942
Larry J. Bryan --- --- --- --- --- ---
Thomas A. Vadnais 20,000 2.65% $25.25 03/10/01 139,522 308,308
Mark H. Hain 15,000 1.99% $25.25 03/10/01 104,642 231,231
</TABLE>
(1) The indicated options were granted pursuant to the Company's 1994 Stock
Incentive Plan at exercise prices equal to the fair market value of the
underlying shares of Common Stock on the date of the grant and have a
term of five years, three months, from the date of the grant. The
exercise price of the options may be paid in cash or by delivery of or
withholding of shares of Common Stock. The indicated options become
exercisable in equal annual increments over a period of five years.
This table presents information regarding options exercised for shares
of the Company's Common Stock during fiscal 1997 and the value of unexercised
options held at November 2, 1997. There were no SARs outstanding during fiscal
1997.
8
<PAGE> 12
AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND 1997 FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT FY-END (#) FY-END ($) (1)
------------------- -----------------------
SHARES ACQUIRED ON VALUE
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- -------------------- ------------------ ---------- --------------- ---------------------
<S> <C> <C> <C> <C>
C. Douglas Miller 77,827 1,515,973 399,046/346,775 8,372,697/4,645,024
James Ernest Riddle --- --- 0/ 75,000 0/ 215,625
Larry J. Bryan 180,817 4,445,418 109,909/149,200 1,925,319/1,777,150
Thomas A. Vadnais 37,110 742,200 93,556/ 56,000 2,116,526/ 770,650
Mark H. Hain 6,000 148,980 52,000/ 33,000 940,449/ 352,875
</TABLE>
- ----------------
(1) Value of unexercised, in-the-money options at November 2, 1997, is the
sum of the value of each option, if more than one, calculated as
follows: [(per share closing sale price on October 31, 1997) less (per
share exercise price)] x number of shares subject to unexercised
options. The per share closing sale price reported by the New York
Stock Exchange ("NYSE") on October 31, 1997, was $29.125. The closing
sale price for October 31, 1997, was used in this calculation because
the Company's fiscal year ended on Sunday, November 2, 1997.
EXECUTIVE OFFICER EMPLOYMENT ARRANGEMENTS
The Company has entered into an employment agreement with C. Douglas
Miller, effective October 1997, which provides for his employment as President
and Chief Executive Officer of the Company until terminated by two weeks notice
from either party to the other. The employment agreement provides for (i) an
annual base salary of $750,000 agreed to by the Company and Mr. Miller, subject
to periodic adjustment by agreement between Mr. Miller and the Company; (ii) an
annual bonus not to exceed 100% of salary based on the extent of achievement of
the Company's pre-tax profit plan presented to the Board of Directors for the
year; and (iii) 36 months severance and immediate vesting of options if
terminated by the Company other than for cause, or by the employee upon either a
change in the terms and conditions of employment or following a change in
control of the Company. The employment agreement contains a three-year
non-competition provision and three-year non-solicitation of employees and
customers provisions, each beginning the date Mr. Miller is no longer an
employee of the Company.
The Company has entered into an employment agreement with James Ernest
Riddle, effective March 3, 1997, which provides for his employment as Chief
Operating Officer and President of the Company until terminated by two weeks
notice from either party to the other. The employment agreement provides for (i)
an annual base salary of $450,000 agreed to by the Company and Mr. Riddle,
subject to periodic adjustment by agreement between Mr. Riddle and the Company;
(ii) an annual bonus not to exceed 90% of salary based on the extent of
achievement of the Company's pre-tax profit plan presented to the Board of
Directors for the year; and (iii) 24 months severance and immediate vesting of
options if terminated by the Company other than for cause, or by the employee
upon either a change in the terms and conditions of employment or following a
change in control of the Company. The employment agreement contains a two-year
non-competition provision and two-year non-solicitation of employees and
customers provisions, each beginning the date Mr. Riddle is no longer an
employee of the Company.
The Company has entered into an employment agreement with Larry J.
Bryan effective May 24, 1993, which provides for his employment as Executive
Vice President of the Company until terminated by ninety days notice by either
party to the other. The employment agreement provides for: (i) a salary and
bonus agreed to by
9
<PAGE> 13
the Company and Mr. Bryan, subject to adjustment from time to time by mutual
agreement; and (ii) 18 months severance and immediate vesting of options if
terminated by the Company other than for cause or by the employee upon change in
terms and conditions of employment following a change in control of the Company.
Mr. Bryan's current salary is $375,000. The employment agreement contains an
18-month non-competition provision and 18-month non-solicitation of employees
and customers provisions, each beginning the date Mr. Bryan is no longer an
employee of the Company.
Tascor Incorporated ("Tascor"), a wholly-owned subsidiary of the
Company, has entered into an employment agreement with Thomas A. Vadnais
effective March 1, 1993, which provides for his employment as President and
Chief Operating Officer of Tascor until terminated by either party on two weeks
notice. The employment agreement provides for: (i) a salary and bonus as agreed
to by Tascor and Mr. Vadnais, subject to adjustment from time to time by mutual
agreement; and (ii) severance in accordance with Tascor's severance policy in
effect at the time of termination. Mr. Vadnais's current salary is $300,000. The
employment agreement contains a one-year non-competition provision and one-year
non-solicitation of employees and customers provisions, each beginning the date
Mr. Vadnais is no longer an employee of Tascor.
The Company has entered into an employment agreement with Mark H. Hain,
effective May 1, 1993, which provides for his employment as Vice President and
General Counsel of the Company until terminated by two weeks notice from either
party to the other. The employment agreement provides for: (i) a salary and
bonus as agreed to by the Company and Mr. Hain, subject to adjustment from time
to time by mutual agreement; and (ii) severance in accordance with the Company's
severance policy in effect at the time of termination. Mr. Hain's current salary
is $240,000. The employment agreement contains a one-year non-competition
provision and one-year non-solicitation of employees and customers provisions,
each beginning the date Mr. Hain is no longer an employee of the Company.
MANAGEMENT EQUITY PLAN
The Company had an executive equity ownership incentive program (the
"Management Equity Plan"), which expired on December 31, 1996, that was designed
to encourage members of senior management who were designated as participants in
the plan to increase their equity ownership in the Company. Under the Management
Equity Plan, the Company established stock acquisition targets that could be
achieved through open market purchases of shares of Common Stock, purchases of
shares from the Company at fair market value under the Management Equity Plan or
otherwise, upon the exercise of stock options, or through contributions to
employee benefit plans which were allocated to the purchase of Common Stock. A
participant in the Management Equity Plan was granted stock options under the
1994 Stock Incentive Plan to purchase up to a specified number of shares of
Common Stock based upon the percentage achievement of the stock acquisition
target established under the Management Equity Plan for such participant. Under
the Management Equity Plan, the Company could make loans to participants
(secured by the stock purchased) to enable them to purchase stock to achieve
annual stock acquisition targets. Stock options granted in connection with the
Management Equity Plan vest ratably over four years, expire 10 years after the
date of grant, and contain terms accelerating the vesting of such options upon
predetermined increases in the market value of the Common Stock. Participants
who met their annual stock acquisition targets were paid a supplemental cash
bonus equal to the lesser of 15% of the purchase price of the shares acquired to
meet their target or 15% of the participant's annual bonus. Stock options
granted in connection with the Management Equity Plan were issued under the
Company's 1994 Stock Incentive Plan.
CERTAIN RETIREMENT BENEFITS
The Company has a nonqualified salary continuation plan (the "Vision
Plan"), which is designed to provide retirement benefits to certain selected
executive employees. At the time of selection to become a participant, the
individual is placed into one of three participation levels. The annual amount
of such individual's retirement benefit, depending upon participation level, is
an amount determined in one of the following three ways: (i) 20% of such
individual's average annual compensation based on the five consecutive calendar
years after becoming a Vision Plan participant during which the individual's
compensation is highest; (ii) 20% of such individual's average annual
compensation for the first five calendar years of plan participation; or (iii)
the greater of (A) 20% of such individual's average annual compensation for the
first five calendar years of plan participation, or (B) 1% of such individual's
10
<PAGE> 14
average annual compensation for the five consecutive calendar years of plan
participation during which compensation is highest, multiplied by actual years
of participation in the plan, to a maximum of 20 years or the end of the year in
which the individual attains age 62, whichever comes first. Employees entering
the Vision Plan after January 1, 1997, will only receive a benefit calculated
according to clause (B) of item (iii) above. Benefits vest commencing after five
years of plan participation and become fully vested after 10 years of plan
participation. Benefits will be paid for 15 years beginning on the later of age
62 or termination of employment. The estimated annual benefits payable to the
Named Executives, assuming retirement at age 62, are as follows: C. Douglas
Miller, $209,232; James Ernest Riddle, $23,062; Larry J. Bryan, $141,922; Thomas
A. Vadnais, $89,942; and Mark H. Hain, $71,212.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors of the Company has
prepared the following report on executive compensation. This report describes
the Company's current executive compensation program, including the underlying
philosophy of the program and the criteria on which executive compensation was
based. This report also discusses the compensation paid to the Company's
Chairman and Chief Executive Officer, C. Douglas Miller, during the most recent
fiscal year.
The Compensation Committee of the Company's Board of Directors (the
"Committee") consists of four directors who are neither employees nor officers
of the Company. The Committee reviews the Company's executive compensation
program and policies each year and determines the compensation of the Named
Executives. The Committee's determinations are reviewed with and approved by all
of the Company's non-employee directors, who constitute a majority of the Board.
The Committee's policy regarding compensation of the Company's officers
is to provide competitive salary levels and compensation incentives that attract
and retain individuals of outstanding ability, that recognize individual
performance and the performance of the Company relative to the performance of
other companies of comparable size and quality, and that support the Company's
primary goal of increasing shareholder value.
The executive compensation program includes three components which,
taken together, constitute a flexible and balanced method of establishing total
compensation for management. These components are base salary, short-term
incentive awards in the form of cash bonuses and long-term incentive awards in
the form of stock option grants, each of which is discussed in more detail
below.
BASE SALARIES
The Committee annually reviews various studies by compensation
consulting firms and public information from other sources regarding
compensation levels for publicly-held companies of similar size located in the
Southeast and elsewhere in the United States. The Committee establishes the
salaries of the Named Executives and reviews the salaries of the other executive
officers. Individual salaries are determined by the Committee's assessment of
the individual's experience level, the scope and complexity of the position held
and the range of salaries for similar positions in publicly-held companies of
similar size. The Committee believes that publicly-held companies of similar
size represent the Company's competitors for executive talent and that a review
of the compensation practices of such companies is more relevant than a review
of the compensation practices of companies of various sizes in the temporary
services or staffing industry.
SHORT-TERM INCENTIVE PROGRAM
The goal of the short-term incentive, or discretionary bonus, program
is to place a portion of the executive officers' total cash compensation at risk
in order to encourage and reward a continued high level of performance each
year, and to further encourage a continued high level of performance in future
years. Individual incentive amounts are determined by the Committee in its
discretion based primarily upon its assessment of the performance of the Company
relative to the Company's plan, which is developed annually by the Company and
approved by the Board of Directors and, to a lesser extent, the performance of
the Company relative to the performance of other companies in the temporary
services or staffing industry and the individual's organizational responsibility
and personal performance. In evaluating the Company's performance relative to
the approved plan, the Committee considers such
11
<PAGE> 15
factors as sales growth, return on equity, return on assets, stock performance,
total shareholder return, growth in earnings per share and specifically pretax
earnings of the Company. No specific weight is assigned to any of such
performance factors; however, specific target levels varying from 80% to 120% of
the approved plan with respect to pretax earnings, if attained, will result in a
bonus award under the program. In fiscal 1997, cash bonuses for all executive
officers were paid annually.
LONG-TERM INCENTIVE PROGRAM
Stock options are the primary basis for the Company's long-term
incentive program. The Committee periodically grants stock options at no less
than fair market value at the date of grant with a vesting period of one to five
years. The option program is designed to link officer compensation to long-term
shareholder value and focus management attention on long-term Company
performance. Stock options are also granted to encourage and facilitate personal
stock ownership by the executive officers and thus strengthen both their
personal commitment to the Company and their longer term perspective. The size
of the grants is based on individual levels of responsibility and the potential
for the officers to contribute to the future success of the Company. The number
of options granted to individual officers was subjectively determined by the
Committee without regard to the number of options previously granted. The
Committee believes the total compensation of officers, including the value of
options at the date of grant, is competitive with total compensation paid by
other major corporations. The amount of any gain that officers ultimately
realize from options depends solely on the future performance of the Company's
Common Stock.
The Committee believes that the three components of compensation
described above provide total compensation that is competitive with the total
compensation paid by other publicly-held companies of similar size, effectively
links officer and shareholder interests through equity-based plans and provides
incentives that are consistent with the long-term increase in value of the
Company as reflected in its per share market price.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee believes that Mr. C. Douglas Miller's compensation as
Chairman and Chief Executive Officer appropriately reflects individual and
Company performance in the short and long term. In determining Mr. Miller's base
salary, bonus and stock option grant for fiscal 1998, the Company considered
both the Company's overall performance and Mr. Miller's individual performance
using the same criteria as it used for the other Named Executives as described
above. It also considered the compensation received by chief executive officers
of other publicly-held companies of similar size as well as incentive levels
considered appropriate by the Committee in establishing Mr. Miller's total
compensation. The options granted to Mr. Miller in fiscal 1997 are shown in the
table entitled "Option Grants in Fiscal 1997" and reflect his individual
performance, and the Committee's view of the continuing importance of his role
in determining the future success of the Company.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), limits the amount of individual compensation for certain executives
that may be deducted by the employer for federal tax purposes in any one fiscal
year to $1 million unless such compensation is "performance-based." The
determination of whether compensation is performance-based depends upon a number
of factors, including shareholder approval of the plan under which the
compensation is paid, the exercise price at which options or similar awards are
granted, the disclosure to and approval by the shareholders of applicable
performance standards, the composition of the Committee, and certification by
the Committee that performance standards were satisfied. While it is possible
for the Company to compensate or make awards under incentive plans and otherwise
that do not qualify as performance-based compensation deductible under Section
162(m), the Committee, in structuring compensation programs for its top
executive officers, intends all compensation awards to be deductible.
12
<PAGE> 16
Submitted by the Compensation Committee of the Company's Board of Directors:
Kaaren Johnson-Street
Donald A. McMahon
Nancy Clark Reynolds
Frank A. Metz, Jr., Chairman
13
<PAGE> 17
PERFORMANCE GRAPH
The following graph indicates the Company's cumulative total return to
shareholders from July 26, 1994 (the first trading day of the Company's Common
Stock), through October 31, 1997 (the last business day prior to the Company's
fiscal year end), as compared to cumulative total returns for the NYSE Stock
Market Index and a group of peers made up of the following public companies:
Kelly Services, Inc., Manpower Inc., The Olsten Corporation and Interim
Services, Inc.
COMPARISON OF CUMULATIVE TOTAL RETURN*
FOR THE YEAR ENDED NOVEMBER 2, 1997
<TABLE>
<CAPTION>
NYSE
Company Stock Index Industry Group Index
<S> <C> <C> <C>
7/26/94 100.0 100.0 100.0
10/28/94 127.0 104.3 111.9
10/27/95 210.8 128.8 108.9
10/25/96 394.5 158.1 116.1
10/31/97 412.6 208.2 130.0
</TABLE>
*Assumes $100 invested on July 26, 1994, in Norrell Corporation Common Stock,
the NYSE Stock Market Index, and the peer group.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
The Company has made loans under the Management Equity Plan from time
to time to certain of the Company's executives to assist those individuals in
purchasing shares of Common Stock. Such indebtedness was evidenced by promissory
notes bearing interest at a specified prime rate on the principal amount
thereof. The largest outstanding amount of such loan to Stanley E. Anderson,
Senior Vice President of Business Development of Norrell Services, Inc., during
fiscal 1997 was $76,805, and as of December 31, 1997, the outstanding amount of
such loan was $38,405. Mr. Carl E. Sanders, a director of the Company, is also
Chairman of Troutman Sanders LLP, a law firm based in Atlanta, Georgia, which
provided legal services to the Company in fiscal 1997 and is expected to
provide legal services to the Company in the future.
PROPOSAL 3. APPROVAL OF AMENDMENT TO THE NORRELL CORPORATION
1994 STOCK INCENTIVE PLAN
The Board of Directors has authorized an amendment to the Norrell
Corporation 1994 Stock Incentive Plan (the "Incentive Plan"). The sole effect of
the amendment is to increase the number of shares of stock reserved for issuance
under the Incentive Plan by an additional 900,000 shares. As of December 29,
1997, 233,938 shares were available for options to be granted and 2,171,446
shares were subject to outstanding option grants. The following is a description
of the Incentive Plan, as proposed to be amended.
The Incentive Plan provides for equity-based incentives, in the form of
nonqualified stock options, incentive stock options, shares of restricted stock,
unrestricted bonus stock, performance units, phantom stock, stock appreciation
rights ("SARs") and dividend equivalent rights. The Incentive Plan gives the
Company flexibility in structuring equity-based incentive compensation by
providing for a broad range of types of incentive
14
<PAGE> 18
awards that may be made. The Board of Directors believes that a flexible plan is
needed to fashion equity-based incentives consistent with the Company's
philosophy of linking executive compensation to total shareholder return and the
long-term financial performance of the Company.
The Incentive Plan is administered by a committee of disinterested
directors who determine the persons to whom, and the times at which, awards will
be granted, the type of awards to be granted, and all other related terms and
conditions of each award. Officers, key employees, consultants and directors of
the Company and its affiliates are eligible to participate in the Incentive
Plan. The Company estimates that approximately 160 persons are currently
eligible to participate in the Incentive Plan.
The terms and conditions of each award under the Incentive Plan are set
forth in a written agreement with a participant or a written program established
by the committee. The per share exercise price of any nonqualified stock option
is determined by the committee. The per share exercise price of any incentive
stock option may not be less than the fair market value of a share of Common
Stock at the time of grant. No incentive stock option may be granted on or after
the tenth anniversary of the date the Incentive Plan was approved by the Board
of Directors. The committee determines whether SARs, performance units, dividend
equivalent rights and phantom stock awards will be settled in cash or in shares
of Common Stock valued at fair value on the date of payment. The committee also
is authorized to accelerate the vesting, exercisability and settlement of awards
and to permit the exercise price of an option to be paid in cash or by the
delivery of or withholding of shares.
The Board of Directors may amend or terminate the Incentive Plan
without the approval of the shareholders, but may condition any amendment on
shareholder approval if the Board of Directors believes it is necessary or
advisable under applicable tax or securities laws. No termination or amendment
of the Incentive Plan without the consent of the holder of an award shall
adversely affect the rights of that participant.
Upon approval by the shareholders of this Proposal 3, a total of
3,890,000 shares of Common Stock (including the additional 900,000 shares) will
be reserved for issuance pursuant to the Incentive Plan. The number of shares of
Common Stock reserved under the Incentive Plan is subject to adjustment in the
event of stock dividends, stock splits, recapitalizations and similar events. As
of January 5, 1998, options to purchase 2,384,646 shares of Common Stock were
outstanding under the Incentive Plan and 595,416 shares of Common Stock were
previously issued upon the exercise of options granted or stock awards made
under the Incentive Plan. To the extent required by Section 162(m) of the Code
and regulations thereunder for compensation to be treated as qualified
performance-based compensation, the maximum number of shares of Common Stock
with respect to which options or SARs may be granted during any one year period
to any employee may not exceed 100,000.
As of January 5, 1998, no grants or awards other than grants of options
were made under the Incentive Plan. No person other than a Named Executive
received 5% or more of the options granted in fiscal 1997 under the Incentive
Plan. The following table sets forth information concerning options granted
since inception through January 5, 1998, under the Incentive Plan, including
options which have been exercised, to each Named Executive and the groups
identified below.
<TABLE>
<CAPTION>
Name of Person or Group Options Granted
- ----------------------- ---------------
<S> <C>
C. Douglas Miller 590,666
Larry J. Bryan 340,666
Thomas A. Vadnais 139,666
James Ernest Riddle 75,000
Mark H. Hain 100,000
All current executive officers 1,973,660
All current directors who are not executive officers 0
All employees, including all current officers who are not executive officers 1,180,482
</TABLE>
The closing sales price per share of the Common Stock on January 9,
1998, as reported by the New York Stock Exchange, was $18.75.
A participant will not recognize income for federal income tax purposes
upon the grant of an option or at
15
<PAGE> 19
any time prior to the exercise of the option.
At the time a participant exercises a nonqualified option, he or she
will recognize compensation taxable as ordinary income in an amount equal to the
excess of the fair market value of the Common Stock on the date the option is
exercised over the price paid for the Common Stock, and the Company will then be
entitled to a corresponding deduction.
A participant who exercises an incentive stock option will not be taxed
at the time the participant exercises the option or a portion thereof. Instead,
the participant will be taxed at the time he or she sells the Common Stock
purchased pursuant to the option. The participant will be taxed on the excess
amount for which the participant sells the stock over the price the participant
had paid for the stock. If the participant sells the stock after two years from
the date of grant of the option and one year from the date the stock is
transferred to the participant, the gain will be capital gain and the Company
will not get a corresponding deduction. If the participant sells the stock at a
gain prior to that time, the difference between (i) the lesser of the fair
market value on the date of exercise and the amount for which the stock is sold,
and (ii) the amount the participant paid for the stock will be taxed as ordinary
income and the Company will be entitled to a corresponding deduction. The
balance, if any, of the gain will be treated as capital gain. If the participant
sells the stock for less than the amount he or she paid for the stock prior to
the one or two year periods indicated above, no amount will be taxed as ordinary
income and the loss will be treated as a capital loss. Exercise of an incentive
option may subject a participant to, or increase a participant's liability for,
the federal alternative minimum income tax.
A participant generally will not recognize income upon the grant of a
SAR, dividend equivalent right, performance units or phantom share. At the time
a participant receives payment under any such award, he or she generally will
recognize compensation taxable as ordinary income in an amount equal to the cash
or the fair market value of the Common Stock received, and the Company will then
be entitled to a corresponding deduction.
A participant will not be taxed upon the grant of a stock award if such
award is not transferable by the participant or is subject to a "substantial
risk of forfeiture," as defined in the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code"). However, when the shares of Common Stock that are
subject to the stock award are transferable by the participant or are no longer
subject to a substantial risk of forfeiture (whichever occurs first), the
participant will recognize compensation taxable as ordinary income in an amount
equal to the fair market value of the stock subject to the stock award, less any
amount paid for such stock, and the Company will then be entitled to a
corresponding deduction.
The Incentive Plan is not qualified under Section 401(a) of the
Internal Revenue Code.
The Company's Board of Directors believes that an increase in the
number of shares of stock reserved for issuance under the Incentive Plan is
necessary to permit the Board to make additional grants of options consistent
with the objectives of the Incentive Plan. The following table sets forth
information concerning options which, subject to approval of this Proposal 3 by
the shareholders, the Compensation Committee of the Board of Directors has
approved for grant under the Incentive Plan as of January 5, 1998, including
option grants to each Named Executive and the groups identified below.
<TABLE>
<CAPTION>
Options To
Name of Person or Group Be Granted
- ----------------------- ----------
<S> <C>
C. Douglas Miller 100,000
Jamed Ernest Riddle 75,000
Larry J. Bryan 50,000
Thomas A. Vadnais 13,000
Mark H. Hain 15,000
All current executive officers 378,000
All current directors who are not executive officers 0
All employees, including all current officers who are not executive officers 130,500
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
PROPOSAL TO APPROVE THE AMENDMENT TO THE NORRELL CORPORATION 1994 STOCK
INCENTIVE PLAN.
AUDITORS
The firm of Arthur Andersen LLP has served as the Company's independent
public accountants since 1985 and the Board of Directors intends to reappoint
this firm for fiscal 1998. The appointment of auditors is a matter of
determination by the Board of Directors and is not being submitted to the
shareholders for approval or ratification. A representative of this firm is
expected to attend the meeting to respond to questions from shareholders and to
make a statement if he or she so desires.
16
<PAGE> 20
SHAREHOLDER PROPOSALS
Any proposals from shareholders to be considered for presentation at
the 1999 Annual Meeting of Shareholders and inclusion in the Company's 1999
proxy materials must be received at the principal executive offices of the
Company, 3535 Piedmont Road, N.E., Bldg. 14, Atlanta, Georgia 30305, not later
than October 1, 1998.
Management does not know of any other matters to be presented at the
meeting for action by shareholders. However, if any other matters requiring a
vote of the shareholders arise at the meeting or any adjournment(s), votes will
be cast pursuant to the proxies with respect to such matters in accordance with
the best judgment of the persons acting under the proxies.
The Company will pay the cost of soliciting proxies in the accompanying
form. In addition to solicitation by use of the mails, certain officers and
regular employees of the Company may solicit the return of proxies by telephone,
telegram or personal interview. The Company may request brokerage houses and
custodians, nominees and fiduciaries to forward soliciting material to their
principals, the beneficial owners of Common Stock, and will reimburse them for
their reasonable out-of-pocket expenses.
ANNUAL REPORT
The Annual Report (which is not part of the proxy soliciting material)
of the Company for fiscal 1997 is being mailed to the Company's shareholders
with this proxy statement.
MARK H. HAIN
Secretary
Atlanta, Georgia
January 24, 1998
17
<PAGE> 21
APPENDIX A
AMENDMENT TO NORRELL CORPORATION BYLAWS
The first sentence of Section 3.2 of the Bylaws of the Company is
amended in its entirety to read as follows:
"The Board of Directors shall consist of not fewer than three nor more than
fifteen members, the precise number to be fixed by resolution of the Board of
Directors from time to time."
<PAGE> 22
APPENDIX B
AMENDMENT TO NORRELL CORPORATION
1994 STOCK INCENTIVE PLAN
The first sentence of Section 2.2 of the Plan is amended in its entirety to read
as follows:
"Subject to adjustment in accordance with Section 5.2, three million eight
hundred ninety thousand (3,890,000) shares of stock (after giving effect to the
one-for-three reverse stock split in June 1994 and the two-for-one stock split
in June 1996) (the "Maximum Plan Shares") are hereby reserved exclusively for
issuance pursuant to Stock Incentives, all or any portion of which may be issued
pursuant to Options."
<PAGE> 23
ANNEX 1
NORRELL CORPORATION
1994 STOCK INCENTIVE PLAN
(AS AMENDED MARCH 1997)
<PAGE> 24
NORRELL CORPORATION
1994 STOCK INCENTIVE PLAN
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2 THE STOCK INCENTIVE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Purpose of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Stock Subject to the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Administration of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 Eligibility and Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3 TERMS OF STOCK INCENTIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Terms and Conditions of All Stock Incentives . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Terms and Conditions of Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Option Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(d) Conditions to the Exercise of an Option. . . . . . . . . . . . . . . . . . . . 6
(e) Termination of Incentive Stock Option. . . . . . . . . . . . . . . . . . . . . 6
(f) Special Provisions for Certain Substitute Options. . . . . . . . . . . . . . . 6
3.3 Terms and Conditions of Stock Appreciation Rights. . . . . . . . . . . . . . . . . . . . 7
(a) Settlement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(b) Conditions to Exercise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Terms and Conditions of Stock Awards. . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Terms and Conditions of Dividend Equivalent Rights. . . . . . . . . . . . . . . . . . . 7
(a) Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(b) Conditions to Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Terms and Conditions of Performance Unit Awards. . . . . . . . . . . . . . . . . . . . . 8
(a) Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Conditions to Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Terms and Conditions of Phantom Shares. . . . . . . . . . . . . . . . . . . . . . . . . 8
(a) Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Conditions to Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Treatment of Awards Upon Termination of Employment . . . . . . . . . . . . . . . . . . . 8
SECTION 4 RESTRICTIONS ON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Escrow of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Restrictions on Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 5 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.1 Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2 Changes in Capitalization; Merger; Liquidation. . . . . . . . . . . . . . . . . . . . . 10
5.3 Cash Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
i
<PAGE> 25
<TABLE>
<S> <C> <C>
5.4 Compliance with Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.5 Right to Terminate Employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.6 Non-alienation of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.8 Termination and Amendment of the Plan. . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.9 Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.10 Choice of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.11 Effective Date of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
ii
<PAGE> 26
NORRELL CORPORATION
1994 STOCK INCENTIVE PLAN
SECTION 1 DEFINITIONS
1.1 Definitions. Whenever used herein, the masculine pronoun
shall be deemed to include the feminine, and the singular to include the
plural, unless the context clearly indicates otherwise, and the following
capitalized words and phrases are used herein with the meaning thereafter
ascribed:
(a) "Board of Directors" means the board of directors of
the Company.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Committee" means the committee appointed by the
Board of Directors to administer the Plan. The Committee shall consist of at
least two members of the Board of Directors each of whom shall be a
"disinterested person," as defined in Rule 16b-3 as promulgated under the
Exchange Act.
(d) "Company" means Norrell Corporation, a Georgia
corporation.
(e) "Disability" has the same meaning as provided in the
long-term disability plan or policy maintained or, if applicable, most recently
maintained, by the Company or, if applicable, any affiliate of the Company for
the Participant. If no long-term disability plan or policy was ever maintained
on behalf of the Participant or, if the determination of Disability relates to
an Incentive Stock Option, Disability shall mean that condition described in
Code Section 22(e)(3), as amended from time to time. In the event of a
dispute, the determination of Disability shall be made by the Committee and
shall be supported by advice of a physician competent in the area to which such
Disability relates.
(f) "Disposition" means any conveyance, sale, transfer,
assignment, pledge or hypothecation, whether outright or as security, inter
vivos or testamentary, with or without consideration, voluntary or involuntary.
(g) "Dividend Equivalent Rights" means certain rights to
receive cash payments as described in Plan Section 3.5
(h) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
(i) "Exercise Price" means the price per share of Stock
purchasable under any Option.
(j) "Fair Market Value" with regard to a date means the
closing price at which Stock shall have been sold on the last trading date
prior to that date as reported by the Nasdaq Stock Market (or, if applicable,
as reported by a national securities exchange selected by the Committee on
which the shares of Stock are then actively traded) and published in The Wall
Street Journal; provided that, for purposes of granting awards other than
Incentive Stock Options, Fair Market Value of the shares of Stock may be
determined by the Committee by reference to the average market value determined
over a period certain or as of specified dates, to a tender offer price for the
shares of Stock
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<PAGE> 27
(if settlement of an award is triggered by such an event) or to any other
reasonable measure of fair market value.
(k) "Option" means a non-qualified stock option or an
incentive stock option.
(l) "Over 10% Owner" means an individual who at the time
an Incentive Stock Option is granted owns Stock possessing more than 10% of the
total combined voting power of the Company or one of its Subsidiaries,
determined by applying the attribution rules of Code Section 424(d).
(m) "Participant" means an individual who receives a
Stock Incentive hereunder.
(n) "Performance Unit Award" refers to a performance unit
award described in Plan Section 3.6.
(o) "Phantom Shares" refers to the rights described in
Plan Section 3.7.
(p) "Plan" means the Norrell Corporation 1994 Stock
Incentive Plan.
(q) "Stock" means the Company's common stock, no par
value.
(r) "Stock Appreciation Right" means a stock appreciation
right described in Plan Section 3.3.
(s) "Stock Award" means a stock award described in Plan
Section 3.4.
(t) "Stock Incentive Agreement" means an agreement
between the Company and a Participant or other documentation evidencing an
award of a Stock Incentive.
(u) "Stock Incentive Program" means a written program
established by the Committee, pursuant to which Stock Incentives are awarded
under the Plan under terms, conditions and restrictions set forth in such
written program.
(v) "Stock Incentives" means, collectively, Dividend
Equivalent Rights, Options, Performance Unit Awards, Phantom Shares, Stock
Appreciation Rights and Stock Awards.
(w) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if,
with respect to incentive stock options, at the time of the granting of the
Option, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain.
(x) "Termination of Employment" means the termination of
the employee-employer relationship between a Participant and the Company and
its affiliates, regardless of whether severance or similar payments are made to
the Participant for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, Disability or retirement. The
Committee shall, in its absolute discretion, determine the effect of all
matters and questions relating to a Termination of Employment, including, but
not by way of limitation, the question of whether a leave of absence
constitutes a Termination of Employment.
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<PAGE> 28
SECTION 2 THE STOCK INCENTIVE PLAN
2.1 Purpose of the Plan. The Plan is intended to (a) provide
incentive to officers, key employees, consultants, and directors of the Company
and its affiliates to stimulate their efforts toward the continued success of
the Company and to operate and manage the business in a manner that will
provide for the long-term growth and profitability of the Company; (b)
encourage stock ownership by officers, key employees, consultants, and
directors by providing them with a means to acquire a proprietary interest in
the Company, acquire shares of Stock, or to receive compensation which is based
upon appreciation in the value of Stock; and (c) provide a means of obtaining,
rewarding and retaining key personnel.
2.2 Stock Subject to the Plan. Subject to adjustment in
accordance with Section 5.2, 2,990,000 shares of Stock (after giving effect to
the one-for-three reverse stock split in June 1994 and the two-for-one stock
split in June 1996) (the "Maximum Plan Shares") are hereby reserved exclusively
for issuance pursuant to Options. At no time shall the Company have
outstanding Stock Incentives subject to Section 16 of the Exchange Act and
shares of Stock issued in respect of Stock Incentives in excess of the Maximum
Plan Shares; for this purpose, the outstanding Stock Incentives and shares of
Stock issued in respect of Stock Incentives shall be computed in accordance
with Rule 16b-3(a)(1) as promulgated under the Exchange Act. To the extent
permitted by Rule 16b-3(a)(1) as promulgated under the Exchange Act, the shares
of Stock attributable to the nonvested, unpaid, unexercised, unconverted or
otherwise unsettled portion of any Stock Incentive that is forfeited or
cancelled or expires or terminates for any reason without becoming vested,
paid, exercised, converted or otherwise settled in full shall again be
available for purposes of the Plan.
2.3 Administration of the Plan. The Plan shall be administered by
the Committee, which shall be comprised of at least two members of the Board of
Directors who are both "disinterested persons," as defined in Rule 16b-3 as
promulgated under the Exchange Act, and "outside directors" within the meaning
of Code Section 162(m) and the regulations thereunder. The Committee shall
have full authority in its discretion to determine the officers, key employees,
consultants, and directors of the Company or its affiliates to whom Stock
Incentives shall be granted and the terms and provisions of Stock Incentives,
subject to the Plan. Subject to the provisions of the Plan, the Committee
shall have full and conclusive authority to interpret the Plan; to prescribe,
amend and rescind rules and regulations relating to the Plan; to determine the
terms and provisions of the respective Stock Incentive Agreements or Stock
Incentive Programs and to make all other determinations necessary or advisable
for the proper administration of the Plan. The Committee's determinations
under the Plan need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, awards under the Plan (whether
or not such persons are similarly situated). The Committee's decisions shall
be final and binding on all Participants. The Committee may delegate to any
member of the Board of Directors or officer of the Company the administrative
authority to (a) interpret the provisions of the Plan, any Stock Incentive
Agreement or any Stock Incentive Program; and (b) determine the treatment of
Stock Incentives upon a Termination of Employment, as contemplated in Plan
Section 3.8.
2.4 Eligibility and Limits. Stock Incentives may be granted only
to officers, key employees, consultants, and directors of the Company, or any
affiliate of the Company; provided, however, that directors who serve on the
Committee shall not be eligible to receive awards that are subject to Section
16 of the Exchange Act while they are members of the Committee and that an
incentive stock option may only be granted to an employee of the Company or any
Subsidiary. In the case of incentive stock options, the aggregate Fair Market
Value (determined as at the date an incentive
3
<PAGE> 29
stock option is granted) of stock with respect to which stock options intended
to meet the requirements of Code Section 422 become exercisable for the first
time by an individual during any calendar year under all plans of the Company
and its Subsidiaries shall not exceed $100,000; provided further, that if the
limitation is exceeded, the incentive stock option(s) which cause the
limitation to be exceeded shall be treated as non-qualified stock option(s).
SECTION 3 TERMS OF STOCK INCENTIVES
3.1 Terms and Conditions of All Stock Incentives.
(a) The number of shares of Stock as to which a Stock
Incentive shall be granted shall be determined by the Committee in its sole
discretion, subject to the provisions of Section 2.2 as to the total number of
shares available for grants under the Plan and subject to the limits on Options
and Stock Appreciation Rights described in the following sentence. To the
extent required under Section 162(m) of the Code and the regulations thereunder
for compensation to be treated as qualified performance-based compensation, the
maximum number of shares of Stock with respect to which Options or Stock
Appreciation Rights may be granted during any one year period to any employee
shall not exceed 100,000.
(b) Each Stock Incentive shall either be evidenced by a
Stock Incentive Agreement in such form and containing such terms, conditions
and restrictions as the Committee may determine to be appropriate, or, except
for Options or Stock Appreciation Rights, be made subject to the terms of a
Stock Incentive Program, containing such terms, conditions and restrictions as
the Committee may determine to be appropriate. Each Stock Incentive Agreement
or Stock Incentive Program shall be subject to the terms of the Plan and any
provisions contained in the Stock Incentive Agreement or Stock Incentive
Program that are inconsistent with the Plan shall be null and void.
(c) The date a Stock Incentive is granted shall be the
date on which the Committee has approved the terms and conditions of the Stock
Incentive and has determined the recipient of the Stock Incentive and the
number of shares covered by the Stock Incentive and has taken all such other
action necessary to complete the grant of the Stock Incentive.
(d) Any Stock Incentive may be granted in connection with
all or any portion of a previously or contemporaneously granted Stock
Incentive. Exercise or vesting of a Stock Incentive granted in connection with
another Stock Incentive may result in a pro rata surrender or cancellation of
any related Stock Incentive, as specified in the applicable Stock Incentive
Agreement or Stock Incentive Program.
(e) Stock Incentives shall not be transferable or
assignable except by will or by the laws of descent and distribution. Stock
Incentives shall be exercisable, during the Participant's lifetime, only by the
Participant; or in the event of the Disability of the Participant, by the legal
representative of the Participant; or in the event of the death of the
Participant, by the legal representatives of the Participant's estate or if no
legal representative has been appointed, by the successor in interest
determined under the Participant's will.
3.2 Terms and Conditions of Options. Each Option granted under
the Plan shall be evidenced by a Stock Incentive Agreement. At the time any
Option is granted, the Committee shall determine whether the Option is to be an
incentive stock option described in Code Section 422 or a
4
<PAGE> 30
non-qualified stock option, and the Option shall be clearly identified as to
its status as an incentive stock option or a non-qualified stock option.
Incentive stock options may only be granted to employees of the Company or any
Subsidiary. At the time any incentive stock option granted under the Plan is
exercised, the Company shall be entitled to legend the certificates
representing the shares of Stock purchased pursuant to the Option to clearly
identify them as representing the shares purchased upon the exercise of an
incentive stock option. An incentive stock option may only be granted within
ten (10) years from the earlier of the date the Plan is adopted or approved by
the Company's stockholders.
(a) Option Price. Subject to adjustment in accordance
with Section 5.2 and the other provisions of this Section 3.2, the Exercise
Price under (i) any non-qualified stock option shall be as set forth in the
applicable Stock Incentive Agreement which may be Fair Market Value on the date
of grant or less than or greater than such Fair Market Value; and (ii) any
incentive stock option shall be as set forth in the applicable Stock Incentive
Agreement, but in no event shall it be less than the Fair Market Value on the
date the incentive stock option is granted. With respect to each grant of an
incentive stock option to a Participant who is an Over 10% Owner, the Exercise
Price shall not be less than 110% of the Fair Market Value on the date the
Option is granted.
(b) Option Term. Any incentive stock option granted to a
Participant who is not an Over 10% Owner shall not be exercisable after the
expiration of ten (10) years after the date the Option is granted. Any
incentive stock option granted to a Participant who is an Over 10% Owner shall
not be exercisable after the expiration of five (5) years after the date the
Option is granted. The term of any non-qualified stock option shall be as
specified in the applicable Stock Incentive Agreement.
(c) Payment. Payment for all shares of Stock purchased
pursuant to exercise of an Option shall be made in any form or manner
authorized by the Committee in the Stock Incentive Agreement, including, but
not limited to, (i) cash, (ii) by delivery to the Company of a number of shares
of Stock which have been owned by the holder for at least six (6) months prior
to the date of exercise having an aggregate Fair Market Value of not less than
the product of the Exercise Price multiplied by the number of shares the
Participant intends to purchase upon exercise of the Option on the date of
delivery; (iii) in a cashless exercise through a broker; or (iv) by having a
number of shares of Stock withheld, the Fair Market Value of which as of the
date of exercise is sufficient to satisfy the Exercise Price. In its
discretion, the Committee also may authorize (at the time an Option is granted
or thereafter) Company financing to assist the Participant as to payment of the
Exercise Price on such terms as may be offered by the Committee in its
discretion. If a Stock Incentive Agreement so provides, the Participant may be
granted a new Option to purchase a number of shares of Stock equal to the
number of previously owned shares of Stock tendered in payment for each share
of Stock purchased pursuant to the terms of the Stock Incentive Agreement. Any
such new Option shall be subject to the terms and conditions of the Stock
Incentive Agreement pursuant to which such new Option is granted. Payment of
the Exercise Price shall be made at the time that the Option or any part
thereof is exercised, and no shares shall be issued or delivered upon exercise
of an Option until full payment has been made by the Participant. The holder
of an Option, as such, shall have none of the rights of a stockholder.
(d) Conditions to the Exercise of an Option. Each Option
granted under the Plan shall be exercisable by whom, at such time or times, or
upon the occurrence of such event or events, and in such amounts, as the
Committee shall specify in the Stock Incentive Agreement; provided, however,
that subsequent to the grant of an Option, the Committee, at any time before
complete termination of such Option, may accelerate the time or times at which
such Option may be exercised in whole or in part and may permit the Participant
or any other designated person to exercise the Option,
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<PAGE> 31
or any portion thereof, for all or part of the remaining Option term,
notwithstanding any provision of the Stock Incentive Agreement to the contrary.
(e) Termination of Incentive Stock Option. With respect
to an incentive stock option, in the event of Termination of Employment of a
Participant, the Option or portion thereof held by the Participant which is
unexercised shall expire, terminate, and become unexercisable no later than the
expiration of three (3) months after the date of Termination of Employment;
provided, however, that in the case of a holder whose Termination of Employment
is due to death or Disability, one (1) year shall be substituted for such three
(3) month period. For purposes of this Subsection (e), Termination of
Employment of the Participant shall not be deemed to have occurred if the
Participant is employed by another corporation (or a parent or subsidiary
corporation of such other corporation) which has assumed the incentive stock
option of the Participant in a transaction to which Code Section 424(a) is
applicable.
(f) Special Provisions for Certain Substitute Options.
Notwithstanding anything to the contrary in this Section 3.2, any Option issued
in substitution for an option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code Section
424(a) is applicable, may provide for an exercise price computed in accordance
with such Code Section and the regulations thereunder and may contain such
other terms and conditions as the Committee may prescribe to cause such
substitute Option to contain as nearly as possible the same terms and
conditions (including the applicable vesting and termination provisions) as
those contained in the previously issued option being replaced thereby.
3.3 Terms and Conditions of Stock Appreciation Rights. Each Stock
Appreciation Right granted under the Plan shall be evidenced by a Stock
Incentive Agreement. A Stock Appreciation Right shall entitle the Participant
to receive the excess of (1) the Fair Market Value of a specified or
determinable number of shares of the Stock at the time of payment or exercise
over (2) a specified or determinable price which, in the case of a Stock
Appreciation Right granted in connection with an Option, shall be not less than
the Exercise Price for that number of shares subject to that Option. A Stock
Appreciation Right granted in connection with a Stock Incentive may only be
exercised to the extent that the related Stock Incentive has not been
exercised, paid or otherwise settled.
(a) Settlement. Upon settlement of a Stock Appreciation
Right, the Company shall pay to the Participant the appreciation in cash or
shares of Stock (valued at the aggregate Fair Market Value on the date of
payment or exercise) as provided in the Stock Incentive Agreement or, in the
absence of such provision, as the Committee may determine.
(b) Conditions to Exercise. Each Stock Appreciation
Right granted under the Plan shall be exercisable or payable at such time or
times, or upon the occurrence of such event or events, and in such amounts, as
the Committee shall specify in the Stock Incentive Agreement; provided,
however, that subsequent to the grant of a Stock Appreciation Right, the
Committee, at any time before complete termination of such Stock Appreciation
Right, may accelerate the time or times at which such Stock Appreciation Right
may be exercised or paid in whole or in part.
3.4 Terms and Conditions of Stock Awards. The number of shares of
Stock subject to a Stock Award and restrictions or conditions on such shares,
if any, shall be as the Committee determines, and the certificate for such
shares shall bear evidence of any restrictions or conditions. Subsequent to
the date of the grant of the Stock Award, the Committee shall have the power to
permit, in its discretion, an acceleration of the expiration of an applicable
restriction period with respect to any
6
<PAGE> 32
part or all of the shares awarded to a Participant.
3.5 Terms and Conditions of Dividend Equivalent Rights. A
Dividend Equivalent Right shall entitle the Participant to receive payments
from the Company in an amount determined by reference to any cash dividends
paid on a specified number of shares of Stock to Company stockholders of record
during the period such rights are effective. The Committee may impose such
restrictions and conditions on any Dividend Equivalent Right as the Committee
in its discretion shall determine, including the date any such right shall
terminate and may reserve the right to terminate, amend or suspend any such
right at any time.
(a) Payment. Payment in respect of a Dividend Equivalent
Right may be made by the Company in cash or shares of Stock (valued at Fair
Market Value on the date of payment) as provided in the Stock Incentive
Agreement or Stock Incentive Program, or, in the absence of such provision, as
the Committee may determine.
(b) Conditions to Payment. Each Dividend Equivalent
Right granted under the Plan shall be payable at such time or times, or upon
the occurrence of such event or events, and in such amounts, as the Committee
shall specify in the applicable Stock Incentive Agreement or Stock Incentive
Program; provided, however, that subsequent to the grant of a Dividend
Equivalent Right, the Committee, at any time before complete termination of
such Dividend Equivalent Right, may accelerate the time or times at which such
Dividend Equivalent Right may be paid in whole or in part.
3.6 Terms and Conditions of Performance Unit Awards. A
Performance Unit Award shall entitle the Participant to receive, at a specified
future date, payment of an amount equal to all or a portion of the value of a
specified or determinable number of units (stated in terms of a designated or
determinable dollar amount per unit) granted by the Committee. At the time of
the grant, the Committee must determine the base value of each unit, the number
of units subject to a Performance Unit Award, the performance factors
applicable to the determination of the ultimate payment value of the
Performance Unit Award and the period over which Company performance shall be
measured. The Committee may provide for an alternate base value for each unit
under certain specified conditions.
(a) Payment. Payment in respect of Performance Unit
Awards may be made by the Company in cash or shares of Stock (valued at Fair
Market Value on the date of payment) as provided in the applicable Stock
Incentive Agreement or Stock Incentive Program or, in the absence of such
provision, as the Committee may determine.
(b) Conditions to Payment. Each Performance Unit Award
granted under the Plan shall be payable at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee shall
specify in the applicable Stock Incentive Agreement or Stock Incentive Program;
provided, however, that subsequent to the grant of a Performance Unit Award,
the Committee, at any time before complete termination of such Performance Unit
Award, may accelerate the time or times at which such Performance Unit Award
may be paid in whole or in part.
3.7 Terms and Conditions of Phantom Shares. Phantom Shares shall
entitle the Participant to receive, at a specified future date, payment of an
amount equal to all or a portion of the Fair Market Value of a specified number
of shares of Stock at the end of a specified period. At the time of the grant,
the Committee shall determine the factors which will govern the portion of the
rights so payable, including, at the discretion of the Committee, any
performance criteria that must be satisfied as a condition to payment. Phantom
Share awards containing performance criteria may be designated as
7
<PAGE> 33
Performance Share Awards.
(a) Payment. Payment in respect of Phantom Shares may be
made by the Company in cash or shares of Stock (valued at Fair Market Value on
the date of payment) as provided in the applicable Stock Incentive Agreement or
Stock Incentive Program, or, in the absence of such provision, as the Committee
may determine.
(b) Conditions to Payment. Each Phantom Share granted
under the Plan shall be payable at such time or times, or upon the occurrence
of such event or events, and in such amounts, as the Committee shall specify in
the applicable Stock Incentive Agreement or Stock Incentive Program; provided,
however, that subsequent to the grant of a Phantom Share, the Committee, at any
time before complete termination of such Phantom Share, may accelerate the time
or times at which such Phantom Share may be paid in whole or in part.
3.8 Treatment of Awards Upon Termination of Employment. Except as
otherwise provided by Plan Section 3.2(e), any award under this Plan to a
Participant who has experienced a Termination of Employment may be cancelled,
accelerated, paid or continued, as provided in the applicable Stock Incentive
Agreement or Stock Incentive Program, or, in the absence of such provision, as
the Committee may determine. The portion of any award exercisable in the event
of continuation or the amount of any payment due under a continued award may be
adjusted by the Committee to reflect the Participant's period of service from
the date of grant through the date of the Participant's Termination of
Employment or such other factors as the Committee determines are relevant to
its decision to continue the award.
SECTION 4 RESTRICTIONS ON STOCK
4.1 Escrow of Shares. Any certificates representing the shares of
Stock issued under the Plan shall be issued in the Participant's name, but, if
the applicable Stock Incentive Agreement or Stock Incentive Program so
provides, the shares of Stock shall be held by a custodian designated by the
Committee (the "Custodian"). Each applicable Stock Incentive Agreement or
Stock Incentive Program providing for transfer of shares of Stock to the
Custodian shall appoint the Custodian as the attorney-in-fact for the
Participant for the term specified in the applicable Stock Incentive Agreement
or Stock Incentive Program, with full power and authority in the Participant's
name, place and stead to transfer, assign and convey to the Company any shares
of Stock held by the Custodian for such Participant, if the Participant
forfeits the shares under the terms of the applicable Stock Incentive Agreement
or Stock Incentive Program. During the period that the Custodian holds the
shares subject to this Section, the Participant shall be entitled to all
rights, except as provided in the applicable Stock Incentive Agreement or Stock
Incentive Program, applicable to shares of Stock not so held. Any dividends
declared on shares of Stock held by the Custodian shall, as the Committee may
provide in the applicable Stock Incentive Agreement or Stock Incentive Program,
be paid directly to the Participant or, in the alternative, be retained by the
Custodian or by the Company until the expiration of the term specified in the
applicable Stock Incentive Agreement or Stock Incentive Program and shall then
be delivered, together with any proceeds, with the shares of Stock to the
Participant or to the Company, as applicable.
4.2 Restrictions on Transfer. The Participant shall not have the
right to make or permit to exist any Disposition of the shares of Stock issued
pursuant to the Plan except as provided in the Plan or the applicable Stock
Incentive Agreement or Stock Incentive Program. Any Disposition of the shares
of Stock issued under the Plan by the Participant not made in accordance with
the Plan or the
8
<PAGE> 34
applicable Stock Incentive Agreement or Stock Incentive Program shall be void.
The Company shall not recognize, or have the duty to recognize, any Disposition
not made in accordance with the Plan and the applicable Stock Incentive
Agreement or Stock Incentive Program, and the shares so transferred shall
continue to be bound by the Plan and the applicable Stock Incentive Agreement
or Stock Incentive Program.
SECTION 5 GENERAL PROVISIONS
5.1 Withholding. The Company shall deduct from all cash
distributions under the Plan any taxes required to be withheld by federal,
state or local government. Whenever the Company proposes or is required to
issue or transfer shares of Stock under the Plan or upon the vesting of any
Stock Award, the Company shall have the right to require the recipient to remit
to the Company an amount sufficient to satisfy any federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such shares or the vesting of such Stock Award. A Participant
may pay the withholding tax in cash, or, if the applicable Stock Incentive
Agreement or Stock Incentive Program provides, a Participant may elect to have
the number of shares of Stock he is to receive reduced by, or with respect to a
Stock Award, tender back to the Company, the smallest number of whole shares of
Stock which, when multiplied by the Fair Market Value of the shares of Stock
determined as of the Tax Date (defined below), is sufficient to satisfy
federal, state and local, if any, withholding taxes arising from exercise or
payment of a Stock Incentive (a "Withholding Election"). A Participant may
make a Withholding Election only if both of the following conditions are met:
(a) The Withholding Election must be made on or prior to
the date on which the amount of tax required to be withheld is determined (the
"Tax Date") by executing and delivering to the Company a properly completed
notice of Withholding Election as prescribed by the Committee; and
(b) Any Withholding Election made will be irrevocable
except on six months advance written notice delivered to the Company; however,
the Committee may in its sole discretion disapprove and give no effect to the
Withholding Election.
5.2 Changes in Capitalization; Merger; Liquidation.
(a) The number of shares of Stock reserved for the grant
of Options, Dividend Equivalent Rights, Performance Unit Awards, Phantom
Shares, Stock Appreciation Rights and Stock Awards; the number of shares of
Stock reserved for issuance upon the exercise or payment, as applicable, of
each outstanding Option, Dividend Equivalent Right, Performance Unit Award,
Phantom Share and Stock Appreciation Right and upon vesting or grant, as
applicable, of each Stock Award; the Exercise Price of each outstanding Option
and the specified number of shares of Stock to which each outstanding Dividend
Equivalent Right, Phantom Share and Stock Appreciation Right pertains shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock resulting from a subdivision or combination of shares or the
payment of a stock dividend in shares of Stock to holders of outstanding shares
of Stock or any other increase or decrease in the number of shares of Stock
outstanding effected without receipt of consideration by the Company.
(b) In the event of or anticipation of a merger,
consolidation or other reorganization of the Company or tender offer for shares
of Stock, the Committee may make such adjustments with respect to awards and
take such other action as it deems necessary or appropriate to reflect such
merger, consolidation, reorganization or tender offer, including, without
limitation, the substitution of new awards, the termination or adjustment of
outstanding awards, the acceleration of
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awards or the removal of restrictions on outstanding awards. Any adjustment
pursuant to this Section 5.2 may provide, in the Committee's discretion, for
the elimination without payment therefor of any fractional shares that might
otherwise become subject to any Stock Incentive, but shall not otherwise
diminish the then value of the Stock Incentive.
(c) The existence of the Plan and the Stock Incentives
granted pursuant to the Plan shall not affect in any way the right or power of
the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any merger
or consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Stock or the rights thereof, the
dissolution or liquidation of the Company, any sale or transfer of all or any
part of its business or assets, or any other corporate act or proceeding.
5.3 Cash Awards. The Committee may, at any time and in its
discretion, grant to any holder of a Stock Incentive the right to receive, at
such times and in such amounts as determined by the Committee in its
discretion, a cash amount which is intended to reimburse such person for all or
a portion of the federal, state and local income taxes imposed upon such person
as a consequence of the receipt of the Stock Incentive or the exercise of
rights thereunder.
5.4 Compliance with Code. All incentive stock options to be
granted hereunder are intended to comply with Code Section 422, and all
provisions of the Plan and all incentive stock options granted hereunder shall
be construed in such manner as to effectuate that intent.
5.5 Right to Terminate Employment. Nothing in the Plan or in any
Stock Incentive shall confer upon any Participant the right to continue as an
employee or officer of the Company or any of its affiliates or affect the right
of the Company or any of its affiliates to terminate the Participant's
employment at any time.
5.6 Non-alienation of Benefits. Other than as specifically
provided with regard to the death of a Participant, no benefit under the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge; and any attempt to do so shall be
void. No such benefit shall, prior to receipt by the Participant, be in any
manner liable for or subject to the debts, contracts, liabilities, engagements
or torts of the Participant.
5.7 Restrictions on Delivery and Sale of Shares; Legends. Each
Stock Incentive is subject to the condition that if at any time the Committee,
in its discretion, shall determine that the listing, registration or
qualification of the shares covered by such Stock Incentive upon any securities
exchange or under any state or federal law is necessary or desirable as a
condition of or in connection with the granting of such Stock Incentive or the
purchase or delivery of shares thereunder, the delivery of any or all shares
pursuant to such Stock Incentive may be withheld unless and until such listing,
registration or qualification shall have been effected. If a registration
statement is not in effect under the Securities Act of 1933 or any applicable
state securities laws with respect to the shares of Stock purchasable or
otherwise deliverable under Stock Incentives then outstanding, the Committee
may require, as a condition of exercise of any Option or as a condition to any
other delivery of Stock pursuant to a Stock Incentive, that the Participant or
other recipient of a Stock Incentive represent, in writing, that the shares
received pursuant to the Stock Incentive are being acquired for investment and
not with a view to distribution and agree that the shares will not be disposed
of except pursuant to an effective registration statement, unless the Company
shall have received an opinion of counsel that such disposition is exempt from
such requirement under the Securities Act of 1933 and any applicable state
securities laws. The Company may include on certificates representing shares
delivered pursuant to a Stock Incentive such legends referring to the foregoing
representations or restrictions or any other
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<PAGE> 36
applicable restrictions on resale as the Company, in its discretion, shall deem
appropriate.
5.8 Termination and Amendment of the Plan. The Board of Directors
at any time may amend or terminate the Plan without stockholder approval;
provided, however, that the Board of Directors may condition any amendment on
the approval of stockholders of the Company if such approval is necessary or
advisable with respect to tax, securities or other applicable laws. No such
termination or amendment without the consent of the holder of a Stock Incentive
shall adversely affect the rights of the Participant under such Stock
Incentive.
5.9 Stockholder Approval. The Plan shall be submitted to the
stockholders of the Company for their approval within twelve (12) months before
or after the adoption of the Plan by the Board of Directors of the Company. If
such approval is not obtained, any Stock Incentive granted hereunder shall be
void.
5.10 Choice of Law. The laws of the State of Georgia shall govern
the Plan, to the extent not preempted by federal law.
5.11 Effective Date of Plan. The Plan shall become effective June
1, 1994, the date of its adoption by the Board of Directors, subject, however,
to the approval of the Plan by the Company's shareholders. Stock Incentives
granted hereunder prior to such approval shall be conditioned upon such
approval. Unless such approval is obtained by December 31, 1994, this Plan and
any Stock Incentives awarded hereunder shall become void thereafter.
NORRELL CORPORATION
By: /s/Mark H. Hain
Title: Vice President and General
Counsel
ATTEST:
/s/Connie S. Caldwell
Assistant Secretary
[Corporate Seal]
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EXHIBIT
NORRELL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 1998 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints C. Douglas Miller, Larry J. Bryan and
Mark H. Hain or either of them, with power of substitution to each, the proxies
of the undersigned to vote the Common Stock of the undersigned at the Annual
Meeting of Shareholders of NORRELL CORPORATION, to be held Tuesday, March 3,
1998, at 9:30 a.m. in the "C" level auditorium of the administrative offices of
the Company at 3535 Piedmont Road, N.E., Atlanta, Georgia 30305, and any
adjournment thereof:
<TABLE>
<S> <C> <C> <C>
1. To approve the amendment of the Company's bylaws to provide that the
Company's Board of Directors shall consist of not fewer than three nor more
than 15 members, the precise number of directors to be fixed by resolution
of the Board of Directors from time to time.
/ / FOR / / AGAINST / / ABSTAIN
2. To elect one (1) Class III director for a term of two years and four
(4) Class II directors for a term of three years and until their
successors are elected and have qualified.
/ / FOR all nominees listed below (except as marked to the / / WITHHOLD AUTHORITY to vote for all nominees
contrary below) listed below
</TABLE>
JAMES ERNEST RIDDLE (CLASS III); LARRY J. BRYAN, KAAREN JOHNSON-STREET, FRANK
A. METZ, JR., GUY W. MILLNER (CLASS II)
INSTRUCTION: To withhold authority to vote for any individual nominee, write the
nominee's name in the space provided below.
- -------------------------------------------------------------------------------
(continued on other side)
<PAGE> 38
(continued from reverse side)
3. To approve the amendment of the Company's 1994 Stock Incentive Plan to
increase the number of shares reserved for issuance under such Plan by an
additional 900,000 shares.
/ / FOR / / AGAINST / / ABSTAIN
4. To vote in accordance with their best judgment with respect to any other
matters that may properly come before the meeting.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" EACH OF THE ABOVE PROPOSALS AND
UNLESS INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED, THIS
PROXY WILL BE SO VOTED.
Please date and sign this Proxy exactly as
name(s) appears on the mailing label.
-------------------------------------------
-------------------------------------------
Print Name (s):
----------------------------
NOTE: When signing as an attorney, trustee,
executor, administrator or guardian, please
give your title as such. If a corporation or
partnership, give full name by authorized
officer. In the case of joint tenants, each
joint owner must sign.
Dated:
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