1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 for the
quarterly period ended:
June 30, 1999
or
[ ] Transition Report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 for the
transition period from: ______to______
Commission file number: 1-10686
MANPOWER INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1672779
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
5301 N. Ironwood Road
Milwaukee, Wisconsin 53217
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 961-1000
Indicate by check mark whether the 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
Indicate the number of shares outstanding of each
of the issuer's classes of common stock, as of the
latest practicable date.
Shares
Outstanding
at June 30,
Class 1999
Common Stock, $.01 par value 76,719,316
<PAGE>
MANPOWER INC. AND SUBSIDIARIES
INDEX
Page
Number
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (unaudited)
- Consolidated Balance Sheets 3 - 4
- Consolidated Statements of Operations 5
- Consolidated Statements of Cash Flows 6
- Notes to Consolidated Financial Statements 7 - 10
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 11 - 15
Item 3 - Quantitative and Qualitative Disclosures
About Market Risk 15
PART II - OTHER INFORMATION AND SIGNATURES
Item 4 - Submission of Matters to a Vote of Security Holders 16
Item 5 - Other Information 16
Item 6 - Exhibits and Reports on Form 8-K 17
Signatures 18
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
MANPOWER INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
ASSETS
June 30, December 31,
1999 1998
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents $116,788 $180,456
Accounts receivable, less allowance for
doubtful accounts of $40,302 and
$39,504, respectively 1,654,099 1,674,729
Prepaid expenses and other assets 62,501 53,565
Future income tax benefits 51,099 52,812
Total current assets 1,884,487 1,961,562
OTHER ASSETS:
Investments in licensees 34,512 33,055
Other assets 219,658 195,223
Total other assets 254,170 228,278
PROPERTY AND EQUIPMENT:
Land, buildings, leasehold improvements
and equipment 396,097 411,391
Less: accumulated depreciation and amoritization 217,621 220,131
Net property and equipment 178,476 191,260
Total assets $2,317,133 $2,381,100
The accompanying notes to consolidated financial statements
are an integral part of these balance sheets.
<PAGE>
MANPOWER INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share data)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
1999 1998
(unaudited)
CURRENT LIABILITIES:
Payable to banks $ 51,511 $ 99,268
Accounts payable 410,790 347,864
Employee compensation payable 69,204 77,084
Accrued liabilities 159,402 154,428
Accrued payroll taxes and insurance 275,245 319,053
Value added and income taxes payable 265,809 309,283
Current maturities of long-term debt 3,587 4,076
Total current liabilities 1,235,548 1,311,056
OTHER LIABILITIES:
Long-term debt 211,400 154,594
Other long-term liabilities 271,908 246,512
Total other liabilities 483,308 401,106
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, authorized
25,000,000 shares, none issued - -
Common stock, $.01 par value, authorized
125,000,000 shares, issued 83,541,916 and
83,279,149 shares, respectively 835 833
Capital in excess of par value 1,607,730 1,602,721
Accumulated deficit (742,981) (787,699)
Accumulated other comprehensive loss (80,083) (17,895)
Treasury stock at cost, 6,822,600 and
4,349,400 shares, respectively (187,224) (129,022)
Total stockholders' equity 598,277 668,938
Total liabilities and stockholders' equity $2,317,133 $2,381,100
The accompanying notes to consolidated financial statements
are an integral part of these balance sheets.
<PAGE>
MANPOWER INC. AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
3 Months Ended 6 Months Ended
June 30, June 30,
1999 1998 1999 1998
Revenues from services $2,327,597 $2,136,103 $4,502,833 $4,008,969
Cost of services 1,922,879 1,775,718 3,717,881 3,321,226
Gross profit 404,718 360,385 784,952 687,743
Selling and administrative
expenses 377,306 315,450 720,748 606,045
Operating profit 27,412 44,935 64,204 81,698
Interest and other expense 5,047 4,352 9,887 7,496
Earnings before income taxes 22,365 40,583 54,317 74,202
Provision for income taxes (9,420) 14,411 1,924 26,340
Net earnings $ 31,785 $ 26,172 $ 52,393 $ 47,862
Net earnings per share $ .41 $ .32 $ .67 $ .59
Net earnings per share - diluted $ .40 $ .32 $ .66 $ .58
Weighted average common shares 77,789 80,646 78,413 80,602
Weighted average common shares
- diluted 78,508 82,031 79,196 82,012
The accompanying notes to consolidated financial statements
are an integral part of these statements.
MANPOWER INC. AND SUBSIDIARIES
Supplemental Systemwide Information (Unaudited)
(in thousands)
3 Months Ended 6 Months Ended
June 30, June 30,
1999 1998 1999 1998
Systemwide Sales $2,756,067 $2,561,343 $5,318,537 $4,838,259
Systemwide information represents the total of Company-owned
branches and franchises.
<PAGE>
MANPOWER INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
6 Months Ended
June 30,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $52,393 $47,862
Adjustments to reconcile net
earnings to net cash
provided by operating activities:
Depreciation and amortization 33,151 26,586
Deferred income taxes (13) 223
Provision for doubtful accounts 6,513 7,186
Changes in operating assets and liabilities:
Accounts receivable (125,835) (232,452)
Other assets (33,794) (12,641)
Other liabilities 83,753 154,419
Cash provided (used) by
operating activities 16,168 (8,817)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (38,703) (63,322)
Proceeds from the sale of property and equipment 10,272 882
Acquisitions of businesses, net of cash acquired (2,518) (6,913)
Cash used by investing activities (30,949) (69,353)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in payable to banks (33,194) 51,560
Proceeds from long-term debt 61,161 40,292
Repayment of long-term debt (4,845) (757)
Proceeds from stock option and purchase plans 5,012 9,515
Repurchase of common stock (58,202) -
Dividends paid (7,675) (7,263)
Cash (used) provided by financing activities (37,743) 93,347
Effect of exchange rate changes on cash (11,144) (1,872)
Net change in cash and cash equivalents (63,668) 13,305
Cash and cash equivalents, beginning of period 180,456 142,246
Cash and cash equivalents, end of period $116,788 $155,551
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $7,601 $4,157
Income taxes paid $37,763 $16,011
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
MANPOWER INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
For the Six Months Ended June 30, 1999 and 1998
(in thousands, except per share data)
(1) Basis of Presentation
Certain information and footnote disclosures normally
included in financial statements prepared in accordance
with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission,
although the Company believes that the disclosures are
adequate to make the information presented not
misleading. These consolidated financial statements
should be read in conjunction with the consolidated
financial statements included in the Company's 1998
Annual Report to Shareholders.
The information furnished reflects all adjustments
that, in the opinion of management, are necessary for a
fair statement of the results of operations for the
periods presented. Such adjustments are of a normal
recurring nature.
(2) Accounting Policies
The Financial Accounting Standards Board ("FASB")
issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" in June 1998. This
statement establishes accounting and reporting
standards requiring that every derivative instrument be
recorded on the balance sheet as either an asset or
liability measured at its fair value. The statement
requires that changes in the derivative's fair value be
recognized currently in earnings unless specific hedge
accounting criteria are met, in which case the gains or
losses would offset the related results of the hedged
item. In June 1999, the FASB issued SFAS No. 137,
"Accounting for Derivative Instruments and Hedging
Activities-Deferral of the Effective Date of FASB
Statement No. 133" which defers the required adoption
date of SFAS No. 133 until 2001 for the Company,
however early adoption is allowed. The Company has not
yet determined the timing or method of adoption or
quantified the impact of adopting this statement.
While the statement could increase volatility in
earnings and other comprehensive income, it is not
expected to have a material impact on the Consolidated
Financial Statements due to the Company's limited use
of derivative instruments.
<PAGE>
(3) Earnings Per Share
The calculations of net earnings per share and net
earnings per share - diluted are as follows:
3 Months Ended 6 Months Ended
June 30, June 30,
1999 1998 1999 1998
Net earnings per share:
Net earnings available to
common shareholders $ 31,785 $ 26,172 $ 52,393 $ 47,862
Weighted average common
shares outstanding 77,789 80,646 78,413 80,602
$ .41 $ .32 $ .67 $ .59
Net earnings per share - diluted:
Net earnings available to
common shareholders $ 31,785 $ 26,172 $ 52,393 $ 47,862
Weighted average common
shares outstanding 77,789 80,646 78,413 80,602
Effect of dilutive stock options 719 1,385 783 1,410
78,508 82,031 79,196 82,012
$ .40 $ .32 $ .66 $ .58
(4) Income Taxes
The Company had a one-time tax benefit of $15.7 million
during the quarter ended June 30, 1999 in connection
with the Company's dissolution of a non-operating
subsidiary. Exclusive of the effect of this benefit,
the Company provided for income taxes at 35.5%, which
is equal to the estimated annual effective tax rate
based on the currently available information. This
rate is higher than the U.S. Federal statutory rate due
to foreign tax rate differences and U.S. state income
taxes.
(5) Stockholders' Equity
Total comprehensive income (loss) consists of net
earnings and foreign currency translation adjustments
and is as follows:
3 Months Ended 6 Months Ended
June 30, June 30,
1999 1998 1999 1998
Net earnings $ 31,785 $ 26,172 $ 52,393 $ 47,862
Foreign currency translation
adjustments (20,856) 4,631 (62,188) (5,929)
Total comprehensive income
(loss) $ 10,929 $ 30,803 $ (9,795) $ 41,933
On April 26, 1999, the Company's Board of Directors
declared a cash dividend of $.10 per share which was
paid on June 14, 1999 to shareholders of record on June 2, 1999.
<PAGE>
(6) Interest Rate Swap
The Company has an interest rate swap agreement,
expiring in 2001, to fix the interest rate at 6.0% on
$50,000 of the Company's borrowings under the revolving
credit agreement. This swap agreement had an immaterial
impact on the recorded interest expense during the six
months of 1999. As of June 30, 1999, the variable
interest rate under the revolving credit agreement was
5.3%.
(7) Business Segment Data by Geographical Area
Geographical segment information is as follows:
3 Months Ended 6 Months Ended
June 30, June 30,
1999 1998 1999 1998
Revenues from services:
United States (a) $ 560,092 $ 538,499 $1,075,921 $1,037,572
France 893,336 900,685 1,721,359 1,622,074
United Kingdom 264,704 254,473 537,507 502,707
Other Europe 357,212 262,207 684,134 493,045
Other Countries 252,253 180,239 483,912 353,571
$2,327,597 $2,136,103 $4,502,833 $4,008,969
Operating Unit Profit:
United States $ 21,023 $ 20,284 $ 34,341 $ 35,544
France 21,302 18,150 34,665 30,216
United Kingdom 7,467 5,592 14,338 12,985
Other Europe 12,582 7,310 21,941 13,427
Other Countries 4,269 5,458 7,661 12,617
66,643 56,794 112,946 104,789
Corporate expenses (9,559) (10,670) (17,489) (20,667)
Amortization of intangible
assets (1,672) (1,189) (3,253) (2,424)
Non-recurring expenses (b) (28,000) - (28,000) -
Operating profit 27,412 44,935 64,204 81,698
Interest and other expense 5,047 4,352 9,887 7,496
Earnings before income
taxes $ 22,365 $ 40,583 $ 54,317 $ 74,202
(a) Total systemwide sales in the United States,
which includes sales of Company-owned branches and
franchises, was $930,526 and $894,951 for the
three months ended June 30, 1999 and 1998,
respectively, and $1,780,916 and $1,726,200 for
the six months ended June 30, 1999 and 1998,
respectively.
(b) Represents non-recurring items ($16,400 after
tax) in the second quarter of 1999 related to
employee severances, retirement costs and other
associated realignment costs.
<PAGE>
(8) Subsequent Events
On July 26, 1999, the Company issued euro200,000 in
unsecured notes with an effective interest rate of
5.69%, due in July 2006. Net proceeds from the issuance
were used to repay amounts under the Company's
unsecured revolving credit agreement and the commercial
paper program.
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations
Operating Results - Three Months Ended June 30, 1999 and 1998
Revenues increased 9.0% to $2,327.6 million for the
second quarter of 1999. Revenues were unfavorably
impacted by changes in currency exchange rates during
the second quarter of 1999 due to the strengthening of
the U.S. Dollar, as compared to the second quarter of
1998, relative to the currencies in most of the
Company's non-U.S. markets. At constant exchange
rates, the increase in revenues would have been 10.1%.
Volume, as measured by billable hours of branch
operations, increased 7.7% in the quarter. All of the
Company's major markets experienced revenue increases,
as measured in their local currencies, including the
United States (4.0%), France (2.4%) and the United
Kingdom (7.0%). The Company's Other Europe and Other
Countries segments reported revenue increases, as
measured in their local currencies, of 41.7% and 24.6%,
respectively.
Cost of services, which consists of payroll and related
expenses of temporary workers, decreased as a
percentage of revenues to 82.6% in the second quarter
of 1999 from 83.1% in the second quarter of 1998.
Gross margins increased in France during the quarter
due to enhanced pricing.
Selling and administrative expenses increased 19.6% to
$377.3 million in the quarter, primarily due to non-
recurring items totaling $28.0 million ($16.4 million
after tax) related to employee severances, retirement
costs and other associated realignment costs. Excluding
these non-recurring items, selling and administrative
expenses remained constant with the first quarter of
1999 level despite the Company's continued investments
in new or expanding markets.
Interest and other expense was $5.0 million in the
second quarter of 1999 compared to $4.4 million in the
second quarter of 1998. Net interest expense, plus the
cost of the U.S. accounts receivable securitization
program in 1999, was $4.3 million and $2.4 million in
the second quarter of 1999 and 1998, respectively. This
increase is primarily due to higher borrowing levels to
finance the share repurchase program and the Company's
investment in new markets. Translation gains were
$100,000 in the second quarter of 1999 compared to
losses of $1.2 million in the second quarter of 1998.
The Company had a one-time tax benefit of $15.7 million
during the quarter ended June 30, 1999 in connection
with the Company's dissolution of a non-operating
subsidiary. Exclusive of the effect of the benefit, the
Company provided for income taxes at 35.5%, which is
equal to the estimated annual effective tax rate based
on the currently available information. This rate is
higher than the U.S. Federal statutory rate due to
foreign tax rate differences and U.S. state income
taxes.
On a diluted basis, net earnings per share was $.40 in
the second quarter of 1999 compared to $.32 in the
secon++d quarter of 1998. Excluding the non-recurring
items and one-time income tax gain, net earnings per
share on a diluted basis would have been $.41 in the
second quarter of 1999. The diluted weighted average
shares decreased by 4.3% for the quarter due to the
Company's treasury stock purchases and a smaller effect
of dilutive stock options (see Note 3 to the
Consolidated Financial Statements) because of the lower
average share price during the quarter.
Operating Results - Six Months Ended June 30, 1999 and 1998
Revenues increased 12.3% to $4,502.8 million for the
first six months of 1999. Revenues were unfavorably
impacted by changes in currency exchange rates during
the first six months of 1999 due to the strengthening
weakening of the U.S. Dollar, as compared to the first
six months of 1998, relative to the currencies in most
of the Company's non-U.S. markets. At constant
exchange rates, the increase in revenues would have
been 11.5%. Volume, as measured by billable hours of
branch operations, increased 9.2% in the six month
period. All of the Company's major markets experienced
revenue increases, as measured in their local
<PAGE>
currencies, including the United States (3.7%), France
(5.9%) and the United Kingdom (8.9%). The Company's
Other Europe and Other Countries segments reported
revenue increases, as measured in their local
currencies, of 40.1% and 23.9%, respectively.
Cost of services, which consists of payroll and related
expenses of temporary workers, was 82.6% of revenues in
the six months of 1999 compared to 82.8% during the
same period in 1998. Gross margins increased in France
during the first six months of 1999 due to enhanced
pricing.
Selling and administrative expenses increased 18.9% to
$720.7 million during the first six month period of
1999 primarily due to non-recurring items totaling
$28.0 million ($16.4 million after tax) related to
employee severances, retirement costs and other
associated realignment costs. Excluding these non-
recurring items, selling and administrative expenses
remain at or below the expense levels of late 1998
despite the Company's continued investments in new or
expanding markets.
Interest and other expense was $9.9 million in the
first six months of 1999 compared to $7.5 million in
the first six months of 1998. Net interest expense,
plus the cost of the U.S. accounts receivable
securitization program in 1999, was $8.3 million and
$3.3 million in the first six months of 1999 and 1998,
respectively. This increase is primarily due to higher
borrowing levels to finance the share repurchase
program and the Company's investment in new markets.
Translation losses were $900,000 in the first six
months of 1999 compared to $2.4 million in the first
six months of 1998.
The Company had a one-time tax benefit of $15.7 million
during the six month period ended June 30, 1999 in
connection with the Company's dissolution of a non-
operating subsidiary. Exclusive of the effect of the
benefit, the Company provided for income taxes at
35.5%, which is equal to the estimated annual effective
tax rate based on the currently available information.
This rate is higher than the U.S. Federal statutory
rate due to foreign tax rate differences and U.S. state
income taxes.
On a diluted basis, net earnings per share was $.66 in
the first six months of 1999 compared to $.58 in the
first six months of 1998. Excluding the non-recurring
items and one-time income tax gain, net earnings per
share on a diluted basis would have been $.67 during
the first six months of 1999. The diluted weighted
average shares decreased by 3.4% for the first six
months due to the Company's treasury stock purchases
and a smaller effect of dilutive stock options (see
Note 3 to the Consolidated Financial Statements)
because of the lower average share price during the
first six months.
Liquidity and Capital Resources
Cash provided by operating activities was $16.2 million
in the first six months of 1999 compared to cash used
by operating activities of $8.8 million in the first
six months of 1998. This change reflects the increased
earnings in the first six months of 1999, along with
the change in working capital requirements between
periods. Cash provided by operating activities before
the changes in working capital requirements was $92.1
million in the first six months of 1999 compared to
$81.9 million in the first six months of 1998. Cash
used by changes in working capital was $75.9 million
and $90.7 million in the first six months of 1999 and
1998, respectively.
Capital expenditures were $38.7 million in the first
six months of 1999 compared to $63.3 million during the
first six months of 1998. These expenditures included
capitalized software of $1.2 million and $18.6 million
in the first six months of 1999 and 1998, respectively.
The balance is comprised of purchases of computer
equipment, office furniture and other costs related to
office openings and refurbishments.
Net cash provided from additional borrowings was $23.1
million and $91.1 million in the first six months of
1999 and 1998, respectively. The additional borrowings
in 1999 were primarily used to support the working
capital growth and to repurchase the Company's common
stock. The Company
<PAGE>
repurchased 2.5 million common shares at a cost of $58.2 million
during the first six months of 1999. The additional borrowings
in 1998 were primarily used to support the working capital growth,
investment in new markets and capital expenditures.
Accounts receivable decreased to $1,654.1 million at
June 30, 1999 from $1,674.7 million at December 31,
1998. This decrease is primarily due to the effect of
the change in currency exchange rates during the first
six months of 1999 offset by the growth in many of the
Company's major markets. The change in exchange rates
negatively impacted the receivable balance by $149.5
million.
As of June 30, 1999, the Company had borrowings of
$139.5 million and letters of credit of $60.0 million
outstanding under its $415 million U.S. revolving
credit facility, and borrowings of $68.0 million
outstanding under its U.S. commercial paper program.
The commercial paper borrowings have been classified as
long-term debt due to the availability to refinance
them on a long-term basis under the revolving credit
facility.
On July 26, 1999, the Company issued euro200 million
in unsecured notes with an effective interest rate of
5.69%, due in July 2006. Net proceeds from the issuance
were used to repay amounts outstanding under the
Company's unsecured revolving credit agreement and the
commercial paper program.
The Company and some of its foreign subsidiaries
maintain separate lines of credit with foreign
financial institutions to meet short-term working
capital needs. As of June 30, 1999, such lines totaled
$154.9 million, of which $103.4 million was unused.
Year 2000
State of Readiness - In order to address Year 2000
compliance, the Company has initiated a comprehensive
project designed to eliminate or minimize any business
disruption associated with its information technology
("IT") and non-IT systems. In connection with this
project, all significant Company subsidiaries have done
systems assessments to determine what modifications
will be required and detailed plans and timetables have
been developed to complete and test the necessary
remediation.
Primarily due to changing customer requirements, the
Company is in the process of converting and upgrading
many of its IT systems, and these new IT systems are
Year 2000 compliant. For those IT systems not otherwise
being converted or upgraded, remediation efforts have
been planned. In the U.S., initial remediation efforts
are completed, and testing of this remediation is
substantially complete. Any further remediation needed
as a result of the testing, and additional testing of
the system interfaces, will continue through August of
1999. For all other significant subsidiaries, initial
remediation is completed and ongoing testing of the
remediation is scheduled to be completed during the
third quarter of 1999. The ongoing remediation or
replacement of all critical non-IT systems is scheduled
to be completed by the third quarter of 1999. The
Company presently believes that with these conversions,
upgrades and remediation efforts, all significant Year
2000 Issues related to the Company's systems will be
addressed.
In addition, the Company is contacting significant
franchisees, vendors and customers to determine the
extent to which the Company is vulnerable to those
third parties' potential failure to remediate their own
systems to address Year 2000 Issues. The Company has
sent information to all U.S. and international
franchisees regarding the business risks associated
with the Year 2000. In addition, the Company contacted
all franchisees requesting information regarding their
Year 2000 status. The results will be used to assess
the Year 2000 operational risks of our franchisees.
Despite the Company's diligence, there can be no
guarantee that companies that the Company relies upon
to conduct its day-to-day business will be compliant.
<PAGE>
Costs - To date, the Company has used both external and
internal resources for the assessment, remediation and
testing of its systems. As of June 30, 1999,
approximately $8.4 million has been expensed for
external resources. The total expense for external
resources is currently estimated to be $10 million to
$12 million. Hardware purchases directly related to
the project, which are expensed as incurred, have been
minimal as of June 30, 1999, and the Company does not
expect any remaining hardware purchases to be
significant. The cost of internal resources is
aggregated with the Company's information technology
cost centers. The total cost of the project is not
expected to have a material impact on the Company's
financial position, results of operations or cash
flows.
Risks - With respect to the risks associated with its
systems, the Company believes that the most reasonably
likely worst case scenario is that the Company will
experience a number of minor system malfunctions and
errors in the early days and weeks of the Year 2000.
The Company does not expect these problems to have a
material impact on the Company's ability to place and
pay workers or invoice customers.
With respect to the risks associated with third
parties, the Company believes that the most reasonably
likely worst case scenario is that some of the
Company's franchisees, vendors and customers will not
be compliant. Failure by these companies, or any
governmental entities, to remediate their systems on a
timely basis could have a material adverse effect on
the Company.
Contingency Plans - The Company is currently preparing
to handle the most reasonably likely worst case
scenarios described above. The Company is evaluating
and developing contingency plans for these risks and is
scheduled to have them completed by October of 1999.
The Euro
On January 1, 1999, eleven of the fifteen member
countries of the European Union (the "participating
countries") established fixed conversion rates between
their existing sovereign currencies (the "legacy
currencies") and the Euro and have agreed to adopt the
Euro as their common legal currency. The legacy
currencies will remain legal tender in the
participating countries as denominations of the Euro
between January 1, 1999 and January 1, 2002 (the
"transition period"). During the transition period,
public and private parties may pay for goods and
services using either the Euro or the participating
country's legacy currency.
The Company is currently assessing the impact of the
Euro in its business operations in all participating
countries. In some countries, the Company has made
system modifications to generate dual currency
invoices, allowing customers to pay in either the
legacy currency or in Euro. To date, the Company has
not had significant customer requests for specific
invoicing or reporting formats that are not handled by
the current systems. However, modifications will be
necessary to convert database information to report
information in either Euro or in both currencies. Such
modifications will occur throughout the transition
period and will be coordinated with other system-
related upgrades and enhancements. The Company
expenses all such system modification costs as
incurred. To date, all modification costs have been
minimal, and the Company currently does not expect
significant costs related to future modifications.
Forward-Looking Statements
Certain information included or incorporated by
reference in this filing and identified by use of the
words `expects,' `believes,' `plans' or the like
constitutes forward-looking statements, as such term is
defined in Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934.
In addition, any information included or incorporated
by reference in future filings by the Company with the
Securities and Exchange Commission, as well as
information contained in written material, releases and
oral statements issued by or on behalf of the Company
may include forward-looking statements. All
<PAGE>
statements which address operating performance, events or
developments that the Company expects or anticipates
will occur or future financial performance are forward-
looking statements.
These forward-looking statements speak only as of the
date on which they are made. They rely on a number of
assumptions concerning future events and are subject to
a number of risks and uncertainties, many of which are
outside of the Company's control, that could cause
actual results to differ materially from such
statements. These risks and uncertainties include, but
are not limited to:
* material changes in the demand from larger
customers, including customers with which the Company
has national or global arrangements
* availability of temporary workers or increases in
the wages paid to these workers
* competitive market pressures, including pricing
pressures
* ability to successfully invest in and implement
information systems
* unanticipated technological changes, including
obsolescence or impairment of information systems
* changes in customer attitudes toward the use of
staffing services
* government or regulatory policies adverse to the
employment services industry
* general economic conditions in international
markets
* interest rate and exchange rate fluctuations
The Company disclaims any obligation to update publicly
or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
The Company's annual report on Form 10-K contains
certain disclosures about market risks affecting the
Company. There have been no material changes to the
information provided which would require additional
disclosures as of the date of this filing except for
the issuance of the euro200 million unsecured notes in
July 1999 (see the Liquidity and Capital Resource
section of the Management Discussion and Analysis for
additional information). These notes will be accounted
for as a hedge of the Company's net investment in
European subsidiaries with Euro functional currencies.
Since the Company's net investment in these
subsidiaries exceeds the amount of the notes, all
translation gains or losses related to the these notes
will be recorded as a component of Other comprehensive
income.
<PAGE>
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
On April 26, 1999, at the Company's Annual Meeting of
Shareholders (the "Annual Meeting") the shareholders of
the Company voted to: (1) Elect two directors to serve
until 2002 as Class III directors, (2) increase the
number of shares authorized for issuance under the 1994
Executive Stock Option and Restricted Stock Plan of
Manpower Inc. and (3) ratify the appointment of Arthur
Andersen LLP as the Company's independent auditors for
1999. In addition Messrs. Dennis Stevenson and John R.
Walter continued as Class I directors (term expiring
2000), and Messrs. J. Ira Harris, Terry A. Hueneke,
Newton N. Minow and Gilbert Palay continued as Class II
directors (term expiring 2001). The results of the
proposals voted upon at the Annual Meeting are as
follows:
Broker
For Against Withheld Abstain Non-Vote
1. a) Election of Dudley
J. Godfrey, Jr. 60,241,162 - 1,537,658 - -
b) Election of Marvin
B. Goodman 60,761,400 - 1,017,420 - -
2. Increase the number
of shares authorized for
issuance under the 1994
Executive Stock Option
and Restricted Stock
Plan 42,293,133 19,230,932 - 254,755 -
3. Ratification of
Arthur Andersen LLP as
independent auditors 61,550,133 61,970 - 166,717
Item 5 - Other Information
On July 26, 1999, the Company issued euro200
million in unsecured notes with an effective
interest rate of 5.69%, due in July 2006. The
Notes were offered outside the United States in
reliance on Regulation S under the Securities Act of
1933, as amended, through a group of managers led
by Goldman Sachs International. The Company
applied to list the Notes on the Luxembourg Stock
Exchange.
<PAGE>
Item 6 - Exhibit and Reports on Form 8-K
(a) Exhibits
10.1 Stock Option Agreement between Manpower Inc. and
John R. Walter dated April 26, 1999.
10.2 Advisory Services Agreement between Manpower, Inc.,
Ashlin Management Company
and John R. Walter dated April 26, 1999.
10.3 Nonstatutory Stock Option Agreement between
Manpower Inc. and Mitchell S. Fromstein dated April 26, 1999.
10.4 Agreement between Manpower Inc. and Mitchell S.
Fromstein dated April 26, 1999.
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed one current report on Form 8-
K on May 3, 1999 with respect to Item 5 - Other
Events for the period ended April 26, 1999.
The Company filed one current report on Form 8-
K on June 28, 1999 with respect to Item 5 -
Other Events for the period ended June 25, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto
duly authorized.
MANPOWER INC.
--------------------------
(Registrant)
Date: August 16, 1999 /s/ Michael J. Van Handel
----------------------------
Michael J. Van Handel
Senior Vice President
Chief Financial Officer,
Treasurer and Secretary
(Signing on behalf of the
Registrant and as the
Principal Financial
Officer and Principal
Accounting Officer)
MANPOWER INC.
STOCK OPTION AGREEMENT
This Stock Option Agreement (this
"Agreement") is executed the 26th day of April, 1999,
by and between MANPOWER INC., a Wisconsin corporation
(the "Corporation"), and John R. Walter (the "Advisor").
WITNESSETH:
WHEREAS, the Corporation has granted to the
Advisor, in partial consideration for the advisory
services to be rendered by the Advisor to the
Corporation, a stock option on the terms provided in
this Agreement;
NOW, THEREFORE, it is agreed as follows:
1. Incorporation of 1994 Plan. The terms and
conditions of the 1994 Executive Stock Option and
Restricted Stock Plan of the Corporation (the "Plan")
shall be incorporated herein by reference and, although
it is not being granted under such Plan, the Option (as
defined below) will be subject to the terms of the Plan
as if the Advisor were an employee of the Corporation
and as if the option had been granted under the Plan,
except to the extent explicitly modified by this
Agreement. Unless otherwise provided herein, all
capitalized words in this Agreement shall have the
meaning ascribed to them in the Plan. The Plan
empowers the Committee to make interpretations, rules
and regulations thereunder, and, in general, provides
that determinations of such Committee with respect to
the Plan shall be binding upon the Advisor. A copy of
the Plan has been delivered to the Advisor concurrently
with the execution of this Agreement.
2. Option; Number of Shares; Option Price. The
Advisor shall have the right and option to purchase, on
the terms and conditions hereinafter set forth, all or
any part of an aggregate of 175,000 Shares (the
"Option") at the purchase price of $23.5625 per share
(the "Option Price"), which is 100% of the fair market
value of the common stock of the Corporation on the
date this option is granted. The Shares purchased
shall, at the option of the Corporation, be shares of
authorized but unissued common stock or shares of such
stock held as treasury shares of the Corporation.
3. Time Limitations on Exercise of Option. The
Option shall be exercisable as to all or any portion of
the 175,000 Shares commencing on the date hereof.
Except as otherwise provided in the Plan, to the extent
not previously exercised, the Option shall expire on
the tenth anniversary of the date hereof. The Option
will be exercisable upon termination of the Advisor's
advisory relationship (or, if the Advisor becomes an
employee of the Corporation or any of its subsidiaries
during the term of the advisory relationship, upon a
later termination of such employment relationship) with
the Corporation and its subsidiaries only in the manner
and to the extent provided in the Plan (applied as if
the Advisor were an employee).
<PAGE>
4. Method of Exercising Option. The Option may be
exercised in whole or in part by delivery to the
Corporation, at the office of its Secretary at
Milwaukee, Wisconsin, of (a) written notice identifying
the Option and stating the number of Shares with
respect to which it is being exercised, and (b) payment
in full of the Option Price of the Shares then being
acquired upon exercise in the manner described in
Section 6 of the Plan. The Corporation shall have the
right to delay the issue or delivery of any Shares to
be delivered hereunder until (a) the completion of such
registration or qualification of such shares under
federal, state or foreign law, ruling or regulation as
the Corporation shall deem to be necessary or
advisable, and (b)receipt from the Advisor of such
documents and information as the Corporation may deem
necessary or appropriate in connection with such
registration or qualification or the issuance of Shares
hereunder.
5. Prohibition Against Transfer. Except as otherwise
provided by the Committee or as provided in the Plan,
the Option, and the rights and privileges conferred
hereby, may not be transferred by the Advisor, and
during the lifetime of the Advisor the Option shall be
exercisable only by the Advisor.
6. Notices. Any notice to be given to the
Corporation under the terms of this Agreement shall be
given in writing to the Corporation in care of its
Secretary at 5301 North Ironwood Road, Milwaukee,
Wisconsin 53217. Any notice to be given to the Advisor
may be addressed to him at his address as it appears on
the records of the Corporation or any subsidiary
thereof.
7. Taxes. The Corporation may require payment or
reimbursement of or may withhold any tax that it
believes is required as a result of the grant or
exercise of the Option, and the Corporation may defer
making delivery with respect to Shares hereunder until
arrangements satisfactory to the Corporation have been
made with respect to such withholding obligations.
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date and year first above
written.
MANPOWER INC.
By: /s/ Michael Van Handel
-------------------------
/s/ John R. Walter
----------------------------
John R. Walter
Manpower Inc.
5301 North Ironwood Road
Milwaukee, Wisconsin 53217
April 26, 1999
Ashlin Management Company:
This letter will confirm our agreement with
respect to the advisory services to be provided by Mr.
John R. Walter to Manpower Inc. (the "Corporation"):
1. The Corporation is retaining Mr. Walter,
through Ashlin Management Company ("Ashlin"), to
provide such advice and assistance respecting the
affairs and activities of the Corporation and its
direct or indirect subsidiaries (the "Manpower
Group") as the senior executive officers of the
Corporation may reasonably request from time to
time, including without limitation, advice on
investor relations matters, conceptual strategic
planning matters, long-term growth planning and
compensation issues. We understand that these
services will be rendered on an irregular, part-
time basis at such times as are mutually agreed
upon by Mr. Walter and the Corporation.
2. This advisory relationship will begin on
the date of this letter and will continue until
April 30, 2001, subject to extension by our mutual
agreement, unless sooner terminated as provided
below (the "Advisory Period").
3. In consideration for Mr. Walter's
services:
(a) The Corporation is granting to Mr.
Walter an option to purchase 175,000 shares
of the Corporation's common stock
contemporaneously with the execution and
delivery of this letter agreement.
(b) During the Advisory Period, the
Corporation will pay Ashlin a fee at the rate
of $500,000 per year, payable in equal
monthly installments on the first day of each
month beginning May 1, 1999.
4. The Corporation will reimburse Ashlin for
all reasonable out-of-pocket expenses incurred by
Mr. Walter or Ashlin in the course of performing
his services
<PAGE>
during the Advisory Period, subject
to your compliance with the guidelines of the
Corporation concerning expense reimbursement.
5. The Advisory Period will terminate early as
follows:
(a) The Advisory Period will terminate
upon Mr. Walter's death.
(b) If Mr. Walter becomes physically or
mentally disabled so as to become unable, for
a total of one hundred eighty days within any
one year period during the Advisory Period,
to perform his duties hereunder when
requested, the Corporation may, at its
option, terminate the Advisory Period.
(c) The Corporation may terminate the
Advisory Period for "Cause." As used in this
letter, "Cause" will mean (i) Mr. Walter's
willful engaging in conduct which is
demonstrably and materially injurious to the
Manpower Group, monetarily or otherwise, (ii)
any dishonest or fraudulent conduct which
results or is intended to result in gain to
Mr. Walter or his personal enrichment at the
expense of the Manpower Group, or (iii) Mr.
Walter's conviction of a felony, misdemeanor
or criminal offense, as evidenced by a
binding and final judgment, order or decree
of a court of competent jurisdiction which
impairs his ability substantially to perform
his duties under this letter agreement.
(d) You may terminate the Advisory
Period at any time by delivering notice to
the Corporation of your election to
terminate.
4. Mr. Walter will at all times remain an independent
contractor and nothing in our arrangement will create
an employment relationship between Mr. Walter and the
Corporation. Accordingly, the Corporation will not
have the right to control or direct the details and
means by which Mr. Walter accomplishes his advisory
services.
5. Our agreement as confirmed by this letter will be
governed by and construed in accordance with the
internal laws of Wisconsin, without regard to
principles of conflicts of law.
<PAGE>
If the foregoing conforms with your understanding
of our agreement, would you kindly indicate your
acceptance by signing the enclosed copy of this letter
in the space provided below and returning it to the
Corporation.
Yours very truly,
MANPOWER INC.
By: /s/ Terry Hueneke
-------------------
Accepted and agreed to the 26th day
of April, 1999.
ASHLIN MANAGEMENT COMPANY
By: /s/ John R. Walter
----------------------
/s/ John R. Walter
- ---------------------
John R. Walter
MANPOWER INC.
NONSTATUTORY STOCK OPTION AGREEMENT
This Nonstatutory Stock Option Agreement (this
"Agreement") is executed as of April 26, 1999, by and
between MANPOWER INC., a Wisconsin corporation (the
"Corporation"), and MITCHELL S. FROMSTEIN (the
"Employee").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Corporation
has established the 1994 Executive Stock Option and
Restricted Stock Plan (the "Plan") for employees of the
Corporation and its subsidiaries; and
WHEREAS, the Corporation has granted to the
Employee an option under the Plan, on the terms
provided in this Agreement and the Plan, in partial
consideration of the commitments made by the Employee
in an agreement between the Corporation and the
Employee being executed and delivered concurrently
herewith, regarding the Employee's resignation from
full-time service with the Corporation and continuing
advisory relationship with the Corporation, and as an
additional incentive to the Employee to put forth
maximum effort for the continued success and growth of
the Corporation and its subsidiaries;
NOW, THEREFORE, the Corporation and the Employee
hereby agree as follows:
1. Provisions of Plan Control. This Agreement
shall be governed by the provisions of the Plan, the
terms and conditions of which are incorporated herein
by reference. The Plan empowers the Committee to make
interpretations, rules and regulations thereunder, and,
in general, provides that determinations of such
Committee with respect to the Plan shall be binding
upon the Employee. Unless otherwise provided herein,
all capitalized words in this Agreement shall have the
meaning ascribed to them in the Plan. A copy of the
Plan will be delivered to the Employee upon reasonable
request.
2. Option; Number of Shares; Option Price. The
Employee shall have the right and option to purchase
all or any part of an aggregate of 100,000 Shares (the
"Option") at the purchase price of $23.5625 per Share.
3. Time Limitations on Exercise of Option.
Unless the Committee establishes otherwise or except as
otherwise provided in the Plan, immediately on or after
the date hereof, all or any portion of the Shares
covered hereby may be purchased. To the extent not
previously exercised according to the terms hereof, the
Option shall expire on the fifth anniversary of the
date hereof.
<PAGE>
4. Termination of Employment. The Option shall
be exercisable upon the termination of the Employee's
employment relationship with the Corporation and its
subsidiaries only in the manner and to the extent
provided in Paragraph 10 of the Plan.
5. Method of Exercising Option. The Option may
be exercised in whole or in part by delivery to the
Corporation, at the office of its Secretary at
Milwaukee, Wisconsin, of (a) written notice identifying
the Option and stating the number of Shares with
respect to which it is being exercised, and (b) payment
in full of the purchase price of the Shares then being
acquired upon exercise in the manner described in
Paragraph 6 of the Plan. The Corporation shall have
the right to delay the issue or delivery of any Shares
to be delivered hereunder until (a) the completion of
such registration or qualification of such Shares under
federal, state, or foreign law, ruling, or regulation
as the Corporation shall deem to be necessary or
advisable, and (b) receipt from the Employee of such
documents and information as the Committee may deem
necessary or appropriate in connection with such
registration or qualification or the issuance of Shares
hereunder.
6. Prohibition Against Transfer. Unless
otherwise provided by the Committee and except as
provided in Paragraph 11 of the Plan, the Option, and
the rights and privileges conferred hereby, may not be
transferred by the Employee, and shall be exercisable
during the lifetime of the Employee only by the
Employee.
7. Notices. Any notice to be given to the
Corporation under the terms of this Agreement shall be
given in writing either to the management of the
subsidiary employing the Employee, or to the
Corporation in care of its Secretary at 5301 North
Ironwood Road, Milwaukee, Wisconsin 53217. Any notice
to be given to the Employee may be addressed to him at
his address as it appears on the payroll records of the
Corporation or any subsidiary thereof. Any such notice
shall be deemed to have been duly given if and when
actually received by the party to whom it is addressed,
as evidenced by a written receipt to that effect.
8. Taxes. The Corporation may require payment or
reimbursement of or may withhold any tax that it
believes is required as a result of the grant or
exercise of the Option, and the Corporation may defer
making delivery with respect to Shares or cash payable
hereunder or otherwise until arrangements satisfactory
to the Corporation have been made with respect to such
withholding obligations.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused
these presents to be executed as of the date and year
first above written, which is the date of the granting
of the Option evidenced hereby.
MANPOWER INC.
By: /s/ Michael J. Van Handel
-------------------------------------------
Michael J. Van Handel Secretary
The undersigned Employee hereby accepts the
foregoing Option and agrees to the several terms and
conditions hereof and of the Plan.
/s/ Mitchell S. Fromstein
-----------------------------------------------
Mitchell S. Fromstein Employee
Manpower Inc.
5301 North Ironwood Road
Milwaukee, Wisconsin 53217
April 26, 1999
Mr. Mitchell S. Fromstein:
This letter will confirm our agreement with
respect to your resignation from full-time service with
Manpower Inc. (the "Corporation") and your continuing
advisory relationship with the Corporation. We have
agreed as follows:
1. Resignation. By executing this letter, you resign
from your positions as Chairman and a member of the
Board of Directors, as President and Chief Executive
Officer of the Corporation, as a trustee of each of the
benefit plans of the Corporation for which you
currently serve as trustee, and as a director and/or
officer of each subsidiary and affiliate of the
Corporation for which you currently serve as a director
and/or officer, all effective as of April 30, 1999 (the
"Effective Date"). As of the Effective Date, the Board
of Directors has appointed you Chairman Emeritus.
2. 1999 Compensation. The Corporation will pay you
your full base salary through the Effective Date at the
rate now in effect. In accordance with your
Employment Agreement dated September 16, 1987, as
amended, the Corporation will also pay you as an
incentive bonus for 1999 an amount equal to the product
of (i) the incentive bonus which would have been
payable to you had your full-time employment with the
Corporation not terminated pursuant to this letter
agreement and (ii) a fraction the numerator of which is
120, and the denominator of which is 365. Your
incentive bonus for 1999 will be payable at the time
the incentive bonus is normally payable.
3. Supplemental Benefit. In accordance with the
terms of your Employment Agreement dated September 16,
1987, as amended, the Corporation will pay you
supplemental retirement pay equal to Five Million Two
Hundred Eighty-Seven Thousand Seven Hundred Eleven
Dollars ($5,287,711). Notwithstanding the terms of
such agreement, such amount will be payable in a lump
sum on July 1, 1999
4. Benefits.
(a) In accordance with the terms of your
Employment Agreement dated September 16, 1987, as
amended, for the remainder of the lives of you and your
spouse, regardless of any eligibility rules in effect
at any time and regardless of your age, the Corporation
will arrange to provide you and your spouse, at the
Corporation's expense, with full coverage under medical
and dental plans of the Corporation having benefits at
least as favorable as those existing under the
Corporation's plans in effect on
<PAGE>
September 16, 1990,
and any increased benefits as may thereafter have been
or may be provided from time to time under any such
plan or substitute therefor or modification thereof;
and notwithstanding any provision of any such plan to
the contrary, neither you nor your spouse will be
required to make any additional payment in order to
obtain this coverage. In the event that your
participation in any such plan is prohibited by the
terms and provisions thereof or the Corporation
otherwise cannot offer such benefits under its plans,
the Corporation will provide alternative coverage for
you and your spouse for each of your remaining lives,
as nearly as practicable, equivalent to that which you
and your spouse would otherwise be entitled under this
Section 4(a).
(b) In addition to other payments under this
letter, the Corporation will make equal monthly
payments to you for your lifetime (or to your spouse
for her lifetime if you predecease her) in such amount
as is necessary to assure that the total payments
received by you (or your spouse) under this
Section 4(b) and under the Manpower Inc. Retirement
Plan and the Manpower Inc. Deferred Compensation Plan
will equal Seven Hundred Fifty Thousand Dollars
($750,000) per year; provided, however, that if you
were to remarry, the amount payable under this
Section 4(b) to your new spouse during her lifetime if
you predecease her shall not exceed the actuarial
equivalent as of the time of your death of the amount
which would be payable to a spouse with the birth date
of your present spouse. These monthly payments will
commence on the first day of the month immediately
after the month in which the Effective Date occurs, and
will continue on the first day of each calendar month
thereafter for the life of the survivor of you and your
spouse.
(c) Except for the retirement benefits and
medical and dental insurance set forth in this
Section 4, any accrued benefits under company plans and
the stock options referred to in Section 8, below, and
any employee benefits provided by law, you shall not
receive on or after April 30, 1999, any employee
benefits or perquisites from the Corporation or be
entitled to participate in any Corporation stock or
other benefit plans.
5. Advisory Services. Beginning on the Effective
Date and continuing until the date three years
thereafter unless earlier terminated under Section 14
hereof (the "Advisory Period"), you will be employed by
the Corporation on a part-time basis to render such
advice and assistance respecting the affairs and
activities of the Corporation and its direct or
indirect subsidiaries (collectively, the "Manpower
Group") as the Chairman of the Board of Directors or a
senior executive officer of the Corporation may from
time to time reasonably request, contemplated to
include advice and assistance as requested relating to
management transition issues, customers and
franchisees, and investor relations matters. Your
advisory services will be performed at such times as
are mutually agreed upon by you and the Corporation.
During the Advisory Period, you may engage in other
activities, subject to the restrictions set forth in
Sections 10 through 12 hereof. At the end of the
Advisory Period, your employment will terminate.
6. Advisory Fee. In consideration of the advisory
services to be performed by you pursuant hereto, and in
partial consideration of your other obligations under
this letter, the Corporation will pay you during the
Advisory Period an annual salary (the "Advisory Fee") of
<PAGE>
Five Hundred Thousand Dollars ($500,000). The
Advisory Fee will be payable in installments according
to the standard payroll practice of the Corporation.
7. Expense Reimbursement. The Corporation will
reimburse you for all reasonable out-of-pocket expenses
incurred by you in the course of performing advisory
services requested by the Corporation and approved by
the Chief Executive Officer during the Advisory Period,
subject to your compliance with the guidelines or rules
of the Corporation concerning expense reimbursement.
8. Stock Options. The Corporation confirms that:
(a) this letter agreement will not affect
your rights with respect to the options you hold
to purchase shares of the Corporation's stock
under the Nonstatutory Stock Option granted
May 31, 1991, the Nonstatutory Stock Option
granted February 10, 1992, and the Nonstatutory
Stock Option Agreement executed as of April 26,
1999 (the "Grant Documents");
(b) your employment will not be considered
to have terminated for purposes of determining
your rights with respect to such options until the
termination of the Advisory Period; and
(c) the 1991 Executive Stock Option and
Restricted Stock Plan (the "1991 Plan") has been
amended to provide for a period of one year, as
opposed to three months as originally provided,
following the cessation of employment due to
retirement (as described in the 1991 Plan) to
exercise any option held under the 1991 Plan, and
the 1991 Plan as so amended will govern your
rights with respect to such options
notwithstanding the terms of the applicable Grant
Documents.
9. Office and Secretary. The Corporation shall
provide to you reasonable and reasonably equipped
office space in a location to be mutually agreed upon
between you and the Corporation and secretarial
assistance during the Advisory Period and for a period
of two years thereafter.
10. Nondisclosure Agreement. You will not,
directly or indirectly, at any time during the Advisory
Period or during the two-year period immediately
following the termination of the Advisory Period, use
for yourself or others, or disclose to others, any
Confidential Information (as defined below), whether or
not conceived, developed, or perfected by you and no
matter how it became known to you, unless (i) you first
secure written consent of the Corporation to such
disclosure or use, (ii) the same shall have lawfully
become a matter of public knowledge other than by your
act or omission, or (iii) you are ordered to disclose
the same by a court of competent jurisdiction or are
otherwise required to disclose the same by law, and you
promptly notify the Corporation of such disclosure.
"Confidential Information" shall mean all business
information (whether or not in written form) which
relates to any company in the Manpower Group and which
is not known to the public generally (absent your
disclosure), including but not limited to confidential
knowledge, operating instructions, computer software,
training materials and systems, customer lists, sales
records and documents, marketing and sales strategies
and plans, market surveys, cost and profitability
analyses, pricing information, competitive strategies,
<PAGE>
personnel-related information, and supplier lists.
This obligation will survive the termination of your
employment for a period of two years and will not be
construed to in any way limit the Corporation's rights
to protect confidential information which constitute
trade secrets under applicable trade secrets law even
after such two-year period. Upon your termination of
employment with the Manpower Group, or at any other
time upon request of the Corporation, you will promptly
surrender to the Corporation, or destroy and certify
such destruction to the Corporation, any documents,
materials, or computer or electronic records containing
any Confidential Information which are in your
possession or under your control.
11. Noncompetition Agreement. During the
Advisory Period, you will not directly or indirectly
assist any competitor of the Manpower Group in any
capacity. In addition, you will not at any time during
the two-year period following the termination of the
Advisory Period, either directly or indirectly:
(a) Contact any customer or prospective
customer of the Manpower Group with whom you
have had contact on behalf of the Manpower
Group during the two-year period preceding the
date of such termination or any customer or
prospective customer about whom you obtained
Confidential Information (as defined below) in
connection with your employment by the Manpower
Group during such two-year period so as to
cause or attempt to cause such customer or
prospective customer of the Manpower Group not
to do business or to reduce such customer's
business with the Manpower Group or divert any
business from the Manpower Group.
(b) Provide services or assistance of a
nature similar to the services provided to the
Manpower Group during the term of your full-
time and/or part-time employment with the
Manpower Group to any entity engaged in the
business of providing temporary staffing
services anywhere in the United States or any
other country in which the Manpower Group
conducts business as of the date when the
Advisory Period terminates which has, together
with its affiliated entities, annual revenues
from such business in excess of US
$500,000,000. You acknowledge that the scope
of this limitation is reasonable in that, among
other things, providing any such services or
assistance during such two-year period would
permit you to use unfairly your close
identification with the Manpower Group and the
customer contacts you developed while employed
by the Manpower Group and would involve the use
or disclosure of Confidential Information
pertaining to the Manpower Group.
12. Nonsolicitation of Employees. You agree that
you will not, at any time during the Advisory Period or
during the two-year period immediately following the
termination of the Advisory Period, either on your own
account or in conjunction with or on behalf of any
other person, company, business entity, or other
organization whatsoever, directly or indirectly induce,
solicit, entice or procure any person who is an
employee of any company in the Manpower Group, or has
been such an employee within the preceding three
months, to terminate his or her employment with the
Manpower Group so as to accept employment elsewhere.
13. Requests for Services; Injunction. The
restrictions imposed by Sections 10 through 12, above,
will not apply in circumstances where you have been
asked to perform services that
<PAGE>
might otherwise involve
a violation of such Sections. You recognize that
irreparable and incalculable injury will result to the
Manpower Group and its businesses and properties in the
event of your breach of any of the restrictions imposed
by Sections 10 through 12, above. You therefore agree
that, in the event of any such actual, impending or
threatened breach, the Corporation will be entitled, in
addition to any other remedies and damages available to
it, to temporary and permanent injunctive relief
(without the necessity of posting a bond or other
security) restraining the violation, or further
violation, of such restrictions by you and by any other
person or entity from whom you may be acting or who is
acting for you or in concert with you.
14. Termination of Advisory Period. The Advisory
Period shall terminate prior to the date three years
after the Effective Date upon the occurrence of any of
the following.
(a) Death. The Advisory Period shall terminate
upon your death.
(b) Cause. The Corporation may terminate the
Advisory Period for "Cause." As used in this letter,
"Cause" shall include (i) your willful and continued
failure to substantially perform your duties with the
Corporation after a written demand for substantial
performance is delivered to you that specifically
identifies the manner in which the Corporation believes
that you have not substantially performed your duties,
and you have failed to resume substantial performance
of your duties on a continuous basis within ten days
after receiving such demand, (ii) your willful engaging
in conduct which is demonstrably and materially
injurious to the Manpower Group, monetarily or
otherwise, (iii) any dishonest or fraudulent conduct
which results or is intended to result in gain to you
or your personal enrichment at the expense of the
Manpower Group, or (iv) your conviction of a felony,
misdemeanor or criminal offense, as evidenced by a
binding and final judgment, order or decree of a court
of competent jurisdiction which impairs your ability
substantially to perform your duties with the
Corporation.
(c) Voluntary Termination. You may terminate the
Advisory Period at any time by delivering notice to the
Corporation of your election to terminate.
15. Nondisparagement. As of the Effective Date,
the Manpower Group agrees to maintain a positive and
constructive attitude and demeanor toward you, and
agrees to refrain from making any derogatory comments
or statements of a negative nature about you.
Likewise, as of the Effective Date, you agree to
maintain a positive and constructive attitude and
demeanor toward the Manpower Group, and agree to
refrain from making derogatory comments or statements
of a negative nature about the Manpower Group, its
officers, directors, shareholders, agents, partners,
representatives and employees, to anyone.
16. Release of Claims.
(a) Release of Claims by You. As further
consideration for the benefits and payments to you as
described in this letter (which you acknowledge to be
greater, in their totality, than any benefits due you
absent the commitments being made by the Corporation in
this letter), you hereby irrevocably and
unconditionally release, waive,
<PAGE>
and fully and forever
discharge all companies within the Manpower Group and
their past and current agents, servants, officers,
directors, stockholders, attorneys, and employees and
their respective successors and assigns (the "Released
Parties") from and against any and all claims,
liabilities, obligations, covenants, rights, demands
and damages of any nature whatsoever, whether known or
unknown, anticipated or unanticipated, relating to or
arising out of any agreement, act, omission,
occurrence, transaction or matter up to and including
the date you sign this letter confirming your agreement
to its terms as provided below, including, without
limitation, any and all claims relating to or arising
out of your employment by the Manpower Group and also
including any claim that might arise regarding our
agreement set forth above providing for your reduction
to part-time employment and your eventual termination
of employment at the end of the Advisory Period. This
release of claims includes, but is not limited to, any
claims or remedies arising under or affected by the Age
Discrimination in Employment Act of 1967, as amended,
Title VII of the Civil Rights Act of 1964, as amended,
the Civil Rights Act of 1991, the Equal Pay Act, as
amended, the Employee Retirement Income Security Act,
as amended, the Americans With Disabilities Act, the
Fair Labor Standards Act, as amended, the Family and
Medical Leave Act of 1993, the Wisconsin Fair
Employment Act, as amended, the Wisconsin Family and
Medical Leave Act, or any other local, state or federal
laws, whether statutorily codified or not, or any claim
arising in contract or in tort. You agree to give up
any benefit conferred on you by any order or judgment
issued in connection with any proceeding filed against
any of the Released Parties regarding the matters
released in this Subsection 16(a).
(b) Release of Claims by the Manpower Group. As
further consideration for the agreements being made by
you as provided in this letter, the Corporation, on
behalf of all companies within the Manpower Group,
hereby irrevocably and unconditionally releases,
waives, and fully and forever discharges you and your
successors and assigns from and against any and all
claims, liabilities, obligations, covenants, rights,
demands and damages of any nature whatsoever, whether
known or unknown, anticipated or unanticipated,
relating to or arising out of any agreement, act,
omission, occurrence, transaction or matter up to and
including the date you sign this letter confirming your
agreement to its terms as provided below.
(c) Scope of Release. Nothing in the waivers or
releases set forth in this letter shall be construed to
constitute any release or waiver by you of any rights
or claims against the Manpower Group, or by the
Manpower Group against you, arising under this letter.
(d) Waiver of Reinstatement. You waive any and
all rights to reinstatement to full-time employment,
and hereby agree not to reapply for full-time
employment with any company in the Manpower Group.
(e) Representations. You represent and warrant
to the Corporation that: (i) BY SIGNING THIS LETTER TO
CONFIRM YOUR AGREEMENT, YOU UNDERSTAND THAT YOU HEREBY
WAIVE AND RELEASE ANY AND ALL RIGHTS AND CLAIMS ARISING
UNDER THE AGE DISCRIMINATION
<PAGE>
IN EMPLOYMENT ACT OF 1967,
AS AMENDED, ITS STATE LAW EQUIVALENT AND ALL OTHER
CLAIMS AGAINST THE CORPORATION ARISING UP TO AND
INCLUDING THE DATE YOU SIGN THIS LETTER, AND ANY CLAIM
ARISING FROM YOUR RESIGNATION FROM FULL-TIME
EMPLOYMENT, (ii) you have executed this letter to
confirm your agreement on the date set forth below your
name on the signature page hereof, (iii) you have
carefully read this letter, you know and understand its
contents, you signed this letter freely and
voluntarily, and you intend to be bound by it, and (iv)
you are not relying on any representations, statements,
or promises whatsoever of the Corporation or anyone
else, other than as set forth in this letter, as an
inducement to execute this letter.
(f) No Admission. Nothing in this letter shall
be deemed an admission by you or any company in the
Manpower Group of liability or wrongdoing of any
nature.
17. Execution and Revocation Rights.
(a) You have the right to sign this letter,
confirming your agreement, any time within twenty-one
(21) calendar days following receipt of the letter.
(b) Following the date you sign, you have the
right to revoke the agreement reflected by this letter
at any time within seven (7) calendar days of your
signing it, not including the date of your signing (the
"Revocation Period"). Any notice of revocation shall
be deemed effective when it is deemed to have been
given as provided below. Our agreement as reflected by
this letter will not become effective or enforceable
until the Revocation Period has expired. If you give a
notice of revocation during the Revocation Period, this
agreement reflected by this letter will be null and
void, all rights and claims of the parties which would
have existed, but for the execution of this letter,
will be restored.
18. Company Car. You have the right to purchase
the car provided to you by the Corporation during the
twelve month period immediately preceding the Effective
Date, at the book value thereof on the Effective Date,
exercisable within thirty days after the Effective
Date. If you do not purchase the car, you agree to
return it to the Corporation within thirty days after
the Effective Date.
19. Successors; Binding Agreement. This letter
agreement will be binding on any successor of the
Corporation and will inure to the benefit of and be
enforceable by your personal or legal representatives,
executors, administrators, successors, heirs,
distributees, devisees and legatees.
20. Notices. Any notice required or permitted to
be given or made hereunder shall be sufficient if, and
occur when, hand delivered, mailed postage prepaid,
sent by prepaid express or courier service or sent by
facsimile transmission and actually received, to the
party to receive such notice at its address set forth
beneath its signature hereto or to such changed address
as such party shall designate by proper notice to the
other.
<PAGE>
21. Previous Agreement. This letter, upon
acceptance by you, expressly supersedes any and all
previous agreements or understandings relating to your
employment by the Corporation or the Manpower Group,
the termination of such employment, or compensation or
benefits to be provided by Manpower Group, including,
but not limited to, your Employment Agreement dated
September 16, 1987, as amended, and all such agreements
and understandings shall have no further force or
effect.
22. Modification. No provision of this letter
may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in
writing by you and the Corporation.
23. Withholding. The amounts payable to you
hereunder are stated before deductions, if any,
required to be made by the Corporation under applicable
law.
If this letter correctly sets forth your
understanding of our agreement, please sign and return
one copy of this letter which will constitute our
agreement with respect to the subject matter of this
letter.
THIS LETTER WAIVES LEGAL CLAIMS AGAINST THE
CORPORATION, INCLUDING POTENTIAL AGE DISCRIMINATION AND
OTHER CLAIMS. YOU ARE ADVISED TO CONSULT YOUR OWN
ATTORNEY PRIOR TO SIGNING THE DOCUMENT. YOU HAVE
TWENTY-ONE (21) DAYS TO SIGN THIS LETTER. YOU CAN
REVOKE YOUR ACCEPTANCE AS PROVIDED IN THIS LETTER.
YOUR DECISION TO SIGN THIS LETTER MUST BE KNOWING AND
VOLUNTARY.
Sincerely,
MANPOWER INC.
By: /s/ Michael J. Van Handel
----------------------------
Address for Notice:
5301 North Ironwood Road
Milwaukee, WI 53217
Attn: President
Agreed this 26th day of April, 1999.
/s/ Mitchell S. Fromstein
- -------------------------
Mitchell S. Fromstein
Address for Notice:
1501 East Fox Lane
Milwaukee, WI 53217
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF
THE REGISTRANT AS OF AND FOR THE
SIX MONTHS ENDED JUNE 30, 1999
AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 116,788
<SECURITIES> 0
<RECEIVABLES> 1,654,099
<ALLOWANCES> 40,302
<INVENTORY> 0
<CURRENT-ASSETS> 1,884,487
<PP&E> 396,097
<DEPRECIATION> 217,621
<TOTAL-ASSETS> 2,317,133
<CURRENT-LIABILITIES> 1,235,548
<BONDS> 211,400
0
0
<COMMON> 835
<OTHER-SE> 597,442
<TOTAL-LIABILITY-AND-EQUITY> 2,317,133
<SALES> 0
<TOTAL-REVENUES> 4,502,833
<CGS> 0
<TOTAL-COSTS> 3,717,881
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 6,513
<INTEREST-EXPENSE> 7,772
<INCOME-PRETAX> 54,317
<INCOME-TAX> 1,924
<INCOME-CONTINUING> 52,393
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 52,393
<EPS-BASIC> 0.67
<EPS-DILUTED> 0.66
</TABLE>
