<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>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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
[NORELL CORPORATION LOGO]
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,
/s/ C. Douglas Miller
C. Douglas Miller
Chairman, President and Chief
Executive Officer
January 24, 1998
<PAGE> 3
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,
/s/ Mark H. Hain
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
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 proposal to amend
the Company's bylaws, in favor of the proposal to elect as directors the
nominees for
<PAGE> 5
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 a
group (27 persons)................................. 11,841,263 41.97
</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.
2
<PAGE> 6
(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.
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 Class II
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.
3
<PAGE> 7
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.
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
4
<PAGE> 8
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.
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.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
-------------------------------- 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 -- 75,658
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 20,753 -- 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 -- -- 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 -- -- 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) $955 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 $15,609, paid to Mr. Miller, Mr. Bryan and Mr.
Vadnais, respectively, as reimbursement of interest on bank loans obtained
for the payment of taxes with respect to the exercise of certain
non-qualified options to purchase the Company's common stock.
7
<PAGE> 11
This table presents information regarding options granted during the 1997
fiscal year to purchase shares of the Company's Common Stock. In accordance with
rules of the SEC, the table shows the hypothetical "gains" or "option spreads"
that would exist for the respective options based on assumed rates of annual
compound stock price appreciation of 5% and 10% from the date the options were
granted over the full option term. There were no SARs outstanding during fiscal
1997.
OPTION GRANTS IN FISCAL 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------ POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF
SECURITIES GRANTED STOCK PRICE
UNDERLYING TO APPRECIATION FOR
OPTIONS EMPLOYEES OPTION TERM
GRANTED IN EXERCISE EXPIRATION ---------------------
NAME (#) (1) FISCAL YEAR PRICE($/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.
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
SHARES FY-END (#) AT FY-END ($) (1)
ACQUIRED VALUE ------------------- --------------------
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) 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.
8
<PAGE> 12
EXECUTIVE OFFICER EMPLOYMENT ARRANGEMENTS
The Company has entered into an employment agreement with C. Douglas
Miller, effective December 9, 1997, which provides for his employment as
Chairman, President and Chief Executive Officer of the Company until terminated
by one month 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 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.
9
<PAGE> 13
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
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.
10
<PAGE> 14
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 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 nine 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.
11
<PAGE> 15
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.
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
12
<PAGE> 16
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>
MEASUREMENT PERIOD INDUSTRY GROUP
(FISCAL YEAR COVERED) COMPANY NYSE STOCK INDEX 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.
13
<PAGE> 17
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 January 5, 1998,
2,384,646 shares were subject to outstanding option grants, 595,416 shares of
Common Stock were previously issued upon the exercise of options granted or
stock awards made, and 9,938 shares were available for options to be granted
under the Incentive Plan. 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 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. 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.
14
<PAGE> 18
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 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.
15
<PAGE> 19
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
James 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, AS SET FORTH IN APPENDIX B.
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.
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.
16
<PAGE> 20
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."
A-1
<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."
B-1
<PAGE> 23
[NORRELL CORPORATION LOGO]
<PAGE> 24
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:
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.
<TABLE>
<S> <C>
[ ] FOR all nominees listed below (except as [ ] WITHHOLD AUTHORITY to vote for all
marked to the contrary below) nominees 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)
(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:
----------------------------------
