<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant -)
Filed by a Party other than the Registrant -
Check the appropriate box:
/ / 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 ss.240.14a-11(c) or ss.240.14a-12
INTERIM SERVICES INC.
-----------------------
(Name of Registrant as Specified In Its Charter)
N/A
-------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
- Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
- Fee paid previously with preliminary materials.
- Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------
<PAGE>
[ INTERIM SERVICES INC. LOGO ]
April 5, 1999
To our Stockholders:
On behalf of the Board of Directors, it is my pleasure to invite you to
attend the Annual Meeting of Stockholders of Interim Services Inc.
As shown in the formal notice enclosed, the meeting will be held at 10:00
a.m. (Eastern Daylight Time) on Thursday, May 6, 1999 at the executive offices
of the Company, 2050 Spectrum Boulevard, Fort Lauderdale, Florida 33309. At the
meeting, in addition to acting on the matters described in the Proxy Statement,
we will present a current report on the activities of the Company. Stockholders
will have an opportunity at that time to comment on or to inquire about the
affairs of the Company that may be of interest to stockholders generally. If you
will need special assistance at the meeting because of a disability, please
contact Ms. Weatherly Treese at (954) 351-8448.
We sincerely hope you will be able to attend our Annual Meeting. However,
whether or not you are personally present, it is important that your shares be
represented at this meeting in order that the presence of a quorum may be
assured. Whether or not you plan to attend the meeting, you are urged to date,
sign and mail the enclosed proxy card in the envelope provided.
Thank you for your support.
Sincerely,
RAYMOND MARCY
Raymond Marcy
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
<PAGE>
INTERIM SERVICES INC.
-----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-----------
TO BE HELD
THURSDAY, MAY 6, 1999
10:00 A.M. EDT
To the Stockholders of Interim Services Inc.:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders (the
"Annual Meeting") of INTERIM SERVICES INC., a Delaware corporation (the
"Company") will be held at 10:00 a.m. (Eastern Daylight Time) on Thursday, May
6, 1999 at the executive offices of the Company, 2050 Spectrum Boulevard, Fort
Lauderdale, Florida 33309. At the Annual Meeting, the Company's stockholders
will be asked to consider and vote upon the following matters:
1. The election of three members of the Board of Directors to hold office
for three years or until their respective successors are duly elected
and qualified.
2. A proposal to ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending December 31,
1999.
3. A proposal to approve an amendment to the Company's 1998 Stock
Incentive Plan increasing the number of shares issuable under this
Plan by an aggregate of 2,200,000 shares.
4. A proposal of a stockholder of the Company to establish a position on
the Company's Board of Directors that is reserved for a
"non-corporate, non-branch management employee" of the Company.
5. The transaction of such other business as may properly come before the
Annual Meeting or any adjournments or postponements thereof.
Only stockholders of record at the close of business on March 12, 1999
are entitled to notice of, and to vote at, the Annual Meeting and any
adjournments or postponements thereof.
BY ORDER OF THE BOARD OF DIRECTORS,
JOHN B. SMITH
Secretary
Fort Lauderdale, Florida
April 5, 1999
================================================================================
--IMPORTANT--
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POST-PAID ENVELOPE.
IF YOU ATTEND THE MEETING AND SO DESIRE, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN
PERSON.
THANK YOU FOR VOTING PROMPTLY.
================================================================================
<PAGE>
1999 ANNUAL MEETING OF STOCKHOLDERS
OF
INTERIM SERVICES INC.
-----------
PROXY STATEMENT
-----------
TIME, PLACE AND DATE OF ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Interim Services Inc., a Delaware corporation (the
"Company"), of proxies from the holders of the Company's Common Stock, $.01 par
value per share (the "Common Stock"), for use at the 1999 Annual Meeting of
Stockholders of the Company to be held pursuant to the enclosed Notice of Annual
Meeting, at 10:00 a.m. (Eastern Daylight Time) on Thursday, May 6, 1999, at the
executive offices of the Company, 2050 Spectrum Boulevard, Fort Lauderdale,
Florida 33309, telephone (954) 938-7600, or at any adjournments or postponements
thereof (the "Annual Meeting").
The approximate date that this Proxy Statement and the enclosed form of
proxy ("Proxy Card") are first being sent to stockholders is April 5, 1999.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any stockholder giving the proxy so desire. Stockholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's principal executive offices a written revocation or
duly executed proxy bearing a later date; however, no such revocation or
subsequent proxy will be effective unless and until written notice of the
revocation or subsequent proxy is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Stockholders and the enclosed proxy is borne by the
Company. Solicitation of proxies will be made by Corporate Investor
Communications, Inc. ("CIC") who will engage approximately two of their
employees to solicit stockholders. The anticipated cost of the solicitation is
$8,000. In addition, solicitation of proxies may be made by certain directors,
officers and employees of the Company who may do so by telephone, telegram, mail
or personal contact. The Company may request banks, brokers and other
custodians, nominees and fiduciaries to forward copies of the proxy material to
their principals and to request authority for the execution of proxies. The
Company may reimburse such persons for their expenses in doing so.
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting, the Company's stockholders will be asked to consider
and vote upon the following matters:
1. The election of three members of the Board of Directors to hold office
for three years or until their respective successors are duly elected
and qualified.
2. A proposal to ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending December 31,
1999.
3. A proposal to approve an amendment to the Company's 1998 Stock
Incentive Plan increasing the number of shares issuable under this
Plan by an aggregate of 2,200,000 shares.
4. A proposal of a stockholder of the Company to establish a position on
the Company's Board of Directors that is reserved for a
"non-corporate, non-branch management employee" of the Company.
5. The transaction of such other business as may properly come before the
Annual Meeting or any adjournments or postponements thereof.
<PAGE>
Unless contrary instructions are indicated on the enclosed Proxy Card, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted (a) "FOR" the election of the respective nominees for director
named herein, (b) "FOR" the approval of each of Proposals 2 and 3 described in
the Notice of Annual Meeting, and (c) "AGAINST" the approval of Proposal 4
described in the Notice of Annual Meeting. The Proxy Card also authorizes the
proxy holders to vote in their discretion the shares represented on any matters
not known at the time this Proxy Statement was printed that may properly be
presented for action at the Annual Meeting. In the event that a stockholder
specifies a different choice by means of the enclosed Proxy Card, such shares
will be voted in accordance with the specification(s) so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on March 12, 1999 as
the record date (the "Record Date") for determining stockholders of the Company
entitled to notice of, and to vote at, the Annual Meeting. As of the Record
Date, there were 47,427,492 shares of Common Stock issued, 47,288,292 of which
are outstanding and entitled to be voted at the Annual Meeting. Each share of
the Company's Common Stock entitles the holder to one vote with respect to all
matters to come before the Annual Meeting and all of such shares vote as a
single class. Stockholders do not have the right to cumulate their votes for
directors.
The attendance, in person or by proxy, of stockholders holding a majority
of the shares of Common Stock entitled to vote at the Annual Meeting will be
necessary to constitute a quorum. Directors will be elected by a plurality of
the votes cast by the shares of Common Stock represented in person or by proxy
at the Annual Meeting and entitled to vote thereon. The affirmative vote of
stockholders holding a majority of the shares of Common Stock represented in
person or by proxy at the Annual Meeting and entitled to vote thereon will be
required to approve each other matter presented at the Annual Meeting. If less
than a majority of the shares of Common Stock entitled to vote are represented
at the Annual Meeting, the holders of a majority of the shares so represented
may adjourn the Annual Meeting to another date, time or place.
Prior to the Annual Meeting, the Company will select one or more inspectors
of election for the Annual Meeting. Such inspector(s) shall determine the number
of shares of Common Stock represented at the meeting, the existence of a quorum
and the validity and effect of proxies, and shall receive, count and tabulate
ballots and votes and determine the results thereof.
Pursuant to Delaware law, abstentions and broker non-votes are counted as
present for purposes of determining the presence or absence of a quorum.
Abstentions are counted as present and entitled to vote and will be counted as
votes cast at the Annual Meeting, but will not be counted as votes cast for or
against any given matter. However, a broker non-vote on a matter is considered
as not present and not entitled to vote on that matter and thus is not counted
as a vote cast or as present in determining whether a matter has been approved.
A list of stockholders entitled to vote at the Annual Meeting will be
available at the Company's executive offices, 2050 Spectrum Boulevard, Fort
Lauderdale, Florida 33309, for a period of ten days prior to the Annual Meeting
and at the Annual Meeting itself for examination by any stockholder.
The Board of Directors encourages you to complete and return the Proxy Card
even if you expect to attend the Annual Meeting.
2
<PAGE>
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of March 1, 1999 by: (i) each
person known by the Company to be the beneficial owner of more than five percent
of such Common Stock; (ii) each present director and nominee for director of the
Company; (iii) the Named Executive Officers in the Summary Compensation Table;
and (iv) all the continuing directors, nominees to the Board of Directors and
executive officers of the Company as a group. The determinations of beneficial
ownership by directors and executive officers of the Company's Common Stock are
based upon Rule 13d-3 under the Securities Act of 1934, as amended. Such Rule
provides that shares shall be deemed so owned where a person has, either solely
or in conjunction with others, the power to vote or to direct the voting of
shares and/or the power to dispose, or to direct the disposition of shares; or
where a person has the right to acquire any such power within 60 days after the
date such beneficial ownership is determined.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER SHARES OF COMMON STOCK PERCENT OF CLASS
(AND ADDRESS IF BENEFICIAL OWNERSHIP EXCEEDS 5%) BENEFICIALLY OWNED (1) IF MORE THAN 1%
- ------------------------------------------------ ---------------------- ----------------
<S> <C> <C>
T. Rowe Price Associates, Inc. (2) 4,080,332 8.60%
100 East Pratt Street
Baltimore, MD 21202
Putnam Investments, Inc. (3) 3,377,700 7.10%
One Post Office Square
Boston, MA 02109
Massachusetts Financial Services Company (4) 2,822,802 6.00%
500 Boylston Street
Boston, MA 02116
Nicholas Company, Inc. (5) 2,686,722 5.68%
700 North Water Street
Milwaukee, WI 53202
Raymond Marcy (6) 396,944 *
Robert E. Livonius (7) 194,851 *
Roy G. Krause (8) 125,906 *
Gary Peck (9) 108,232 *
J. Ian Morrison (10) 28,174 *
Jerome B. Grossman (11) 27,556 *
William F. Evans (12) 27,556 *
Robert J. Evans (13) 25,586 *
Steven S. Elbaum (14) 25,906 *
Cinda A. Hallman (15) 21,556 *
A. Michael Victory (16) 13,556 *
Directors and Executive Officers as a group (19 persons) (17) 1,258,384 2.66%
</TABLE>
3
<PAGE>
* Indicates less than 1.0%
- -----------
(1) Unless otherwise indicated in the notes to this Table, the stockholders
listed in the Table have sole voting and dispositive power with respect to
shares beneficially owned by them.
(2) Based on Schedule 13G filed with the Securities and Exchange Commission on
February 9, 1999, T. Rowe Price Associates, Inc. is the beneficial owner of
4,080,332, or 8.60% of shares outstanding, of the Company's common stock,
which shares were acquired for investment purposes by such investment
adviser for certain of its clients. T. Rowe Price Associates, Inc. asserts
sole voting power as to 368,200 of those shares and sole dispositive power
with respect to all such shares.
(3) Based on Schedule 13G filed with the Securities and Exchange Commission on
February 9, 1999, Putnam Investments, Inc., and certain of its affiliates
including its parent company Marsh & McLennan Companies, Inc., and its
subsidiaries Putnam Investment Management, Inc. and The Putnam Advisory
Company, Inc., are beneficial owners of 3,377,700, or 7.10% of shares
outstanding, of the Company's common stock, which shares were acquired for
investment purposes by such investment advisers for certain of their
clients. Neither Putnam Investments, Inc. nor its affiliates assert sole
voting power or sole dispositive power over such shares. Putnam
Investments, Inc. and The Putnam Advisory Company, Inc. assert shared
dispositive power as to 143,100 shares, and Putnam Investments, Inc. and
Putnam Investment Management, Inc. assert shared dispositive power as to
3,234,600 shares. Putnam Investments, Inc. and The Putnam Advisory Company,
Inc. assert shared voting power as to 47,100 of such shares.
(4) Based on Schedule 13G filed with the Securities and Exchange Commission on
February 11, 1999, Massachusetts Financial Services Company is the
beneficial owner of 2,822,802, or 6.00% of shares outstanding, of the
Company's common stock, which shares were acquired for investment purposes
by such investment adviser for certain of its clients. Massachusetts
Financial Services Company asserts sole voting power with respect to
2,780,602 of such shares and sole dispositive power with respect to all
such shares.
(5) Based on Schedule 13G filed with the Securities and Exchange Commission on
February 11, 1999, Nicholas Company, Inc. is the beneficial owner of
2,686,722, or 5.68% of shares outstanding, of the Company's common stock,
which shares were acquired for investment purposes by such investment
adviser for certain of its clients. Nicholas Company, Inc. asserts no
voting power with respect to any of such shares and sole dispositive power
with respect to all such shares. Albert O. Nicholas is the Chief Executive
Officer, Chairman, Director and majority shareholder of Nicholas Company,
Inc. Mr. Nicholas owns no shares of the Company for his individual account,
but is deemed to have beneficial ownership of the shares beneficially owned
by Nicholas Company, Inc. by virtue of his affiliation with Nicholas
Company, Inc.
(6) Includes 278,298 shares of Common Stock deemed to be beneficially owned by
Mr. Marcy by reason of his right to acquire such shares within 60 days
after March 1, 1999 through the exercise of stock options granted to him
pursuant to the 1998 Stock Incentive Plan (the "1998 Plan") and its
predecessor plans.
(7) Includes 159,582 shares of Common Stock deemed to be beneficially owned by
Mr. Livonius by reason of his right to acquire such shares within 60 days
after March 1, 1999 through the exercise of stock options granted to him
pursuant to the 1998 Plan and its predecessor plans.
(8) Includes 77,916 shares of Common Stock deemed to be beneficially owned by
Mr. Krause by reason of his right to acquire such shares within 60 days
after March 1, 1999 through the exercise of stock options granted to him
pursuant to the 1998 Plan and its predecessor plans.
(9) Includes 96,283 shares of Common Stock deemed to be beneficially owned by
Mr. Peck by reason of his right to acquire such shares within 60 days after
March 1, 1999 through the exercise of stock options granted to him pursuant
to the 1998 Plan and its predecessor plans.
4
<PAGE>
(10) Includes 24,000 shares of Common Stock deemed to be beneficially owned by
Mr. Morrison by reason of his right to acquire such shares within 60 days
after March 1, 1999 through the exercise of stock options granted to him
pursuant to the 1998 Plan and its predecessor plans.
(11) Includes 24,000 shares of Common Stock deemed to be beneficially owned by
Mr. Grossman by reason of his right to acquire such shares within 60 days
after March 1, 1999 through the exercise of stock options granted to him
pursuant to the 1998 Plan and its predecessor plans.
(12) Includes 24,000 shares of Common Stock deemed to be beneficially owned by
Mr. William F. Evans by reason of his right to acquire such shares within
60 days after March 1, 1999 through the exercise of stock options granted
to him pursuant to the 1998 Plan and its predecessor plans.
(13) Includes 19,343 shares of Common Stock deemed to be beneficially owned by
Mr. Robert J. Evans by reason of his right to acquire such shares within 60
days after March 1, 1999 through the exercise of stock options granted to
him pursuant to the 1998 Plan and its predecessor plans.
(14) Includes 9,280 shares of Common Stock deemed to be beneficially owned by
Mr. Elbaum by reason of his right to acquire such shares within 60 days
after March 1, 1999 through the exercise of stock options granted to him
pursuant to the 1998 Plan and its predecessor plans.
(15) Includes 20,000 shares of Common Stock deemed to be beneficially owned by
Ms. Hallman by reason of her right to acquire such shares within 60 days
after March 1, 1999 through the exercise of stock options granted to her
pursuant to the 1998 Plan and its predecessor plans.
(16) Includes 12,000 shares of Common Stock deemed to be beneficially owned by
Mr. Victory by reason of his right to acquire such shares within 60 days
after March 1, 1999 through the exercise of stock options granted to him
pursuant to the 1998 Plan and its predecessor plans.
(17) Includes an aggregate of 953,781 shares of Common Stock deemed to be
beneficially owned by Directors and Executive Officers of the Company by
reason of their right to acquire such shares within 60 days after March 1,
1999 through the exercise of stock options granted to them pursuant to the
1998 Plan and its predecessor plans.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
The Company's Certificate of Incorporation and Bylaws provide that the
number of directors to constitute the Board of Directors shall be nine unless
otherwise fixed by a resolution adopted by a majority of the entire Board. The
Certificate of Incorporation and Bylaws further provide that the Board of
Directors shall be divided into three classes: Class I, Class II and Class III,
with each class to consist, as nearly as possible, of one-third of the members
of the Board. Members of each class of the Board of Directors are elected for a
term of three years, and the term of office of one class of directors expires at
each annual meeting of stockholders. Directors elected at an annual meeting of
stockholders to succeed those whose terms expire shall be identified as being of
the same class as those directors they succeed and shall be elected for a term
to expire at the third annual meeting of stockholders after their election.
At the Annual Meeting to be held on May 6, 1999, three Class III directors
will be elected to hold office for three years or until their respective
successors are duly elected and qualified. Raymond Marcy, J. Ian Morrison and A.
Michael Victory have been nominated for election as Class III directors of the
Company and all of them are currently Class III directors of the Company. The
Nominating Committee of the Board of Directors continues to search for two new
outside directors to fill the vacancies which arose upon the retirement of
Harold Toppel in May 1997 (Class I Director) and the resignation of Allan C.
Sorensen in September 1997 (Class II Director). The persons nominated to fill
the vacant seats in Class I and Class II will be selected by a majority vote of
the Board of Directors. The shares voted by the proxies will be voted for the
election of Mr. Marcy, Mr. Morrison and Mr. Victory unless authority to do so is
withheld as provided in the form of proxy. All nominees have consented to serve
if elected and the Board of Directors has no reason to believe that any of the
nominees will be unable to accept the office of director, but if such
contingency
5
<PAGE>
should arise, it is the intention of the proxies to vote for such person or
persons as the Board of Directors may recommend.
<TABLE>
<CAPTION>
NAME AND AGE PRINCIPAL OCCUPATION AND DIRECTORSHIPS
- ------------ --------------------------------------
NOMINEES FOR CLASS III
(TERM EXPIRING IN 2002)
<S> <C>
Raymond Marcy (48)................. Chairman of the Company since August 1997. Director of the Company since
November 1989. Chief Executive Officer of the Company since September 1991.
President since November 1989. Chief Operating Officer from November 1989 until
September 1991.
J. Ian Morrison (46)............... Director of the Company since August 1993. Consultant and Senior Fellow of the
Institute for the Future (IFTF), a non-profit research and consulting firm,
since August 1996; President from May 1990 until August 1996.
A. Michael Victory (64)............ Director of the Company since August 1980. President of AMEC Capital, Inc. since
September 1996. Prior to that, and for more than five years, general partner in
Cumberland Investment Group.
CONTINUING DIRECTORS - CLASS I
(TERM EXPIRING IN 2000)
William F. Evans (51).............. Director of the Company since August 1993. Executive Vice President,
Productivity Point International, since June 1998. Executive Vice President,
ProSource, Inc., a food service distribution company, from July 1995 until June
1998. Consultant to H & R Block, Inc. from November 1994 through June 1995.
Senior Vice President, Corporate Operations, of H&R Block, Inc., from August
1992 through October 1994.
Cinda A. Hallman (54).............. Director of the Company since February 1995. Senior Vice President of E. I.
DuPont de Nemours & Co. ("DuPont") since March 1998. Global Vice President
Integrated Processes and Systems of DuPont from August 1997 to March 1998. Vice
President, Information Systems and Chief Information Officer of DuPont from
November 1992 to August 1997.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
CONTINUING DIRECTORS - CLASS II
(TERM EXPIRING IN 2001)
<S> <C>
Steven S. Elbaum (50).............. Director of the Company since May 1996. Director of Brandon Systems Corporation
from January 1987 until May 1996. Chairman of the Board and Chief Executive
Officer of The Alpine Group, Inc., a diversified public holding company, since
June 1984. Chairman and Chief Executive Officer of Superior Telecom, Inc., a
wire and cable telecommunications company, since October 1996. Chairman of the
Board, PolyVision Corporation, since April 1996. Director of Vestaur Securities,
Inc. since March 1999.
Jerome B. Grossman (79)............ Director of the Company since August 1978. Executive Vice President and Chief
Operating Officer of H&R Block, Inc. from May 1971 to August 1989 and then as
Vice Chairman of the Board until he retired in July 1992. Director of H&R Block,
Inc. from September 1973 until September l992, at which time he was elected Vice
Chairman Emeritus.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES FOR CLASS III AS DIRECTORS OF THE COMPANY AND PROXIES SOLICITED BY THE
BOARD WILL BE SO VOTED IN THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY.
DIRECTORS' COMPENSATION, COMMITTEES AND MEETINGS
Non-employee directors receive an annual retainer. The annual retainer is
determined by the Board of Directors at the regularly scheduled meeting of the
directors coinciding with the annual meeting of the stockholders of the Company,
and such retainer is effective for the twelve month period commencing on the
following July 1st. The Board of Directors may designate the manner in which the
annual retainer shall be payable including, but not limited to, in cash, in
shares of the Company's Common Stock or in any combination thereof. Further, the
Board of Directors may permit up to fifty percent of the annual retainer to be
deferred and paid to the directors in the form of stock units, after a plan
permitting such deferral and issuance of stock units is adopted by the Company.
Effective July 1, 1998, the annual retainer payable to each non-employee
director has been set at $25,000, payable in cash. Additionally, non-employee
directors are compensated at the rate of $2,000 per Board meeting attended and
$1,500 per Committee meeting attended, each payable in cash. Attendance fees are
not paid for Board or Committee meetings that, in the judgment of the Chairman
or Chairperson thereof, are not of sufficient length or significance to warrant
an attendance fee. Non-employee directors are reimbursed for expenses which may
be incurred by them in connection with the business and affairs of the Company.
In May 1998, the Company established stock ownership guidelines for outside
directors equal to three times the annual retainer. Only shares actually owned
(and not unexercised options) count toward the ownership requirement.
Pursuant to the Company's 1998 Stock Incentive Plan (the "1998 Plan" and,
similarly, its predecessor plans including the 1997 Long Term Compensation and
Outside Director Stock Option Plan, the "1997 Plan"), each non-employee director
is entitled to receive an annual stock option grant to purchase 4,000 shares of
the Company's Common Stock, vesting on the first anniversary of the date of
grant. The annual stock option grants are made on the date coinciding with the
annual meeting of stockholders of the Company, at an exercise price equal to the
closing price of such stock on the date of grant. Outside director stock options
of 4,000 shares each were granted on April 30, 1995 (at an exercise price of
$14.44 per share and became fully exercisable on April 30, 1996), on April 30,
1996 (at an exercise price of $21.69 per share and became fully exercisable on
April 30, 1997), on April 30, 1997 (at an exercise price of $19.38 per share and
became fully exercisable on April 30, 1998), and on May 7, 1998 (at an exercise
price of $31.00 per share and will become fully exercisable on May 7, 1999). In
a separate grant of options unrelated to the 1997 Plan or the 1998 Plan, stock
options of 8,000 shares each, plus an additional 4,000 shares in the case of Mr.
Evans who had previously waived his right to receive an earlier 1994 grant under
the 1997 Plan, were granted on May 11, 1995 at an exercise price of $12.00, with
50% exercisable on May 11, 1996 and the remainder exercisable on May 11, 1997.
The information in this paragraph has been adjusted for the two-for-one stock
split that was effective in
7
<PAGE>
September 1997 and it should be noted that options granted prior to April 30,
1997 were granted under a predecessor plan to the 1997 Plan.
The standing committees of the Board include: the Audit Committee, the
Compensation Committee, the Corporate Governance Committee, the Executive
Committee and the Nominating Committee.
The Audit Committee, whose members are William F. Evans (Chairperson),
Jerome B. Grossman and A. Michael Victory held two meetings during the twelve
months ended December 25, 1998. The functions of the committee include, among
other things, reviewing the various internal accounting controls of the Company;
reviewing and approving the services of the Company's independent auditors,
including any non-audit services provided by them; making recommendations to the
Board of Directors with respect to the employment, retention or replacement of
such auditors, as well as monitoring the independence of such auditors; and
reviewing the scope of the annual audit and related matters. Also, the Audit
Committee periodically meets with and receives reports from the Company's
internal audit group.
The Compensation Committee, whose members are Cinda A. Hallman
(Chairperson), Steven S. Elbaum and J. Ian Morrison, held four meetings during
the twelve months ended December 25, 1998. The functions of the committee
primarily include presenting recommendations to the Board of Directors on the
compensation of the Chief Executive Officer and approving the compensation
program for certain of the Company's other executive officers after receiving
recommendations from the Chief Executive Officer. Duties also include
determining executive salaries, setting the performance criteria for annual
bonuses, approving executive bonuses under the annual incentive programs and
administering the Company's 1998 Stock Incentive Plan. The Compensation
Committee also determines the amount and terms of all stock options awarded to
employees of the Company.
The Corporate Governance Committee consists of all of the outside Directors
and is chaired by Mr. Grossman. The Committee is to meet at least once each year
to review the performance of the Chief Executive Officer and to consider issues
of corporate governance. The committee held three meetings during the twelve
months ended December 25, 1998.
The Executive Committee, whose members are Raymond Marcy (Chairperson),
William F. Evans, Jerome B. Grossman and A. Michael Victory, held nine meetings
during the twelve months ended December 25, 1998. The primary function of the
Executive Committee is to control and manage, during intervals between meetings
of the Board, the property and business of the Company in all matters in which
exclusive authority has not been given to the entire Board of Directors or in
which specific direction has not been given by the Board.
The Nominating Committee, whose members are J. Ian Morrison (Chairperson),
Raymond Marcy and A. Michael Victory, held no meetings during the twelve months
ended December 25, 1998. The Nominating Committee is responsible for the
initiation of nominations for election as a director of the Company. The
Nominating Committee will consider nominees recommended by stockholders (see
section below entitled "STOCKHOLDER PROPOSALS").
The Board of Directors met nine times during the twelve months ended
December 25, 1998. There were a total of twenty-seven meetings of the Board and
its committees, as well as additional actions taken by written consent. All
directors attended at least seventy-five percent of the aggregate of (i) the
total number of meetings of the Board and (ii) the total number of meetings held
by all committees of the Board on which such director served during the last
fiscal year.
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the aggregate compensation paid during each
of the Company's three most recently completed fiscal years to Raymond Marcy,
the Company's Chief Executive Officer (the "CEO") and each of the four most
highly compensated executive officers of the Company in the 1998 fiscal year
other than the CEO (together with the CEO, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS (1)
------------------------------------------------- --------------
BONUS OTHER ANNUAL INTERIM STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) (YEAR EARNED)($) COMPENSATION($)(2) OPTIONS (#)(3) COMPENSATION ($)
- --------------------------- ---- --------- ---------------- ------------------ -------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Raymond Marcy 1998 $ 620,577 $ 598,500 (4) $ 25,894 300,000 $ 62,233 (5)
Chairman, President and 1997 536,538 402,325 10,853 100,000 27,219
Chief Executive Officer 1996 487,884 150,000 7,318 80,000 1,573
Robert E. Livonius 1998 $ 325,165 $ 235,778 (6) $ 12,513 125,000 $ 23,684 (7)
Executive Vice President 1997 270,621 137,724 5,498 50,000 1,566
and Chief Operating Officer 1996 250,903 91,520 3,763 40,000 1,546
Roy G. Krause 1998 $ 324,355 $ 235,778 (8) $ 11,951 125,000 $ 29,362 (9)
Executive Vice President 1997 254,618 129,740 5,122 50,000 53,137
and Chief Financial Officer 1996 218,850 85,800 3,283 40,000 71,220
Gary Peck 1998 $ 289,422 $ 127,122 $ 11,201 75,000 $ 4,046 (10)
President, Commercial 1997 246,577 108,664 5,230 40,000 932
Staffing Group 1996 238,502 102,069 5,701 20,000 875
Robert J. Evans(11) 1998 $ 232,527 $ 118,481 (12) $ 7,305 15,000 $ 18,978 (13)
Vice President and Chief 1997 215,846 95,184 2,390 20,000 60,901
Information Officer 1996 131,654 65,691 -0- 9,728 10,161
</TABLE>
- --------------------
(1) There were no Restricted Stock Awards, Stock Appreciation Rights or
Long-Term Incentive Plan Payouts to the listed individuals during fiscal
years1996, 1997 or 1998.
(2) For 1998, consists of matching contributions paid by the Company on behalf
of its executives to the Interim Services Inc. Deferred Compensation Plan
("IDCP").
(3) Incentive stock options and non-qualified stock options were granted under
the Company's 1998 Plan and predecessor plans at an exercise price equal to
the fair market value of the Company's Common Stock on January 31, 1996,
February 5, 1997 and March 5, 1998, the dates of grant. In addition, on
August 1, 1997 Mr. Peck received a grant of 10,000 shares, on May 9, 1996,
Mr. Evans received a grant of 9,728 shares, on December 31, 1997, Mr. Marcy
received a grant of 100,000 shares, and on January 1, 1998 Mr. Peck
received a grant of 75,000 shares, each of Messrs. Krause and Livonius
received a grant of 125,000 shares and Mr. Marcy received a grant of
200,000 shares, all at an exercise price equal to the fair market value of
the Company's Common Stock on the respective dates of grant. These options
have ten-year terms (except for those options granted in 1996 to Messrs.
Krause, Livonius and Marcy, which have five-year terms) and become
exercisable over a three-year period in cumulative increments of 33-1/3%
per year beginning with the first anniversary of the date of grant (except
for those options granted to Mr. Marcy on December 31, 1997 and those
options granted to Messrs. Peck, Krause, Livonius and Marcy on January 1,
1998 which become exercisable over a four year period in cumulative
increments of 25% per year beginning with the first anniversary of the date
of grant). All options granted prior to the September 1997 stock split have
been restated to adjust for the effects thereof.
(4) Pursuant to the Company's bonus plan for its executives, this includes a
mandatory deferred amount of $148,500, which is deferred over a three-year
period and is subject to forfeiture.
9
<PAGE>
(5) Includes $1,686 as the imputed economic value of a death benefit provided
by the Company for life insurance purchased by the Executive and $60,547
reimbursement of loan interest expense related to purchase of stock to meet
stock ownership goals.
(6) Pursuant to the Company's bonus plan for its executives, this includes a
mandatory deferred amount of $46,778, which is deferred over a three-year
period and is subject to forfeiture.
(7) Includes $2,791 as the imputed economic value of a death benefit provided
by the Company for life insurance purchased by the Executive and $20,893
reimbursement of loan interest expense related to purchase of stock to meet
stock ownership goals.
(8) Pursuant to the Company's bonus plan for its executives, this includes a
mandatory deferred amount of $46,778, which is deferred over a three-year
period and is subject to forfeiture.
(9) Includes $2,791 as the imputed economic value of a death benefit provided
by the Company for life insurance purchased by the Executive, $24,390
reimbursement of loan interest expense related to purchase of stock to meet
stock ownership goals and $2,181 as moving expenses paid by the Company.
(10) Includes $1,686 as the imputed economic value of a death benefit provided
by the Company for life insurance purchased by the Executive and $2,360
reimbursement of loan interest expense related to purchase of stock to meet
stock ownership goals.
(11) Mr. Evans joined the Company in May 1996.
(12) Pursuant to the Company's bonus plan for its executives, this includes a
mandatory deferred amount of $16,781, which is deferred over a three-year
period and is subject to forfeiture.
(13) Includes $3,846 as the imputed economic value of a death benefit provided
by the Company for life insurance purchased by the Executive, $3,620
reimbursement of loan interest expense related to purchase of stock to meet
stock ownership goals and $11,512 as moving expenses paid by the Company.
OPTION GRANTS IN THE FISCAL YEAR ENDED DECEMBER 25, 1998
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO GRANT DATE
GRANTED EMPLOYEES IN EXERCISE VALUE
NAME (#) (1) FISCAL YEAR PRICE ($/SH) EXPIRATION DATE ($)(2)
- ---- ---------- ------------ ------------ --------------- ----------
<S> <C> <C> <C> <C> <C>
Raymond Marcy(3) 100,000 5.8% $ 25.8750 12/31/07 $ 663,553
200,000 11.6% 25.8750 01/01/08 1,327,105
Robert E. Livonius 125,000 7.3% 25.8750 01/01/08 829,441
Roy G. Krause 125,000 7.3% 25.8750 01/01/08 829,441
Gary Peck 75,000 4.4% 25.8750 01/01/08 497,664
Robert J. Evans 15,000 0.9% 27.5625 03/05/08 93,738
</TABLE>
- --------------------
(1) See Note (3) to the Summary Compensation Table for a description of the
terms and other information regarding these options.
(2) The dollar amounts under this column are the result of calculations
utilizing the Black-Scholes option pricing model. The assumptions used
relating to the expected volatility, risk-free rate of return, dividend
yield and time of exercise were 0.33, 5.51, 0.00, and 2.00 respectively.
(3) Mr. Marcy received two separate option grants in the fiscal year ended
December 25, 1998.
10
<PAGE>
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during the fiscal year
ended December 25, 1998, and unexercised options held as of the end of that
year.
AGGREGATED OPTION EXERCISES IN THE FISCAL YEAR ENDED
DECEMBER 25, 1998 AND THAT YEAR'S END OPTION VALUES
<TABLE>
<CAPTION>
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
ON VALUE AT YEAR END (#) YEAR END ($)(1)
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Raymond Marcy 70,000 $1,071,875 156,664 393,336 $ 595,206 $ 99,170
Chairman, President and
Chief Executive Officer
Robert E. Livonius 27,000 386,500 98,332 171,668 491,353 49,584
Executive Vice
President and Chief
Operating Officer
Roy G. Krause 21,298 178,371 16,666 171,668 17,708 49,585
Executive Vice
President and Chief
Financial Officer
Gary Peck 5,400 80,425 65,865 108,335 354,540 28,335
President, Commercial
Staffing Group
Robert J. Evans 3,486 48,173 9,665 31,577 5,398 14,167
Vice President, Chief
Information Officer
</TABLE>
- --------------------
(1) The value realized on the exercise of options and the value of unexercised
in-the-money options at year end are determined by subtracting the exercise
price for the options from the fair market value of the shares subject to
the options as of the date of exercise or year end, respectively. There can
be no assurance that the value of "unexercised options" reported above will
be realized, and any gains on exercise will depend on the value of the
Company's Common Stock on the date of exercise.
EMPLOYMENT CONTRACTS
On November 18, 1998, the Company entered into an employment agreement with
Mr. Marcy which superceded his prior agreement. The term of Mr. Marcy's
employment agreement ends on April 30, 2001 and is automatically renewable for
successive one year terms thereafter unless, not later than six months prior to
the end of the term, written notice is given by Mr. Marcy or the Company
advising that the term of employment shall not be extended further. Mr. Marcy's
employment agreement provides, among other things, that if the Company
terminates Mr. Marcy without "cause" (as such term is defined therein), he would
be entitled to receive a lump sum cash severance payment in an amount equal to
three times the sum of his annual salary plus his target bonus. Mr. Marcy's
compensation arrangement is further described in the Compensation Committee's
Report on Executive Compensation.
The Company also entered into employment agreements with each of the Named
Executive Officers on November 18, 1998. The employment agreements between the
Company and each of Messrs. Livonius, Krause, Peck and Evans provide for
employment at will and, accordingly, may be terminated by either party thereto
at any time for any reason. The employment agreements provide, among other
things, that if the Company terminates the executive without "cause" (as such
term is defined therein), the executive would be entitled to receive a lump sum
cash severance payment in an amount equal to: (i) two times the sum of the
executive's annual salary plus his target bonus, in the case of Messrs. Livonius
and Krause, and (ii) the sum of the executive's annual salary plus his target
bonus, in the case of Messrs. Peck and Evans.
11
<PAGE>
The Company also entered into Change in Control Agreements (the "CIC
Agreements") with Mr. Marcy and each of the Named Executive Officers on November
18, 1998. A "Change of Control" is defined in the CIC Agreements, subject to
future change by the Company's Board of Directors, and excludes certain
transactions that are approved by the Company's Board of Directors. The CIC
Agreements provide for certain benefits to be paid to Mr. Marcy and the Named
Executive Officers upon the occurrence of a Change in Control, including the
waiving of all restrictions and conditions applicable to any awards of
restricted stock or the vesting of stock options, and certain specified
severance payments in the event that the employment of such executive is
terminated following a Change In Control. Such severance includes a cash payment
in an amount equal to: three times the sum of the executive's annual salary plus
his target bonus, in the case of Mr. Marcy, (ii) two times the sum of the
executive's annual salary plus his target bonus, in the case of Messrs. Livonius
and Krause, and (iii) the sum of the executive's annual salary plus his target
bonus, in the case of Messrs. Peck and Evans.
Copies of the employment agreements and the CIC Agreements for Mr. Marcy
and each of the Named Executive Officers are filed as exhibits to the Company's
Form 10-K for the fiscal year ended December 25, 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
During the fiscal year ended December 25, 1998, the Compensation Committee
was comprised of Cinda A. Hallman (Chairperson), Steven S. Elbaum and J. Ian
Morrison, none of whom are or were an officer or employee of the Company or any
of its subsidiaries.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company's Board of Directors (the
"Committee") has prepared the following report on executive compensation. This
report describes the Company's current executive compensation program including
the underlying philosophy of the program and the criteria on which executive
compensation is based. This report also describes the compensation paid to the
Company's Chairman and Chief Executive Officer, Raymond Marcy, during the most
recent fiscal year.
The Committee is composed entirely of independent outside directors. Their
responsibilities include presenting recommendations to the Board of Directors on
the compensation of the Chief Executive Officer and approving the compensation
program for certain of the Company's other executive officers, currently
consisting of eleven executives (including the Named Executive Officers), after
receiving recommendations from the Chief Executive Officer. Specific duties
include determining the executive salaries, setting the performance criteria for
annual bonuses, approving their awards under the annual incentive program, and
administering the Company's 1998 Stock Incentive Plan. The Committee also
reviews total compensation for the Company's top 30 executives.
The Committee has retained the services of an outside consultant, Frederic
W. Cook & Co., to provide information and advice on executive compensation
issues.
COMPENSATION PHILOSOPHY
The Company's executive compensation program consists of three main
elements:
BASE SALARY
Base compensation set to attract and retain qualified management, when
combined with the other components of the compensation program.
ANNUAL BONUS
An opportunity to earn additional cash reward for yearly business success
and individual performance.
12
<PAGE>
STOCK OPTIONS
Grants, which will encourage stock ownership and reward executives for
increases in stockholder value. There is strong emphasis on stock option awards
as both recruitment and retention vehicles.
The annual bonus is "at risk" compensation in that it is not payable except
to the extent that the Company's business objectives are attained. Similarly,
stock options are "at risk" in that their value depends upon success in
enhancing stockholder value.
The compensation program is designed to contribute to the viability and
long-term success of the Company by meeting the following objectives:
o To compensate fairly for financial and strategic success and the
enhancement of stockholder value.
o To attract, retain and motivate experienced and competent managers and
professionals who are performance-oriented.
o To reinforce a commitment to take action, which will contribute to the
long-term success of the Company.
o To encourage the ownership of Interim stock so that management's
long-term financial interests are closely linked with success in
serving the long-term interests of the Company's stockholders. To this
end, in 1997, Interim adopted stock ownership goals for the direct
reports of the CEO and select direct reports of the COO and CFO, to
include approximately 22 executives. The Company also adopted a
discounted stock purchase plan for all employees.
COMPETITIVE STANCE
In 1998, the Company continued its comparison groups for senior executives
to include other service companies and high growth companies in addition to the
temporary service and staffing industry and general industry comparisons
previously used. Industry-specific companies are also used for business-unit
heads. All of the companies used in the peer group for the total stockholder
return graph are included within the temporary service comparison group.
The Company's policy is to offer salaries which are competitive at the
median of companies of similar size within the comparison groups, annual
incentive opportunities, which could pay at median levels if pre-set performance
goals are met and above-median if the goals are exceeded, and stock option
awards, which are highly competitive and at least median over time.
BASE SALARIES
Base salaries are reviewed annually using competitive compensation
information provided by nationally recognized consulting firms. Increases in
base salaries are granted after considering relative competitive positions,
individual performance and general salary increases within the rest of the
Company.
INCENTIVE COMPENSATION
The Committee determines the performance measures used in setting the
annual incentive targets of the CEO and his direct reports, including the Named
Executive Officers. Incentive compensation is designed to specifically relate
executive pay to Company performance. Bonuses under such plans provide financial
rewards for achievement of substantive business results and where substantive
business results are attained, for the attainment of objectively measured
personal performance goals. Bonuses are paid after the end of the fiscal year if
the individual remains in the employ of the Company and achieves established
performance targets. The bonus incentive requires the attainment of specific
earnings per share (EPS) growth targets for the Company's stock. The CEO's bonus
is based 100% on EPS growth, while the COO's and the CFO's bonuses are based 75%
on EPS growth. Other executives have either 50% or
13
<PAGE>
75% of their bonuses based on EPS. If more than the target bonus is earned, the
excess bonus is deferred, is subject to forfeiture and, beginning with bonuses
earned in 1999, will be paid out in equal installments over the next two years.
STOCK OPTION AWARDS
The Committee views stock options as a critical element of the compensation
program. Options have been granted broadly in the Company, may be used as a
hiring inducement, and are increasingly viewed as a key element in retaining
executives important to the future success of the Company. Because the Company
has a high proportion of professionals, it expects to utilize an above-average
level of stock in its program.
In this Proxy Statement is a proposal for an amendment to the 1998 Stock
Incentive Plan, which, if approved, will increase the number of shares issuable
under such Plan by an aggregate of 2,200,000 shares.
STOCK OWNERSHIP
In 1997, the Committee adopted stock ownership goals for 22 top executives,
which range from five times salary for the CEO to two times salary for first
level participants. Participants have been offered a favorable financing program
whereby the Company reimburses executives for loan interest for the first three
years. As of February 4, 1999, the CEO achieved 91% of his goal, the CFO
achieved 118%, and the COO achieved 82%. The other executives achieved 47% of
their goals. Total stock ownership for this group as of February 4, 1999, is
330,955 shares.
CHANGE IN CONTROL/EMPLOYMENT AGREEMENTS
The Committee implemented Change In Control and Employment Agreements for
the top executives. The details of these agreements for the CEO and the Named
Executive Officers are included in this Proxy Statement.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
The Committee intends that all compensation paid to Interim executives will
be tax-deductible. The Committee has requested stockholder approval where
necessary and has established administrative rules for its plans in order to be
in compliance with Internal Revenue Code Section 162(m).
CHIEF EXECUTIVE OFFICER COMPENSATION FOR 1998
In 1998, the base salary, incentive compensation and stock option awards
for the Chief Executive Officer were determined by the Committee based on the
principles outlined above. After reviewing a competitive study from its
consultants, the Board of Directors adopted the Compensation Committee's
recommendation to increase the CEO's salary from $600,000 to $630,000 effective
January 1, 1999. His target incentive for 1999 remained 75% of salary. In 1998,
the CEO earned a bonus of $598,500 under the bonus incentive plan for executives
described above, $148,500 of which was deferred under the terms of the plan. In
calendar year 1998, he was granted one stock option award of 200,000 shares.
The previous employment agreement of the CEO, which was effective May 1,
1994, was superceded by a new Employment Agreement dated November 18, 1998 and
has a term expiring on April 30, 2001, with provisions for automatic renewals
subject to a prior notice not to extend the term. The Committee and Board of
Directors approved and implemented both an Employment Agreement and a Change In
Control Agreement for the CEO as described in preceding portions of this Proxy
Statement.
BY THE COMPENSATION COMMITTEE,
CINDA A. HALLMAN, Chairperson
STEVEN S. ELBAUM
J. IAN MORRISON
14
<PAGE>
PERFORMANCE GRAPH
The following graph sets forth the cumulative total stockholder return on
the Company's Common Stock for the period beginning January 27, 1994 (the date
of the Company's initial public offering) and ending December 25, 1998, as well
as the cumulative total return of the Standard and Poor's 500 stock index and a
Peer Group Index, for the same time period. The total cumulative return on
investment (change in stock price plus reinvested dividends, if any) for the
Company, the Standard and Poor's 500 stock index and the Peer Group Index
assumes that a $100 investment was made on January 27, 1994. The Company has not
declared any dividends in the period represented in this performance graph.
The Peer Group Index is comprised of the following publicly traded
companies: CDI Corp.; Kelly Services, Inc.; Manpower Inc.; and Robert Half
International Inc.
The data for this performance graph was compiled by the Company from
Bloomberg Financial Services. The stock price performance shown on this graph is
not necessarily indicative of future price performance of the Company's Common
Stock.
<TABLE>
<CAPTION>
[ GRAPH ]
1/27/94 6/94 12/94 6/95 12/95 6/96 12/96 6/97 12/97 6/98 12/98
------- ---- ----- ---- ----- ---- ----- ---- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INTERIM SERVICES INC. 100.00 118.75 123.13 125.00 173.75 215.00 177.50 222.50 258.75 321.25 233.75
S&P 500 COMPOSITE 100.00 92.50 95.94 113.80 128.63 140.09 154.74 184.90 202.72 236.86 256.79
PEER GROUP 100.00 103.79 126.55 121.69 133.12 183.13 167.66 225.73 228.86 222.32 184.34
</TABLE>
15
<PAGE>
RATIFICATION OF APPOINTMENT OF AUDITORS
(ITEM 2 ON PROXY CARD)
Deloitte & Touche LLP audited the accounts of the Company for the twelve
months ended December 25, 1998. Deloitte & Touche LLP has offices or affiliates
convenient to most of the Company's operations in the United States and other
countries and is considered by the Company to be well qualified. The Board of
Directors has appointed such firm as the Company's independent auditors for the
fiscal period ending December 31, 1999, and recommends that the stockholders
ratify such appointment. Representatives of Deloitte & Touche LLP expect to
attend the Annual Meeting, will be afforded an opportunity to make a statement
if they desire to do so, and will be available to respond to appropriate
questions by stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AND PROXIES SOLICITED BY THE BOARD WILL BE
SO VOTED IN THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY.
APPROVAL OF AMENDMENT TO 1998 STOCK INCENTIVE PLAN
(ITEM 3 ON PROXY CARD)
On February 18, 1999 the Company's Board of Directors unanimously adopted,
subject to the approval by the Company's stockholders, a resolution to amend the
Company's 1998 Stock Incentive Plan (the "1998 Plan") to increase the number of
shares eligible for grant under the 1998 Plan by 2,200,000 shares. The 1998 Plan
was originally adopted by the Board of Directors on March 5, 1998 and approved
by the stockholders of the Company on May 7, 1998.
GENERAL TERMS AND CONDITIONS
The purposes of the 1998 Plan are to provide incentives and reward to those
employees largely responsible for the success and growth of the Company and its
subsidiary corporations and to assist all such entities in attracting and
retaining executives and other key employees with experience and ability; to
attract and retain experienced and qualified directors who are not employees of
the Company or any subsidiary; and to secure for the Company and its
stockholders the benefit of stock ownership in the Company by those employees
and directors.
MATERIAL FEATURES OF THE PLAN
A copy of the 1998 Plan, as proposed to be amended, is attached as Exhibit
A to this Proxy Statement. The material features of the 1998 Plan, as proposed
to be amended, are described below, but this description is only a summary and
is qualified in its entirety by reference to the actual text of Exhibit A.
SHARES SUBJECT TO THE 1998 PLAN
The 1998 Plan previously authorized the issuance of 1,500,000 shares of
Common Stock, plus an additional 503,108 shares from a predecessor plan which,
as of the time of adoption of the 1998 Plan, had not been reserved for issuance
pursuant to specific option grants or grants of other awards under the
predecessor plan, for a total of 2,003,108 shares, subject to increase due to
the anti-dilution provisions of the 1998 Plan and any Non-Issuance or Stock
Exercise (as defined below). As of March 12, 1999, Awards (as defined below) of
or Stock Options to purchase 1,542,262 shares of Common Stock had been granted
under the 1998 Plan, and 460,846 shares of Common Stock remained available for
issuance.
In order to make additional awards under the 1998 Plan so that the Company
continues to receive the benefits associated therewith, the proposed amendment
to the 1998 Plan authorizes an additional 2,200,000 shares of Common Stock for
issuance in accordance with the 1998 Plan's terms, bringing the total amount of
shares available for issuance under the 1998 Plan as of March 12, 1999 to
2,660,846.
16
<PAGE>
Shares of Common Stock not actually issued pursuant to an Award or Director
Stock Option (as hereinafter defined) under the 1998 Plan, or an award under any
other stock option or benefit plan of the Company for the benefit of employees
or Directors which has been approved by the stockholders of the Company
(collectively, "Other Company Plans"), due to forfeiture, cancellation, lapse,
surrender, payment of withholding taxes or otherwise, are available for future
Awards or Director Stock Options under the 1998 Plan (a non-issuance of Common
Stock under any plan other than the 1998 Plan, is referred to herein as a
"Non-Issuance."). In the event that shares of Common Stock already owned by an
optionee are tendered either to exercise a Stock Option, or a stock option
granted under any Other Company Plan, or for the payment of withholding taxes
under the 1998 Plan or any Other Company Plan (collectively, a "Stock
Exercise"), the shares of Common Stock so tendered shall be added to the total
number of authorized shares available for issuance under the 1998 Plan, but such
shares so added in respect of a stock option granted under any Other Company
Plan shall not be available for grants of Incentive Stock Options (as
hereinafter defined).
Shares of Common Stock to be delivered or purchased under the 1998 Plan may
be either authorized but unissued Common Stock or treasury shares. Not more than
ten percent (10%) of the shares reserved for issuance under the 1998 Plan
(subject to the anti-dilution provisions of the 1998 Plan) may be issued in
Awards other than Stock Options. All of the remaining shares available for
issuance under the 1998 Plan may be issued thereunder in connection with the
exercise of options which qualify as "Incentive Stock Options" under Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), subject to
increases due to either the anti-dilution provisions of the 1998 Plan or any
Stock Exercise with respect to Awards or options ("Director Stock Options")
issued to directors of the Company who are not employees of the company or any
subsidiary of the Company ("Outside Directors"). The maximum number of shares of
Common Stock with respect to which Stock Options and stock appreciation rights
may be granted to any Recipient during any three calendar years is 1,000,000
shares.
ELIGIBILITY
Awards may be granted to (i) employees of the Company and its subsidiaries,
(ii) members of the Boards of Directors of the Company or its subsidiaries,
(iii) persons who have agreed in writing to become an employee of the Company or
a subsidiary within thirty (30) days, or (iv) consultants or advisors who have
rendered bona fide services to the Company or a subsidiary (not including
services in connection with the offer or sale of securities in a capital-raising
transactions) (collectively, "Recipients"); provided, that Incentive Stock
Options may only be granted to employees of the Company or a subsidiary in which
the Company owns, directly or indirectly, stock possessing 50% or greater of the
total combined voting power of such subsidiary. No member of the Committee
(other than an ex-officio member) shall be eligible for grants of Awards under
the 1998 Plan by the Committee, although such member may be eligible for grants
of Director Stock Options or for Awards which are granted by the Board of
Directors.
ADMINISTRATION
The Plan is administered by the Committee, which shall at all times consist
of not less than two (2) non-employee directors of the Company (an "Outside
Director") each of whom qualifies as an Outside Director under Treasury
Regulation Section 1.162-27(e)(3) and as a "Non-Employee Director" under Rule
16b-3 promulgated under the Securities Exchange Act of 1934, as amended. The
members of the Committee are appointed by and serve at the pleasure of the Board
of Directors of the Company. The Committee has full power and authority to
determine which Recipients shall receive Awards, to construe, interpret and
administer the 1998 Plan and, to make determinations which shall be final,
conclusive and binding upon all persons. The Committee shall impose such
conditions upon the grant and exercise of Awards under the 1998 Plan as may from
time to time be deemed necessary or advisable, in the opinion of counsel to the
Company, to comply with applicable laws and regulations, and from time to time
may adopt rules, regulations and policies for carrying out the 1998 Plan. Such
policies may include, but need not be limited to, the type, size and terms of
Awards to be made to Recipients and the conditions for payment of such Awards.
In addition, the Committee may delegate to the Chief Executive Officer of the
Company the authority to grant Awards to Recipients who are not subject to
Section 16(a) of the Securities Act of 1934, as amended. Notwithstanding the
foregoing, the Board of Directors has the authority to determine which Outside
Directors shall receive Awards and the terms and conditions of such Awards.
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TYPES OF AWARDS
Awards to Recipients under the 1998 Plan (collectively, "Awards") include
shares of Common Stock, restricted shares of Common Stock ("Restricted Shares"),
the right to purchase shares of the Company's Common Stock upon exercise of an
option granted under the Plan (a "Stock Option"), including a Reload Stock
Option (as defined below), (but excluding Director Stock Options), stock
appreciation rights, and performance shares, performance units and other Awards
(other than Stock Options or stock appreciation rights, the payment of which is
intended to qualify as "performance-based compensation" under Section 162(m) of
the Code ("Target Awards"). The Committee may establish performance goals to be
achieved within such performance periods as may be selected by it using such
measures of the performance of the Company it may select as a condition to the
receipt of the Award.
In addition to the Awards granted to Recipients, as of each annual meeting
of the stockholders of the Company, each Outside Director of the Company,
including newly elected Outside Directors, shall be granted a Director Stock
Option to purchase 4,000 shares of Common Stock. Director Stock Options vest one
year from the date of grant, shall have a term of ten years, and must be
exercised prior to the first anniversary of the Outside Director's termination
of service as a director.
Additionally, in connection with the exercise of a Stock Option (other than
a Director Stock Option), if a Recipient exercises such Stock Option by
surrendering other shares of Common Stock (as discussed in PRICING AND MARKET
VALUE RESTRICTIONS), the Committee may grant an additional Stock Option for the
number of shares of Common Stock so surrendered and also for the number of
shares withheld or tendered to satisfy tax withholding requirements (a "Reload
Stock Option"). Any Reload Stock Option shall become exercisable upon such terms
and conditions as the Committee shall determine, but the exercise price shall
not be less than the market value of the shares of Common Stock on the date of
the exercise of such prior Stock Option and the term shall not extend beyond the
expiration of the prior Stock Option.
The Committee may determine that all or a portion of an Award or a payment
to a Recipient pursuant to an Award, in any form whatsoever, shall be vested at
such times and upon such terms as may be selected by it, provided, however, that
an Award of Restricted Shares may not vest in less than three years from the
date of grant. The Committee may determine that the vesting of any Award shall
be accelerated in the event of a change of control of the Company, as such terms
may be defined in the Award agreement. The Committee, or in the case of Awards
to Outside Directors, the Board of Directors of the Company, may determine that
the receipt of all or a portion of an Award or a payment to a Recipient pursuant
to an Award, in any form whatsoever, (i) shall be deferred, or (ii) at the
election of such Recipient, may be deferred. Deferrals shall be for such periods
and upon such terms as the Committee, or in the case of Awards to Outside
Directors, the Board of Directors of the Company, may determine. Additionally,
the Committee may determine the term of a Stock Option or other Award, provided
no Stock Option or other Award may have a term of greater than ten (10) years.
In addition, the Committee may require a Recipient to refund to the Company
the value of an Award realized by a Recipient, if the Recipient accepts
employment with a competitor of the Company or a subsidiary of the Company
within six (6) months of such realization. In the case of a Stock Option, a
Recipient is deemed to realize its value upon the exercise of the Stock Option
and its value is an amount equal to the excess of the market value of the shares
of Common Stock received as of the date of the exercise over the exercise price
paid for such shares. In the case of all other Awards, a Recipient is deemed to
realize its value upon the payment (in cash or stock) of the Award and its value
is the amount of any cash received plus an amount equal to the market value of
the shares of Common Stock received in connection with the Award. The market
value of shares shall be the closing price for the Common Stock on the New York
Stock Exchange (or on the principal securities exchange or other market on which
the Common Stock is then being traded) on the date of realization, or if such
closing price is not reported on such date, the last reported closing price.
The Committee and the Board of Directors, respectively, has the power to
specify the form of Award contracts and Director Stock Option agreements to be
granted from time to time pursuant to and in accordance with the 1998 Plan. No
Recipient or Outside Director has any rights as a stockholder of the Company
with respect to Awards or Director Stock Options unless and until certificates
for shares of Common Stock or Restricted Shares are issued to the Recipient or
Outside Director.
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The Company has the right to deduct from all Awards paid in cash any
federal, state, local or foreign taxes required by law to be withheld with
respect to such Awards, and with respect to Awards paid in other than cash, to
require the payment (through withholding from the Recipient's salary or
otherwise) of any such taxes. Subject to such conditions as the Committee may
establish, Awards payable in shares of Common Stock may provide that the
Recipients thereof may elect, in accordance with any applicable regulations, to
tender shares of Common Stock, or have the Company withhold shares of the Common
Stock to satisfy all or part of such withholding obligations, with the value of
such tendered or withheld shares of Common Stock based upon their fair market
value on the date the tax withholding is required to be made.
PAYMENT OF TARGET AWARDS
The payment under any Target Award is contingent upon the attainment of one
or more pre-established performance goals established by the Committee in
writing within ninety (90) days of the commencement of a performance period
designated by the Committee (the "Target Award Performance Period") (or in the
case of a newly hired Recipient, before 25% of such Recipient's service for such
Target Award Performance Period has elapsed). Such performance goals are based
upon one or more of the following performance-based criteria: earnings per share
of the Common Stock, the Company's return on net assets, equity, or revenues, or
the Company's cash flow, book value, Common Stock performance or price-earnings
ratio. The Committee, in its discretion, may cancel or decrease an earned Target
Award, but, except as otherwise permitted by the applicable Treasury Regulations
promulgated under the Code, may not, under any circumstances, increase such
Award. The maximum amount which any Recipient may be paid under a Target Award
is $2,000,000 per calendar year. The Committee may, in its discretion, decrease
this maximum, but, except as otherwise permitted under the applicable Treasury
Regulations, may not, under any circumstances, increase this maximum. Before
payments are made under a Target Award, the Committee is required to certify in
writing that the performance goals justifying the payment under the Target Award
have been met.
PRICING AND MARKET VALUE RESTRICTIONS
The amounts of certain Awards are based on the market value of a share of
Common Stock at a specified point in time. The exercise price per share of
Common Stock under each Stock Option granted under the 1998 Plan (including
Director Stock Options) may not be less than the closing price for the Common
Stock on the New York Stock Exchange (or on the principal securities exchange or
other market on which the Common Stock is then being traded) on the date the
Stock Option is granted or if such closing price is not reported on the date of
grant, the last reported closing price. The exercise price for each Stock Option
remains constant during the life of the option, subject to adjustment pursuant
to the anti-dilution provisions of the 1998 Plan. The base value per share of
Common Stock covered by an Award in the form of a stock appreciation right may
not be less than the market value of one share of Common Stock on the initial
day of the performance period for such stock appreciation right. Other than
pursuant to the anti-dilution provisions of the 1998 Plan, no Stock Option may
be re-priced to a lower price without approval of the stockholders of the
Company. On March 12, 1999, closing price of the Common Stock on The New York
Stock Exchange was $17.0625 per share.
Payment for exercise of any Stock Option, including Director Stock Options,
may be made (a) in cash, (b) by delivery of Common Stock having a market value
equal to the aggregate exercise price, (c) by a combination of payment of cash
and delivery of Common Stock in amounts such that the amount of cash plus the
market value of the Common Stock equals the aggregate exercise price, or (d) by
a cashless exercise upon such terms and conditions as the Committee, it its sole
and absolute discretion, shall determine. The Committee may, in its discretion,
include within any Stock Option agreement (other than an agreement covering a
Director Stock Option), a provision entitling the Recipient to a Reload Stock
Option in the event that shares of Common Stock are surrendered for payment of
the exercise price.
EMPLOYMENT
With respect to Awards granted to Recipients who are employees of the
Company or its subsidiaries, the Committee requires that a Recipient must be an
employee of the Company or a subsidiary (or must have retired with the approval
of the Company or a subsidiary) at the time an Award becomes vested and may
provide for the termination of any such outstanding Award if a Recipient ceases
to be an employee of the Company or a subsidiary or a Director, and may
establish such other provisions with respect to the termination or disposition
of an Award on the death or retirement of a Recipient as it, in its sole and
absolute discretion, deems advisable. Notwithstanding the
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foregoing, the Committee has the sole power to determine the date of, and the
circumstances which shall constitute, a cessation of employment (including
whether the spin-off of a subsidiary constitutes a cessation of employment of
employees who continue in the employ of the spun-off company) and to determine
whether such cessation is the result of retirement, death or any other reason.
No Award shall be construed as imposing upon the Company or a subsidiary
the obligation to continue the employment of a Recipient. No employee or other
person shall have any claim or right to be granted an Award under the Plan.
ANTI-DILUTION PROTECTION
In the event of any changes in the capital structure of the Company,
including but not limited to a change resulting from a stock dividend or
split-up, or combination or reclassification of shares, the Board of Directors
of the Company shall make such equitable adjustments with respect to Awards and
Director Stock Options or any other provisions of the 1998 Plan as it deems
necessary and appropriate, including, if necessary, any adjustment in the
maximum number of shares of Common Stock subject to the 1998 Plan or the number
of shares of Common Stock subject to an outstanding Award or Director Stock
Option. If the Company shall become a party to any corporate merger,
consolidation, major acquisition of property for stock, reorganization, or
liquidation, the Board of Directors of the Company may make such arrangements it
deems advisable with respect to outstanding Awards or Director Stock Options,
which arrangements shall be binding upon Recipients and Outside Director
Recipients, including, but not limited to, the substitution of any new Awards or
Director Stock Options then outstanding, the assumption of any such Awards or
Director Stock Options and the termination of, or payment for, such Awards or
Director Stock Options.
ASSIGNABILITY
No Award or Director Stock Option granted pursuant to the 1998 Plan is
transferable or assignable by the Recipient other than by will or the laws of
descent and distribution and during the lifetime of the Recipient shall be
exercisable or payable only by or to him or her. Notwithstanding the foregoing,
the Committee specifically may designate that a Stock Option (other than an
Incentive Stock Option) may be transferred to a family member, a trust
established primarily for the benefit of a family member, or to an entity which
is a corporation, partnership, or limited liability company (or any other
similar entity) the owners of which are primarily the aforementioned persons or
trusts. Any such Stock Option so transferred is subject to the provisions of the
1998 Plan concerning the exercisability during such transferor's employment or
service as Director.
REGISTRATION
Each Award and Director Stock Option is subject to the requirement that if
at any time the Committee (or in the case of a Director Stock Option, counsel
for the Company) shall determine that qualification or registration under any
state or federal law of the shares of Common Stock, Restricted Shares, Stock
Options or other securities thereby covered, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of or in
connection with the granting of such Award or Director Stock Option or the
purchase of shares thereunder, the Award or Director Stock Option may not be
paid or exercised in whole or in part unless and until such qualification,
registration, consent or approval shall have been effected or obtained free of
any conditions the Committee, in its sole discretion, deems unacceptable.
FEDERAL INCOME TAX CONSEQUENCES
The Company has been advised by its counsel that the federal income tax
consequences of the grant and/or exercise of Awards and Director Stock Options
under the 1998 Plan are as described below. The following information is not a
definitive explanation of the tax consequences of the Awards. Recipients should
consult with their own tax advisors with respect to the tax consequences
inherent in the ownership and/or exercise of the Awards, and the ownership and
disposition of any underlying securities.
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COMMON STOCK AWARDS; RESTRICTED SHARES. Under the Code, the federal income
tax consequence to the recipient of an Award of Common Stock or Restricted
Shares will depend on the facts and circumstances of each such Award, and, in
particular, the nature of the restrictions imposed with respect to the shares of
stock which is the subject of such Award. In general, if the shares that are the
subject of the Common Stock or Restricted Share Awards are actually issued to
the Recipient, are nontransferable and are subject to a "substantial risk of
forfeiture," e.g., if the rights to ownership of the shares are conditioned upon
the future performance of substantial services by the Recipient, a taxable event
occurs only when the substantial risk of forfeiture ceases and not before. So
long as the sale of stock at a profit could subject the Recipient to suit under
Section 16(b) of the Securities Exchange Act of 1934, the shares are considered
to be subject to a "substantial risk of forfeiture" and not transferable. At
such time as the substantial risk of forfeiture ceases, the Recipient will
realize ordinary income to the extent of the excess of the fair market value of
the shares of stock on the date the risk of forfeiture terminates over the
Recipient's cost of such shares (if any), and the same amount is deductible by
the Company as compensation. Under certain circumstances, the Recipient, by
making an election under Section 83(b) of the Code, include in his gross income,
at the time of transfer, the excess of the fair market value of the stock over
the amount, if any, paid for the stock as of the date the stock has been
transferred to the Recipient. If the restrictions by their nature, do not
subject the recipient to a "substantial risk of forfeiture" of the stock, then
the Recipient will realize ordinary income equal to the excess, at the time of
grant, of the fair market value of the stock over amount, if any, paid for such
stock and the same amount is then deductible by the Company.
Any disposition of shares after restrictions lapse will be subject to the
regular rules governing long-term and short-term capital gains and losses, with
the basis for this purpose equal to the fair market value of the shares at the
end of the restricted period (or the date of the receipt of the Restricted
Shares, if the Recipient elects to be taxed on the fair market value upon such
receipt). Dividends received by a Recipient during the restricted period will be
taxable to the recipient at ordinary income tax rates and will be deductible by
the Company unless the Recipient has elected to be taxed on the fair market
value of the Restricted Shares upon receipt, in which case they will thereafter
be taxable to the Recipient as dividends and will not be deductible by the
Company.
INCENTIVE STOCK OPTIONS. The 1998 Plan qualifies as an "incentive stock
option plan" within the meaning of Section 422 of the Code, provided that at all
times during the period beginning on the date of the granting of the option and
ending on the day three months before the date of exercise of such option, the
Recipient is an employee of either the Company or a parent or subsidiary
corporation, Recipient who is granted an Incentive Stock Option will not
recognize any taxable income for federal income tax purposes either on the grant
or exercise of the Incentive Stock Option. However, the excess of the fair
market value of the Common Stock received upon the exercise of the Incentive
Stock Option over the exercise price is included in the recipient's alternative
minimum taxable income and may be subject to alternative minimum tax ("AMT").
For AMT purposes only, the basis of the Common Stock acquired upon the exercise
of the Incentive Stock Option is increased by the amount of such excess ("AMT
Basis").
If the Recipient disposes of the shares purchased pursuant to the Incentive
Stock Option more than two years after the date of grant and more than one year
after the transfer of the shares to him (the required statutory "holding
period"), (a) the Recipient will recognize long-term capital gain or loss, as
the case may be, equal to the difference between the selling price and the
exercise price; and (b) the Company will not be entitled to a deduction with
respect to the shares so issued. For AMT purposes, the gain is the difference
between the sales price and the AMT Basis. If the holding period requirements
are not met (a "disqualifying disposition"), any gain realized upon disposition
of the shares will be taxed as ordinary income to the extent of the excess of
the lesser of (i) the fair market value of the shares at the time of exercise,
or (ii) the amount, if any, realized on the disposition, over the exercise
price. The Company will be entitled to a deduction in the year of a
disqualifying disposition in an amount equal to the ordinary income recognized
by the Recipient. Any additional gain will be taxed as short-term or long-term
capital gain depending upon the holding period for the shares. For AMT purposes,
the gain is the difference between the sales price and the AMT Basis.
NONQUALIFIED STOCK OPTIONS. The Recipient of a nonqualified stock option
under the 1998 Plan (or the Outside Director in the case of a Director Stock
Option) will not recognize any income for federal income tax purposes on the
grant of the Stock Option. Generally, on the exercise of the Stock Option, the
Recipient will recognize taxable ordinary income equal to the difference between
the fair market value of the shares on the exercise date and the exercise price
for the shares. The Company generally will be entitled to a deduction on the
date of exercise in an amount equal to the ordinary income recognized by the
Recipient. Upon disposition of the shares purchased pursuant to the Stock
Option, the Recipient will recognize long-term or short-term capital gain or
loss, as the case may be, equal to
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the difference between the amount realized on such disposition and the basis for
such shares, which basis will include the amount previously recognized by the
Recipient as ordinary income.
STOCK APPRECIATION RIGHTS. A Recipient who is granted stock appreciation
rights will not recognize any taxable income on the receipt of the stock
appreciation rights. Upon the exercise of a stock appreciation right, for
federal income tax purposes the Recipient will recognize ordinary income equal
to cash, or the fair market value of shares of Common Stock, or a combination of
both cash and shares, received by the Recipient upon such exercise (which
generally shall equal the excess of the market value of the shares of Common
Stock covered by the stock appreciation right over the base line exercise value
of such shares established on the date of grant). The Company will be entitled
to a deduction on the date of exercise in an amount equal to the ordinary income
recognized by the Recipient. Upon disposition of any shares received, the
Recipient will recognize long-term or short-term gain or loss depending upon the
period for which he or she has held the shares in an amount equal to the
difference between the selling price and the fair market value of the shares on
the date of receipt.
PERFORMANCE SHARES AND PERFORMANCE UNITS. A Recipient of performance shares
or performance units will not recognize any income for federal income tax
purposes on the date of the grant of the right to receive performance shares or
performance units. The Recipient will recognize ordinary income for federal
income tax purposes at the time of receipt of cash and/or Common Stock or a
combination of both cash and shares, upon satisfaction of the designated
performance goals, in an amount equal to: (i) the sum of the amount of cash
received plus (ii) fair market value of the shares of Common Stock, if any,
received in excess of the amount, if any, paid for by the participant for such
performance units or performance shares. The Company will be entitled to a
deduction on the date of receipt of the cash or shares, or a combination of both
cash and shares, by the Recipient in an amount equal to the ordinary income
recognized by the Recipient. Upon disposition of any shares received, the
Recipient will recognize long-term or short-term gain or loss depending upon the
period for which he or she has held the shares in an amount equal to the
difference between the selling price and the fair market value of the shares on
the date of receipt.
TARGET AWARDS. A Recipient of a Target Award will not recognize any income
for federal income tax purposes on the date of grant of a Target Award. The
Recipient of a Target Award will recognize ordinary income for federal income
tax purposes at the time of receipt of any cash or Common Stock, or a
combination of both, upon the attainment of one or more pre-established
performance goals, in an amount equal to the sum of the amount of cash received
plus the fair market value of any shares of Common Stock received, in excess of
the amount, if any, paid by the participant for such Target Award. The Company
will be entitled to a deduction on the date of receipt of the cash or shares, or
a combination of both, by the Recipient in an amount equal to the ordinary
income recognized by the Recipient. Section 162(m) of the Code provides that
compensation paid to certain highly compensated executives of public companies
is not deductible to the extent such compensation paid to any such executive
exceeds $1 million per year (the "$1 million deduction limitation"). However,
compensation which qualifies as "performance-based compensation" within the
meaning of the regulations under Section 162(m) is exempt from the $1 million
deduction limitation. Payments under the Target Awards are intended to qualify
as "performance-based compensation" so that they will not be subject to the $1
million deduction limit.
AMENDMENTS AND TERMINATION
The Board of Directors of the Company has the right at any time during the
continuance of the 1998 Plan to amend, modify, supplement, suspend or terminate
the 1998 Plan, provided that in the absence of the approval of the holders of a
majority of the shares of Common Stock of the Company present in person or by
proxy at a duly constituted meeting of the stockholders of the Company, no such
amendment, modification or supplement shall (i) increase the aggregate number of
shares which may be issued under the 1998 Plan, unless such increase is by
reason of any change in capital structure, (ii) change the termination date of
the 1998 Plan, or (iii) delete or amend the market value restrictions contained
in the 1998 Plan, and provided further, that no amendment, modification or
termination of the 1998 Plan shall in any manner affect any previously granted
Award or Director Stock Option without the consent of the Recipient or the
Outside Director, as the case may be, unless such amendment, modification or
termination is by reason of any change in capital structure or unless the same
is by merger, consolidation, reorganization, liquidation or similar occurrence.
Awards and Director Stock Options may be granted at any time prior to March
5, 2008, on which date the 1998 Plan will terminate except as to Awards and
Stock Options then outstanding thereunder, which Awards and Stock
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Options shall remain in effect until they have expired according to their terms
or until March 5, 2018, whichever first occurs. No Incentive Stock Option is
exercisable later than 10 years following the date it is granted, and no other
Award will have a term of more than 10 years.
AWARDS TO BE GRANTED UNDER THE 1998 PLAN
Set forth in the Proxy Statement under the section entitled "Executive
Compensation" is information concerning the type and amount of grants under the
1998 Plan and the Other Company Plans made to eligible employees and Outside
Directors of the Company. Pursuant to the 1998 Plan, each Outside Director
receives annual grant of a Director Stock Option to purchase 4,000 shares of
Common Stock. The Board of Directors may decide to pay the Outside Director's
annual retainer (currently $25,000) by the issuance of Awards of Common Stock.
The exact types and amounts of any other Awards to be made by the Committee in
the future to any eligible employees or Outside Directors pursuant to the 1998
Plan are not presently determinable. As a result of the discretionary nature of
the 1998 Plan, it is not possible to state who the additional Recipients of
Awards under the Plan will be, the numbers of Stock Options or other Awards to
be received by any person or group, or the benefits or amounts that would have
been received by certain persons or groups under the 1998 Plan. In the exercise
of its discretion under the 1998 Plan, the Committee may choose to grant other
types of Awards under such Plan or may choose to grant no additional Awards
under such Plan.
INTEREST IN THE 1998 PLAN
Because of their status as executive officers or Outside Directors of the
Company (and, in some cases, as nominees for election as directors of the
Company), and due to their eligibility for the grant of additional Awards under
the 1998 Plan, the executive officers and Outside Directors may be considered to
have a direct interest in the approval of the amendment to the 1998 Plan by the
stockholders of the Company. The executive officers of the Company are: Shannon
Allen, Ronald deHeer, Robert Evans, Richard Gorman, Kenneth Kilburn, Roy G.
Krause, Robert Livonius, Raymond Marcy, Robert Morgan, Gary Peck, Mark W. Smith,
John B. Smith and Janet Wahby. The Company's Outside Directors are Steven S.
Elbaum, William F. Evans, Jerome B. Grossman, Cinda A. Hallman, J. Ian Morrison
and A. Michael Victory. Neither the 1998 Plan nor any Award or Director Stock
Option granted thereunder confers any right upon a person to continue as a
director or executive officer of the Company or interferes in any way with
either the right of the Board of Directors or stockholders of the Company to
terminate the directorship or employment of a person or the person's right to
terminate his or her directorship or employment at any time.
RECOMMENDATION OF THE BOARD OF DIRECTORS "FOR" THIS PROPOSAL
The Board of Directors believes that the proposed amendment to the 1998
Plan will continue to promote the interests of the Company and its stockholders
and enable the Company and its subsidiaries to continue to attract, retain and
reward persons important to the Company's success. The 1998 Plan is designed to
further align the interests of the plan participants with the interests of the
Company's stockholders. As such, the Board of Directors believes that the
proposed amendment to the 1998 Plan is in the best interests of the Company and
its stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE PROPOSED
AMENDMENT TO THE 1998 STOCK INCENTIVE PLAN AND PROXIES SOLICITED BY THE BOARD
WILL BE SO VOTED IN THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY.
OTHER INFORMATION
Information as to certain benefit plans currently in effect or proposed for
directors, officers and employees of the Company is set forth in the sections of
this proxy statement entitled, "DIRECTORS' COMPENSATION, COMMITTEES AND
MEETINGS" and "EXECUTIVE COMPENSATION."
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NEW PLAN BENEFITS
The following table sets forth certain information concerning stock options
to be granted to Outside Directors pursuant to the 1998 Plan. Because of the
discretionary nature of the 1998 Plan, the exact type and quantity of Awards to
be granted to any eligible employees pursuant to the 1998 Plan are not presently
determinable.
1998 STOCK INCENTIVE PLAN (1)
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF SECURITIES UNDERLYING OPTION GRANTS
- ----------------- ---------------------------------------------
<S> <C>
Non-Executive Director Group (2)..................... 24,000
</TABLE>
- --------------------
(1) See discussion under "APPROVAL OF AMENDMENT TO 1998 STOCK INCENTIVE PLAN."
(2) All current directors who are not officers as a group. The value of each
Director Stock Option is not determinable until the date of the Annual
Meeting and, thus, is not set forth above.
STOCKHOLDER PROPOSAL TO ESTABLISH A POSITION ON THE BOARD OF
DIRECTORS THAT IS RESERVED FOR A "NON-CORPORATE, NON-BRANCH
MANAGEMENT EMPLOYEE" OF THE COMPANY
(ITEM 4 ON PROXY CARD)
The Company has been notified that a stockholder of the Company, Mr. Vivek
Satsangi, intends to present the following proposal (the "Proposal") for
consideration at the Annual Meeting. Mr. Satsangi's address and stock ownership
will be furnished to stockholders upon request to the Company's Investor
Relations Director listed on the last page of this Proxy Statement.
"ESTABLISH AN EMPLOYEE POSITION ON THE BOARD OF DIRECTORS
AS A PROVIDER OF STAFFING SERVICES, OUR MAJOR ASSETS ARE OUR EMPLOYEES.
THEY WALK OUT THE DOOR EVERY EVENING AND WE ONLY RETAIN THEM TO THE EXTENT THAT
WE CAN KEEP OURSELVES AN EMPLOYEE-FOCUSED COMPANY. WE CAN DO THIS BY HAVING AN
EMPLOYEE-ORIENTED VISION OF THE COMPANY AT ALL LEVELS; AND BY KEEPING EMPLOYEE
SATISFACTION AS OUR NUMBER ONE OBJECTIVE FROM THE TOP LEVELS ON DOWN. WE CAN
BETTER OUR UNDERSTANDING OF OUR EMPLOYEES AND THEREFORE BE MORE EFFECTIVE IN
HIRING AND MOTIVATING OUR EMPLOYEES BY ALWAYS KEEPING THEM IN MIND. THEREFORE, I
WISH TO PROPOSE THAT WE ESTABLISH A POSITION ON THE BOARD OF DIRECTORS THAT IS
RESERVED FOR A NON-CORPORATE, NON-BRANCH MANAGEMENT EMPLOYEE OF OUR COMPANY. THE
PERSON IN THIS POSITION WILL BE ABLE TO ADVANCE THE GOALS OF THE SHAREHOLDERS AS
A SHAREHOLDER HIMSELF OR HERSELF, AND ALSO IN THE LONG TERM BY ENSURING THE
HAPPINESS OF OUR EMPLOYEES.
THIS MOVE WILL ESTABLISH INTERIM AS A COMPANY THAT IS SERIOUS ABOUT HIRING
THE RIGHT KIND OF EMPLOYEES, I.E., ONES THAT WISH TO GROW ALONG WITH THE
COMPANY. IT WILL ALSO ENSURE THAT THE VOICES OF OUR CUSTOMERS (WHICH WE HEAR
BEST THROUGH OUR EMPLOYEES WHO WORK ON THEIR SITES) AND THE VOICES OF OUR
EMPLOYEES WILL BE HEARD AT THE TOP LEVELS. IT WILL ESTABLISH THE COMPANY AS VERY
FORWARD THINKING IN THE MINDS OF ALL EMPLOYEES AND POTENTIAL EMPLOYEES, JUST AS
THE COMPANY WON KUDOS FOR ITS PROGRESSIVE POLICY OF PROVIDING LOANS TO SENIOR
OFFICERS FOR PURCHASE OF COMPANY STOCK.
THIS PROPOSAL WILL DOUBTLESS RESULT IN BETTER BOTTOM LINE RESULTS FOR THE
OWNERS OF THE COMPANY."
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THE PROPOSAL FOR THE
FOLLOWING REASONS:
The Company has since May 1995 had a policy of limiting membership on the
Company's Board of Directors to independent non-management, non-employee
individuals other than the Company's Chief Executive Officer. The principal
basis for this policy is the belief that the Company and its stockholders will
benefit most from the guidance and direction provided by individuals having a
broad base of business and industry experience and who are familiar with the
responsibilities and procedures associated with corporate governance. Moreover,
by insuring the independence of the members of the Company's Board of Directors,
the Company believes that such members will act in a manner designed to further
the best interests of the Company and all stockholders, and not simply members
of a particular constituency. The proposal submitted by Mr. Satsangi is in
direct conflict with the foregoing policy. The Company believes that the
consequences of electing a member of the Company's Board of Directors from a
particular constituency, such as "non-corporate, non-branch management
employees" are several. First, such designee would likely act and vote with
respect to particular matters in a manner designed to benefit the particular
constituency from which he or she has been nominated, and not necessarily with
regard to the short- and long-term interests of the Company and all of its
stockholders generally. Second, the advocacy by a Director on behalf of a
particular group would likely result in dissension among Board members, with
resultant lack of productivity and cohesive long-term planning. Finally, the
Board believes that reserving a seat on the Company's Board of Directors for
members from a particular group would be inconsistent with well-established
concepts of corporate democracy which permit each stockholder of the Company to
vote his or her shares for a nominee of his or her choosing, and that the
Company's current policy regarding Board membership has been well-received by
the public markets and the investment community generally.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THE PROPOSAL AND PROXIES
SOLICITED BY THE BOARD WILL BE SO VOTED IN THE ABSENCE OF INSTRUCTIONS TO THE
CONTRARY.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors and persons who own beneficially more than ten percent of
the Company's Common Stock to file with the Commission and the New York Stock
Exchange initial reports of beneficial ownership of the Common Stock on Form 3
and reports of changes in beneficial ownership of the Common Stock on Form 4 or
Form 5. Such persons are also required to furnish the Company with copies of all
such reports filed. Based solely on its review of Forms 3 and 4 and amendments
thereto furnished to the Company during the fiscal year ended December 25, 1998
and Forms 5 and amendments thereto furnished to the Company with respect to the
fiscal year ended December 25, 1998 and written representations from or on
behalf of certain reporting persons, the Company believes that, during the
fiscal year ended December 25, 1998, all Section 16(a) filing requirements
applicable to such persons were timely satisfied with the exception of the
following: Officer Robert E. Livonius filed one late report on Form 4 which
involved four transactions; Officer John B. Smith filed one late report on Form
4 which involved two transactions; and Officer Richard Gorman, Officer Robert
Morgan and the Company's Investor Relations Director Deirdre Skolfield each
filed one late report on Form 3.
STOCKHOLDER PROPOSALS
Recommendations to the Nominating Committee for nominees to be elected to
the Board of Directors and proposals of stockholders intended to be presented at
the next Annual Meeting scheduled to be held in May or June, 2000, must be
submitted in writing to the Secretary of Interim Services Inc., 2050 Spectrum
Boulevard, Fort Lauderdale, Florida 33309. Stockholder recommendations and
proposals must be received by the Secretary no later than December 7, 1999, in
order to be included in next year's Proxy Statement and Proxy Card.
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OTHER MATTERS
The Board of Directors knows of no other matters which will be presented at
the meeting, but if other matters do properly come before the meeting it is
intended that the persons named in the proxy will vote in their discretion.
The Annual Report To Stockholders of the Company for the twelve months
ended December 25, 1998 (the "Annual Report"), is being mailed concurrently with
this Proxy Statement to all stockholders of record as of March 12, 1999, except
for accounts where the stockholder had filed a written request to eliminate
duplicate reports. In addition, the Company has provided brokers, dealers,
banks, voting trustees and their nominees, at Company expense, with additional
copies of the Annual Report so that such record holders could supply such
material to beneficial owners as of March 12, 1999. AN ADDITIONAL COPY OF THE
COMPANY'S ANNUAL REPORT AND THE ANNUAL REPORT ON FORM 10-K FOR THE TWELVE MONTHS
ENDED DECEMBER 25, 1998, AS FILED WITH THE COMMISSION (THE "FORM 10-K"), BUT
WITHOUT EXHIBITS TO THE FORM 10-K, WILL BE AVAILABLE WITHOUT CHARGE, UPON
WRITTEN REQUEST TO:
Deirdre Skolfield
Investor Relations Director
Interim Services Inc.
2050 Spectrum Boulevard
Fort Lauderdale, Florida 33309
By Order of the Board of Directors,
JOHN B. SMITH
Secretary
April 5, 1999
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EXHIBIT A
INTERIM SERVICES INC.
AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN
1. PURPOSES.
The purposes of this Interim Services Inc. Amended and Restated 1998
Stock Incentive Plan are to provide incentives and rewards to those
employees largely responsible for the success and growth of Interim
Services Inc. and its Subsidiary corporations, and to assist all such
entities in attracting and retaining executives and other key employees
with experience and ability; to attract and retain experienced and
qualified directors who are not employees of the Company or any
Subsidiary; and to secure for the Company and its stockholders the
benefit of stock ownership in the Company by those employees and
directors.
2. DEFINITIONS.
(a) "Award" means one or more of the following: shares of
Common Stock, Restricted Shares, Stock Options (including Reload Stock
Options), Stock Appreciation Rights, Performance Shares, Performance
Units or Target Awards (but shall not mean a Director Stock Option).
(b) "Board of Directors" means the Board of Directors of the
Company.
(c) "Common Stock" means the Common Stock, $0.01 par value,
of the Company.
(d) "Company" means Interim Services Inc., a Delaware
corporation.
(e) "Director" means a member of the Board of Directors of the
Company or a member of the Board of Directors of any Subsidiary.
(f) "Director Stock Option" means a Stock Option granted
pursuant to Section 11.
(g) "Incentive Stock Option" means a Stock Option which meets
all of the requirements of an "incentive stock option" as defined in
Section 422(b) of the Internal Revenue Code.
(h) "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended.
(i) "Outside Director" means a Director who is not an employee
of the Company or a Subsidiary.
(j) "Outside Director Recipient" means an Outside Director who
has been granted a Director Stock Option.
(k) "Performance Period" means that period of time specified
by the Committee during which a Recipient must satisfy any designated
performance goals in order to receive an Award.
(l) "Performance Share" means the right to receive, upon
satisfying designated performance goals for a Performance Period,
shares of Common Stock.
(m) "Performance Unit" means the right to receive, upon
satisfying designated performance goals within a Performance Period,
Performance Shares, cash, or a combination of cash and Performance
Shares, based upon the market value of shares of Common Stock covered
by such Performance Shares at the close of the Performance Period.
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(n) "Plan" means this Interim Services Inc. Amended and
Restated 1998 Stock Incentive Plan, as the same may be amended from
time to time.
(o) "Recipient" means someone who has been granted an Award
under the Plan and is either (i) an employee of the Company or a
Subsidiary, (ii) a Director, (iii) a person who has agreed in writing
to become an employee of the Company or a Subsidiary within thirty (30)
days, or (iv) a consultant or advisor who has rendered bona fide
services to the Company or a Subsidiary not in connection with the
offer or sale of securities in a capital-raising transaction.
(p) "Reload Stock Option" means an additional Stock Option
(other than a Director Stock Option) granted either in connection with,
or (except in the case of Incentive Stock Options) after, the grant of
a prior Stock Option, entitling the Recipient to such additional Stock
Option in the event the Recipient exercises such prior Stock Option by
surrendering other shares of Common Stock in accordance with Section
12. Any such Reload Stock Option shall be for the number of shares of
Common Stock surrendered but may also include the number of shares
tendered or withheld for taxes in accordance with Section 18, shall
become exercisable upon such terms and conditions as the Committee
shall determine, but (i) the purchase price shall not be less than the
market value of the shares of Common Stock on the date of exercise of
such prior Stock Option, and (ii) the term shall not extend beyond the
expiration of the prior Stock Option.
(q) "Restricted Share" means a share of Common Stock issued to
a Recipient hereunder subject to such terms and conditions, including,
without limitation, forfeiture or resale to the Company, and to such
restrictions against sale, transfer or other disposition, as the
Committee may determine at the time of issuance.
(r) "Stock Appreciation Right" means the right to receive,
upon exercise of a Stock Appreciation Right granted under the Plan,
shares of Common Stock, cash, or a combination of cash and shares of
Common Stock, based on the market value of the shares of Common Stock
covered by such Stock Appreciation Right on the date of exercise over
the base line exercise value established on the initial day of a
Performance Period for such Stock Appreciation Right.
(s) "Stock Option" means the right to purchase shares of the
Company's Common Stock upon exercise of an option granted under the
Plan, including a Director Stock Option.
(t) "Subsidiary" means a subsidiary of the Company controlled
directly or indirectly by the Company within the meaning of Rule 405
promulgated under the Securities Act of 1933, as amended, and such
subsidiaries divisions, departments, and subsidiaries and the
respective divisions, departments and subsidiaries of such
subsidiaries.
(u) "Target Award" means an Award, other than a Stock Option
or Stock Appreciation Right, the payment under which is intended to
qualify as "performance-based compensation" under Section 162(m) of the
Internal Revenue Code and the regulations thereunder.
(v) "Target Award Performance Period" means the performance
period over which a Target Award is earned.
3. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by a Compensation Committee
(the "Committee") consisting of not less than two (2) Outside Directors
of the Company each of whom qualifies as an "Outside Director" under
Treasury Regulation Section 1.162-27(e)(3) and as a "Non-Employee
Director" under Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended. The members of the Committee shall be
appointed by, and serve at the pleasure of, the Board of Directors. A
majority of the Committee members shall constitute a quorum and the
acts of a majority of the members present at any meeting at which a
quorum is present or acts approved in writing by a majority of the
Committee, shall be valid acts of the Committee. All references herein
to the Committee shall be deemed to mean any successor to the
Committee, however designated, or the Board of Directors, if the Board
of Directors has not appointed a Committee.
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(b) Subject to the powers herein specifically reserved to the
Board of Directors, the Committee shall have full power and authority
to determine which Recipients shall receive Awards, to construe,
interpret and administer the Plan and, subject to the other provisions
of the Plan, to make determinations which shall be final, conclusive
and binding upon all persons including, without limitation, the
Company, the stockholders of the Company, the Board of Directors, the
Recipients and any persons having any interest in any Awards which may
be granted under the Plan. The Committee shall impose such additional
conditions upon the grant and exercise of Awards under the Plan as may
from time to time be deemed necessary or advisable, in the opinion of
counsel to the Company, to comply with applicable laws and regulations.
The Committee from time to time may adopt such rules and regulations
for the carrying out the Plan and written policies for implementation
of the Plan. Such policies may include, but need not be limited to, the
type, size and terms of Awards to be made to Recipients and the
conditions for payment of such Awards. Notwithstanding the foregoing,
the Board of Directors shall have authority to determine which
Directors shall receive Awards and the terms and conditions of such
Awards. In addition, the Committee may delegate to the Chief Executive
Officer of the Company the authority to grant Awards to Recipients who
are not subject to Section 16(a) of the Securities Act of 1933, as
amended.
(c) The payment under any Target Award shall be contingent
upon the attainment of one or more pre-established performance goals
established by the Committee in writing within ninety (90) days of the
commencement of the Target Award Performance Period (or in the case of
a newly hired Recipient, before 25% of such Recipient's service for
such Target Award Performance Period has elapsed). Such performance
goals will be based upon one or more of the following performance-based
criteria: earnings per share of the Common Stock, the Company's return
on net assets, equity, or revenues, or the Company's cash flow, book
value, Common Stock performance or price-earnings ratio. The Committee,
in its discretion, may cancel or decrease an earned Target Award, but,
except as otherwise permitted by Treasury Regulation Section
1.162-27(e)(2)(iii)(C), may not, under any circumstances, increase such
award. The maximum amount which any Recipient may be paid under a
Target Award is $2,000,000 per calendar year. The Committee may, in its
discretion, decrease this maximum, but, except as otherwise permitted
under Treasury Regulation Section 1.162-27(e)(2)(iii)(C), may not,
under any circumstances, increase this maximum. Before payments are
made under a Target Award, the Committee shall certify in writing that
the performance goals justifying the payment under Target Award have
been met.
4. ELIGIBILITY.
Awards may be granted to any Recipient. Provided, that Incentive Stock
Options may only be granted to employees of the Company or a Subsidiary
in which the Company owns, directly or indirectly, stock possessing 50%
or more of the total combined voting power of such Subsidiary (or such
other level of stock ownership as may from time to time be set forth in
Section 424(c) of the Internal Revenue Code). No member of the
Committee (other than an ex officio member) shall be eligible for
grants of Awards under the Plan by the Committee, although such member
may be eligible for grants of Director Stock Options or for Awards
granted by the Board of Directors.
5. STOCK SUBJECT TO THE PLAN.
(a) The total number of shares of Common Stock issuable under
this Plan may not exceed an aggregate of 3,700,000 shares plus the
number of unused shares under the Interim Services Inc. 1997 Long Term
Executive Compensation Plan and Outside Directors' Stock Option Plan
(the "1997 Plan"), (which equals 4,203,108 in the aggregate, comprised
of the 3,700,000 referred to previously and 503,108 unused shares from
the 1997 Plan), subject to adjustment pursuant to Section 16 pertaining
to a change in capital structure, and subject to increase as provided
in Sections 5(d) and 5(e). Shares of Common Stock to be delivered or
purchased under the Plan may be either authorized but unissued Common
Stock or treasury shares. All of such shares may be issued or issuable
under this Plan in connection with the exercise of Incentive Stock
Options, provided that not more than 4,203,108 may used to grant
Incentive Stock Options subject to adjustment pursuant to Section 16
pertaining to a change in capital structure, and subject to increase as
provided in Section 5(e).
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(b) Not more than 10% of the 4,203,108 shares reserved for
issuance under the Plan (subject to adjustment pursuant to Section 16
pertaining to a change in capital structure) may be issued in Awards
other than Stock Options.
(c) Shares of Common Stock reserved for issuance pursuant to
previously granted Awards or Director Stock Options which are not
actually issued pursuant to such Award or Director Stock Option
pursuant to this Plan (due to forfeiture, cancellation, lapse,
surrender, payment of withholding taxes or otherwise) shall be
available for future Awards or Director Stock Options.
(d) Shares of Common Stock reserved for issuance pursuant to
previously granted stock options under any other plan of the Company
for the benefit of employees or Directors which has been approved by
the stockholders of the Company, and which are not actually issued
pursuant to such stock option (due to forfeiture, cancellation, lapse,
surrender, payment of withholding taxes or otherwise) shall be
available for future Awards or Director Stock Options.
(e) In the event that (i) a Stock Option (or a stock option
granted under any other stock option plan of the Company for the
benefit of employees or Directors which has been approved by the
stockholders of the Company) is exercised by tendering shares of Common
Stock already owned, or (ii) shares of Common Stock already owned are
tendered to satisfy tax withholding requirements, the shares of Common
Stock so tendered shall be added to the total number of authorized
shares hereunder, but such shares so added in respect of a stock option
granted under another plan of the Company shall not be available for
grants of Incentive Stock Options.
(f) The maximum number of shares of Common Stock with respect
to which Stock Options and Stock Appreciation Rights may be granted to
any Recipient during any three (3) calendar years is 1,000,000 shares.
6. AWARDS.
(a) Awards under the Plan may include shares of Common Stock,
Restricted Shares, Stock Options, Stock Appreciation Rights,
Performance Shares, Performance Units and Target Awards.
The Committee may establish performance goals to be
achieved within such Performance Periods as may be selected by it using
such measures of the performance of the Company it may select as a
condition to the receipt of the Award
7. VESTING REQUIREMENTS AND OTHER CONTINGENCIES.
The Committee may determine that all or a portion of an Award or a
payment to a Recipient pursuant to an Award, in any form whatsoever,
shall be vested at such times and upon such terms as may be selected by
it, except that an award of Restricted Shares shall not vest prior to
the expiration of three (3) years from the date of grant. However, the
Committee may accelerate the vesting of any Award upon a "Change of
Control of the Company" as such term may be defined in the Award
agreement. In addition, the Committee may require a Recipient to refund
to the Company the value of an Award realized by a Recipient, if the
Recipient accepts employment with a competitor of the Company or a
subsidiary of the Company within six (6) months of such realization. In
the case of a Stock Option, a Recipient shall be deemed to realize its
value upon the exercise of the Stock Option and its value shall be an
amount equal to the excess of the market value of the shares of Common
Stock received as of the date of the exercise over the exercise price
paid for such shares. In the case of all other Awards, a Recipient
shall be deemed to realize their value upon the payment (in cash or
stock) of the Award and its value shall be the amount of any cash
received plus an amount equal to the market value of the shares of
Common Stock received in connection with the Award. The market value of
shares shall be the closing price for the Common Stock on the New York
Stock Exchange (or on the principal securities exchange or other market
on which the Common Stock is then being traded) on the date of
realization, or if such closing price is not reported on such date, the
last reported closing price.
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8. DEFERRED PAYMENT.
The Committee, or in the case of Awards to Outside Directors, the Board
of Directors, may determine that the receipt of all or a portion of an
Award or a payment to a Recipient pursuant to an Award, in any form
whatsoever, (i) shall be deferred, or (ii) at the election of such
Recipient, may be deferred. Deferrals shall be for such periods and
upon such terms as the Committee, or in the case of Awards to Outside
Directors, the Board of Directors, may determine.
9. CONTINUATION OF EMPLOYMENT.
With respect to Awards granted to employees, the Committee shall
require that (a) Awards may only be granted to Recipients, and (b) a
Recipient must be an employee of the Company or a Subsidiary (or must
have retired with the approval of the Company or a Subsidiary) at the
time an Award becomes vested. Notwithstanding the foregoing, the
Committee shall have the sole power to determine the date of and the
circumstances which shall constitute a cessation of employment
(including whether the spin-off of a Subsidiary constitutes a cessation
of employment of employees who continue in the employ of Subsidiary
subject to such spin-off) and to determine whether such cessation is
the result of retirement, death or any other reason. The Committee may
provide for the termination of any such outstanding Award if a
Recipient ceases to be an employee of the Company or a Subsidiary or a
Director and may establish such other provisions with respect to the
termination or disposition of an Award on the death or retirement of a
Recipient as it, in its sole and absolute discretion, deems advisable.
10. EMPLOYMENT STATUS.
No Award shall be construed as imposing upon the Company or a Subsidiary
the obligation to continue the employment of a Recipient. No employee or
other person shall have any claim or right to be granted an Award under
the Plan.
11. DIRECTOR STOCK OPTIONS.
As of each annual meeting of the stockholders of the Company, each
continuing Outside Director serving on the Company's Board of Directors
(including newly elected Outside Directors) shall be granted a stock
option to purchase 4,000 shares of Common Stock ( a Director Stock
Option). Director Stock Options shall vest on the first anniversary of
the date of grant, shall have a term of ten (10) years, and must be
exercised prior to the first anniversary of the Outside Director's
termination of service as a Director.
12. STOCK OPTION PRICE.
The purchase price per share of Common Stock under each Stock Option
shall not be less than the closing price for the Common Stock on the
New York Stock Exchange (or on the principal securities exchange or
other market on which the Common Stock is then being traded) on the
date the Stock Option or Incentive Stock Option is granted or if such
closing price is not reported on the date of grant, the last reported
closing price. Payment for exercise of any Stock Option granted
hereunder shall be made (a) in cash, or (b) by delivery of Common Stock
having a market value equal to the aggregate option price, (c) by a
combination of payment of cash and delivery of Common Stock in amounts
such that the amount of cash plus the market value of the Common Stock
equals the aggregate option price, or (d) by a cashless exercise upon
such terms and conditions as the Committee, in its sole and absolute
discretion, shall determine. The Committee may, in its discretion,
include within any Stock Option agreement (other than an agreement
covering a Director Stock Option), a Reload Stock Option provision.
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13. STOCK APPRECIATION RIGHT VALUE.
The base line exercise value per share of Common Stock covered by an
Award in the form of a Stock Appreciation Right shall be not less than
the market value of one share of Common Stock on the initial day of a
Performance Period for such Stock Appreciation Right.
14. REGISTRATION OF STOCK.
Each Award and each Director Stock Option shall be subject to the
requirement that if at any time the Committee (or, in the case of a
Director Stock Option, counsel for the Company) shall determine that
qualification or registration under any state or federal law of the
shares of Common Stock, Restricted Shares, Stock Options, Incentive
Stock Options, or other securities thereby covered or the consent or
approval of any governmental regulatory body is necessary or desirable
as a condition of or in connection with the granting of such Award or
Stock Option or the purchase of shares thereunder, the Award or Stock
Option may not be paid or exercised in whole or in part unless and
until such qualification, registration, consent or approval shall have
been effected or obtained free of any conditions the Committee, in its
sole discretion, deems unacceptable.
15. ASSIGNABILITY.
No Award or Director Stock Option shall be transferable or assignable by
the Recipient other than by will or the laws of descent and distribution
(subject, in the case of Director Stock Options, to such restrictions as
may be imposed pursuant to Section 11) and during the lifetime of the
Recipient shall be exercisable or payable only by him or her.
Notwithstanding the forgoing, the Committee may permit a Recipient of a
Stock Option (other than an Incentive Stock Option) or an Outside
Director Recipient, to transfer such Stock Option to any one or more of
the following: such Recipient's or Outside Director Recipient's family
member, a trust established primarily for the benefit of a family
member, or to an entity which is a corporation, partnership, or limited
liability company (or any other similar entity) the owners of which are
primarily the aforementioned persons or trusts. Any such Stock Option so
transferred shall be subject to the provisions of Section 9 or 11 as the
case may be, concerning the exercisability during such transferor's
employment or service as a Director.
16. DILUTION OR OTHER ADJUSTMENTS.
In the event of any changes in the capital structure of the Company,
including, but not limited to a change resulting from a stock dividend
or split-up, or combination or reclassification of shares, the Board of
Directors shall make such equitable adjustments with respect to Awards
and Director Stock Options or any other provisions of this Plan as it
deems necessary and appropriate, including, if necessary, any
adjustment in the maximum number of shares of Common Stock subject to
the Plan or the number of shares of Common Stock subject to an
outstanding Award or Director Stock Option. In the absence of any of
the foregoing transactions, in no event will Stock Options be re-priced
to a lower price without approval of the stockholders of the Company.
17. MERGER, CONSOLIDATION, REORGANIZATION, LIQUIDATION, ETC.
The Board of Directors may make such arrangements it deems advisable
with respect to outstanding Awards or Director Stock Options in
connection with any corporate merger, consolidation, major acquisition
of property for stock, reorganization, or liquidation, which
arrangements shall be binding upon Recipients of outstanding Awards and
all Outside Director Recipients, including, but not limited to, the
substitution of any new Awards or Director Stock Options then
outstanding, the assumption of any such Awards or Director Stock
Options and the termination of or payment for such Awards or Director
Stock Options.
18. WITHHOLDING TAXES.
The Company shall have the right to deduct from all Awards paid
hereunder in cash any federal, state, local or foreign taxes required
by law to be withheld with respect to such Awards and, with respect to
Awards paid in other than cash, to require the payment (through
withholding from the Recipient's salary or otherwise) of any such
taxes. Subject to such conditions as the Committee may establish,
Awards payable in shares of Common
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Stock may provide that the Recipients thereof may elect, in accordance
with any applicable regulations, to tender shares of Common Stock to
the Company, or have the Company withhold shares of Common Stock, to
satisfy all or part of any such withholding obligations, with the
value of such tendered or withheld shares of Common Stock based upon
their fair market value on the date the tax withholding is required to
be made.
19. COSTS AND EXPENSES.
The costs and expenses of administering the Plan shall be borne by the
Company and not charged to any Award nor to any Recipient or Outside
Director Recipient.
20. FUNDING THE PLAN.
The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation
of assets to assure the payment of any Award under the Plan.
21. AWARD CONTRACTS AND STOCK OPTION AGREEMENTS.
The Committee shall have the power to specify the form of Award
contracts to be granted from time to time pursuant to and in accordance
with the provisions of the Plan and such contracts shall be final,
conclusive and binding upon the Company, the stockholders of the
Company and the Recipients. The Board of Directors shall have the power
to specify the form of Director Stock Option agreements to be granted
from time to time pursuant to and in accordance with the provisions of
the Plan and such agreements shall be final, conclusive and binding
upon the Company, the stockholders of the Company and the Outside
Director Recipients. No Recipient or Outside Director Recipient shall
have any rights as a holder of Common Stock with respect to Awards or
Director Stock Options hereunder unless and until certificates for
shares of Common Stock or Restricted Shares are issued to the Recipient
or to the Outside Director Recipient.
22. GUIDELINES.
The Board of Directors of the Company shall have the power to provide
guidelines for administration of the Plan by the Committee and to make
any changes in such guidelines from time to time as the Board deems
necessary.
23. AMENDMENT AND DISCONTINUANCE.
The Board of Directors of the Company shall have the right at any time
during the continuance of the Plan to amend, modify, supplement,
suspend or terminate the Plan, provided that in the absence of the
approval of the holders of a majority of the shares of Common Stock of
the Company present in person or by proxy at a duly constituted meeting
of the stockholders of the Company, no such amendment, modification or
supplement shall (i) increase the aggregate number of shares which may
be issued under the Plan, unless such increase is by reason of any
change in capital structure referred to in Section 16 hereof, (ii)
change the termination date of the Plan provided in Section 24, or
(iii) delete or amend the market value restrictions contained in
Sections 12 and 13 hereof, and provided further, that no amendment,
modification or termination of the Plan shall in any manner affect any
Award or Director Stock Option of any kind theretofore granted under
the Plan without the consent of the Recipient of the Award or the
Outside Director Recipient, as the case may be, unless such amendment,
modification or termination is by reason of any change in capital
structure referred to in Section 16 hereof or unless the same is by
reason of the matters referred to in Section 17 hereof.
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24. TERMINATION.
The Committee may grant Awards and Director Stock Options at any time
prior to March 5, 2008, on which date this Plan will terminate except
as to Awards and Stock Options then outstanding hereunder, which Awards
and Director Stock Options shall remain in effect until they have
expired according to their terms or until March 5, 2018, whichever
first occurs. No Stock Option shall be exercisable later than ten (10)
years following the date it is granted and no other Award shall have a
term of more than ten (10) years.
25. APPROVAL.
The original version of the 1998 Stock Incentive Plan was adopted by
the Board of Directors on March 5, 1998 and approved by the
stockholders of the Company on May 7, 1998. The Plan was adopted by the
Board of Directors on February 18, 1999, subject to the approval of the
stockholders of the Company. The Plan shall take effect upon due
approval of the stockholders of the Company.
A-8
<PAGE>
INTERIM SERVICES INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, a stockholder of INTERIM SERVICES INC., a Delaware
corporation (the "Company"), hereby appoints Roy G. Krause and John B. Smith,
and each of them, as the proxy or proxies of the undersigned, each with full
power of substitution, and hereby authorizes each of them to represent and to
vote all of the shares of Common Stock of the Company that the undersigned is
entitled to vote at the Annual Meeting of Stockholders of the Company to be
held at 10:00 a.m. (Eastern Daylight Time) on Thursday, May 6, 1999 at the
executive offices of the Company, 2050 Spectrum Boulevard, Fort Lauderdale,
Florida 33309, and at any adjournments or postponements thereof (the "Annual
Meeting"), on the following proposals as designated below and, in their
discretion, on such other matters as may properly come before the Annual
Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF ALL OF THE DIRECTOR NOMINEES LISTED IN
PROPOSAL 1, "FOR" THE APPROVAL OF EACH OF THE PROPOSALS 2 AND 3, "AGAINST"
THE APPROVAL OF PROPOSAL 4 AND IN THE DISCRETION OF THE PROXIES APPOINTED
HEREBY ON ANY OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
YOU ARE REQUESTED TO COMPLETE, SIGN AND RETURN THIS PROXY PROMPTLY.
(Continued and to be SIGNED on the reverse side)
<PAGE>
(Continued from other side)
The Board of Directors unanimously recommends a vote FOR the election of
all of the director nominees listed in Proposal 1. FOR the approval of each
of Proposals 2 and 3 and AGAINST the approval of Proposal 4.
<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS
NOMINEES: RAYMOND MARCY J. IAN MORRISON A. MICHAEL VICTORY
/ / VOTE FOR all nominees listed above / / WITHHOLD AUTHORITY TO
(except as marked to the contrary) VOTE for all nominees listed above
INSTRUCTION: To withhold authority to vote for
any individual nominee, write that nominee's
name in the space below.
------------------------------------------------
</TABLE>
2. Vote for the proposal to ratify the appointment of Deloitte & Touche LLP
as the Company's independent auditors for the fiscal year ending
December 31, 1999.
/ / VOTE FOR / / VOTE AGAINST / / ABSTAIN
3. Vote for the proposal to approve an amendment to the Company's 1998 Stock
Incentive Plan increasing the number of shares issuable under this Plan
by an aggregate of 2,200,000 shares.
/ / VOTE FOR / / VOTE AGAINST / / ABSTAIN
4. Vote for the proposal of a stockholder to establish a position on the
Company's Board of Directors that is reserved for a "non-corporate,
non-branch management employee" of the Company.
/ / VOTE FOR / / VOTE AGAINST / / ABSTAIN
The undersigned hereby acknowledges receipt of (1) the Notice of Annual
Meeting for the 1999 Annual Meeting and related Proxy Statement, and (2) the
Company's 1998 Annual Report to Stockholders.
Dated: ______________________________, 1999
______________________________________
(Signature)
______________________________________
(Signature, if held jointly)
IMPORTANT: Please sign exactly as your name appears hereon and mail it
promptly even if you plan to attend the meeting. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
When shares are held by joint tenants, both should sign. 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.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENVELOPE
PROVIDED. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
