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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended November 2, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-14018
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Norrell Corporation
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(Exact name of Registrant as specified in its charter)
Georgia 58-0953079
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3535 Piedmont Road N.E., Atlanta, Georgia 30305
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (404) 240-3000
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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Common Stock, no par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant, as of December 31, 1997, was approximately $280,615,781. This
amount excludes a total of 13,002,887 shares of Common Stock owned either
directly or beneficially by officers, directors and principal stockholders of
the Registrant, who may be deemed to be affiliates under applicable rules of the
Securities and Exchange Commission. As of December 31, 1997, there were
27,121,920 shares of Registrant's Common Stock, no par value, outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's Proxy Statement which has been mailed to
stockholders in connection with the Company's annual meeting of stockholders,
scheduled to be held on March 3, 1998, are incorporated by reference in Part III
of this report. Except for the portions expressly incorporated by reference, the
Company's Proxy Statement shall not be deemed to be a part of this report.
Portions of the Norrell Corporation Annual Report 1997, which has been
mailed to stockholders, are incorporated by reference in Part II of this report.
Except for the portions expressly incorporated by reference, the Norrell
Corporation Annual Report 1997 shall not be deemed to be a part of this report.
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PART I
ITEM 1. BUSINESS
GENERAL
Norrell Corporation (referred to herein, along with its subsidiaries and
joint ventures, as the "Company" or "Norrell") is a strategic workforce
management company and a leading provider of staffing, outsourcing and
professional services. The Company is organized into three business groups:
Staffing Services, which provides temporary administrative, teleservices and
light industrial staffing; Outsourcing Services, which provides administrative
services, teleservices and human resources services, in which the Company
assumes responsibility for the results of a client process; and Professional
Services, which provides accounting staffing, information technology staffing,
project management services, systems integration consulting services, and
executive placement. The Company's customers are businesses, professional and
service organizations, and government agencies in the United States and Canada.
Based upon revenues, the Company believes it is one of the largest companies in
the staffing industry in North America.
The Company provides a broad range of services through its national
network of 468 locations, including 155 Company-owned locations, 133 outsourcing
services locations, 137 franchised locations, and 43 professional services
offices as of December 31, 1997. In fiscal 1997, the Company supplied to
approximately 19,000 clients (including subsidiaries and affiliated companies)
in the United States and Canada over 236,000 staffing, outsourcing and
professional personnel. The Company's employees possess a wide variety of
office, light industrial, information technology and other skills, including
secretarial, clerical, word processing, data entry, graphics, telemarketing,
assembly, picking, packing and sorting, shipping and receiving, customer
service, records management, administrative, human resources (recruiting,
interviewing, assessment and training), computer programming, computer
consulting, systems analysis, systems integration, accounting and additional
financial services. The Company also provides home health aides and related
services to government agencies and home health agencies.
Since its incorporation in Georgia in 1965, the Company's quality service
and customer focus have enabled it to compile a history of core business growth
and expansion. From its beginnings as a provider of short-term replacement or
fill-in personnel, often referred to as traditional temporary services, the
Company has expanded into long-term staffing, managed staffing, "Master Vendor
Partnering", outsourcing and professional services. In addition, the Company has
expanded geographically from a base of locally owned and operated offices in
Atlanta, Georgia, to a national network of 468 locations as of December 31,
1997. In recent years, the Company has supplemented this internal growth with
acquisitions and joint ventures, which has not only added to the Company's
geographic markets, but has also increased revenues and expertise in desirable
service offerings such as information technology, financial services,
teleservices, and temporary and permanent executive placements.
BUSINESS STRATEGY
The Company's objective is to continue to be a leading national provider
of staffing, outsourcing, and professional services. The key components of the
Company's strategy are as follows:
Offer a Seamless Spectrum of Strategic Workforce Management Solutions.
Through its national network of offices, the Company offers strategic workforce
management for clients committed to high quality, value-added services which are
customized to strengthen a specific client's organizational effectiveness and
flexibility. The Company partners with these clients to diagnose workforce
problems and design an integrated service solution, ranging from short-term
staff augmentation to comprehensive workforce structures that include dedicated
management teams.
Maintain High Quality Service Focus. The Company is dedicated to
providing high quality services and believes it is an industry leader in its
quality focus and related performance measurement systems. To maintain a
consistently high quality standard for all of its employees, the Company uses a
number of automated systems to
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screen and evaluate potential employees, to make appropriate assignments, to
evaluate and review employees' performance, and to obtain and act upon client
feedback. These extensive, integrated and automated quality measurement and
control systems distinguish the Company from its competitors and help to attract
and retain customers seeking consistent results and a nationwide approach to
their staffing needs. The Company has made a substantial investment in and
intends to continue to invest in technology and information related software and
hardware. See "Quality and Technology." These investments have included
integrating the Company's personnel and client databases nationwide, automating
many tasks at the branch level, and enhancing back-office efficiency.
Develop and Expand Service Offerings. The Company plans to grow its
existing base of business by continuing to develop service offerings that
complement its core business. Services added in the last three years through
joint ventures, acquisitions and internal growth include information technology
staffing and consulting (including systems integration), financial staffing,
outsourced call center management, and temporary and permanent executive
placements. By cross-selling these new services to existing accounts, the
Company seeks to increase the volume of business within its current base of over
19,000 clients. The Company also plans to attract new clients based upon its
comprehensive solutions approach. In addition to expanding its existing service
offerings, the Company continually evaluates new service offerings which will
enable it to better meet its clients' needs.
Pursue Strategic Acquisitions. The Company intends to continue to pursue
strategic acquisition opportunities that allow the Company to develop new
services, acquire additional management expertise or enter key geographic
markets. Since July 1995, the Company has acquired three information technology
services, one accounting services and three staffing services businesses, and
one executive temporary and permanent placement firm. The Company believes that
the professional services acquisitions represent business opportunities with
growth and profitability potential in excess of the Company's core staffing
business.
BUSINESS GROUPS
The Company has classified its businesses into three business groups:
Staffing Services, Outsourcing Services, and Professional Services.
Staffing Services. The Company's staffing services are generally
performed by its subsidiary, Norrell Services, Inc. In addition, Norrell Health
Care provides staffing in the health care field, primarily in the states of New
York, New Jersey and Pennsylvania.
Temporary Staffing. Employees may be assigned to work for a client for
either a specified or indefinite period of time as necessary to meet the needs
of clients. The expense and inconvenience to a client of recruiting workers,
including advertising, interviewing and testing, conducting reference and
background checks and drug testing are reduced when temporary personnel are
engaged. Use of these services also enables the client to eliminate or reduce
record keeping, expenses associated with fringe benefits, turnover and related
personnel costs usually associated with its workers. A client pays only for
actual hours worked by temporary personnel and may terminate the use of
temporary services without the adverse effects of layoffs. The Company also
offers short-term staffing, sometimes referred to as project or peak period
staffing, through which the Company can meet fluctuating staffing requirements
quickly and easily, helping clients maintain high levels of productivity without
the need to add permanent staff. The Company defines short-term staffing as an
assignment of less than six months that involves one-time, seasonal or recurring
use of temporary employees. During fiscal 1997, the Company generated $358.8*
million from its temporary staffing services, compared with $323.3 million in
revenues in fiscal 1996.
Long-Term Staffing. The Company offers long-term staffing options
tailored to specific client needs. Through long-term staffing, the Company
provides and supervises employees for functions or departments on an extended
basis. The Company defines long-term staffing as the staffing of specific
positions for six months or
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* /All information concerning fiscal 1997 revenues in this Item 1 has been
adjusted to exclude results attributable to a 53rd week of operations, which
occurs every five to six fiscal years.
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more. During fiscal 1997, the Company generated $212.8* million in revenues from
its long-term staffing services, compared with $191.5 million in fiscal 1996.
Managed Staffing. The Company emphasizes managed staffing, which is the
staffing of positions with personnel on a planned and continuing basis, in most
cases with one of the Company's on-site managers who is trained to manage the
contingent workforce process. Managed staffing represents a cost-effective
solution for employers who spend a significant amount of administrative and
personnel department time managing employees whose jobs are generally routine
and are characterized by high turnover rates and also for employers in
industries with fluctuating personnel needs. Such employers use staffing
personnel as a valuable management tool to control overhead costs and enhance
profitability. Examples of managed staffing clients of the Company include
customer service centers, distribution centers, and various light manufacturing
and packaging businesses. The Company's managed staffing business grew 48.9%
during fiscal 1997 from $82.9 million in revenues in fiscal 1996 to $123.4*
million in revenues during fiscal 1997.
Master Vendor Partnering ("MVP"). The Company offers its MVP program to
its clients in conjunction with its other service offerings. Through its MVP
program, the Company acts as a general manager for all of the client's external
staffing needs. The Company provides a broad spectrum of solutions from staffing
to call center services to information technology services to help the client
meet its changing needs. The MVP program enables the client to significantly
increase its organizational flexibility and effectiveness. During fiscal 1997,
revenues from the Company's MVP program increased 18.4% from $143.0 million in
fiscal 1996 to $169.3* million in fiscal 1997.
Outsourcing Services
The Company today provides a portfolio of outsourcing services including
administrative (secretarial, clerical, graphics, desktop publishing,
multimedia), corporate and general services (mail center management, courier
management, shipping/receiving, records retention), document processing
(imaging, personnel records management, electronic data interchange, accounts
payable, data entry, invoicing), human resources (recruiting, interviewing,
assessment and training) and call center services. Typical outsourcing
arrangements have many of the following characteristics: the Company supplies
and manages the staff, the agreement contains specific service productivity and
quality measurements, extends a year or longer, covers a defined scope of work,
and has a gainsharing agreement. Outsourcing services are generally performed by
the Company's subsidiary, Tascor Incorporated ("Tascor"), and by its joint
venture entities CallTask Incorporated and NorCross Teleservices, Inc. The
business of another joint venture - HealthTask L.P. - is being wound down due to
failure to perform to the expectations of its partners and the Company. In
fiscal 1997, the Company's outsourcing revenues were $247.6* million, an
increase of 19% over fiscal 1996, which had $208.1 million in outsourcing
revenues.
Professional Services
The Company's Professional Services group includes Norrell Information
Services, Inc., a subsidiary of the Company, Norrell Financial Staffing, a
division of the Company's Norrell Services, Inc. subsidiary, and IMCOR, Inc., an
executive temporary and permanent placement firm acquired in October, 1997.
Information technology services is one of the Company's newest products,
built with three acquisitions: Analytical Technologies, Inc. and ANATEC Canada,
Inc. (collectively referred to as "ANATEC") and American Technical Resources,
Inc. ("ATR"), which were acquired in fiscal 1996, and Comtex Information
Systems, Inc. ("Comtex"), which was acquired in fiscal 1997. The Company is in
the process of integrating these acquisitions into Norrell Information Services,
which delivers full life-cycle solutions including technology consulting,
project management, software development, documentation services, and education
and training. Norrell Information Services also provides systems planning and
development, systems integration, organizational consulting related to business
transformation, and staff augmentation support, and provides contract employees
from its national
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* /All information concerning fiscal 1997 revenues in this Item 1 has been
adjusted to exclude results attributable to a 53rd week of operations, which
occurs every five to six fiscal years.
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database of information technology professionals. Revenues from the Company's
information technology services increased from $50.5 million in fiscal 1996 to
$133.8* million in fiscal 1997, an increase of 165%.
The Company's Norrell Financial Staffing division is led by staffing
consultants who are experienced accounting and financial professionals with the
ability to recruit, screen and hire financial specialists ranging from a chief
financial officer to an accounting clerk. During fiscal 1997, the Company
experienced significant growth in financial staffing due to growth of existing
accounts. Revenues from financial staffing increased from $14.6 million in
fiscal 1996 to $29.4* million in fiscal 1997, an increase of 101%.
On October 17, 1997, the Company acquired IMCOR, Inc., an executive
temporary and permanent placement firm based in Stamford, Connecticut. IMCOR
recruits, screens and hires "portable" executives and places them in client
organizations throughout the United States. IMCOR executives work as interim
managers and project leaders in areas such as general management, finance,
operations, information technology, manufacturing, marketing, human resources
and strategic planning. IMCOR executives perform services on an as-needed basis
or to allow the client to assess the executive's ability prior to making an
offer to hire the executive.
QUALITY AND TECHNOLOGY
The Company is dedicated to providing high quality services and believes
it is an industry leader in its quality focus and technological approach
including related measurement systems. In order to maintain a consistently high
quality standard for all of its temporary and staffing employees, the Company
uses automated systems to screen and evaluate potential employees, to make
appropriate assignments, and to evaluate and review an employee's performance.
The Company's quality system, Qualisys, is comprised of three major components:
(i) Exact MatchSM, a screening and placement process which matches the employee
to the client's needs; (ii) B.O.S.S., its Branch Office Support System, an
extensive database of client and personnel information; and (iii) I.R.I.S. SM,
or Integrated Research Information System, by which the Company obtains direct
client feedback and measures individual employee performance. These automated
services enable the Company to provide staffing services quickly and
efficiently, monitor client needs and utilization trends, measure the Company's
service quality and evaluate and train its employees. This extensive, integrated
and automated quality measurement and control system distinguishes the Company
from its competitors. With its outsourcing clients, the Company also develops
customized performance measurement benchmarks and systems for each client
contract as requested. These standards and systems are designed with client
input and take into account clients' quality needs and standards.
In 1995 the Company began an initiative to install state-of-the-art
systems in order to support the substantial growth of the Company, provide
better support for the Company's national accounts, facilitate the integration
of newly acquired companies, and to identify and resolve any Year 2000 issues
with its systems. Due largely to changes in the Company's business, certain of
the systems that had been developed - including particularly the Company's
payroll and billing systems - were determined to be too limited to support
future business needs. As a result, the Company recorded a write-off in the
fourth quarter of fiscal 1997 related to these systems and embarked upon a new
design approach. See Note 6 to the Company's Consolidated Financial Statements.
A process, supported by outside consultants, is underway to enhance its systems
to meet long-term business needs and to determine an appropriate technical
solution to the Company's systems requirements. The Company anticipates
completing the technical assessment by the end of the first quarter of fiscal
1998. The Company anticipates no disruption in normal business.
In a related effort, the Company has conducted a comprehensive review of
its computer systems and is developing an implementation plan to address the
effects on its systems of the Year 2000 issue. The Year 2000 issue is the result
of computer programs being written using two digits rather than four to define
the applicable year. If this issue is not addressed appropriately and in a
timely manner, any of the Company's programs that have time-sensitive software
may recognize a date using "00" as the year 1900 rather than the year 2000,
resulting in a major system failure or miscalculations. The Company presently
believes that, with planned modifications to existing
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* /All information concerning fiscal 1997 revenues in this Item 1 has been
adjusted to exclude results attributable to a 53rd week of operations, which
occurs every five to six fiscal years.
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software and conversions to new software, the Year 2000 issue will not pose
significant operational problems for the Company's computer systems as so
modified and converted. However, if such modifications and conversions are not
completed in a timely manner, the resulting Year 2000 problems could have a
material adverse impact on the operations of the Company.
ORGANIZATIONAL STRUCTURE
The Company provides its services through a national network of 468
Company-owned locations, franchised locations, outsourcing locations, and
professional services locations. The table below sets forth certain historical
information concerning the number of Company locations:
<TABLE>
<CAPTION>
As of the End of Fiscal
Year
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Company-Owned Offices 115 115 121 133 152
Franchised Offices (1/) 103 107 119 133 134
Outsourcing Locations (2/) 59 75 91 105 134
Professional Services Offices (3/) 2 2 21 30 48
--- --- --- --- ---
Total Company Offices and Locations 279 299 352 401 468
=== === === === ===
</TABLE>
During fiscal 1997, the Company focused upon aligning its organization to
better support its vision as a strategic workforce management company. Through
the efforts of multiple task-forces which analyzed many aspects of the company's
business approaches and methods, the Company is in the process of reorganizing
to enhance the structure of its field organization, corporate resources and its
methods of selling and supplying its services. While some of the changes
resulting from this process have already been implemented, much of this
realignment will occur in fiscal 1998 and beyond. The organizational structure
of the Company, before the reorganization, is described below.
Company-Owned Operations. The Company owns and operates temporary
personnel services offices in major markets, each of which is managed by a
Norrell manager who is responsible for most aspects of the Company's business
within that market. These responsibilities include sales and client development,
recruitment and retention of staffing employees and the implementation of
Norrell's marketing strategies. The Company provides training to field managers,
sales representatives and operations personnel in all of these areas. A
substantial portion of field employees' compensation is based on financial
performance, including the attainment of profit objectives. Company-owned
offices operating in "middle markets" (generally markets with populations
between 500,000 and 1.5 million) are operated under special incentive
arrangements by managers who receive lower salaries and higher incentive
compensation relative to managers of other Company-owned offices.
Franchised Operations. The Company operates franchised offices throughout
the United States and in Canada and Puerto Rico. The Company developed its
initial franchise strategy in the mid-1960s as an important element of its
overall growth plans. Franchising provides the opportunity to enter targeted
markets with substantially less capital than would be required to establish
Company-owned offices. The Company's primary franchise target markets are cities
with populations between 50,000 and 500,000 people. The Company also establishes
franchised offices under its trade name
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1 / Occasionally, the Company acquires a franchised office and operates it as a
Company-owned office until it is refranchised. Such offices are included in
franchised locations.
2 / Outsourcing services are generally performed at the clients' facilities.
3 / Most of the offices of Norrell Financial Staffing included in the number of
Professional Services Offices share space with offices also listed above as
Company-Owned Offices.
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Dynamic People to increase market penetration in major markets in which the
Company may also operate Company-owned offices.
Outsourcing Operations. The Company currently has operations at sites
throughout the United States responsible for the delivery of outsourcing
services. The majority of the Company's outsourcing operations are located on
site at its customers' facilities, and the remaining outsourcing sites are
located in leased offices. Other than regional offices and its corporate offices
in the Company's headquarters building, the Company's outsourcing subsidiary
does not maintain sales or administrative offices separate from the locations at
which client services are performed, allowing the Company to control the growth
of overhead costs. Outsourcing services are delivered by employees who are hired
by the Company to perform services during the term of an outsourcing contract.
These employees and related field operations are managed by the Company's site
managers and area managers who are responsible for service delivery, customer
satisfaction, and sales of additional services to current customers through both
expansion of existing contracts as well as the addition of new contracts.
Professional Services Operations. As of December 31, 1997, the Company
maintains 43 professional services offices in the principal markets it currently
serves. Each location is managed by a financial or information technology
professional responsible for its marketing strategies.
SALES AND MARKETING
The Company has developed a sales and marketing strategy which is
implemented through its Company-owned and franchised staffing services offices,
its on-site and off-site outsourcing services locations, and its professional
services locations. The Company executes this strategy on both a national and
local level. National sales is a joint effort conducted by a national account
team located in the home office and the field organization. The local branch
offices provide the service and sales efforts necessary to support large
national customers. Pursuing national account relationships is important to the
Company's growth due to the consolidation of vendors by large national clients
and due to the broad spectrum of services these customers desire. Local accounts
are developed by the Company-owned and franchised offices primarily through
client referrals, community involvement and direct contacts with prospective
clients. Contacts are made through sales representatives, telephone marketing
calls and direct mail solicitation.
For all traditional staffing clients, the Company has developed a system
of formal consultation with its clients' management to determine the clients'
specific requirements and to evaluate their potential use of staffing personnel.
This approach involves: (i) an in-depth study of the client's corporate
attitudes and departmental organization to gain insight into the client's
operating philosophy; (ii) an analysis of the client's performance expectations
and work experience requirements for staffing personnel; (iii) a job-by-job
analysis of the cost effectiveness the client can expect from the use of the
Company's staffing employees; and (iv) on-going management reports evaluating
the actual results of utilizing the Company's services. This process facilitates
an effective match of a client's needs with skills of the staffing employee and
enables the client to analyze its use of staffing services. The Company offers
all clients the "Norrell Guarantee", under which a client will not be billed if
the client is not satisfied with a staffing employee's performance.
The Company's sales efforts for its outsourcing and professional services
offerings are accomplished by both the field sales organization and the national
accounts teams. Functional experts from Norrell's spectrum of services,
including information services, financial staffing, call center services and
outsourcing provide invaluable sales support with these service offerings. New
sales are generally made to companies at the senior executive level. Sales of
outsourcing and professional services to an existing client are made by both the
operations management team responsible for the client and the field sales
organization and the national accounts organization.
The development of awareness and preference for both the Norrell brand
and the Company's service offerings is a primary initiative of the corporate
sales and marketing and communications departments. Through a variety of
national and local marketing vehicles and public and media relations, the
Company communicates the attributes of a brand position and service offerings to
current customers, prospects and the business community. By definition,
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Strategic Workforce Management is the strategy and process by which the Company
delivers competitive advantage to its clients through an array of integrated
workforce solutions. This approach also serves to articulate the value
proposition that enables the Company to differentiate and favorably position its
brand as well as communicate compelling attributes relative to its individual
service offerings. For recruitment purposes, the Company and its franchisees
utilize a multi-tier marketing strategy to attract and retain employees to fill
the broad spectrum of staffing and outsourcing services.
RECRUITING AND PLACEMENT
The Company's staffing personnel are primarily individuals between jobs
or careers, individuals re-entering the job market or individuals who prefer the
flexibility and variety of shorter-term work assignments. A substantial
proportion of new staffing personnel are obtained through referrals by other
Norrell personnel. Staffing personnel are also recruited through local and
national advertising media. Due to shortages in the labor market, the Company
focuses upon developing and implementing recruiting techniques which will
attract and retain qualified personnel.
The Company conducts an interviewing and testing process to screen and
evaluate the skills of potential personnel. Company-developed or purchased
programs are used to determine skill levels and work attitudes in order to
assist in making proper assignments. The Company provides training programs to
increase and improve the skills of its personnel. To maintain the quality and
effectiveness of its staffing workforce, the Company uses the I.R.I.S. system to
review an employee's performance with the client.
To be able to meet demand for qualified home health personnel, who are
generally in short supply, the Company recruits employees and conducts a
two-week training program to qualify employees as certified home health aids or
a one-week training program to qualify them as personal care aides. These
training programs effectively increase the Company's supply of qualified aides.
MAJOR CLIENTS
The Company receives a material portion of its revenues from its largest
clients. During fiscal 1996 and 1997, revenues generated by the Company from
contracts with IBM equaled $158.6 million and $171.9* million, respectively,
representing 15.6% and 13.2% respectively, of the Company's consolidated
revenues for such periods. During fiscal 1997, the Company received $37.6*
million in revenues for services performed under a Management Services Agreement
with IBM. The balance of the Company's IBM-related revenues are consolidated
under multiple contracts with different purchasing units within IBM.
During fiscal 1996 and 1997, revenues generated by the Company from
contracts with United Parcel Service, Inc. ("UPS") equaled $122.2 million and
$112.5* million respectively, representing 12.0% and 8.8% respectively of the
Company's consolidated revenues for such periods. Following a strike at UPS in
the fourth quarter of fiscal 1997, revenues from UPS declined substantially.
Although the strike lasted only two weeks, current revenue levels are at only
75% to 80% of pre-strike levels. Several locations have not resumed service and
bill rates have been lowered in certain cases as UPS tries to reduce costs.
Although the Company maintains a strong relationship with UPS, the Company
expects lower revenues from UPS to persist in the near future.
No other client accounted for more than 10% of the Company's consolidated
revenues for fiscal 1996 or 1997. However, the loss of, or a further substantial
reduction in the revenue provided by UPS or IBM could have a material adverse
effect on the Company. Moreover, the Company's results of operations can be
highly sensitive to changes in the business of its major clients and changes in
its relationships with such clients.
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* /All information concerning fiscal 1997 revenues in this Item 1 has been
adjusted to exclude results attributable to a 53rd week of operations, which
occurs every five to six fiscal years.
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COMPETITION
The staffing industry is highly competitive with more than 7,000
temporary services and staffing companies operating in the United States. The
staffing services provided by the Company also are provided by several other
companies with nationwide operations that have substantially greater resources
than the Company. In addition, the Company competes with numerous local and
regional companies, which are frequently the strongest competitors in their
particular markets. Accordingly, the Company's competition varies from market to
market. Although the Company and other national firms benefit from having
nationally recognized names, the Company believes that its customers primarily
differentiate among firms by comparing the quality of personnel and services
provided by each local office. Customers typically use more than one staffing
firm to satisfy their personnel requirements.
The largest competitors of the Company's temporary and staffing personnel
offerings include Kelly Services, Inc., Manpower Inc., Adecco SA, AccuStaff,
Inc., The Olsten Corporation, and Interim Services. In addition, there are a
number of other firms with annual sales in excess of $100 million, many of which
are regional and/or emphasize specialized niches. There are also numerous local
and single office firms which are able to compete on price because of their
lower overhead structures. These firms are typically located in one city and
some are able to compete effectively on that limited basis.
The Company believes that no single competitor has more than a 10% share
of the national staffing services market. Nevertheless, the Company anticipates
that the industry will continue to consolidate with the large national firms
increasing their market share at the expense of firms that may lack the capital
to compete operationally with larger industry competitors.
The temporary health care market also is highly fragmented and
competitive at the local level. While several national health care companies
compete with the Company in its markets, many local health care staffing
services and home health agencies also compete with the Company. Selections of
home health aide services are made primarily on a local basis by agencies and
health care administrative personnel.
The principal competitive factors in the temporary services industry are
the availability and quality of personnel, the level of service, the effective
monitoring of job performance and the price of service. The Company believes
that it competes favorably in these areas.
The Company believes that the largest companies that compete with its
outsourcing offering are "niche" players which do not compete with the Company's
full range of outsourcing services. These outsourcing services providers offer a
more limited range of services, assuming responsibility for functions such as
food services, facilities maintenance, mailrooms or reprographics.
Tascor's principal competitors for its outsourcing services are companies
such as Pitney-Bowes, Inc., an equipment manufacturer which provides mailroom
services; Manpower; Xerox, an equipment manufacturer that provides reprographics
services; Kelly Services, and other large staffing firms which are attempting to
expand their services offerings; and Host Marriott Corporation, which is
expanding beyond its traditional hospitality and food services operations in the
area of facilities staffing.
In the professional services industry, a large number of national
companies provides information technology consulting services related to systems
planning and development and business processes and transformation, including
Andersen Consulting & Co., IBM Global Services, and Electronic Data Systems.
Staff augmentation services in the information technology field are provided
primarily by regional and local firms as well as some national firms.
Competitive factors in the information technology industry include a proven
track record in the marketplace, recruitment and retention of employees with the
appropriate skills, development and implementation of effective methodologies,
and process and business expertise.
10
<PAGE> 11
PERSONNEL
As of January 8, 1998, the Company employed approximately 8,866
associates and contract employees, which includes employees who perform services
on outsourcing contracts. In addition, during fiscal 1997, the Company placed
approximately 236,000 temporary and staffing personnel on assignments, including
those operating out of franchised offices. The Company has no collective
bargaining agreements with its employees. The Company believes that it has good
relations with its employees.
SERVICE MARKS
The Company is the owner of various service marks, including Norrell, The
Norrell Advantage, Dynamic, Dynamic People, Smarter Ways to Get Things Done,
Tascor and ANATEC, and the Company has applied for a service mark for Strategic
Workforce Management. The Company protects its service marks and believes that
the "Norrell" service mark is an important asset to the Company's operations.
GOVERNMENTAL REGULATION
The marketing of the Company's franchises is subject to the disclosure
requirements of the Federal Trade Commission and the registration and/or
disclosure requirements of certain states. In certain states, the Company's
relationship with its franchisees also are governed by the franchise laws of
such states.
The Company's home health aide business operates in New York, New Jersey,
and Pennsylvania which require licensing of home care providers. In those
states, the Company is subject to periodic licensure surveys to ensure continued
compliance with licensing requirements. A change in control or the sale of the
Company's home health aide business must be approved by the Public Health
Council of the New York State Department of Public Health.
In certain states, companies which engage in permanent placement are
subject to regulations. The Company analyzes the applicability of these state
regulations to the permanent placement activities of Norrell Financial Staffing
and IMCOR and complies with these requirements, if applicable. In addition,
certain states require licensure and otherwise regulate companies which provide
employee leasing services. The Company analyzes these state laws in light of its
service offerings and complies when the state law is applicable.
SEASONALITY
Revenues and profits generated in the Company's fourth fiscal quarter
(August through October) are typically the highest of its four fiscal quarters.
Management believes that this results from a heavier demand during this period
and because the fourth quarter includes only one nationally observed holiday.
Conversely, revenues for the first fiscal quarter (November through January) are
typically the lowest of its four fiscal quarters due to the reduced number of
business days for many of the Company's clients because of the number of
observed holidays and inclement weather. Revenues and operating profits for the
Company's first quarter are typically less than the fourth quarter of the
previous year.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Part I and Item 7 (Management's Discussion and Analysis of Financial
Condition and Results of Operations) of this Annual Report on Form 10-K contain
forward-looking statements, including statements regarding, among other matters:
(i) the Company's plans, intentions and expectations with respect to its future
prospects, including its business and growth strategies and its relationships
with its major clients; (ii) industry trends, competitive conditions and client
preferences; (iii) expected capital expenditures to be made in the future,
including investments in its computerized management information systems; (iv)
the sufficiency of funds from operations and available borrowings to meet the
Company's working capital and capital expenditure needs for fiscal 1998; (v) the
Company's plans, beliefs and expectations with respect to changes which have
been or will be made to its computerized management information systems,
including modifications to its payroll and billing systems and other
modifications to address Year 2000 issues; and (vi) resolution of pending
litigation without material adverse
11
<PAGE> 12
effect on the Company. This notice is intended to take advantage of the "safe
harbor" provided by the Private Securities Litigation Reform Act of 1995 with
respect to such forward-looking statements. These forward-looking statements
involve a number of risks and uncertainties. Among others, factors that could
cause actual results to differ materially from the Company's beliefs or
expectations are the following: industry trends and trends in the general
economy or in industries in which the Company's major clients operate;
competitive factors in the markets in which the Company or its major clients
operate; the loss or reduction of revenues generated by the Company's major
clients; the variability of quarterly results and seasonality of the Company's
business; the dependence on key personnel who have been hired or retained by the
Company; changes in regulatory requirements which are applicable to the
Company's business; the availability of strategic acquisitions or joint venture
partners; and other factors referenced herein or from time to time in the
Company's Securities and Exchange Commission reports.
ITEM 2. PROPERTIES
The Company leases approximately 150,000 square feet of the building
which houses its office headquarters pursuant to a lease agreement which will
expire June 30, 2007.
At November 2, 1997, the Company was committed under operating leases for
office facilities and certain equipment. Aggregate minimum rental requirements
under these leases are as follows:
<TABLE>
<CAPTION>
--------------------------------------
YEAR AMOUNT
(IN THOUSANDS)
--------------------------------------
<S> <C>
1998 11,838
--------------------------------------
1999 13,178
--------------------------------------
2000 11,908
--------------------------------------
2001 10,491
--------------------------------------
2002 9,218
--------------------------------------
Thereafter 10,870
--------------------------------------
TOTAL $67,503
--------------------------------------
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
The Company is, from time to time, a party to ordinary, routine
litigation incidental to the Company's business. The Company believes that the
ultimate resolution of all pending litigation will not have a material adverse
effect on the Company's business or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of fiscal 1997 to a
vote of security holders.
ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY
The Company's executive officers are elected annually and serve at the
discretion of the Board of Directors. Information concerning the executive
officers, as of January 1, 1998, is provided below.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
C. Douglas Miller..................56 Director; Chairman, Chief Executive Officer and President
J. Ernest Riddle...................56 Chief Operating Officer, Norrell Corporation; President,
Norrell Services, Inc.
Larry J. Bryan.....................54 Director; Executive Vice President
Thomas A. Vadnais .................50 Director; Vice President, National Service Management;
President and Chief Operating Officer, Tascor
</TABLE>
12
<PAGE> 13
<TABLE>
<S> <C> <C>
Stanley E. Anderson................44 President, Southeast Division, Norrell Information Services
James L. Donahue...................53 Vice President and General Manager, West Division,
Norrell Services
Caress C. Kennedy..................47 Vice President and General Manager, Northeast Division,
Norrell Services*
Ronald T. Self.....................41 Senior Vice President and General Manager, Metro Markets
Division, Norrell Services
Eugene F. Obermeyer................54 Vice President; President and Chief Operating Officer,
Franchise Division, Norrell Services
Mark H. Hain.......................48 Vice President, Secretary and General Counsel
Peter F. Rosen.....................50 Vice President, Human Resources
Stanley Smith......................48 Vice President and General Manager, North Central Division,
Norrell Services
Theresa G. Williams................38 Vice President and General Manager, Mid-Atlantic Division,
Norrell Services
Robert W. Grissom, Jr..............40 Vice President, Marketing
Timothy E. Tindle.................42 President, Central Division, Norrell Information Services
Charles F. Phillips................41 President, Atlantic Division, Norrell Information Services
Michael C. Mullins.................49 President, Northeast Division, Norrell Information Services
Wayne M. Mincey....................40 Vice President, Strategic Planning
Scott L. Colabuono** ..............49 Senior Vice President, Chief Financial Officer
Ted A. Jurkuta*** .................45 Senior Vice President and Chief Information Officer
</TABLE>
C. Douglas Miller was elected Chief Executive Officer and President of
the Company effective October 15, 1993. He joined Norrell Services 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.
J. Ernest Riddle joined Norrell Corporation in March 1997 as Chief
Operating Officer of Norrell Corporation 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 as Senior Vice President and
Executive Vice President, Marketing and Sales, with Ryder Systems, Inc., since
January 1993. Mr. Riddle was a Vice President, Marketing and Sales, for Xerox
Corporation for ten years prior to joining Ryder Systems, Inc.
Larry J. Bryan joined the Company in October 1985 and is an Executive
Vice President of the Company. Prior to his current position, Mr. Bryan was
Chief Financial Officer of the Company.
Thomas A. Vadnais joined Tascor on September 1, 1992 and served as Vice
President -- General Manager until October 31, 1993 when he was elected
President and Chief Operating Officer of Tascor. Mr. Vadnais is also Vice
President, National Service Management and has served in that capacity since
October, 1995. Prior to joining Tascor, 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.
Stanley E. Anderson has been employed by Norrell Services since 1981. He
is currently President, Southeast Division, Norrell Information Services. Prior
to his current role, Mr. Anderson was Senior Vice President of Business
Development, a position he assumed in February, 1996. Previously, he held the
positions of Vice President and General Manager, Southeast Division, Vice
President and General Manager, East Division, Vice President of Franchise
Development, Regional Manager, Branch Manager, and Sales Training Manager.
- --------------------
* / Caress C. Kennedy resigned from the Company effective January 2, 1998.
** / Scott L. Colabuono joined the Company effective January 19, 1998.
***/ Ted A. Jurkuta joined the Company effective January 23, 1998.
13
<PAGE> 14
James L. Donahue is presently Vice President and General Manager for the
West Division of Norrell Services. He has been employed by Norrell Services
since August, 1994. Prior to that time, he was Vice President of a temporary
services firm in San Juan Capistrano, California from April 1991 until August,
1994.
Caress C. Kennedy was employed by Norrell Services from August 12, 1992
until January 2, 1998. She served as Vice President and General Manager,
Northeast Division, and previously held the position of Market Vice President in
New York and New Jersey. Prior to joining Norrell Services, Ms. Kennedy was
employed by Thompson Financial Services as Senior Vice President of Sales and
Marketing and by Xerox as Vice President of Marketing, and Vice President of
Strategic Planning and New Business Development.
Ronald T. Self joined Norrell Services on August 31, 1990. He is Senior
Vice President and General Manager, Metro Markets Division, Norrell Services. He
has held the position of Vice President and General Manager, Central Division,
Vice President - Major Accounts and Market Vice President. From 1986 to 1990,
Mr. Self was employed by Coca-Cola U.S.A., Atlanta, Georgia, most recently as
Southeast Area Manager.
Eugene F. Obermeyer has been employed by Norrell Services since July 1,
1979. He has been the President and Chief Operating Officer of the Franchise
Division of Norrell Services since 1991. He previously held the positions of
President and Chief Operating Officer, Southeast Division, Regional Vice
President and Regional Manager, District Manager and Branch Manager.
Mark H. Hain has been Vice President, Secretary and General Counsel to
the Company since March 1, 1988, when he joined the Company.
Peter F. Rosen is presently Vice President, Human Resources for Norrell
Corporation and has served in that capacity since September, 1995. Prior to that
time, he was Senior Vice President of Human Resources for GAB Robbins, and
Director of Human Resources for SmithKline Beecham.
Stanley Smith is Vice President and General Manager of the North Central
Division of Norrell Services and has held that position since February, 1996.
Prior to February, 1996, Mr. Smith held the position of Regional Vice President,
North Central Region, Norrell Services from March 1989 until February, 1996.
Theresa G. Williams has been the Division Vice President and General
Manager of the Mid-Atlantic Division for Norrell Services since February, 1996.
Ms. Williams has been employed with the Company since March, 1984 and has
previously held the positions of Region Vice President, Region Manager and
Branch Manager.
Robert W. Grissom, Jr. has served as Vice President, Marketing since
February 1996. Mr. Grissom has also held the positions of Vice President, New
Market Development, Region Vice President, Franchise Division and Region
Manager, Franchise Division.
Timothy E. Tindle currently serves as President, Central Division,
Norrell Information Systems. Prior to his current role, Mr. Tindle was President
and Chief Executive Officer of Analytical Technologies, Inc. ("ANATEC") a
position he held since 1994. Prior to his association with ANATEC, Mr. Tindle
was employed with Compaq Computer Corporation for approximately 11 years where
he served as Director, National Support Center, Director, Systems Support and
National Service Manager.
Charles F. Phillips is President, Mid-Atlantic Division, Norrell
Information Systems. From February, 1986 until November 2, 1997, Mr. Phillips
was President of American Technical Resources, Inc.
Michael C. Mullins is President, Northeast Division, Norrell Information
Systems. Previously, Mr. Mullins was President and Chief Executive Officer of
Comtex Information Systems, Inc., a company he founded in 1976.
Wayne M. Mincey is Vice President, Strategic Planning and has held that
position since September 1997. Prior to joining the Company, Mr. Mincey served
as Vice President, Operations for Ryder TRS, Inc. Mr. Mincey also
14
<PAGE> 15
served as Vice President - Eastern Area U.S., and Vice President - Development
and Operations for Ryder Consumer Truck Rental, Inc. Prior to joining the truck
rental division, Mr. Mincey served as Group Director - Business and Financial
Planning for the Vehicle Leasing and Services Division of Ryder Systems, Inc.,
and also as Chief Financial Officer - European Operations of Ryder Truck Rental,
Ltd.
Scott L. Colabuono joined the Company effective January 19, 1998 as
Senior Vice President and Chief Financial Officer. Prior to joining the Company,
Mr. Colabuono served from February, 1997 until December, 1997 as President of
the Golf Center Business Division of Golden Bear Inc. From 1995 until joining
Golden Bear, Inc., Mr. Colabuono was a Financial Consultant. From 1990 to 1995,
Mr. Colabuono served as Senior Vice President - Worldwide Brand Strategy and
Chief Financial Officer of Burger King Corporation, and from 1988 to 1990, Mr.
Colabuono served as Senior Vice President - Financial Operations, Sprint
Corporation and Executive Vice President and Chief Financial Officer for U. S.
Sprint.
Ted A. Jurkuta is Senior Vice President and Chief Information Officer for
the Company effective January 23, 1998. Prior to his role with the Company, Mr.
Jurkuta served as Senior Vice President, Global Information Management for
American Airlines/The SABRE Group. From 1995 to 1996, Mr. Jurkuta held the
position of Senior Vice President, SABRE Architecture for American Airlines/The
SABRE Group, and from 1992 to 1995, Mr. Jurkuta served as Senior Vice President,
Data Center Services, Vice President, SABRE Group; and Managing Director, SABRE
Decision Technology for American Airlines/The SABRE Group. Prior to his
association with American Airlines/The SABRE Group in 1979, Mr. Jurkuta was
associated with Delta Airlines.
15
<PAGE> 16
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company's stock trades on the New York Stock Exchange under the
symbol NRL. The following table sets forth the quarterly sales price for the
Company's stock for the last two fiscal years.
HIGH/LOW STOCK PRICE
<TABLE>
<CAPTION>
HIGH LOW
---------------------------
<S> <C> <C>
First Quarter, 1996 $16 11/16 $13 1/2
Second Quarter, 1996 $19 1/8 $12 9/16
Third Quarter, 1996 $30 $18 1/4
Fourth Quarter, 1996 $34 1/2 $26 1/4
First Quarter, 1997 $29 7/8 $22
Second Quarter, 1997 $28 7/8 $22 1/2
Third Quarter, 1997 $35 1/4 $24 3/4
Fourth Quarter, 1997 $35 15/16 $27 5/8
</TABLE>
At December 29, 1997 there were 283 shareholders of record.
The Company declared a dividend on its Common Stock of $.035 per share in
December, 1995, March, 1996, June, 1996 and September, 1996. The Company
declared a dividend of $.04 per share on its Common Stock in December, 1996,
March, 1997, June, 1997 and September, 1997. The Company's loan agreement
restricts the amount available for the payment of dividends to not more than 40%
of the Company's cumulative net income since November 1, 1993.
ITEM 6. SELECTED FINANCIAL DATA
Information as to Selected Financial Data required by this item is
incorporated by reference to the information contained in the Norrell
Corporation Annual Report 1997 under the caption "Selected Consolidated
Financial Data", included as Exhibit 13.1 to this Form 10-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Information as to Management's Discussion and Analysis of Financial
Condition and Results of Operation required by this item is incorporated by
reference to the information contained in the Norrell Corporation Annual Report
1997 under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations", included as Exhibit 13.1 to this Form
10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information as to Financial Statements and Supplementary Data required by
this item is incorporated by reference to the information contained in the
Norrell Corporation Annual Report 1997 under the captions "Consolidated Balance
Sheets", "Consolidated Statements of Income", "Consolidated Statements of
Shareholder's Equity",
16
<PAGE> 17
"Consolidated Statements of Cash Flows" and "Notes to Consolidated Financial
Statement", included as Exhibit 13.1 to this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
Information regarding Executive Officers of the Company is contained in
Item 4A of Part I. Information as to Directors required by this item is
incorporated by reference from the Company's definitive Proxy Statement, under
the caption "Proposal 1. Election of Directors", which Proxy Statement has been
mailed to stockholders in connection with the Company's annual meeting of
stockholders, which is scheduled to be held March 3, 1998 and has been filed
with the Securities and Exchange Commission pursuant to Regulation 14A.
ITEM 11. EXECUTIVE COMPENSATION.
Information as to Executive Compensation required by this item is
incorporated by reference from the Company's definitive Proxy Statement, under
the caption "Executive Compensation" which Proxy Statement has been mailed to
stockholders in connection with the Company's annual meeting of stockholders,
which is scheduled to be held March 3, 1998 and has been filed with the
Securities and Exchange Commission pursuant to Regulation 14A.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Information as to Security Ownership of Certain Beneficial Owners and
Management required by this item is incorporated by reference from the Company's
definitive Proxy Statement, under the caption "Voting Rights and Principal
Shareholders", which Proxy Statement has been mailed to stockholders in
connection with the Company's annual meeting of stockholders, which is scheduled
to be held March 3, 1998 and has been filed with the Securities and Exchange
Commission pursuant to Regulation 14A.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information as to Certain Relationships and Related Transactions required
by this item is incorporated by reference from the Company's definitive Proxy
Statement, under the caption "Certain Transactions and Relationships", which
Proxy Statement has been mailed to stockholders in connection with the Company's
annual meeting of stockholders, which is scheduled to be held March 3, 1998 and
has been filed with the Securities and Exchange Commission pursuant to
Regulation 14A.
17
<PAGE> 18
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K.
(A) FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND EXHIBITS.
1. FINANCIAL STATEMENTS.
The following consolidated financial statements of the Company
and it subsidiaries are incorporated by reference to the
Norrell Corporation Annual Report 1997, included as Exhibit
13.1 to this Form 10-K.
Consolidated Balance Sheets as of November 2, 1997 and October
27, 1996. Consolidated Statements of Income for fiscal years
1997, 1996, and 1995. Consolidated Statements of Shareholders'
Equity for fiscal years 1997, 1996, and 1995. Consolidated
Statements of Cash Flows for fiscal years 1997, 1996, and
1995.
Notes to Consolidated Financial Statements.
Report of Independent Public Accountants.
Selected quarterly financial data for the fiscal years ended
November 2, 1997 and October 27, 1996 is incorporated by
reference to Note 13 Selected Quarterly Information
(Unaudited) in the Norrell Corporation Annual Report 1997,
included as Exhibit 13.1 to this Form 10-K.
2. FINANCIAL STATEMENT SCHEDULES.
The following financial statement schedule of the Company is
included herein:
II. Valuation and Qualifying Accounts
Schedules not listed above have been omitted because they are
not applicable, or the required information is included in the
financial statements or notes thereto.
3. EXHIBITS.
The Exhibits filed as a part of this Form 10-K are listed in
Item 14(c) of this report, which listing is incorporated
herein by reference.
(B) REPORTS ON FORM 8-K.
(a) No Reports on Form 8-K were filed during the last quarter of
the period covered by this report on Form 10-K.
18
<PAGE> 19
3. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
-----------------------------------------------------------------------
<S> <C>
3.1 Amended and Restated Articles of Incorporation of the Company,
incorporated by reference to Exhibit 3.1 of the Company's
Amendment No. 1 to Registration Statement on Form S-1, as
filed with the Securities and Exchange Commission on June 22,
1994.
3.2 Amended and Restated Bylaws of the Company, incorporated by
reference to Exhibit 3.2 of the Company's Registration
Statement on Form S-1, as filed with the Securities and
Exchange Commission on June 10, 1994.
10.1 Stock Purchase Agreement executed in 1981 by and among Guy W.
Millner, Robert J. Gibson, Norrell Corporation and the several
purchasers named therein and related stock purchase option
agreement, incorporated by reference to Exhibit 10.1 of the
Company's Registration Statement on Form S-1, as filed with
the Securities and Exchange Commission on June 10, 1994.
10.2.1 Norrell Corporation Employee Stock Purchase Plan, incorporated
by reference to Exhibit 10.2 to the Company Form 10-K for the
year ended October 29, 1995.*
10.2.2 Second Amendment to the Norrell Corporation Employee Stock
Purchase Plan, dated August 28, 1997 by Norrell Corporation,
to be effective September 30, 1997.*
10.3 Agreement and Plan of Reorganization among American Technical
Resources, Inc., Charles F. Phillips, Ralph L. Lary, III, Gary
L. Kilgore, William C. Holman, George G. Lytle, Norrell
Corporation and N. Acquisition Corp., dated August 5, 1996,
incorporated by reference to Exhibit 1 of the Company's
Current Report on Form 8-K filed on August 20, 1996.
10.4 Asset Purchase Agreement among Analytical Technologies, Inc.,
Anatec Canada, Inc., Albert G. Schornberg, James A. Barbour,
Timothy E. Tindle, David H. Cleland and Norrell Corporation,
Norrell Technical Services, Inc., and Norrell Services, Ltd.,
dated July 22, 1996, incorporated by reference to Exhibit 1 of
the Company's Current Report on Form 8-K filed on August 6,
1996.
10.5 Agreement of Acquisition dated October 29, 1993 by and among
Hooper Holmes, Inc., Norrell Health Care, Inc. and Norrell
Corporation, incorporated by reference to Exhibit 10.5 of the
Company's Registration Statement on Form S-1, as filed with
the Securities and Exchange Commission on June 10, 1994.
10.6 Shareholders Agreement among Norrell Corporation, Harvard
Teleservicing, LLC and CallTask Incorporated, dated March 22,
1996, incorporated by reference to Exhibit 10.6 to the Company
Form 10-K for the year ended October 27, 1996.
10.7 Omitted.
10.8 Form of Franchise Agreement used by Dynamic Temporary
Services, Inc., incorporated by reference to Exhibit 10.8 to
the Company Form 10-K for the year ended October 27, 1996.
</TABLE>
- ----------------------------------
* / A management contract or compensatory plan, contract or arrangement.
19
<PAGE> 20
<TABLE>
<S> <C>
10.9 Form of Franchise Agreement used by Norrell Services, Inc.,
incorporated by reference to Exhibit 10.9 of the Company's
Registration Statement on Form S-1, as filed with the
Securities and Exchange Commission on June 10, 1994.
10.10 Form of Master Vendor Agreement used by Norrell Services, Inc.
10.11 Form of Agreement between Tascor Incorporated and franchisees
of Norrell Services, Inc., incorporated by reference to
Exhibit 10.11 of the Company's Registration Statement on Form
S-1, as filed with the Securities and Exchange Commission on
June 10, 1994.
10.12 Form of Management Services Agreement used by Tascor
Incorporated.
10.13 Joint Venture Agreement dated as of October 15, 1986 between
Habersham Venture, Ltd. and Norrell Corporation, incorporated
by reference to Exhibit 10.13 of the Company's Registration
Statement on Form S-1, as filed with the Securities and
Exchange Commission on June 10, 1994.
10.14 Lease dated October 15, 1986 between Norhab Associates and
Norrell Corporation, as amended by that certain amendment
dated May 3, 1988, that certain amendment No. 2 dated
September 13, 1988, and that certain amendment No. 3 dated May
1, 1989, incorporated by reference to Exhibit 10.14 of the
Company's Registration Statement on Form S-1, as filed with
the Securities and Exchange Commission on June 10, 1994.
10.15 Amendment to Lease, dated December 11, 1995, amending Lease
Agreement dated October 15, 1986 between Norhab Associates and
Norrell Corporation, incorporated by reference to Exhibit
10.15 to the Company Form 10-K for the year ended October 29,
1995.
10.16 First Amendment to Lease, (two), dated December 11, 1995
between Norhab Associates and Norrell Corporation, amending
Lease Agreement dated May 3, 1988, incorporated by reference
to Exhibit 10.16 to the Company Form 10-K for the year ended
October 29, 1995.
10.17 Form of Indemnification Agreement, incorporated by reference
to Exhibit 10.17 of the Company's Registration Statement on
Form S-1, as filed with the Securities and Exchange Commission
on June 10, 1994.
10.18 Employment Agreement dated May 24, 1993 between Norrell
Corporation and Larry J. Bryan, incorporated by reference to
Exhibit 10.18 of the Company's Registration Statement on Form
S-1, as filed with the Securities and Exchange Commission on
June 10, 1994.*
10.19 Employment Agreement dated October 15, 1993 between Norrell
Corporation and C. Douglas Miller, incorporated by reference
to Exhibit 10.19 of the Company's Registration Statement on
Form S-1, as filed with the Securities and Exchange Commission
on June 10, 1994.*
10.20 Form of agreement for executive officers relating to
confidentiality and non-competition.*
10.21 Amended and Restated Employment Agreement dated December 15,
1997 by and between Norrell Corporation and C. Douglas
Miller.*
10.22 Employment Agreement by and between Norrell Corporation and
James Ernest Riddle effective March 3, 1997.*
</TABLE>
- --------------------------
* / A management contract or compensatory plan, contract or arrangement.
20
<PAGE> 21
<TABLE>
<S> <C>
10.23 Agreement and Plan of Merger among Comtex Information Systems,
Inc., Comtex Systems, Inc., Norrell Corporation and N.
Acquisition Corp. dated December 8, 1996, incorporated by
reference to the Company's Report on Form 8-K dated December
8, 1996 and filed on December 20, 1996.
10.24 Omitted.
10.25 Norrell Corporation Horizon - Vision Supplemental Plan, as
amended and restated on June 8, 1994, incorporated by
reference to Exhibit 10.25 of the Company's Registration
Statement on Form S-1, as filed with the Securities and
Exchange Commission on June 10, 1994.*
10.26 Form of Norrell Corporation Non-Management Director Restricted
Stock Grant Agreement, incorporated by reference to Exhibit
10.26 of the Company's Registration Statement on Form S-1, as
filed with the Securities and Exchange Commission on June 10,
1994.*
10.27 Norrell Corporation 1994 Stock Incentive Plan, incorporated by
reference to Exhibit 10.27 of the Company's Registration
Statement on Form S-1, as filed with the Securities and
Exchange Commission on June 10, 1994.*
10.28 Omitted.
10.29 The Norrell Corporation 1991 Stock Option Plan, incorporated
by reference to Exhibit 10.29 of the Company's Registration
Statement on Form S-1, as filed with the Securities and
Exchange Commission on June 10, 1994.*
10.30 Preferred Vendor Agreement, executed May 14, 1993 between
Norrell Services, Inc. and United Parcel Service General
Services Company, incorporated by reference to Exhibit 10.30
to the Company's Form 10-K for the year ended October 27,
1996. The Exhibit A of the Agreement has been omitted. The
Company agrees to furnish supplementally to the Commission
upon its request a copy of such Exhibit.
10.31 Management Services Agreement between International Business
Machines and Tascor Incorporated, executed on December 1, 1994
("MSA"), incorporated by reference to Exhibit 10.31 to the
Company Form 10-K for the year ended October 30, 1994. The
attachments to the MSA listed on page 11 of the Agreement have
been omitted. The Company agrees to furnish supplementally to
the Commission upon its request a copy of any such attachment.
10.32 Amended and Restated Credit Agreement, dated October 21, 1996,
by and among Norrell Corporation as the Company, certain
Commercial Lending Institutions as the Lenders, Bank of
America National Trust and Savings Association, as the Agent
for the Lenders, and SunTrust Bank, Atlanta, as the co-Agent
for the Lenders, incorporated by reference to Exhibit 10.32 to
the Company Form 10-K for the year ended October 27, 1996. The
Credit Agreement contains a list of schedules and exhibits on
page (v) of the table of contents. These schedules and
exhibits have been omitted. The Company agrees to furnish
supplementally to the Commission upon its request a copy of
any such schedules and exhibits.
10.33 First Amendment to Credit Agreement, dated December 26, 1996,
amending the Amended and Restated Credit Agreement dated
October 21, 1996 among Norrell Corporation as the Company,
certain Commercial Lending Institutions as the Lenders, Bank
of America National Trust and Savings Association, as the
Agent for the Lenders and SunTrust Bank, Atlanta, as co-agent
for the Lenders, incorporated by reference to Exhibit 10.33 to
the Company Form 10-K for the year ended
</TABLE>
- --------------------------
* / A management contract or compensatory plan, contract or arrangement.
21
<PAGE> 22
<TABLE>
<S> <C>
October 27, 1996. Schedules and exhibits referenced in the
Agreement have been omitted. The Company agrees to furnish
supplementally to the Commission upon its request a copy of
any such schedules and exhibits.
10.34 Agreement of Limited Partnership executed October 6, 1994 by
and between HealthTask Corporation, Tascor Incorporated and
Ernst & Young U.S. LLP, incorporated by reference to Exhibit
10.34 to the Company Form 10-K for the year ended October 30,
1994.
10.35 Omitted.
10.36 Non-Technical Services Agreement between International
Business Machines Corporation and Tascor Incorporated, entered
into between the parties on April 4, 1995 and April 11, 1995,
incorporated by reference to Exhibit 10.36 to the Company Form
10-K for the year ended October 29, 1995. The attachments and
appendices listed on page iii of the Agreement have been
omitted. The Company agrees to furnish supplementally to the
Commission upon its request a copy of any such attachment or
appendix.
10.37 Purchase and Sale Agreement between Norhab Associates, a joint
venture comprised of Norrell Corporation and Habersham
Venture, Ltd. as Seller and Oregon Public Employees'
Retirement Fund, or its nominee, as Buyer, dated October 25,
1995, incorporated by reference to Exhibit 10.37 to the
Company Form 10-K for the year ended October 29, 1995. The
exhibits listed on page iii of the Agreement have been
omitted. The Company agrees to furnish supplementally to the
Commission upon its request a copy of any such exhibit.
10.38 First Amendment to Purchase and Sale Agreement between Norhab
Associates, a joint venture comprised of Norrell Corporation
and Habersham Venture, Ltd. as Seller and Oregon Public
Employees' Retirement Fund, or its nominee, Property Georgia
OBJLW One Corporation, an Oregon Corporation, as Buyers, dated
December 4, 1995, incorporated by reference to Exhibit 10.38
to the Company Form 10-K for the year ended October 29, 1995.
10.39 Closing Document # 3 Assignment and Assumption of Leases dated
October 25, 1995 between Norhab Associates, a joint venture,
comprised of Norrell Corporation and Habersham Venture, Ltd.
("Assignor") and Property Georgia OBJLW One Corporation, an
Oregon Corporation ("Assignee"), incorporated by reference to
Exhibit 10.39 to the Company Form 10-K for the year ended
October 29, 1995.
10.40 Stockholders Agreement among Norrell Corporation, The Cross
Country Group, LLC and Norcross, Inc. dated August 15, 1996,
incorporated by reference to Exhibit 10.40 to the Company Form
10-K for the year ended October 27, 1996.
10.41.1 Norrell Corporation 401(k) Retirement Savings Plan,
incorporated by reference to Exhibit 10.41 to the Company Form
10-K for the year ended October 27, 1996.
10.41.2 Second Amendment to the Norrell Corporation 401(k) Retirement
Savings Plan dated December 30, 1996 by Norrell Corporation to
be effective January 1, 1997.
10.42.1 Norrell Corporation Non-Qualified Deferred Compensation Plan,
effective January 1, 1995, incorporated by reference to
Exhibit 10.42 to the Company Form 10-K for the year ended
October 29, 1995.*
10.42.2 Amendment to Norrell Corporation Non-Qualified Deferred
Compensation Plan.*
</TABLE>
- --------------------------
* / A management contract or compensatory plan, contract or arrangement.
22
<PAGE> 23
<TABLE>
<S> <C>
11.1 Computation of Primary Earnings Per Share.
11.2 Computation of Fully Diluted Earnings Per Share.
13.1 Portions of the Norrell Corporation Annual Report 1997 which
have been incorporated by reference in this Form 10-K.
21 Subsidiaries of the Company.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule. (for SEC use only).
</TABLE>
23
<PAGE> 24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
NORRELL CORPORATION
The Company
By: /S/ C. DOUGLAS MILLER
--------------------------------------------------
C. Douglas Miller
Chairman, Chief Executive Officer and President
Date: January 26, 1998
--------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated.
By: /S/ C. DOUGLAS MILLER
--------------------------------------------------
C. Douglas Miller
Chairman, Chief Executive Officer and President
(Principal Executive Officer)
Date: January 26, 1998
--------------------------------------------------
By: /S/ SCOTT L. COLABUONO
--------------------------------------------------
Scott L. Colabuono
Sr. Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: January 26, 1998
--------------------------------------------------
By: /S/ GUY W. MILLNER
--------------------------------------------------
Guy W. Millner
Director
Date: January 26, 1998
--------------------------------------------------
By: /S/ THOMAS A. VADNAIS
--------------------------------------------------
Thomas A. Vadnais
Director, President and Chief
Operating Officer, Tascor
Date: January 27, 1998
--------------------------------------------------
24
<PAGE> 25
By: /S/ LARRY J. BRYAN
--------------------------------------------------
Larry J. Bryan
Director and Executive Vice President
Date: January 27, 1998
--------------------------------------------------
By: /S/ CARL E. SANDERS
--------------------------------------------------
Carl E. Sanders
Director
Date: January 26, 1998
--------------------------------------------------
By: /S/ LUCIUS E. BURCH, III
--------------------------------------------------
Lucius E. Burch, III
Director
Date: January 27, 1998
--------------------------------------------------
By: /S/ DONALD A. MCMAHON
--------------------------------------------------
Donald A. McMahon
Director
Date: January 26, 1998
--------------------------------------------------
By:
--------------------------------------------------
Nancy Clark Reynolds
Director
Date:
--------------------------------------------------
By: /S/ FRANK A. METZ, JR.
--------------------------------------------------
Frank A. Metz, Jr.
Director
Date: January 26, 1998
--------------------------------------------------
By: /S/ KAAREN JOHNSON-STREET
--------------------------------------------------
Kaaren Johnson-Street
Director
Date: January 27, 1998
--------------------------------------------------
25
<PAGE> 26
SCHEDULE II
VALUATION OF QUALIFYING
ACCOUNTS
26
<PAGE> 27
SCHEDULE II
NORRELL CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED NOVEMBER 2, 1997, OCTOBER 27, 1996, AND OCTOBER 29, 1995
(In thousands)
<TABLE>
<CAPTION>
1995 1996 1997
------- ------ -------
<S> <C> <C> <C>
Allowance for doubtful accounts,
balance at beginning of year $ 4,835 $4,869 $ 7,411
Addition charged to cost and expense 1,699 2,315 1,095
Charged to other accounts -- 227 --
Deductions (1,665) -- (2,009)
------- ------ -------
Allowance for doubtful accounts,
balance at end of year $ 4,869 $7,411 $ 6,497
======= ====== =======
</TABLE>
27
<PAGE> 28
EXHIBIT LIST
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
-----------------------------------------------------------------------
<S> <C>
3.1 Amended and Restated Articles of Incorporation of the Company,
incorporated by reference to Exhibit 3.1 of the Company's
Amendment No. 1 to Registration Statement on Form S-1, as
filed with the Securities and Exchange Commission on June 22,
1994.
3.2 Amended and Restated Bylaws of the Company, incorporated by
reference to Exhibit 3.2 of the Company's Registration
Statement on Form S-1, as filed with the Securities and
Exchange Commission on June 10, 1994.
10.1 Stock Purchase Agreement executed in 1981 by and among Guy W.
Millner, Robert J. Gibson, Norrell Corporation and the several
purchasers named therein and related stock purchase option
agreement, incorporated by reference to Exhibit 10.1 of the
Company's Registration Statement on Form S-1, as filed with
the Securities and Exchange Commission on June 10, 1994.
10.2.1 Norrell Corporation Employee Stock Purchase Plan, incorporated
by reference to Exhibit 10.2 to the Company Form 10-K for the
year ended October 29, 1995.*
10.2.2 Second Amendment to the Norrell Corporation Employee Stock
Purchase Plan, dated August 28, 1997 by Norrell Corporation,
to be effective September 30, 1997.*
10.3 Agreement and Plan of Reorganization among American Technical
Resources, Inc., Charles F. Phillips, Ralph L. Lary, III, Gary
L. Kilgore, William C. Holman, George G. Lytle, Norrell
Corporation and N. Acquisition Corp., dated August 5, 1996,
incorporated by reference to Exhibit 1 of the Company's
Current Report on Form 8-K filed on August 20, 1996.
10.4 Asset Purchase Agreement among Analytical Technologies, Inc.,
Anatec Canada, Inc., Albert G. Schornberg, James A. Barbour,
Timothy E. Tindle, David H. Cleland and Norrell Corporation,
Norrell Technical Services, Inc., and Norrell Services, Ltd.,
dated July 22, 1996, incorporated by reference to Exhibit 1 of
the Company's Current Report on Form 8-K filed on August 6,
1996.
10.5 Agreement of Acquisition dated October 29, 1993 by and among
Hooper Holmes, Inc., Norrell Health Care, Inc. and Norrell
Corporation, incorporated by reference to Exhibit 10.5 of the
Company's Registration Statement on Form S-1, as filed with
the Securities and Exchange Commission on June 10, 1994.
10.6 Shareholders Agreement among Norrell Corporation, Harvard
Teleservicing, LLC and CallTask Incorporated, dated March 22,
1996, incorporated by reference to Exhibit 10.6 to the Company
Form 10-K for the year ended October 27, 1996.
10.7 Omitted.
10.8 Form of Franchise Agreement used by Dynamic Temporary
Services, Inc., incorporated by reference to Exhibit 10.8 to
the Company Form 10-K for the year ended October 27, 1996.
</TABLE>
- ----------------------------------
* / A management contract or compensatory plan, contract or arrangement.
<PAGE> 29
<TABLE>
<S> <C>
10.9 Form of Franchise Agreement used by Norrell Services, Inc.,
incorporated by reference to Exhibit 10.9 of the Company's
Registration Statement on Form S-1, as filed with the
Securities and Exchange Commission on June 10, 1994.
10.10 Form of Master Vendor Agreement used by Norrell Services, Inc.
10.11 Form of Agreement between Tascor Incorporated and franchisees
of Norrell Services, Inc., incorporated by reference to
Exhibit 10.11 of the Company's Registration Statement on Form
S-1, as filed with the Securities and Exchange Commission on
June 10, 1994.
10.12 Form of Management Services Agreement used by Tascor
Incorporated.
10.13 Joint Venture Agreement dated as of October 15, 1986 between
Habersham Venture, Ltd. and Norrell Corporation, incorporated
by reference to Exhibit 10.13 of the Company's Registration
Statement on Form S-1, as filed with the Securities and
Exchange Commission on June 10, 1994.
10.14 Lease dated October 15, 1986 between Norhab Associates and
Norrell Corporation, as amended by that certain amendment
dated May 3, 1988, that certain amendment No. 2 dated
September 13, 1988, and that certain amendment No. 3 dated May
1, 1989, incorporated by reference to Exhibit 10.14 of the
Company's Registration Statement on Form S-1, as filed with
the Securities and Exchange Commission on June 10, 1994.
10.15 Amendment to Lease, dated December 11, 1995, amending Lease
Agreement dated October 15, 1986 between Norhab Associates and
Norrell Corporation, incorporated by reference to Exhibit
10.15 to the Company Form 10-K for the year ended October 29,
1995.
10.16 First Amendment to Lease, (two), dated December 11, 1995
between Norhab Associates and Norrell Corporation, amending
Lease Agreement dated May 3, 1988, incorporated by reference
to Exhibit 10.16 to the Company Form 10-K for the year ended
October 29, 1995.
10.17 Form of Indemnification Agreement, incorporated by reference
to Exhibit 10.17 of the Company's Registration Statement on
Form S-1, as filed with the Securities and Exchange Commission
on June 10, 1994.
10.18 Employment Agreement dated May 24, 1993 between Norrell
Corporation and Larry J. Bryan, incorporated by reference to
Exhibit 10.18 of the Company's Registration Statement on Form
S-1, as filed with the Securities and Exchange Commission on
June 10, 1994.*
10.19 Employment Agreement dated October 15, 1993 between Norrell
Corporation and C. Douglas Miller, incorporated by reference
to Exhibit 10.19 of the Company's Registration Statement on
Form S-1, as filed with the Securities and Exchange Commission
on June 10, 1994.*
10.20 Form of agreement for executive officers relating to
confidentiality and non-competition.*
10.21 Amended and Restated Employment Agreement dated December 15,
1997 by and between Norrell Corporation and C. Douglas
Miller.*
10.22 Employment Agreement by and between Norrell Corporation and
James Ernest Riddle effective March 3, 1997.*
</TABLE>
- --------------------------
* / A management contract or compensatory plan, contract or arrangement.
<PAGE> 30
<TABLE>
<S> <C>
10.23 Agreement and Plan of Merger among Comtex Information Systems,
Inc., Comtex Systems, Inc., Norrell Corporation and N.
Acquisition Corp. dated December 8, 1996, incorporated by
reference to the Company's Report on Form 8-K dated December
8, 1996 and filed on December 20, 1996.
10.24 Omitted.
10.25 Norrell Corporation Horizon - Vision Supplemental Plan, as
amended and restated on June 8, 1994, incorporated by
reference to Exhibit 10.25 of the Company's Registration
Statement on Form S-1, as filed with the Securities and
Exchange Commission on June 10, 1994.*
10.26 Form of Norrell Corporation Non-Management Director Restricted
Stock Grant Agreement, incorporated by reference to Exhibit
10.26 of the Company's Registration Statement on Form S-1, as
filed with the Securities and Exchange Commission on June 10,
1994.*
10.27 Norrell Corporation 1994 Stock Incentive Plan, incorporated by
reference to Exhibit 10.27 of the Company's Registration
Statement on Form S-1, as filed with the Securities and
Exchange Commission on June 10, 1994.*
10.28 Omitted.
10.29 The Norrell Corporation 1991 Stock Option Plan, incorporated
by reference to Exhibit 10.29 of the Company's Registration
Statement on Form S-1, as filed with the Securities and
Exchange Commission on June 10, 1994.*
10.30 Preferred Vendor Agreement, executed May 14, 1993 between
Norrell Services, Inc. and United Parcel Service General
Services Company, incorporated by reference to Exhibit 10.30
to the Company's Form 10-K for the year ended October 27,
1996. The Exhibit A of the Agreement has been omitted. The
Company agrees to furnish supplementally to the Commission
upon its request a copy of such Exhibit.
10.31 Management Services Agreement between International Business
Machines and Tascor Incorporated, executed on December 1, 1994
("MSA"), incorporated by reference to Exhibit 10.31 to the
Company Form 10-K for the year ended October 30, 1994. The
attachments to the MSA listed on page 11 of the Agreement have
been omitted. The Company agrees to furnish supplementally to
the Commission upon its request a copy of any such attachment.
10.32 Amended and Restated Credit Agreement, dated October 21, 1996,
by and among Norrell Corporation as the Company, certain
Commercial Lending Institutions as the Lenders, Bank of
America National Trust and Savings Association, as the Agent
for the Lenders, and SunTrust Bank, Atlanta, as the co-Agent
for the Lenders, incorporated by reference to Exhibit 10.32 to
the Company Form 10-K for the year ended October 27, 1996. The
Credit Agreement contains a list of schedules and exhibits on
page (v) of the table of contents. These schedules and
exhibits have been omitted. The Company agrees to furnish
supplementally to the Commission upon its request a copy of
any such schedules and exhibits.
10.33 First Amendment to Credit Agreement, dated December 26, 1996,
amending the Amended and Restated Credit Agreement dated
October 21, 1996 among Norrell Corporation as the Company,
certain Commercial Lending Institutions as the Lenders, Bank
of America National Trust and Savings Association, as the
Agent for the Lenders and SunTrust Bank, Atlanta, as co-agent
for the Lenders, incorporated by reference to Exhibit 10.33 to
the Company Form 10-K for the year ended
</TABLE>
- --------------------------
* / A management contract or compensatory plan, contract or arrangement.
<PAGE> 31
<TABLE>
<S> <C>
October 27, 1996. Schedules and exhibits referenced in the
Agreement have been omitted. The Company agrees to furnish
supplementally to the Commission upon its request a copy of
any such schedules and exhibits.
10.34 Agreement of Limited Partnership executed October 6, 1994 by
and between HealthTask Corporation, Tascor Incorporated and
Ernst & Young U.S. LLP, incorporated by reference to Exhibit
10.34 to the Company Form 10-K for the year ended October 30,
1994.
10.35 Omitted.
10.36 Non-Technical Services Agreement between International
Business Machines Corporation and Tascor Incorporated, entered
into between the parties on April 4, 1995 and April 11, 1995,
incorporated by reference to Exhibit 10.36 to the Company Form
10-K for the year ended October 29, 1995. The attachments and
appendices listed on page iii of the Agreement have been
omitted. The Company agrees to furnish supplementally to the
Commission upon its request a copy of any such attachment or
appendix.
10.37 Purchase and Sale Agreement between Norhab Associates, a joint
venture comprised of Norrell Corporation and Habersham
Venture, Ltd. as Seller and Oregon Public Employees'
Retirement Fund, or its nominee, as Buyer, dated October 25,
1995, incorporated by reference to Exhibit 10.37 to the
Company Form 10-K for the year ended October 29, 1995. The
exhibits listed on page iii of the Agreement have been
omitted. The Company agrees to furnish supplementally to the
Commission upon its request a copy of any such exhibit.
10.38 First Amendment to Purchase and Sale Agreement between Norhab
Associates, a joint venture comprised of Norrell Corporation
and Habersham Venture, Ltd. as Seller and Oregon Public
Employees' Retirement Fund, or its nominee, Property Georgia
OBJLW One Corporation, an Oregon Corporation, as Buyers, dated
December 4, 1995, incorporated by reference to Exhibit 10.38
to the Company Form 10-K for the year ended October 29, 1995.
10.39 Closing Document # 3 Assignment and Assumption of Leases dated
October 25, 1995 between Norhab Associates, a joint venture,
comprised of Norrell Corporation and Habersham Venture, Ltd.
("Assignor") and Property Georgia OBJLW One Corporation, an
Oregon Corporation ("Assignee"), incorporated by reference to
Exhibit 10.39 to the Company Form 10-K for the year ended
October 29, 1995.
10.40 Stockholders Agreement among Norrell Corporation, The Cross
Country Group, LLC and Norcross, Inc. dated August 15, 1996,
incorporated by reference to Exhibit 10.40 to the Company Form
10-K for the year ended October 27, 1996.
10.41.1 Norrell Corporation 401(k) Retirement Savings Plan,
incorporated by reference to Exhibit 10.41 to the Company Form
10-K for the year ended October 27, 1996.
10.41.2 Second Amendment to the Norrell Corporation 401(k) Retirement
Savings Plan dated December 30, 1996 by Norrell Corporation to
be effective January 1, 1997.
10.42.1 Norrell Corporation Non-Qualified Deferred Compensation Plan,
effective January 1, 1995, incorporated by reference to
Exhibit 10.42 to the Company Form 10-K for the year ended
October 29, 1995.*
10.42.2 Amendment to Norrell Corporation Non-Qualified Deferred
Compensation Plan.*
</TABLE>
- --------------------------
* / A management contract or compensatory plan, contract or arrangement.
<PAGE> 32
<TABLE>
<S> <C>
11.1 Computation of Primary Earnings Per Share.
11.2 Computation of Fully Diluted Earnings Per Share.
13.1 Portions of the Norrell Corporation Annual Report 1997 which
have been incorporated by reference in this Form 10-K.
21 Subsidiaries of the Company.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule. (for SEC use only).
</TABLE>
<PAGE> 1
Exhibit 10.2.2
SECOND AMENDMENT TO THE
NORRELL CORPORATION EMPLOYEE
STOCK PURCHASE PLAN
<PAGE> 2
SECOND AMENDMENT TO THE
NORRELL CORPORATION EMPLOYEE STOCK PURCHASE PLAN
THIS SECOND AMENDMENT to the Norrell Corporation Employee Stock
Purchase Plan (the "Plan") is made on this 28th day of August, 1997, by
Norrell Corporation (the "Company"), to be effective as of September 30, 1997.
W I T N E S S E T H :
WHEREAS, the Company has the right to amend the Plan at any time; and
WHEREAS, the Company desires to amend the Plan as provided herein;
NOW, THEREFORE, Section 4(b) of the Plan hereby is amended by deleting
subparagraphs (i) and (ii) thereof and substituting the following in lieu
thereof:
(i) any Employee who, as of the Offering Date
(as defined below) of a Purchase Period, has been employed by
the Company and/or one of its Subsidiaries for less than three
consecutive months;
(ii) any Employee who has not completed 250 hours
of service with the Company and/or one of its Subsidiaries in
any calendar quarter; and
IN WITNESS WHEREOF, the Company has caused its duly authorized officer
to execute this Second Amendment on the date first written above.
NORRELL CORPORATION
By: /s/ M. L. SMITH
--------------------------------------------
Title: Vice President of Compensation and
Benefits
--------------------------------------
<PAGE> 1
EXHIBIT 10.10
MASTER VENDOR AGREEMENT
<PAGE> 2
MASTER VENDOR AGREEMENT
THIS MASTER VENDOR AGREEMENT made as of this ____ day of _______________,
199__ , by and between Norrell Services, Inc., a Georgia corporation
("Norrell"), and ______________________________, a _____________________________
corporation ("Client").
W I T N E S S E T H:
WHEREAS, Client has a continuing need for supplemental personnel; and
WHEREAS, Norrell is a leading provider of such personnel to businesses in
the United States and Canada;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. Services Provided. Norrell will provide to Client the services
described in Exhibit A attached hereto and made a part hereof (the "Services")
as Client shall require, pursuant to the terms and conditions of this Agreement.
Unless specifically authorized in Exhibit A, Client agrees that Norrell
employees will not be placed in any jobs involving driving Client vehicles;
handling cash, credit card information or other valuables; lifting over forty
(40) pounds; cleaning bathrooms, first responder tasks or any work in any area
with possible exposure to bloodborne pathogens; handling of chemicals; the
operation of any production machinery that is not guarded in accordance with
relevant OSHA requirements; use of any power tools; maintenance or repair of any
machinery; work on or around navigable bodies of water; and any work above floor
level, including elevated platforms, scaffolding, manlifts, ladders, etc. The
parties may, from time to time, amend Exhibit A in a writing signed by a duly
authorized representative of each party.
2. Master Vendor Program. During the term of this Agreement, Client
agrees to use Norrell exclusively for the Services. In the event Norrell is
unable to fill any Client order with a Norrell employee, Client agrees that
Norrell, as Master Vendor, may subcontract for such services with another
vendor.
3. Term. This Agreement shall continue for a term of two (2) years
after the date first entered above, unless sooner terminated as set forth
herein, and may be automatically renewed for like terms unless either party
serves written notice of its intent to terminate the Agreement not less than
thirty (30) days prior to the expiration of any such term. Either party hereto
may terminate this Agreement with or without cause by giving not less than sixty
(60) days written notice to the other party hereto. If Client delivers notice to
Norrell of its intent to terminate, Client shall include therein the reasons for
such termination and Norrell shall have thirty (30) days to rectify or modify
its performance, after which 30-day period Client shall revoke or affirm its
termination.
<PAGE> 3
4. Rates for Services. For the term of this Agreement, the rates for
the performance of the Services pursuant to this Agreement shall be as set forth
in Exhibit A attached hereto and made a part hereof.
5. Invoices. Norrell shall submit to Client a weekly invoice for the
Services performed during the previous Monday through Sunday billing period.
Invoices submitted hereunder shall be due and payable by Client net fifteen (15)
days. Client agrees to pay reasonable costs, expenses and fees of collection, if
Client's account is in default and placed with a collection agency or attorney
for collection. In the event of termination of this Agreement, Client shall pay
Norrell for all Services performed prior to the date of termination.
6. Buyer Satisfaction. Norrell agrees that the Services will be
performed to the satisfaction of Client and agrees to allow Client a reasonable
period of time to determine if the Services provided by Norrell were performed
in a satisfactory manner. If Client determines within a reasonable period of
time that the Services provided by a Norrell employee are not satisfactory, and
Norrell is so notified, Client will not be charged for such Services performed
and Norrell will provide corrective Services and, if necessary or requested,
replacement personnel upon notification from Client or within a mutually agreed
upon period of time.
7. Hiring of Norrell Employees by Client. Client agrees that
utilization of any Norrell employee by Client within six months of the last use
of such Norrell employee through Norrell shall only be through Norrell. If
Client desires to hire any Norrell employee on a permanent basis, Client will
notify Norrell, in writing. Client may directly hire any Norrell employee at any
time after the employee has been assigned to Client by Norrell for thirteen (13)
full time weeks (or 520 hours), without further obligation to Norrell.
8. Independent Contractor. Norrell shall act at all times as an
independent contractor, and nothing contained herein shall be construed to
create the relationship of principal and agent, or employer and employee,
between Norrell and Client. The Norrell employees assigned to perform the
Services for Client are the employees of Norrell, and any subcontractor's
employees assigned to perform the Services for Client are the employees of that
subcontractor.
9. Norrell Employees. Norrell shall recruit, interview, test, select,
hire, and train the persons who shall provide the Services hereunder. Client
agrees that the costs of any pre-assignment screening required by Client which
is not routinely performed by Norrell as a part of its regular hiring procedures
(drug testing, credit checks, and criminal background checks are examples of
non-routine screening) shall be paid or reimbursed by Client. Norrell shall have
sole responsibility to counsel, discipline, review, evaluate, set the pay rates
of, and terminate its employees assigned to Client. Norrell assumes full
responsibility for all contributions, taxes and assessments with respect to its
employees under all applicable federal, state and
2
<PAGE> 4
local laws (including withholding from wages of employees where required).
Norrell further agrees that it will comply with all other applicable federal,
state or local laws or regulations applicable to Norrell as an employer
regarding compensation, hours of work or other conditions of employment.
10. Client Contractors. If Client desires Services not described in
Exhibit A to this Agreement which are outside the normal scope of Services
provided by Norrell, Norrell agrees that Client may hire contractors (the
"Client Contractors") to provide such Services, and that Client may request that
such Client Contractors forward invoices directly to Norrell. Norrell agrees to
dispatch job orders to the Client Contractors and submit to Client a weekly
invoice, as more fully described in Section 5 of this Agreement, which is an
aggregate bill for Services rendered by Norrell, by Norrell's subcontractors and
by the Client Contractors, if any. In no event shall Norrell be responsible for
supervising or controlling the Client Contractors nor shall Norrell be liable
for any acts or omissions of Client Contractors, their agents or employees.
11. Indemnification.
(a) Norrell shall indemnify and hold harmless Client, its
agents and employees from and against any and all claims, losses, actions,
damages, expenses, and all other liabilities, including but not limited to
attorneys' fees (the "Liabilities"), arising out of or resulting from Norrell's
negligent performance of or failure to perform the work hereunder to the extent
any such Liabilities are attributable to bodily injury to or death of any person
or to damage to or destruction of any property, whether belonging to Client or
to another, provided, however, that Norrell shall not indemnify or hold harmless
Client to the extent any such Liabilities are caused by the negligent or
unlawful acts or omissions of Client, its employees or third parties. Work
product produced by Norrell employees shall be reviewed and approved by a Client
representative prior to its incorporation into Client's work product, processes
or plans, and Norrell shall have no liability for such end product or process.
In the event that the Liabilities are the result of the joint or concurrent
negligence of Norrell and Client, Norrell's duty of indemnification shall be in
the same proportion that the negligence of Norrell contributed thereto. Client
acknowledges and agrees that in no event shall Norrell or any of its officers,
directors, employees, or representatives be liable to Client for any special,
indirect, incidental or consequential damages in connection with this Agreement.
(b) Norrell agrees to require each of its subcontractors to
execute an indemnification agreement which directly indemnifies Client and holds
it harmless under the same terms and conditions as outlined in this Section 11.
3
<PAGE> 5
12. Insurance. Norrell shall maintain at its expense: (a) Workers'
Compensation and Employer's Liability Insurance, (b) Commercial General
Liability Insurance, and (c) a Fidelity Bond. Norrell shall require each of its
subcontractors to list Norrell and Client as additional insureds on each such
subcontractor's Commercial General Liability Insurance. If Norrell's insurance
policy is to be canceled or changed by insured or insurer so as to affect the
coverage required by this Agreement, at least ten (10) days prior written notice
of such cancellation or change shall be sent to Client at the address to which
invoices are to be sent by Norrell.
13. Notices. All notices which it may be necessary or proper for
either Client or Norrell to give or deliver to the other shall be sent, and
shall be deemed given when received by registered or certified mail, postage
prepaid and return receipt requested, and if given by Client to Norrell shall be
addressed to:
Norrell Services, Inc.
---------------------------------------
---------------------------------------
Attn:
----------------------------------
With a copy to: Norrell Corporation
3535 Piedmont Road, NE
Atlanta, GA 30305
Attn: General Counsel
and if given by Norrell to Client, shall be addressed to:
---------------------------------------
---------------------------------------
---------------------------------------
Attn:
----------------------------------
14. Assignment. The rights and obligations of the parties hereunder
shall not be assigned without the prior written consent of the other party,
except that Norrell may assign its rights and obligations hereunder to any
affiliate of Norrell without the prior written consent of the Client. Otherwise,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto, and their respective successors and assigns.
15. Amendments. This Agreement, and the provisions hereof, may be
altered, amended, modified or superseded only in a writing executed by both of
the parties hereto.
4
<PAGE> 6
16. Force Majeure. The obligations of Norrell hereunder shall be
excused during any period of delay caused by matters such as strikes, acts of
God, shortages of raw material or power, governmental actions or compliance with
governmental requirements, whether voluntary or pursuant to order, or any other
matter which is beyond the reasonable efforts of Norrell to control.
17. Enforcement, Waiver. No waiver of or failure to exercise any
option, right or privilege under the terms of this Agreement by either of the
parties hereto on any occasion or occasions shall be construed to be a waiver of
the same or of any other option, right or privilege on any other occasion.
18. Entire Agreement. This Agreement, together with the Exhibits
referenced herein, shall constitute the entire Agreement between the parties
with respect to the subject matter and supersedes all previous Agreements
between Client and Norrell relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.
NORRELL SERVICES, INC.
-----------------------------------
By: By:
---------------------------------- --------------------------------
Title: Title:
------------------------------- -----------------------------
5
<PAGE> 7
EXHIBIT A
SERVICES AND RATES
I. Positions to be Filled; Rates.
[IF PAYROLLING SERVICES ARE BEING CONSIDERED, YOU MUST CONTACT THE LEGAL
DEPARTMENT TO DISCUSS]
II. Cost of Living Adjustments
The fees for the Services shall be increased effective on each
anniversary date of this Agreement over the fees shown in Part I above by the
percentage increase equal to the percentage increase in the applicable regional
Consumer Price Index for the month which is two months immediately preceding
such anniversary date over the applicable regional Consumer Price Index for the
same month one year prior.
III. Governmentally Mandated Cost Increases
If Norrell's compliance with any law or the requirements of any
governmental agency after the date of execution of this Agreement shall result
in an increase in the labor cost to Norrell of providing the Services (an "Event
of Change"), then Norrell shall have the right to immediately increase its fees
to compensate for such increased costs and to place Norrell in the same position
after any Event of Change as Norrell was in prior to such Event of Change (e.g.
a change to minimum wage rates, state unemployment insurance, workers'
compensation, mandatory benefits requirements).
<PAGE> 1
EXHIBIT 10.12
MANAGEMENT
SERVICES AGREEMENT
<PAGE> 2
MANAGEMENT SERVICES AGREEMENT
THIS AGREEMENT is made as of this ____ day of ______________, 199__, by
and between Tascor Incorporated, a Georgia corporation ("Tascor"), and
______________________, a __________________ corporation ("Client").
W I T N E S S E T H:
WHEREAS, Client has a need for management services; and
WHEREAS, Tascor is a leading provider of such management services to
businesses in the United States and Canada;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties agree as follows:
1. Services Provided. Tascor will provide to Client the management
services described in the Scope of Work attached hereto as Exhibit A and made a
part hereof (the "Services") as Client shall require, pursuant to the terms and
conditions of this Agreement.
2. Term. This Agreement shall continue for a term (the "Term") of
three (3) years after the date first entered above and will be automatically
renewed for two additional one-year terms.
3. Fees for Services.
(a) For the initial term of this Agreement, the fees and
payment terms for the performance of the Services pursuant to this Agreement
shall be as set forth in Exhibit B attached hereto and made a part hereof.
Thereafter the fees and payment terms shall be as mutually agreed upon by Client
and Tascor and shall be set forth in a written amendment to Exhibit B signed by
each of the parties hereto.
[(b) Client shall provide all supplies, materials, office space,
utilities, and other operating expense items necessary for the performance of
the Services. Client shall provide, and maintain in good working order, all
equipment deemed necessary by Client and Tascor to the provision of the Services
by Tascor.]
4. Invoices.
(a) Tascor shall, on the fifteenth day of each month, submit to
Client a monthly invoice in advance equal to 1/12th of the annual fee for the
Services to be provided, as described in Exhibit B. Invoices submitted hereunder
shall be due and payable by Client thirty (30) days from invoice date.
Adjustments to the monthly
<PAGE> 3
invoice for rate or transaction variances (if any) will be included in the next
month's billing.
(b) Client agrees to pay reasonable costs, expenses and fees of
collection, if Client's account is in default and/or placed with a collection
agency or attorney for collection. In the event of termination of this
Agreement, Client agrees to pay Tascor for all Services performed prior to the
date of termination.
5. Reports. Tascor shall provide to Client such written reports as
Tascor and Client shall agree upon from time to time.
6. Termination. This Agreement may not be terminated prior to the end
of the Term except as follows:
(a) Client or Tascor may terminate this Agreement for Cause (as
herein defined) upon delivery to the other party of written notice of its intent
to terminate for Cause. The terminating party shall include in such notice the
basis for termination and the other party shall have ninety (90) days to rectify
or modify its performance, after which 90 - day period the terminating party
shall revoke or affirm its termination. As used herein, "Cause" shall mean a
material breach of the terms of this Agreement.
(b) Client may terminate this Agreement for Client's
convenience upon payment of liquidated damages in an amount equal to twenty-five
percent (25%) of the remaining fees owed by Client to Tascor for the remaining
Term of this Agreement. In the event that Client's termination of this Agreement
(either in full or in part) would impose notice requirements on Tascor pursuant
to the federal Work Adjustment and Retraining Notification Act and/or state or
local laws or regulations pertaining to business or plant closings, or partial
or complete business cessations or business relocations, Client will provide
Tascor with at least ninety (90) days prior written notice of such termination.
7. Performance Requirements. Tascor shall meet or exceed written
performance standards to which Client and Tascor mutually agree after the
Services have been provided by Tascor for ninety (90) days ("Performance
Standards"). The Performance Standards shall be attached to this Agreement as
Exhibit C. In the event no written standards are attached as Exhibit C to this
Agreement, Tascor shall provide the Services in a commercially reasonable
manner.
8. Laws and Regulations. Tascor agrees that it will comply with all
laws and regulations applicable to Tascor's employees, including the Fair Labor
Standards Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act of 1967, the Rehabilitation Act of 1973, the Immigration
Reform and Control Act of 1986, and the Americans with Disabilities Act of 1990.
2
<PAGE> 4
9. Independent Contractor. Tascor shall act at all times as an
independent contractor, and nothing contained herein shall be construed to
create the relationship of principal and agent, or employer and employee,
between Tascor and Client.
10. Tascor Employees.
(a) The Tascor employees assigned to perform the Services for
Client are solely the employees of Tascor. Tascor shall have sole responsibility
to counsel, discipline, review, evaluate, set the pay rates of, and terminate
its employees who perform the Services. Tascor will maintain all necessary
payroll and personnel records, and compute wages and withhold applicable
federal, state and local taxes and social security payments for the Tascor
personnel performing the Services.
(b) During the term of this Agreement and for six (6) months
thereafter, Client agrees not to hire, nor to solicit for the purpose of hiring,
any Tascor employee who has provided Services to Client pursuant to this
Agreement without the prior written approval of Tascor and payment to Tascor of
liquidated damages in the amount of $3,000.00 for each Tascor employee hired.
11. Indemnification.
(a) Tascor and Client, as Indemnitors, shall each indemnify and
hold harmless the other party to this Agreement and such party's agents and
employees, as Indemnitees, from and against any and all claims, losses, actions,
damages, expenses, and all other liabilities, including but not limited to
attorneys' fees (the "Liabilities"), to the extent arising out of or resulting
from the Indemnitor's negligent performance of or failure to perform its
obligations hereunder to the extent any such Liabilities are attributable to
bodily injury to or death of any person or to damage to or destruction of any
property, provided, however, that the Indemnitor shall not indemnify or hold
harmless the Indemnitee to the extent any such Liabilities are caused by the
negligent or unlawful acts or omissions of the Indemnitee, its agents, employees
or third parties. In the event that the Liabilities are the result of the joint
or concurrent negligence of Tascor and Client, the Indemnitor's duty of
indemnification shall be in the same proportion that the negligence of the
Indemnitor contributed thereto. Client acknowledges and agrees that in no event
shall Tascor, any affiliate, or any of its officers, directors, employees, or
representatives be liable to Client for any special, indirect, incidental or
consequential damages in connection with this Agreement.
(b) Tascor agrees to require each of its subcontractors to
execute an indemnification agreement which directly indemnifies Client and holds
it harmless under the same terms and conditions as outlined in this Section 11.
3
<PAGE> 5
12. Confidentiality.
(a) Tascor and Client each agree that they will not, either
during the term of Tascor's provision of the Services to Client or for three (3)
years thereafter, without the prior written consent of the other party hereto,
disclose or make available any Confidential Information (as herein defined) to
any person or entity, nor shall either party make or cause to be made, or permit
or allow, either on its own behalf or on behalf of others, any use of the other
party's Confidential Information. Tascor and Client agree not to use,
transcribe, copy, duplicate or otherwise reproduce or retain all or any portion
of the Confidential Information in any manner whatsoever and shall cause all
Confidential Information or copies thereof to be returned to the other party
promptly upon termination of the Services. "Confidential Information" shall mean
all personnel records, fees and charges, and all documents evidencing business
plans, proposals, strategies, sales and marketing information, training and
operations material and memoranda, and pricing and financial information, and
all computer software and computer programs identified to the recipient of such
information by the giving party as proprietary, and which are obtained by or
furnished, disclosed or disseminated to the recipient during the course of
Tascor's engagement by Client, all of which information provided by one party to
the other party shall be in tangible form and marked confidential prior to
disclosure or delivery to the recipient, as well as all information and matters
which constitute trade secrets of the disclosing party, all of which are hereby
agreed to be the property of and confidential to the owner and discloser of such
Confidential Information. Notwithstanding the terms of this Agreement, the
obligations of each party as set forth in this Agreement with respect to the
Confidential Information of the other party shall not apply to any Confidential
Information which: (i) is at the time of disclosure, or thereafter becomes, a
part of the public domain through no act or error by the recipient party; (ii)
was otherwise in the lawful possession of the recipient party prior to
disclosure, as shown by competent evidence; or (iii) is hereafter received by
the recipient party from a third party, provided that such source is not known
to the receiving party to be bound by a confidentiality agreement or other
obligation of secrecy to the disclosing party.
(b) In the event of a breach or threatened breach of the
provisions of this paragraph, the disclosing party shall be entitled to an
injunction restraining such breach or threatened breach without having to prove
actual damages. Such injunctive relief as Tascor or Client may obtain shall be
in addition to other rights and remedies available at law and in equity to the
parties. The rights and obligations of this paragraph shall survive the
termination or expiration of this Agreement for such time as the rights and
obligations created by subparagraph 12(a) above shall continue.
(c) At the request of Client, Tascor shall have each of its
employees assigned to perform the Services execute a non-disclosure agreement in
a form mutually acceptable to Client and Tascor.
4
<PAGE> 6
13. Insurance. Tascor shall maintain at its expense: (a) Workers'
Compensation and Employer's Liability Insurance, (b) Commercial General
Liability Insurance, and (c) a Fidelity Bond. Tascor shall require each of its
subcontractors to list Client and Tascor as additional insureds on each such
subcontractor's Commercial General Liability Insurance. If Tascor's insurance
policy is to be canceled or changed by insured or insurer so as to affect the
coverage required by this contract, at least ten (10) days prior written notice
of such cancellation or change shall be sent to Client at the address to which
invoices are to be sent by Tascor.
14. Notices. All notices which it may be necessary or proper for
either Client or Tascor to give or deliver to the other shall be sent, and shall
be deemed given when received by registered or certified mail, postage prepaid
and return receipt requested, and if given by Client to Tascor shall be
addressed to:
Tascor Incorporated
3535 Piedmont Road, N.E.
Atlanta, Georgia 30305
Attn: Manager, Business Management
with a copy to:
Tascor Incorporated
3535 Piedmont Road, N.E.
Atlanta, Georgia 30305
Attn: Mark H. Hain, General Counsel
and if given by Tascor to Client, shall be addressed to:
--------------------------------------
--------------------------------------
--------------------------------------
Attn:
---------------------------------
15. Assignment. The rights and obligations of the parties hereunder
shall not be assigned without the prior written consent of the other party,
except that Tascor may assign its rights and obligations hereunder to any
affiliate of Tascor without the prior written consent of Client, provided that
any such assignment shall in no way affect the rights and obligations of Client
hereunder. Otherwise, this contract shall be binding upon and shall inure to the
benefit of the parties hereto, and their respective successors and assigns.
16. Amendments. This Agreement, and the provisions hereof, may be
altered, amended, modified or superseded only in a writing executed by both of
the parties hereto.
5
<PAGE> 7
17. Force Majeure. Neither party shall be liable to the other nor be
deemed to be in breach of this Agreement for failure or delay in rendering
performance arising out of causes factually beyond its control and without its
fault or negligence. Such causes may include, but are not limited to: Acts of
God or the public enemy, wars, fires, floods, epidemics, quarantine
restrictions, strikes, unforeseen freight embargoes or unusually severe weather.
Dates or times of performance shall be extended to the extent of delays excused
by this section, provided that the party whose performance is affected notifies
the other party promptly of the existence and nature of such delay.
18. No Waiver. No waiver of or failure to exercise any option, right
or privilege under the terms of this Agreement by either of the parties hereto
on any occasion or occasions shall be construed to be a waiver of the same or of
any other option, right or privilege on any other occasion.
19. Entire Agreement. This Agreement, together with the Exhibits
referenced herein, shall constitute the entire Agreement between the parties
with respect to the subject matter and supersedes all previous agreements
between Client and Tascor relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.
TASCOR INCORPORATED
--------------------------------
By: By:
-------------------------------- -----------------------------
Title: Title:
---------------------------- --------------------------
6
<PAGE> 8
EXHIBIT A
Scope of Work
[Unless specifically authorized in Exhibit A, Client agrees that Tascor
employees will not be placed in any jobs involving driving Client vehicles;
handling cash, credit card information or other valuables; lifting over forty
(40) pounds; cleaning bathrooms, first responder tasks or any work in any area
with possible exposure to blood-borne pathogens; handling of chemicals; the
operation of any production machinery that is not guarded in accordance with
relevant OSHA requirements; use of any power tools; maintenance or repair of any
machinery; work on or around navigable bodies of water; and any work above floor
level, including elevated platforms, scaffolding, manlifts, ladders, etc.]
<PAGE> 9
EXHIBIT B
Fees for Services
I. Fees for Services.
II. Governmentally Mandated Cost Increases
If Tascor's compliance with any law or the requirements of any
governmental agency after the date of execution of this Agreement shall result
in an increase in the labor cost to Tascor of providing the Services (an "Event
of Change"), then Tascor shall have the right to immediately increase its fees
to compensate for such increased costs and to place Tascor in the same position
after any Event of Change as Tascor was in prior to such Event of Change (e.g. a
change to minimum wage rates, state unemployment insurance, workers'
compensation, mandatory benefits requirements).
<PAGE> 1
EXHIBIT 10.20
EXECUTIVE CONFIDENTIALITY &
NON-COMPETITION AGREEMENT
<PAGE> 2
INSTRUCTIONS TO COMPLETING EMPLOYMENT AGREEMENTS
(BSC - Corporate)
- - PLEASE PREPARE AND EXECUTE TWO DUPLICATE ORIGINALS OF EACH EMPLOYMENT
AGREEMENT. PROVIDE THE EMPLOYEE WITH A FULLY SIGNED ORIGINAL AND SEND
THE OTHER SIGNED ORIGINAL TO THE HUMAN RESOURCES DEPARTMENT, PROPERLY
IDENTIFIED AS AN ORIGINAL.
- - CORPORATE SIGNATURES
Employment Agreements should be signed by a Vice President responsible
for the department or division in which the employee works, or by Peter
Rosen.
- - EXHIBIT A
The definition of the territory should be limited to the geographic
area in which the employee performs his or her duties on behalf of
Norrell; it cannot be defined with respect to the geographic area in
which Norrell does business. DO NOT DEFINE THE TERRITORY AS "THE UNITED
STATES" OR "THE UNITED STATES AND CANADA!"
The employee must perform his duties in all or substantially all of the
defined territory; for example, the definitions should not specify the
state of Georgia when the employee's duties are limited to the Atlanta
metropolitan area.
The territory must be clearly defined and definite as of the date the
agreement is signed; it cannot expand or contract automatically during
the term of the Agreement to reflect an expansion or contraction of the
area in which the employee performs his or her duties on behalf of
Norrell. If the employee's territory changes, the parties should
execute a new Exhibit A and attach it to the original.
- - EXHIBIT B
Because each Norrell employee will have different duties, this
definition should be completed on a case-by-case basis. In completing
the definition, it will be important to be as accurate as possible. The
listing of a duty which the employee does not perform on behalf of
Norrell (but under the terms of the Agreement he or she would be
prohibited from performing for a Competing Business), could render the
entire covenant unenforceable. Conversely, however, the definition
should be as broad as possible, so that Norrell can reap the full
protection available to it. If the employee's job changes, the parties
should execute a new Exhibit B and attach it to the original.
- - EXHIBIT C
Exhibit C should contain a list of all Inventions, patents, and Works
to which the Associate claims ownership as described in Sections 9, 10,
and 11 herein and of all agreements referred to in Section 12 herein.
If the Associate claims no such ownership or has no applicable
agreements, state "None."
[DO NOT INCLUDE THIS PAGE IN FINAL AGREEMENT.]
<PAGE> 3
EMPLOYMENT AND NONCOMPETITION AGREEMENT
(BSC Corporate)
THIS AGREEMENT is effective this _____ day of _________, 199__ ,
between Norrell Corporation and/or any of its Subsidiaries (the "Company"), and
_____________________________ whose address is ________________________ (the
"Associate").
W I T N E S S E T H:
WHEREAS, the Company desires to employ or to continue the employment of
the Associate to perform, throughout the Area (as defined in Section 1(a)), the
services described in Section 2(b), and the Associate desires to accept or to
continue such employment on the terms and conditions hereinafter set forth; and
WHEREAS, in the course of the Associate's employment, the Company will
provide Associate and the Associate will gain knowledge of the business,
affairs, finances, management, marketing programs and philosophy, customers and
methods of operation of the Company, the Company will train the Associate at the
expense of the Company in the operation and management of the Business of the
Company and the marketing and sale of the Company's services through the use of
techniques, systems, forms and methods used and devised by the Company; and the
Associate will be furnished by Company with access to lists of the Company's
Customers and their needs, and will or has become personally known to and
acquainted with the Company's Customers in the Area thereby establishing a
personal relationship with such Customers for the benefit of the Company; and
WHEREAS, the Company would suffer irreparable harm if the Associate
were to use such knowledge, information, business acumen and personal
relationships in competition with the Company; and
NOW, THEREFORE, in consideration of the employment or continued
employment of the Associate by the Company, the above premises and the other
agreements hereinafter set forth, the Company and the Associate (collectively,
the "Parties" and individually, a "Party"), intending to be legally bound,
hereby agree as follows:
1. Definitions.
(a) "Area" shall mean the area set forth in Exhibit "A" which the
Parties acknowledge is no broader than the geographical areas in which or for
which Associate will perform the Duties. As and when the territory in which the
Associate performs the Duties materially changes, the Parties agree to amend
Exhibit "A".
(b) "Business of the Company" shall mean and include the business of
marketing and providing personnel, including personnel to provide accounting,
financial, bookkeeping, clerical, health care, technical and light industrial
services, on a temporary basis to customers located in the Area, and marketing
and providing to customers located in the Area facilities staffing, contract
services, teleservices, communication skills training, human resource services,
staffing services, Management Services and outsourcing, permanent placement, and
data entry services, or the licensing or franchising of others to engage in any
such business. It shall also mean the business of conducting the affairs and
activities of the Corporate Office functions in conjunction with all such
business described in this section.
(c) "Competing Business" shall mean a person or entity engaged in any
business which is the same or essentially the same as the Business of the
Company.
(d) "Confidential Information" of the Company shall mean all
non-public, competitively sensitive information or data of or about Company
other than "Trade Secrets" (as defined below). Confidential Information shall
not include (1) information released to the public at large without restriction,
(2) information generally known to be obtainable from public sources in usable
form without significant effort or expense, (3) information lawfully and
independently developed or acquired without reliance in any way on the
information received pursuant to the Associate's employment hereunder, and (4)
general skills and learning lawfully and independently acquired.
(e) "Corporate Office" shall mean the office of the Company at 3535
Piedmont Road, N.E., Atlanta, Georgia 30305.
(f) "Customers" shall mean actual customers and clients of the Company
and actively solicited prospective customers and clients of the Company.
(g) "Duties" shall mean the duties set forth on Exhibit "B" attached
hereto and made a part hereof. As and when the duties of the Associate
materially change, the Parties agree to amend Exhibit "B" to reflect such
changes in duties, and such other tasks as the Board of Directors, the Chairman
or the President of the Company, or their respective designees, may assign to
the Associate from time to time.
(h) "Management Services" shall mean the managing and performing of all
or part of a client's business activities or functions, in which the provider of
the services has responsibility for the function or activity performed and for
the results of such performance.
(i) "Subsidiaries" shall mean any entities in which Norrell Corporation
has greater than a 20% beneficial interest.
<PAGE> 4
(j) "Trade Secrets" shall mean information that: (a) derives economic
value, actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can obtain economic
value from its disclosure or use; and (b) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. To the extent that
applicable law mandates a definition of "trade secret" inconsistent with the
foregoing definition, then the foregoing definition shall be construed in such a
manner as to be consistent with the mandated definition under applicable law.
Assuming the criteria of applicable law are met, Trade Secrets shall include,
without limitation, actual and potential customer lists, sales and marketing
information, customer account records, training and operations material and
memoranda, computer software and systems, personnel records, code books, pricing
information and financial information concerning or relating to the business,
accounts, customers, associates and affairs of the Company or its franchisees
and licensees and all physical embodiments of the foregoing.
2. Terms of Employment; Duties.
(a) The Company employs or agrees to continue the employment of the
Associate and the Associate accepts or agrees to continue such employment with
the Company subject to the terms and conditions of this Agreement.
(b) The Company employs or agrees to continue the employment of the
Associate to perform the Duties and the Associate agrees to devote all of the
Associate's business time to performing the Duties for the Company, subject to
the terms and conditions of this Agreement.
(c) All funds and property received by the Associate on behalf of the
Company or its parent or any affiliated corporation shall be received and held
by the Associate in trust, and the Associate shall account for and remit all
such funds to the Company.
3. Compensation.
(a) In consideration for the Associate's performing the Associate's
obligations hereunder, the Company shall pay to the Associate that salary set
forth in the Personnel Change Notice pertaining to the Associate effective as of
the date of this Agreement, subject to adjustment from time to time by agreement
of the Parties, and shall permit Associate to participate in any present or
future incentive compensation, bonus, profit-sharing, stock option, stock
purchase, pension, retirement, medical or insurance plan of the Company as and
to the extent Associate's participation in such plan(s) is approved by the Board
of Directors of the Company.
(b) The Company shall have the right to withhold any sums otherwise
payable to the Associate hereunder and to apply the same to any indebtedness of
the Associate to the Company.
(c) The Associate shall be entitled to be reimbursed in accordance with
the policies of the Company, as adopted and amended from time to time, for all
reasonable and necessary expenses incurred by the Associate in connection with
the performance of the Duties; provided Associate shall, as a condition of such
reimbursement, submit verification of the nature and amount of such expenses in
accordance with the reimbursement policies from time to time adopted by the
Company.
(d) The Associate shall not be entitled to any compensation other than
that set forth in this Section 3 for any services rendered by the Associate in
any capacity to the Company or its parent or any affiliated corporation.
4. Termination of this Agreement.
(a) The employment of the Associate by the Company may be terminated by
either party at any time, provided that the Associate shall give the Company no
less than two (2) weeks' prior notice.
(b) Upon the termination of the Associate's employment hereunder, the
Company shall have no further obligation to the Associate or the Associate's
personal representative with respect to this Agreement, except for base salary
(exclusive of bonus) accrued hereunder and unpaid at the date of such
termination and payment of severance amounts, if any, payable in accordance with
the severance policy of the Company in effect at the time of termination.
(c) The covenants of the Associate in Sections 5, 6, 7 and 8 shall
survive the termination or replacement of this Agreement and termination of the
Associate's employment hereunder, and shall not be extinguished by any such
events.
5. Agreement Not to Compete.
In consideration of the Company's providing the Associate with access
to its Confidential Information and Trade Secrets, the Company's training the
Associate in the Business of the Company, and the Company's agreement to employ
or continue the employment of the Associate hereunder, the Associate agrees that
during the Associate's employment by the Company and for a period of one (1)
year following the termination, for any reason, of this Agreement or of the
Associate's employment with the Company, whichever shall first occur, the
Associate will not, without the prior written consent of the Company, within the
Area, either directly or indirectly, on the Associate's own behalf or in the
service or on behalf of others, affiliate with any Competing Business as either
(i) a manager, supervisor, administrator, consultant, instructor, officer,
director, employee, independent contractor or salesperson providing services the
same as or substantially similar to the Duties, or (ii) as a shareholder or
owner of any equity interests in any Competing Business other than up to a five
percent (5%) ownership of publicly traded equity interests of a Competing
Business.
6. Agreement Not to Solicit Customers.
In consideration of the Company's providing the Associate with access
to its Confidential Information and Trade Secrets, the Company's training the
Associate in the Business of the Company and the Company's agreement to employ
or continue the employment of the Associate
2
<PAGE> 5
hereunder, the Associate agrees that during the Associate's employment by the
Company and for a period of one (1) year following the termination, for any
reason, of this Agreement or of the Associate's employment with the Company,
whichever shall first occur, the Associate will not, without the prior written
consent of the Company, either directly or indirectly, on the Associate's own
behalf or in the service or on behalf of others, solicit, or attempt to solicit,
any Customer (i) whose account with the Company was sold, serviced or actively
solicited by or under the supervision of the Associate during the two (2) years
preceding the termination of such employment or (ii) that is otherwise located
in the Area, for the purpose of providing such Customer or having such Customer
provided with services competitive with those that have been offered by the
Company to such Customer. The foregoing subsection (ii) shall not apply where
the Area is defined as the United States or the United States and Canada.
7. Agreement Not to Solicit Personnel.
In consideration of the Company's providing the Associate with access
to its Confidential Information and Trade Secrets, the Company's training the
Associate in the Business of the Company and the Company's agreement to employ
or continue the employment of the Associate hereunder, the Associate agrees that
during the Associate's employment by the Company and for a period of one (1)
year following the termination, for whatever reason, of this Agreement or of the
Associate's employment with the Company, the Associate will not, either directly
or indirectly, on the Associate's own behalf or in the service or on behalf of
others, solicit away or attempt to solicit away to any Competing Business (i)
any person employed by or under an independent contractor relationship with the
Company or any franchisee or licensee of the Company within the Area, whether or
not such person is a full-time associate or a temporary employee of the Company
or such franchisee or licensee, and whether or not such employment is pursuant
to written agreement and whether or not such employment is for a determined
period or is at will, or (ii) any person or entity that is a franchisee or
licensee of the Company within the Area, nor will Associate at any time during
such period, either directly or indirectly, induce or attempt to induce any such
employee, franchisee or licensee to terminate, breach or otherwise fail fully to
perform any employment agreement, franchise or license agreement with the
Company.
8. Ownership and Non-disclosure and Non-use of Confidential Information.
(a) In consideration of the Associate's receipt of and access to
confidential information, the Associate acknowledges and agrees that all
Confidential Information and Trade Secrets of the Company, and all physical
embodiments thereof, are confidential to and shall be and remain the sole and
exclusive property of the Company. Upon request by the Company, and in any event
upon termination of the Associate's employment with the Company for any reason,
as a prior condition to receiving any final wage or salary check or any employee
benefit payment, the Associate shall promptly deliver to the Company all
property belonging to the Company including, without limitation, all
Confidential Information and Trade Secrets of the Company (and all embodiments
thereof) then in the Associate's custody, control or possession, but any
forfeiture of such wage or salary check or any employee benefit payment shall
not be considered as satisfaction or a release of or liquidated damages for any
claims for damages against the Associate which may accrue to the Company as a
result of any breach of this Section 8(a) by the Associate.
(b) In consideration of the Company's providing the Associate with
access to its Confidential Information and Trade Secrets, the Company's training
the Associate in the Business of the Company and the Company's agreement to
employ or continue the employment of the Associate hereunder, the Associate
agrees that the Associate will not, either during the term of the Associate's
employment by the Company or, in the case of Confidential Information, for three
(3) years thereafter and, in the case of Trade Secrets, for the life of the
trade secret, without the prior written consent of the Company, disclose or make
available any Confidential Information or Trade Secret to any person or entity
or make or cause to be made or permit or allow, either on the Associate's own
behalf or on behalf of others, any use of any Confidential Information or Trade
Secret other than in the proper performance of the Associate's duties hereunder.
The Company agrees that the Associate is not prohibited hereby from disclosing
or using any Confidential Information or Trade Secret which the Associate is
required to disclose pursuant to a requirement of a governmental agency or of
law without similar restrictions or other protections against public disclosure,
provided, however, that the Associate shall first have given written notice of
such required disclosure to the Company and have taken reasonable steps to allow
the Company to seek to protect the confidentiality of the information required
to be disclosed.
9. Inventions.
(a) The Associate agrees that all Subject Inventions (as defined below)
conceived or first practiced by the Associate during his or her employment by
the Company, and all patent rights and copyrights to the Subject Inventions
shall become the property of the Company, and the Associate hereby irrevocably
assigns to the Company all of the Associate's rights to all Subject Inventions.
"Subject Invention" means any Invention (as defined below) which is conceived by
the Associate alone or in a joint effort with others during the Associate's
employment by the Company which (i) may be reasonably expected to be used in a
product of the Company; (ii) results from work that the Associate has been
assigned as part of his or her duties as an employee of the Company; (iii) is in
an area of technology which is the same as or substantially related to the areas
of technology with which the Associate is involved in the performance of his or
her duties as an employee of the Company; or (iv) is useful, or which the
Associate reasonably expects may be useful, in any manufacturing or product
design process of the Company. "Invention" means any discovery, whether or not
patentable, including, but not limited to, any useful process, method, formula,
technique, machine, manufacture, composition of matter, algorithm or computer
program, as well as improvements thereto, which is new or which the Associate
has a reasonable basis to believe may be new.
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<PAGE> 6
(b) The Associate agrees that if he or she conceives an Invention
during his or her employment and there is a reasonable basis to believe that the
Invention is a Subject Invention, the Associate will promptly provide a written
description of the Invention to the Company adequate to allow evaluation for a
determination as to whether the Invention is a Subject Invention. If the
Associate is required by his or her supervisor as a part of the Associate's
duties to maintain an engineering or similar notebook, the proper maintenance of
the notebook shall satisfy the requirement of providing a written disclosure of
any Subject Inventions. It is agreed that all the notebooks and written
disclosures are the property of the Company.
(c) If, upon commencement of the Associate's employment with the
Company, the Associate has previously conceived an Invention or acquired any
ownership interest in any Invention, which: (i) is the Associate's property, or
of which the Associate is a joint owner with another person or company; (ii) is
not described in any issued patent as of the commencement of the Associate's
employment with Company; and (iii) would be a Subject Invention if such
Invention were made while a Company employee; then the Associate must, at the
Associate's election, either: (i) provide the Company with a written description
of the Invention on Exhibit C, if any, in which case the written description
(but no rights to the Invention) shall become the property of the Company; or
(ii) provide the Company with the license described in Section 9(d) of this
Agreement.
(d) If the Associate has previously conceived or acquired any ownership
interest in an Invention described above in Section 9(c) and the Associate
elects not to disclose the same to the Company as provided above, then the
Associate hereby grants to the Company a nonexclusive, paid up, royalty-free
license to use and practice the Invention, including a license under all patents
to issue in any country which pertain to the Invention.
(e) The Associate owns no patents, individually or jointly with others,
except those described on Exhibit C, if any.
10. Patent Applications.
(a) The Associate agrees that should the Company elect to file an
application for patent protection, either in the United States or in any foreign
country on a Subject Invention of which the Associate was an inventor, the
Associate will execute all necessary documentation relating to the patent
applications, including formal assignments to the Company.
(b) The Associate further agrees that he or she will cooperate with
attorneys or other persons designated by the Company by explaining the nature of
any Subject Invention for which the Company elects to file an application for
patent protection, reviewing applications and other papers and providing any
other cooperation required for prosecution of the patent applications. The
Company will be responsible for all expenses incurred for the preparation and
prosecution of all patent applications on Subject Inventions assigned to the
Company.
11. Copyrights.
(a) The Associate agrees that any Works (as defined below) created by
the Associate in the course of the Associate's duties as an employee of the
Company constitute "Work for Hire" as defined in Sections 101 and 201 of the
United States Copyright Law, Title 17 of the United States Code. "Work" means a
copyrightable work of authorship, including without limitation, any technical
descriptions for products, user's guides, illustrations, advertising materials,
computer programs (including the contents of read only memories) and any
contribution to such materials. All right, title and interest to copyrights in
all Works which have been or will be prepared by the Associate within the scope
of his or her employment with the Company will be the property of the Company.
The Associate acknowledges and agrees that, to the extent the provisions of
Title 17 of the United States Code do not vest in the Company the copyrights to
any Works, the Associate hereby assigns to the Company all right, title and
interest to copyrights which the Associate may have in the Works.
(b) The Associate agrees to disclose to the Company all Works referred
to in Section 11(a) and will execute and deliver all applications,
registrations, and documents relating to the copyrights to the Works and will
provide assistance to secure the Company's title to the copyrights in the Works.
The Company will be responsible for all expenses incurred in connection with the
registration of all the copyrights.
(c) The Associate claims no ownership rights in any Works, except those
described on Exhibit C, if any.
12. Contracts or Other Agreements with Former Employer or Business.
(a) The Associate agrees that he or she will provide to the Company,
upon the execution and delivery of this Agreement, a copy of the pertinent
portions of any employment agreement or similar document (described on Exhibit
C, if any), executed by the Associate with a former employer or any business
with which the Associate has been associated, which prohibits the Associate
during a period of time from: (i) competing with or participating in a business
which competes with the Associate's former employer or business; (ii) soliciting
personnel of the former employer or business to leave the former employer's
employment or to leave the business; or (iii) soliciting customers of the former
employer or business on behalf of another business.
(b) The Associate hereby represents to the Company that he or she has
not executed any agreement with any other party which purports to require the
Associate to assign any Work or any Invention created, conceived or first
practiced by the Associate during a period of time which includes the date of
his or her commencement of employment with the company, except as described on
Exhibit C, if any. The Associate will obtain and provide to the Company a copy
of the above described agreement(s).
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<PAGE> 7
13. Severability, Etc.
(a) The Associate agrees that the covenants and agreements contained in
Sections 5, 6, 7 and 8 of this Agreement, and the subsections of those Sections,
are of the essence of this Agreement; that each of such covenants is reasonable
and necessary to protect and preserve the interests and properties of the
Company and the Business of the Company; that the Company is engaged in and
throughout the Area in the Business of the Company; that the Associate will
perform or has performed the Duties in and throughout the Area; that irreparable
loss and damage will be suffered by the Company should Associate breach any of
such covenants and agreements; that each of such covenants and agreements is
separate, distinct and severable not only from the other of such covenants and
agreements but also from the other and remaining provisions of this Agreement;
that the unenforceability of any such covenant or agreement shall not affect the
validity or enforceability of any other such covenant or agreement or any other
provision or provisions of this Agreement; and that, in addition to other
remedies available to it, the Company shall be entitled to both temporary and
permanent injunctions to prevent a breach or contemplated breach by Associate of
any of such covenants or agreements. In the event that the Company should seek
an injunction hereunder, the Associate waives any requirement that the Company
post a bond or any other security.
(b) The Parties intend that in the event that a court, in construing
the enforceability of any provision of this Agreement, determines that the
covenant is unenforceably broad or ambiguous, such court shall have full power
and authority to disregard or strike through any portion of the provision that
renders the provision unenforceably broad or ambiguous or to modify or to reform
the provision to the extent necessary to render it enforceable.
(c) In the event that the Associate shall breach any of the covenants
set forth in Section 5, 6, 7 or 8 hereof, the running of the period of the
restriction set forth in such Section shall be tolled during the continuation of
any such breach by the Associate for a period of not more than two (2) years,
and the running of the period of such restrictions shall commence only upon
compliance by the Associate with the terms of the applicable Section.
14. No Set-off by Associate.
The existence of any claim, demand, action or cause of action by the
Associate against the Company, or any parent, subsidiary or affiliate of the
Company, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of any of its rights
hereunder.
15. Amendment.
This Agreement and the Exhibits attached hereto, which are all hereby
incorporated into and made a part of this Agreement, may be altered, amended,
modified or superseded only in a writing executed by both of the Parties hereto.
Notwithstanding anything to the contrary in this Agreement, any Exhibit hereto
which is amended or superseded shall, for the purposes of Sections 5, 6 and 7
hereof only, remain effective for a period of one (1) year from the effective
date of the Exhibit amending or superseding it.
16. Assignment; Entire Agreement.
(a) This Agreement may be assigned by the Company and shall inure to
the benefit of any such assignee. The waiver by the Company of any breach of
this Agreement by the Associate shall not be effective unless in writing, and no
such waiver shall constitute the waiver of the same or another breach on a
different occasion.
(b) This Agreement and those provisions of prior employment agreements
(if any) between the Associate and the Company which are expressly stated to
survive the termination or the replacement of any such agreement embody the
entire agreement of the parties hereto relating to the employment by the Company
of the Associate in the capacity herein stated.
17. Acknowledgement.
THE ASSOCIATE ACKNOWLEDGES THAT HE OR SHE HAS BEEN PROVIDED WITH AMPLE
TIME TO CAREFULLY REVIEW EACH OF THE PROVISIONS OF THIS AGREEMENT AND TO CONSULT
WITH COUNSEL OF HIS OR HER CHOICE, AND THAT HE OR SHE FULLY UNDERSTANDS EACH OF
THE PROVISIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the Company and the Associate have each caused this
Agreement to be executed and delivered as of the date first shown above.
THE COMPANY:
NORRELL CORPORATION
By:
------------------------------------------------
Title:
---------------------------------------------
THE ASSOCIATE:
- ---------------------------------------------------
(Signature)
- ---------------------------------------------------
(Print or type name here)
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<PAGE> 8
EXHIBIT A
Effective as of ____________, 199_.
The Area shall be that territory located within a _____________________
(_____) mile radius of each of the following offices of the Company:
THE COMPANY:
NORRELL CORPORATION
By:
-----------------------------------------
Title:
-------------------------------------
THE ASSOCIATE:
--------------------------------------------
(Signature)
--------------------------------------------
(Print or type name here)
<PAGE> 9
EXHIBIT B
Effective as of ____________, 199_.
The Duties of the Associate, as a __________________________________ of
the Company shall be as follows:
THE COMPANY:
NORRELL CORPORATION
By:
-----------------------------------------
Title:
--------------------------------------
THE ASSOCIATE:
--------------------------------------------
(Signature)
--------------------------------------------
(Print or type name here)
<PAGE> 10
EXHIBIT C
Effective as of _________________, 199_.
THE COMPANY:
NORRELL CORPORATION
By:
-----------------------------------------
Title:
--------------------------------------
THE ASSOCIATE:
--------------------------------------------
(Signature)
--------------------------------------------
(Print or type name here)
<PAGE> 1
Exhibit 10.21
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
<PAGE> 2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT effective as of December 9, 1997 amends and restates
that certain Employment Agreement effective June 7, 1994 by and between Norrell
Corporation, a Georgia corporation (the "Company"), and C. Douglas Miller, whose
address is 745 Whitmere Court, Atlanta, Georgia 30327 (the "Executive").
WITNESSETH:
WHEREAS, the Company is engaged directly and through its franchisees
and licensees in and throughout the Area (as defined herein) in the Business of
the Company (as defined herein); and
WHEREAS, the Company desires to continue the employment of the
Executive as Chairman of the Board and Chief Executive Officer of the Company
and the Executive desires to continue such employment on the terms and
conditions hereinafter set forth; and
WHEREAS, in the course of the Executive's employment, the Executive has
gained knowledge of the business, affairs, finances, management, marketing
programs and philosophy, customers and methods of operation of the Company, has
been trained at the expense of the Company in the operation and management of
the Business of the Company and the marketing and sale of the Company's services
through the use of techniques, systems, forms and methods used and devised by
the Company, has access to lists of the Company's customers in the Area and
their needs and will or has become personally known to and acquainted with the
Company's major customers in the Area thereby establishing a personal
relationship with such customers for the benefit of the Company;
WHEREAS, the Company would suffer irreparable harm if the Executive
were to use such knowledge, information, business acumen and personal
relationships in competition with the Company; and
WHEREAS, the Company recognizes the contributions made by the Executive
to the Company in the past and, to assure that the Company will continue to have
the Executive's services available to it, desires to provide the Executive with
benefits upon the occurrence of certain contingencies in addition to the annual
compensation payable hereunder;
<PAGE> 3
NOW, THEREFORE, in consideration of the continued employment of the
Executive by the Company, the above premises and the mutual agreements
hereinafter set forth, the parties agree as follows:
1. Definitions.
(a) "Affiliate" or "Affiliated" means any person, firm, corporation,
partnership, association or entity that directly or indirectly controls, is
controlled by, or is under common control with a specified person, firm,
corporation, partnership, association or entity.
(b) "Area" shall mean the area set forth in Exhibit A hereto and made a
part hereof. As and when the territory in which the Executive performs his
Duties expands, Exhibit A may, upon the mutual agreement of the Company and the
Executive, be amended to include such additional territory. Such amended Exhibit
A, when executed by the Company and the Executive, shall be attached hereto and
shall replace the previous Exhibit A hereto.
(c) "Associate" means (i) any corporation, partnership or other entity
of which a specified person is an officer or partner, or is, directly or
indirectly, the beneficial owner of ten percent (10%) or more of any class of
equity securities thereof, (ii) any trust or estate in which the specified
person has a substantial beneficial interest or as to which the specified person
serves as trustee or in a similar fiduciary capacity, (iii) any relative or
spouse of such specified person, or any relative of such spouse, who has the
same home as such specified person, and (iv) any person who is a trustee,
officer or partner of such specified person or of any corporation, partnership
or other entity that is an Affiliate of such specified person.
(d) "Beneficial Owner" shall be defined by reference to Rule 13d-3
under the Exchange Act as such Rule is in effect on the date hereof; provided,
however, that any individual, corporation, partnership, Group, association or
other person or entity which, directly or indirectly, owns or has the right to
acquire any of the Company's outstanding securities entitled to vote generally
in the election of directors at any time in the future, whether such right is
contingent, absolute, direct or indirect, pursuant to any agreement, arrangement
or understanding or upon exercise of conversion rights, warrants or options or
otherwise, shall be deemed the Beneficial Owner of such securities.
(e) "Business of the Company" shall mean and include the business of
marketing and providing personnel, including but not limited to office,
professional and marketing and providing light industrial personnel, on a
temporary basis to customers located in the Area, and marketing and providing to
customers located in the Area facilities staffing, contract services, management
services, outsourcing, training, and data entry services or the licensing or
franchising of others to engage in any such business. It shall also mean the
business of
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<PAGE> 4
conducting the affairs and activities of the Corporate Office in conjunction
with all such business described in this section.
(f) "Cause" shall mean conduct of the Executive amounting to fraud,
dishonesty, gross or willful misconduct or neglect of duty, conviction of any
federal, state or local laws involving a felony or crime involving fraud or
moral turpitude (other than pursuant to actions taken at the direction or with
the approval of the Board of Directors of the Company), or after five (5) days
notice and failure to cure, engaging in activities prohibited by Sections 5, 6,
7 and 8 hereof.
(g) A "Change of Control" shall be deemed to have occurred if and when
(i) any individual, corporation, partnership, Group, association or other person
or entity, together with his, its or their Affiliates or Associates (other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company) hereafter becomes the Beneficial Owner of securities of the
Company representing thirty percent (30%) or more of the combined voting power
of the Company's then outstanding securities entitled to vote generally in the
election of directors; (ii) the Continuing Directors of the Company shall at any
time fail to constitute a majority of the members of the Board of Directors of
the Company; or (iii) all or substantially all of the assets of the Company are
sold, conveyed, transferred or otherwise disposed of, whether through one event
or a series of related events, or the Company is a party to a merger
transaction, without such sale, transfer disposition, or merger being approved
by at least two-thirds (2/3) of the Continuing Directors of the Company.
(h) "Competing Business" shall mean any business which is the same or
substantially the same as the Business of the Company and its subsidiaries.
(i) "Confidential Information" shall mean all information related to
the Business of the Company which (i) derives economic value, actual or
potential, from not being generally known to other persons who can obtain
economic value from its disclosure or use and (ii) is the subject of efforts by
the Company that are reasonable under the circumstances to maintain its secrecy.
Assuming the criteria in clauses (i) and (ii) above are met, Confidential
Information shall include, without limitation, actual and potential customer
lists, sales and marketing information, customer account records, training and
operations material and memoranda, computer software and systems, personnel
records, code books, pricing information and financial information concerning or
relating to the business, accounts, customers, associates and affairs of the
Company or its subsidiaries, franchisees or licensees and all physical
embodiments of the foregoing. Confidential Information shall not include (i)
information released to the public at large without restriction, (ii)
information generally known to be obtainable from public sources in usable form
without significant effort or
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<PAGE> 5
expense, (iii) information lawfully and independently developed or acquired
without reliance in any way on the information received pursuant to the
Executive's employment hereunder, and (iv) general skills and learning lawfully
and independently acquired.
(j) "Continuing Director" means a director who either was a member of
the Board of Directors of the Company on the date hereof, or who becomes a
member of the Board of Directors of the Company subsequent to such date and
whose election or nomination for election by the Board of Directors of the
Company was Duly Approved by the Continuing Directors of the Company at the time
of such election or nomination, either by a specific vote or by approval of the
proxy statement issued by the Company on behalf of the Board of Directors of the
Company in which such person is named as a nominee for director.
(k) "Corporate Office" shall mean the office of the Company at 3535
Piedmont Road, N.E., Atlanta, Georgia 30305.
(1) "Duly Approved by the Continuing Directors" means an action
approved by the vote of at least a majority of the Continuing Directors then on
the Board of Directors of the Company; provided, however, if the votes of such
Continuing Directors in favor of such action would be insufficient to constitute
an act of the entire Board of Directors of the Company as if a vote by all of
its members had been taken, or if the number of persons constituting the
Continuing Directors of the Company is three or less, then the term "Duly
Approved by the Continuing Directors" shall mean an action approved by the
unanimous vote of the Continuing Directors then on the Board of Directors of the
Company.
(m) "Duties" shall mean the duties set forth on Exhibit B attached
hereto and made a part hereof. As and when the Duties of the Executive expand or
change, Exhibit B may, upon the written agreement of the Company and the
Executive, be amended to reflect such additions or changes in the Executive's
Duties. Such amended Exhibit B, when executed by the Company and the Executive,
shall be attached hereto and shall prospectively replace previous Exhibit B
hereto in its entirety.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(o) "Group" means persons who act in concert as described in Section
13(d)(3) of the Exchange Act as in effect on the date hereof.
(p) "Invention" means any discovery, whether or not patentable,
including, but not limited to, any useful process, method, formula, technique,
machine, manufacture, composition of matter, algorithm or computer program, as
well as improvements thereto, which is new or which the Executive has a
reasonable basis to believe may be new, except for those processes, methods,
etc., which are not related to the Company's business.
(q) "Subject Invention" means any Invention which is conceived by the
Executive alone or in a joint effort with others during the Executive's
employment by the Company which (i) may
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<PAGE> 6
be reasonably expected to be used in a product of the Company; (ii) results from
work that the Executive has been assigned as part of his Duties as an employee
of the Company; (iii) is in an area of technology which is the same as or
substantially related to the areas of technology with which the Executive is
involved in the performance of his Duties as an employee of the Company; or (iv)
is useful, or which the Executive reasonably expects may be useful, in any
manufacturing or product design process of the Company.
(r) "Work" means a copyrightable work of authorship, including without
limitation, any technical descriptions for products, user's guides,
illustrations, advertising materials, computer programs (including the contents
of read only memories) and any contribution to such materials, but shall not
include any works which are not related to the Company's business.
2. Terms of Employment; Duties.
(a) The Company agrees to continue the employment of the Executive as
Chairman of the Board and Chief Executive Officer of Norrell Corporation and the
Executive agrees to continue such employment with the Company subject to the
terms and conditions hereof.
(b) All funds and property received by the Executive on behalf of the
Company or its parent or any Affiliated corporation shall be received and held
by the Executive in trust, and the Executive shall account for and remit all
such funds to the Company.
3. Compensation.
(a) For services provided hereunder, the Company shall pay to the
Executive an annual salary of Seven Hundred Fifty Thousand Dollars ($750,000)
per year subject to adjustment from time to time by written agreement of the
Executive and the Company. Such annual salary shall be paid periodically in
accordance with the Company's generally applicable executive officer payroll
practices in effect from time to time and shall be subject to deductions for
income and other taxes as required by law. The Executive shall also be paid a
bonus, if earned, in accordance with the terms of Exhibit D attached hereto,
subject to adjustment from time to time by written agreement of the Executive
and the Company. The Executive shall receive the employee benefits, or their
equivalent, that the Executive is currently receiving including MERP, PERK,
country club dues, car allowance, and the like; benefits may be changed from
time to time by written agreement of the Executive and the Company. Certain
employee benefits which Executive is currently receiving are listed on Exhibit E
attached hereto.
(b) The Executive shall be entitled to be reimbursed in accordance with
the generally applicable executive officer reimbursement policies of the
Company, as adopted and amended from time to time, for all reasonable and
necessary expenses incurred by the Executive in connection with the performance
of his Duties of employment or other obligations hereunder; provided the
Executive shall, as a condition of such reimbursement, submit verification of
the nature and amount of such expenses in accordance with the reimbursement
policies from time to time reasonably adopted by the Company.
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<PAGE> 7
(c) The Executive shall receive no compensation in addition to that set
forth in this Section 3 for any services rendered by the Executive in any
capacity to the Company or any affiliated corporation, except that the Executive
shall be entitled to participate in any present or future incentive
compensation, bonus, profit-sharing, stock option, stock purchase, pension,
retirement, medical or insurance plan of the Company approved by the Board of
Directors of the Company and made available to any other executive employee of
the Company.
4. Termination of Employment.
(a) The employment of the Executive by the Company may be terminated by
the Company for Cause upon written communication of the instance of the problem
conduct to the Executive by written notice from the Company. The Executive shall
have the opportunity to cure such problem conduct within a reasonable period of
time specified in such notice, which period shall not be less than five (5)
business days following receipt of such written notice from the Company. The
Chairman of the Compensation Committee of the Board of Directors, or the Board
of Directors of Company, itself, or a committee designated by the Board of
Directors of Company for such purpose, shall also provide the Executive with an
opportunity to meet with him or it in order to provide the Executive an
opportunity to refute or explain the problem conduct referred to in such written
notice. Such refutation or explanation reasonably satisfactory to the Chairman
of the Compensation Committee, the Board of Directors, or a committee so
designated by the Board, as the case may be, shall constitute a cure.
(b) The Executive may terminate this Agreement and his employment
hereunder voluntarily by giving the Company no less than one month prior notice.
(c) The Executive may terminate this Agreement and his employment
hereunder by giving the Company no less than two (2) weeks prior notice if (i)
material changes in the nature or scope of the Executive's Duties are made
without his written consent, (ii) any change of the Executive's title is made
without his written consent, (iii) the Executive's office is relocated to a
location more than twenty (20) miles from the city limits of Atlanta, Georgia,
(iv) the Executive's compensation or benefits are reduced without his written
consent, (v) the Company breaches this Agreement, or (vi) a Change of Control
occurs.
(d) If the Company terminates this Agreement and the Executive's
employment hereunder for any reason specified in subparagraph (a) of this
Section 4 or the Executive terminates this Agreement and his employment
hereunder voluntarily other than pursuant to subparagraph (c) of this Section 4,
the Company shall have no further obligation to the Executive or his personal
representative with respect to this Agreement or his employment hereunder except
for compensation accrued hereunder and unpaid at the date of such termination
and except with respect to the Executive's participation in benefit plans of the
Company and his rights and benefits under any other agreement between him and
the Company, all of which shall be governed by such other plans and agreements.
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<PAGE> 8
(e) If (i) a Change in Control occurs, and Executive notifies Company
within six months (6) months of the date of such Change of Control in writing,
or (ii) or the Company terminates this Agreement and the employment of the
Executive hereunder without Cause, or (iii) the Executive terminates this
Agreement and his employment hereunder for any reason specified in subparagraph
(c) of this Section 4, (A) the Executive shall be entitled to receive, for a
period of thirty-six (36) months from the date of termination, the compensation
set forth in Section 3 hereof, (B) all options to purchase stock of the Company
held by the Executive shall be fully vested and shall become immediately
exercisable, (C) upon request of the Executive, the Company shall purchase for
cash, within ten (10) days of such request, all stock of the Company then held
by the Executive for its fair market value and all options to purchase stock of
the Company then held by the Executive for the excess of the fair market value
of the stock purchasable upon the exercise of such options over the exercise
price of such options, and (D) the Company shall provide the Executive and his
spouse with medical coverage equivalent to that received by Executive during his
employment hereunder and for the life of each of the Executive and his spouse.
After each becomes eligible for Medicare, such coverage shall supplement
Medicare coverage. The fair market value of stock of the Company shall be the
last quoted price for such stock, if it is then publicly traded, prior to the
date of the Executive's request, and if it is not then publicly traded, shall be
the value determined in good faith by the Board of Directors of the Company. If
the Executive disagrees with the determination of the Board of Directors, the
Executive and the Company shall agree on an investment banking firm to make such
determination. If they cannot agree on the selection of such firm, each of the
Company and the Executive shall choose an investment banking firm and if the two
such firms cannot agree, such two firms shall choose a third investment banking
firm which shall choose one of the values determined by the other two investment
banking firms. The Company shall pay all of the fees and expenses of all of the
investment banking firms which are engaged under this Section 4(e). If the
purchase of such stock and options would cause the Executive to be liable under
Section 16(b) of the Exchange Act, he shall be allowed to defer such purchase as
necessary to avoid such liability.
(f) In the event that any of the payments or benefits that are provided
for hereunder or under any other plan, agreement or arrangement between the
Executive and the Company, be determined to be subject to an excise or similar
purpose tax pursuant to Section 4999 of the Internal Revenue Code of 1986 as
amended, or any successor or other comparable federal, state or local tax laws,
the Company shall pay to the Executive such additional compensation as is
necessary (after taking into account all federal, state and local income taxes
payable by the Executive as a result of the receipt of such additional
compensation) to place the Executive in the same aftertax position (including
federal, state and local taxes) he would have been in had no such tax (or any
interest or penalties thereon) been paid or incurred.
(g) Except in the case of the Executive's termination of employment
under subparagraph (c) of this Section 4, the covenants of the Executive in
Sections 5, 6, 7 and 8 shall survive the termination, amendment or replacement
of this Agreement and the termination of the Executive's employment hereunder,
and shall not be extinguished by any of such events.
(h) For a period of two years after the death of the Executive or after
a disability that prevents the Executive from performing his Duties, the Company
shall continue the compensation
7
<PAGE> 9
provided for in this Agreement, and the MERP benefits described on Exhibit E,
except that the Executive shall not be entitled to any bonuses other than those
earned by the Executive, if any, through the date of such death or disability.
(i) If Executive's employment is terminated for any reason, the Company
shall assign any and all rights it may have to any life insurance policy in
which the Executive is the insured (including but not limited to Policy 1 949022
issued by Connecticut General Life Insurance Co.) to the Executive or such other
person or entity as the Executive shall direct in writing, without cost to
Executive, and if Executive terminates employment other than pursuant to
subsection (c) of this Section 4, less a retention by Company of the rights to
receive an amount equal to all premiums paid by Company on such policy.
(j) All provisions of this Section 4 shall survive the expiration or
termination of this Agreement.
5. Agreement Not to Compete.
The Executive agrees that (a) during the Executive's employment by the
Company and for a period of three (3) years following the termination, for any
reason, of this Agreement or of the Executive's employment with the Company,
whichever shall first occur, the Executive will not, without the prior written
consent of the Company, within the Area, either directly or indirectly, on the
Executive's own behalf or in the service or on behalf of others, engage in any
Competing Business as either (i) a manager, supervisor, administrator,
consultant, instructor, officer, director, executive employee or salesperson
providing services the same as or substantially similar to the Duties, or (ii)
as a shareholder or owner of interests (other than as a shareholder of less than
five percent (5%) of the issued and outstanding voting securities of an entity
whose voting securities are traded on a national securities exchange or are
reported on the automated quotation system of the National Association of
Securities Dealers, Inc.) in any Competing Business.
6. Agreement Not to Solicit Customers.
The Executive agrees that during the Executive's employment by the
Company and for a period of three (3) years following the termination, for any
reason, of this Agreement or of the Executive's employment with the Company,
whichever shall first occur, the Executive will not, without the prior written
consent of the Company, within the Area, either directly or indirectly, on the
Executive's own behalf or in the service or on behalf of others, solicit, divert
or appropriate, or attempt to solicit, divert or appropriate, to any Competing
Business any person or entity whose account with the Company or any of its
subsidiaries was sold, serviced or actively solicited by or under the
supervision of the Executive during the three (3) years preceding the
termination of such employment.
8
<PAGE> 10
7. Agreement Not to Solicit Employees.
The Executive agrees that during the Executive's employment by the
Company and for a period of three (3) years following the termination, for
whatever reason, of this Agreement or of the Executive's employment with the
Company, whichever shall first occur, the Executive will not, either directly or
indirectly, on the Executive's own behalf or in the service or on behalf of
others, solicit, divert or hire away or attempt to solicit, divert or hire away,
to any Competing Business (i) any person employed by the Company or any of its
subsidiaries, franchisees or licensees within the Area, whether or not such
employee is a full-time associate or a temporary employee of the Company,
subsidiaries, franchisees or licensees, and whether or not such employment is
pursuant to written agreement and whether or not such employment is for a
determined period or is at will or (ii) any person or entity that is a
franchisee or licensee of the Company within the Area, nor will the Executive at
any time during such period, either directly or indirectly, induce or attempt to
induce any such employee, franchisee or licensee to terminate, breach or
otherwise fail fully to perform any employment agreement or franchise or license
agreement with the Company or any of its subsidiaries.
8. Ownership and Non-Disclosure and Non-Use of Confidential Information.
(a) The Executive acknowledges and agrees that all Confidential
Information, and all physical embodiments thereof, is confidential to and shall
be and remain the sole and exclusive property of the Company. Upon request by
the Company, and in any event upon termination of the Executive's employment
with the Company for any reason, as a prior condition to receiving any final
wage or salary check, the Executive shall promptly deliver to the Company all
property belonging to the Company including, without limitation, all
Confidential Information (and all embodiments thereof) then in the Executive's
custody, control or possession, but any withholding of such wage or salary check
shall not be considered as satisfaction or a release of or liquidated damages
for any claims for damages against the Executive which may accrue to the Company
as a result of any breach of this Section 8(a) by the Executive.
(b) The Executive agrees that the Executive will not, either during the
term of the Executive's employment by the Company or for three (3) years
thereafter, without the prior written consent of the Company, disclose or make
available any Confidential Information to any person or entity or make or cause
to be made or permit or allow, either on the Executive's own behalf or on behalf
of others, any use of any Confidential Information other than in the proper
performance of the Executive's duties hereunder. The Company agrees that the
Executive is not prohibited hereby from disclosing or using any Confidential
Information which the Executive is required to disclose pursuant to a
requirement of a governmental agency or of law without similar restrictions or
other protections against public disclosure, provided, however, that the
Executive shall first have taken reasonable steps to allow the Company to seek
to protect the confidentiality of the information required to be disclosed.
9. Inventions.
(a) The Executive agrees that all Subject Inventions conceived or first
practiced by the Executive during his employment by the Company, and all patent
rights and copyrights to the
9
<PAGE> 11
Subject Inventions will become the property of the Company, and the Executive
hereby irrevocably assigns to the Company all of his rights to all Subject
Inventions.
(b) The Executive agrees that if he conceives an Invention during his
or her employment and there is a reasonable basis to believe that the Invention
is a Subject Invention, the Executive will promptly provide a written
description of the Invention to the Company adequate to allow evaluation for a
determination as to whether the Invention is a Subject Invention.
(c) If, upon commencement of the Executive's employment with the
Company, the Executive has previously conceived an Invention or acquired any
ownership interest in any Invention, which: (i) is the Executive's property, or
of which the Executive is a joint owner with another person or company; (ii) is
not described in any issued patent as of the commencement of the Executive's
employment with Company; and (iii) would be a Subject Invention if such
Invention was made while a Company employee; then the Executive must, at the
Executive's election, either: (i) provide the Company with a written description
of the Invention on Exhibit C, if any, in which case the written description
(but no rights to the Invention) shall become the property of the Company; or
(ii) provide the Company with the license described in Section 9(d) of this
Agreement.
(d) If the Executive has previously conceived or acquired any ownership
interest in an Invention described above in Section 9(c) and the Executive
elects not to disclose the same to the Company as provided above, then the
Executive hereby grants to the Company a nonexclusive, paid-up, royalty-free
license under all patents to issue in any country which pertain to the
Invention.
(e) The Executive owns no patents, individually or jointly with others.
10. Patent Applications.
(a) The Executive agrees that should the Company elect to file an
application for patent protection, either in the United States or in any foreign
country on a Subject Invention of which the Executive was an inventor, the
Executive will execute all necessary documentation relating to the patent
applications, including formal assignments to the Company.
(b) The Executive further agrees that he will cooperate with attorneys
or other persons designated by the Company by explaining the nature of any
Subject Invention for which the Company elects to file an application for patent
protection, reviewing applications and other papers and providing any other
cooperation required for prosecution of the patent applications. The Company
will be responsible for all expenses incurred for the preparation and
prosecution of all patent applications on Subject Inventions assigned to the
Company.
11. Copyrights.
(a) The Executive agrees that any Works created by the Executive in the
course of the Executive's Duties as an employee of the Company are subject to
the "Work for Hire" provisions contained in Sections 1 01 and 201 of the United
States Copyright Law, Title 1 7 of the United States
10
<PAGE> 12
Code. All right, title and interest to copyrights in all Works which have been
or will be prepared by the Executive within the scope of his employment with the
Company will be the property of the Company. The Executive acknowledges and
agrees that, to the extent the provisions of Title 1 7 of the United States Code
do not vest in the Company the copyrights to any Works, the Executive hereby
assigns to the Company all right, title and interest to copyrights which the
Executive may have in the Works.
(b) The Executive must disclose to the Company all Works referred to in
Section 1 1 (a) and will execute and deliver all applications, registrations and
documents relating to the copyrights to the Works and will provide assistance to
secure the Company's title to the copyrights in the Works. The Company will be
responsible for all expenses incurred in connection with the registration of all
the copyrights.
(e) The Executive claims no ownership rights in any Works, except those
described on Exhibit C, if any.
12. Contracts or Other Agreements with Former Employer or Business.
(a) The Executive agrees that he will provide to the Company, upon the
execution and delivery of this Agreement, a copy of the pertinent portions of
any employment agreement or similar document (described on Exhibit C, if any),
executed by the Executive with a former employer or any business with which the
Executive has been associated, which prohibits the Executive during a period of
time from: (i) competing with or participating in a business which competes with
the Executive's former employer or business; (ii) soliciting personnel of the
former employer or business to leave the former employer's employment or to
leave the business; or (iii) soliciting customers of the former employer or
business on behalf of another business.
(b) The Executive hereby represents to the Company that he has not
executed any agreement with any other party which purports to require the
Executive to assign any Work or any Invention created, conceived or first
practiced by the Executive during a period of time which includes the date of
his commencement of employment with the Company, except as described on Exhibit
C, if any. The Executive will obtain and provide to the Company a copy of any
such described agreement.
11
<PAGE> 13
13. Severability.
(a) The Executive agrees that the covenants and agreements contained in
Section 5, 6, 7 and 8 of this Agreement are of the essence of this Agreement;
that each of such covenants is reasonable and necessary to protect and preserve
the interests and properties of the Company and the Business of the Company;
that the Company is engaged in and throughout the Area in the Business of the
Company; that irreparable loss and damage will be suffered by the Company should
the Executive breach any of such covenants and agreements; that each of such
covenants and agreements is separate, distinct and severable not only from the
other of such covenants and agreements but also from the other and remaining
provisions of this Agreement; that the unenforceability of any such covenant or
agreement shall not affect the validity or enforceability of any other such
covenant or agreement or any other provision or provisions of this Agreement;
and that, in addition to other remedies available to it, the Company shall be
entitled to both temporary and permanent injunctions to prevent a breach or
contemplated breach by the Executive of any of such covenants or agreements.
(b) In the event that the Executive shall breach any of the covenants
set forth in Section 5, 6, 7 or 8 hereof, the running of the period of the
restriction set forth in such Section shall be tolled during the continuation of
any such breach by the Executive, and the running of the period of such
restrictions shall commence only upon compliance by the Executive with the terms
of the applicable Section.
14. Expenses of the Executive.
(a) All costs and expenses (including reasonable legal, accounting and
other advisory fees) incurred by the Executive to enforce his rights under this
Agreement, including but not limited to his rights to receive the compensation
payable pursuant to Sections 3 and 4 hereof, upon written demand by the
Executive to the Company shall be promptly advanced or reimbursed to the
Executive or paid directly, on a current basis, by the Company or its
successors.
(b) If at any time during the term of this Agreement or afterwards
there should arise any dispute as to the rights of the Executive under this
Agreement, the Company agrees, upon written demand by the Executive to the
Company (and the Executive shall be entitled, upon application to any court of
competent jurisdiction, to the entry of a mandatory injunction, without the
necessity of posting any bond with respect thereto, compelling the Company)
promptly to provide sums sufficient to pay on a current basis (either directly
or by reimbursing the Executive) the Executive's costs and reasonable attorneys'
fees (including, without limitation, expenses of investigation and disbursements
for the fees and expenses of experts) incurred by the Executive in connection
with any such dispute or any litigation, regardless of whether the Executive is
the prevailing party in such dispute or litigation; provided that, the court in
which such litigation is first initiated determines with respect to this
obligation, upon application of either party hereto, that the Executive did not
initiate such litigation frivolously. Under no circumstances shall the Executive
be obligated to pay or reimburse the Company for any attorneys' fees, costs or
expenses incurred by the Company. The provisions of this Section 14 shall
survive the expiration or termination of this Agreement.
12
<PAGE> 14
(c) Company shall pay Executive's reasonable attorneys fees incurred in
preparing and negotiating this Agreement.
15. No Set-off by the Executive or the Company.
The existence of any claim, demand, action or cause of action by the
Executive against the Company, or any subsidiary or Affiliate of the Company,
whether predicated upon this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of any of its rights hereunder, and
the existence of any claim, demand, action or cause of action by the Company (or
any subsidiary or affiliate of the Company) against the Executive or any
relative of the Executive, whether predicated upon this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Executive of any of his
rights hereunder.
16. Amendment.
This Agreement and the exhibits attached hereto may be altered,
amended, modified or superseded only by a writing executed by both of the
parties hereto.
17. Assignment; Entire Agreement.
(a) This Agreement may not be assigned by the Company, except that it
may be assigned by Company in connection with a Change of Control of Company
and, in such case, this Agreement shall inure to the benefit of any such
assignee. The waiver by either party to this Agreement of any breach of this
Agreement by the other party shall not be effective unless in writing, and no
such waiver shall constitute the waiver of the same or another breach on a
subsequent occasion.
(b) This Agreement, together with any agreements noted on Exhibit E to
this Agreement, embodies the entire agreement of the parties hereto relating to
the employment by the Company of the Executive in the capacity herein stated,
and all other prior written agreements between the parties are null and void.
IN WITNESS WHEREOF, the Company and the Executive have each caused this
Agreement to be executed and delivered as of the date first shown above.
THE COMPANY:
NORRELL CORPORATION
By: /s/ Mark Hain 12/15/97
--------------------------------
(Date)
Title: V.P.
-----------------------------
THE EXECUTIVE:
/s/ C. Douglas Miller 12/15/97
-----------------------------------
C. Douglas Miller (Date)
13
<PAGE> 15
EXHIBIT A
The Area shall be an area within a twenty-five (25) mile radius of each office
of Company which exists during the term of this Agreement.
THE COMPANY:
NORRELL CORPORATION
By: Mark Hain 12/15/97
--------------------------------
(Date)
Title: V.P.
-----------------------------
THE EXECUTIVE:
C. Douglas Miller 12/15/97
-----------------------------------
C. Douglas Miller (Date)
14
<PAGE> 16
EXHIBIT B
The Duties of the Chairman of the Board and Chief Executive Officer of the
Company shall be as follows:
To be responsible for the development of the strategic plan for the Company and
all changes to the plan, consistent with the direction of the Board of
Directors;
To supervise and control all the business and affairs of the Company, including
development of the basic long and short term objectives, policies, and operating
plans of the Company, all to be consistent with the strategic direction of the
Company or as directed by the Board of Directors of the Company;
To ensure that adequate plans for future development and growth of the Company
are prepared, and to participate in and direct such preparations;
To present such plans for review and approval by the Board of Directors of the
Company;
To be responsible for meeting the Company plans, objectives, and goals;
To present proposed operating and capital budgets for review and approval by the
Board of Directors of the Company;
To plan for the development of personnel resources within the Company;
To direct and supervise the performance of the key executives of the Company;
To represent the Company as appropriate in its relationships with major
customers, suppliers, competitors, employees, stockholders, government agencies,
professional societies and the public;
To cause all books, reports, statements, and certificates of the Company to be
properly kept and filed as required by law;
To sign and execute contracts in the name of the Company, or to delegate such
duties to other authorized officers or employees of the Company; and
15
<PAGE> 17
To perform such other reasonable executive duties and responsibilities as the
Board of Directors of the Company may require from time to time.
THE COMPANY:
NORRELL CORPORATION
By: Mark Hain 12/15/97
--------------------------------
(Date)
Title: V.P.
-----------------------------
THE EXECUTIVE:
C. Douglas Miller 12/15/97
-----------------------------------
C. Douglas Miller (Date)
16
<PAGE> 18
EXHIBIT C
None.
17
<PAGE> 19
EXHIBIT D
The Executive shall earn a bonus equal to the percentage of annual salary
("Bonus Percentage") corresponding to the Company's achievement of its Pre-tax
Profit Plan (as presented to the Board of Directors) multiplied by the
Executive's annual salary as follows:
<TABLE>
<CAPTION>
% of Company's Pre-tax Profit Plan Achieved Bonus Percentage
- ------------------------------------------- ----------------
<S> <C>
80% 50%
90% 60%
100% 70%
105% 80%
110% 90%
115% 100%
</TABLE>
An equitable adjustment to the Pre-tax Profit Plan shall be made to account for
acquisitions and divestitures; extraordinary items shall be excluded from all
calculations.
THE COMPANY:
NORRELL CORPORATION
By: /s/ MARK HAIN 12/15/97
------------------------------
(Date)
Title: /s/ V.P.
----------------------------
THE EXECUTIVE:
/s/ C. DOUGLAS MILLER 12/15/97
----------------------------------
C. Douglas Miller (Date)
18
<PAGE> 20
EXHIBIT E
1. Medical Executive Reimbursement Plan (MERP)
2. Executive Perquisite Plan (PERK)
3. Group Life, Medical, Dental, Vision and Disability Plans in accordance with
elections made by Executive
4. Deferred Compensation Plan
5. Supplemental Executive Retirement Plan (Vision)
6. Country Club dues reimbursement
7. Supplemental Disability Policies #PRL-D1 010215767003
PRL-D1 010239546103
PRL-D1 010254546903
8. Split dollar Life Insurance Policy # 1949022
9. Automobile allowance
THE COMPANY:
NORRELL CORPORATION
By: /s/ Mark Hain 12/15/97
--------------------------------
(Date)
Title: /s/ V.P.
-----------------------------
THE EXECUTIVE:
/s/ C. Douglas Miller 12/15/97
-----------------------------------
C. Douglas Miller (Date)
19
<PAGE> 1
EXHIBIT 10.22
EMPLOYMENT AGREEMENT
JAMES ERNEST RIDDLE
<PAGE> 2
EMPLOYMENT AGREEMENT
THIS AGREEMENT effective as of March 3, 1997 by and between Norrell
Corporation, a Georgia corporation (the "Company"), and James Ernest Riddle,
whose address is 4452 NW 93rd Doral Court, Miami, Florida 33178 (the
"Executive").
W I T N E S S E T H:
WHEREAS, the Company is engaged directly and through its franchisees
and licensees in and throughout the Area in the Business of the Company; and
WHEREAS, the Company desires to employ the Executive as Chief Operating
Officer of the Company and the Executive desires to be employed on the terms and
conditions hereinafter set forth; and
WHEREAS, in the course of the Executive's employment, the Executive
will gain knowledge of the business, affairs, finances, management, marketing
programs and philosophy, customers and methods of operation of the Company, will
be trained at the expense of the Company in the operation and management of the
Business of the Company and the marketing and sale of the Company's services
through the use of techniques, systems, forms and methods used and devised by
the Company, will have access to lists of the Company's customers in the Area
and their needs and will become personally known to and acquainted with the
Company's major customers in the Area thereby establishing a personal
relationship with such customers for the benefit of the Company; and
WHEREAS, the Company would suffer irreparable harm if the Executive
were to use such knowledge, information, business acumen and personal
relationships in competition with the Company; and
WHEREAS, the Company recognizes the contributions to be made by the
Executive to the Company and, to assure that the Company will continue to have
the Executive's services available to it, desires to provide the Executive with
benefits upon the occurrence of certain contingencies in addition to the annual
compensation payable hereunder.
NOW, THEREFORE, in consideration of the employment of the Executive by
the Company, the above premises and the mutual agreements hereinafter set forth,
the parties agree as follows:
1. Definitions.
(a) "Affiliate" or "Affiliated" means any person, firm, corporation,
partnership, association or entity that directly or indirectly controls, is
controlled by, or is under common control with, a specified person, firm,
corporation, partnership, association or entity.
<PAGE> 3
(b) "Area" shall mean the area set forth in Exhibit A attached hereto
and made a part hereof. As and when the territory in which the Executive
performs his Duties, changes, Exhibit A will, upon the mutual agreement of the
Company and the Executive, be amended to include such changed territory. Such
amended Exhibit A, when executed by the Company and the Executive, shall be
attached hereto and shall replace the previous Exhibit A hereto.
(c) "Associate" means (i) any corporation, partnership or other entity
of which a specified person is an officer or partner, or is, directly or
indirectly, the beneficial owner of ten percent (10%) or more of any class of
equity securities thereof, (ii) any trust or estate in which the specified
person has a substantial beneficial interest or as to which the specified person
serves as trustee or in a similar fiduciary capacity, (iii) any relative or
spouse of such specified person, or any relative of such spouse, who has the
same home as such specified person, and (iv) any person who is a trustee,
officer or partner of such specified person or of any corporation, partnership
or other entity that is an Affiliate of such specified person.
(d) "Beneficial Owner" shall be defined by reference to Rule 13d-3
under the Exchange Act as such Rule is in effect on the date hereof; provided,
however, that any individual, corporation, partnership, Group, association or
other person or entity which, directly or indirectly, owns or has the right to
acquire any of the Company's outstanding securities entitled to vote generally
in the election of directors at any time in the future, whether such right is
contingent, absolute, direct or indirect, pursuant to any agreement, arrangement
or understanding or upon exercise of conversion rights, warrants or options or
otherwise, shall be deemed the Beneficial Owner of such securities.
(e) "Business of the Company" shall mean and include the business of
marketing and providing personnel, including but not limited to office,
professional and light industrial personnel, on a temporary basis to customers
located in the Area, and marketing and providing to customers located in the
Area facilities staffing, contract services, management services, outsourcing,
training, and data entry services or the licensing or franchising of others to
engage in any such business. It shall also mean the business of conducting the
affairs and activities of the Corporate Office in conjunction with all such
business described in this section.
(f) "Cause" shall mean conduct of the Executive amounting to fraud,
dishonesty, gross or willful misconduct or neglect of duty, conviction of any
federal, state or local laws involving a felony or crime involving fraud or
moral turpitude (other than pursuant to actions taken at the direction or with
the approval of the Board of Directors of the Company), or engaging in
activities prohibited by Sections 5, 6, 7 and 8 hereof.
(g) A "Change of Control" shall be deemed to have occurred if and when
(i) any individual, corporation, partnership, Group, association or other person
or entity, together with his, its or their Affiliates or Associates (other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or Guy W. Millner and his Affiliates) hereafter becomes the
Beneficial Owner of securities of the Company representing thirty percent (30%)
or more of the combined voting power of the Company's then outstanding
securities entitled to vote generally in the election of directors; (ii) the
2
<PAGE> 4
Continuing Directors of the Company shall at any time fail to constitute a
majority of the members of the Board of Directors of the Company; or (iii) all
or substantially all of the assets of the Company are sold, conveyed,
transferred or otherwise disposed of, whether through one event or a series of
related events, without such sale or transfer being Duly Approved by the
Continuing Directors of the Company.
(h) "Competing Business" shall mean any business which is the same or
substantially the same as the Business of the Company and its subsidiaries.
(i) "Confidential Information" shall mean all information related to
the Business of the Company which (i) derives economic value, actual or
potential, from not being generally known to other persons who can obtain
economic value from its disclosure or use and (ii) is the subject of efforts by
the Company that are reasonable under the circumstances to maintain its secrecy.
Assuming the criteria in clauses (i) and (ii) above are met, Confidential
Information shall include, without limitation, actual and potential customer
lists, sales and marketing information, customer account records, training and
operations material and memoranda, computer software and systems, personnel
records, code books, pricing information and financial information concerning or
relating to the business, accounts, customers, associates and affairs of the
Company or its subsidiaries, franchisees or licensees and all physical
embodiments of the foregoing, all of which are hereby agreed to be the property
of and confidential to the Company. Confidential Information shall not include
(i) information released to the public at large without restriction, (ii)
information generally known to be obtainable from public sources in usable form
without significant effort or expense, (iii) information lawfully and
independently developed or acquired without reliance in any way on the
information received pursuant to the Executive's employment hereunder, and (iv)
general skills and learning lawfully and independently acquired.
(j) "Continuing Director" means a director who either was a member of
the Board of Directors of the Company on the date hereof, or who becomes a
member of the Board of Directors of the Company subsequent to such date and
whose election or nomination for election by the Board of Directors of the
Company was Duly Approved by the Continuing Directors of the Company at the time
of such election or nomination, either by a specific vote or by approval of the
proxy statement issued by the Company on behalf of the Board of Directors of the
Company in which such person is named as a nominee for director.
(k) "Corporate Office" shall mean the office of the Company at 3535
Piedmont Road, N.E., Atlanta, Georgia 30305.
(l) "Duly Approved by the Continuing Directors" means an action
approved by the vote of at least a majority of the Continuing Directors then on
the Board of Directors of the Company; provided, however, if the votes of such
Continuing Directors in favor of such action would be insufficient to constitute
an act of the entire Board of Directors of the Company as if a vote by all of
its members had been taken, or if the number of persons constituting the
Continuing Directors of the Company is three or less, then the term "Duly
Approved by the Continuing Directors" shall mean an action approved by the
unanimous
3
<PAGE> 5
vote of the Continuing Directors then on the Board of Directors of the Company.
(m) "Duties" shall mean the duties set forth on Exhibit B attached
hereto and made a part hereof. As and when the Duties of the Executive changes,
Exhibit B will, upon the mutual agreement of the Company and the Executive, be
amended to reflect such changes in the Executive's Duties. Such amended Exhibit
B, when executed by the Company and the Executive, shall be attached hereto and
shall replace previous Exhibit B hereto in its entirety.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(o) "Group" means persons who act in concert as described in Section
13(d)(3) of the Exchange Act as in effect on the date hereof.
(p) "Invention" means any discovery, whether or not patentable,
including, but not limited to, any useful process, method, formula, technique,
machine, manufacture, composition of matter, algorithm or computer program, as
well as improvements thereto, which is new or which the Executive has a
reasonable basis to believe may be new.
(q) "Subject Invention" means any Invention which is conceived by the
Executive alone or in a joint effort with others during the Executive's
employment by the Company which (i) may be reasonably expected to be used in a
product of the Company; (ii) results from work that the Executive has been
assigned as part of his Duties as an employee of the Company; (iii) is in an
area of technology which is the same as or substantially related to the areas of
technology with which the Executive is involved in the performance of his Duties
as an employee of the Company; or (iv) is useful, or which the Executive
reasonably expects may be useful, in any manufacturing or product design process
of the Company.
(r) "Work" means a copyrightable work of authorship, including without
limitation, any technical descriptions for products, user's guides,
illustrations, advertising materials, computer programs (including the contents
of read only memories) and any contribution to such materials.
2. Terms of Employment; Duties.
(a) The Company agrees to employ the Executive as Chief Operating
Officer of Norrell Corporation and the Executive agrees to such employment with
the Company subject to the terms and conditions hereof.
(b) The Company agrees to employ the Executive to perform the Duties
and such other tasks as the Board of Directors or the President and Chief
Executive Officer of the Company, or their respective designees, may assign to
the Executive from time to time and the Executive agrees to perform the Duties
for the Company, subject to the terms and conditions hereof.
4
<PAGE> 6
(c) All funds and property received by the Executive on behalf of the
Company or its parent or any Affiliated corporation shall be received and held
by the Executive in trust, and the Executive shall account for and remit all
such funds to the Company.
3. Compensation.
(a) For services provided hereunder, the Company shall pay to the
Executive an annual salary of Four Hundred Fifty Thousand Dollars ($450,000) per
year subject to adjustment from time to time by written agreement of the
Executive and the Company. Such annual salary shall be paid periodically in
accordance with the Company's payroll practices in effect from time to time and
shall be subject to deductions for income and other taxes as required by law.
The Executive shall also be paid a bonus, if earned, in accordance with the
terms of Exhibit D attached hereto, subject to adjustment from time to time by
agreement of the Executive and the Company. The Executive shall receive the
employee benefits, or their equivalent, as described in the offer letter dated
February 26, 1997, including MERP, PERK, country club dues, car allowance, and
the like; benefits may be changed from time to time by agreement of the
Executive and the Company.
(b) The Executive shall be entitled to be reimbursed in accordance with
the policies of the Company, as adopted and amended from time to time, for all
reasonable and necessary expenses incurred by the Executive in connection with
the performance of his Duties of employment hereunder; provided the Executive
shall, as a condition of such reimbursement, submit verification of the nature
and amount of such expenses in accordance with the reimbursement policies from
time to time adopted by the Company.
(c) The Executive shall receive no compensation in addition to that set
forth in this Section 3 for any services rendered by the Executive in any
capacity to the Company or any affiliated corporation. Nothing contained herein
shall, however, preclude the Executive from participating in any present or
future incentive compensation, bonus, profit-sharing, stock option, stock
purchase, pension, retirement, medical or insurance plan of the Company as and
to the extent granted or approved by the Board of Directors of the Company.
4. Termination of Employment.
(a) The employment of the Executive by the Company may be terminated by
the Company immediately for Cause; provided, however, that if such Cause is the
Executive's gross or willful misconduct or neglect of duty, the instance of such
gross or willful misconduct or neglect of duty shall be communicated to the
Executive with specificity by written notice by the Company. The Executive shall
have the opportunity to cure such action, inaction, or behavior constituting
gross or willful misconduct or neglect of duty to the reasonable satisfaction of
the Board of Directors of the Company within a reasonable period of time, which
period shall not be less than five (5) business days following receipt of such
written notice from the Company. The Chairman of the Board of Directors of the
Company shall also provide the Executive with an opportunity to meet with him in
order to provide the Executive an opportunity to refute or explain acts,
omissions or behavior
5
<PAGE> 7
referred to in such written notice. If such acts, omissions or behavior cannot
be refuted or reversed, the Executive's written assurance (demonstrated by
conduct on his part not inconsistent with such assurance) that he will not
repeat such acts, omissions or behavior shall constitute a cure, provided,
however, that a second instance of substantially the same act, omission or
behavior may not be cured by subsequent written assurance, but shall constitute
grounds for immediate termination for Cause.
(b) The Executive may terminate this Agreement and his employment
hereunder voluntarily by giving no less than two (2) weeks prior notice.
(c) The Executive may terminate this Agreement and his employment
hereunder by giving the Company no less than two (2) weeks prior notice if (i)
he is dismissed by the Company (x) without Cause within three (3) years after a
Change in Control or (y) without Cause at any other time, (ii) material changes
in the nature or scope of the Executive's Duties are made without his consent,
(iii) any change of the Executive's title is made without his consent, (iv) the
Executive's office is relocated to a location more than fifty (50) miles from
the city limits of Atlanta, Georgia, (v) the Executive's compensation or
benefits are reduced without his consent, or (vi) the Company breaches this
Agreement.
(d) If the Company terminates this Agreement and the Executive's
employment hereunder for any reason specified in subparagraph (a) of this
Section 4 or the Executive terminates this Agreement and his employment
hereunder voluntarily as set forth in subparagraph (b) of this Section 4, the
Company shall have no further obligation to the Executive or his personal
representative with respect to this Agreement or his employment hereunder except
for compensation accrued hereunder and unpaid at the date of such termination
and except with respect to the Executive's participation in benefit plans of the
Company and his rights and benefits under any other agreement between him and
the Company, all of which shall be governed by such other plans and agreements.
(e) If (i) a Change in Control of the Company occurs while the
Executive is employed by the Company and if within three (3) years of such
Change in Control the Company terminates this Agreement and the employment of
the Executive hereunder without Cause or (ii) the Executive terminates this
Agreement and his employment hereunder for any reason specified in subparagraph
(c) of this Section 4, (A) the Executive shall be entitled to receive, for a
period of twenty-four (24) months from the date of termination, the compensation
set forth in Section 3 hereof and (B) all options to purchase stock of the
Company held by the Executive shall become immediately exercisable and, upon
request of the Executive, the Company shall purchase for cash, within ten (10)
days of such request, all stock of the Company then held by the Executive for
its fair market value and all options to purchase stock of the Company then held
by the Executive for the excess of the fair market value of the stock
purchasable upon the exercise of such options over the exercise price of such
options. The fair market value of stock of the Company shall be the last quoted
price for such stock, if it is then publicly traded, prior to the date of the
Executive's request, and if it is not then publicly traded, shall be the value
determined in good faith by the Board of Directors of the Company. If the
Executive disagrees with the determination of the Board of Directors, the
Executive and the Company shall agree on an investment banking firm to make such
determination. If they cannot agree on the selection of such firm, each of the
Company and the Executive shall choose an investment
6
<PAGE> 8
banking firm and if the two such firms cannot agree, such two firms shall choose
a third investment banking firm which shall choose one of the values determined
by the other two investment banking firms. The Company shall pay all of the fees
and expenses of all of the investment banking firms which are engaged under this
Section 4(e). If the purchase of such stock and options would cause the
Executive to be liable under Section 16(b) of the Exchange Act, he shall be
allowed to defer such purchase as necessary to avoid such liability.
(f) In the event that any of the payments or benefits that are provided
for hereunder or under any other plan, agreement or arrangement between the
Executive and the Company, be determined to be subject to an excise or similar
purpose tax pursuant to Section 4999 of the Internal Revenue Code of 1986 as
amended, or any successor or other comparable federal, state or local tax laws,
the Company shall pay to the Executive such additional compensation as is
necessary (after taking into account all federal, state and local income taxes
payable by the Executive as a result of the receipt of such additional
compensation) to place the Executive in the same aftertax position (including
federal, state and local taxes) he would have been in had no such tax (or any
interest or penalties thereon) been paid or incurred.
(g) Except in the case of the Executive's termination of employment
under subparagraphs (c) (i) (x) of this Section 4, the covenants of the
Executive in Sections 5, 6, 7 and 8 shall survive the termination, amendment or
replacement of this Agreement and the termination of the Executive's employment
hereunder, and shall not be extinguished by any of such events. Upon termination
of the Executive's employment under subparagraphs (c) (i) (x) of this Section 4,
the covenants of the Executive in Sections 5, 6 and 7 shall be void and of no
further effect, but the covenant of the Executive in Section 8 shall continue in
effect.
5. Agreement Not to Compete.
The Executive agrees that (a) during the Executive's employment by the
Company and for a period of two (2) years following the termination, for any
reason, of this Agreement or of the Executive's employment with the Company,
whichever shall first occur, the Executive will not, without the prior written
consent of the Company, within the Area, either directly or indirectly, on the
Executive's own behalf or in the service or on behalf of others, engage in any
Competing Business as either (i) a manager, supervisor, administrator,
consultant, instructor, officer, director, executive employee or salesperson
providing services the same as or substantially similar to the Duties, or (ii)
as a shareholder or owner of interests (other than as a shareholder of less than
five percent (5%) of the issued and outstanding voting securities of an entity
whose voting securities are traded on a national securities exchange or are
reported on the automated quotation system of the National Association of
Securities Dealers, Inc.) in any Competing Business.
7
<PAGE> 9
6. Agreement Not to Solicit Customers.
The Executive agrees that during the Executive's employment by the
Company and for a period of two (2) years following the termination, for any
reason, of this Agreement or of the Executive's employment with the Company,
whichever shall first occur, the Executive will not, without the prior written
consent of the Company, within the Area, either directly or indirectly, on the
Executive's own behalf or in the service or on behalf of others, solicit, divert
or appropriate, or attempt to solicit, divert or appropriate, to any Competing
Business any person or entity whose account with the Company or any of its
subsidiaries was sold, serviced or actively solicited by or under the
supervision of the Executive during the two (2) years preceding the termination
of such employment.
7. Agreement Not to Solicit Employees.
The Executive agrees that during the Executive's employment by the
Company and for a period of two (2) years following the termination, for
whatever reason, of this Agreement or of the Executive's employment with the
Company, whichever shall first occur, the Executive will not, either directly or
indirectly, on the Executive's own behalf or in the service or on behalf of
others, solicit, divert or hire away or attempt to solicit, divert or hire away,
to any Competing Business (i) any person employed by the Company or any of its
subsidiaries, franchisees or licensees within the Area, whether or not such
employee is a full-time associate or a temporary employee of the Company,
subsidiaries, franchisees or licensees, and whether or not such employment is
pursuant to written agreement and whether or not such employment is for a
determined period or is at will or (ii) any person or entity that is a
franchisee or licensee of the Company within the Area, nor will the Executive at
any time during such period, either directly or indirectly, induce or attempt to
induce any such employee, franchisee or licensee to terminate, breach or
otherwise fail fully to perform any employment agreement or franchise or license
agreement with the Company or any of its subsidiaries.
8. Ownership and Non-Disclosure and Non-Use of Confidential Information.
(a) The Executive acknowledges and agrees that all Confidential
Information, and all physical embodiments thereof, is confidential to and shall
be and remain the sole and exclusive property of the Company. Upon request by
the Company, and in any event upon termination of the Executive's employment
with the Company for any reason, as a prior condition to receiving any final
wage or salary check, the Executive shall promptly deliver to the Company all
property belonging to the Company including, without limitation, all
Confidential Information (and all embodiments thereof) then in the Executive's
custody, control or possession, but any forfeiture of such wage or salary check
shall not be considered as satisfaction or a release of or liquidated damages
for any claims for damages against the Executive which may accrue to the Company
as a result of any breach of this Section 8(a) by the Executive.
(b) The Executive agrees that the Executive will not, either during the
term of the Executive's employment by the Company or for five (5) years
thereafter, without the
8
<PAGE> 10
prior written consent of the Company, disclose or make available any
Confidential Information to any person or entity or make or cause to be made or
permit or allow, either on the Executive's own behalf or on behalf of others,
any use of any Confidential Information other than in the proper performance of
the Executive's duties hereunder. The Company agrees that the Executive is not
prohibited hereby from disclosing or using any Confidential Information which
the Executive is required to disclose pursuant to a requirement of a
governmental agency or of law without similar restrictions or other protections
against public disclosure, provided, however, that the Executive shall first
have given written notice of such required disclosure to the Company and have
taken reasonable steps to allow the Company to seek to protect the
confidentiality of the information required to be disclosed.
9. Inventions.
(a) The Executive agrees that all Subject Inventions conceived or first
practiced by the Executive during his employment by the Company, and all patent
rights and copyrights to the Subject Inventions will become the property of the
Company, and the Executive hereby irrevocably assigns to the Company all of his
rights to all Subject Inventions.
(b) The Executive agrees that if he conceives an Invention during his
or her employment and there is a reasonable basis to believe that the Invention
is a Subject Invention, the Executive will promptly provide a written
description of the Invention to the Company adequate to allow evaluation for a
determination as to whether the Invention is a Subject Invention.
(c) If, upon commencement of the Executive's employment with the
Company, the Executive has previously conceived an Invention or acquired any
ownership interest in any Invention, which: (i) is the Executive's property, or
of which the Executive is a joint owner with another person or company; (ii) is
not described in any issued patent as of the commencement of the Executive's
employment with Company; and (iii) would be a Subject Invention if such
Invention was made while a Company employee; then the Executive must, at the
Executive's election, either: (i) provide the Company with a written description
of the Invention on Exhibit C, if any, in which case the written description
(but no rights to the Invention) shall become the property of the Company; or
(ii) provide the Company with the license described in Section 9(d) of this
Agreement.
(d) If the Executive has previously conceived or acquired any ownership
interest in an Invention described above in Section 9(c) and the Executive
elects not to disclose the same to the Company as provided above, then the
Executive hereby grants to the Company a nonexclusive, paid-up, royalty-free
license under all patents to issue in any country which pertain to the
Invention.
(e) The Executive owns no patents, individually or jointly with others,
except those described on Exhibit C, if any.
9
<PAGE> 11
10. Patent Applications.
(a) The Executive agrees that should the Company elect to file an
application for patent protection, either in the United States or in any foreign
country on a Subject Invention of which the Executive was an inventor, the
Executive will execute all necessary documentation relating to the patent
applications, including formal assignments to the Company.
(b) The Executive further agrees that he will cooperate with attorneys
or other persons designated by the Company by explaining the nature of any
Subject Invention for which the Company elects to file an application for patent
protection, reviewing applications and other papers and providing any other
cooperation required for prosecution of the patent applications. The Company
will be responsible for all expenses incurred for the preparation and
prosecution of all patent applications on Subject Inventions assigned to the
Company.
11. Copyrights.
(a) The Executive agrees that any Works created by the Executive in the
course of the Executive's Duties as an employee of the Company are subject to
the "Work for Hire" provisions contained in Sections 101 and 201 of the United
States Copyright Law, Title 17 of the United States Code. All right, title and
interest to copyrights in all Works which have been or will be prepared by the
Executive within the scope of his employment with the Company will be the
property of the Company. The Executive acknowledges and agrees that, to the
extent the provisions of Title 17 of the United States Code do not vest in the
Company the copyrights to any Works, the Executive hereby assigns to the Company
all right, title and interest to copyrights which the Executive may have in the
Works.
(b) The Executive must disclose to the Company all Works referred to in
Section 11(a) and will execute and deliver all applications, registrations and
documents relating to the copyrights to the Works and will provide assistance to
secure the Company's title to the copyrights in the Works. The Company will be
responsible for all expenses incurred in connection with the registration of all
the copyrights.
(c) The Executive claims no ownership rights in any Works, except those
described on Exhibit C, if any.
12. Contracts or Other Agreements with Former Employer or Business.
(a) The Executive agrees that he will provide to the Company, upon the
execution and delivery of this Agreement, a copy of the pertinent portions of
any employment agreement or similar document (described on Exhibit E, if any),
executed by the Executive with a former employer or any business with which the
Executive has been associated, which prohibits the Executive during a period of
time from: (i) competing with or participating in a business which competes with
the Executive's former employer or
10
<PAGE> 12
business; (ii) soliciting personnel of the former employer or business to leave
the former employer's employment or to leave the business; or (iii) soliciting
customers of the former employer or business on behalf of another business.
(b) The Executive hereby represents to the Company that he has not
executed any agreement with any other party which purports to require the
Executive to assign any Work or any Invention created, conceived or first
practiced by the Executive during a period of time which includes the date of
his commencement of employment with the Company, except as described on Exhibit
E, if any. The Executive will obtain and provide to the Company a copy of any
such described agreement.
13. Severability.
(a) The Executive agrees that the covenants and agreements contained in
Section 5, 6, 7 and 8 of this Agreement are of the essence of this Agreement;
that each of such covenants is reasonable and necessary to protect and preserve
the interests and properties of the Company and the Business of the Company;
that the Company is engaged in and throughout the Area in the Business of the
Company; that irreparable loss and damage will be suffered by the Company should
the Executive breach any of such covenants and agreements; that each of such
covenants and agreements is separate, distinct and severable not only from the
other of such covenants and agreements but also from the other and remaining
provisions of this Agreement; that the unenforceability of any such covenant or
agreement shall not affect the validity or enforceability of any other such
covenant or agreement or any other provision or provisions of this Agreement;
and that, in addition to other remedies available to it, the Company shall be
entitled to both temporary and permanent injunctions to prevent a breach or
contemplated breach by the Executive of any of such covenants or agreements. In
the event that the Company should seek an injunction hereunder, the Executive
waives any requirement that the Company post a bond or any other security.
(b) In the event that the Executive shall breach any of the covenants
set forth in Section 5, 6, 7 or 8 hereof, the running of the period of the
restriction set forth in such Section shall be tolled during the continuation of
any such breach by the Executive, and the running of the period of such
restrictions shall commence only upon compliance by the Executive with the terms
of the applicable Section.
14. Expenses of the Executive.
(a) All costs and expenses (including reasonable legal, accounting and
other advisory fees) incurred by the Executive to enforce his rights under this
Agreement, including but not limited to his rights to receive the compensation
payable pursuant to Sections 3 and 4 hereof, upon written demand by the
Executive to the Company shall be promptly advanced or reimbursed to the
Executive or paid directly, on a current basis, by the Company or its
successors.
11
<PAGE> 13
(b) If at any time during the term of this Agreement or afterwards
there should arise any dispute as to the rights of the Executive under this
Agreement, the Company agrees, upon written demand by the Executive to the
Company (and the Executive shall be entitled, upon application to any court of
competent jurisdiction, to the entry of a mandatory injunction, without the
necessity of posting any bond with respect thereto, compelling the Company)
promptly to provide sums sufficient to pay on a current basis (either directly
or by reimbursing the Executive) the Executive's costs and reasonable attorneys'
fees (including, without limitation, expenses of investigation and disbursements
for the fees and expenses of experts) incurred by the Executive in connection
with any such dispute or any litigation, regardless of whether the Executive is
the prevailing party in such dispute or litigation; provided that, the court in
which such litigation is first initiated determines with respect to this
obligation, upon application of either party hereto, that the Executive did not
initiate such litigation frivolously. Under no circumstances shall the Executive
be obligated to pay or reimburse the Company for any attorneys' fees, costs or
expenses incurred by the Company. The provisions of this Section 14 shall
survive the expiration or termination of this Agreement.
15. No Set-off by the Executive.
The existence of any claim, demand, action or cause of action by the
Executive against the Company, or any subsidiary or Affiliate of the Company,
whether predicated upon this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of any of its rights hereunder.
16. Amendment.
This Agreement and the exhibits attached hereto may be altered,
amended, modified or superseded only by a writing executed by both of the
parties hereto.
17. Assignment; Entire Agreement.
(a) This Agreement may be assigned by the Company and shall inure to
the benefit of any such assignee. The waiver by the Company of any breach of
this Agreement by the Executive shall not be effective unless in writing, and no
such waiver shall constitute the waiver of the same or another breach on a
subsequent occasion.
(b) This Agreement and those provisions of prior employment agreements
(if any) between the Executive and the Company which are expressly stated to
survive the termination or the replacement of any such agreement embody the
entire agreement of the parties hereto relating to the employment by the Company
of the Executive in the capacity herein stated.
12
<PAGE> 14
IN WITNESS WHEREOF, the Company and the Executive have each caused this
Agreement to be executed and delivered as of the date first shown above.
THE COMPANY:
NORRELL CORPORATION
By: /s/ Mark Hain
----------------------------------------
(Date)
Title: V.P.
-------------------------------------
THE EXECUTIVE:
/s/ James Ernest Riddle 5/30/97
--------------------------------------------
James Ernest Riddle (Date)
13
<PAGE> 15
EXHIBIT A
The Area shall be within 25 miles of each office listed on the attached
Schedule 1 to this Exhibit A.
THE COMPANY:
NORRELL CORPORATION
By: /s/ Mark Hain
----------------------------------------
(Date)
Title: V.P.
-------------------------------------
THE EXECUTIVE:
/s/ James Ernest Riddle 5/30/97
--------------------------------------------
James Ernest Riddle (Date)
14
<PAGE> 16
Schedule 1
MASTERS 2/6/97
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
MAIL CHARGE STREET ADDRESS COMPANY NAME STATE ZIP
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1005 74-731300-1005 2001 GATEWAY PLACE NORRELL WEST CA 95110-
- -------------------------------------------------------------------------------------------------
1007 74-731300-1007 1512 J. EATONTON HWY NORRELL S.E. GA 30605-
- -------------------------------------------------------------------------------------------------
1010 74-731300-1010 1040 CROWN POINTE PKWY NORRELL S E GA 30338-
- -------------------------------------------------------------------------------------------------
1012 74-731300-1012 3535 PIEDMONT RD NE NORRELL S E GA 30305-
- -------------------------------------------------------------------------------------------------
1013 74-731300-1013 1404 SOUTHLAKE PLAZA DR NORRELL S E GA 30260-
- -------------------------------------------------------------------------------------------------
1014 74-731300-1014 2980 COBB PKWY NORRELL S E GA 30339-
- -------------------------------------------------------------------------------------------------
1016 74-731300-1016 1895 GA HWY 20 NORRELL S E GA 30208-
- -------------------------------------------------------------------------------------------------
1017 74-731300-1017 3150 HOLCOMB BRIDGE RD NE NORRELL S E GA 30071-
- -------------------------------------------------------------------------------------------------
1018 74-731300-1018 740 WENDELL CT NORRELL S E GA 30336-
- -------------------------------------------------------------------------------------------------
1021 70-123205-1021 2901 UNIVERSITY AVE NORRELL FRANCHISE GA 31907-
- -------------------------------------------------------------------------------------------------
1022 70-123205-1022 9101 BURNET ROAD NORRELL FRANCHISE TX 78758-
- -------------------------------------------------------------------------------------------------
1024 70-123205-1024 668 N. ORLANDO AVE NORRELL F R FL 32751-
- -------------------------------------------------------------------------------------------------
1025 70-123205-1025 130 E COLONIAL DR NORRELL F R FL 32801-
- -------------------------------------------------------------------------------------------------
1026 70-123205-1026 600 W AMELIA ST NORRELL F R FL 32801-
- -------------------------------------------------------------------------------------------------
1028 74-731300-1028 6360 N W 5TH WAY NORRELL S E FL 33309-
- -------------------------------------------------------------------------------------------------
1029 74-731300-1029 8375 NORTHWEST 12TH ST NORRELL S E FL 33126-
- -------------------------------------------------------------------------------------------------
1030 74-731300-1030 1321 RUTHERFORD LN NORRELL C/O XEROX TX 78753-
- -------------------------------------------------------------------------------------------------
1031 74-731300-1031 8102 BLANDING BLVD NORRELL S E FL 32244-
- -------------------------------------------------------------------------------------------------
1034 74-731300-1034 629 GREEN VALLEY RD NORRELL S E NC 27408-
- -------------------------------------------------------------------------------------------------
1037 70-123205-1037 204 SPRING ST NORRELL F R GA 31201-
- -------------------------------------------------------------------------------------------------
1038 70-123205-1038 3643 28TH ST SE NORRELL F R MI 49512-
- -------------------------------------------------------------------------------------------------
1042 70-123205-1042 6025 LEE HWY NORRELL F R TN 37421-
- -------------------------------------------------------------------------------------------------
1050 70-123205-1050 401 WHITNEY AVE NORRELL F R LA 70056-
- -------------------------------------------------------------------------------------------------
1051 70-123205-1051 3929 VETERANS VLVD NORRELL FR LA 70002-
- -------------------------------------------------------------------------------------------------
1053 74-731300-1053 379 HWY 51 N NORRELL C MS 38606-
- -------------------------------------------------------------------------------------------------
1055 74-731300-1055 4350 N FAIRFAX DR NORRELL S E VA 22203-
- -------------------------------------------------------------------------------------------------
1056 74-731300-1056 2001 PENNSYLVANIA AVE NW NORRELL S E DC 20006-
- -------------------------------------------------------------------------------------------------
1059 74-731300-1059 2727 ALLEN PKWY NORRELL C 1059/16 TX 77019-
- -------------------------------------------------------------------------------------------------
1060 74-731300-1060 14015 SOUTHWEST FREEWAY NORRELL C TX 77478-
- -------------------------------------------------------------------------------------------------
1062 74-731300-1062 6305 IVY LANE NORRELL S E MD 20770-
- -------------------------------------------------------------------------------------------------
1065 74-731300-1065 511 E JOHN CARPENTER FREE NORRELL C TX 75062-
- -------------------------------------------------------------------------------------------------
1066 74-731300-1066 16475 DALLAS PKWY NORRELL C TX 75248-
- -------------------------------------------------------------------------------------------------
1069 74-731300-1069 100 E 15TH ST NORRELL C TX 76102-
- -------------------------------------------------------------------------------------------------
1071 74-731300-1071 1770 KIRBY PKWY NORRELL C TN 38138-
- -------------------------------------------------------------------------------------------------
1072 74-731300-1072 4740 SHELBY DR NORRELL C TN 38118-
- -------------------------------------------------------------------------------------------------
1073 70-123205-1073 3005 W. LAKE MARY BLVD NORRELL FR FL 32746-
- -------------------------------------------------------------------------------------------------
1075 70-123205-1075 555 SOUTH MEMORIAL NORRELL F R OK 74112-
- -------------------------------------------------------------------------------------------------
1080 74-731300-1080 410 17TH ST NORRELL W CO 80202-
- -------------------------------------------------------------------------------------------------
1084 74-731300-1084 14001 E ILIFF AVE NORRELL W CO 80014-
- -------------------------------------------------------------------------------------------------
1086 74-731300-1086 1447 YORK RD NORRELL S E MD 21093-
- -------------------------------------------------------------------------------------------------
1087 74-731300-1087 9311 SAN PEDRO NORRELL CENTRAL TX 78216-
- -------------------------------------------------------------------------------------------------
1089 74-731300-1089 601 JEFFERSON ST NORRELL C/O M W KEL TX 77002-
- -------------------------------------------------------------------------------------------------
1094 70-123205-1094 762 SOUTH GOLDENROD NORRELL FRANCHISE FL 32872-
- -------------------------------------------------------------------------------------------------
1095 70-123205-1095 2868 ZELDA ROAD NORRELL FRANCHISE AL 36106-
- -------------------------------------------------------------------------------------------------
1100 70-123205-1100 1798 THOMASVILLE RD NORRELL F R FL 32303-
- -------------------------------------------------------------------------------------------------
1101 70-123205-1101 180 FRANKLIN TURNPIKE NORRELL FRANCHISE NJ 07430-
- -------------------------------------------------------------------------------------------------
1109 70-123205-1109 4995 LACROSS RD NORRELL F R SC 29406-
- -------------------------------------------------------------------------------------------------
1110 70-123205-1110 1284 WOODRUFF RD NORRELL F R SC 29607-
- -------------------------------------------------------------------------------------------------
1110 63-731300-1005 2001 GATEWAY PLACE NORRELL W CA 95110-
- -------------------------------------------------------------------------------------------------
1114 70-123205-1114 1144 PELICAN BAY DR NORRELL F R FL 32119-
- -------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE> 17
MASTERS 2/6/97
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
MAIL CHARGE STREET ADDRESS COMPANY NAME STATE ZIP
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1115 70-123205-1115 1855 LAKELAND DR NORRELL F R MS 39216-
- -------------------------------------------------------------------------------------------------
1116 70-123205-1116 1321 SECOND ST NORRELL F R KY 42420-
- -------------------------------------------------------------------------------------------------
1117 74-731300-1117 5728 MAJOR BLVD NORRELL FRANCHISE FL 32819-
- -------------------------------------------------------------------------------------------------
1119 70-123205-1119 293 EAST COLUMBIA NORRELL F R MI 49015-
- -------------------------------------------------------------------------------------------------
1124 70-123205-1124 1801 SARNO RD NORRELL F R FL 32935-
- -------------------------------------------------------------------------------------------------
1126 70-123205-1126 1305 GRAND CENTRAL AVE NORRELL F R WV 26105-
- -------------------------------------------------------------------------------------------------
1127 70-123205-1127 611 WEST HIGHWAY 6 NORRELL F R TX 76710-
- -------------------------------------------------------------------------------------------------
1128 70-123205-1128 2303 S E 17TH ST NORRELL F R FL 34471-
- -------------------------------------------------------------------------------------------------
1129 70-123205-1129 1233 SHELBURNE RD NORRELL F R VT 05403-
- -------------------------------------------------------------------------------------------------
1132 74-731300-1132 50 PUBLIC SQ NORRELL C OH 43604-
- -------------------------------------------------------------------------------------------------
1134 70-123205-1134 150 GREENLEAF AVE NORRELL F R NH 03801-
- -------------------------------------------------------------------------------------------------
1140 74-731300-1140 124 N SUMMIT TD NORRELL C OH 43604-
- -------------------------------------------------------------------------------------------------
1144 74-731300-1144 8901 ATLANTIC BLVD NORRELL FRANCHISE FL 32824-
- -------------------------------------------------------------------------------------------------
1145 70-731300-1145 35 EAST GAY STREET NORRELL F R OH 43215-
- -------------------------------------------------------------------------------------------------
1149 74-731300-1149 8011 PHILLIPS HWY NORRELL S E FL 32256-
- -------------------------------------------------------------------------------------------------
1152 74-731300-1152 3221 W BIG BEAVER RD NORRELL C MI 48084-
- -------------------------------------------------------------------------------------------------
1153 74-731300-1153 17187 N LAUREL PK DR NORRELL C MI 48152-
- -------------------------------------------------------------------------------------------------
1160 74-731300-1160 2509 N MAYFAIR RD NORRELL C WI 53226-
- -------------------------------------------------------------------------------------------------
1161 74-731300-1161 6933 W BROWNDEER RD NORRELL C WI 53223-
- -------------------------------------------------------------------------------------------------
1168 70-123205-1168 9011 ARBORETUM PKWY NORRELL F R VA 23236-
- -------------------------------------------------------------------------------------------------
1169 70-123205-1169 1514 MOFFETT ST NORRELL F R CA 93905-
- -------------------------------------------------------------------------------------------------
1170 74-731300-1170 1 MID AMERICA PLAZA NORRELL C IL 60181-
- -------------------------------------------------------------------------------------------------
1172 74-731300-1172 8912 MID SOUTH AVE NORRELL C MS 38654-
- -------------------------------------------------------------------------------------------------
1173 74-731300-1173 70 BULLSBORO DR NORRELL S E GA 30263-
- -------------------------------------------------------------------------------------------------
1174 74-731300-1174 575 W PIKE ST NORRELL S E GA 30245-
- -------------------------------------------------------------------------------------------------
1176 70-123205-1176 5620 H CRAWFORDSVILLE RD NORRELL FR SPEEDWA IN 46224-
- -------------------------------------------------------------------------------------------------
1177 74-731300-1177 1275 PEACHTREE ST NE NORRELL S E (1695) GA 30309-
- -------------------------------------------------------------------------------------------------
1178 74-731300-1178 150 E PONCE DE LEON AVE NORRELL S E GA 30030-
- -------------------------------------------------------------------------------------------------
1179 74-731300-1171
- -------------------------------------------------------------------------------------------------
1179 74-731300-1179 6100 FAIRVIEW NORRELL NC 28210-
- -------------------------------------------------------------------------------------------------
1180 74-731300-1180 FREEDOM BUSINESS CNTR NORRELL FINANCIAL S PA 19406-
- -------------------------------------------------------------------------------------------------
1181 74-731300-1181 10561 BARKLEY NORRELL C KS 66212-
- -------------------------------------------------------------------------------------------------
1183 70-123205-1183 2313 SILVERDALE DRIVE NORRELL FR TN 37601-
- -------------------------------------------------------------------------------------------------
1187 70-123205-1187 415 SILAS DEANE HWY NORRELL STAFFING SE CT 06109-
- -------------------------------------------------------------------------------------------------
1189 70-123205-1189 120 RT 17 N NORRELL F R NJ 07652-
- -------------------------------------------------------------------------------------------------
1190 74-731300-1190 5402 PARKDALE DR NORRELL C MN 55416-
- -------------------------------------------------------------------------------------------------
1192 74-731300-1192 3033 W JEFFERSON ST NORRELL C IL 60435-
- -------------------------------------------------------------------------------------------------
1194 63-731300-1194 940 S. COAST DR NORRELL FINANCIAL S CA 92626-
- -------------------------------------------------------------------------------------------------
1195 74-731300-1195 610 FREEDOM BUSINESS CTR NORRELL N E PA 19406-
- -------------------------------------------------------------------------------------------------
1196 74-731300-1196 1001 JEFFERSON PLAZA NORRELL N E DE 19801-
- -------------------------------------------------------------------------------------------------
1198 74-731300-1198 4700 SOUTH MILLS AVE NORRELL FINANCIAL S AZ 85282-
- -------------------------------------------------------------------------------------------------
1199 74-731300-1199 200 STATE ST NORRELL N E PA 19063-
- -------------------------------------------------------------------------------------------------
1202 74-731300-1202 930 N NATIONAL PKWY NORRELL C IL 60173-
- -------------------------------------------------------------------------------------------------
1203 74-731300-1203 35 E WACKER DR NORRELL C IL 60601-
- -------------------------------------------------------------------------------------------------
1204 70-123205-1204 3767 RT 36 E NORRELL F R IL 62521-
- -------------------------------------------------------------------------------------------------
1205 74-731300-1205 9923 SOUTHWEST HGWY NORRELL MIDWEST IL 60453-
- -------------------------------------------------------------------------------------------------
1209 70-123205-1209 349 W. WEBSTER AVE NORRELL F R MI 49440-
- -------------------------------------------------------------------------------------------------
1211 63-731300-1211 550 CALIFORNIA AVE NORRELL FINANCIAL S CA 94301-
- -------------------------------------------------------------------------------------------------
1212 74-731300-1212 9399 W HIGGINS RD NORRELL C IL 60018-
- -------------------------------------------------------------------------------------------------
1214 74-731300-1214 35 EAST WACKER DR NORRELL FINANCIAL S IL 60601-
- -------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE> 18
MASTERS 2/6/97
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
MAIL CHARGE STREET ADDRESS COMPANY NAME STATE ZIP
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1215 70-123205-1215 8720 CASTLE CREEK PKWY NORRELL FRANCHISE IN 46250-
- -------------------------------------------------------------------------------------------------
1218 74-731300-1218 3020 CANTON RD NORRELL S E GA 30066-
- -------------------------------------------------------------------------------------------------
1219 70-123205-1219 1326 W N BLVD NORRELL F R FL 34748-
- -------------------------------------------------------------------------------------------------
1220 74-731300-1220 2001 COMMERCE ST NORRELL CENTRAL MS 38901-
- -------------------------------------------------------------------------------------------------
1221 70-123205-1221 5505 S. OLD U.S. HWY 23 NORRELL FRANCHISE MI 48116-
- -------------------------------------------------------------------------------------------------
1222 70-123205-1222 303 LANDMARK DR NORRELL F R IL 61761-
- -------------------------------------------------------------------------------------------------
1223 70-123205-1223 16 BERRYHILL RD NORRELL F R SC 29210-
- -------------------------------------------------------------------------------------------------
1224 70-123205-1224 5728 MAJOR BLVD NORRELL F R FL 32819-
- -------------------------------------------------------------------------------------------------
1226 70-123205-1226 4100 CENTER PONITE DR NORRELL F R FL 33916-
- -------------------------------------------------------------------------------------------------
1228 70-123205-1228 1209 NW 12TH AVE NORRELL F R FL 32601-
- -------------------------------------------------------------------------------------------------
1231 70-123205-1231 5925 COUNCIL ST NORRELL F R IA 52402-
- -------------------------------------------------------------------------------------------------
1236 70-123205-1236 100 EAST 6TH ST NORRELL FR C/O CARG FL 33843-
- -------------------------------------------------------------------------------------------------
1237 70-123205-1237 9700 KINGSTON PIKE NORRELL F R TN 37922-
- -------------------------------------------------------------------------------------------------
1245 70-123205-1245 805 S MAIN NORRELL F R KS 67202-
- -------------------------------------------------------------------------------------------------
1247 70-123205-1247 237 MAIN ST NORRELL F R PA 18519-
- -------------------------------------------------------------------------------------------------
1248 70-123205-1248 1215 E MARKET ST NORRELL F R PA 17403-
- -------------------------------------------------------------------------------------------------
1250 70-123205-1250 3462 B STELLHORN RD NORRELL F R IN 46815-
- -------------------------------------------------------------------------------------------------
1253 70-123205-1253 228 SOUTH MAIN NORRELL F R TX 75766-
- -------------------------------------------------------------------------------------------------
1254 70-123205-1254 640 ROMENCE RD NORRELL F R MI 49002-
- -------------------------------------------------------------------------------------------------
1255 70-123205-1255 105 E JEFFERSON BLVD NORRELL FR IN 46601-
- -------------------------------------------------------------------------------------------------
1257 70-123205-1257 500 N. CONGRESS AVE NORRELL FR IN 47715-
- -------------------------------------------------------------------------------------------------
1259 74-731300-1259 50 N. FRONT STREET NORRELL FINANCIAL S TN 38103-
- -------------------------------------------------------------------------------------------------
1260 70-123205-1260 2109 LUANN LANE NORRELL FRANCHISE WI 53713-
- -------------------------------------------------------------------------------------------------
1265 74-731300-1265 1811 LOSANTIVILLE RD NORRELL C OH 45237-
- -------------------------------------------------------------------------------------------------
1266 70-123205-1266 3300 WASHTENAW NORRELL FR MI 48104-
- -------------------------------------------------------------------------------------------------
1269 70-123205-1269 4455 EAST 5TH ST NORRELL F R AZ 85711-
- -------------------------------------------------------------------------------------------------
1271 70-123205-1271 612 W GLEN AVE NORRELL F R IL 61614-
- -------------------------------------------------------------------------------------------------
1273 70-123205-1273 4616 E STATE ST NORRELL FR IL 61108-
- -------------------------------------------------------------------------------------------------
1274 70-123205-1274 701 DEVONSHIRE DR NORRELL FR IL 61820-
- -------------------------------------------------------------------------------------------------
1275 70-123205-1275 2435 E. KIMBERLY RD NORRELL FR IA 52722-
- -------------------------------------------------------------------------------------------------
1276 70-123205-1276 4525 OUTER LOOP NORRELL FRANCHISE KY 40219-
- -------------------------------------------------------------------------------------------------
1277 74-731300-1277 11330 OLIVE ST RD NORRELL C MO 63141-
- -------------------------------------------------------------------------------------------------
1278 70-123205-1278 2040 S HURSTBOURNE NORRELL FR KY 40220-
- -------------------------------------------------------------------------------------------------
1279 70-123205-1279 111 W FIRST ST NORRELL FR OH 45402-
- -------------------------------------------------------------------------------------------------
1281 70-123205-1281 1054 A BELLEFONTAINE AVE NORRELL FR OH 45804-
- -------------------------------------------------------------------------------------------------
1282 74-731300-1282 700 BLUE RIDGE RD NORRELL SE NC 27606-
- -------------------------------------------------------------------------------------------------
1283 70-123205-1283 2050 CHERRY VALLEY RD NORRELL FR OH 43055-
- -------------------------------------------------------------------------------------------------
1287 70-123205-1287 5728 MAJOR BLVD NORRELL FR FL 32819-
- -------------------------------------------------------------------------------------------------
1289 70-123205-1289 2829 WESTOWN PKWY NORRELL FR IA 50266-
- -------------------------------------------------------------------------------------------------
1290 70-123205-1290 5615 "0" STREET NORRELL FR NE 68510-
- -------------------------------------------------------------------------------------------------
1291 70-123205-1291 102 AMARYLLIS NORRELL FR LA 70503-
- -------------------------------------------------------------------------------------------------
1292 70-123205-1292 147 JACKSON ST SE NORRELL FR VA 24060-
- -------------------------------------------------------------------------------------------------
1294 70-123205-1294 3737 PRINCETON DR N.E. NORRELL FR NM 87107-
- -------------------------------------------------------------------------------------------------
1295 70-123205-1295 404 BNA DR NORRELL FR TN 37217-
- -------------------------------------------------------------------------------------------------
1296 70-123205-1296 201 MERCHANT ST NORRELL FR HI 96813-
- -------------------------------------------------------------------------------------------------
1302 63-731300-1302 440 N MOUNTAIN AVE NORRELL W CA 91786-
- -------------------------------------------------------------------------------------------------
1303 63-731300-1303 940 S COAST DR NORRELL W CA 92626-
- -------------------------------------------------------------------------------------------------
1304 63-731300-1304 4909 LAKEWOOD BLVD NORRELL W CA 90712-
- -------------------------------------------------------------------------------------------------
1306 63-731300-1306 101 S KRAEMER BLVD NORRELL W CA 92670-
- -------------------------------------------------------------------------------------------------
1308 63-731300-1308 4525 WILSHIRE BLVD NORRELL W CA 90010-
- -------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE> 19
MASTERS 2/6/97
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
MAIL CHARGE STREET ADDRESS COMPANY NAME STATE ZIP
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1309 63-731300-1309 10920 WILSHIRE BLVD NORRELL W CA 90024-
- -------------------------------------------------------------------------------------------------
1311 63-731300-1311 790 E COLORADO NORRELL W CA 91101-
- -------------------------------------------------------------------------------------------------
1312 63-731300-1312 5950 CANOGA AVE NORRELL W CA 91367-
- -------------------------------------------------------------------------------------------------
1313 74-731300-1313 5685 COTTLE RD NORRELL CA 92513-
- -------------------------------------------------------------------------------------------------
1314 63-731300-1314 2377 CRENSHAW BLVD NORRELL W CA 90501-
- -------------------------------------------------------------------------------------------------
1316 63-731300-1316 1 CIVIC PLAZA DR NORRELL W CA 90745-
- -------------------------------------------------------------------------------------------------
1322 63-731300-1322 333 MARKET ST NORRELL W CA 94105-
- -------------------------------------------------------------------------------------------------
1323 70-123205-1323 1451 RIVER PARK DR NORRELL FR CA 95815-
- -------------------------------------------------------------------------------------------------
1328 70-123205-1328 1151 BROAD STREET NORRELL FR NJ 07702-
- -------------------------------------------------------------------------------------------------
1329 70-123205-1329 11715 BRICKSOME AVE NORRELL FR LA 70816-
- -------------------------------------------------------------------------------------------------
1333 74-731300-1333 2228 WEST NORTHERN AVE NORRELL NORTHSIDE AZ 85021-
- -------------------------------------------------------------------------------------------------
1334 74-731300-1334 4602 WEST INDIAN SCHOOL R NORRELL WESTSIDE AZ 85031-
- -------------------------------------------------------------------------------------------------
1335 74-731300-1335 3923 SOUTH MCCLINTOCK DR NORRELL EASTSIDE AZ 85282-
- -------------------------------------------------------------------------------------------------
1340 70-123205-1340 50 HANCOCK ST NORRELL FR IN 47274-
- -------------------------------------------------------------------------------------------------
1349 70-123205-1349 801 D S COLLEGE RD NORRELL FR NC 28403-
- -------------------------------------------------------------------------------------------------
1351 70-123205-1351 1300 MARKET ST NORRELL FR PA 17043-
- -------------------------------------------------------------------------------------------------
1352 70-123205-1352 8910 WESLEYAN RD NORRELL FR IN 46268-
- -------------------------------------------------------------------------------------------------
1353 74-731300-1353 PLAZA 273 NORRELL N E DE 19702-
- -------------------------------------------------------------------------------------------------
1356 74-731300-1356 428 BLVD OF THE ALLIES NORRELL STAFFING SE PA 15219-
- -------------------------------------------------------------------------------------------------
1363 74-731300-1363 5980 STOENRIDGE DR NORRELL W CA 94588-
- -------------------------------------------------------------------------------------------------
1364 70-123205-1364 491 AMHURST ST NORRELL FR NH 03060-
- -------------------------------------------------------------------------------------------------
1367 70-123205-1367 107 AUDUBON RD NORRELL FR MA 01880-
- -------------------------------------------------------------------------------------------------
1368 70-731300-1368 934 CLEVELAND DR NORRELL FR NY 14225-
- -------------------------------------------------------------------------------------------------
1374 70-731300-1374 216 AQUARIS DR NORRELL FR AL 35209-
- -------------------------------------------------------------------------------------------------
1377 70-123205-1377 2000 EDGEWOOD DR NORRELL FR FL 33803-
- -------------------------------------------------------------------------------------------------
1378 70-123205-1378 1109 EDEN WAY N NORRELL F R VA 23320-
- -------------------------------------------------------------------------------------------------
1382 70-123205-1382 3240 CHRISTY WAY NORRELL FR MI 48603-
- -------------------------------------------------------------------------------------------------
1383 74-731300-1383 1655 WALNUT ST NORRELL W CO 80302-
- -------------------------------------------------------------------------------------------------
1385 70-123205-1385 525 E COUNTY LINE RD NORRELL FR NJ 08701-
- -------------------------------------------------------------------------------------------------
1386 70-731300-1386 3760 S HIGHLAND DR NORRELL FR UT 84106-
- -------------------------------------------------------------------------------------------------
1400 74-731300-1400 120 BROADWAY NORRELL NE NY 10271-
- -------------------------------------------------------------------------------------------------
1401 74-731300-1401 420 LEXINGTON AVE NORRELL NE NY 10017-
- -------------------------------------------------------------------------------------------------
1403 70-123205-1403 3894 COURNEY ST NORRELL FR PA 18017-
- -------------------------------------------------------------------------------------------------
1404 70-123205-1404 311-D SOUTH SAGE AVE NORRELLFR AL 36606-
- -------------------------------------------------------------------------------------------------
1405 74-731300-1405 3 EDGEWATER DR NORRELL N.E. MA 02062-
- -------------------------------------------------------------------------------------------------
1406 70-123205-1406 400 RESRVOIR AVE NORRELL FR RI 29073-
- -------------------------------------------------------------------------------------------------
1407 70-123205-1407 2027 W MARCH LANE NORRELL FR CA 95207-
- -------------------------------------------------------------------------------------------------
1410 74-731300-1410 2001 RT 46 E NORRELL N E NJ 07054-
- -------------------------------------------------------------------------------------------------
1411 70-731300-1411 8755 S.W. CITIZENS DR NORRELL FR OR 97070-
- -------------------------------------------------------------------------------------------------
1412 70-123205-1412 353 EAST 3RD STREET NORRELL FR VA 24153-
- -------------------------------------------------------------------------------------------------
1415 70-123205-1415 11414 W CTR BLVD NORRELL FR NE 68144-
- -------------------------------------------------------------------------------------------------
1416 70-123205-1416 110 WOLF RD NORRELL FR NY 12205-
- -------------------------------------------------------------------------------------------------
1417 74-731300-1417 1450 PARKSIDE AVE NORRELL N.E. NJ 08638-
- -------------------------------------------------------------------------------------------------
1419 70-123205-1419 3985 ONEIDA ST NORRELL FR NY 13413-
- -------------------------------------------------------------------------------------------------
1421 70-123205-1421 73-140 HWY 111 NORRELL FR CA 92260-
- -------------------------------------------------------------------------------------------------
1425 63-731300-1425 6480 WEATHERS PLACE NORRELL WEST CA 92121-
- -------------------------------------------------------------------------------------------------
1428 70-123205-1428 2797 BECHELLI LN NORRELL FR CA 96002-
- -------------------------------------------------------------------------------------------------
1430 70-731300-1430 2950 S. RAINBOW BLVD NORRELL FR NV 89102-
- -------------------------------------------------------------------------------------------------
1431 74-731300-1431 545 MADISON AVE ACCURATE TEMPORAR NY 10022-
- -------------------------------------------------------------------------------------------------
1449 74-731300-1449 3535 PIEDMONT RD BLDG 14 NORRELL C/O MCI GA 30305-
- -------------------------------------------------------------------------------------------------
</TABLE>
Page 4
<PAGE> 20
MASTERS 2/6/97
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
MAIL CHARGE STREET ADDRESS COMPANY NAME STATE ZIP
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1457 74-731300-1457 10700 PARKRIDGE BLVD NORRELL SE VA 22091-
- -------------------------------------------------------------------------------------------------
1459 70-123205-1459 100 COMMERCE BLVD NORRELL FR PA 18702-
- -------------------------------------------------------------------------------------------------
1461 74-731300-1461 CENTRE SQ E 1500 MARKET S NORRELL N E PA 19102-
- -------------------------------------------------------------------------------------------------
1470 74-731300-1470 1801 S FEDERAL HWY NORRELL FL 33483-
- -------------------------------------------------------------------------------------------------
1471 74-731300-1471 100 MILL PLAIN RD NORRELL NE CT 06811-
- -------------------------------------------------------------------------------------------------
1474 74-731300-1474 4350 E. CAMELBACK ROAD NORRELL W AZ 85018-
- -------------------------------------------------------------------------------------------------
1478 70-123205-1478 176 LIBERTY ST NORRELL FR OR 97301-
- -------------------------------------------------------------------------------------------------
1481 74-731300-1481 4212-B WEST WENDOVER AVE NORRELL S.E. NC 27407-
- -------------------------------------------------------------------------------------------------
1482 74-731300-1482 14670 NE 8YH ST NORRELL W WA 98007-
- -------------------------------------------------------------------------------------------------
1486 70-123205-1486 201 S EMERSON AVE NORRELL FR IN 46143-
- -------------------------------------------------------------------------------------------------
1496 74-731300-1496 197 HWY 8 S NORRELL NE NJ 08816-
- -------------------------------------------------------------------------------------------------
1501 91-123105-9901 25 SHEPPARD AVENUE WEST NORRELL FR CANADA ON M2N6S
- -------------------------------------------------------------------------------------------------
1502 91-123105-9901 1 CITY CENTRE NORRELL CANADA ON L5B1M
- -------------------------------------------------------------------------------------------------
1506 91-123105-9901 130 DUFFERIN AVE NORRELL CANADA C/O ON N6A5R
- -------------------------------------------------------------------------------------------------
1509 91-123105-9901 4940 NO 3 ROAD NORRELL CANADA BC V6X3A
- -------------------------------------------------------------------------------------------------
1561 91-123105-9901 2 BLOOR STREET WEST NORRELL CANADA ON M4W3E
- -------------------------------------------------------------------------------------------------
1564 91-123105-9901 1201-1166 ALBERNI STREET NORRELL CANADA BC V63Z3
- -------------------------------------------------------------------------------------------------
1600 70-123205-1600 500 HARVEY RD NORRELL FR NH 03103-
- -------------------------------------------------------------------------------------------------
1601 70-123205-1601 529 ENON SPRINGS RD E NORRELL FR TN 37167-
- -------------------------------------------------------------------------------------------------
1602 70-731300-1602 5401 S W 33RD ST NORRELL FR OK 73179-
- -------------------------------------------------------------------------------------------------
1603 70-123205-1603 9445 INDIANAPOLIS BLVD NORRELL FR IN 46322-
- -------------------------------------------------------------------------------------------------
1604 70-123205-1604 208 LAFAYETTE CENTER NORRELL FR ME 04043-
- -------------------------------------------------------------------------------------------------
1606 70-123205-1606 1646 PLAINFIELD AVE NORRELL FR WI 53545-
- -------------------------------------------------------------------------------------------------
1609 70-123205-1609 1855 BOYRUM NORRELL FR IA 52240-
- -------------------------------------------------------------------------------------------------
1610 70-123205-1610 777 S 8TH ST NORRELL FR ID 83702-
- -------------------------------------------------------------------------------------------------
1611 70-123205-1611 2301 LUCIEN WY NORRELL FR FL 32751-
- -------------------------------------------------------------------------------------------------
1612 70-123205-1612 2445 LEE RD NORRELL FR FL 32789-
- -------------------------------------------------------------------------------------------------
1623 70-123205-1623 14 S WATERS ST E NORRELL FR WI 53538-
- -------------------------------------------------------------------------------------------------
1624 74-731300-1624 7601 B NORTHWEST PKWY NORRELL SE GA 30202-
- -------------------------------------------------------------------------------------------------
1626 74-731300-1626 1715 N. WEST SHORE BLVD NORRELL SE FL 33607-
- -------------------------------------------------------------------------------------------------
1627 74-731300-1627 8927 J M KEYNES DRIVE NORRELL SERVICES NC 28262-
- -------------------------------------------------------------------------------------------------
1628 70-731300-1628 5331 SW MAC ADAM ST NORRELL FR OR 97201-
- -------------------------------------------------------------------------------------------------
1631 74-731300-1631 1100 MAIN STREET NORRELL CENTRAL MO 64105-
- -------------------------------------------------------------------------------------------------
1633 63-731300-1633 AVON REFINERY NORRELL W CA 94533-
- -------------------------------------------------------------------------------------------------
1636 63-731300-1636 11766 WILSHIRE BLVD NORRELL W CA 90025-
- -------------------------------------------------------------------------------------------------
1637 74-731300-1637 140 GRAND ST NORRELL NE NY 10601-
- -------------------------------------------------------------------------------------------------
1638 74-731300-1638 9399 W. HIGGINS RD NORRELL DIVISION IL 60018-
- -------------------------------------------------------------------------------------------------
1639 74-731300-1639 3 RAVINIA DR NORRELL SE C/O MCI GA 30346-
- -------------------------------------------------------------------------------------------------
1642 70-123205-1642 966 N COCA BLVD NORRELL FR FL 32922-
- -------------------------------------------------------------------------------------------------
1644 70-123205-1644 3373 W VINE ST NORRELL FR FL 34741-
- -------------------------------------------------------------------------------------------------
1645 70-123205-1645 500 SOUTHBOROUGH DR NORRELL FR ME 04106-
- -------------------------------------------------------------------------------------------------
1647 74-731300-1647 18 TREMONT STREET NORRELL NE MA 02108-
- -------------------------------------------------------------------------------------------------
1651 74-731300-1651 5769 38TH AVE N NORRELL S E FL 33710-
- -------------------------------------------------------------------------------------------------
1653 74-731300-1653 1651 OLD MEADOW RD AMERICAN TECH RESO VA 22102-
- -------------------------------------------------------------------------------------------------
1657 74-731300-1657 197 HIGHWAY 18 /o Prudential NJ 08816--
- -------------------------------------------------------------------------------------------------
1658 70-123205-1658 270 MUNOZ RIVIERA AVE NORRELL FR PR 00918-
- -------------------------------------------------------------------------------------------------
1661 74-731300-1661 5445 DTC PKWY NORRELL FINANCIAL S CO 80111-
- -------------------------------------------------------------------------------------------------
1664 70-123205-1664 ONE OLD DOVER RD NORRELL FR NH 03867-
- -------------------------------------------------------------------------------------------------
1665 70-731300-1665 10208 WEST BROAD ST NORRELL FR VA 23060-
- -------------------------------------------------------------------------------------------------
1666 70-731300-1666 1244 PARIS PIKE NORRELL FR KY 40324-
- -------------------------------------------------------------------------------------------------
</TABLE>
Page 5
<PAGE> 21
MASTERS 2/6/97
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
MAIL CHARGE STREET ADDRESS COMPANY NAME STATE ZIP
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1668 70-123205-1668 4210 WEST MAPLE AVE NORRELL FR MI 49221-
- -------------------------------------------------------------------------------------------------
1670 74-731300-1670 35 E GAY ST NORRELL FINANCIAL S OH 43215-
- -------------------------------------------------------------------------------------------------
1671 74-731300-1671 2445 LEE ROAD NORRELL FINANCIAL S FL 32789-
- -------------------------------------------------------------------------------------------------
1672 70-123205-1672 734 W NATIONAL RD NORRELL FR OH 45377-
- -------------------------------------------------------------------------------------------------
1673 74-731300-1673 911 WASHINGTON AVE NORRELL MO 63101-
- -------------------------------------------------------------------------------------------------
1674 70-731300-1674 315 ALBERTA DR NORRELL F R NY 14226-
- -------------------------------------------------------------------------------------------------
1675 74-731300-1675 191 EAST MAIN ST NORRELL S E GA 30114-
- -------------------------------------------------------------------------------------------------
1676 63-731300-1676 550 CALIFORNIA AVE NORRELL WEST CA 94301-
- -------------------------------------------------------------------------------------------------
1677 70-123205-1677 115 SOUTH 4TH ST NORRELL FR WI 53094-
- -------------------------------------------------------------------------------------------------
1678 74-731300-1678 6822 STAGE ROAD NORRELL CENTRAL TN 38134-
- -------------------------------------------------------------------------------------------------
1680 74-731300-1680 6901 ROCKLEDGE DRIVE NORRELL SE MD 20817-
- -------------------------------------------------------------------------------------------------
1683 74-731300-1683 100 HIGHTOWER BLVD NORRELL PA 15205-
- -------------------------------------------------------------------------------------------------
1685 70-123205-1685 1420 MCCANN NORRELL FR TX 75601-
- -------------------------------------------------------------------------------------------------
1686 70-123205-1686 138 RIVER RD NORRELL FR MA 01810-
- -------------------------------------------------------------------------------------------------
1688 74-731300-1688 1889 F STREET NORRELL/WORLDBANK DC 20433-
- -------------------------------------------------------------------------------------------------
1689 63-731300-1689 6280 MANCHESTER BLVD NORRELL WEST CA 90620-
- -------------------------------------------------------------------------------------------------
1690 70-123205-1690 119 DAVIS RD NORRELL FR GA 30907-
- -------------------------------------------------------------------------------------------------
1693 70-123205-1693 5727 20TH STREET NORRELL FR (1124VER FL 32966-
- -------------------------------------------------------------------------------------------------
1697 74-731300-1697 IN HOUSE NORRELL SYSTEMS SE
- -------------------------------------------------------------------------------------------------
1706 74-731300-1706 2620 THOUSAND PAKS BLVD NORRELL C TN 38118-
- -------------------------------------------------------------------------------------------------
1710 74-731300-1710 4401 CONNECTICTU AVE NW NORRELL SE DC 20008-
- -------------------------------------------------------------------------------------------------
1712 74-731300-1712 629 GREEN VALLEY RD NORRELL S E NC 27408-
- -------------------------------------------------------------------------------------------------
1721 74-731300-1721 16475 DALLAS PARKWAY NORRELL CENTRAL TX 75248-
- -------------------------------------------------------------------------------------------------
1742 74-731300-1742 5445 DTC PKWY NORRELL W CO 80111-
- -------------------------------------------------------------------------------------------------
1743 74-731300-1743 9399 W. HIGGINS RD NORRELL CENTRAL IL 60018-
- -------------------------------------------------------------------------------------------------
1748 74-731300-1748 100 W. BIG BEAVER RD NORRELL CENTRAL MI 48084-
- -------------------------------------------------------------------------------------------------
1750 74-731300-1750 111 DEERWOOD RD NORRELL WEST CA 94583-
- -------------------------------------------------------------------------------------------------
1757 74-731300-1757 635 WEST 7TH ST NORRELL CENTRAL OH 45203-
- -------------------------------------------------------------------------------------------------
1759 74-731300-1759 3030 OLD RANCH PKWY NORRELL W CA 90740-
- -------------------------------------------------------------------------------------------------
1761 74-731300-1761 11766 WILSHIRE BLVD NORRELL W CA 90025-
- -------------------------------------------------------------------------------------------------
1779 74-731300-1779 940 SOUTH COAST DRIVE NORRELL FINANCIAL S CA 92626-
- -------------------------------------------------------------------------------------------------
1788 74-731300-1788 4350 E. CAMELBACK RD NORRELL AZ 85018-
- -------------------------------------------------------------------------------------------------
1793 74-731300-1793 780 3RD AVE NORRELL N E NY 10017-
- -------------------------------------------------------------------------------------------------
1810 70-731300-1810 12065 GREYWING SQUARE NORRELL FRANCHISE VA 22091-
- -------------------------------------------------------------------------------------------------
1813 70-731300-1813 347 ERICSON RD NORRELL FR TN 38018-
- -------------------------------------------------------------------------------------------------
1819 70-731300-1819 1851 HERITAGE LN NORRELL FR CA 95815-
- -------------------------------------------------------------------------------------------------
1825 70-731300-1825 900 JORIE BLVD NORRELL FR IL 60521-
- -------------------------------------------------------------------------------------------------
1841 70-731300-1841 6682 PARKEDGE CIRCLE NORRELL FR WI 53132-
- -------------------------------------------------------------------------------------------------
1843 70-731300-1843 47219 STONECREST DR NORRELL FR MI 48170-
- -------------------------------------------------------------------------------------------------
1846 70-731300-1846 20 SUFFOLK AVENUE NORRELL FR N.E. REGI NJ 07040-
- -------------------------------------------------------------------------------------------------
1847 70-731300-1847 312 CHICASAW COURT NORRELL FR FL 32259-
- -------------------------------------------------------------------------------------------------
1869 70-731300-1869 2675 WINDMILL PKWY NORRELL FR NV 89014-
- -------------------------------------------------------------------------------------------------
1872 70-731300-1872 65 CRESTA VERDE DRIVE NORRELL SERVICES IN CA 90274-
- -------------------------------------------------------------------------------------------------
1873 70-731300-1873 1506 UPAS STREET NORRELL FR CA 92103-
- -------------------------------------------------------------------------------------------------
1901 70-731300-1901 4218 SOUTH STEELE ST NORRELL FRANCHISE WA 98409-
- -------------------------------------------------------------------------------------------------
1903 74-731300-1903 3 EDGEWATER DR NORRELL FIN STAFF MA 02062-
- -------------------------------------------------------------------------------------------------
1904 74-731300-1904 155 WESTMINSTER ST NORRELL FIN STAFF RI 02903-
- -------------------------------------------------------------------------------------------------
1905 70-123205-1905 #1 PENCIL STREET NORRELL FRANCHISE TN 37160-
- -------------------------------------------------------------------------------------------------
1910 74-731300-1910 2228 WEST NORTHERN NORRELL WEST AZ 85021-
- -------------------------------------------------------------------------------------------------
1911 70-123205-1911 7120 WYOMING BLVD NORRELL / MCI CALL C NM 87109-
- -------------------------------------------------------------------------------------------------
</TABLE>
Page 6
<PAGE> 22
MASTERS 2/6/97
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
MAIL CHARGE STREET ADDRESS COMPANY NAME STATE ZIP
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1912 74-731300-1912 710 ASH STREET MCI MASS MARKETS CO 80222-
- -------------------------------------------------------------------------------------------------
1916 74-731300-1916 2 MID AMERICA PLAZA NORRELL SERVICES IL 60181-
- -------------------------------------------------------------------------------------------------
1919 74-731300-1919 707 17TH STREET NORRELL C/O MCI CO 80202-
- -------------------------------------------------------------------------------------------------
2516 73-731300-2516 135 WEST WELLS DYNAMIC WI 53203-
- -------------------------------------------------------------------------------------------------
2517 73-123205-2517 33607 SEVEN MILE RD DYNAMIC MI 48152-
- -------------------------------------------------------------------------------------------------
2557 73-123205-2557 6303 BARFIELD RD DYNAMIC GA 30328-
- -------------------------------------------------------------------------------------------------
2570 73-123205-2570 570 LAKE COOK RD DYNAMIC IL 60015-
- -------------------------------------------------------------------------------------------------
2574 73-123205-2574 34 S BROADWAY DYNAMIC NY 10601-
- -------------------------------------------------------------------------------------------------
2578 73-123205-2578 100 E BIG BEAVER DYNAMIC MI 48083-
- -------------------------------------------------------------------------------------------------
2598 73-123205-2598 260 PEACHTREE ST DYNAMIC GA 30303-
- -------------------------------------------------------------------------------------------------
3200 42-731300-3200 1651 OLD MEADOW RD AMERICAN TECHNICAL VA 22102-
- -------------------------------------------------------------------------------------------------
3575 42-731300-3575 529 MAIN ST NORCROSS C/O NORRE MA 02129-
- -------------------------------------------------------------------------------------------------
3900 42-731300-3900 10777 WESTHEIMER ANATEC TX 77042-
- -------------------------------------------------------------------------------------------------
7510 63-731300-7510 2 MID AMERICA PLAZA TASCOR C/O BANK OF IL 60181-
- -------------------------------------------------------------------------------------------------
ACCI 40-531300-4490 30 S WACKER DR IL 60606-
- -------------------------------------------------------------------------------------------------
AHEI 40-531300-4441 2000 W AMERITECH CTR DR TASCOR C/O AMERITE IL 60196-
- -------------------------------------------------------------------------------------------------
AMKN 0LD ORCHARD RD TASCOR C/O IBM NY 10504-
- -------------------------------------------------------------------------------------------------
BACI 200 W. JACKSON BANK OF AMERICA IL 60606-
- -------------------------------------------------------------------------------------------------
BDRC 40-531300-4208 6300 DIAGONAL HWY TASCOR C/O IBM - CO 80301-
- -------------------------------------------------------------------------------------------------
BOCF 40-531300-4200 1798 NW 40TH ST TASCOR FL 33431-
- -------------------------------------------------------------------------------------------------
BOWL 3535 PIEDMONT RD CAM INHOUSE GA 30305-
- -------------------------------------------------------------------------------------------------
BRMA 3500 BLUE LAKE DR TASCOR C/O IBM AL 35243-
- -------------------------------------------------------------------------------------------------
BSSC 40-731300-8715 00000-
- -------------------------------------------------------------------------------------------------
BTHM 40-531300-4223 6710 ROCKLEDGE DR TASCOR C/O IBM MD 20817-
- -------------------------------------------------------------------------------------------------
BTJN 40-531300-4464 34 EXCHANGE PLACE TASCOR C/O BANKERS NJ 07302
- -------------------------------------------------------------------------------------------------
BTNY 40-531300-4462 130 LIBERTY ST TASCOR C/O BANKERS NY 10006-
- -------------------------------------------------------------------------------------------------
BUZC 40-731300-4821 111 DEERWOOD RD TASCOR CA 94583-
- -------------------------------------------------------------------------------------------------
CAM 40-731300-4778 3701 RED OAK LANE NORRELL SERVICES IL 60532-
- -------------------------------------------------------------------------------------------------
CCW 40-531300-4477 404 WYMAN ST TASCOR C/O IBM CALL MA 02154-
- -------------------------------------------------------------------------------------------------
CHRN 40-531300-4310 8501 IBM DRIVE TASCOR C/O IBM NC 28262-
- -------------------------------------------------------------------------------------------------
CHTT 40-531300-4327 2 UNION SQUARE TASCOR C/O IBM TALL TN 37402-
- -------------------------------------------------------------------------------------------------
CIAI 40-531300-4326 330 N. WABASH AVE TASCOR C/O IBM 1 IB IL 60611-
- -------------------------------------------------------------------------------------------------
COLO 40-531300-4197 140 E TOWN ST TASCOR C/O IBM OH 43215-
- -------------------------------------------------------------------------------------------------
CSPC 40-531300-4423 1900 GARDENS OF THE GODS TASCOR C/O HEWLLET CO 80907-
- -------------------------------------------------------------------------------------------------
CTGT 40-731300-8010 329 W. FRANKLIN ST LAQUINTA CALL CENT TX 77963--
- -------------------------------------------------------------------------------------------------
</TABLE>
Page 7
<PAGE> 23
MASTERS 2/6/97
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
MAIL CHARGE STREET ADDRESS COMPANY NAME STATE ZIP
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DAYN 40-531300-4526 431 RIDGE ROAD TASCOR C/O IBM BLD NJ 08810
- -------------------------------------------------------------------------------------------------
DLTX 40-531300-4501 1605 LBJ FREEWAY TASCOR C/O IBM TX 75234-
- -------------------------------------------------------------------------------------------------
EATX 40-531300-4550 700 LAVACA TASCOR/ERNST & Y0U TX 78701-
- -------------------------------------------------------------------------------------------------
EDSN 40-531300-4331 27 COMMERCE DR TASCOR C/O IBM NJ 07016
- -------------------------------------------------------------------------------------------------
EKRD 40-531300-4476 8333 BRYAN DIARY RD TASCOR C/O ISSC/EC FL 34647-
- -------------------------------------------------------------------------------------------------
EMRG 40-531300-4251 EMORY POST OFFICE TASCOR C/O EMORY GA 30322-
- -------------------------------------------------------------------------------------------------
EPSC 40-531300-4181 20770 MEDRONA TASCOR C/O EPSON A CA 90503-
- -------------------------------------------------------------------------------------------------
EQIV 40-531300-4187 2 N RIVERSIDE PLAZA TASCOR/EQUITY INVE IL 60606-
- -------------------------------------------------------------------------------------------------
ERYG 40-531300-4418 1225 CONNETICUT AV N W TASCOR C/O ERNST & DC 20036-
- -------------------------------------------------------------------------------------------------
EYHT 40-531300-4456 1221 MCKINNEY TASCOR C/O IBM TX 77010-
- -------------------------------------------------------------------------------------------------
FHKN 40-531300-4392 RT 9 MERRIT PARK TASCOR C/O IBM BLD NY 12524-
- -------------------------------------------------------------------------------------------------
FITCH 55 GLENLAKE UPS GA 30304-
- -------------------------------------------------------------------------------------------------
FRLF 6301 N W 5TH WAY TASCOR C/O IBM FL 33309-
- -------------------------------------------------------------------------------------------------
GNVF 2511 N W 41ST ST TASCOR C/O IBM FL 32606-
- -------------------------------------------------------------------------------------------------
GRSC 220 N. MAIN ST TASCOR C/O IBM SC 29601-
- -------------------------------------------------------------------------------------------------
HCPN 40-531300-4119 500 MAMARONEK AVE TASCOR C/O IBM NY 10528-
- -------------------------------------------------------------------------------------------------
HJNY 40-531300-4559 1580 ROUTE 52 TASCOR C/O IBM NY 12533-
- -------------------------------------------------------------------------------------------------
HNTA 40-531300-4487 620 DISCOVERY DR TASCOR C/O IBM AL 35806-
- -------------------------------------------------------------------------------------------------
HPCC 40-531300-4532 19410 HOMESTEAD ROAD TASCOR C/O HEWLETT CA 95014-
- -------------------------------------------------------------------------------------------------
HPNN 40-531300-4366 399 PARK AVE TASCOR C/O HEWLETT NY 10022-
- -------------------------------------------------------------------------------------------------
HPRC 40-531300-4442 8000 FOOTHILLS BLVD TASCOR C/O HEWLETT CA 95747-
- -------------------------------------------------------------------------------------------------
IBGM 40-531300-4496 800 N FREDERICK TASCOR C/O IBM COR MD 20879-
- -------------------------------------------------------------------------------------------------
IBMP 40-531300-4478 5267 E SIMPSON FERRY RD TACOR C/O IBM PA 17055-
- -------------------------------------------------------------------------------------------------
ILNJ 40-531300-4431 283 KING GEORGE RD TASCOR/ISSC/LUCENT NJ 07059-
- -------------------------------------------------------------------------------------------------
ISWN 40-531300-4296 67 WHIPPANY RD TASCOR/ISSC/LUCENT NJ 07981-
- -------------------------------------------------------------------------------------------------
JAXF 10407 CENTURION PKWY NO. TASCOR C/O IBM FL 32256-
- -------------------------------------------------------------------------------------------------
JCKM 6360 INTERSTATE 55 NO. TASCOR C/O IBM MS 39211-
- -------------------------------------------------------------------------------------------------
JSWD P O BOX 871 JIMMY SMALLWOOD GA 30279-
- -------------------------------------------------------------------------------------------------
KINT 40-531300-4327 1000 PRESTON PL NORTH TASCOR C/O IBM TN 37660-
- -------------------------------------------------------------------------------------------------
KLEN 40-731300-4768 207 E OHIO ST TASCOR IL 60611-
- -------------------------------------------------------------------------------------------------
KNXT 40-531300-4340 900 S GAY ST TASCOR C/O IBM 600 TN 37902-
- -------------------------------------------------------------------------------------------------
KODC 40-531300-4281 9952 EASTMAN PK DR TASCOR C/O KODAK CO 80551-
- -------------------------------------------------------------------------------------------------
LKSG 40-531300-4090 4111 NORTHSIDE PKWY TASCOR C/O IBM GA 30327-
- -------------------------------------------------------------------------------------------------
LPNN 40-531300-4503 220 E 42ND ST TASCOR C/O LASALLE NY 10017-
- -------------------------------------------------------------------------------------------------
MAD 40-731300-4805 590 MADISON AVE TASCOR 7TH FLOOR NY 10022-
- -------------------------------------------------------------------------------------------------
MARK 74-731300-1055 502 GOLD VALLEY RD MARK FREE VA 22508-
- -------------------------------------------------------------------------------------------------
MAV 40-731300-4805 590 MADISON AVE TASCOR C/O IBM NY 10022-
- -------------------------------------------------------------------------------------------------
MCN 40-531300-4487 688 WALNUT ST TASCOR C/O IBM GA 31201-
- -------------------------------------------------------------------------------------------------
MEMT 40-531300-4528 3106 DIRECTORS ROW TASCOR TN 38131-
- -------------------------------------------------------------------------------------------------
MFWP 404-531300-447 580 E SWEDESFORD RD TACOR C/O IBM PA 19087-
- -------------------------------------------------------------------------------------------------
MIAF 40-531300-4236 1 ALHAMBRA PLAZA TASCOR C/O IBM FL 33134-
- -------------------------------------------------------------------------------------------------
MLVN 40-531300-4367 538 BROAD HOLLOW RD TASCOR C/O HEWLETT NY 11747-
- -------------------------------------------------------------------------------------------------
MNTA 40-531300-4487 4525 EXECUTIVE PARK DR TASCOR C/O IBM AL 36116-
- -------------------------------------------------------------------------------------------------
MOBA 40-531300-4487 820 S. UNIVERSITY BLVD TASCOR C/O IBM AL 36609-
- -------------------------------------------------------------------------------------------------
MOR 63-731300-4747 34 TAYLOR ST HERBERT MORROW NY 11743-
- -------------------------------------------------------------------------------------------------
MPST 860 RIDGE LAKE BLVD TASCOR C/O IBM TN 38120-
- -------------------------------------------------------------------------------------------------
MSNN 40-531300-4549 1251 AVE OF THE AMERICAS TASCOR/MORGAN STA NY 10020-
- -------------------------------------------------------------------------------------------------
MTPN 40-531300-4354 RT 9 TOWN OF MY PLEASANT TASCOR C/O IBM NY 10591-
- -------------------------------------------------------------------------------------------------
NBCN 40-5331300-448 30 ROCKEFELLER PLAZA TASCOR C/O NBC ROO NY 10112-
- -------------------------------------------------------------------------------------------------
NSHT 40-531300-4327 150 FOURTH AVE N. TASCOR /IBM FIRST U TN 37219-
- -------------------------------------------------------------------------------------------------
</TABLE>
Page 8
<PAGE> 24
MASTERS 2/26/97
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
MAIL CHARGE STREET ADDRESS COMPANY NAME STATE ZIP
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NWPA 40-531300-4565 632 S. MAIN ST TASCOR C/O NABISCO PA 18702-
- -------------------------------------------------------------------------------------------------
OBII 40-531300-4316 2702 BUTTERFIELD RD TASCOR IL 60521-
- -------------------------------------------------------------------------------------------------
PALN RT 9 W PO BOX 1001 TASCOR C/0 IBM MAI NY 10964-
- -------------------------------------------------------------------------------------------------
PAYB 1770 BATHGATE ROAD TASCOR C/0 IBM COR PA 18017-
- -------------------------------------------------------------------------------------------------
PECO 2301 MARKET ST TASCOR C/0 ISSC/PEC PA 19103-
- -------------------------------------------------------------------------------------------------
PHXA 40-531300-4220 2929 N CENTRAL TASCOR C/0 IBM AZ 85012-
- -------------------------------------------------------------------------------------------------
PIBN 40-531300-4521 1 MACK DRIVE TASCOR C/0 IBM NJ 07653-
- -------------------------------------------------------------------------------------------------
PINJ 40-531300-4425 53 KNIGHTSBRIDGE RD TASCOR C/0 IBM NJ 08855-
- -------------------------------------------------------------------------------------------------
PKWT 40-531300-4303 1503 LBJ FREEWAY TASCOR C/0 IBM TX 75234-
- -------------------------------------------------------------------------------------------------
PMUV 40-531300-4383 4100 BERMUDA HUNDRED RD TASCOR C/0 PHILLIP VA 23831-
- -------------------------------------------------------------------------------------------------
PRMN 40-531300-4312 W 120 CENTURY RD TASCOR C/0 HEWLET NJ 07652
- -------------------------------------------------------------------------------------------------
RALN 40-731300-4746 4813 EMPEROR BLVD TASCOR NC 27703-
- -------------------------------------------------------------------------------------------------
ROLI 40-531300-4397 1701 WEST GOLF RD TASCOR C/0 ROLM S IL 60008-
- -------------------------------------------------------------------------------------------------
RVEG 40-531300-4075 1500 RIVER EDGE PRKWY TASCOR C/0 SKILL DY GA 30328-
- -------------------------------------------------------------------------------------------------
SBWN 40-731300-4805 44 SOUTH BROADWAY TASCOR C/0 IBM NY 10601-
- -------------------------------------------------------------------------------------------------
SBYC 40-731300-4805 150 KETTLETON RD TASCOR C/0 IBM CT 06488
- -------------------------------------------------------------------------------------------------
SJCC 40-531300-4360 555 BAILEY ROAD TASCOR / IBM SANTA CA 95141-
- -------------------------------------------------------------------------------------------------
SNJC 40-531300-4280 5685 COTTLE RD TASCOR C/0 IBM CA 95123-
- -------------------------------------------------------------------------------------------------
SOMN 40-731300-4727 RT 100 SE116 TASCOR C/0 IBM NY 10589-
- -------------------------------------------------------------------------------------------------
SRSI 40-531300-4188 3333 BEVERLY BLVD TASCOR C/0 SEARS IL 60179-
- -------------------------------------------------------------------------------------------------
SRW 40-531300-4373 200 N COBB PKWY TASCOR C/0 UPS GA 30062-
- -------------------------------------------------------------------------------------------------
STFN 40-531300-4258 100 LONG MEADOW RD TASCOR C/0 IBM NY 10979-
- -------------------------------------------------------------------------------------------------
STLW 40-531300-4453 500 S FRONT ST TASCOR SITE MGR WA 98108-
- -------------------------------------------------------------------------------------------------
SVNG 450 MALL BLVD TASCOR C/0 IBM GA 31406-
- -------------------------------------------------------------------------------------------------
THJN 40-531300-4546 1580 ROUTE 52 TASCOR C/0 IBM NY 12533-
- -------------------------------------------------------------------------------------------------
TIGC 40-531300-4551 1855 GATEWAY BLVD TASCOR/TGI INSURAN CA 94520-
- -------------------------------------------------------------------------------------------------
TMPF 40-531300-4056 3405 W DR MLK JR BLVD TASCOR FL 33607-
- -------------------------------------------------------------------------------------------------
TRIT 40-731300-4722 5605 MACARTHUR BLVD TASCOR SUITE 3 TX 75038-
- -------------------------------------------------------------------------------------------------
TTEX 40-531300-4552 5205 N. OCONNOR BLVD TIG INSIRANCE / TASC TX 75039-
- -------------------------------------------------------------------------------------------------
TWB 40-531300-4553 1889 F STREET TASCOR C/0 WORLD DC 20433-
- -------------------------------------------------------------------------------------------------
TWD 500 COLUMBUS AVE TASCOR C/0 IBM NY 10594-
- -------------------------------------------------------------------------------------------------
WCH 40-731300-4805 1133 WESTCHESTER AVE TASCOR C/0 IBM NY 10604-
- -------------------------------------------------------------------------------------------------
XHDG 40-531300-4548 5240 PANOLA IND. BLVD HARLAND SRC GA 30035-
- -------------------------------------------------------------------------------------------------
YKTN 40-531300-4185 ROUTE 134 TASCOR C/0 IBM NY 10598-
- -------------------------------------------------------------------------------------------------
</TABLE>
Page 9
<PAGE> 25
EXHIBIT B
The duties of the Chief Operating Officer ("COO") of the Company shall be as
follows:
To be responsible for the development of the operating plans for the
Company, its subsidiaries, divisions, and functions and all changes to
the plans, consistent with the direction of the Chief Executive
Officer, the Chairman of the Board, and the Board of Directors;
To supervise, manage, and direct the businesses and affairs of the
Company, its subsidiaries, divisions, and functions reporting to the
COO, including the development of long and short term objectives,
policies, and operating plans of the Company, its subsidiaries,
divisions, and functions, all to be consistent with the strategic
direction of the Company or as directed by the Chief Executive Officer,
the Chairman of the Board, and the Board of Directors of the Company;
To ensure that adequate plans for future development and growth of the
Company, its subsidiaries, divisions, and functions are prepared, and
to participate in and direct such preparations;
To present such plans for review and approval by the Chief Executive
Officer of the Company;
To be responsible for meeting the Company, its subsidiaries, divisions,
and functions plans, objectives, and goals;
To present proposed operating and capital budgets for review and
approval by the Chief Executive Officer of the Company;
To plan for the development of personnel resources within the Company,
its subsidiaries, divisions, and functions;
To direct and supervise the performance of the key executives of the
Company, its subsidiaries, divisions, and functions reporting to the
COO;
To represent the Company, its subsidiaries, divisions, and functions as
appropriate in its relationships with major customers, suppliers,
competitors, employees, stockholders, government agencies, professional
societies and the public;
To cause all books, reports, statements, and certificates of the
Company, its subsidiaries, divisions, and functions to be properly kept
and filed as required by law;
To sign and execute contracts in the name of the Company, its
subsidiaries, divisions, and functions, or to delegate such duties to
other authorized officers or employees of the Company, its
subsidiaries, divisions, and functions; and
15
<PAGE> 26
To perform such other duties and responsibilities as the Chief Executive
Officer, Chairman, and the Board of Directors of the Company may require from
time to time.
THE COMPANY:
NORRELL CORPORATION
By: /s/ Mark Hain
----------------------------------------
(Date)
Title: V.P.
-------------------------------------
THE EXECUTIVE:
/s/ James Ernest Riddle 5/30/97
--------------------------------------------
James Ernest Riddle (Date)
16
<PAGE> 27
EXHIBIT C
None.
THE COMPANY:
NORRELL CORPORATION
By: Mark Hain
----------------------------------------
(Date)
Title: V.P.
-------------------------------------
THE EXECUTIVE:
/s/ James Ernest Riddle 5/30/97
--------------------------------------------
James Ernest Riddle (Date)
17
<PAGE> 28
EXHIBIT D
The Executive shall earn a bonus corresponding to the Company's
achievement of its 52 Week Pre-tax Profit Plan (as presented to the Board of
Directors) as follows:
<TABLE>
<CAPTION>
% of Company's 52 Week Pre-tax Profit Plan Achieved Bonus Amount($)
- --------------------------------------------------- ---------------
<S> <C>
80% 200,000
90% 240,000
100% 280,000
105% 320,000
110% 360,000
115% 400,000
</TABLE>
An equitable adjustment to the Pre-tax Profit Plan shall be made to account for
acquisitions and divestitures; extraordinary items shall be excluded from all
calculations.
THE COMPANY:
NORRELL CORPORATION
By: /s/ Mark Hain
----------------------------------------
(Date)
Title: V.P.
-------------------------------------
THE EXECUTIVE:
/s/ James Ernest Riddle 5/30/97
--------------------------------------------
James Ernest Riddle (Date)
18
<PAGE> 29
EXHIBIT E
16. Covenant of Non-Solicitation. Until January 31, 1999, Employee, either on
Employee's own account or for any person, firm or company, shall not solicit,
interfere with or induce, or attempt to induce, any employee of the Company or
any of its subsidiaries or affiliates to leave their employment or to breach
their employment agreement, if any.
17. Covenant of Non-Disparagement and Cooperation. Employee agrees not to make
any remarks disparaging the conduct or character of the Company or any of its
subsidiaries or affiliates, their agents, employees, officers, directors,
successors or assigns ("Ryder"). In addition, Employee agrees to cooperate with
Ryder in any litigation or administrative proceedings (e.g., EEOC charges)
involving any matters with which Employee was involved during Employee's
employment with the Company. The Company shall reimburse Employee for travel
expenses approved by the Company incurred in providing such assistance.
18. Covenant Against Competition. Until January 31, 1999, Employee shall not
engage or become a partner, director, officer, principal, employee, consultant,
investor, creditor or stockholder, directly or indirectly, in any business,
proprietorship, association, firm or corporation not owned or controlled by the
Company and/or any of its subsidiaries or affiliates which is engaged or
proposes to engage or hereafter engages in a business competitive directly or
indirectly with the business conducted by the Company and/or any of its
subsidiaries or affiliates in any geographic area where such business of the
Company and/or any of its subsidiaries or affiliates is conducted, without the
prior written consent of the Company's Chairman, President and Chief Executive
Officer. This prohibition includes, but is not limited to, the purchaser of the
Company's consumer truck rental and move management business. However, Employee
is not prohibited from owning one percent (1%) or less of the outstanding
capital stock of any corporation whose stock is listed on a national securities
exchange.
19. Specific Remedy. Employee acknowledges and agrees that if Employee commits a
material breach of the Covenant of Confidentiality (Paragraph 15), Covenant of
Non-solicitation (Paragraph 16), Covenant of Non-Disparagement and Cooperation
(Paragraph 17) or Covenant Against Competition (Paragraph 18), the Company shall
have the right to have the obligations of Employee specifically enforced by any
court having appropriate jurisdiction on the grounds that any such breach will
cause irreparable injury to the Company, and that money damages will not provide
an adequate remedy to the Company. Employee further acknowledges and agrees that
the obligations contained in Paragraphs 15, 16, 17 and 18 of this Agreement and
Release are fair, do not unreasonably restrict Employee's future employment and
business opportunities, and are commensurate with the compensation arrangements
set out in this Agreement and Release.
20. Applicable Law. This Agreement and Release shall be governed by and
construed according to the laws of the state of Florida.
21. Withholding and Taxation. All payments under this Agreement and Release
shall be less applicable withholding taxes and other proper deductions consented
to in writing by Employee or required by applicable law or regulation.
Additionally, the payments and benefits under this Agreement and Release may
result in imputed income to Employee and may be included in either Employee's
W-2 earnings statements or 1099 statements.
19
<PAGE> 1
Exhibit 10.41.2
SECOND AMENDMENT TO
THE NORRELL CORPORATION
401(K) RETIREMENT SAVINGS
PLAN (1994 RESTATEMENT)
<PAGE> 2
SECOND AMENDMENT TO THE
NORRELL CORPORATION 401(K) RETIREMENT SAVINGS PLAN
(1994 RESTATEMENT)
THIS SECOND AMENDMENT to the Norrell Corporation 401(k) Retirement
Savings Plan (1994 Restatement) (the "Plan") is made on this ____ day of
December, 1996, by Norrell Corporation (the "Company"), to be effective as of
January 1, 1997.
W I T N E S S E T H :
WHEREAS, Section 12.1 of the Plan provides that the Company has the
right to amend the Plan at any time; and
WHEREAS, the Company desires to amend the Plan to comport with changes
in the manner in which "highly compensated employees" are determined under the
Internal Revenue Code, and to provide that Matching Contributions may be made to
certain Management Services Employees;
NOW, THEREFORE, the Plan hereby is amended as follows:
I.
Section 1.45 is amended in its entirety to read as follows:
1.45 Highly Compensated Employee shall mean an
employee of an Affiliate who is described in subsection (a)
below, as modified by subsections (b), (c) and (d) hereof. The
determination of who is a Highly Compensated Employee shall be
made separately for (i) the Controlling Company and its
Affiliates, and (ii) each Related Company and its Affiliates.
(a) General Rule.
(1) An employee who, at any time during the
current or immediately preceding Plan Year, owned [or was
considered as owning within the constructive ownership rules
of Code ss.318 as modified by Code ss.416(i)(1)(B)(iii)] more
than 5 percent of the outstanding stock of a corporate
Affiliate or stock possessing more than 5 percent of the total
combined voting power of all stock of a corporate Affiliate or
more than 5 percent of the capital or profits interest in a
noncorporate Affiliate; or
<PAGE> 3
(2) An employee who received Compensation
from Affiliates during the immediately preceding Plan Year in
excess of $80,000 [as adjusted by the Internal Revenue Service
under Code ss.414(q) (which references Code ss.415(d) of the
regulations promulgated thereunder for cost of living
increases)] and, if elected by the Company for such preceding
Plan Year, was within the group consisting of the most highly
compensated 20 percent of the employees of all Affiliates for
such preceding Plan Year.
(b) Excluded Employees. For purposes of
subsection (a)(2) hereof, the following may be excluded when
determining the most highly compensated 20 percent of the
employees and the total number of officers, respectively, of
an Affiliate:
(1) employees who have not completed 6
months of service;
(2) employees who normally work fewer than
17-1/2 hours per week;
(3) employees who normally work during not
more than 6 months during any Plan Year;
(4) employees who have not attained age 21;
and
(5) except to the extent provided in
Treasury Regulations, employees who are included in a
unit of employees covered by an agreement which the
Secretary of Labor finds to be a collective
bargaining agreement between employee representatives
and an Affiliate.
(c) Nonresident Aliens. For purposes of this
Section, nonresident aliens who receive no earned income from
an Affiliate which constitutes income from sources within the
United States [as described in Code ss.414(q)(11)] shall not
be treated as employees.
(d) Compliance with Code ss.414(q). The
determination of who is a Highly Compensated Employee,
including all of the parts of that definition, shall be made
in accordance with Code ss.414(q) and the regulations
promulgated thereunder.
II.
New subsections (f) and (g) are added to Section 1.25 as follows:
(f) An Employee who is an active participant in
the Norrell Corporation Nonqualified Deferred Compensation
Plan as of the first day
<PAGE> 4
of the Plan Year and who, based on a reasonable estimate of
such Employee's Compensation for the Plan Year, will be
considered a Highly Compensated Employee for the immediately
following Plan Year; and
(g) An individual who is classified as an
independent contractor or leased employee under a
Participating Company's customary worker classification
practices, regardless of whether such person is an Employee.
III.
Section 1.37 is amended to read as follows:
1.37 Eligible Participant shall mean, for
any Plan Year, any Active Participant (other
than a Management Services, Staffing or
Temporary Services Employee) who was in the
active employ of an Affiliate on the last
day of the Plan Year. Notwithstanding the
foregoing, the term Eligible Participant
shall also include any Management Services
Employee who is designated as eligible to
receive matching contributions in accordance
with ss.2.4 and who was in the active employ
of an Affiliate on the last day of the Plan
Year.
IV.
Section 2.4 is amended to read as follows:
2.4 Limited Participation by Certain
Employees
Notwithstanding anything herein to the
contrary, Management Services Employees (except as provided
below), Staffing Employees and Temporary Services Employees
[provided such Temporary Services Employees have completed
1,000 Hours of Service as provided in ss.3.1(d)] shall be
eligible to make Rollover Contributions and Before-Tax
Contributions to the Plan but shall not be eligible to receive
allocations of Matching Contributions for any period in which
they are employed in such status, as provided in ss.1.37 and
ss.3.2. Notwithstanding the foregoing, to the extent provided
in a written agreement between a Participating Company and a
client, Management Services Employees who are not performing
services for such client shall be eligible to receive Matching
Contributions.
<PAGE> 5
V.
Section 3.2 is amended by revising the parenthetical in the first
sentence thereof to read as follows:
(other than a Staffing or Temporary Services Employee or a
Management Services Employee who is not entitled to receive
Matching Contributions under ss.2.4)
VI.
Schedule B is amended as attached hereto to provide that the rate of
Matching Contributions under the Plan is increased from 25 percent to 50 percent
of a Participant's Before-Tax Contributions.
IN WITNESS WHEREOF, the Company has caused its duly authorized officer
to execute this Amendment on the date first written above.
NORRELL CORPORATION
By: M.L. Smith
------------------------------------
Title: Vice President
Compensation and Benefits
---------------------------------
<PAGE> 6
NORRELL CORPORTATION 401(K) RETIREMENT SAVINGS PLAN
(1994 RESTATEMENT)
SCHEDULE B
MATCHING CONTRIBUTIONS
[See Plan ss.3.2]
(AMENDED EFFECTIVE JANUARY 1, 1997)
For each Active Participant on whose behalf a Participating Company has
made, with respect to a payroll period, any Before-Tax Contributions, such
Participating Company shall make, with respect to such payroll period, a
Matching Contribution equal to 50 percent of the amount of the total of such
Before-Tax Contributions; provided, the total amount of the Matching
Contributions which a Participating Company shall make for any Active
Participant for any payroll period shall not exceed 2 percent of such Active
Participant's Compensation paid by such Participating Company for such payroll
period (that is, the 50-percent Matching Contribution shall not be applied to
the amount of a Before-Tax Contribution that exceeds 4 percent of a
Participant's Compensation for a payroll period), nor shall such amount exceed
(or cause the Contributions to exceed) any of the maximum limitations described
in ss.6.1, ss.6.4 or ss.6.7. The Administrative Committee, in its sole
discretion, may change the 50 percent and 4 percent levels set forth
hereinabove, and any such change shall be effective without amendment to the
Plan.
<PAGE> 1
EXHIBIT 10.42.2
AMENDMENT TO NORRELL
CORPORATION NONQUALIFIED
DEFERRED COMPENSATION PLAN
<PAGE> 2
AMENDMENT TO NORRELL CORPORATION
NONQUALIFIED DEFERRED COMPENSATION PLAN
Section 1.18 of the Plan is amended in its entirety to read as follows:
1.18 Eligible Employee shall mean, for a Plan Year, an individual:
(a) Who is a member of a select group of highly compensated or key
management employees; and
(b) Who has completed 30 days of employment with the Company.
The Administrative Committee shall determine, from time to time and in
its sole discretion, which employees satisfy said criteria, and the
Administrative Committee's determination, whether or not accurate, shall be
binding.
<PAGE> 1
EXHIBIT 11.1
COMPUTATION OF PRIMARY
EARNINGS PER SHARE
<PAGE> 2
NORRELL CORPORATION AND SUBSIDIARIES
COMPUTATION OF PRIMARY EARNINGS PER SHARE
(Dollars and shares in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
--------------------------- --------------------------
November 2, October 27, November 2, October 27,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
INCOME AVAILABLE TO COMMON SHARES
- ---------------------------------
PRIMARY:
Net (loss) income applicable to common stock $ (397) $ 7,275 $24,458 $25,257
======== ======= ======= =======
WEIGHTED AVERAGE SHARES
- -----------------------
PRIMARY:
Common shares 26,723 23,540 24,660 23,408
Common share equivalents applicable to stock options 2,105 2,280 2,087 1,936
-------- ------- ------- -------
Total 28,828 25,820 26,747 25,344
======== ======= ======= =======
EARNINGS PER SHARE
- ------------------
PRIMARY:
Net (loss) income applicable to common stock $ (0.01) $ 0.28 $ 0.91 $ 1.00
======== ======= ======= =======
</TABLE>
<PAGE> 1
EXHIBIT 11.2
COMPUTATION OF FULLY
DILUTED EARNINGS
PER SHARE
<PAGE> 2
NORRELL CORPORATION AND SUBSIDIARIES
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
(Dollars and shares in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
--------------------------- --------------------------
November 2, October 27, November 2, October 27,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
INCOME AVAILABLE TO COMMON SHARES
FULLY DILUTED:
Net (loss) income applicable to common stock $ (397) $ 7,275 $24,458 $25,257
======== ======= ======= =======
WEIGHTED AVERAGE SHARES
FULLY DILUTED:
Common shares 26,723 23,540 24,660 23,407
Common share equivalents applicable to stock options 2,105 2,216 2,106 2,344
-------- ------- ------- -------
Total 28,828 25,756 26,766 25,751
======== ======= ======= =======
EARNINGS PER SHARE (A)
FULLY DILUTED:
Net (loss) income applicable to common stock $ (0.01) $ 0.28 $ 0.91 $ 0.98
======== ======= ======= =======
</TABLE>
(a) This calculation is submitted in accordance with Regulation S-K 601(b)(11)
although not required by footnote 2 to paragraph 14 of APB Opinion No. 15
since it results in dilution of less than 3%.
<PAGE> 1
EXHIBIT 13.1
FINANCIAL DATA
<PAGE> 2
FINANCIAL REVIEW
Selected Consolidated Financial Data
- --------------------------------------------------------------------------------
Norrell Corporation and Subsidiaries
The following Selected Consolidated Financial Data with respect to the Company's
consolidated statements of income for the years ended November 2, 1997, October
27, 1996, and October 29, 1995, and, with respect to the Company's consolidated
balance sheets as of November 2, 1997, and October 27, 1996, have been derived
from the Company's Consolidated Financial Statements for such years which have
been audited by Arthur Andersen LLP, and are included elsewhere herein. The
Selected Consolidated Financial Data with respect to the Company's consolidated
statements of income for the years ended October 30, 1994, and October 31, 1993,
and, with respect to the Company's consolidated balance sheets as of October 29,
1995, October 30, 1994, and October 31, 1993, have been derived from the
Company's Consolidated Financial Statements for such years which have been
audited by Arthur Andersen LLP. The following data should be read in conjunction
with the Company's Financial Statements and the Notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
Fiscal Years Ended Nov. 2, 1997(1) Oct. 27, 1996 Oct. 29, 1995 Oct. 30, 1994 Oct. 31, 1993
- ------------------------------------------------------------------------------------------------------------------------------
(in thousands, except per share amounts)
Income Statement Data:
<S> <C> <C> <C> <C> <C>
Revenues $ 1,300,039 $ 1,013,877 $ 842,360 $ 701,921 $ 576,748
Cost of services 1,014,048 795,013 656,517 543,330 436,287
- ------------------------------------------------------------------------------------------------------------------------------
Gross profit 285,991 218,864 185,843 158,591 140,461
Operating expenses 209,499 169,206 149,745 128,919 117,196
Depreciation and amortization 10,365 5,904 4,261 4,677 3,596
Non-recurring charges 17,700 -- -- -- --
Write-off of goodwill -- -- -- -- 6,584
Write-off of software development costs -- -- -- -- 1,527
Provision for lease, legal and other charges -- -- -- -- 1,381
- ------------------------------------------------------------------------------------------------------------------------------
Income from operations 48,427 43,754 31,837 24,995 10,177
- ------------------------------------------------------------------------------------------------------------------------------
Other income (expense)
Recovery of preferred
stock investment -- -- -- 5,000 --
Interest expense (6,989) (1,200) (365) (1,956) (3,797)
Other (1,986) (1,485) (1,628) (408) (398)
- ------------------------------------------------------------------------------------------------------------------------------
Total Other Income (Expense) (8,975) (2,685) (1,993) 2,636 (4,195)
- ------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations
before income taxes 39,452 41,069 29,844 27,631 5,982
Income taxes 14,994 15,812 12,518 11,827 2,699
- ------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations 24,458 25,257 17,326 15,804 3,283
Discontinued operations:
Loss from operations, net -- -- -- -- (2,909)
(Loss) gain on disposal, net -- -- (348) -- 5,813
Extraordinary item -- -- -- -- (499)
Cumulative effect of change in
accounting principle -- -- -- 3,414 --
- ------------------------------------------------------------------------------------------------------------------------------
Net income $ 24,458 $ 25,257 $ 16,978 $ 19,218 $ 5,688
- ------------------------------------------------------------------------------------------------------------------------------
Earnings (loss) per common share:
Continuing operations $ 0.91 $ 1.00 $ 0.71 $ 0.69 $ 0.13
Discontinued operations -- -- (0.01) -- 0.12
Extraordinary item -- -- -- -- (0.02)
Cumulative effect of change in
accounting principle -- -- -- 0.15 --
- ------------------------------------------------------------------------------------------------------------------------------
Net income $ 0.91 $ 1.00 $ 0.70 $ 0.84 $ 0.23
- ------------------------------------------------------------------------------------------------------------------------------
Weighted average number of shares 26,747 25,344 24,357 22,782 24,872
Consolidated Balance Sheet Data:
Current assets $ 237,879 $ 167,388 $ 138,495 $ 111,735 $ 120,612
Working capital 113,314 64,590 55,492 46,952 30,556
Total assets 438,844 263,231 182,024 153,243 166,274
Long-term debt 60,129 23,316 2,057 386 19,180
Shareholders' equity 207,206 98,032 72,934 67,266 43,600
</TABLE>
(1) Fiscal year included 53 weeks. All other fiscal years included 52 weeks.
<PAGE> 3
Management's Discussion and Analysis of Financial
Condition and Results of Operations
- --------------------------------------------------------------------------------
Norrell Corporation and Subsidiaries
The following discussion should be read in conjunction with the Selected
Consolidated Financial Data and the Consolidated Financial Statements of the
Company and related notes thereto appearing elsewhere in this Annual Report.
Recent Developments
Stock Offering
On July 28, 1997, the Company sold an additional 2,500,000 shares of its common
stock. The net proceeds of $76.1 million were used to reduce indebtedness under
the Company's $150.0 million revolving credit facility.
Acquisitions
On January 2, 1997, the Company acquired all of the outstanding common and
preferred stock and all vested and unvested stock rights of Comtex Information
Systems, Inc. ("Comtex") for $67.0 million of cash plus stock options to acquire
approximately 141,000 shares of Norrell Corporation Common Stock at a weighted
average exercise price of $4.56 per share. Comtex is a New York City-based
provider of information technology services, including systems planning and
development, organizational consulting related to business transformation and
staff augmentation support. Comtex has locations in New York, New York; White
Plains, New York; and Miami, Florida. The acquisition, which was accounted for
under the purchase method, was financed with borrowings under the Company's
revolving credit facility. The results of operations of Comtex are included in
the statements of income beginning January 2, 1997.
On October 17, 1997, the Company acquired all of the assets of IMCOR,
Inc. ("IMCOR") in an all-cash-purchase transaction. IMCOR is based in
Connecticut and provides companies with experienced interim managers and project
leaders in the areas of general management, finance, operations, information
technology, manufacturing, marketing, human resources and strategic planning.
IMCOR has offices in Stamford, Connecticut; Chicago, Illinois; Dallas, Texas;
Los Angeles, California; and New York, New York.
On the last day of the 1997 fiscal year, the Company repurchased its
franchise in Orlando, Florida, consisting of six Staffing Services offices. The
purchase price was composed of cash and Norrell Corporation Common Stock.
Non-recurring Charges
During the fourth quarter of 1997, the Company recorded a charge of $17.7
million, before tax, of which $15.0 million was related to the impairment of
certain management information systems (MIS) development costs. The MIS
development cost write-down resulted from an examination of the Company's
payroll and billing systems. Based on a review made in conjunction with outside
consultants, the system architecture of the weekly payroll system lacked the
required capacity, flexibility and speed to support anticipated volumes.
Additionally, as a consequence of billing system customizations required to meet
the Company's customer and financial reporting requirements, and the resulting
difficulty and cost to upgrade the billing system, the system must be replaced
versus upgraded. A process, supported by outside consultants, is underway to
re-examine long-term business needs and to determine an appropriate technical
solution to the Company's systems requirements. The Company anticipates
completing the technical assessment by the end of the first quarter of fiscal
1998. In the interim, the Company expects no disruption in normal business. The
recognition of this impairment was in accordance with the provisions of
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of."
The remaining $2.7 million charge resulted from the termination of two
businesses that did not meet the Company's expectations: a joint venture formed
in October 1994 of which the Company has a 50% interest and a Staffing Services
business acquired in April 1994 which provided executive training. This charge
was equal to the Company's investment in the joint venture, the acquired
goodwill in the Staffing Services business and estimated costs to terminate
operations of each business.
Teamsters Strike at UPS
The Company's fourth quarter was adversely impacted by the Teamsters strike at
UPS, one of the Company's largest customers. The estimated fourth quarter impact
of the strike was reduced earnings per share of approximately $.04. Although the
strike lasted only two weeks, current revenue levels are at only 75% to 80% of
pre-strike levels. Several locations have not resumed service and bill rates
have been lowered in certain cases as UPS tries to reduce costs. The Company
maintains a strong relationship with UPS and anticipates this relationship to
continue. However, the Company expects the lower revenue level from UPS to
persist in the near future.
General
The Company is organized into three service groups: Staffing Services, which
provides temporary administrative, teleservices and light industrial staffing;
Professional Services, which provides information technology, accounting
staffing and interim executive staffing; and Outsourcing Services, which
provides administrative services and teleservices through contracts in which the
Company assumes responsibility for the results of a client process. The
Company's customers are businesses, professional and service organizations, and
government agencies in the United States and Canada.
Revenue is generally recognized upon the performance of services. Certain
services are performed under long-term contracts and revenue from these
contracts is recognized by the percentage-of-completion method.
A portion of the Company's revenues is attributable to franchised
operations. Employees and customers of the franchised operations are employees
and customers of the Company. The Company includes such revenues and related
direct costs in its revenues and cost of services, respectively. The net
distribution paid to franchisees is based upon a percentage of the gross profit
generated and is included in the Company's selling, general and administrative
expenses.
The fiscal year ended November 2, 1997, is referred to as "1997," the
fiscal year ended October 27, 1996, is referred to as "1996" and the fiscal year
ended October 29, 1995, is referred to as "1995."
<PAGE> 4
Results of Operations
The following table sets forth certain statement of income items as a percentage
of revenues for 1997, 1996 and 1995:
<TABLE>
<CAPTION>
1997(1) 1996 1995
<S> <C> <C> <C>
Revenues 100.0% 100.0% 100.0%
Cost of services 78.0 78.4 77.9
- -------------------------------------------------------------------
Gross profit 22.0 21.6 22.1
Operating expenses 16.1 16.7 17.8
Depreciation and amortization 0.8 0.6 0.5
Non-recurring charges 1.4 -- --
- -------------------------------------------------------------------
Income from operations 3.7 4.3 3.8
- -------------------------------------------------------------------
Other expense
Interest expense (0.5) (0.1) (0.1)
Other (0.2) (0.1) (0.2)
- -------------------------------------------------------------------
Income from continuing operations
before income taxes 3.0 4.1 3.5
Income tax expense 1.1 1.6 1.4
- -------------------------------------------------------------------
Income from continuing operations 1.9 2.5 2.1
- -------------------------------------------------------------------
Net income 1.9 2.5 2.0
- -------------------------------------------------------------------
</TABLE>
(1) Fiscal year included 53 weeks.
The Company operates on a 52-53-week fiscal calendar. A 53rd week occurs
in one of every five or six fiscal years depending on the timing of leap years.
The 1997 fiscal year included 53 weeks compared to 52 weeks for the 1996 and
1995 years. Therefore, 1997 revenues and associated costs and expenses were
impacted by this extra week of operations. If 1997 had been a 52-week year and
the previously discussed non-recurring charges were excluded, comparative
results of operations would have been reported as follows:
<TABLE>
<CAPTION>
Adjusted 1997(1) 1996
<S> <C> <C>
Revenues $ 1,275,051 $ 1,013,877
Cost of services 994,279 795,013
- --------------------------------------------------------------------
Gross profit 280,772 218,864
Operating expenses 206,526 169,206
Depreciation and amortization 10,365 5,904
- --------------------------------------------------------------------
Income from operations 63,881 43,754
Other expense
Interest expense (6,960) (1,200)
Other (1,897) (1,485)
- --------------------------------------------------------------------
Income from operations
before income taxes 55,024 41,069
Income tax expense 20,911 15,812
- --------------------------------------------------------------------
Net income $ 34,113 $ 25,257
- --------------------------------------------------------------------
Earnings per common share $ 1.28 $ 1.00
- --------------------------------------------------------------------
</TABLE>
Excludes the impact of the 53rd week and non-recurring charges.
Year Ended November 2, 1997, Compared to Year Ended October 27, 1996
Revenues increased 28.2%, or $286.2 million, to $1.3 billion in 1997. Staffing
Services revenues grew 19.2% to $882.9 million, and accounted for 67.9% and
73.1% of total 1997 and 1996 revenues, respectively. Staffing Services volume,
as measured by hours that staffing employees worked, increased 13.6% and prices
rose 3.0% compared to 12.4% and 3.9% for 1996. Outsourcing Services revenues
grew 21.4% to $252.6 million. Outsourcing Services revenues from customers other
than IBM increased $31.3 million from 1996 to $91.6 million. Included in
Outsourcing Services revenues was the recognition of $1.8 million and $2.2
million in 1997 and 1996, respectively, of deferred gain from the return in
January 1995 of Company stock held by IBM. Professional Services revenues were
$164.6 million in 1997 compared to $65.1 million in 1996, a 152.9% increase. The
Company added to its Professional Services Group through the acquisitions of
Analytical Technologies, Inc. and ANATEC Canada, Inc. (collectively "ANATEC") in
July, 1996, American Technical Resources, Inc. ("ATR") in August, 1996,
Accounting Resources, Inc. ("ARI") in November, 1996 and Comtex in January,
1997. The accompanying financial statements include the results of operations of
Comtex, ANATEC and ARI from the acquisition dates. ATR was accounted for as a
pooling of interests and, accordingly, the accompanying financial statements
include the results of ATR for all periods presented. If revenues for the 53rd
week were excluded, consolidated 1997 revenues would have increased $261.2
million or 25.8%. Staffing Services, Outsourcing Services and Professional
Services revenues would have grown $123.6 million, $39.5 million and $98.1
million and 16.7%, 19.0% and 150.6%, respectively.
Gross profit increased 30.7%, or $67.1 million, to $286.0 million in
1997. Gross margin (gross profit as a percent of revenues) increased from 21.6%
in 1996 to 22.0% in 1997. Staffing Services gross margin decreased from 22.0% in
1996 to 21.3% in 1997. The decline was due to volume increases in certain lower
margin accounts. Outsourcing Services gross margin increased from 18.2% in 1996
to 18.4% in 1997. Professional Services gross margin increased from 27.6% in
1996 to 31.2% in 1997 due principally to the acquisition of Comtex. If gross
profit for the 53rd week was excluded, consolidated gross profit would have
increased $61.9 million. Staffing Services, Outsourcing Services and
Professional Services gross profit would have increased $21.0 million, $7.8
million, and $33.1 million, respectively.
Operating expenses increased 23.8%, or $40.3 million. The operating
expense increase included $5.0 million of higher franchise commissions
associated with increased franchise revenues, $26.5 million of increased
personnel and personnel-related costs associated with internal growth, and $6.0
million of increased costs associated with the Comtex and ANATEC acquisitions.
If operating expenses associated with the 53rd week were excluded, operating
expenses would have increased $37.3 million or 22.1%. Depreciation and
amortization expense increased 75.6%, or $4.5 million due to increased
investment in management information systems and amortization of goodwill from
acquisitions.
Interest expense increased from $1.2 million in 1996 to $7.0 million in
1997 as a result of borrowings to fund the acquisitions discussed above;
spending on MIS development; additions to property and equipment; and the
increased cost associated with carrying a higher trade accounts receivable
balance (see Liquidity and Capital Resources), net of the proceeds from the
Company's July 28, 1997, stock offering.
Other expense increased from $1.5 million in 1996 to $2.0 million in
1997. Included in other expense is the Company's share of losses from its 50%
ownership in a joint venture formed in October 1995 to provide administrative
outsourcing for health care facilities. The losses totaled $2.0 million in 1997
and $830,000 in 1996. The termination of this business is discussed above.
<PAGE> 5
Management's Discussion and Analysis of Financial
Condition and Results of Operations
- --------------------------------------------------------------------------------
Norrell Corporation and Subsidiaries
The effective income tax rate declined from 38.5% in 1996 to 38.0% in
1997 primarily as a result of reduced state income taxes.
Earnings per share declined to $0.91 in 1997 from $1.00 in 1996.
Excluding the impact of the 53rd week and the 1997 non-recurring charges, 1997
earnings per share would have been $1.28, a 28.0% increase over 1996.
Year Ended October 27, 1996, Compared to Year Ended October 29, 1995
Revenues increased 20.4%, or $171.5 million, to $1.014 billion in 1996. Staffing
Services revenues grew 16.7% to $740.7 million, and accounted for 73.1% and
75.3% of total 1996 and 1995 revenues, respectively. Staffing Services volume
increased 12.4% and prices rose 3.9% compared to 13.4% and 7.0% for 1995. During
1996, the Company acquired two information technology companies, ANATEC and ATR.
ANATEC, which specializes in information technology consulting, project
management, training, and software systems integration, was purchased for cash
on July 15, 1996. ATR, which provides short- and long-term contract programmers,
was acquired in a transaction accounted for as a pooling of interests on August
5, 1996. These two acquisitions plus the Company's existing Financial Staffing
division, which provides temporary accounting and financial staffing, were
combined into the Professional Services group. The accompanying financial
statements include the results of operations of ANATEC from July 15, 1996, the
acquisition date. ATR was accounted for as a pooling and, accordingly, the
accompanying financial statements include the results of ATR for all periods
presented. Professional Services revenues were $65.1 million in 1996 compared to
$34.0 million in 1995, a 91.5% increase. Outsourcing Services revenues grew
19.7% to $208.1 million. Outsourcing Services revenues from customers other than
IBM increased $15.3 million from 1995 to $60.3 million. Included in Outsourcing
Services revenues was the recognition of $2.2 million and $4.5 million in 1996
and 1995, respectively, of deferred gain from the return in January 1995 of
Company stock held by IBM.
Gross profit increased 17.8%, or $33.0 million, to $218.9 million in
1996. Gross margin decreased from 22.1% in 1995 to 21.6% in 1996. Staffing
Services gross margin decreased slightly from 22.4% in 1995 to 22.0% in 1996.
During the first quarter of 1996, workers' compensation liability for the
franchise division of Norrell Services was adjusted to give effect to a much
better than expected loss experience. The adjustment resulted in a reduction of
$800,000 in cost of services which added 0.1% to the Staffing Services gross
margin. Without this adjustment, gross margin declined to 21.9% in 1996 due to a
higher proportion of large accounts which typically have lower margins.
Outsourcing Services gross margin declined from 20.4% in 1995 to 18.2% in 1996
due primarily to the renegotiation of a large contract with IBM. The
renegotiation extended the contract term through December 1998. Of the 2.2
percentage point decline in Outsourcing Services gross margin, 1.8 percentage
points were the result of the renegotiation. Professional Services gross margin
increased from 24.6% in 1995 to 27.6% in 1996 as a result of higher information
technology services margins.
Operating expenses increased 13.0%, or $19.5 million. The increase also
included $2.6 million of higher franchise commissions associated with increased
franchise revenues, $15.7 million of increased personnel and personnel-related
costs, and $2.1 million of increased costs associated with 1996 office
additions. Depreciation and amortization expense increased 38.6%, or $1.6
million.
Interest expense increased from $365,000 in 1995 to $1.2 million in 1996
as a result of borrowings to fund the purchase of ANATEC.
Other expense decreased from $1.6 million in 1995 to $1.5 million in
1996. Included in other expense is the Company's share of losses from its 50%
ownership in a joint venture formed in October 1994 to provide administrative
outsourcing for health care facilities. The losses totaled $830,000 in 1996 and
$875,000 in 1995. Other expenses for 1995 also included a loss of $307,000 from
the sale in October 1995 of rental real estate. The property had a net book
value of $4.3 million and the Company received cash and a $3.4 million,
three-year, 7% note.
The effective income tax rate declined from 41.9% in 1995 to 38.5% in
1996 primarily as a result of reduced state income taxes.
Earnings per share from continuing operations rose to $1.00 in 1996 from
$.71 in 1995. The 1995 period included a discontinued loss of $.01 per share.
Liquidity and Capital Resources
The Company's short-term liquidity depends primarily upon its level of net
income, accounts receivable, accounts payable and accrued expenses. The nature
of the Company's business requires payment of wages to its temporary personnel
on a weekly basis and to its other employees on a bi-weekly basis while payments
from its clients are received on average 30 to 60 days after billing. As a
result of this timing difference, the Company's working capital requirements
increase proportionately with its revenue increases. The Company has no binding
commitments for capital expenditures during the next fiscal year. The Company,
with the assistance of outside consultants, is currently assessing 1998 capital
and information systems development spending required to meet long term billing,
payroll and reporting needs. The Company anticipates completing the technical
assessment by the end of the first quarter and does expect that its operating
cash flows and credit facilities will be sufficient to fund such spending. See
Note 12 of Notes to Consolidated Financial Statements regarding commitments
under the Company's headquarters office building lease and information systems
contract. The Company's primary sources of liquidity are operating cash flows
and credit facilities totaling $150.0 million. See Note 7 of Notes to
Consolidated Financial Statements.
Cash used in operations in 1997 was $1.4 million compared to cash
provided of $38.0 million in 1996. The 1997 period included an increase of $60.7
million in trade accounts receivable compared to an increase of $20.2 million in
1996. The 1997 increase was due principally to the higher level of
<PAGE> 6
revenues in 1997 and to continuing billing delays caused by the conversion in
December 1996 to a new billing and accounts receivable system. The Company does
not believe that system issues have materially impacted the collectibility of
its accounts receivable. The Company is currently assessing the billing system
technical design and expects to incur additional costs to replace the existing
system and to improve its operations. Higher revenues in 1997 were due, in part,
to the January acquisition of Comtex and a full year of operations for ANATEC.
During the 1997 period, cash used in operating activities was partially offset
by an increase in accrued expenses (an increase in cash) of $18.0 million
compared to an increase of $7.8 million in 1996. This increase was due to
internal growth in operations and payments that will be made in the future
related to the acquisitions of Comtex and the Orlando franchise. The 1996 cash
provided by operating activities included a $13.0 million gain from the sale of
the Company's interest in its Atlanta headquarters building which was sold by
its joint venture owner. The Company had a 50% interest in the joint venture.
Concurrent with the sale, the Company extended its lease for office space in the
building for an additional seven years to now expire in 2007. The gain is being
deferred and amortized on a straight-line basis through July 2005, the date on
which the landlord may terminate the lease, and is recorded as a reduction in
rent expense.
Investing activities used cash of $121.0 million in 1997 compared to cash
used of $56.9 million in 1996. The October 1997 purchases of IMCOR and the
Orlando franchise, the January 1997 purchase of Comtex, the November 1996
purchase of ARI and the final payment associated with the July 1996 acquisition
of ANATEC resulted in cash uses of $87.7 million in 1997. The purchase of Valley
Staffing Services, Inc. in January 1996 and ANATEC in July 1996 used cash of
$33.0 million in 1996. The investing activities for 1997 and 1996 included MIS
development costs of $17.7 million and $14.7 million, respectively.
Financing activities provided cash of $120.2 million in 1997 compared to
cash provided of $22.7 million in 1996. The 1997 period included the receipt of
proceeds from the July 28 stock offering of $76.1 million. Additionally, net
proceeds from the issuance of long-term debt provided cash in 1997 of $39.9
million compared to cash provided of $23.8 million in 1996. The increase in cash
was used to fund the acquisitions discussed above; spending on MIS development;
property and equipment; and the increased cost associated with carrying a higher
trade accounts receivable balance.
The Company's long-term liquidity is also dependent upon cash flows from
operations and borrowing under its credit facilities. The Company has
historically been able to obtain debt financing adequate to fund its operations.
As described in Note 7 to the Notes to Consolidated Financial Statements, the
Company has an unsecured revolving credit facility of $150.0 million which
extends until September 30, 2000, and $50.0 million of unsecured bank lines of
credit. Management believes the Company's relationships with its lenders are
good and that it will be able to obtain any required financing upon maturity of
its existing credit facilities. The Company has no long-term commitments other
than those described in Note 12 to the Notes to Consolidated Financial
Statements.
The Company believes that funds provided from operations and available
borrowings under its credit facilities will be sufficient to meet its needs for
working capital and capital expenditures at least through the end of the coming
fiscal year.
New Accounting Pronouncements
In March 1997, the Financial Accounting Standards Board released Statement of
Financial Accounting Standard No. 128 ("SFAS 128"), "Earnings Per Share," which
is effective for fiscal years ending after December 15, 1997. Early adoption is
not permitted. SFAS 128 may significantly change reported earnings per share
("EPS") for companies, such as Norrell Corporation, with complex capital
structures as compared to EPS calculated using the modified treasury stock
method. See Note 1 of Notes to Consolidated Financial Statements where
discussed.
In June 1997, the FASB issued Financial Accounting Standard No. 130,
"Reporting Comprehensive Income," and Financial Accounting Standard No. 131,
"Disclosure about Segments of an Enterprise and Related Information." These
standards are effective for fiscal years beginning after December 15, 1997. See
Note 1 of Notes to Consolidated Financial Statements where discussed.
Inflation
The effects of inflation were not significant to the Company's operations during
1997, 1996 or 1995.
Year 2000 Issues
The Company has conducted a comprehensive review of its computer systems to
identify the systems that could be affected by the "Year 2000" issue and is
developing an implementation plan to resolve the issue. The Year 2000 issue is
the result of computer programs being written using two digits rather than four
to define the applicable year. Any of the Company's programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a major system failure or
miscalculations. The Company presently believes that, with planned modifications
to existing software and conversions to new software, the Year 2000 problem will
not pose significant operational problems for the Company's computer systems as
so modified and converted. However, if such modifications and conversions are
not completed in a timely fashion, the Year 2000 problem may have a material
impact on the operations of the Company.
Special Note Regarding "Forward-Looking" Information
The foregoing section contains "forward-looking" statements which represent the
Company's expectations or beliefs concerning future events, including the
sufficiency of funds from operations and available borrowings to meet the
Company's working capital and capital expenditure needs for 1998. A number of
important factors could, individually or in the aggregate, cause actual results
to differ materially from those forming the basis of the forward-looking
statements, including changes in the Company's relationship with its largest
customers and increased competition in, and changes in laws and regulations
relating to, the temporary services, professional services and outsourcing
industry.
<PAGE> 7
Consolidated Balance Sheets
- --------------------------------------------------------------------------------
Norrell Corporation and Subsidiaries
<TABLE>
<CAPTION>
Nov. 2, 1997 Oct. 27, 1996
(in thousands, except share amounts)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and short-term investments $ 6,678 $ 8,876
Accounts receivable trade, less
allowances of $6,497 in 1997 and
$7,411 in 1996 215,463 145,843
Prepaid expenses 2,915 2,674
Other 12,823 9,995
- ----------------------------------------------------------------------------------------
Total current assets 237,879 167,388
PROPERTY AND EQUIPMENT, LESS ACCUMULATED DEPRECIATION 19,759 13,513
- ----------------------------------------------------------------------------------------
NONCURRENT DEFERRED INCOME TAXES 12,690 6,034
- ----------------------------------------------------------------------------------------
OTHER ASSETS
Goodwill and other intangibles, net of amortization 136,358 45,069
MIS development costs, net of amortization 19,486 18,634
Investments and other assets 12,672 12,593
- ----------------------------------------------------------------------------------------
Total other assets 168,516 76,296
- ----------------------------------------------------------------------------------------
Total Assets $ 438,844 $ 263,231
- ----------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 12,881 $ 9,789
Accounts payable 12,390 14,651
Accrued expenses 90,515 67,536
Deferred revenue and gain 8,779 10,822
- ----------------------------------------------------------------------------------------
Total current liabilities 124,565 102,798
Long-Term Debt, less current maturities 60,129 23,316
Long-Term Deferred Gain 9,983 11,471
Long-Term Accrued Expenses 36,961 27,614
- ----------------------------------------------------------------------------------------
Total liabilities 231,638 165,199
- ----------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Common stock, stated value $.01 per share;
50,000,000 shares authorized,
with shares issued and outstanding
of 26,903,738 in 1997 and 23,566,204 in 1996 270 236
Treasury stock, at cost; 34,457 shares in
1997 and 29,091 shares in 1996 (1,062) (575)
Additional paid-in capital 133,219 44,096
Notes receivable from officers and employees (125) (111)
Retained earnings 74,904 54,386
- ----------------------------------------------------------------------------------------
Total shareholders' equity 207,206 98,032
- ----------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 438,844 $263,231
- ----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 8
Consolidated Statements of Income
- --------------------------------------------------------------------------------
Norrell Corporation and Subsidiaries
<TABLE>
<CAPTION>
Years Ended Nov. 2, 1997(1) Oct. 27, 1996 Oct. 29, 1995
- -----------------------------------------------------------------------------------------------------
(in thousands, except per share amounts)
<S> <C> <C> <C>
REVENUES $ 1,300,039 $ 1,013,877 $ 842,360
COST OF SERVICES 1,014,048 795,013 656,517
- ----------------------------------------------------------------------------------------------------
Gross profit 285,991 218,864 185,843
OPERATING EXPENSES 209,499 169,206 149,745
DEPRECIATION AND AMORTIZATION 10,365 5,904 4,261
NON-RECURRING CHARGES 17,700 -- --
- ----------------------------------------------------------------------------------------------------
Income from operations 48,427 43,754 31,837
- ----------------------------------------------------------------------------------------------------
OTHER EXPENSE
Interest (6,989) (1,200) (365)
Other (1,986) (1,485) (1,628)
- ----------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 39,452 41,069 29,844
INCOME TAXES 14,994 15,812 12,518
- ----------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS 24,458 25,257 17,326
DISCONTINUED OPERATIONS
Loss on disposal, net -- -- (348)
- ----------------------------------------------------------------------------------------------------
NET INCOME $ 24,458 $ 25,257 $ 16,978
- ----------------------------------------------------------------------------------------------------
EARNINGS (LOSS) PER COMMON SHARE
Continuing operations $ 0.91 $ 1.00 $ 0.71
Discontinued operations -- -- (0.01)
- ----------------------------------------------------------------------------------------------------
$ 0.91 $ 1.00 $ 0.70
- ----------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 26,747 25,344 24,357
- ----------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
(1) Fiscal year included 53 weeks.
<PAGE> 9
Consolidated Statements of Shareholders' Equity
- --------------------------------------------------------------------------------
Norrell Corporation and Subsidiaries
<TABLE>
<CAPTION>
Additional Notes Receivable
Common Stock Treasury Paid-ln From Officers Retained
(in thousands, except share and per share amounts) Shares Amount Stock Capital and Employees Earnings
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at October 30, 1994 23,856 $ 239 $ (217) $ 43,035 $ (545) $ 24,754
Stock options exercised 560 5 299 1,987 (96) --
Common stock issued 12 -- 28 78 (14) --
Dividends on common stock ($0.12 per share) -- -- -- -- -- (2,639)
Issuance of options for discounted stock option plan -- -- -- 703 -- --
Purchase and retirement of common stock (1,162) (12) -- (4,421) -- (6,899)
Purchase of treasury stock (52) -- (586) -- -- --
Decrease in receivable from employees -- -- -- -- 257 --
Net income -- -- -- -- -- 16,978
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at October 29, 1995 23,214 232 (476) 41,382 (398) 32,194
Stock options exercised 337 4 436 1,213 -- --
Common stock issued 41 -- -- 563 (40) --
Dividends on common stock ($0.14 per share) -- -- -- -- -- (3,065)
Issuance of options for discounted stock option plan -- -- -- 938 -- --
Purchase of treasury stock (26) -- (535) -- -- --
Decrease in receivable from employees -- -- -- -- 327 --
Net income -- -- -- -- -- 25,257
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at October 27, 1996 23,566 236 (575) 44,096 (111) 54,386
Stock options exercised, including related tax benefits 614 6 1,159 4,773 -- --
Stock offering proceeds 2,500 25 -- 76,091 -- --
Other common stock issued 284 3 19 7,191 (40) --
Dividends on common stock ($0.16 per share) -- -- -- -- -- (3,940)
Issuance of options for discounted stock option plan -- -- -- 1,068 -- --
Purchase of treasury stock (60) -- (1,665) -- -- --
Decrease in receivable from employees -- -- -- -- 26 --
Net income -- -- -- -- -- 24,458
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at November 2, 1997 (1) 26,904 $ 270 $(1,062) $ 133,219 $ (125) $ 74,904
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
(1) Fiscal year included 53 weeks.
<PAGE> 10
Consolidated Statements of Cash Flows
- --------------------------------------------------------------------------------
Norrell Corporation and Subsidiaries
<TABLE>
<CAPTION>
Years Ended Nov. 2, 1997(1) Oct. 27, 1996 Oct. 29, 1995
- --------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net income $ 24,458 $ 25,257 $ 16,978
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization - operating expenses 10,365 5,904 4,261
Depreciation and amortization - cost of
services/other expenses 667 409 235
Gain on retirement of common stock (1,884) (2,177) (4,499)
Non-recurring charge 17,700 -- --
Provision for doubtful accounts 1,095 2,315 1,699
Deferred income taxes (8,114) 173 963
Deferred gain on sale of building (1,488) 12,967 --
Long-term accrued expenses 3,989 2,304 3,222
Other 4,071 106 270
Change in current assets and current liabilities
Accounts receivable, trade (60,748) (20,235) (28,899)
Accounts payable (7,434) 3,025 6,180
Accrued expenses 17,983 7,759 8,320
Other (2,059) 174 (1,383)
- --------------------------------------------------------------------------------------------------------------
Net cash (used in) provided
by operating activities (1,399) 37,981 7,347
- --------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities
Cost of acquisitions, net of cash acquired (87,662) (32,963) (2,861)
Increase in MIS development costs, net (17,695) (14,741) (4,687)
Additions to property and equipment, net (10,902) (6,880) (5,336)
(Increase) decrease in goodwill and other intangibles, net (1,344) (270) 1,599
Increase in investments and other non-current assets (3,361) (2,046) (50)
- --------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (120,964) (56,900) (11,335)
- --------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Proceeds from the issuance of long-term debt 272,827 87,886 6,398
Repayments of long-term debt (232,924) (64,102) (4,181)
Stock option exercises, including related tax benefits 5,913 1,646 2,186
Dividends paid on common stock (3,940) (3,065) (2,639)
Acquisition of treasury stock (520) (536) (552)
Proceeds from the issuance of common stock 78,809 851 315
- --------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 120,165 22,680 1,527
- --------------------------------------------------------------------------------------------------------------
Net (Decrease) Increase in Cash and Short-Term Investments (2,198) 3,761 (2,461)
Cash and Short-Term Investments at Beginning of Period 8,876 5,115 7,576
- --------------------------------------------------------------------------------------------------------------
Cash and Short-Term Investments at End of Period $ 6,678 $ 8,876 $ 5,115
- --------------------------------------------------------------------------------------------------------------
Supplementary Cash Flow Disclosures
Cash payments during the period for
Interest $ 6,340 $ 1,183 $ 364
Income taxes, net of refunds 20,828 17,303 12,907
Noncash investing and financing activity
Issuance of options to benefit plan 1,083 938 703
Exercise of benefit plan stock options (1,488) (630) (385)
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
(1) Fiscal year included 53 weeks.
<PAGE> 11
Notes to Consolidated Financial Statements
- -------------------------------------------------------------------------------
Norrell Corporation and Subsidiaries
1. Summary of Significant Accounting Policies and Other Matters
Basis of Presentation
The consolidated financial statements include the accounts of Norrell
Corporation and its subsidiaries (the "Company"). All material intercompany
accounts and transactions have been eliminated.
Business and Revenue Recognition
The Company operates in one industry segment, providing staffing and outsourcing
services in the United States and parts of Canada. Revenue is generally
recognized upon the performance of services. Certain services are performed
under long-term contracts.
Revenue from these contracts is recognized using the percentage-of-completion
method based on the percentage that incurred costs to date bear to total
estimated costs after giving effect to the most recent estimates of total cost.
Losses expected to be incurred on jobs in process would be charged to income as
soon as such losses are known. Amounts received from customers in excess of
revenues recognized to date are classified as deferred revenues and are included
in current liabilities.
A portion of the Company's revenue is attributable to franchise operations.
Employees and customers of franchise operations are employees and customers of
the Company. The Company includes such revenues and related direct costs in its
revenues and cost of services, respectively. The net distribution paid to the
franchisee is based on a percentage of the gross profit generated and is
included in operating expenses.
Significant Customer Information
For fiscal years 1997 and 1995, one customer accounted for 13.2% and 16.2% of
revenues, respectively. For fiscal year 1996, two customers accounted for
revenues of 27.6%.
Statements of Cash Flows
For purposes of the statements of cash flows, the Company considers all liquid
investments with a maturity of three months or less at the time of purchase to
be cash and short-term investments.
Financial Instruments
Based on pertinent information available to the Company at November 2, 1997, the
Company estimates that the carrying value of cash and short-term investments,
investments, current maturities of long-term debt and long-term debt approximate
their fair values when compared to instruments of similar type, terms and
maturity.
Intangible Assets
Intangible assets consist primarily of goodwill associated with acquired
businesses, which is amortized on a straight-line basis over 40 years.
Subsequent to an acquisition, the Company regularly evaluates whether events and
circumstances have occurred that indicate the carrying amount of goodwill may
warrant revision or may not be recoverable.
When factors indicate that goodwill should be evaluated for possible impairment,
the Company uses an estimate of the future undiscounted net cash flows of the
related business over the remaining life of the goodwill in measuring whether
the goodwill is recoverable. Other intangible assets are amortized over two to
seven years. Amortization expense for fiscal years 1997, 1996 and 1995 was
$3,617,000, $1,015,000 and $641,000, respectively. Accumulated amortization of
intangibles was $11,470,000 and $7,853,000 at November 2, 1997, and October 27,
1996, respectively.
Management Information Systems ("MIS") Development
During fiscal 1997 and 1996, the Company incurred costs associated with the
purchase and development of management information systems unrelated to the
impact of year 2000 processing issues. These costs are capitalized and amortized
on a straight-line basis over five years. MIS development cost amortization for
1997 and 1996 was $2,464,000 and $719,000, respectively.
Preferred Stock
The Company is authorized to issue 10,000,000 shares of no par preferred stock.
The Board of Directors is authorized to fix relative rights, preferences and
limitations of any unissued series of preferred stock. No preferred stock was
issued or outstanding at November 2, 1997, or October 27, 1996.
Other Income (Expense)
Other income (expense) consists of the following:
<TABLE>
<CAPTION>
1997 1996 1995
- --------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Interest income $ 346 $ 481 $ 428
Equity in loss of joint ventures (2,026) (803) (656)
Amortization of deferred
loan costs and bank fees (907) (885) (762)
Loss on disposal of fixed assets (16) (218) (335)
Minority interest 193 (10) --
Other, net 424 (50) (303)
- --------------------------------------------------------------------
Total $(1,986) $(1,485) $(1,628)
- --------------------------------------------------------------------
</TABLE>
Earnings (Loss) Per Share
Earnings (loss) per share is computed by dividing income (loss) attributable to
common shareholders by the weighted average number of shares of common stock
outstanding during each period adjusted to reflect the assumed exercise of
dilutive stock options under the treasury stock method.
Stock Split
On June 4, 1996, the Board of Directors authorized a two-for-one split of common
stock for shareholders of record on June 24, 1996. The stated value remained at
$.01 per share. All references in the accompanying financial statements to the
number of common shares, except shares authorized, and to per-share amounts have
been restated to reflect the stock split. The stated value of the additional
shares of common stock issued in connection with the stock split has been
credited to common stock with the like amount charged to retained earnings.
<PAGE> 12
Stock Offering
On July 28, 1997, the Company completed the sale of 2,500,000 shares of its
common stock at a public offering price of $32.25 per share. The net proceeds of
$76,116,000 were used to reduce amounts outstanding under the $150,000,000
revolving credit facility.
New Accounting Pronouncements
In March 1997, the Financial Accounting Standards Board ("FASB") released
Statement of Financial Accounting Standard No. 128 ("SFAS 128"), "Earnings Per
Share," which is effective for fiscal years ending after December 15, 1997.
Early adoption is not permitted. SFAS 128 may significantly change reported
earnings per share ("EPS") for companies, such as Norrell Corporation, with
complex capital structures, as compared to EPS calculated using the modified
treasury stock method. The pro forma effect of applying the provisions of SFAS
128 is as follows:
<TABLE>
<CAPTION>
1997 1996
Historical Pro Forma Historical Pro Forma
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Primary/Basic EPS $0.91 $0.99 $1.00 $1.08
Fully Diluted/Diluted EPS $0.91 $0.91 $0.98 $1.00
</TABLE>
In June 1997, the FASB issued Financial Accounting Standard No. 130,
"Reporting Comprehensive Income," effective for fiscal years beginning after
December 15, 1997. This statement establishes standards for reporting and
display of comprehensive income and its components in a full set of general
purpose financial statements. Based on current accounting standards, this new
accounting statement is not expected to have a material impact on the Company's
consolidated financial statements. The Company will adopt this accounting
standard in fiscal 1999.
Also in June 1997, the FASB issued Financial Accounting Standard No. 131,
"Disclosure about Segments of an Enterprise and Related Information," effective
for fiscal years beginning after December 15, 1997. This statement requires
companies to identify segments consistent with the manner in which management
makes decisions about allocating resources to segments and measuring their
performance. Disclosures for the newly identified segments are similar to those
required under current standards, with the addition of certain quarterly
disclosure requirements. It also establishes standards for related disclosures
about products and services, geographic areas and major customers. The Company
will adopt this accounting standard in fiscal 1999.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Reclassifications
Certain amounts have been reclassified in the 1996 and 1995 financial statements
to conform to the 1997 presentation.
Fiscal Year
The Company operates on a 52- or 53-week fiscal year which resulted in fiscal
year ends of November 2, 1997, October 27, 1996, and October 29, 1995. The
fiscal year ended November 2, 1997, included 53 weeks. Fiscal years ended
October 27, 1996, and October 29, 1995, included 52 weeks.
2. Acquisitions
Effective July 15, 1996, the Company acquired all of the assets and certain of
the liabilities of Analytical Technologies, Inc. and ANATEC Canada, Inc.
(collectively, "ANATEC"). ANATEC is a software services and technology
organization serving primarily Fortune 500 companies in the Midwestern United
States. Services include consulting, project management, software development,
training and software systems integration services. The $25,905,000 excess of
the acquisition cost over fair value of ANATEC's tangible assets has been
allocated to goodwill and is being amortized over 40 years. In addition to the
$27,100,000 paid at closing, ANATEC was paid a contingent payment of $9,200,000
based on its achieving a specified level of gross profit for the 12-month period
ending December 31, 1996. At June 30, 1996, ANATEC had net assets of $1,469,000.
On August 5, 1996, the Company acquired all of the issued and outstanding
stock of American Technical Resources, Inc. ("ATR") in exchange for 1,000,000
shares of company common stock in a transaction accounted for as a pooling of
interests. ATR is an information technology staffing company that specializes in
providing computer professionals for short and long-term assignments including
contract programming, contract recruiting and payrolling services. At July 31,
1996, ATR had net assets of $3,224,000. The Company's financial statements have
been restated to include the results of ATR for all periods presented.
Effective January 2, 1997, the Company acquired all of the outstanding
common and preferred stock and all vested and unvested stock rights of Comtex
Information Systems, Inc. ("Comtex") for $67,000,000 of cash plus stock options
to acquire approximately 141,000 shares of Norrell Corporation Common Stock at a
weighted average exercise price of $4.56 per share. Comtex is a New York
City-based provider of information technology services, including systems
planning and development, organizational consulting related to business
transformation and staff augmentation support. Comtex has locations in New York,
New York; White Plains, New York; and Miami, Florida. The $62,231,000 excess of
the acquisition cost over the fair value of Comtex's tangible assets has been
allocated to goodwill and is being amortized over 40 years. At December 31,
1996, Comtex had net assets of $10,066,000.
<PAGE> 13
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
Norrell Corporation and Subsidiaries
3. Discontinued Operations
On October 29, 1993, the Company sold substantially all assets of its
comprehensive home care and nursing resource management operations to Hooper
Holmes, Inc., a New York corporation. In the third quarter of 1995, a loss on
disposal of $348,000, net of tax, was provided for legal expenses and expenses
associated with the wind down of these operations.
4. Property and Equipment, Investments and Other Assets
Property and Equipment
The major classes of property and equipment are as follows:
<TABLE>
<CAPTION>
1997 1996
- -------------------------------------------------------
(in thousands)
<S> <C> <C>
Leasehold improvements $ 5,964 $ 5,542
Furniture, fixtures and equipment 26,815 31,508
- -------------------------------------------------------
32,779 37,050
Less accumulated depreciation 13,020 23,537
- -------------------------------------------------------
Net property and equipment $19,759 $13,513
- -------------------------------------------------------
</TABLE>
Property and equipment are stated at cost. Depreciation is provided on a
straight-line basis over the estimated asset lives of three to twelve years for
leasehold improvements and three to ten years for furniture, fixtures and
equipment.
Depreciation expense for fiscal years 1997, 1996 and 1995 was $4,892,000,
$4,273,000 and $3,413,000, respectively.
Investments and Other Assets
Investments consist principally of securities held for employee benefit
plans and are carried at market.
In October 1994, the Company acquired a 50% equity interest in a joint
venture formed for the purpose of providing administrative outsourcing services
for health care facilities. During fiscal years 1997, 1996 and 1995, the Company
contributed $2,092,000, $1,059,000 and $908,000, respectively, for general
operating purposes in accordance with the joint venture agreement. Refer to Note
6, where the termination of this investment is discussed.
5. Accrued Expenses
Current and long-term accrued expenses are summarized as follows:
<TABLE>
<CAPTION>
1997 1996
- -------------------------------------------------------
(in thousands)
<S> <C> <C>
Current:
Accrued wages, salaries
and related taxes $58,505 $48,905
Workers' compensation
reserve, current portion 7,292 6,737
Other 24,718 11,894
- -------------------------------------------------------
Total $90,515 $67,536
- -------------------------------------------------------
Long-term:
Workers' compensation
reserve, less current portion $17,477 $16,146
Other 19,484 11,468
Total $36,961 $27,614
- -------------------------------------------------------
</TABLE>
The Company self-insures up to specified limits for certain risks related
to workers' compensation liability. The estimated costs of existing and future
claims under the insurance program are accrued as incidents occur based on
historical loss development trends which may be subsequently revised based on
developments relating to such claims.
6. Non-recurring Charges
During the fourth quarter of 1997, the Company recorded a charge of $17,700,000,
before tax, of which $14,980,000 was related to the impairment of certain MIS
development costs. The MIS development cost write-down resulted from an
examination of the Company's payroll and billing systems. Based on a review made
in conjunction with outside consultants, the system architecture of the weekly
payroll system lacked the required capacity, flexibility and speed to support
anticipated volumes. Additionally, as a consequence of billing system
customizations required to meet the Company's customer and financial reporting
requirements, and the resulting difficulty and cost to upgrade the billing
system, the system must be replaced versus upgraded. A process, supported by
outside consultants, is underway to re-examine long-term business needs and to
determine an appropriate technical solution to the Company's systems
requirements. The Company anticipates completing the technical assessment by the
end of the first quarter of fiscal 1998. In the interim, the Company expects no
disruption in normal business. The recognition of this impairment was in
accordance with the provisions of Statement of Financial Accounting Standards
No. 121, "Accounting for the
<PAGE> 14
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
of." The remaining $2,720,000 charge resulted from the termination of two
businesses that did not meet the Company's expectations: a joint venture formed
in October 1994 of which the Company has a 50% interest and a Staffing Services
business acquired in April 1994 which provided executive training. This charge
was equal to the Company's investment in the joint venture, the acquired
goodwill in the Staffing Services business, and estimated costs to terminate
operations of each business.
7. Notes Payable and Long-Term Debt
The Company's debt is summarized as follows:
<TABLE>
<CAPTION>
1997 1996
- ----------------------------------------------------------
(in thousands)
<S> <C> <C>
Revolving credit facility, due
September 30, 2000, with
varying interest rates,
interest payable monthly $60,000 $23,000
Bank lines of credit due in
varying installments before
October 30, 1998, with
varying interest rates, interest
payable monthly 12,540 9,555
Other notes payable in various
installments through 2000 470 550
- ----------------------------------------------------------
Total 73,010 33,105
Less current maturities 12,881 9,789
- ----------------------------------------------------------
Total long-term debt $60,129 $23,316
- ----------------------------------------------------------
</TABLE>
At November 2, 1997, the Company had a $150,000,000 revolving credit
facility expiring September 30, 2000 with a group of commercial banks.
Borrowings are unsecured and bear interest at LIBOR, plus an applicable margin.
The revolving credit facility contains negative and affirmative covenants which
(a) limit additional indebtedness, liens, investments, payment of dividends and
disposition of assets and (b) require maintenance of certain financial ratios.
In addition, five commercial banks make available unsecured lines of credit that
total $50,000,000. Maturities and interest rates on borrowings under these lines
are negotiated at the time such borrowings occur. The Company's policy is to
classify borrowings under the revolving credit facility as long-term debt since
the Company has the ability under the credit agreement, and the intent, to
maintain the obligation for longer than one year.
The Company has also entered into four interest rate swap agreements in
order to manage exposure to fluctuations in interest rates. The difference
between fixed and variable interest amounts calculated by reference to
agreed-upon notional principal amounts is recognized as an adjustment to
interest expense over the life of the swaps. Two of the swap agreements are each
for notional principal amounts of $20,000,000. The remaining two agreements are
for notional principal amounts of $12,000,000 and $8,000,000. The Company
exchanges floating interest rates based on LIBOR for an average fixed rate of
6.43% at quarterly settlement dates. The swap agreements expire between November
2001 and January 2002. At November 2, 1997, if the Company had terminated each
of the swap agreements, the Company's cost of termination would have totaled
approximately $997,000.
The following is a summary of data concerning total debt:
<TABLE>
<CAPTION>
Revolving Credit Facility Lines of Credit
1997 1996 1997 1996
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(in thousands of dollars)
Outstanding borrowings
at end of period $ 60,000 $ 23,000 $ 12,540 $ 9,555
Outstanding
month-end balances:
Maximum 120,000 33,448 40,225 11,470
Average 85,417 30,835 22,116 5,274
Weighted average
interest rate (including
the effect of the
aforementioned
interest rate swap
agreements):
At end of period 6.74% 5.63% 6.04% 5.57%
For the period 6.26% 5.95% 5.75% 5.65%
</TABLE>
Future maturities of long-term debt at November 2, 1997 are as follows:
<TABLE>
<CAPTION>
Year Amount
- ------------------------------------
(in thousands)
<S> <C>
Fiscal 1999 $ 72
Fiscal 2000 60,057
- ------------------------------------
Total $60,129
- ------------------------------------
</TABLE>
8. Deferred Revenue and Gain
On December 11, 1995, the Company's headquarters building was sold by its joint
venture owner. The Company had a 50% interest in this joint venture which was
formed in 1986 to construct, finance, own and operate a 300,000 square-foot
office building in Atlanta, Georgia. The Company's share of the pretax gain from
the sale was $14,251,000. Concurrent with the sale, the Company extended its
lease for office space in the building for an additional seven years. The gain
has been deferred and is being amortized on a straight-line basis through July
2005 since the landlord may terminate the lease as of this date, and is recorded
as a reduction in rent expense. At November 2, 1997, and October 27, 1996, the
deferred gain was $11,479,000 and $12,967,000, of which $9,983,000 and
$11,471,000, respectively, was classified as long term.
Included in deferred revenue in the accompanying balance sheets was
$2,237,000 and $4,121,000 at November 2, 1997, and October 27, 1996,
respectively, resulting from redemption of 580,947 shares of the Company's
common stock. On December 1, 1994, the stock was returned by a major customer as
partial consideration for the Company agreeing to renegotiate that customer's
contract for services. The difference between the fair market value of the stock
at the redemption date and the unamortized cost of the prior service contract
was deferred and is being amortized into income through December 1998, the term
of the new service contract.
<PAGE> 15
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
Norrell Corporation and Subsidiaries
9. Stock Option and Purchase Plans
The Company has a stock incentive plan and an employee stock purchase plan.
These plans are described in detail below.
The stock incentive plan provides for the grant of incentive stock
options, nonqualified stock options and other equity-based incentives. At
November 2, 1997, there were 3,293,334 shares of common stock reserved for this
plan, of which 153,063 shares were available for future option grants. Incentive
stock options are granted at not less than fair value and expire five to ten
years after the date of grant. Nonqualified options are granted at prices
determined by the Board of Directors and expire five to ten years after the date
of grant. The exercise period for all options is fixed by the Board.
Nonqualified stock options to purchase common stock have been granted to certain
directors.
On January 1, 1996, the Company instituted an employee stock purchase
plan for all employees. Employees may contribute up to 15% of their compensation
to purchase the Company's common stock at 85% of the lower of the fair market
value on the first or last business day of quarterly purchase periods. Under the
plan, the Company sold 50,903 and 59,332 shares in 1997 and 1996 at average
exercise prices of $22.77 and $13.26, respectively. The Company has reserved
600,000 shares of common stock for the plan. At November 2, 1997, 489,766 shares
were available for future issuance.
No compensation expense related to these plans has been recognized
consistent with the provisions of Accounting Principles Board Opinion No. 24,
"Accounting for Stock Issued to Employees." Had compensation expense for the
plans been recorded based on the fair value of the options at the grant date as
prescribed by Statement of Financial Accounting Standards No. 123 ("SFAS 123"),
"Accounting for Stock-Based Compensation," the Company's net income and earnings
per share would have been reduced to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
Fiscal years 1997 1996
- ---------------------------------------------------------------------
(in thousands, except per share amounts)
<S> <C> <C>
Net income:
As reported $ 24,458 $ 25,257
Pro forma $ 22,549 $ 24,775
Primary earnings per share:
As reported $ 0.91 $ 1.00
Pro forma $ 0.84 $ 0.98
</TABLE>
Pro forma amounts were computed using the Black-Scholes option pricing model
with the following assumptions used for grants in 1997 and 1996: dividend yield
of 0.60%; expected volatility of 32%; risk-free interest rates of 4.91% to 6.91%
and expected lives of 3 months to 7.7 years. Since the SFAS 123 method of
accounting has not been applied to options granted prior to October 30, 1995,
the resulting pro forma compensation cost may not be representative of that to
be expected in future years.
A summary of stock option activity follows:
<TABLE>
<CAPTION>
Weighted
Average
Options Exercise Price
- ----------------------------------------------------------------
<S> <C> <C>
Outstanding, at October 30, 1994 2,250,910 $ 6.30
Granted 1,379,598 12.50
Exercised (525,586) 4.34
Canceled/Expired (107,172) 4.71
- ----------------------------------------------------------------
Outstanding, at October 29, 1995 2,997,750 8.28
Options exercisable, end of year 630,910 3.05
Granted 469,674 21.13
Exercised (298,733) 5.51
Canceled/Expired (151,331) 11.94
- ----------------------------------------------------------------
Outstanding, at October 27, 1996 3,017,360 10.37
Options exercisable, end of year 1,517,514 7.22
Granted 753,393 21.64
Exercised (560,345) 6.16
Canceled/Expired (70,151) 15.18
- ----------------------------------------------------------------
Outstanding, at November 2, 1997 3,140,257 13.72
- ----------------------------------------------------------------
Options exercisable, end of year 1,511,456 $ 9.12
- ----------------------------------------------------------------
</TABLE>
A summary of options outstanding at November 2, 1997, follows:
<TABLE>
<CAPTION>
Weighted Average
Range Number Remaining Weighted Average Number Weighted Average
Exercise Prices Outstanding Contractual Life Exercise Prices Exercisable Exercise Prices
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3.05 - $ 9.25 1,139,621 5.1 $ 5.38 920,058 $ 5.65
11.38 - 19.00 1,114,826 7.9 13.10 527,633 13.39
24.00 - 29.50 872,578 8.2 25.14 61,709 24.35
31.13 - 32.00 13,232 9.2 31.67 2,056 32.00
- -------------------------------------------------------------------------------------------------------------------
$ 3.05 - $32.00 3,140,257 6.9 $13.72 1,511,456 $ 9.12
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 16
10. Benefit Plans
The Company has a tax qualified 401(k) profit sharing plan which covers
substantially all nonhighly compensated employees, as defined under the Internal
Revenue Code, other than temporary employees. The plan provides for a matching
company contribution of an amount up to 2% of employee compensation. In
addition, the Company may make discretionary contributions to the plan. Company
contributions are 100% vested after three years of service (two years in the
case of employees hired on or after January 1, 1998).
The Company has an unfunded, nonqualified plan for those highly
compensated employees not covered by the 401(k) plan. Under this plan, the
Company may match participant contributions up to 2% of participant compensation
determined by the Company. In addition, the Company may make discretionary
contributions to the plan. Participants are immediately 100% vested in their
contributions and are 100% vested in the Company's contribution after three
years of service (two years for employees hired on or after January 1, 1998).
Participant contributions may be used to purchase rights to buy company stock or
may be invested in funds established by the plan administrator. All company
contributions are used to purchase rights to buy company stock. Rights are
purchased at the fair value of the underlying stock at the time of grant, less
the exercise price of $0.15 per share. Rights may not be exercised until the
date the participant terminates employment. At November 2, 1997, 370,154 rights
ranging in price from $3.05 to $34.69 per share were outstanding and 487,877
were available for grant.
Effective in June 1994, the Company instituted a management equity
program whereby members of senior management who were designated as participants
could purchase, at fair market value, shares of company common stock, and for
those participants who met certain minimum stock ownership thresholds, stock
options were granted as set forth in the plan. This plan was terminated on
December 31, 1996. At November 2, 1997, 106,932 shares had been issued under the
plan. Any stock options granted under this plan were issued under the Company's
stock incentive plan. At November 2, 1997, the balance of notes receivable from
plan participants for stock purchases was $125,000.
Certain highly compensated employees may also qualify for an unfunded,
nonqualified salary continuation plan. The plan provides for a benefit upon
reaching age 62 and ending at age 76 equal to 20% of average annual compensation
as defined in the plan. For participants who become eligible after January 1,
1997, the plan provides for a benefit equal to 1% of average annual
compensation, as defined in the plan, multiplied by the lesser of 20 years or
the years from eligibility until attainment of age 62. Vesting occurs over ten
years (starts in year six at 20% and reaches 100% after year ten).
Total expense related to the above described benefit plans for the years
ended 1997, 1996 and 1995 was $3,371,000, $3,164,000 and $2,408,000,
respectively.
11. Income Taxes
The provision (benefit) for federal, foreign and state income taxes consists of
the following:
<TABLE>
<CAPTION>
1997 1996 1995
- ---------------------------------------------------------------
<S> <C> <C> <C>
(in thousands)
Current:
Federal $ 10,021 $ 14,197 $ 9,749
State 2,080 1,576 1,758
Foreign 427 (83) 68
- ---------------------------------------------------------------
12,528 15,690 11,575
- ---------------------------------------------------------------
Deferred:
Federal 3,764 (1,415) 1,009
State (1,298) 1,537 (318)
- ---------------------------------------------------------------
2,466 122 691
- ---------------------------------------------------------------
Total $ 14,994 $ 15,812 $ 12,266
- ---------------------------------------------------------------
Continuing operations $ 14,994 $ 15,812 $ 12,518
Discontinued operations -- -- (252)
- ---------------------------------------------------------------
Total $ 14,994 $ 15,812 $ 12,266
- ---------------------------------------------------------------
</TABLE>
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant
components of the Company's deferred tax liabilities and assets are as follows:
<TABLE>
<CAPTION>
Nov. 2, Oct. 27,
1997 1996
- --------------------------------------------------------
(in thousands)
<S> <C> <C>
Deferred tax liabilities:
MIS development costs $ (4,074) $ (4,099)
Other (3,820) (4,680)
- --------------------------------------------------------
(7,894) (8,779)
- --------------------------------------------------------
Deferred tax assets:
Workers' compensation 10,527 8,000
Profit sharing 6,017 4,767
Bad debts 2,845 2,510
Gains on sale of interest in
headquarters building 4,436 5,094
Other 3,731 398
- --------------------------------------------------------
27,556 20,769
- --------------------------------------------------------
Net deferred tax assets $ 19,662 $ 11,990
- --------------------------------------------------------
</TABLE>
The reconciliation of income tax attributable to continuing operations
computed at the U.S. statutory tax rate to income tax expense is:
<TABLE>
<CAPTION>
1997 1996 1995
- -----------------------------------------------------------------
<S> <C> <C> <C>
Income taxes at statutory rate 35.0% 35.0% 35.0%
State taxes, net of federal benefit 1.7 2.4 6.0
Amortization of goodwill 2.0 0.4 0.4
Other, net (0.7) 0.7 0.5
- -----------------------------------------------------------------
Total 38.0% 38.5% 41.9%
- -----------------------------------------------------------------
</TABLE>
<PAGE> 17
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
Norrell Corporation and Subisidiaries
12. Commitments and Contingencies
At November 2, 1997, the Company was committed under operating leases for office
facilities and certain equipment. Aggregate minimum rental requirements under
these leases are as follows:
<TABLE>
<CAPTION>
Year Amount
- -------------------------------
(in thousands)
<S> <C>
1998 $11,838
1999 13,178
2000 11,908
2001 10,491
2002 9,218
Thereafter 10,870
- -------------------------------
Total $67,503
- -------------------------------
</TABLE>
Rent expense was $10,241,000, $8,409,000 and $8,441,000 for fiscal years
1997, 1996 and 1995, respectively.
Effective April 1, 1993, the Company entered into a ten-year contract for
the purchase of information systems operations services at an annual base cost
ranging from $3,000,000 to $5,000,000.
The Company is, from time to time, a party to ordinary, routine
litigation incidental to the Company's business. In the opinion of management,
the ultimate resolution of all pending legal proceedings will not have an
adverse effect on the Company's business or financial condition.
13. Selected Quarterly Information (Unaudited)
<TABLE>
<CAPTION>
Fiscal 1997 Quarter Ended
(in thousands, except per share amounts) Jan. 26 April 27 July 27 Nov. 2 (2)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 281,234 $ 317,943 $ 332,691 $ 368,171
Gross profit $ 60,889 $ 69,911 $ 74,317 $ 80,874
Net income $ 7,201 $ 8,479 $ 9,175 $ (397)
- -----------------------------------------------------------------------------------------------------------
Earnings per common share (1) $ 0.28 $ 0.33 $ 0.35 $ (0.01)
- -----------------------------------------------------------------------------------------------------------
Weighted average number of shares outstanding 25,732 25,944 26,308 28,828
- -----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Fiscal 1996 Quarter Ended
(in thousands, except per share amounts) Jan. 28 April 28 July 28 Oct. 27
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $229,251 $250,334 $255,275 $279,017
Gross profit 49,434 53,323 53,977 62,130
Net income $ 5,114 $ 6,249 $ 6,619 $ 7,275
- -----------------------------------------------------------------------------------------------------------
Earnings per common share $ 0.21 $ 0.25 $ 0.26 $ 0.28
- -----------------------------------------------------------------------------------------------------------
Weighted average number of shares outstanding 24,774 24,929 25,485 25,820
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Due to changes in the weighted average number of shares outstanding each
quarter, the sum of earnings per share per quarter does not equal the
earnings per share for the applicable year.
(2) Refer to Note 6, where non-recurring charges are discussed.
Report of Independent Public Accountants
- --------------------------------------------------------------------------------
To The Shareholders of Norrell Corporation:
We have audited the accompanying consolidated balance sheets of Norrell
Corporation (a Georgia corporation) and subsidiaries as of November 2, 1997 and
October 27, 1996, and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the three years in the period
ended November 2, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Norrell Corporation
and subsidiaries as of November 2, 1997 and October 27, 1996, and the results of
their operations and their cash flows for each of the three years in the period
ended November 2, 1997, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
December 10, 1997
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES
<PAGE> 2
<TABLE>
<CAPTION>
SUBSIDIARIES OF NORRELL CORPORATION STATE OF INCORPORATION
- ----------------------------------- ----------------------
<S> <C>
Norrell Services, Inc. Georgia
Norrell Services International, Inc. Georgia
Norrell Services, Ltd. Canada
Norrell Temporary Services, Inc. Georgia
Dynamic Temporary Services, Inc. Georgia
Norrell Acquisition Corp. Delaware
Norrell Health Care, Inc. Georgia
Tascor Incorporated Georgia
HealthTask Corporation* Delaware
HealthTask L.P.** Delaware
The Executive Speaker, Inc. Florida
Norrell Home Health Services, Inc. Georgia
Norrell Home Health Services of Nashville, TN, Inc. Tennessee
Norrell Home Health Services of Corpus Christi, TX, Inc. Texas
HCA - Home Care Services, Inc. New York
Norrell Health Care of New York, Inc. New York
Norrell Infusion Services, Inc. Georgia
Norrell Asset Management Company Nevada
Norrell Licensing Company Nevada
Norrell Finance Company Nevada
Norrell Enterprises Corporation Nevada
Norrell Resources Corporation Delaware
NC Holding Corporation Georgia
CallTask Incorporated*** Georgia
Valley Temporary Services, Inc. Arizona
Manzanita Resources, Inc. Arizona
Norrell Information Services, Inc. Georgia
NorCross Teleservices Inc.**** Delaware
Tascor Resources Corporation Georgia
American Technical Resources, Inc. Virginia
Accounting Resources, Inc. Rhode Island
Accounting Resources of Massachusetts, Inc. Massachusetts
Comtex Information Systems, Inc. Delaware
ANATEC Asset Management Company Nevada
ATR Asset Management Company Nevada
Comtex Asset Management Company Nevada
Norrell Services of Texas, Inc. Georgia
Norrell International Ltd. Nevada
</TABLE>
* 50% owned by Norrell Corporation
50% owned by Ernst & Young Resources L.L.C.
** Limited Partnership
49% owned by Tascor Incorporated
49% owned by Ernst & Young U.S. LLP
2% owned by HealthTask Corporation as General Partner
*** 51% Norrell Corporation
49% HTI Communications, Inc.
**** 51% owned by Norrell Corporation
49% owned by Cross Country Group, LLC
<PAGE> 1
EXHIBIT 23
CONSENT OF ARTHUR ANDERSEN
<PAGE> 2
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants we hereby consent to the incorporation of our
report included in this Form 10-K, into the Company's previously filed Form S-8
Registration Statements File Nos. 33-82004 (1994 Stock Incentive Plan), 33-82002
(1991 Stock Option Plan), 33-82006 (Management Equity Plan), 33-82348 (Goal
Plan), 33-82350 (Horizon-Pace and Strides), and 33-99934 (Employee Stock
Purchase Plan).
ARTHUR ANDERSEN LLP
January 26, 1998
26
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-02-1997
<PERIOD-START> OCT-27-1996
<PERIOD-END> NOV-02-1997
<EXCHANGE-RATE> 1
<CASH> 6,678
<SECURITIES> 0
<RECEIVABLES> 215,463
<ALLOWANCES> 6,497
<INVENTORY> 0
<CURRENT-ASSETS> 237,879
<PP&E> 32,779
<DEPRECIATION> 13,020
<TOTAL-ASSETS> 438,844
<CURRENT-LIABILITIES> 124,565
<BONDS> 0
0
0
<COMMON> 270
<OTHER-SE> 206,936
<TOTAL-LIABILITY-AND-EQUITY> 438,844
<SALES> 1,300,039
<TOTAL-REVENUES> 1,300,039
<CGS> 1,014,048
<TOTAL-COSTS> 1,014,048
<OTHER-EXPENSES> 237,564
<LOSS-PROVISION> 1,105
<INTEREST-EXPENSE> 6,989
<INCOME-PRETAX> 39,452
<INCOME-TAX> 14,994
<INCOME-CONTINUING> 24,458
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,458
<EPS-PRIMARY> .91
<EPS-DILUTED> .91
</TABLE>
