SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
[Amendment No. _____________]
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 Section 240.14a-
11(c) or Section 240.14a-12
PERSONNEL MANAGEMENT, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) 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: ________________________________
[ ] 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>
<PAGE>2 DEFINITIVE PROXY SOLICITATION
MATERIALS--INTENDED TO BE RELEASED
2/4/97
PERSONNEL MANAGEMENT, INC.
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
The 1997 Annual Meeting of Shareholders of Personnel
Management, Inc. will be held in Conference Room A on
the 3rd Floor of the Bank One Tower, Indianapolis,
Indiana 46204, at 10:00 a.m., Eastern Standard Time, on
Tuesday, February 25, 1997, for the following purposes:
1. To elect one Director to hold office until the
Annual Meeting of Shareholders to be held in the
year 2000 and thereafter until his successor is
elected and has qualified.
2. To transact such other business as may properly
come before the Annual Meeting.
Holders of Common Shares of record at the close of
business on January 13, 1997, are entitled to notice of
and to vote at the Annual Meeting.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN
PERSON. ALL SHAREHOLDERS, EVEN IF THEY PLAN TO ATTEND
THE MEETING, ARE REQUESTED TO COMPLETE, SIGN AND DATE
THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES.
Don R. Taylor
President and Chief
Executive Officer
January 31, 1997
Greenwood, Indiana
(ANNUAL REPORT ENCLOSED)
<PAGE>
<PAGE>3 PROXY STATEMENT
1997 ANNUAL MEETING OF SHAREHOLDERS OF
PERSONNEL MANAGEMENT, INC.
This Proxy Statement is being furnished to
Shareholders on or about January 31, 1997, in
connection with the solicitation by the Board of
Directors of Personnel Management, Inc. (the
"Company"), of proxies to be voted at the 1997 Annual
Meeting of Shareholders to be held at 10:00 a.m.,
Eastern Standard Time, on Tuesday, February 25, 1997,
in Conference Room A on the 3rd Floor of the Bank One
Tower, Indianapolis, Indiana 46204. The Company's
executive offices are located at 1499 Windhorst Way,
Suite 100, Greenwood, Indiana 46143.
At the close of business on January 13, 1997, the
record date for the Annual Meeting, there were
2,020,156 Common Shares issued and outstanding and
entitled to vote at the Annual Meeting.
If the enclosed form of proxy is executed and
returned, it may nevertheless be revoked at any time
insofar as it has not been exercised. The proxy may be
revoked by either (a) filing with the Secretary (or
other officer or agent of the Company authorized to
tabulate votes) (i) an instrument revoking the proxy or
(ii) a subsequently dated proxy, or (b) attending the
Annual Meeting and voting in person. Unless revoked,
the proxy will be voted at the Annual Meeting in
accordance with the instructions of the shareholder as
indicated on the proxy. If no instructions are given,
the shares will be voted as recommended by the
Directors.
ELECTION OF DIRECTOR
The members of the Board of Directors are divided
into three classes with the members of one class being
elected at each annual meeting of Shareholders to serve
a term of three years and thereafter until their
successors are duly elected and have qualified. The
Board of Directors was reduced from six to five members
in December 1996 following the resignation of a
Director. The terms of the current Directors expire as
follows: 1997--Mr. Taylor; 1998--Messrs. Swider and
VonDerHaar; and 1999--Messrs. Cook and DeJonge.
Don R. Taylor has been nominated to fill the one
position on the Board that is to be filled at the
Annual Meeting. It is the intention of the persons
named in the accompanying form of proxy to vote such
proxy in favor of the re-election of Mr. Taylor to the
<PAGE>4
Board of Directors for an additional three-year term.
Mr. Taylor has indicated that he will accept nomination
and election as a Director. If, however, he is unable
or unwilling to accept nomination or election, it is
the intention of the Board of Directors to nominate
such other person as Director as it may in its
discretion determine, in which event the shares subject
to the proxy will be voted for that person.
A nominee will be elected if the nominee receives
a plurality of the votes cast by the shares entitled to
vote in the election with respect to the Board seat for
which the nominee has been nominated, provided that a
quorum is present at the meeting. Proxies marked as
"vote withheld" and shares held in street name that are
designated by brokers on proxy cards as not voted will
be treated as shares present for the purpose of
determining whether a quorum is present. Shares
present but not voted for any nominee do not influence
in any manner the determination of whether a nominee
has received a plurality of the votes cast. If for
some unforeseen reason a nominee of the Board of
Directors should become unavailable for election, the
proxy may be voted for a substitute nominee, or the
number of Directors constituting the Board may be
reduced prior to the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR THE ONE NOMINEE
IDENTIFIED ABOVE (ITEM 1 ON THE PROXY).
<PAGE>
<PAGE>5
The following table presents certain information
regarding the Directors of the Company, including the
Director who has been proposed by the Board of
Directors for re-election at the Annual Meeting.
Unless otherwise indicated in a footnote, the principal
occupation of each Director has been the same for the
last five years and such Director possesses sole voting
and investment powers with respect to the shares
indicated as beneficially owned by such Director.
Unless specified otherwise, a Director is deemed to
share voting and investment powers over shares
indicated as held by a spouse, children or other family
members residing with the Director. Mr. Taylor, who
beneficially owned 29.5 percent of the Company's Common
Shares, and Mr. VonDerHaar, who beneficially owned 1.3
percent of the Company's Common Shares, are the only
persons named below who beneficially owned more than
1.0 percent of the Company's Common Shares as of the
date indicated.
<TABLE>
<CAPTION>
Shares
Beneficially
Name, Age and Director Owned on December
Present Principal Occupation Since 31, 1996
____________________________ _________ ___________________
<S> <C> <C>
Don R. Taylor* 1986 596,805
49
President and Chief Executive
Officer of the Company
Joseph C. Cook, Jr. 1994 14,338 (2)
54
President, Cambrian Associates
LLC (consulting) (1)
Max K. DeJonge 1995 6,100 (3)
56
President,
O'Neal Steel, Inc. (steel distribution)
David L. Swider 1993 6,000 (4)
43
Partner, Bose McKinney & Evans (attorneys)
Richard L. VonDerHaar 1994 25,819 (5)
46
Senior Vice President and Director of
Municipal Finance of David A. Noyes &
Company (an investment firm)
</TABLE>
_________________________________________________________
* Nominee
(1) Mr. Cook retired as Group Vice President of Eli Lilly & Co.
(pharmaceuticals) in December 1993. Prior to becoming Group
Vice President in June 1992, Mr. Cook served as Vice President,
Production Operations, of Eli Lilly & Co. Mr. Cook also owns
Life Science
<PAGE>6
Advisors, which has provided strategic consulting services
since 1994. Mr. Cook also serves as a Director of Amylin
Pharmaceuticals, Inc., North American Biologicals, Inc. and
Dura Pharmaceuticals, Inc.
(2) Includes 7,500 shares held of record by Farview Management
Company, L.P., for which shares Mr. Cook has or shares voting
and investment power, and 2,338 shares that Mr. Cook may
acquire upon the exercise of stock options.
(3) Includes 1,100 shares that Mr. DeJonge may acquire upon the
exercise of stock options.
(4) Includes 3,850 shares that Mr. Swider may acquire upon the
exercise of stock options.
(5) Includes 1,600 shares held by the trust of Mr. VonDerHaar's
spouse, 3,850 shares that Mr. VonDerHaar may acquire upon the
exercise of stock options and 7,259 shares that Mr. VonDerHaar
has the right to acquire pursuant to warrants issued by the
Company.
Director Meetings and Standing Committees
The Board of Directors of the Company held four
meetings during the fiscal year ended October 31, 1996.
Each of the Company's Directors attended at least
seventy-five percent of the meetings of the Board of
Directors and the committees on which he or she served
during fiscal 1996.
The committees of the Board include the Audit
Committee and the Compensation Committee (which also
acts as the Stock Option Committee). The Board does
not have a nominating committee. Messrs. Swider and
VonDerHaar, both of whom are non-employee Directors,
served as the entire membership of these Committees
during fiscal 1996. The Audit Committee, which
recommends to the Board the appointment of the
Company's independent accountants and meets
periodically with such accountants, met six times
during fiscal 1996. The Compensation Committee reviews
and approves compensation for the Company's executive
officers and, acting as the Stock Option Committee,
administers the Company's stock option plans. The
Compensation Committee met once during fiscal 1996.
EXECUTIVE COMPENSATION
The following table sets forth certain summary
information regarding the compensation paid by the
Company or its subsidiaries to or on behalf of the
Company's Chief Executive Officer and each other
executive officer whose salary and bonus earned during
fiscal 1996 exceeded $100,000.
<PAGE>
<PAGE>7
<TABLE>
Summary Compensation Table
<CAPTION>
Long Term Compensation
______________________
Annual Compensation Awards
___________________ _______
Securities
Name and Underlying
Principal Position Year Salary ($) Bonus ($) Options/SARs (#)
__________________ ____ __________ _________ ________________
<S> <C> <C> <C> <C>
Don R. Taylor, President 1996 277,883 0 0
and Chief Executive Officer 1995 298,075 27,639 0
1994 175,815 206,595 0
Elizabeth McFarland, 1996 117,998 10,374 10,000
Vice President-Operations 1995 124,532 13,517 33,005(1)
1994 92,030 48,247 59,100
</TABLE>
(1) All of the options granted to Ms. McFarland during fiscal 1995 were
subsequently cancelled.
Employment Agreements
Don Taylor and Elizabeth McFarland entered into
employment agreements with the Company in November
1995. The agreements provide for employment on an at-
will basis and are terminable at any time with or
without cause by either the executive or the Company.
The agreements provide for the payment of a base salary
in an amount to be determined by the Board of Directors
or a committee of the Board of Directors and for the
payment of such bonuses, other cash incentive awards,
and/or benefits that the Board of Directors or a
committee of the Board may authorize from time to time.
No base salary or other compensation amounts are
specified in the agreements.
The employment agreements provide for the payment
of a severance benefit equal to one month's base salary
as then in effect for the executive if the executive's
employment is terminated other than for misconduct, as
defined in the agreement, or on the account of death.
The agreements state that the Board, or an authorized
Board committee, may, but is under no obligation to,
award such additional severance benefits as it may
determine if termination is other than for misconduct
or on the account of death.
At the time Mr. Taylor and Ms. McFarland entered
into their employment agreements they each also entered
into change in control severance benefit agreements.
The agreements provide that if the executive's
employment is terminated concurrently with, within <PAGE>
<PAGE>8
three months immediately preceding, or within twenty-
four months immediately following, a "change of
control" (as defined in the agreements) and such
termination is not by the Company for "cause,"
"disability" or death or by the executive for "good
reason" (as these terms are defined in the agreements),
then the Company will pay the executive a severance
benefit in the amount equal to two times the highest
amount of annual base salary paid to the executive by
the Company during the Company's employment of the
executive. The amount of the severance benefit will be
reduced, however, to the extent of any indebtedness
then owed to the Company by the executive. The
agreements also provide that if the severance benefit
would constitute an "excess parachute payment" within
the meaning of the Internal Revenue Code, then the
Company will pay the executive additional amounts to
cover all federal excise tax attributable to the excess
payment and to cover all state and federal income taxes
on the additional payment made for excise tax.
A "change in control," as defined in the
agreements, is deemed to have occurred if, subject to
certain qualifications and exceptions, (a) the Company
is a party to a reorganization, consolidation or merger
and the Company is not the surviving corporation or the
Company's Common Shares are converted into cash,
securities or other property, or there is a sale,
lease, exchange or other transfer of all or
substantially all of the assets of the Company and its
consolidated subsidiaries; (b) a person or group of
persons acquires beneficial ownership of twenty percent
or more of the voting power of the Company's then-
outstanding voting securities, or (c) at the end of any
two-year period the persons who served on the Board at
the beginning of the period no longer constitute a
majority of the members of the Board.
Compensation of Directors
The 1994 Directors Stock Option Plan (the "Director
Plan"), was adopted by the Board of Directors on April
30, 1995, and approved by the Shareholders on March 28,
1996. Each non-employee Director was granted options
during fiscal 1996 under the Director Plan at the rate
of 550 shares for each meeting of the Board of
Directors attended and 275 shares for each meeting of a
committee of the Board of Directors attended. For
attendance at meetings during fiscal 1996, grants of
stock options to purchase an aggregate of 11,825 Common
Shares at a weighted average exercise price of $7.22
per share with expiration dates ranging from January
30, 2001 to October 30, 2001 were made under the
Director Plan to the non-employee directors.
<PAGE>
<PAGE>9
Option/SAR Grants in Last Fiscal Year
The following table sets forth information with
respect to stock options (the Company has never granted
SARs) granted to the named executive officers during
the fiscal year that ended October 31, 1996.
<TABLE>
<CAPTION>
Potential
Realizable
Value at
Assumed
Annual
Rates of
Number of % of Total Stock Price
Securities Options/SARs Appreciation
Underlying Granted to Exercise or For(1)
Options/SARs Employees Base Expiration Option Term
Name Granted (#) in Fiscal Year Price ($/Sh) Date 5% 10%
____ ____________ ______________ ____________ __________ ________________
<S> <C> <C> <C> <C> <C> <C>
Elizabeth McFarland 10,000(2) 8.85% $8.73 6/9/2006 $54,900 $139,000
</TABLE>
(1) The amounts in the table compute the potential future value of each
option grant, as of the date of grant, assuming that the market price of
the Company's Common Shares appreciates from the market price on the
date of grant at arbitrary rates of stock price appreciation mandated by
SEC rules. These assumptions are not intended to forecast possible
future appreciation, if any, of the Company's Common Stock.
(2) The option was granted pursuant to the Personnel Management, Inc. 1994
Stock Option Plan. The option is intended to qualify as an incentive
stock option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended. The option was granted at fair market value
on the date of grant, with the per share exercise price being based on
the average closing bid and asked prices of one Common Share reported on
NASDAQ for the five trading days immediately preceding the date of
grant. The option becomes exercisable in twenty percent increments,
with twenty percent of the shares covered by the option becoming
exercisable on the date of grant and an additional twenty percent
becoming exercisable on each of the first four anniversaries of the
grant date; provided, however, that the option becomes immediately
exercisable upon the optionee's death, permanent and total disability,
and in the event of certain changes in control of the Company or other
corporate transactions.
Aggregated Option/SAR Exercises in
Last Fiscal Year and Fiscal Year-End
Option/SAR Values
The following table sets forth information with respect to
the options that have been granted to the named executive
officers and the value of unexercised options held by the named
executive officers as of October 31, 1996.(1) There were no
exercises of options by the named executive officers during
fiscal 1996.<PAGE>
<PAGE>10
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options/SARs at Fiscal In-the-Money Options/SARs
Year-End(#) at Fiscal Year-End ($)(1)
Exercisable/ Exercisable/
Name Unexercisable
<S> <C> <C>
Elizabeth McFarland 9,762/8,000 0/0(2)
</TABLE>
(1) The value is calculated by multiplying (i) the number of shares covered
by those options that were "in the money" by (ii) the difference between
the closing price of a Common Share on October 31, 1996 ($7.00) and the
per share exercise price of the options.
(2) The per share exercise prices of the options held by Ms. McFarland
exceeded the closing price of a Common Share on October 31, 1996.
REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The following report is furnished by the
Compensation Committee of the Board of Directors (the
"Committee") with respect to the compensation of Don R.
Taylor, the Company's CEO, and of the other executive
officer named in the compensation table appearing
above, for the fiscal year ended October 31, 1996.
The Committee, which is composed of two Directors
who are not officers or employees of the Company, is
responsible for determining the salary, bonus and other
compensatory awards, plans and arrangements for the
Company's CEO and other executive officers. The
Committee also serves as the Stock Option Committee and
administers the Company's Amended and Restated 1993
Stock Option Plan and 1994 Stock Option Plan.
In general, the major goal of the Company's
compensation program with respect to all management
personnel, including the CEO and other executive
officers, is the alignment of compensation with
business results. For the reasons discussed below,
however, the Committee did not establish any specific
benchmarks of corporate performance (either qualitative
or quantitative) against which executive compensation
was determined for fiscal 1996. The Company remains
committed to paying compensation that is competitive
with other leading temporary staffing companies to
ensure that it can attract and retain the most
qualified individuals. The principal components of the
Company's executive compensation program include base
salary, merit bonuses, and stock option grants.
<PAGE>11
In preparation for determining compensation for
the 1995 fiscal year, the Committee reviewed
comparative compensation information from publicly
available sources with respect to other public
temporary staffing companies. The Company's 1995
performance did not achieve the expectations of
management or of the Compensation Committee. Thus,
Mr. Taylor and the other named executive officer
voluntarily waived their rights to bonus participation
under the 1995 executive bonus pool then in effect with
respect to the last two quarters of 1995, and such
officers received no merit bonuses for 1995. The
Company's executive officers also agreed to new
employment agreements with the Company effective at the
end of the 1995 fiscal year which provided for their
continued employment solely on an at-will basis and
eliminated their entitlement to specific base salary
and other compensation payments. Also, at the
beginning of the 1996 fiscal year, the Company
commenced a search for a new chief financial and
accounting officer due to the resignation of the prior
chief financial officer.
The Committee did not request an update of the
compensation information in connection with setting
1996 compensation for Mr. Taylor and the other named
executive officer due to 1995's disappointing earnings
performance, the need to retain flexibility in order to
structure a compensation package that would attract a
new chief financial officer, the desirability of having
input from the newly-hired chief financial officer as
to the Company's overall executive compensation
programs, and the willingness of the Company's
executive officers to forego bonus accruals and rights
voluntarily. In June 1996, Mr. Taylor voluntarily
offered to accept a reduction of his future base salary
(which reduction the Committee accepted and approved)
by approximately $50,000 on an annualized basis. The
Committee did not award any bonus to Mr. Taylor for
1996.
The Committee did not grant any stock options to
Mr. Taylor during the 1996 fiscal year, because the
Committee continued to believe that the substantial
shareholdings of Mr. Taylor were sufficient to ensure
that the interests of Mr. Taylor were closely aligned
with the interests of the Company's other shareholders.
An option covering 10,000 Common Shares was granted to
the other named executive officer in June 1996 at the
time of a reduction in such officer's base salary.
The Internal Revenue Code of 1986 limits to $1
million the deduction that a publicly held corporation
may claim with respect to the compensation paid to
certain highly paid executive officers, subject to
<PAGE>12
certain conditions. The Committee has not taken any
action to recommend changes in the Company's
compensation policies in response to this limitation on
deductibility because base salaries and other awards
made to the Company's CEO and executive officers have
historically been substantially less than the $1
million maximum amount.
SUBMITTED BY THE MEMBERS OF THE COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS:
David L. Swider
Richard L. VonDerHaar
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
Mr. Swider, a Director of the Company and a member
of the Compensation Committee, is a partner in the law
firm of Bose McKinney & Evans. Bose McKinney & Evans
has represented the Company as legal counsel in certain
matters during fiscal 1996 and the Company expects that
the firm will continue to represent the Company in
similar matters during fiscal 1997.
<PAGE>
<PAGE>13
PERFORMANCE GRAPH
The following Performance Graph compares the
cumulative total shareholders' return on the Company's
Common Shares since quotations of its stock price
commenced on the NASDAQ National Market System in
connection with the Company's initial public offering
in 1994, with the cumulative total return of the NASDAQ
Stocks U.S. Companies and a peer group consisting of
all NASDAQ Stocks U.S. Companies providing personnel
supply services (based on those companies having SIC
Codes 7360 to 7369).
<TABLE>
Comparison of Five-Year Cumulative Total Returns
[TABLE SUBSTITUTED FOR GRAPH]
<CAPTION>
10/31/91 10/30/92 10/29/93 10/31/94 10/31/95 10/31/96
<S> <C> <C> <C> <C> <C> <C>
Personnel Management, 128.2 102.9 79.0
Inc.
Nasdaq Stock Market 68.0 76.7 98.8 99.3 133.8 157.9
(US Companies)
NASDAQ Stocks 82.4 89.3 87.9 107.6 126.4 218.2
(SIC 7360-7369
US Companies)
Personnel Supply
Services
</TABLE>
Notes:
A. The lines represent monthly index levels derived from
compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the market
capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not
a trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 01/26/94.
<PAGE>
<PAGE>14
CERTAIN TRANSACTIONS
JBD Real Estate, Inc. The Company leases four of its Indiana office
locations from JBD Real Estate, Inc., an Indiana corporation ("JBD")
under leases that were executed in fiscal years prior to 1996. JBD is
owned by Don R. Taylor, who is the Company's President, a member of
its Board of Directors, and a beneficial owner of more than five
percent of the Company's Common Shares. During fiscal year 1996, Ms.
McFarland sold her interest in JBD to Mr. Taylor. Total rental
expenses paid by the Company to JBD during fiscal year 1996 were
$126,730, and such expenses are expected to be approximately $150,000
in fiscal 1997.
Loans to Don R. Taylor. The Company made loans to Mr. Taylor during
calendar year 1992 in the original aggregate principal amount of
$409,598. The loans, which were refinanced in November 1995 and are
repayable in December 1997, remain outstanding. As of October
31, 1996, Mr. Taylor was indebted to the Company under these loans in
the aggregate amount (with interest) of $508,148.
Loan to Elizabeth McFarland. In 1994, the Board of Directors
authorized a loan to Ms. McFarland under the Loan Plan for Key
Employees for the purpose of assisting Ms. McFarland in satisfying
federal and state income tax withholding requirements with respect to
the ordinary income realized by her for income tax purposes upon
exercise of her nonqualified stock options in December 1994. The
authorization for the loan was renewed in August 1995. The funds for
the loan were disbursed in April 1996, at which time the amount of
$123,352 was lent to Ms. McFarland. Subsequently, Ms. McFarland
repaid one half of this loan. The loan is secured by Ms. McFarland's
pledge of 24,670 Common Shares and evidenced by a promissory note due
April 14, 2006, in the principal amount of the loan, with interest
payable annually at a variable rate (adjusted annually) equal to the
"Prime Rate," which is defined as the base rate charged on corporate
loans by large U.S. banks as reported in the Money Rates column of The
Wall Street Journal. The loan is reflected in the Company's financial
statements as a deduction from common stock. At October 31, 1996, Ms.
McFarland was indebted to the Company under this loan in an aggregate
amount (including interest) of $65,203.
APPOINTMENT OF AUDITORS
Price Waterhouse LLP served as independent auditors for the Company
in 1996. The Company's Board of Directors has not yet considered the
appointment of auditors for 1997. Representatives of Price Waterhouse
will be present at the 1997 Annual Meeting, will have the opportunity
to make a statement if they desire to do so and will be available to
respond to appropriate questions.
<PAGE>
<PAGE>15
PRINCIPAL OWNERS OF COMMON SHARES
The following table sets forth information as of December 31, 1996,
relating to every person, including any group, known by management to
beneficially own more than five percent of the Company's Common Shares
and the beneficial ownership of the Company's Common Shares by all
Directors and executive officers as a group.
<TABLE>
<CAPTION>
Name and Address Shares Beneficially Owned
of Beneficial Owner as of December 31, 1996 Percent of Class
___________________ ________________________ ________________
<S>
Don R. Taylor <C> <C>
1499 Windhorst Way
Suite 100
Greenwood, IN 46143 596,805 (1) 29.5 %
Carolyn S. Taylor
Rural Route 5, Box 92
Rockville, IN 47872 280,790 (2) 13.9 %
Stockholders Agreement Group (3)
c/o Don R. Taylor
1499 Windhorst Way
Suite 100
Greenwood, IN 46143 918,634 (4) 45.5 %
Heartland Advisors, Inc. and
Heartland Group, Inc.
790 North Milwaukee Street
Milwaukee, WI 53202 389,600 (5) 19.3 %
All Directors and executive
officers (a group consisting
of 7 persons) 682,187 (6) 33.0 %
</TABLE>
(1) Does not include an additional 321,829 shares beneficially
owned by Elizabeth McFarland and Carolyn S. Taylor, although
Mr. Taylor has the power under the Stockholders Agreement to
direct their vote with respect to the election of Directors for
the remaining term of the Stockholders Agreement.
(2) Includes 110 shares held by one of Ms. Taylor's sons.
(3) On November 19, 1993, Don R. Taylor, Elizabeth McFarland,
Carolyn S. Taylor and a former officer of the Company (who no
longer owns any Common Shares) entered into a Stockholders
Agreement with the Company. The Stockholders Agreement grants
the Company's executive officers (by vote of a majority of the
shares held by those executive officers, which vote presently
is effectively controlled by Mr. Taylor) the power to direct
the voting of all shares held by the parties to the
Stockholders Agreement with respect to elections of Directors.
The Stockholders Agreement also restricts certain sales,
transfers or other dispositions by those parties of their
shares.
(4) Includes an aggregate of 9,762 shares that Ms. McFarland has
the right to acquire pursuant to options granted to her under
the Company's 1993 and 1994 Option Plans.
(5) Based solely upon information reported by Heartland Advisors,
Inc., in Amendment No. 1 to its statement on Schedule 13G filed
with the Securities and Exchange Commission on June 10, 1996.
(6) Includes 11,138 shares that non-employee Directors have the
right to acquire pursuant to options granted under the Director
Plan (Mr. Cook: 2,338; Mr. DeJonge: 1,100; Mr. Swider: 3,850;
Mr. VonDerHaar: 3,850) and 7,259 shares that Mr. VonDerHaar has
the right to acquire pursuant to warrants issued by the
Company. Does not include an additional 280,790 shares
beneficially owned by Ms. Taylor and 41,039 shares beneficially
owned by Ms. McFarland, although Mr. Taylor has the power under
the Stockholders Agreement to direct their vote with respect to
the election of Directors for the remaining term of the
Stockholders Agreement.
OTHER MATTERS
The Board of Directors knows of no matters, other
than the election of directors reported above, that are
to be brought before the meeting. However, if other
matters properly come before the meeting, it is the
intention of the persons named in the enclosed form of
proxy to vote such proxy in accordance with their
judgment on such matters.
EXPENSES
All expenses in connection with this solicitation of
proxies will be borne by the Company.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
A shareholder desiring to submit a proposal for
inclusion in the Company's proxy statement for the 1998
Annual Meeting of Shareholders must deliver the proposal
so that it is received by the Company no later than
October 3, 1997. Proposals should be sent to Secretary,
Personnel Management, Inc., 1499 Windhorst Way, Suite
100, Greenwood, Indiana 46143, and mailed by certified
mail, return receipt requested.
<PAGE>
<PAGE>17
PROXY
PERSONNEL MANAGEMENT, INC.
Proxy Solicited on Behalf of the Board of Directors
of the Company for the Annual Meeting of
Stockholders on February 25, 1997
The undersigned hereby constitutes and appoints David L. Swider and
Robert R. Millard, and each of them, his true and lawful agents and
proxies with full power of substitution in each, to represent the
undersigned at the Annual Meeting of Stockholders of Personnel
Management, Inc., to be held at the Bank One Center/Tower, 3rd Floor.
Conference Room A, Indianapolis, Indiana at 10:00 a.m. on Tuesday,
February 25, 1997, and at any adjournments thereof, on all matters
coming before said meeting.
Election of Director, Nominee:
Three year term Don R. Taylor
(change of address)
_____________________________________
_____________________________________
_____________________________________
_____________________________________
(If you have written in the
above
space, please mark the
corresponding
box on the reverse side of
this card.)
You are encouraged to specify your choices by marking the appropriate
boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish
to vote for Item 1. The Proxy Committee cannot vote your shares
unless you sign and return this card.
[See Reverse Side]
<PAGE>
<PAGE>18
Please mark your SHARES IN YOUR
NAME
/ X / votes as in
- ------- this example.
FOR WITHHELD
1. Election of / / / / THE BOARD OF DIRECTORS
RECOMMENDS
Director ------ ------ A VOTE "FOR" ITEM 1.
(see reverse)
In their discretion, the
proxies are authorized to
vote upon such other business
as may properly come before the
meeting.
Change
of / /
address ------
Attend / /
Meeting ------
SIGNATURE(S)__________________________________________
DATE_______________
SIGNATURE(S)__________________________________________
DATE_______________
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. Trustees, Executors, etc. should indicate
capacity in which they are signing.
