<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
NORRELL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(NORELL CORPORATION LOGO)
To Our Shareholders:
You are cordially invited to attend the 1999 Annual Meeting of Shareholders
to be held in the "C" Level auditorium at the administrative offices of the
Company, 3535 Piedmont Road, N.E., Atlanta, Georgia, on March 2, 1999, at 9:30
a.m. Eastern Standard Time.
The principal business of the meeting will be to elect four Class I
directors.
We hope that you will be able to attend this meeting. Whether you plan to
attend or not, we would appreciate your completing, signing, dating and
returning the enclosed proxy card in the envelope provided at your earliest
convenience. If you choose to attend the meeting, you may, of course, revoke
your proxy and personally cast your votes. We look forward to seeing you there.
Sincerely yours,
/s/ C. Douglas Miller
C. Douglas Miller
Chairman, President and Chief
Executive Officer
January 27, 1999
<PAGE> 3
NORRELL CORPORATION
3535 PIEDMONT ROAD, N.E.
ATLANTA, GEORGIA 30305
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
---------------
The 1999 Annual Meeting of Shareholders of Norrell Corporation will be held
on March 2, 1999, at 9:30 a.m. (EST) at the principal administrative offices of
the Company, 3535 Piedmont Road, N.E., Atlanta, Georgia, in the "C" Level
auditorium.
The meeting is called for the following purposes:
1. To elect four Class I directors for a three-year term expiring on
the date of the annual meeting of shareholders in 2002.
2. To consider and act upon such other business as may properly come
before the meeting or any adjournment(s).
The Board of Directors has fixed the close of business on January 5, 1999,
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting.
By order of the Board of Directors,
/s/ MARK H. HAIN
Mark H. Hain
Secretary
January 27, 1999
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO SIGN,
COMPLETE AND RETURN THE ENCLOSED PROXY SO THAT YOUR STOCK WILL BE REPRESENTED.
<PAGE> 4
NORRELL CORPORATION
3535 PIEDMONT ROAD, N.E.
ATLANTA, GEORGIA 30305
------------------------
PROXY STATEMENT
------------------------
The enclosed proxy is solicited by the Board of Directors of Norrell
Corporation (the "Company") for use at the 1999 Annual Meeting of Shareholders
to be held on March 2, 1999, at 9:30 a.m. (EST), at the administrative offices
of the Company, 3535 Piedmont Road, N.E., Atlanta, Georgia. Any shareholder
giving a proxy has the power to revoke it at any time before it is voted by
filing with the Secretary either an instrument revoking the proxy or a duly
executed proxy bearing a later date. Proxies may also be revoked by any
shareholder present at the meeting who expresses a desire to vote his or her
shares in person. Proxies in the accompanying form which are properly executed
by shareholders, duly returned and not revoked will be voted. Such proxies will
be voted in accordance with the directions, if any, given by such shareholders,
and if directions are not given, will be voted in favor of the proposal to elect
the four nominees for Class I directors, and in accordance with the best
judgment of the proxy holders on any other matter that may properly come before
the meeting.
This proxy statement and proxy and the accompanying notice were first
mailed to shareholders on or about January 27, 1999.
VOTING RIGHTS AND PRINCIPAL SHAREHOLDERS
January 5, 1999, has been fixed as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting or any
adjournment(s). As of the record date, the Company had outstanding and entitled
to vote at the meeting 26,234,427 shares of Common Stock, each share being
entitled to one vote (the "Common Stock"). The holders of a majority of the
shares entitled to be voted must be present or represented by proxy to
constitute a quorum. Shares as to which authority to vote is withheld,
abstentions and broker non-votes are counted in determining whether a quorum
exists.
With regard to Proposal 1, the Company's bylaws provide that directors are
elected by the affirmative vote of the holders of a majority of the shares
entitled to notice of and to vote in the election at a meeting at which a quorum
is present. Accordingly, shares not represented at the meeting and shares with
respect to which authority to vote for one or more nominees is withheld will
have the effect of negative votes.
Guy W. Millner, a Director of the Company, beneficially owns, with the
power to vote, approximately 36% of the outstanding shares of Common Stock. Mr.
Millner has indicated that he intends to vote in favor of the proposal to elect
the nominees for Class I directors set forth below.
The following table sets forth stock ownership information concerning those
persons known by management of the Company to own beneficially more than 5% of
the Common Stock, the directors of the Company, the executive officers named in
the Summary Compensation Table set forth under the heading "Executive
Compensation" below, and all directors and executive officers as a group. All
information is given as of December 31, 1998. An asterisk in the Percent of
Class column indicates beneficial ownership of less than 1% of the outstanding
Common Stock.
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(2)(3) PERCENT OF CLASS
- --------------------------------------- -------------------------- ----------------
<S> <C> <C>
Guy W. Millner(4).................................... 9,510,546(5) 36.25
Millner Preferred LLC(6)............................. 4,502,007 17.18
MI Holdings, Inc.(7)................................. 2,252,844 8.60
C. Douglas Miller.................................... 759,009 2.85
Larry J. Bryan....................................... 252,949(8) *
Lucius E. Burch, III................................. 120,800 *
Kaaren Johnson-Street................................ 9,800 *
Donald A. McMahon.................................... 36,800 *
Frank A. Metz, Jr.................................... 16,800 *
Parker H. Petit...................................... 2,000 *
Nancy Clark Reynolds................................. 13,800 *
James Ernest Riddle.................................. 69,648 *
Carl E. Sanders...................................... 79,232(9) *
Thomas A. Vadnais.................................... 180,999 *
All current executive officers and directors as a
group (22 persons)................................. 10,278,868 43.01
</TABLE>
- ---------------
(1) Addresses given only for beneficial owners of more than 5% of the Common
Stock.
(2) Treats Common Stock and all options exercisable within 60 days of December
31, 1998, as beneficially owned and, unless otherwise indicated, the shares
shown are solely owned by the indicated beneficial owner.
(3) Includes (i) shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days of December 31, 1998, as follows: Mr.
Miller, 452,721; Mr. Bryan, 103,916; Mr. Burch, 120,800; Ms. Johnson-Street,
8,800; Mr. McMahon, 4,800; Mr. Metz, 14,800; Ms. Reynolds, 13,800; Mr.
Riddle, 15,000; Mr. Sanders, 36,132; Mr. Vadnais, 106,468; and all executive
officers and directors as a group, 1,026,812; (ii) shares of Common Stock
issuable upon the exercise of stock purchase rights acquired under the
Company's nonqualified deferred compensation plan as follows: Mr. Millner,
30,146; Mr. Miller, 17,584; Mr. Bryan, 39,234; Mr. Riddle, 2,651; Mr.
Vadnais, 1,306; and all executive officers and directors as a group,
159,964; (iii) shares of Common Stock held in the Company's profit sharing
plan as follows: Mr. Millner, 91,051; Mr. Miller, 27,189; Mr. Bryan, 3,286;
and all executive officers and directors as a group, 156,080; and (iv)
shares of Common Stock held in the Company's Employee Stock Purchase Plan as
follows: Mr. Bryan, 2,694; Mr. Vadnais, 2,455; Mr. Riddle, 1,997; and all
executive officers and directors as a group, 12,590.
(4) 3535 Piedmont Road, N.E., Atlanta, Georgia 30305
(5) Of the indicated shares, 2,252,844 are held by MI Holdings, Inc., a
corporation of which Mr. Millner owns a majority of the voting stock, and
4,502,007 are held by Millner Preferred, LLC, a limited liability company of
which Mr. Millner owns a majority of the voting membership interests.
(6) 3108 Piedmont Road, N.E., Suite 105, Atlanta, Georgia 30305
(7) 3108 Piedmont Road, N.E., Suite 105, Atlanta, Georgia 30305
(8) Of the indicated shares, 26,293 are owned by Dorothy Bryan, Mr. Bryan's
wife. Mr. Bryan disclaims ownership of these shares.
(9) Of the indicated shares, 9,000 are indirectly held by Mr. Sanders in the
Carl E. Sanders Retirement Plan Trust, of which Mr. Sanders is trustee.
PROPOSAL 1. ELECTION OF DIRECTORS
NOMINEES
The Board of Directors of the Company is divided into three classes of
directors with staggered terms of office. Upon the expiration of the term of
office for a class of directors, the nominees for that class are elected for a
term of three years to serve until the election and qualification of their
successors. At the Annual
2
<PAGE> 6
Meeting of Shareholders this year, the four nominees are in Class I. The
incumbent Class III and Class II directors have one year and two years,
respectively, remaining in their terms of office.
It is the intention of the persons named as proxies to vote their proxies
for the election of Mr. Lucius E. Burch, III, Mr. Donald A. McMahon, Mr. C.
Douglas Miller, and Mr. Parker H. Petit as Class I directors. All of the
nominees currently serve as directors. In the event any of the nominees refuses
or is unable to serve as a director (which is not anticipated), the persons
named as proxies reserve full discretion to vote for such other person or
persons as may be nominated.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES
NAMED BELOW.
The following section sets forth the names, ages, occupations and
employment during the last five years of each of the nominees and the directors
continuing in Class III and Class II, the period during which each has served as
a director of the Company and other directorships held, all as of December 11,
1998.
NOMINEES FOR CLASS I
(TERM EXPIRING 2002)
LUCIUS E. BURCH, III
Director since 1982 Age: 57
Mr. Burch has been Chairman of the investment firm of Massey Burch
Investment Group, Inc. for more than five years. Mr. Burch is also a director of
QMS, Inc., Physicians Resource Group, Inc., and Titan Holdings, Inc.
DONALD A. MCMAHON
Director since 1984 Age: 67
Mr. McMahon has been a private investor for more than five years and
currently serves on the Boards of Directors of Intelligent Systems Corp. and
Richton International.
C. DOUGLAS MILLER
Director since 1984 Age: 57
Mr. Miller is and has been Chief Executive Officer and President of the
Company since October 15, 1993. He joined Norrell Services, Inc., a subsidiary
of the Company, in 1979, and served as President and Chief Operating Officer of
the Company immediately prior to his election as President and Chief Executive
Officer. Mr. Miller is also Chairman of the Company's Board of Directors and a
director of American Business Products, Inc.
PARKER H. PETIT
Director since 1998 Age: 59
Mr. Petit has been Chairman of Healthdyne Information Enterprises, Inc. and
Matria Healthcare, Inc. since 1994 and 1996, respectively. He is the founder of
and was Chairman and CEO of Healthdyne, Inc. from 1970 until 1996. He is
currently on the Board of Directors of each of Atlantic Southeast Airlines,
Inc., Intelligent Systems, Inc., and Logility, Inc.
3
<PAGE> 7
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
CLASS III
(TERM EXPIRING 2000)
NANCY CLARK REYNOLDS
Director since 1989 Age: 71
Ms. Reynolds was the Vice Chairman of the consulting firm of Wexler,
Reynolds, Fuller, Harrison and Schule, Inc. from 1989 until she retired in 1993
and President of the same firm from 1983 to 1989. She serves as a director of
Wackenhut Corporation.
JAMES ERNEST RIDDLE
Director since 1998 Age: 57
Mr. Riddle is and since March 1997 has been 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 first as Senior Vice President, and then as Executive Vice
President, Marketing and Sales, with Ryder System, Inc. since January 1993. He
is a director of Danka Business Systems PLC.
CARL E. SANDERS
Director since 1989 Age: 73
Mr. Sanders is the Chairman of the law firm of Troutman Sanders LLP,
Atlanta, Georgia. Prior to 1995, Mr. Sanders served as Chief Partner of Troutman
Sanders for more than five years. He serves as a director of Carmike Cinemas,
Inc., Matria Healthcare, Inc., Healthdyne Information Enterprises and Metromedia
International Group, Inc.
THOMAS A. VADNAIS
Director since 1994 Age: 51
Mr. Vadnais is and has been President, Global Alliances, of the Company
since February 1998, and is and has been the President and Chief Operating
Officer of Tascor Incorporated, a subsidiary of the Company, since October 31,
1993.
CLASS II
(TERM EXPIRING 2001)
LARRY J. BRYAN
Director since 1985 Age: 55
Mr. Bryan is and has been Executive Vice President of the Company since
1985. Mr. Bryan also served as Chief Financial Officer of the Company from 1985
until October 1995.
KAAREN JOHNSON-STREET
Director since 1996 Age: 52
Ms. Johnson-Street is the President of Kaaren Street Associates. She was
Vice President of Diversity Business Enterprise of Burger King Corporation from
1994 to May 1996. From 1991 to 1994, she was President and Chief Executive
Officer of the Private Industry Council of Dade County d/b/a Jobs for Miami.
4
<PAGE> 8
FRANK A. METZ, JR.
Director since 1993 Age: 64
Mr. Metz was Chairman of Roosevelt Hospital in New York City from 1994
until May 1996. From 1989 until January 1993, Mr. Metz was Senior Vice President
and Chief Financial Officer of International Business Machines Corporation where
he worked for 38 years. Mr. Metz is a director of Solutia Inc. and Allegheny
Power Systems Company.
GUY W. MILLNER
Director since 1961 Age: 62
Mr. Millner served as Chairman since the Company was founded until October,
1997. From November 1983 until October 15, 1993, Mr. Millner served as President
and Chief Executive Officer of the Company.
MEETINGS AND COMMITTEES
During the past fiscal year, the Board of Directors met four (4) times.
The executive committee consists of Messrs. Miller, Bryan, Metz, Millner,
and Sanders and did not meet during the past fiscal year. The executive
committee functions with substantially all of the powers and duties of the Board
of Directors; however, the committee lacks authority to amend the Articles of
Incorporation or Bylaws of the Company, fill vacancies on the Board of
Directors, approve or propose to shareholders action for which shareholder
approval is required by law or approve mergers that do not require shareholder
approval.
The audit and finance committee consists of Mr. Burch, Ms. Johnson-Street,
Mr. Metz, and Ms. Reynolds. The audit and finance committee met two (2) times
during the past fiscal year. This committee is responsible for reviewing the
financial statements of the Company, for evaluating the Company's internal
control systems and procedures, and for coordinating and approving the
activities of the Company's external auditors.
The compensation and stock option committee consists of Ms. Johnson-Street,
Mr. McMahon, Mr. Metz, Mr. Petit, and Ms. Reynolds, and met three (3) times
during the past fiscal year. This committee is responsible for setting and
reviewing the compensation, including fringe benefits, of the executive officers
and directors of the Company and administering the Company's stock option and
benefit plans.
The governance and nominating committee consists of Ms. Johnson-Street, Mr.
McMahon, Mr. Burch and Mr. Sanders. This committee met two (2) times during the
past fiscal year. The governance and nominating committee is responsible for
recommending nominees for election as Directors and for review of the Board's
effectiveness and governance. No formal procedure for shareholder
recommendations regarding nominees to the Board of Directors has been adopted.
The committee would consider any such shareholder recommendations if submitted
in writing, addressed to the chairman of the committee at the Company's
principal administrative offices.
DIRECTOR COMPENSATION
During fiscal 1998, nonmanagement directors other than Mr. Burch received
fees of $20,000, plus a fee of $1,000 for each board meeting and committee
meeting attended. Pursuant to the terms of a 1981 agreement, the Company paid a
consulting fee to Massey Burch Investment Group, Inc. of approximately $2,270
per month during fiscal 1998, and Mr. Burch did not receive any director's fees
for fiscal 1998. The Company paid ordinary and necessary travel expenses for
directors to attend board and committee meetings. Directors are also eligible to
receive non-qualified stock options which are generally exercisable ratably over
four or five years at a price equal to the fair market value of the Common Stock
on the date of grant.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and certain officers and persons who own beneficially more than 10% of
a registered class of the Company's equity
5
<PAGE> 9
securities to file with the Securities and Exchange Commission (the "SEC")
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Certain officers, directors and
greater than 10% shareholders are required by SEC regulations to furnish the
Company with copies of all such forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, its officers, directors, and greater than 10%
shareholders complied during fiscal 1998 with all applicable Section 16(a)
filing requirements, except as follows: Mr. Mincey filed three Form 4 reports
late for four transactions.
6
<PAGE> 10
EXECUTIVE COMPENSATION
This table discloses the compensation awarded or paid to, or earned by, the
Company's Chief Executive Officer and its four other most highly compensated
executive officers with respect to the 1998, 1997 and 1996 fiscal years
(together, these persons are sometimes referred to as the "Named Executives").
The Company has no outstanding stock appreciation rights ("SARs") and granted no
SARs during fiscal 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
----------------------------------------- COMPENSATION
OTHER ANNUAL ------------ ALL OTHER
FISCAL SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
NAME AND POSITION YEAR ($) ($) ($)(1) (#) ($)(2)
- ----------------- ------ ------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
C. Douglas Miller................ 1998 675,770 -- 24,144 100,000 54,135
Chairman, President 1997 550,000 440,000 23,099 -- 75,658
and Chief Executive Officer 1996 482,698 550,000 59,338 174,000 31,117
James Ernest Riddle.............. 1998 450,000 -- 5,936 75,000 87,526
Chief Operating 1997 294,231 213,100 2,073 75,000 123,846
Officer, and President, 1996 -- -- -- -- --
Norrell Services, Inc.
Larry J. Bryan................... 1998 375,000 -- 23,428 50,000 50,295
Executive Vice 1997 375,000 300,000 20,753 -- 65,856
President 1996 324,511 375,000 -- 74,000 12,966
Thomas A. Vadnais................ 1998 300,000 88,029 17,414 13,000 67,998
President, Global Alliances, 1997 282,692 160,000 14,908 20,000 27,465
and President and Chief 1996 247,404 200,000 -- -- 13,391
Operating Officer,
Tascor Incorporated
Scott L. Colabuono............... 1998 230,769 118,740 1,188 30,000 71,906
Senior Vice President, 1997 -- -- -- -- --
and Chief Financial 1996 -- -- -- -- --
Officer
</TABLE>
- ---------------
(1) Includes $39,617 paid for membership dues for Mr. Miller in fiscal 1996.
Perquisites and other personal benefits, securities, or property in an
aggregate amount less than the lesser of (a) $50,000, and (b) 10% of the
Named Executive's total annual salary and bonus are not reflected in this
table.
(2) For fiscal 1998, the amounts in this column represent (i) the Company's
matching contributions and discretionary profit sharing allocations to the
nonqualified deferred compensation plan accounts of the Named Executives,
(ii) $675 in premium payments made by the Company for life insurance for Mr.
Miller, (iii) $81,641 and $71,906 paid for Mr. Riddle's and Mr. Colabuono's
moving expenses, respectively, and (iv) $31,722, $36,795, and $57,037, paid
in fiscal 1998 to Mr. Miller, Mr. Bryan and Mr. Vadnais, respectively, as
reimbursement of interest on bank loans obtained for the payment of taxes
with respect to the exercise of certain non-qualified options to purchase
the Company's common stock.
7
<PAGE> 11
This table presents information regarding options granted during the 1998
fiscal year to purchase shares of the Company's Common Stock. In accordance with
rules of the SEC, the table shows the hypothetical "gains" or "option spreads"
that would exist for the respective options based on assumed rates of annual
compound stock price appreciation of 5% and 10% from the date the options were
granted over the full option term. There were no SARs outstanding during fiscal
1998.
OPTION GRANTS IN FISCAL 1998
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF
SECURITIES GRANTED STOCK PRICE
UNDERLYING TO APPRECIATION FOR
OPTIONS EMPLOYEES OPTION TERM
GRANTED IN EXERCISE EXPIRATION ---------------------
NAME (#)(1) FISCAL YEAR PRICE($/SH) DATE 5%($) 10%($)
- ---- ---------- ----------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
C. Douglas Miller............... 100,000 20.89 19.375 12/30/07 1,218,483 3,087,876
James Ernest Riddle............. 75,000 15.67 18.75 01/09/08 884,383 2,241,200
Larry J. Bryan.................. 50,000 10.44 19.375 12/30/07 609,242 1,543,938
Thomas A. Vadnais............... 13,000 2.71 19.375 12/30/07 158,403 401,424
Scott L. Colabuono.............. 30,000 6.26 18.875 01/20/08 356,112 902,457
</TABLE>
- ---------------
(1) The indicated options were granted pursuant to the Company's 1994 Stock
Incentive Plan at exercise prices equal to the fair market value of the
underlying shares of Common Stock on the date of the grant and have a term
of ten years from the date of the grant. The exercise price of the options
may be paid in cash or by delivery of or withholding of shares of Common
Stock. The indicated options (other than those granted to Mr. Colabuono)
become exercisable at the end of nine years but may be accelerated if the
price of the Company's common stock reaches certain specified levels; those
options granted to Mr. Colabuono become exercisable in five equal annual
increments at the end of each of the first five years of the term.
This table presents information regarding options exercised for shares of
the Company's Common Stock during fiscal 1998 and the value of unexercised
options held at November 1, 1998. There were no SARs outstanding during fiscal
1998.
AGGREGATED OPTION EXERCISES IN FISCAL 1998 AND 1998 FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FY-END(#) AT FY-END($)(1)
ACQUIRED VALUE ------------------- --------------------
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ---- ----------- --------- ------------------- --------------------
<S> <C> <C> <C> <C>
C. Douglas Miller..................... 88,700 1,195,962 452,721/304,400 2,240,395/81,250
James Ernest Riddle................... -- -- 15,000/135,000 0/ 0
Larry J. Bryan........................ 50,793 485,708 103,916/154,400 60,381/48,750
Thomas A. Vadnais..................... 15,088 144,279 102,468/ 45,000 681,446/13,000
Scott L. Colabuono.................... 0 0 0/ 30,000 0/ 0
</TABLE>
- ---------------
(1) Value of unexercised, in-the-money options at November 1, 1998, is the sum
of the value of each option, if more than one, calculated as follows: [(per
share closing sale price on October 30, 1998) less (per share exercise
price)] x number of shares subject to unexercised options. The per share
closing sale price reported by the New York Stock Exchange ("NYSE") on
October 30, 1998, was $13.5625. The closing sale price for October 30, 1998,
was used in this calculation because the Company's fiscal year ended on
Sunday, November 1, 1998.
8
<PAGE> 12
EXECUTIVE OFFICER EMPLOYMENT ARRANGEMENTS
The Company has entered into an employment agreement with C. Douglas
Miller, effective December 9, 1997, which provides for his employment as
Chairman, President and Chief Executive Officer of the Company until terminated
by one month's notice from either party to the other. The employment agreement
provides for (i) an annual base salary of $750,000 agreed to by the Company and
Mr. Miller, subject to periodic adjustment by agreement between Mr. Miller and
the Company; (ii) an annual bonus not to exceed 100% of salary based on the
extent of achievement of the Company's pre-tax profit plan presented to the
Board of Directors for the year; and (iii) 36 months severance and immediate
vesting of options if terminated by the Company other than for cause, or by the
employee upon either a change in the terms and conditions of employment or
following a change in control of the Company. The employment agreement contains
a three-year non-competition provision and three-year non-solicitation of
employees and customers provisions, each beginning the date Mr. Miller is no
longer an employee of the Company.
The Company has entered into an employment agreement with James Ernest
Riddle, effective March 3, 1997, which provides for his employment as Chief
Operating Officer and President of the Company until terminated by two weeks'
notice from either party to the other. The employment agreement provides for (i)
an annual base salary of $450,000 agreed to by the Company and Mr. Riddle,
subject to periodic adjustment by agreement between Mr. Riddle and the Company;
(ii) an annual bonus not to exceed 90% of salary based on the extent of
achievement of the Company's pre-tax profit plan presented to the Board of
Directors for the year; and (iii) 24 months severance and immediate vesting of
options if terminated by the Company other than for cause, or by the employee
upon either a change in the terms and conditions of employment or following a
change in control of the Company. The employment agreement contains a two-year
non-competition provision and two-year non-solicitation of employees and
customers provisions, each beginning the date Mr. Riddle is no longer an
employee of the Company.
The Company has entered into an employment agreement with Larry J. Bryan
effective May 24, 1993, which provides for his employment as Executive Vice
President of the Company until terminated by ninety days' notice by either party
to the other. The employment agreement provides for: (i) a salary and bonus
agreed to by the Company and Mr. Bryan, subject to adjustment from time to time
by mutual agreement; and (ii) 18 months severance and immediate vesting of
options if terminated by the Company other than for cause or by the employee
upon a change in terms and conditions of employment following a change in
control of the Company. Mr. Bryan's current salary is $375,000. The employment
agreement contains an 18-month non-competition provision and 18-month
non-solicitation of employees and customers provisions, each beginning the date
Mr. Bryan is no longer an employee of the Company.
The Company has entered into an employment agreement with Thomas A. Vadnais
effective February 15, 1996, which provides for his employment as President,
Global Alliances, of the Company and President of Tascor Incorporated until
terminated by either party on two weeks' notice. The employment agreement
provides for: (i) a salary and bonus as agreed to by the Company and Mr.
Vadnais, subject to adjustment from time to time by mutual agreement; and (ii)
severance in accordance with the Company's severance policy in effect at the
time of termination. Mr. Vadnais's current salary is $300,000. The employment
agreement contains a one-year non-competition provision and one-year
non-solicitation of employees and customers provisions, each beginning the date
Mr. Vadnais is no longer an employee of the Company.
The Company has entered into an employment agreement with Scott L.
Colabuono, effective January 19, 1998, which provides for his employment as
Senior Vice President and Chief Financial Officer of the Company until
terminated by two weeks' notice from either party to the other. The employment
agreement provides for: (i) a salary and bonus as agreed to by the Company and
Mr. Colabuono, subject to adjustment from time to time by mutual agreement; and
(ii) severance in accordance with the Company's severance policy in effect at
the time of termination. Mr. Colabuono's current salary is $300,000. The
employment agreement contains a one-year non-competition provision and one-year
non-solicitation of employees and customers provisions, each beginning the date
Mr. Colabuono is no longer an employee of the Company.
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<PAGE> 13
CERTAIN RETIREMENT BENEFITS
The Company has a nonqualified salary continuation plan (the "Vision
Plan"), which is designed to provide retirement benefits to certain selected
executive employees. At the time of selection to become a participant, the
individual is placed into one of three participation levels. The annual amount
of such individual's retirement benefit, depending upon participation level, is
an amount determined in one of the following three ways: (i) 20% of such
individual's average annual compensation based on the five consecutive calendar
years after becoming a Vision Plan participant during which the individual's
compensation is highest; (ii) 20% of such individual's average annual
compensation for the first five calendar years of plan participation; or (iii)
the greater of (A) 20% of such individual's average annual compensation for the
first five calendar years of plan participation, or (B) 1% of such individual's
average annual compensation for the five consecutive calendar years of plan
participation during which compensation is highest, multiplied by actual years
of participation in the plan, to a maximum of 20 years or the end of the year in
which the individual attains age 62, whichever comes first. Employees entering
the Vision Plan after January 1, 1997, will receive a benefit calculated
according to clause (B) of item (iii) above. Benefits vest commencing after six
years of plan participation and become fully vested after 10 years of plan
participation. Benefits will be paid for 15 years beginning on the later of age
62 or termination of employment. The estimated annual benefits payable to the
Named Executives, assuming retirement at age 62, are as follows: C. Douglas
Miller, $200,246; James Ernest Riddle, $20,877; Larry J. Bryan, $136,384; Thomas
A. Vadnais, $90,077; and Scott L. Colabuono, $46,464.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors of the Company has
prepared the following report on executive compensation. This report describes
the Company's current executive compensation program, including the underlying
philosophy of the program and the criteria on which executive compensation was
based. This report also discusses the compensation paid to the Company's
Chairman and Chief Executive Officer, C. Douglas Miller, during the most recent
fiscal year.
The Compensation Committee of the Company's Board of Directors (the
"Committee") consists of five directors who are neither employees nor officers
of the Company. The Committee reviews the Company's executive compensation
program and policies each year and determines the compensation of the Named
Executives. The Committee's determinations are reviewed with and approved by all
of the Company's non-employee directors, who constitute a majority of the Board.
The Committee's policy regarding compensation of the Company's officers is
to provide competitive salary levels and compensation incentives that attract
and retain individuals of outstanding ability, that recognize individual
performance and the performance of the Company relative to the performance of
other companies of comparable size and quality, and that support the Company's
primary goal of increasing shareholder value.
The executive compensation program includes three components which, taken
together, constitute a flexible and balanced method of establishing total
compensation for management. These components are base salary, short-term
incentive awards usually in the form of cash bonuses and long-term incentive
awards in the form of stock option grants, each of which is discussed in more
detail below.
BASE SALARIES
The Committee reviews various studies by compensation consulting firms and
public information from other sources regarding compensation levels for
publicly-held companies of similar size located in the Southeast and elsewhere
in the United States. The Committee establishes the salaries of the Named
Executives and reviews the salaries of the other executive officers. Individual
salaries are determined by the Committee's assessment of the individual's
experience level, the scope and complexity of the position held and the range of
salaries for similar positions in publicly-held companies of similar size. The
Committee believes that publicly-held companies of similar size represent the
Company's competitors for executive talent and that
10
<PAGE> 14
a review of the compensation practices of such companies is more relevant than a
review of the compensation practices of companies of various sizes in the
temporary services or staffing industry.
SHORT-TERM INCENTIVE PROGRAM
The goal of the short-term incentive, or discretionary bonus, program is to
place a portion of the executive officers' total cash compensation at risk in
order to encourage and reward a continued high level of performance each year,
and to further encourage a continued high level of performance in future years.
Individual incentive amounts are determined by the Committee in its discretion
based primarily upon its assessment of the performance of the Company relative
to the Company's plan, which is developed annually by the Company and approved
by the Board of Directors and, to a lesser extent, the performance of the
Company relative to the performance of other companies in the temporary services
or staffing industry and the individual's organizational responsibility and
personal performance. In evaluating the Company's performance relative to the
approved plan, the Committee considers such factors as sales growth, return on
equity, return on assets, stock performance, total shareholder return, growth in
earnings per share and specifically pretax earnings of the Company. No specific
weight is assigned to any of such performance factors; however, specific target
levels varying from 80% to 120% of the approved plan with respect to pretax
earnings, if attained, will result in a bonus award under the program. In fiscal
1998, limited cash bonuses for certain executive officers were paid. Mr. Miller,
Mr. Riddle and Mr. Bryan each waived any right they had to receive a bonus for
the 1998 fiscal year.
LONG-TERM INCENTIVE PROGRAM
Stock options are the primary basis for the Company's long-term incentive
program. The Committee periodically grants stock options at no less than fair
market value at the date of grant with a vesting period of one to nine years.
The option program is designed to link officer compensation to long-term
shareholder value and focus management attention on long-term Company
performance. Stock options are also granted to encourage and facilitate personal
stock ownership by the executive officers and thus strengthen both their
personal commitment to the Company and their longer term perspective. The size
of the grants is based on individual levels of responsibility and the potential
for the officers to contribute to the future success of the Company. The number
of options granted to individual officers was subjectively determined by the
Committee without regard to the number of options previously granted. The
Committee believes the total compensation of officers, including the value of
options at the date of grant, is competitive with total compensation paid by
other major corporations. The amount of any gain that officers ultimately
realize from options depends solely on the future performance of the Company's
Common Stock.
The Committee believes that the three components of compensation described
above provide total compensation that is competitive with the total compensation
paid by other publicly-held companies of similar size, effectively links officer
and shareholder interests through equity-based plans and provides incentives
that are consistent with the long-term increase in value of the Company as
reflected in its per share market price.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee believes that Mr. C. Douglas Miller's compensation as
Chairman and Chief Executive Officer appropriately reflects individual and
Company performance in the short and long term. In determining Mr. Miller's base
salary, bonus and stock option grant for fiscal 1998, the Committee considered
both the Company's overall performance and Mr. Miller's individual performance
using the same criteria as it used for the other Named Executives as described
above. It also considered the compensation received by chief executive officers
of other publicly-held companies of similar size as well as incentive levels
considered appropriate by the Committee in establishing Mr. Miller's total
compensation. On December 30, 1997, Mr. Miller received options for 100,000
shares of the Company's Common Stock at fair market value on the date of grant.
Mr. Miller did not receive a bonus for fiscal year 1998.
11
<PAGE> 15
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), limits the amount of individual compensation for certain executives
that may be deducted by the employer for federal tax purposes in any one fiscal
year to $1 million unless such compensation is "performance-based." The
determination of whether compensation is performance-based depends upon a number
of factors, including shareholder approval of the plan under which the
compensation is paid, the exercise price at which options or similar awards are
granted, the disclosure to and approval by the shareholders of applicable
performance standards, the composition of the Committee, and certification by
the Committee that performance standards were satisfied. While it is possible
for the Company to compensate or make awards under incentive plans and otherwise
that do not qualify as performance-based compensation deductible under Section
162(m), the Committee, in structuring compensation programs for its top
executive officers, intends all compensation awards to be deductible.
Submitted by the Compensation Committee of the Company's Board of
Directors:
Kaaren Johnson-Street
Donald A. McMahon
Nancy Clark Reynolds
Parker H. Petit
Frank A. Metz, Jr., Chairman
12
<PAGE> 16
PERFORMANCE GRAPH
The following graph indicates the Company's cumulative total return to
shareholders from July 26, 1994 (the first trading day of the Company's Common
Stock), through October 30, 1998 (the last business day prior to the Company's
fiscal year end), as compared to cumulative total returns for the NYSE Stock
Market Index and a group of peers made up of the following public companies:
Kelly Services, Inc., Manpower Inc., The Olsten Corporation and Interim
Services, Inc.
COMPARISON OF CUMULATIVE TOTAL RETURN*
FOR THE YEAR ENDED NOVEMBER 1, 1998
<TABLE>
<CAPTION>
MEASUREMENT PERIOD NORRELL NYSE STOCK
(FISCAL YEAR COVERED) CORPORATION MARKET PEER INDEX
<S> <C> <C> <C>
7/26/94 100.0 100.0 100.0
10/28/94 127.0 104.3 111.9
10/27/95 210.8 128.8 108.9
10/25/96 394.5 158.1 116.1
10/31/97 412.6 208.2 130.0
10/30/98 193.8 241.2 92.9
</TABLE>
* Assumes $100 invested on July 26, 1994, in Norrell Corporation Common Stock,
the NYSE Stock Market Index, and the peer group.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
The Company made loans under an executive equity ownership incentive plan
which expired December 31, 1996, known as the Management Equity Plan, from time
to time to certain of the Company's executives to assist those individuals in
purchasing shares of Common Stock. Such indebtedness was evidenced by promissory
notes bearing interest at a specified prime rate on the principal amount
thereof. The largest outstanding amount of such loan to Stanley E. Anderson,
President -- Technical Resources Division, Norrell Information Services, Inc.,
during fiscal 1998 was $76,805, and as of December 31, 1998, the outstanding
amount of such loan was $19,205. Mr. Carl E. Sanders, a director of the Company,
is also Chairman of Troutman Sanders LLP, a law firm based in Atlanta, Georgia,
which provided legal services to the Company in fiscal 1998 and is expected to
provide legal services to the Company in the future.
13
<PAGE> 17
AUDITORS
The firm of Arthur Andersen LLP has served as the Company's independent
public accountants since 1985 and the Board of Directors intends to reappoint
this firm for fiscal 1999. The appointment of auditors is a matter of
determination by the Board of Directors and is not being submitted to the
shareholders for approval or ratification. A representative of this firm is
expected to attend the meeting to respond to questions from shareholders and to
make a statement if he or she so desires.
SHAREHOLDER PROPOSALS
Any proposals from shareholders to be considered for presentation at the
2000 Annual Meeting of Shareholders and inclusion in the Company's 2000 proxy
materials must be received at the principal executive offices of the Company,
3535 Piedmont Road, N.E., Bldg. 14, Atlanta, Georgia 30305, not later than
September 26, 1999. The proxy or proxies designated by the Company will have
discretionary authority to vote on any matter properly presented by a
shareholder for consideration at the 2000 Annual Meeting of Shareholders but not
submitted for inclusion in the proxy materials for such meeting unless notice of
the matter is received by the Company at its principal executive office not
later than December 10, 1999, and certain other conditions of the applicable
rules of the SEC are satisfied.
Management does not know of any other matters to be presented at the
meeting for action by shareholders. However, if any other matters requiring a
vote of the shareholders arise at the meeting or any adjournment(s), votes will
be cast pursuant to the proxies with respect to such matters in accordance with
the best judgment of the persons acting under the proxies.
The Company will pay the cost of soliciting proxies in the accompanying
form. In addition to solicitation by use of the mails, certain officers and
regular employees of the Company may solicit the return of proxies by telephone,
telegram or personal interview. The Company may request brokerage houses and
custodians, nominees and fiduciaries to forward soliciting material to their
principals, the beneficial owners of Common Stock, and will reimburse them for
their reasonable out-of-pocket expenses.
ANNUAL REPORT
The Annual Report (which is not part of the proxy soliciting material) of
the Company for fiscal 1998 is being mailed to the Company's shareholders with
this proxy statement.
MARK H. HAIN
Secretary
Atlanta, Georgia
January 27, 1999
14
<PAGE> 18
(NORRELL CORPORATION LOGO)
<PAGE> 19
NORRELL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 1999 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints C. Douglas Miller, Larry J. Bryan and Mark
H. Hain or either of them, with power of substitution to each, the proxies of
the undersigned to vote the Common Stock of the undersigned at the Annual
Meeting of Shareholders of NORRELL CORPORATION, to be held Tuesday, March 2,
1999, at 9:30 a.m. in the "C" level auditorium of the administrative offices of
the Company at 3535 Piedmont Road, N.E., Atlanta, Georgia 30305, and any
adjournment thereof:
1. To elect four (4) Class I directors for a term of three years and until
their successors are elected and have qualified.
<TABLE>
<S> <C>
[ ] FOR all nominees listed below (except as [ ] WITHHOLD AUTHORITY to vote for all nominees
marked to the contrary below) listed below
</TABLE>
LUCIUS E. BURCH, III; DONALD A. MCMAHON; C. DOUGLAS MILLER; PARKER H. PETIT
INSTRUCTION: To withhold authority to vote for any individual nominee, write the
nominee's name in the space provided below.
- --------------------------------------------------------------------------------
(continued on other side)
(continued from reverse side)
2. To vote in accordance with their best judgment with respect to any other
matters that may properly come before the meeting.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" EACH OF THE ABOVE PROPOSALS AND
UNLESS INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED, THIS
PROXY WILL BE SO VOTED.
Please date and sign this Proxy
exactly as name(s) appears on the
mailing label.
----------------------------------
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Print Name(s):
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NOTE: When signing as an attorney,
trustee, executor, administrator
or guardian, please give your
title as such. If a corporation or
partnership, give full name by
authorized officer. In the case of
joint tenants, each joint owner
must sign.
Dated:
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