<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
</TABLE>
Manpower Inc.
- --------------------------------------------------------------------------------
(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:
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<PAGE> 2
MANPOWER INC.
5301 NORTH IRONWOOD ROAD
MILWAUKEE, WISCONSIN 53217
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 17, 2000
To the Shareholders of Manpower Inc.:
The 2000 Annual Meeting of Shareholders of Manpower Inc. (the "Company")
will be held at the Bradley Pavilion of the Marcus Center for the Performing
Arts, 929 North Water Street, Milwaukee, Wisconsin, on April 17, 2000 at 10
a.m., local time, for the following purposes:
(1) To elect three directors to serve until 2003 as Class I directors;
(2) To approve a performance-based incentive compensation arrangement for
the Company's President and Chief Executive Officer;
(3) To ratify the appointment of Arthur Andersen LLP as the Company's
independent auditors for 2000; and
(4) To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on February 22, 2000 are
entitled to notice of and to vote at the Annual Meeting and at all adjournments
thereof.
HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES MUST BE PRESENT IN PERSON
OR BY PROXY IN ORDER FOR THE ANNUAL MEETING TO BE HELD. THEREFORE, SHAREHOLDERS
ARE URGED TO DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ENVELOPE WHETHER OR NOT THEY EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON. IF
YOU ATTEND THE ANNUAL MEETING AND WISH TO VOTE YOUR SHARES PERSONALLY, YOU MAY
DO SO BY REVOKING YOUR PROXY AT ANY TIME PRIOR TO VOTING.
Michael J. Van Handel, Secretary
March 20, 2000
<PAGE> 3
MANPOWER INC.
5301 NORTH IRONWOOD ROAD
MILWAUKEE, WISCONSIN 53217
MARCH 20, 2000
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Manpower Inc.
(the "Company") for use at the Annual Meeting of Shareholders to be held at 10
a.m., local time, on April 17, 2000, or at any postponement or adjournment
thereof (the "Annual Meeting"), for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting will
be held at the Bradley Pavilion of the Marcus Center for the Performing Arts,
929 North Water Street, Milwaukee, Wisconsin.
The expenses of printing and mailing proxy material, including expenses
involved in forwarding materials to beneficial owners of stock, will be paid by
the Company. No solicitation other than by mail is contemplated, except that
officers or employees of the Company or its subsidiaries may solicit the return
of proxies from certain shareholders by telephone. In addition, the Company has
retained Georgeson Shareholder Communications Inc. to assist in the solicitation
of proxies for a fee of approximately $7,000 plus expenses.
Only shareholders of record at the close of business on February 22, 2000
(the "Record Date") are entitled to notice of and to vote the shares of common
stock, $.01 par value (the "Common Stock"), of the Company registered in their
name at the Annual Meeting. As of the Record Date, the Company had outstanding
76,255,136 shares of its Common Stock. The presence, in person or by proxy, of a
majority of the shares of the Common Stock outstanding on the Record Date will
constitute a quorum at the Annual Meeting. Abstentions and broker non-votes
(i.e., proxies from brokers or nominees indicating that such persons have not
received instructions from the beneficial owners or other persons entitled to
vote shares as to a matter with respect to which brokers or nominees do not have
discretionary power to vote) will be treated as present for purposes of
determining the quorum. Abstentions and broker non-votes will not be counted as
voting on any matter at the Annual Meeting. Each share of Common Stock entitles
its holder to cast one vote on each matter to be voted upon at the Annual
Meeting.
This Proxy Statement, Notice of Meeting and the accompanying proxy card,
together with the Company's Annual Report to Shareholders, including financial
statements for its fiscal year ended December 31, 1999, are being mailed to
shareholders of the Company commencing on or about March 20, 2000.
IF THE ACCOMPANYING PROXY CARD IS PROPERLY SIGNED AND RETURNED TO THE
COMPANY AND NOT REVOKED, IT WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS
CONTAINED THEREIN. EACH SHAREHOLDER MAY REVOKE A PREVIOUSLY GRANTED PROXY AT ANY
TIME BEFORE IT IS EXERCISED BY WRITTEN NOTICE OF REVOCATION OR BY SUBMITTING A
DULY EXECUTED PROXY BEARING A LATER DATE TO THE SECRETARY OF THE COMPANY.
ATTENDANCE AT THE ANNUAL MEETING WILL NOT, IN ITSELF, CONSTITUTE REVOCATION OF A
PROXY. UNLESS OTHERWISE DIRECTED, ALL PROXIES WILL BE VOTED FOR THE ELECTION OF
EACH OF THE INDIVIDUALS NOMINATED TO SERVE AS CLASS I DIRECTORS BY THE BOARD OF
DIRECTORS, FOR THE APPROVAL OF THE PERFORMANCE-BASED INCENTIVE COMPENSATION
ARRANGEMENT FOR THE COMPANY'S PRESIDENT AND CHIEF EXECUTIVE OFFICER, FOR
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR 2000, AND AS RECOMMENDED BY THE BOARD OF DIRECTORS WITH
REGARD TO ALL OTHER MATTERS OR, IF NO SUCH RECOMMENDATION IS GIVEN, IN THEIR OWN
DISCRETION.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table lists as of the Record Date information as to the
persons believed by the Company to be beneficial owners of more than 5% of its
outstanding Common Stock:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNERS BENEFICIAL OWNERSHIP CLASS(1)
------------------- -------------------- ----------
<S> <C> <C>
Trimark Financial Corporation........................... 7,216,600(2) 9.5%
One First Canadian Place, Suite 5600
P.O. Box 487
Toronto, Ontario M5X 1E5
Canada
Wellington Management Company, LLP...................... 7,101,500(3) 9.3%
75 State Street
Boston, Massachusetts 02109
Pacific Financial Research, Inc......................... 5,896,000(4) 7.7%
9601 Wilshire Boulevard, Suite 800
Beverly Hills, California 90210
</TABLE>
- ---------------
(1) Based on 76,255,136 shares of Common Stock outstanding as of the Record
Date.
(2) This information is based on a Schedule 13G dated February 1, 2000. Trimark
Financial Corporation has sole voting power and investment power for all
shares held.
(3) This information is based on a Schedule 13G dated February 9, 2000.
Wellington Management Company, LLP has shared voting power with respect to
5,670,200 shares held and shared investment power with respect to 7,101,500
shares held.
(4) This information is based on a Schedule 13G dated February 10, 2000. Pacific
Financial Research, Inc. has sole voting power and investment power for all
shares held.
2
<PAGE> 5
1. ELECTION OF DIRECTORS
The Company's directors are divided into three classes, designated as Class
I, Class II and Class III, with staggered terms of three years each. The term of
office of directors in Class I expires at the Annual Meeting. The Board of
Directors proposes that the nominees described below, each of whom are currently
serving as Class I directors, be elected as Class I directors for a new term of
three years ending at the 2003 Annual Meeting and until their successors are
duly elected and qualified.
Nominees receiving the largest number of affirmative votes cast will be
elected as directors up to the maximum number of directors to be chosen at the
election. Accordingly, any shares not voted affirmatively, whether by
abstention, broker non-vote or otherwise, will not be counted as affirmative
votes cast for any director.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND DIRECTORSHIPS
---- --------------------
<S> <C>
NOMINEES FOR DIRECTORS -- CLASS I
Dennis Stevenson..................... Chairman of AerFi Group plc, a provider of financing to the
Age 54 aviation industry, Chairman of Pearson plc, a multimedia
company and Chairman of Halifax plc, a banking institution.
A director of the Company for more than five years.
John R. Walter....................... Chairman of the Company since April, 1999 and a director of
Age 53 the Company since October, 1998. Chairman of Ashlin
Management Company. Retired President and Chief Operating
Officer of AT&T Corp. from November, 1996 to July, 1997.
Chairman and Chief Executive Officer of R.R. Donnelley &
Sons Company, a print and digital information management,
reproduction and distribution company, from 1989 through
1996. Also a director of Abbott Laboratories, a
pharmaceutical manufacturer, Celestica Inc., Jones Lang
LaSalle, a real estate firm, Deere & Company, an equipment
manufacturer, and Prime Capital Corporation, a finance
company.
Jeffrey A. Joerres................... President and Chief Executive Officer of the Company and a
Age 39 director since April, 1999. Senior Vice
President -- European Operations and Marketing and Major
Account Development from July, 1998 to April, 1999. Senior
Vice President -- Major Account Development of the Company
from November, 1995 to July 1998. Vice President --
Marketing and Major Account Development of the Company from
July, 1993 to November, 1995.
CONTINUING DIRECTORS
CLASS II DIRECTORS (TERM EXPIRING 2001)
J. Ira Harris........................ Chairman of J. I. Harris & Associates, a consulting firm,
Age 61 and Vice Chairman of The Pritzker Organization, LLC, a
merchant banking investment management services firm, since
January, 1998. Senior Managing Director of the investment
banking firm of Lazard Freres & Co. LLC until December,
1997. A director of the Company for more than five years.
Terry A. Hueneke..................... Executive Vice President of the Company and a director since
Age 57 December, 1995. Senior Vice President Group Executive of
the Company's former principal operating subsidiary from
1987 until 1996.
Newton N. Minow...................... Of Counsel to the law firm of Sidley & Austin, Chicago,
Age 74 Illinois, since March, 1991. From 1965 through March, 1991,
Mr. Minow was a partner in the law firm of Sidley & Austin.
A director of the Company for more than five years. Also a
director of AON Corporation.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND DIRECTORSHIPS
---- --------------------
<S> <C>
Gilbert Palay........................ Consultant to the Company since January, 1994. Senior
Age 72 Executive Vice President of the Company from August, 1991 to
December, 1993 and Senior Executive Vice President of the
Company's former principal operating subsidiary from
September, 1989 to December, 1993. Principal Financial
Officer of the Company from August, 1991 to August, 1993. A
director of the Company for more than five years.
CLASS III DIRECTORS (TERM EXPIRING 2002)
Dudley J. Godfrey, Jr................ A shareholder in the law firm of Godfrey & Kahn, S.C.,
Age 73 Milwaukee, Wisconsin. A director of the Company for more
than five years.
Marvin B. Goodman.................... Principal shareholder and officer of Manpower Services
Age 71 (Toronto) Limited, a Company franchise in Ontario, Canada
from 1956 to August, 1993. A director of the Company for
more than five years.
</TABLE>
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors has standing Audit, Executive Compensation,
Executive Performance Compensation, Executive and Nominating and Governance
Committees. The Board of Directors held five meetings and acted three times by
written consent during 1999. Each director attended at least 75% of the full
board meetings and meetings of committees on which each served in 1999, except
for Mr. Stevenson, who attended three of the five meetings of the Board of
Directors.
The Audit Committee consists of Messrs. Minow (Chairman), Godfrey, Goodman
and Harris. The functions of the Audit Committee are to: (i) recommend to the
Board of Directors the selection of the independent auditors for the annual
audit; (ii) approve, in advance, the planned scope of the annual audit and
review the fee arrangements with the auditors; (iii) review non-recurring
services of the independent auditors in order to ensure their independence; (iv)
review the adequacy of the Company's internal controls, accounting policies and
procedures and internal audit function with the independent auditors; (v) review
with the Company's management and internal auditors the results of the annual
audit, recommendations resulting from the annual audit and any disagreements
between the Company's management and internal auditors; (vi) review with
management the adequacy of the Company's systems of internal controls; (vii)
review the Company's policies and financial practices related to compliance with
the law, ethical conduct and conflicts of interest; (viii) review current or
pending litigation which may have a material financial impact on the Company or
which relates to matters entrusted to the Committee; and (ix) be available to
receive suggestions, questions or recommendations from the Company's independent
auditors or certain senior officers of the Company. The Audit Committee held
four meetings during 1999. The Audit Committee did not take action by written
consent during 1999.
The Executive Compensation Committee consists of Messrs. Godfrey
(Chairman), Goodman, Harris and Walter (who was appointed to the Committee in
July, 1999). The functions of this Committee are to: (i) establish the
compensation of Mr. Joerres, the Chief Executive Officer of the Company, and Mr.
Hueneke, Executive Vice President of the Company, subject to ratification by the
Board of Directors; (ii) approve the compensation, based on the recommendations
of the senior executive officers, of certain other senior executives of the
Company and its subsidiaries; (iii) review the compensation of all other senior
managers of the Company and its subsidiaries; and (iv) serve as the
administrative committee for the Company's stock option and stock purchase
plans. Certain performance-based compensation for executive officers must also
be approved by the Executive Performance Compensation Committee as discussed
below. The Executive Compensation Committee held six meetings and took action by
written consent three times during 1999.
The Executive Performance Compensation Committee consists of Messrs.
Goodman and Minow. The Executive Performance Compensation Committee acts as the
compensation committee of outside directors
4
<PAGE> 7
under Section 162(m) of the Internal Revenue Code ("IRC"). In addition, the
Committee serves as a committee of disinterested directors for purposes of Rule
16b-3 under the Securities Exchange Act of 1934 and will approve transactions
subject to Rule 16b-3 to the extent deemed advisable under the Rule. The
Executive Performance Compensation Committee did not meet in 1999, but took
action by written consent four times during 1999.
The Executive Committee consists of Messrs. Walter, Joerres and Palay. Mr.
Fromstein resigned from the Committee effective April 30, 1999 and Mr. Godfrey
resigned from the Committee effective July 20, 1999. This Committee may exercise
full authority in the management of the business and affairs of the Company's
Board of Directors when the Board of Directors is not in session, except to the
extent limited by Wisconsin law, the Company's Articles of Incorporation or
By-Laws, or as otherwise limited by the Board of Directors. Although the
Committee has very broad powers, in practice, it acts only infrequently to take
formal action on a specific matter when it would be impractical to call a
meeting of the Board of Directors. The Executive Committee did not meet in 1999,
but took action by written consent once in 1999.
The Nominating and Governance Committee was formed on November 8, 1999 and
consists of Messrs. Harris (Chairman), Godfrey and Walter. The functions of this
Committee are to: (i) recommend nominees to stand for election at annual
shareholders meetings, to fill vacancies on the Board of Directors and to serve
on committees of the Board of Directors; (ii) establish procedures and assist in
identifying candidates for Board membership; (iii) review the qualifications of
candidates for Board membership; (iv) review compensation arrangements in effect
for non-management members of the Board of Directors and recommend changes
deemed appropriate; (v) establish and review, for recommendation to the Board of
Directors, guidelines and policies on the size and composition of the Board, the
structure, composition and functions of the Board committees, and other
significant corporate governance principles and procedures; (vi) undertake
additional activities within the scope of the primary functions of the Committee
as the Committee or the Board of Directors may determine. The Nominating and
Governance Committee will consider Board candidates nominated by shareholders in
accordance with the Company's By-Laws. The Nominating and Governance Committee
met once in 1999. The Nominating and Governance Committee did not take action by
written consent during 1999.
REMUNERATION OF DIRECTORS
Directors of the Company who are not employees of the Company or any of its
subsidiaries, are currently entitled to an annual fee of $50,000, inclusive of a
retainer and all meeting and committee fees. In addition, each director is
reimbursed for travel expenses incurred in connection with attending Board of
Directors meetings. In lieu of receiving payment of fees in cash, directors may
elect, except for Mr. Stevenson who is required to elect, in advance of the
period for which such fees would be paid, to receive an option to purchase
shares of the Company's Common Stock under the 1991 Directors Stock Option Plan
(the "Plan"). For each year for which such cash fees are waived, a director
receives an option over 10,000 shares of the Company's Common Stock, which
number is adjusted based on the price per share of the Company's Common Stock on
the date of election relative to $28.00. The per share purchase price for each
option awarded is equal to the fair value of the Company's Common Stock on the
date of grant. Options granted under the Plan are exercisable for the vested
portion during the director's tenure and a limited period thereafter. All of the
directors have agreed, and Mr. Stevenson was required, to accept stock options
under the Plan in lieu of cash fees.
Mr. Palay has entered into an agreement with the Company whereby Mr. Palay
provides certain advisory services to the Company. Pursuant to the agreement,
the Company pays Mr. Palay an annual fee of $150,000 plus certain monthly
retirement and deferred compensation amounts, provides medical and dental
benefits to Mr. Palay and his spouse, reimburses Mr. Palay's reasonable
out-of-pocket expenses and provides Mr. Palay with office space. Certain
information with respect to Messrs. Godfrey, Harris and Walter is set forth
under "EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION,"
below.
5
<PAGE> 8
SECURITY OWNERSHIP OF MANAGEMENT
Set forth in the table below, as of the Record Date, are the shares of the
Company's Common Stock beneficially owned by each director and nominee, each of
the named executive officers, and all directors and executive officers of the
Company as a group and the shares of the Company's Common Stock that could be
acquired within 60 days of the Record Date by such persons.
<TABLE>
<CAPTION>
COMMON STOCK
NAME OF BENEFICIALLY RIGHT TO ACQUIRE PERCENT OF
BENEFICIAL OWNER OWNED(1) COMMON STOCK(1) CLASS(2)
---------------- ------------ ---------------- ----------
<S> <C> <C> <C>
Jeffrey A. Joerres.............................. 65,365 48,500(3) *
Mitchell S. Fromstein........................... 912,377 706,543(3) 1.2%
Terry A. Hueneke................................ 62,895 53,000(3) *
Michael J. Van Handel........................... 36,682 26,000(3) *
Dudley J. Godfrey, Jr........................... 84,000(4) 32,500(5) *
Marvin Goodman.................................. 66,489(6) 63,489(5) *
J. Ira Harris................................... 67,500(7) 57,500(5) *
Newton N. Minow................................. 74,000(8) 57,500(5) *
Gilbert Palay................................... 310,022 201,604(3)(5) *
Dennis Stevenson................................ 84,000 82,500(5) *
John R. Walter.................................. 193,829 193,829(5) *
All Directors and Executive Officers as a
group......................................... 1,957,159 1,522,965 2.6%
</TABLE>
- ---------------
(1) Except as indicated below, all shares shown in this column are owned with
sole voting and investment power. Amounts shown in the Right to Acquire
Common Stock column are also included in the Common Stock Beneficially Owned
column.
(2) Except as indicated, no person named in the table beneficially owns more
than 1% of the outstanding shares of Common Stock. The percentage is based
on the column entitled Common Stock Beneficially Owned.
(3) Common Stock that may be acquired within 60 days of the date hereof through
the exercise of stock options.
(4) Includes 500 shares held by Mr. Godfrey's spouse and 500 shares held in
trust.
(5) Includes the vested portion of options held under the 1991 Directors Stock
Option Plan.
(6) Includes 1,000 shares held by Mr. Goodman's spouse.
(7) Includes 10,000 shares held in a living trust for the benefit of Mr. Harris.
(8) Includes 12,500 shares held in a living trust for the benefit of Mr. Minow
and 2,200 shares held in a living trust for the benefit of his spouse. The
total also includes 1,800 shares held in a family charitable foundation, as
to which Mr. Minow disclaims beneficial ownership.
6
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table (the "Summary Compensation Table") sets forth the
compensation for the past three years of each of the Company's named executive
officers:
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------------ ----------------------------------
AWARDS PAYOUTS
------------------------ -------
SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND COMPENSATION STOCK OPTIONS/ PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) AWARDS($) SARS(#) ($) ($)(2)
------------------ ---- --------- -------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J.A. Joerres............. 1999(3) $568,493 $ 200,000 $16,085 $350,000(4) 150,000 -- $ 7,183
President and Chief 1998(5) 300,000 300,000 2,680 -- 50,000 -- 4,524
Executive Officer
M.S. Fromstein........... 1999(6) $282,740 $ 924,238 -- -- 100,000 -- $5,287,711(7)
Chairman of the Board, 1998 860,000 1,237,208(8) $ 2,680 -- -- -- --
President and Chief 1997 860,000 3,567,711 3,749 -- -- -- --
Executive Officer
T. A. Hueneke............ 1999 $350,000 $ 678,913 $16,085 -- 105,000 -- --
Executive Vice
President 1998 350,000 400,000(9) 2,680 -- -- -- --
1997 350,000 820,234 3,749 -- -- -- --
M. J. Van Handel......... 1999 $225,000 $ 180,000 -- -- 50,000 -- $ 3,804
Senior Vice President
-- 1998 225,000 150,000 -- -- 25,000 -- 2,812
Chief Financial Officer 1997 150,000 75,000 -- -- -- -- 1,501
and Secretary
</TABLE>
- ---------------
(1) "Other Annual Compensation" includes the discount associated with purchases
of Common Stock under the Manpower 1990 Employee Stock Purchase Plan. The
Manpower 1990 Employee Stock Purchase Plan is available to all U.S.
employees (meeting certain qualifying standards) and employees in certain
other countries and is described below. See "Stock Purchase Plans."
(2) "All Other Compensation" for Mr. Joerres and Mr. Van Handel consists of the
dollar value of the Company's contribution to accounts under the Company's
Nonqualified Savings Plan.
(3) Mr. Joerres was appointed President and Chief Executive Officer of the
Company effective April 30, 1999.
(4) Represents the dollar value of the grant of 10,000 shares of the Company's
Common Stock on January 14, 2000 using the fair market value of the
Company's Common Stock on the date of grant, which was $35.00 per share. Of
the 10,000 shares granted, 6,500 shares vested on January 14, 2000 and 3,500
shares will vest on January 14, 2001. Dividends will be paid on all of the
shares granted. Mr. Joerres did not hold any restricted stock at the end of
1999.
(5) Mr. Joerres was appointed as an executive officer of the Company in July,
1998. Accordingly, information for years prior to 1998 is not included in
the table.
(6) Mr. Fromstein retired from his positions as Chairman of the Board, President
and Chief Executive Officer of the Company effective April 30, 1999.
(7) Amounts received in connection with Mr. Fromstein's retirement as Chairman
of the Board, President and Chief Executive Officer of the Company. See
"Employment and Other Agreements."
(8) Mr. Fromstein's bonus calculated pursuant to the terms of his employment
agreement would have been $2,848,958 in 1998. Mr. Fromstein voluntarily
agreed to a $1,611,750 reduction in his 1998 bonus in recognition of the
1998 charge to earnings for the write-down of capitalized software.
(9) Mr. Hueneke's bonus calculated pursuant to the terms of his employment
agreement would have been $609,940 in 1998. Mr. Hueneke voluntarily agreed
to a $209,940 reduction in his 1998 bonus in recognition of the 1998 charge
to earnings for the write-down of capitalized software.
7
<PAGE> 10
EMPLOYEE STOCK OPTION AND RESTRICTED STOCK PLANS
The Company maintains several plans pursuant to which incentive and
non-statutory stock options, restricted stock and SARs (stock appreciation
rights) have been granted in the past and/or may be granted in the future.
Participation is generally limited to full-time employees of the Company or its
subsidiaries. The option exercise price of all options granted under the
Company's plans to executive officers of the Company has been l00% of the
closing market price as reported on the NYSE for the business day immediately
prior to the date of grant. Directors of the Company who are not full-time
employees may participate in the 1991 Directors Stock Option Plan, as described
on page 5 hereof.
The following table summarizes certain information concerning option grants
to the named executive officers of the Company during 1999:
OPTION/SAR GRANTS IN FISCAL 1999
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
------------------------------------------------------------- ------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE GRANT
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION DATE PRESENT
NAME GRANTED (#) FISCAL YEAR ($/SH)(1) DATE VALUE ($)(2)
---- ------------ ------------ --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Jeffrey A. Joerres............. 50,000(3) 4.5% 23.5625 4/26/09 $249,500
100,000(4) 8.9 21.9375 7/20/09 472,000
Mitchell S. Fromstein.......... 100,000(5) 8.9 23.5625 4/26/04 876,000
Terry A. Hueneke............... 30,000(6) 2.7 22.50 2/22/09 140,000
25,000(3) 2.2 23.5625 4/26/09 124,750
50,000(4) 4.5 21.9375 7/20/09 236,000
Michael J. Van Handel.......... 15,000(3) 1.3 23.5625 4/26/09 74,850
35,000(7) 3.1 34.50 11/8/09 278,950
</TABLE>
- ---------------
(1) All options were granted at 100% of the fair market value on the date of
grant.
(2) Present value is determined by using the Black-Scholes option pricing model.
The Grant Date Value is based on a nine-year option life. Other assumptions
used for the Black-Scholes option pricing model vary depending on the date
of grant. For the option granted on February 22, 1999, the assumptions were
a risk-free rate of return of 5.03%, a volatility factor of 16.6% and a
dividend yield of 0.5% during the option life. For options granted on April
26, 1999, the assumptions were a risk-free rate of return of 5.20%, a
volatility factor of 16.5% and a dividend yield of 0.5% during the option
life. For options granted on July 20, 1999, the assumptions were a risk-free
rate of return of 5.72%, a volatility factor of 13.5% and a dividend yield
of 0.5% during the option life. For the option granted on November 8, 1999,
the assumptions were a risk-free rate of return of 6.0%, a volatility factor
of 12.4% and a dividend yield of 0.5% during the option life. The resulting
value derived from the Black-Scholes model was reduced for each grant by
43%, except for the option granted on November 8, 1999 which was reduced by
40%, for lack of marketability and liquidity. The option grant to Mr.
Fromstein was not reduced for lack of marketability or liquidity.
(3) These options were granted on April 26, 1999 and become exercisable as to
10% of the number of shares covered by the option on each of the first four
anniversaries of the date of grant, and become exercisable as to the
remaining number of shares covered by the option on the fifth anniversary of
the date of grant.
(4) These options were granted on July 20, 1999 and become exercisable as to 10%
of the number of shares covered by the option on each of the first four
anniversaries of the date of grant, and become exercisable as to the
remaining number of shares covered by the option on the fifth anniversary of
the date of grant.
(5) This option was granted on April 26, 1999 and was exercisable as to all of
the shares covered by the option on that date.
8
<PAGE> 11
(6) This option was granted on February 22, 1999 and becomes exercisable as to
10% of the number of shares covered by the option on each of the first four
anniversaries of the date of grant, and becomes exercisable as to the
remaining number of shares covered by the option on the fifth anniversary of
the date of grant.
(7) This option was granted on November 8, 1999 and becomes exercisable as to
all of the shares covered by the option on the third anniversary of the date
of grant.
The following table summarizes for each of the named executive officers the
number of shares of Common Stock acquired upon exercise of options during the
fiscal year ended December 31, 1999, the dollar value realized upon exercise of
options, the total number of shares of Common Stock underlying unexercised
options held at December 31, 1999 (exercisable and unexercisable), and the
aggregate dollar value of in-the-money, unexercised options held at December 31,
1999 (exercisable and unexercisable). Value realized upon exercise is the
difference between the fair market value of the underlying Common Stock on the
exercise date and the exercise or base price of the option. Value of
unexercised, in-the-money options at fiscal year-end is the difference between
its exercise price and the fair market value of the underlying Common Stock as
of December 31, 1999, which was $37.625 per share. These values, unlike any
amounts which may be set forth in the column headed "value realized" have not
been, and may never be, realized. The underlying options have not been, and may
not be, exercised; the actual gains, if any, on exercise will depend on the
value of the Company's Common Stock on the date of exercise. There can be no
assurance that these values will be realized.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR 1999
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END(#) AT FY-END($)
SHARES ACQUIRED VALUE ------------------------------ ------------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J.A. Joerres......... 0 0 48,500 200,000 $ 748,875 $2,989,688
M.S. Fromstein....... 0 0 706,543 0 15,352,336 0
T.A. Hueneke......... 0 0 50,000 105,000 1,025,000 1,589,688
M.J. Van Handel...... 0 0 26,000 72,500 376,656 667,656
</TABLE>
STOCK PURCHASE PLANS
The Company has adopted and maintains several employee stock purchase plans
designed to encourage employees to purchase Company Common Stock. The plans are
broad based and are available to all U.S. employees (including qualifying
temporary employees) and employees in certain other countries. The plans
generally provide that employees accumulate funds through payroll deductions
over a prescribed offering period (one to seven years) and are entitled to
purchase shares at a discount (a maximum of 15%) from the market price at the
beginning and/or end of the offering period. No more than $25,000 of stock,
measured by the market price as of the beginning of the offering period, may be
purchased by any participating employee in any year.
PENSION PLANS
The Company maintains a broad-based qualified, noncontributory defined
benefit pension plan for eligible U.S. employees (the "Qualified Plan"). The
Company has also established a nonqualified, deferred compensation plan to
provide retirement benefits for management and other highly compensated
employees in the U.S. who are ineligible to participate in the Qualified Plan
(together with the "Qualified Plan," the "U.S. Pension Plans"). Certain of the
Company's foreign subsidiaries maintain various pension and retirement plans.
None of the Company's executive officers have participated in such foreign
plans. Under the U.S. Pension Plans, a pension is payable upon retirement at age
65, or upon earlier termination if certain conditions are satisfied. The pension
benefit is based on years of credited service and the lesser of the average
annual
9
<PAGE> 12
compensation received during the last five consecutive calendar years prior to
retirement or $261,664. Compensation covered by the plans is base salary or
hourly wages, unless paid entirely on a commission basis, in which case
commissions of up to $20,000 per calendar year are taken into account. Bonuses,
overtime pay or other kinds of extra compensation are not considered. Under his
employment agreement, Mr. Fromstein was entitled to receive, upon termination of
employment for any reason, total retirement benefits, when added to those
payable under the U.S. Pension Plans, equal to those payable as if he had 30
years of credited service under the Qualified Plan and as if certain Qualified
Plan limitations did not apply. In connection with his retirement, Mr. Fromstein
entered into an agreement with the Company which superseded his employment
agreement and pursuant to which, among other things, Mr. Fromstein's pension
benefits were fixed at $750,000 per year. Under the non-qualified, deferred
compensation plan, Messrs. Joerres, Hueneke and Van Handel are entitled to
receive, upon termination of employment for any reason, retirement benefits
equal to those payable based on 6, 26 and 11 years of credited service under the
Qualified Plan, respectively.
The table below shows the estimated aggregate annual benefit, computed as a
straight life annuity amount, under the Company's U.S. Pension Plans at various
salary levels and years of credited service payable upon retirement at age 65 or
later. The benefit shown is not subject to any deduction for any Social Security
benefit:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF CONSECUTIVE SERVICE
FINAL AVERAGE -----------------------------------------------------------
ANNUAL PAY 10 15 20 25 30
- ------------- -- -- -- -- --
<C> <S> <C> <C> <C> <C> <C>
$ 100,000 ......................... $ 8,245 $12,367 $16,490 $20,613 $24,735
200,000 ......................... 18,245 27,368 36,490 45,612 54,735
261,664 ......................... 24,411 36,617 48,823 61,029 73,234
300,000 ......................... 24,411 36,617 48,823 61,029 73,234
400,000 ......................... 24,411 36,617 48,823 61,029 73,234
500,000 ......................... 24,411 36,617 48,823 61,029 73,234
600,000 ......................... 24,411 36,617 48,823 61,029 73,234
700,000 ......................... 24,411 36,617 48,823 61,029 73,234
800,000 ......................... 24,411 36,617 48,823 61,029 73,234
900,000 ......................... 24,411 36,617 48,823 61,029 73,234
1,000,000 ......................... 24,411 36,617 48,823 61,029 73,234
1,100,000 ......................... 24,411 36,617 48,823 61,029 73,234
</TABLE>
As of February 29, 2000, the U.S. Pension Plans were frozen. Upon
retirement at age 65 or later, Messrs. Joerres, Hueneke and Van Handel will be
entitled to an aggregate annual benefit equal to $11,882, $60,663 and $14,472,
respectively.
EMPLOYMENT AND OTHER AGREEMENTS
Messrs. Joerres, Hueneke, and Van Handel have each entered into employment
agreements with the Company.
Under his agreements, Mr. Joerres is entitled to receive an annual base
salary of $300,000 or more as determined by the Executive Compensation Committee
and an annual bonus determined by the Executive Compensation Committee, subject
to ratification by the Board of Directors. If Mr. Joerres' employment is
terminated by the Company for other than Cause (as defined in the agreement) or
by Mr. Joerres for Good Reason (also defined in the agreement), Mr. Joerres is
entitled to receive: (i) all base compensation and other benefits to which he
was entitled through his date of termination, including a prorated bonus; (ii)
one year of base compensation (two and one-half times this amount if termination
is in connection with a change of control), plus the highest incentive bonus
paid to him during the prior three years or the current year (two and
10
<PAGE> 13
one-half times this amount if termination is in connection with a change of
control); and (iii) certain other benefits as specified in the agreement.
Under his agreement, Mr. Hueneke is entitled to receive an annual base
salary of $350,000 and an annual incentive bonus based on the Company's
Specified Operating Unit Profits (as defined in the agreement). If Mr. Hueneke's
employment is terminated for other than Cause (as defined in the agreement), Mr.
Hueneke is entitled to receive: (i) all base compensation and other benefits to
which he was entitled through his date of termination, including a prorated
bonus; (ii) two years of base compensation plus the greater of (a) the highest
incentive bonus paid to him during the prior five years and (b) the incentive
bonus which would have otherwise been paid to him for the year of termination;
and (iii) certain other benefits as specified in the agreement.
Under his agreements, Mr. Van Handel is entitled to receive an annual base
salary of $225,000 and an annual incentive bonus recommended by the Chief
Executive Officer and approved by the Executive Compensation Committee. If Mr.
Van Handel's employment is terminated by the Company for other than Cause (as
defined in the agreement) or by Mr. Van Handel for Good Reason (also defined in
the agreement), Mr. Van Handel is entitled to receive: (i) all base compensation
and other benefits to which he was entitled through his date of termination,
including a prorated bonus; (ii) one year of base compensation (two times this
amount if termination is in connection with a change of control), plus the
highest incentive bonus paid to him during the prior three years (two times this
amount if termination is in connection with a change of control); and (iii)
certain other benefits as specified in the agreement.
Mr. Fromstein served as Chairman of the Board, President and Chief
Executive Officer of the Company pursuant to an agreement under which he
received an annual base salary of $860,000, an annual incentive bonus based on
the Company's Adjusted Net Profit Before Tax (as defined in the agreement) and
was entitled, upon retirement, to retirement benefits under the Company's U.S.
Pension Plans based on 30 years of service and calculated as if certain
limitations of the Qualified Plan did not apply. See "Pension Plans." Under his
agreement, if Mr. Fromstein's employment was terminated other than for cause,
Mr. Fromstein was entitled to receive: (i) all base compensation and other
benefits to which he was entitled through his date of termination, including a
prorated bonus; (ii) two years of base compensation plus the highest incentive
bonus paid to him since 1990; (iii) a cash payment equal to the fair market
value of any stock options, SARs, purchase rights or restricted stock held
pursuant to any benefit plan which ceases to cover him; and (iv) certain other
benefits as specified in the agreement.
Effective April 30, 1999, Mr. Fromstein retired as Chairman of the Board,
President and Chief Executive Officer of the Company. In connection with his
retirement, Mr. Fromstein entered into an agreement with the Company pursuant to
which he resigned all of his positions with the Company and the Company paid Mr.
Fromstein his base salary and incentive bonus through April 30, 1999, plus a
supplemental retirement benefit in a lump sum amount equal to $5,287,711 in
accordance with the terms of his employment agreement. The Company also agreed
to continue to provide medical and dental benefits to Mr. Fromstein and his
spouse in accordance with the terms of his employment agreement and his
employment agreement was canceled. The agreement also provides that in
recognition of his past service to the Company and in consideration for his
agreement to provide certain advisory services to the Company, not to compete
with the Company for a period of three years, not to solicit customers or
employees of the Company for a period of five years and to release all claims
relating to his employment with the Company, the Company will pay Mr. Fromstein
for a period of three years an annual fee of $500,000, plus certain monthly
retirement and deferred compensation amounts, reimburse Mr. Fromstein's
reasonable out-of-pocket expenses and provide Mr. Fromstein with office space.
The Company also granted Mr. Fromstein an option to purchase 100,000 shares of
the Company's common stock at an exercise price of $23.5625 per share. The
option expires on April 26, 2004.
11
<PAGE> 14
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Executive Compensation Committee of the Board of Directors (the
"Committee") has furnished the following report on executive compensation.
Because certain matters related to performance-based compensation are approved
by the Executive Performance Compensation Committee, that committee joins in the
report of the Executive Compensation Committee.
The Committee consists of four non-employee directors. The Committee is
responsible for establishing the compensation of Mr. Joerres, the President and
Chief Executive Officer of the Company and Mr. Hueneke, Executive Vice
President, and until April 30, 1999 was responsible for establishing the
compensation of Mr. Fromstein, subject to ratification by the Board of
Directors. In addition, the Committee has responsibility to approve the
compensation of other senior executives, including Mr. Van Handel, and to review
the compensation of other senior managers of the Company and its subsidiaries.
The Committee also has authority for administration of the Company's stock-based
compensation plans.
General Compensation Policies
The Committee's broad intent is to provide a total compensation program for
the Company's senior executives that serves to attract, retain and motivate
executives with the skills and experience required for the success of the
Company's business and that creates a commonality of interest between the senior
executives and the Company's shareholders. These objectives have been pursued
through a compensation structure that consists in general of three principal
components: base salary, annual bonus and periodic grants of stock options or,
occasionally, restricted stock. The Committee believes that this approach
creates both short-term and long-term incentives for corporate management. As a
result of these policies, a high proportion of compensation for the Company's
senior executives is at risk through the annual bonus, generally based on
formulas tied to profitability of the individual's profit center, as well as
stock ownership and/or stock options, which create a direct link between
long-term remuneration and the price of the Company's Common Stock.
Base salary determinations are an important ingredient in attracting and
retaining quality personnel in a competitive market. Base salaries are set at
levels based generally on subjective factors, including the individual's level
of responsibility, experience and past performance record, as well as base
salary levels for comparable positions at other companies. As a large
multinational business, the Company competes for senior executive talent with
large public and private companies throughout the world, many of which are not
in businesses which directly compete with the Company. These are not the same
companies as those included in the Dow Jones General Industrial & Commercial
Services Index which is used as a peer group to compare shareholder returns in
the Performance Graph.
The Committee also believes that a significant portion of compensation
should be directly related to and contingent upon Company profitability based on
objective performance criteria. Accordingly, it is the Company's general
practice that the executive officers of the Company as well as many other senior
executives of the Company and its subsidiaries participate in bonus arrangements
based on formulas and other criteria tied to profitability of the individual's
profit center or the Company as a whole. However, as described below for Mr.
Joerres, in certain circumstances considered appropriate by the Committee in its
discretion, such as mid-year changes in responsibilities, the Committee will
determine annual bonuses on a subjective basis.
The Committee believes that it is important that the executive officers and
other key executives of the Company and its subsidiaries hold equity positions
in the Company. Stock option grants to executives permit them to hold equity
interests at more meaningful levels than they could through other alternatives,
such as stock purchase arrangements. Accordingly, while the Committee is
conscious of the dilutive effects of stock options on shareholders, it believes
that stock option grants at reasonable levels are an important component of
executive compensation. In addition, because of the nature of the Company's
operations, the Company's management believes, and the Committee agrees, that it
is important that stock options be granted to a broad range of employees where
the options provide an important incentive. Approximately 292 employees and each
of the Company's three executive officers received option grants in 1999.
12
<PAGE> 15
Chief Executive Officer Compensation
Mr. Joerres was promoted to President and Chief Executive Officer of the
Company effective as of April 30, 1999.
Mr. Joerres' employment agreement establishes his base salary at $300,000
per year or more or determined by the Committee. Effective as of the date of his
promotion, his base salary was increased to $700,000 per year. The amount of the
increased base salary was determined by the Committee based on its subjective
evaluation of factors including Mr. Joerres' new level of responsibility and his
skill and experience.
The Committee awarded Mr. Joerres a cash bonus for 1999 in the amount of
$200,000. Following its policy to tie a significant part of executive
compensation to stock ownership, the Committee also granted Mr. Joerres in
January 2000, as a component of his bonus for 1999, 10,000 shares of Company
Common Stock, a portion of which are restricted subject to forfeiture on
termination of employment for a one-year period. The cash bonus amount and
number of shares granted were determined by the Committee based on its
subjective assessment of factors including Mr. Joerres' new level of
responsibility, his performance during the year, the overall financial
performance of the Company for the year, and the total salary plus annual bonus
levels of chief executive officers at a peer group of companies and at companies
of comparable size in general industry. In making this determination, the
Committee also took into account the fact that Mr. Joerres served as President
and Chief Executive Officer for only a portion of the year.
Finally, as a long-term incentive, and again consistent with the policy
described above regarding the use of stock options as a part of executive
compensation, the Executive Performance Compensation Committee, based on the
recommendation of the Committee, also granted to Mr. Joerres during 1999 options
to purchase 150,000 shares of the Company's Common Stock. Each such option has
an exercise price equal to the market value of the stock on the date of grant
and is not immediately exercisable but becomes exercisable over a five-year
vesting period. For years beginning in 2000, Mr. Joerres' annual bonus and
long-term incentive compensation will, subject to shareholder approval, be
determined in accordance with the annual bonus plan and long-term incentive plan
described on pages 16 to 17.
Mr. Fromstein's base salary and bonus were determined on the basis of his
employment agreement, which was canceled upon his retirement as Chairman of the
Board, President and Chief Executive Officer of the Company effective April 30,
1999. Mr. Fromstein's employment agreement established a base salary of
$860,000, which had been fixed at this level since 1989. Mr. Fromstein's annual
bonus was determined under the employment agreement by measuring the Company's
pretax profit for the year (subject to certain adjustments) against a graduated
scale after exceeding a threshold level.
Other Executive Officers of the Company
The base salary and bonus of Mr. Hueneke are determined on the basis of his
employment agreement. Mr. Hueneke's annual bonus is determined under the
employment agreement by measuring the total operating unit profits (subject to
certain adjustments) of certain regions in which the Company conducts business
over which Mr. Hueneke has responsibility for the fiscal year against a
graduated scale after exceeding a threshold level. Accordingly, Mr. Hueneke's
bonus will fluctuate significantly based on the Company's operating performance
in the regions over which he has management responsibility. As a result of the
fact that Mr. Hueneke has assumed responsibility for certain additional regions
which are not included in the bonus formula set out in his employment agreement,
the Committee awarded him a discretionary bonus for 1999, in addition to the
bonus required under the agreement, equal to $79,340. This amount was determined
by applying the formula in the agreement as if these additional regions were
included. Also, as a long-term incentive, the Executive Performance Compensation
Committee, based on the recommendation of the Committee, also granted to Mr.
Hueneke during 1999 options to purchase 105,000 shares of the Company's common
stock. Each such option has an exercise price equal to the market value of the
stock on the date of grant and is not immediately exercisable but becomes
exercisable over a 5-year vesting period.
Mr. Van Handel's employment agreement establishes a base salary of
$225,000, which was determined on the basis of the nature of his position, his
contribution to the Company and his experience and tenure. The
13
<PAGE> 16
Committee approved a bonus for Mr. Van Handel for 1999 in the amount of
$180,000. This amount was determined by the Committee based on its subjective
assessment of factors, including Mr. Van Handel's performance during the year,
the overall financial performance of the Company for the year, and total salary
plus annual bonus levels of chief financial officers at a peer group of
companies and at companies of comparable size in general industry. Also, as a
long-term incentive, the Executive Performance Compensation Committee, based on
the recommendation of the Committee, also granted to Mr. Van Handel during 1999
options to purchase 50,000 shares of the Company's common stock. Each such
option has an exercise price equal to the market value of the stock on the date
of grant and is not immediately exercisable. One option for 15,000 shares
becomes exercisable over a five-year vesting period and the other option for
35,000 shares becomes exercisable in its entirety after a three-year vesting
period. For years beginning in 2000, Mr. Van Handel's annual bonus and long-term
incentive compensation will be determined under the same annual bonus plan and
long-term incentive plan as is described for Mr. Joerres at pages 16 to 17.
Internal Revenue Code Section 162(m)
Section 162(m) of the IRC generally disallows a tax deduction to public
corporations for compensation over $1,000,000 for any fiscal year paid to the
corporation's chief executive officer and four other most highly compensated
executive officers in service as of the end of any fiscal year. However, Section
162(m) also provides that qualifying performance-based compensation will not be
subject to the deduction limit if certain requirements are met. The Committee
currently intends to structure compensation amounts and plans which meet the
requirements for deductibility. In order to satisfy these requirements, the
annual bonus arrangement for Mr. Hueneke has been approved by the Executive
Performance Compensation Committee and the shareholders, and the new incentive
compensation arrangement for Mr. Joerres for 2000 and later years has been
approved by the Executive Performance Compensation Committee and is being
submitted for approval by the shareholders at the Annual Meeting. Because of
uncertainties as to the application and interpretation of Section 162(m) and the
regulations issued thereunder, no assurance can be given, notwithstanding the
efforts of the Company in this area, that compensation intended by the Company
to satisfy the requirements for deductibility under Section 162(m) does in fact
do so. In addition, the Company may pay compensation that does not satisfy these
requirements for deductibility if required for sound management and approved by
the Committee.
<TABLE>
<S> <C>
THE EXECUTIVE COMPENSATION COMMITTEE THE EXECUTIVE PERFORMANCE COMPENSATION COMMITTEE
Dudley J. Godfrey, Jr. (Chairman) Marvin B. Goodman
Marvin B. Goodman Newton N. Minow
J. Ira Harris
John R. Walter
</TABLE>
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Dudley J. Godfrey, Jr. is a shareholder in Godfrey & Kahn, S.C., which is
general counsel to the Company.
J. Ira Harris is currently Chairman of J. I. Harris & Associates, a
consulting firm, which may from time to time perform services for the Company.
The Company has retained Mr. Walter, through Ashlin Management Company, to
provide certain consulting services to the senior executive officers of the
Company. The Company granted an option to Mr. Walter to purchase 175,000 shares
of the Company's common stock in recognition of his agreement to serve as
Chairman of the Company. In addition, the Company pays Ashlin Management Company
an annual fee in the amount of $500,000 and reimburses Mr. Walter's reasonable
out-of-pocket expenses. Ashlin Management Company is owned by Mr. Walter.
14
<PAGE> 17
PERFORMANCE GRAPH
Set forth below is a graph for the periods ending December 31, 1994-1999
comparing the cumulative total shareholder return on the Company's Common Stock,
with the cumulative total return of companies in the Standard & Poor's 500 Stock
Index and the Dow Jones General Industrial & Commercial Services Index (f/k/a
Dow Jones Other Industrial & Commercial Services Index). The graph assumes a
$100 investment on December 31, 1994 in the Company's Common Stock, the S&P 500
Stock Index and the Dow Jones General Industrial & Commercial Services Index and
assumes the reinvestment of all dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG MANPOWER, S&P 500 STOCK INDEX AND
DOW JONES GENERAL INDUSTRIAL & COMMERCIAL SERVICES INDEX
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
MANPOWER S&P 500 STOCK INDEX DOW JONES GENERAL
-------- ------------------- INDUSTRIAL & COMMERCIAL
SERVICES INDEX
-----------------------
<S> <C> <C> <C>
12/94 100 100 100
12/95 100 134 118
12/96 117 161 126
12/97 127 211 144
12/98 91 268 159
12/99 137 320 174
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Manpower............................................. $100 $100 $117 $127 $ 91 $137
S&P 500 Stock Index.................................. $100 $134 $161 $211 $268 $320
Dow Jones General Industrial & Commercial Services
Index.............................................. $100 $118 $126 $144 $159 $174
</TABLE>
15
<PAGE> 18
2. APPROVAL OF PERFORMANCE-BASED INCENTIVE COMPENSATION ARRANGEMENT FOR THE
COMPANY'S PRESIDENT AND CHIEF EXECUTIVE OFFICER
The Executive Compensation Committee of the Board of Directors of the
Company has established an annual bonus plan and a long-term incentive
compensation plan for designated executives of the Company. These plans provide
for receipt of incentive compensation based on achievement of goals relating to
Company financial performance.
Subject to receipt of shareholder approval, Mr. Joerres will participate in
these plans beginning in 2000. In order to qualify for the performance-based
compensation exception under Section 162(m) of the IRC and thereby avoid
potential nondeductibility of compensation paid to Mr. Joerres under the plans,
the material terms of his performance-based incentive compensation arrangement
under the plans must be approved by the shareholders. Accordingly, this proposed
arrangement is being submitted for shareholder approval. Mr. Joerres'
participation will take effect only if such approval is obtained.
The annual bonus plan provides for an annual cash bonus based on
achievement of goals for growth in earnings per share ("EPS") of the Company and
controlling growth in net assets of the Company, as defined in the plan, for the
relevant year. Under the plan, Mr. Joerres is assigned possible cash bonus
levels for threshold, target and outstanding performance in achieving these
goals.
The EPS growth and net asset growth goals and possible bonus levels for Mr.
Joerres are established each year, no later than 90 days after the beginning of
the year, by the Executive Performance Compensation Committee based on the
recommendation of the Executive Compensation Committee. Depending upon the
actual performance of the Company for the year as measured against these goals,
Mr. Joerres would be paid a cash bonus following the close of the year. In the
determination of the bonus amount, 75% of the weight is assigned to EPS growth
and 25% to net asset growth. The maximum bonus Mr. Joerres would be entitled to
earn under the annual bonus plan for any one year is $1,500,000.
Under the long-term incentive plan, Mr. Joerres is entitled to receipt of
an incentive award for each three-year period beginning in 2000 and continuing
with successive three-year cycles beginning in later years based on achievement
of a goal for improvement in cumulative economic profit of the Company over the
period. Economic profit is net operating profit after taxes of the Company, as
defined in the plan, less a capital charge. The capital charge is equal to a
cost of capital factor multiplied by the amount of net assets of the Company.
Under the plan, Mr. Joerres is assigned possible incentive award levels for
threshold, target and outstanding performance in achieving the goal.
The economic profit improvement goal and the possible incentive award
levels for Mr. Joerres are established for each three-year cycle, no later than
90 days after the beginning of the cycle, by the Executive Performance
Compensation Committee based on the recommendation of the Executive Compensation
Committee. Depending upon the actual financial performance of the Company for
the period as measured against the goal, Mr. Joerres would earn an award
following the close of the three-year cycle. This award would be given in the
form of a grant of shares of Company Common Stock under, and subject to the
terms of, the Company's 1994 Executive Stock Option and Restricted Stock Plan
having a value at the date of grant equal to the award amount earned. The
maximum incentive award amount Mr. Joerres would be entitled to earn under the
plan based on improvement in economic profit for any cycle is $1,500,000.
The long-term incentive plan, as indicated, operates on a three-year cycle,
with three such cycles running concurrently at any time. In addition, at
inception three cycles are to begin simultaneously - a one-year cycle for 2000,
a two-year cycle for 2000-2001, and a three-year cycle for 2000-2002. The
shorter cycles will have separately determined economic profit improvement goals
which reflect the shorter periods.
The long-term incentive plan also provides for annual grants of stock
options. The number of shares for each annual grant is determined based on the
target award levels established for the three concurrent cycles covering the
year and a determination of the value of the option grant. Such stock options
will be granted under, and subject to the terms of, the Company's 1994 Executive
Stock Option and Restricted Stock Plan or successor plan and have an exercise
price per share no less than the market price per share of the Company's Common
Stock at the time of grant.
16
<PAGE> 19
The amounts, if any, which would be received by Mr. Joerres under the
annual bonus plan or as an incentive award under the long-term incentive plan
are not yet determinable. These amounts would not have been determinable for
1999 if the plans had been in effect because EPS growth, net asset growth and
economic profit improvement goals, and incentive award levels may vary from year
to year, and no such goals or award levels were established for 1999. However,
if the annual bonus plan had been in place in 1999 and the EPS growth and net
asset growth goals and possible bonus levels for Mr. Joerres were the same as
for 2000, Mr. Joerres would have earned a bonus for 1999 equal to $534,277.
Also, if the long-term incentive plan had been in place in 1999 and the economic
profit improvement goal and possible incentive award levels for Mr. Joerres were
the same as for the 2000 cycle, Mr. Joerres would have earned an award for 1999
based on improvement of economic profit equal to $412,927.
The annual bonus plan and the long-term incentive plan may be amended in
any manner without shareholder approval. Certain amendments may, under Section
162(m) of the IRC, affect the deductibility of payments or awards to Mr. Joerres
under these plans. No such amendments are currently contemplated.
The affirmative vote of a majority of the shares voting on the proposal is
required for approval of the performance-based incentive compensation
arrangement for Mr. Joerres. Abstentions will not be counted as voting and,
therefore, will have no impact on the approval of the proposal.
The Board of Directors recommends you vote FOR the approval of the
performance-based incentive compensation arrangement and your proxy will be so
voted unless you specify otherwise.
3. RATIFICATION OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee and subject to ratification by
the shareholders at the Annual Meeting, the Board of Directors has appointed
Arthur Andersen LLP, an independent public accounting firm, to audit the
consolidated financial statements of the Company for the fiscal year ending
December 31, 2000. Arthur Andersen LLP has audited the Company (or its
predecessors) since 1975. Representatives of Arthur Andersen LLP will attend the
Annual Meeting and have the opportunity to make a statement if they so desire,
and will also be available to respond to appropriate questions.
If the shareholders do not ratify the appointment of Arthur Andersen LLP,
the selection of the Company's independent auditors will be reconsidered by the
Board of Directors.
The affirmative vote of a majority of the votes cast on this proposal shall
constitute ratification of Arthur Andersen LLP as the independent auditors for
the fiscal year ending 2000. Abstentions will not be counted as voting and,
therefore, will have no impact on the approval of the proposal.
The Board of Directors recommends you vote FOR the ratification of the
appointment of Arthur Andersen LLP as the Company's independent auditors for the
fiscal year ending December 31, 2000 and your proxy will be so voted unless you
specify otherwise.
SUBMISSION OF SHAREHOLDER PROPOSALS
In accordance with the Company's By-Laws, nominations, other than by or at
the direction of the Board of Directors, of candidates for election as directors
at the 2001 Annual Meeting of Shareholders and any other shareholder proposed
business to be brought before the 2001 Annual Meeting of Shareholders must be
received by the Company no later than January 17, 2001. To be considered for
inclusion in the proxy statement solicited by the Board of Directors,
shareholder proposals for consideration at the 2001 Annual Meeting of
Shareholders of the Company must be received by the Company at the Company's
principal executive offices by November 20, 2000. Such nominations or proposals
must be submitted to Mr. Michael J. Van Handel, Secretary, Manpower Inc., 5301
North Ironwood Road, Milwaukee, Wisconsin 53217. To avoid disputes as to the
date of receipt, it is suggested that any shareholder proposal be submitted by
certified mail, return receipt requested.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and officers to file reports with the Securities and
Exchange Commission disclosing their ownership, and changes in their ownership,
of stock in the Company. Copies of these reports must also be furnished to the
Company. Based solely on a review of these copies, the Company believes that
during 1999 all filing requirements were met, except that Mr. Minow
inadvertently failed to file a Form 5 to report a gift of approximately 16
shares of the Company's Common Stock to certain family members.
OTHER MATTERS
Although management is not aware of any other matters that may come before
the Annual Meeting, if any such matters should be presented, the persons named
in the accompanying proxy intend to vote such proxy in accordance with their
best judgment.
Shareholders may obtain a copy of the Company's Annual Report to the
Securities and Exchange Commission as filed on Form 10-K at no cost by writing
to Mr. Michael J. Van Handel, Secretary, Manpower Inc., 5301 North Ironwood
Road, Milwaukee, Wisconsin 53217.
By Order of the Board of Directors,
Michael J. Van Handel, Secretary
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APPENDIX I
MANPOWER INC.
2000 CORPORATE SENIOR MANAGEMENT
INCENTIVE PLAN
ADMINISTRATIVE GUIDELINES
EFFECTIVE
JANUARY 1, 2000
<PAGE> 22
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I. GENERAL PROVISIONS...................................................................................1
Section 1. Purpose of the Plan................................................................................1
Section 2. Overview of the Plan...............................................................................1
Section 3. Definitions........................................................................................2
Section 4. Plan Administration................................................................................4
ARTICLE II. ANNUAL BONUS PLAN....................................................................................5
Section 1. Eligibility and Participation Guidelines...........................................................5
Section 2. Performance Measures...............................................................................5
Section 3. Performance Goals..................................................................................6
Section 4. Award Opportunities................................................................................7
Section 5. Calculation of Awards..............................................................................7
Section 6. Distribution of Awards.............................................................................8
ARTICLE III. LONG-TERM INCENTIVE PLAN.............................................................................9
Section 1. Eligibility and Participation Guidelines...........................................................9
Section 2. Award Type.........................................................................................9
Section 3. Award Opportunities...............................................................................10
Section 4. Performance Measures for LTIP.....................................................................11
Section 5. Performance Goals for LTIP........................................................................12
Section 6. Calculation of LTIP Awards........................................................................13
Section 7. Distribution of LTIP Awards.......................................................................13
Section 8. Stock Option Grants...............................................................................13
ARTICLE IV. MISCELLANEOUS PROVISIONS............................................................................15
Section 1. Termination of Employment.........................................................................15
Section 2. No Discretion to Increase Awards Otherwise Earned.................................................15
Section 3. Change of Control.................................................................................15
Section 4. No Guarantee of Employment........................................................................15
Section 5. Withholding Taxes.................................................................................15
Section 6. Amendment and Discontinuance of the Plan..........................................................16
Section 7. Effective Date....................................................................................16
Section 8. Term of the Plan..................................................................................16
</TABLE>
<PAGE> 23
ARTICLE I
GENERAL PROVISIONS
SECTION 1. PURPOSE OF THE PLAN
The Plan has several key objectives:
o Reinforce the Company's short-term and long-term business strategy
o Focus Company Executives on shareholder value creation
o Reward Company Executives for performance and provide opportunities to
earn significant rewards for outstanding performance
o Enable the Company to attract, retain and motivate Company Executives
o Enhance teamwork
SECTION 2. OVERVIEW OF THE PLAN
The Plan has two components - an Annual Bonus Plan and a Long-term Incentive
Plan. The Annual Bonus Plan will focus Company Executives and reinforce the
short-term business strategy by rewarding Executives for achieving short-term
operating goals. The Long-term Incentive Plan will focus Company Executives on
long-term shareholder value creation and execution of the long-term business
strategy by aligning Executives' interests with shareholders' interests.
The Plan encourages and focuses Company Executives on shareholder value
creation. Shareholder value is defined as sustained improvement in the Company's
stock price over time. The Company can create shareholder value by improving
both its short-term and long-term operating performance and growth.
Improving operating performance in the short term needs to be focused on
improving earnings while managing assets. Growing EPS while controlling the
asset base is consistent with the Company's goal of improving operating
performance relative to peers. Therefore, the best performance measures for
short-term operating performance improvement are a combination of EPS growth and
asset growth.
Improving operating performance over the long term should be captured and
measured by a single performance measure to avoid confusion. Having too many
performance measures will dilute Executives' focus on what areas of operating
performance to improve. Economic profit is the best performance measure to use
as the long-term measure for the Company because it is an all-inclusive measure
that captures both EPS growth and asset efficiency. In addition, economic profit
is highly correlated with shareholder value creation.
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2000 Corporate Senior Management Incentive Plan
The Annual Bonus Plan provides for cash awards to be determined shortly after
the end of each Plan Year. The performance measures in the Annual Bonus Plan are
EPS growth and asset growth. The annual bonus Award is dependent on achieving
certain EPS and asset growth goals set at the beginning of the year by the
Compensation Committee. Each Participant is assigned threshold, target and
outstanding bonus opportunity levels.
The Long-term Incentive Plan has two components - Stock option grants and a
performance -based long-term incentive plan. The first component of the
Long-term Incentive Plan is granting a portion of the total long-term incentive
Award in stock options. Stock options are designed to align Executive's
interests with shareholders' interests by promoting growth in shareholder value.
The second component of the Long-term Incentive Plan is a performance-based
long-term incentive plan ("LTIP"). The LTIP is designed to focus corporate
Executives on improving the Company's operating performance over the long term.
The performance measure is three-year cumulative economic profit improvement.
The LTIP Award is dependent on achieving certain levels of economic profit
improvement as established at the beginning of the Performance Cycle by the
Compensation Committee. Performance Cycles are three years long and are
overlapping. The LTIP award will be a portion of Executives' total long-term
incentive award opportunity, paid in Restricted Stock (subject to the terms
provided below) based on actual economic profit improvement over the Performance
Cycle.
SECTION 3. DEFINITIONS
As used herein, the following terms shall have the following meanings:
(a) Award - any cash, stock option, or restricted stock award granted
under the Plan.
(b) Cause - termination of Employment by the Company for Cause will mean
termination upon (i) Participant's willful and continued failure to
substantially perform his or her duties with the Company after a
written demand for substantial performance is delivered to the
Participant that specifically identifies the manner in which the
Company believes that the Participant has not substantially performed
such duties and the Participant has failed to resume substantial
performance of such duties on a continuous basis within ten days after
receiving such demand, (ii) the Participant's commission of any
material act of dishonesty or disloyalty involving the Company, (iii)
the Participant's chronic absence from work other than by reason of a
serious health condition, (iv) the Participant's commission of a crime
which substantially relates to the circumstances of his or her
position with the Company or which has material adverse effect on the
business of the Company, or (v) the willful engaging by the
Participant in conduct which is demonstrably and materially injurious
to the Company.
(c) Change of Control - a Triggering Event as defined in the Stock Option
and Restricted Stock Plan, as the same may be amended from time to
time, or if a successor plan is adopted then as defined in such
successor plan.
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2000 Corporate Senior Management Incentive Plan
(d) Common Stock - the common stock of the Company with a par value of
$0.01 per share.
(e) Compensation Committee - the Executive Compensation Committee of the
Board of Directors of the Company.
(f) Code - the Internal Revenue Code of 1986, as it may be amended from
time to time, and any proposed, temporary or final Treasury
Regulations promulgated thereunder.
(g) Company - Manpower Inc., a Wisconsin corporation.
(h) Employment - continuous employment with the Company or its
subsidiaries.
(i) EPS - fully diluted earnings per share as shown in the audited
financial statements of the Company and its subsidiaries.
(j) Executives - all Participants for a given performance period. Pertains
to corporate executives and not country managers.
(k) LTIP - defined in Section 2 of Article I.
(l) LTIP Target Opportunity, LTIP Threshold Opportunity, LTIP Outstanding
Opportunity - defined in Section 3 of Article III.
(m) Participant - any Executive designated by the Compensation Committee
to participate in the Plan.
(n) Performance Compensation Committee - the Executive Performance
Compensation Committee of the Board of Directors of the Company.
(o) Performance Cycle - each consecutive three-year period, and the
one-year period for 2000 and two-year period for 2000-2001 described
in Section 5 of Article III, commencing on January 1st of each year
during the term of the Plan.
(p) Plan - 2000 Corporate Senior Management Incentive Plan. Includes the
Annual Bonus Plan and Long-term Incentive Plan.
(q) Plan Year - each yearly period commencing on January 1st of each year
during the term of the Plan.
(r) Plan Document - this document which shall govern the administration of
the Plan.
(s) Restricted Stock - as defined in the Stock Option and Restricted Stock
Plan.
(t) Stock Option Amount - defined in Section 3 of Article III.
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2000 Corporate Senior Management Incentive Plan
(u) Stock Option and Restricted Stock Plan - the 1994 Executive Stock
Option and Retricted Stock Plan of the Company or any successor plan.
SECTION 4. PLAN ADMINISTRATION
(a) Power and authority of the Compensation Committee:
The Compensation Committee shall administer the Plan. The Compensation
Committee is authorized to interpret the Plan, to adopt such rules and
regulations, as it may from time to time deem necessary for the
effective operation of the Plan, and to act upon all matters relating
to the granting of Awards under the Plan. Any determination,
interpretation, construction or other action made or taken pursuant to
the provisions of the Plan by or on behalf of the Compensation
Committee shall be final, binding and conclusive for all purposes and
upon all persons including, without limitation, the Company and
Executives and their respective successors in interest.
(b) Performance Compensation Committee:
Notwithstanding the foregoing, in recognition of the requirements of
Section 162(m) of the Code, the Compensation Committee may require in
the case of any proposed Participant (i) that such Executive's
participation in the Plan and the performance goals and award
opportunities established for such Participant under Sections 3 and 4
of Article II and Sections 3 and 5 of Article III shall be subject to
the approval of the Performance Compensation Committee, and (ii) that
the payment or distribution of Awards shall be subject to the prior
certification by the Performance Compensation Committee that the
relevant performance goals have been attained. The Compensation
Committee shall itself take the actions indicated, in lieu of action
by the Performance Compensation Committee, if at the time of the
action the Compensation Committee is comprised solely of two or more
"outside directors" under Section 162(m) of the Code.
(c) No liability:
No member of the Compensation Committee or Performance Compensation
Committee shall be personally liable by reason of any contract or
other instrument executed by such member, or on such member's behalf,
in such member's capacity as a member of such committee nor for any
mistake of judgment made in good faith, and the Company shall
indemnify and hold harmless each member of the Compensation Committee
and Performance Compensation Committee and each other officer,
employee, or director of the Company to whom any duty or power
relating to the administration or interpretation of the Plan has been
delegated, against any cost or expense (including counsel fees) or
liability (including any sum paid in settlement of a claim with the
approval of the Compensation Committee) arising out of any act or
omission in connection with the Plan unless arising out of such
person's own fraud or bad faith.
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<PAGE> 27
2000 Corporate Senior Management Incentive Plan
ARTICLE II
ANNUAL BONUS PLAN
SECTION 1. ELIGIBILITY AND PARTICIPATION GUIDELINES
(a) Criteria for participation:
The Compensation Committee (subject to Section 4 of Article I) will
approve Plan Participants based on such criteria as it determines,
including:
o Corporate executives who can have a significant impact on EPS
growth and asset growth through their actions or decisions
o Corporate executives who have demonstrated significant teamwork
and leadership skills
o Corporate executives with consistent outstanding performance and
contributions to the Company
o The nature of any existing compensation agreement in effect for a
corporate executive
(b) Notification of participation:
The Compensation Committee will notify Participants of their
participation at the beginning of the Plan Year.
(c) Renewal of participation:
The Compensation Committee reserves the right to remove any Plan
Participant from the Plan at any time. Plan participation in one year
does not guarantee participation in subsequent Plan Years.
SECTION 2. PERFORMANCE MEASURES
(a) Performance measures:
The performance measures used in the Annual Bonus Plan for each
Participant will be EPS growth and net asset growth.
(b) Definition of measures:
o EPS growth shall be defined as follows:
- EPS growth is the growth in EPS from the previous year to
the current year
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2000 Corporate Senior Management Incentive Plan
o Net asset growth shall be defined as follows:
- Net assets are consolidated total assets less non-interest
bearing liabilities plus securitized accounts receivable
plus accumulated amortization of intangible assets minus
cumulative translation adjustments
- The amount of the purchase price for any acquisitions in
excess of $20,000,000 will be excluded from net assets for
the year in which the acquisition is consummated
- Net assets for the Plan Year will equal the average of the
monthly ending net assets during the Plan Year. Similarly,
net assets for the prior year will equal the average of the
monthly ending net assets during the prior year.
- Net asset growth is the growth in net assets from the
previous year to the current year
In the determination of Awards, 75% of the weight will be assigned to EPS growth
and 25% to asset growth.
Formal and final calculations of EPS growth and asset growth will be based on
the audited financial statements of the Company as applicable.
SECTION 3. PERFORMANCE GOALS
The Compensation Committee shall set the appropriate EPS growth and asset growth
goals for each Plan Year (subject to Section 4 of Article I) no later than 90
days into the Plan Year. The EPS growth and asset growth goals will be based on
meeting shareholder expectations as well as the Company's strategic goals. EPS
growth and asset growth goals may vary from year to year.
(a) Threshold goal - The minimum level of performance for which an Award
will be earned, will be established as the threshold goal. Achieving
the threshold goal will yield the threshold opportunity level.
(b) Target goal - The expected level of performance will be established as
the target goal. Achieving the target goal will yield the target
opportunity level.
(c) Outstanding goal - An outstanding level of performance, for which an
outstanding Award will be earned, will be established as the
outstanding goal. Achieving the outstanding goal will yield the
outstanding opportunity level.
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<PAGE> 29
2000 Corporate Senior Management Incentive Plan
SECTION 4. AWARD OPPORTUNITIES
The Compensation Committee shall set the Award opportunities for each
Participant for the Plan Year (subject to Section 4 of Article I) no later than
90 days into the Plan Year.
(a) Target opportunity equals a dollar amount determined by the
Compensation Committee with respect to each Participant for each Plan
Year.
(b) Threshold opportunity equals a dollar amount, which will be less than
the target opportunity, determined by the Compensation Committee with
respect to each Participant for each Plan Year.
(c) Outstanding opportunity equals a dollar amount, which will be greater
than the target opportunity, determined by the Compensation Committee
with respect to each Participant for each Plan Year.
Notwithstanding any other provision of this Plan to the contrary, the maximum
Award any Participant will be entitled to receive for any Plan Year under this
annual Bonus Plan is $1,500,000.
SECTION 5. CALCULATION OF AWARDS
The Compensation Committee shall determine the Awards for each Plan Year based
on actual performance relative to the pre-established EPS growth and asset
growth goals for the year.
Actual EPS growth and asset growth performance at the target goal will result in
100% of the target opportunity.
EPS growth and/or asset growth performance between the target goal and
outstanding goal will result in a payout that is linearly interpolated between
the target and outstanding opportunities. The amount of the bonus Award shall be
capped, and therefore performance in excess of the outstanding goal will result
in the outstanding opportunity.
EPS growth and/or asset growth performance between the threshold goal and target
goal will result in a payout that is linearly interpolated between the threshold
and target opportunities. Performance that is below the threshold goal will
result in no bonus Award.
Notwithstanding the foregoing, the Compensation Committee may in its discretion
reduce the amount of any Award otherwise determined under the foregoing criteria
to reflect any extraordinary items, repurchases of Common Stock, or such other
items as it may deem relevant.
SECTION 6. DISTRIBUTION OF AWARDS
The annual bonus Awards earned for the Plan Year will be distributed as soon as
possible after the Awards have been determined, but in no event beyond 90 days
after the end of the Plan Year. The annual bonus Award will be distributed as
cash.
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2000 Corporate Senior Management Incentive Plan
Participants may elect to defer a portion of their annual bonus Award in
accordance with the terms of the Company's Nonqualified Savings Plan.
8
<PAGE> 31
2000 Corporate Senior Management Incentive Plan
ARTICLE III
LONG-TERM INCENTIVE PLAN
SECTION 1. ELIGIBILITY AND PARTICIPATION GUIDELINES
(a) Criteria for participation:
The Compensation Committee (subject to Section 4 of Article I) will
select Plan Participants based on such criteria as it determines,
including:
o Corporate executives who can have a significant impact on
economic profit over the long term through their actions or
decisions
o Corporate executives who have demonstrated significant teamwork
and leadership skills
o Corporate executives with consistent outstanding performance and
contributions to the Company
o The nature of any existing compensation agreement in effect for a
corporate executive
(b) Notification of participation:
The Compensation Committee will notify Participants of their
participation at the beginning of the Performance Cycle.
(c) Renewal of participation:
The Compensation Committee reserves the right to remove any Plan
Participant from the Long-term Incentive Plan at any time. Plan
participation in one Performance Cycle does not guarantee
participation in subsequent Performance Cycles.
SECTION 2. AWARD TYPE
The Long-term Incentive Plan has two components - Stock option grants and a
performance-based long-term incentive plan.
Granting stock options will align Executives' interests with shareholders'
interests by promoting growth in shareholder value. Accordingly, each
Participant shall be eligible to receive grants of options to purchase shares of
Common Stock.
(a) Such stock options shall be granted under, and subject to the terms
of, the Stock Option and Restricted Stock Plan.
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2000 Corporate Senior Management Incentive Plan
(b) The exercise price shall be determined by the Compensation Committee;
provided however, that such exercise price shall not be less than 100
percent of the Market Price (as defined in the Stock Option and
Restricted Stock Plan) on the business day immediately preceding the
date of grant of such stock option.
(c) Such stock options shall not be immediately exercisable but shall
become exercisable as to 25 percent of the shares covered by the
option on each of the first four anniversaries of the date of grant.
(d) Such stock options shall have such other terms as the Compensation
Committee shall determine.
The second component of the Long-term Incentive Plan is the LTIP. The LTIP is
designed to focus Executives on improving the Company's operating performance
over the long term. The LTIP will have the following characteristics:
(a) The value of the LTIP will be a percentage of the target award
opportunity.
(b) The LTIP Award is dependent on achieving three-year economic profit
improvement goals set at the beginning of each Performance Cycle for
the Company.
(c) The Award will be paid out in Restricted Stock (subject to the terms
provided below) based on actual economic profit improvement during the
Performance Cycle.
(d) The Restricted Stock shall be granted under, and subject to the terms
of, the Stock Option and Restricted Stock Plan.
(e) The number of shares of Restricted Stock issued will equal the dollar
amount of the Award divided by the Market Price (as defined in the
Stock Option and Restricted Stock Plan) on the business day
immediately preceding the date of grant.
(f) The Restricted Stock shall fully vest one year after the date of grant
and shall be subject to such other terms as the Compensation Committee
shall determine.
SECTION 3. AWARD OPPORTUNITIES
The Compensation Committee shall set the Award opportunities for each
Participant for each Performance Cycle (subject to Section 4 of Article I) no
later than 90 days into the Performance Cycle.
(a) Target opportunity equals a dollar amount determined by the
Compensation Committee with respect to each Participant for each
Performance Cycle. The Stock Option Amount will equal 80% of the
target opportunity for the
10
<PAGE> 33
2000 Corporate Senior Management Incentive Plan
Performance Cycle, and the LTIP Target Opportunity will equal 20% of
the target opportunity for the Performance Cycle.
(b) Threshold opportunity equals a dollar amount, which will be less than
the target opportunity, determined by the Compensation Committee with
respect to each Participant for each Performance Cycle. The LTIP
Threshold Opportunity will equal 20% of the threshold opportunity for
the Performance Cycle.
(c) Outstanding opportunity equals a dollar amount, which will be greater
than the target opportunity, determined by the Compensation Committee
with respect to each Participant for each Performance Cycle. The LTIP
Outstanding Opportunity will equal 20% of the outstanding opportunity
for the Performance Cycle.
(d) Notwithstanding the foregoing, for the start-up cycles referred to in
Section 5 of this Article, the LTIP Opportunities will be separately
determined.
Notwithstanding any other provision of this Plan to the contrary, the maximum
Award any Participant will be entitled to receive under the LTIP component of
this Long-term Incentive Plan for any cycle (including any start-up cycle) is
$1,500,000.
SECTION 4. PERFORMANCE MEASURES FOR LTIP
(a) Performance measure:
The performance measure used in the LTIP for each Participant will be
a three-year (except at inception as described below) cumulative
economic profit improvement of the Company and its subsidiaries.
(b) Definition of measures:
Economic profit is defined as net operating profit after taxes less a
capital charge.
o Net operating profit after taxes is defined as operating profit
plus (or minus) translation gain (loss) plus (or minus) net other
income (loss) plus goodwill amortization plus (minus) loss (gain)
on sale of securitized accounts receivable less taxes at the
effective rate
o Capital charge is defined as net assets multiplied by cost of
capital
- Net assets are consolidated total assets less non-interest
bearing liabilities plus securitized accounts receivable
plus accumulated amortization of intangible assets minus
cumulative translation adjustments
- Net assets will be calculated based on an average of the
monthly ending net assets during the year
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2000 Corporate Senior Management Incentive Plan
- Cost of capital is the weighted average of the Company's
cost of equity and cost of debt as determined by the
Compensation Committee
Economic profit improvement will mean the increase in economic profit for
any year during a Performance Cycle over the economic profit, using the
same cost of capital, in the base year.
o Economic profit improvement will be measured over a three-year
period (except at inception as indicated below)
o The base year will be the year immediately preceding the first
year of any Performance Cycle
o Any decrease in economic profit in any year during any
Performance Cycle as compared to the base year will be subtracted
in determining cumulative economic profit improvement for such
cycle.
The amount of the purchase price for any acquisitions in excess of
$20,000,000 will be excluded from net assets for purposes of the cost of
capital calculation, including for the base year, for the year in which the
acquisition is consummated and for the first year thereafter
Formal and final calculations of economic profit will be based on the audited
financial statements of the Company as applicable.
SECTION 5. PERFORMANCE GOALS FOR LTIP
For the LTIP, the Compensation Committee will set the cumulative three-year
economic profit improvement goal for each Performance Cycle (subject to Section
4 of Article I) no later than 90 days into the Performance Cycle. The economic
profit improvement goal is based on reinforcing the EPS and asset growth goals,
meeting shareholder expectations as well as Company strategic goals.
At the inception of the plan, three cycles of the LTIP will begin
simultaneously. One will be a one-year cycle (FY 2000), one is a two-year cycle
(FY 2000-2001), and one is a three-year cycle (FY 2000-2002). In subsequent
years, one three-year cycle will be instituted at the beginning of the year. The
shorter cycles will have separately determined economic profit improvement goals
reflecting the shorter periods.
(a) Threshold goal - The minimum level of performance for which an LTIP
Award will be earned, will be established as the threshold goal.
Achieving the threshold goal will yield the LTIP Threshold Opportunity
level.
(b) Target goal - The expected level of performance will be established as
the target goal. Achieving the target goal will yield the LTIP Target
Opportunity level.
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2000 Corporate Senior Management Incentive Plan
(c) Outstanding goal - An outstanding level of performance, for which an
outstanding Award will be earned, will be established as the
outstanding goal. Achieving the outstanding goal will yield the LTIP
Outstanding Opportunity level.
SECTION 6. CALCULATION OF LTIP AWARDS
The Compensation Committee shall determine the LTIP Awards for each Performance
Cycle based on actual economic profit improvement relative to the
pre-established goals for the Performance Cycle.
Actual economic profit performance at the target goal will result in 100% of the
LTIP Target Opportunity.
Economic profit performance between the target goal and outstanding goal will
result in a payout that is linearly interpolated between the LTIP Target and
LTIP Outstanding Opportunities. The LTIP Award is uncapped, and therefore
performance in excess of the outstanding goal will result in Awards based on the
linear relationship between LTIP Target and Outstanding Opportunities (subject
to the maximum specified in Section 3 of this Article III).
Economic profit performance between the threshold goal and target goal will
result in a payout that is linearly interpolated between the LTIP Threshold and
LTIP Target opportunities. Performance that is below the threshold goal will
result in no Award under the LTIP.
Notwithstanding the foregoing, the Compensation Committee may in its discretion
reduce the amount of any LTIP Award otherwise determined under the foregoing
criteria to reflect any extraordinary items or other items as it may deem
relevant.
SECTION 7. DISTRIBUTION OF LTIP AWARDS
It is anticipated that the Restricted Stock for LTIP Awards earned for the
Performance Cycle will be granted by the Compensation Committee at the time of
the first meeting of the Compensation Committee after the end of each
Performance Cycle and the Award amounts have been determined, but in no event
later than 90 days after the end of the Performance Cycle. Any such grant shall
be subject to and shall require action by the Compensation Committee.
SECTION 8. STOCK OPTION GRANTS
Each Participant shall be eligible to receive a grant of an option each year to
purchase shares of Common Stock on the terms specified in Section 2 of this
Article. Any such grant shall be subject to and shall require action by the
Compensation Committee (or Performance Compensation Committee as indicated
below). The number of shares for each annual grant shall be determined by the
Compensation Committee based on the following guidelines:
(a) The Compensation Committee shall determine the value of an option to
purchase one share of Common Stock on the terms specified in Section 2
using the Black-Scholes method as of the date of grant.
13
<PAGE> 36
2000 Corporate Senior Management Incentive Plan
(b) The number of shares will equal (i) the sum of the Stock Option
Amounts for each Performance Cycle in which the year is included
divided by three, (ii) such amount further divided by the
Black-Scholes value determined under subparagraph (a), above.
(c) Notwithstanding the foregoing, for the year 2000, the number of shares
will equal the Stock Option Amount for the three-year Performance
Cycle beginning in 2000, divided by the Black-Scholes value determined
under subparagraph (a), above.
(d) Notwithstanding the foregoing, for the year 2001, the number of shares
will equal (i) the sum of the Stock Option Amount for the three-year
Performance Cycle beginning in 2000, multiplied by two and divided by
three, and the Stock Option Amount for the three-year Performance
Cycle beginning in 2001, divided by three, (ii) such amount further
divided by the Black-Scholes value determined under subparagraph (a),
above.
It is anticipated that such stock option grants will be made at the time of the
first meeting each calendar year of the Compensation Committee. A Participant
shall not be granted any such option if at the time the grant would otherwise be
made the Participant is no longer in the Employment of the Company or the Plan
has been terminated.
Notwithstanding the foregoing, in recognition of the requirements of Section
162(m) of the Code, for any Participant who is a "covered employee" under that
Section, the grant of any option to purchase Common Stock under this Plan shall
be subject to the approval of, and only made by, the Performance Compensation
Committee. However, if the Compensation Committee is comprised solely of two or
more "outside directors" under that Section at the time of the proposed grant,
such grant shall be subject to the approval of, and made by, the Compensation
Committee.
14
<PAGE> 37
2000 Corporate Senior Management Incentive Plan
ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION 1. TERMINATION OF EMPLOYMENT
(a) If a Participant's Employment is terminated by the Company without
Cause, by reason of the Participant's disability or death, or by the
Participant because of retirement on or after the Participant's Normal
Retirement Date (as defined in the Manpower Inc. Retirement Plan) or
early retirement with the consent of the Committee, the Participant
shall be entitled to receive a prorated annual bonus Award and LTIP
Award based on the Company's performance to the date of termination.
(b) If a Participant's Employment is terminated for any reason not
specified in paragraph (a) above, all Awards for the current Plan Year
or current Performance Cycles shall be forfeited.
SECTION 2. NO DISCRETION TO INCREASE AWARDS OTHERWISE EARNED
The Compensation Committee shall have no discretion to increase the amount of
any Award under the Annual Bonus Plan or the Long-term Incentive Plan otherwise
earned based on the attainment of a performance goal or goals.
SECTION 3. CHANGE OF CONTROL
Upon a Change of Control, the Plan will terminate and a Participant will be
entitled to receive a prorated annual bonus Award and LTIP Award based on the
Company's performance to the date of the Change of Control.
SECTION 4. NO GUARANTEE OF EMPLOYMENT
Participation in the Plan shall not give any Participant any right to be
retained in the Employment of the Company. This Plan shall not affect any right
of the Company to terminate, with or without cause, any Participant's Employment
at any time.
SECTION 5. WITHHOLDING TAXES
The Company shall have the right to withhold from any compensation payable to a
Participant, or to cause the Participant (or the executor or administrator of
his or her estate or his or her distributee) to make payment of, any federal,
state, local, or foreign taxes required to be withheld with respect to the
distribution of any Awards.
15
<PAGE> 38
2000 Corporate Senior Management Incentive Plan
SECTION 6. AMENDMENT AND DISCONTINUANCE OF THE PLAN
The Compensation Committee may amend, alter, suspend or discontinue the Plan, as
it shall from time to time consider desirable. No such action shall adversely
affect the rights of any Participant accrued under the Plan prior to such action
without the consent of the Participant.
SECTION 7. EFFECTIVE DATE
The effective date of the Plan is January 1, 2000.
SECTION 8. TERM OF THE PLAN
The Plan shall be in effect until such time as the Compensation Committee
decides to terminate the Plan.
16
<PAGE> 39
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED Please mark
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED your votes
SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY as indicated [X]
WILL BE VOTED FOR PROPOSALS 1, 2 AND 3. in this
example
1. ELECTION OF DIRECTORS WITHHOLD
AUTHORITY
FOR all nominees to vote for all
listed to the right nominees listed
(except as marked to the right
to the contrary)
[ ] [ ]
NOMINEES: Dennis Stevenson, John R. Walter and Jeffrey A. Joerres
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- --------------------------------------------------
2. Approval of a performance-based incentive compensation arrangement for the
Company's President and Chief Executive Officer.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Ratification of Arthur Andersen LLP as the Company's independent auditors
for 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: , 2000
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature)
- --------------------------------------------------------------------------------
(Signature if held jointly)
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
- FOLD AND DETACH HERE -
MANPOWER INC.
ANNUAL MEETING
OF
MANPOWER INC. SHAREHOLDERS
MONDAY, APRIL 17, 2000
10:00 A.M.
BRADLEY PAVILION OF THE MARCUS CENTER
FOR THE PERFORMING ARTS
929 NORTH WATER STREET
MILWAUKEE, WISCONSIN
AGENDA
o Elect three directors to serve until 2003 as Class I directors.
o Approval of a performance-based incentive compensation arrangement for
the Company's President and Chief Executive Officer.
o Ratify the appointment of Arthur Andersen LLP as the Company's
independent auditors for 2000.
o Transact such other business as may properly come before the meeting.
<PAGE> 40
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
MANPOWER INC.
The undersigned hereby appoints Jeffrey A. Joerres and Michael J. Van Handel
proxies, each with power to act without the other and with power of
substitution, and hereby authorizes them to represent and vote, as designated on
the other side, all the shares of stock of Manpower Inc. standing in the name of
the undersigned with all powers which the undersigned would possess if present
at the Annual Meeting of Shareholders of the Company to be held April 17, 2000
or any adjournment thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- FOLD AND DETACH HERE -
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(in thousands) 1999 1998
-------------- ----------- -----------
<S> <C> <C>
SYSTEMWIDE SALES (a) $11,511,350 $10,523,377
REVENUES FROM SERVICES $ 9,770,098 $ 8,814,272
OPERATING MARGIN (b) $ 258,651 $ 222,503
</TABLE>
(a) Represents total sales of Company-owned branches and franchises.
(b) Represents Revenue from Services less Cost of Services and Selling and
Administrative Expenses before non-recurring items, related to employee
severances, retirement costs and other associated realignment costs, in
1999 and the write-down of capitalized software in 1998.
