SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [x]
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to /section/ 240.14a-11(c) or /section/
240.14a-12
TECHFORCE CORPORATION
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(Name of Registrant as Specified in its Charter)
TECHFORCE CORPORATION
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(Name of Person(s) Filing Proxy Statement )
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<PAGE>
TECHFORCE CORPORATION
5741 RIO VISTA DRIVE
CLEARWATER, FLORIDA 33760
(727) 533-3600
April 19, 1999
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of Shareholders
of TechForce Corporation (the "Company"), which will be held at 11:00 a.m.
Eastern Time on Wednesday, May 19, 1999, at the Company's headquarters, 5741 Rio
Vista Drive, Clearwater, Florida 33760 (the "Annual Meeting").
The principal business of the meeting will be: (i) to elect directors for
the ensuing year; and (ii) to transact such other business as may properly come
before the meeting. During the meeting, we will also review the results of the
past fiscal year and report on significant aspects of our operations during the
first quarter of fiscal 1999.
Whether or not you plan to attend the Annual Meeting, please complete,
sign, date and return the enclosed proxy card in the postage prepaid envelope
provided so that your shares will be voted at the meeting. If you decide to
attend the meeting, you may, of course, revoke your proxy and personally cast
your votes.
Sincerely yours,
John A. Koehler
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
<PAGE>
TECHFORCE CORPORATION
5741 RIO VISTA DRIVE
CLEARWATER, FLORIDA 33760
(727) 533-3600
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 1999 Annual Meeting of Shareholders of TechForce Corporation (the
"Company") will be held at 11:00 a.m. Eastern Time on Wednesday, May 19, 1999,
at the Company's headquarters, 5741 Rio Vista Drive, Clearwater, Florida 33760.
The meeting is called for the following purposes:
(i) To elect directors for the ensuing year;
(ii) To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on April 5, 1999, as
the record date for the purpose of determining the shareholders who are entitled
to notice of and to vote at the meeting and any adjournment or postponement
thereof.
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED
TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD SO THAT
YOUR SHARES WILL BE REPRESENTED.
By order of the Board of Directors,
John A. Koehler
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Clearwater, Florida
April 19, 1999
<PAGE>
TECHFORCE CORPORATION
5741 RIO VISTA DRIVE
CLEARWATER, FLORIDA 33760
(727) 533-3600
PROXY STATEMENT
This Proxy Statement is furnished by and on behalf of the Board of
Directors of TechForce Corporation (the "Company" or "TechForce") in connection
with the solicitation of proxies for use at the 1999 Annual Meeting of
Shareholders of the Company to be held at 11:00 a.m. Eastern Time on Wednesday,
May 19, 1999, at the Corporate Headquarters of TechForce, 5741 Rio Vista Drive,
Clearwater, Florida 33760, and at any adjournments or postponements thereof (the
"Annual Meeting"). This Proxy Statement and the enclosed proxy card will be
mailed on or about April 19, 1999, to the Company's shareholders of record on
the Record Date, as defined below.
THE BOARD OF DIRECTORS URGES YOU TO MARK, SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE PREPAID
ENVELOPE PROVIDED.
SHARES ENTITLED TO VOTE
GENERAL
Proxies will be voted as specified by the shareholder or shareholders
granting the proxy. Unless contrary instructions are specified, if the enclosed
proxy card is executed and returned (and not revoked) prior to the Annual
Meeting, the shares of common stock, $.01 par value per share (the "Common
Stock"), of the Company represented thereby will be voted (i) FOR the election
as directors of the nominees listed in this Proxy Statement. The submission of a
signed proxy will not affect a shareholder's right to attend and to vote in
person at the Annual Meeting. A shareholder who executes a proxy may revoke it
at any time before it is voted by filing with the Secretary of the Company
either a written revocation or an executed proxy bearing a later date or by
attending and voting in person at the Annual Meeting.
Only holders of record of Common Stock as of the close of business on April
5, 1999 (the "Record Date") will be entitled to vote at the Annual Meeting. As
of the close of business on the Record Date, there were 8,266,568 shares of
Common Stock (the "Shares") outstanding. Holders of Shares authorized to vote
are entitled to cast one vote per Share on all matters to be voted on at the
Annual Meeting.
<PAGE>
QUORUM REQUIRED
According to the Company's Bylaws, the holders of a majority of the Shares
entitled to vote must be present or represented by proxy to constitute a quorum.
Shares as to which authority to vote is withheld and abstentions are counted in
determining whether a quorum exists.
VOTE REQUIRED
Under Georgia law, directors are elected by the affirmative vote, in person
or by proxy, of a plurality of the shares entitled to vote in the election at a
meeting at which a quorum is present. Only votes actually cast will be counted
for the purpose of determining whether a particular nominee received more votes
than the persons, if any, nominated for the same seat on the Board of Directors.
Ratification of any other matter that may properly come before the Annual
Meeting, requires, at a meeting at which a quorum is present, the affirmative
vote of a majority of the Shares, represented in person or by proxy, voted on
such matter. Abstentions are not counted in determining the number of votes cast
in connection with the ratification of auditors. Broker non-votes will not be
counted as votes for or against approval of such matters.
With respect to any other matters that may come before the Annual Meeting,
if proxies are executed and returned, such proxies will be voted in a manner
deemed by the proxy representatives named therein to be in the best interests of
the Company and its shareholders.
PRINCIPAL SHAREHOLDERS
Information regarding the ownership of the Company's Common Stock is
presented herein under "Beneficial Ownership of Common Stock."
PROPOSAL I - ELECTION OF DIRECTORS
NOMINEES
The Company's Bylaws provide that the Company shall have at least one and
not more than seven directors, the exact number to be fixed by resolution of the
Board of Directors. The Board of Directors has fixed the number of directors at
five. At the Annual Meeting, all five directors will be elected for a term
expiring upon the 2000 annual meeting of shareholders and the election and
qualification of their successors. The Board of Directors has nominated William
E. Bassett, Paul J. Ferri, John A. Koehler, Bertil D. Nordin and Richard D.
Tadler for election to the Board of Directors at the Annual Meeting, each to
serve until the 2000 annual meeting of shareholders and until their successors
are duly elected and qualified.
All Shares represented by properly executed proxies received in response to
this solicitation will be voted for the election of directors as specified
therein by the shareholders. Unless otherwise specified in the proxy, it is the
intention of the persons named on the enclosed proxy card to vote FOR the
election of the nominees listed in this Proxy Statement to the Board of
Directors. Each nominee has consented to serve as a director of the Company if
elected. If at the time of the Annual
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Meeting a nominee is unable or declines toserve as a director, the discretionary
authority provided in the enclosed proxy card may be exercised to vote for a
substitute candidate designated by the Board of Directors. The Board of
Directors has no reason to believe that any nominee will be unable or will
decline to serve as a director.
Shareholders may withhold their votes from the entire slate of nominees by
so indicating in the space provided on the enclosed proxy card. Shareholders may
withhold their votes from any particular nominee by writing that nominee's name
in the space provided for that purpose on the enclosed proxy card.
Set forth below is certain biographical information furnished to the
Company by each director nominee. All of the nominees currently serve as
directors of the Company.
INFORMATION REGARDING NOMINEES FOR DIRECTORS
WILLIAM E. BASSETT
Age: 57
WILLIAM BASSETT was appointed a director of the Company in February 1997 to
fill a vacancy on the Board which resulted from the resignation of Anthony M.
Ramunno, Jr. From October 1977 to January 1997, Mr. Bassett held various
positions with BancTec, Inc., a worldwide systems integration and services
company specializing in automated applications solutions for the financial
services, insurance, healthcare, government, utility, telecommunications,
grocery and retail industries. In 1986, Mr. Bassett was appointed Senior Vice
President, and in 1989 was appointed President, of BancTec Service Corp., the
service division of BancTec, Inc. From 1992 to 1994, he also served as the
Executive Vice President of BancTec, Inc.'s North American Operations. Mr.
Bassett then held the position of Executive Vice President of the Office of the
Chairman of BancTec, Inc. from 1994 to 1997.
PAUL J. FERRI
Age: 60
PAUL FERRI has served as a director of TechForce since March 1994. He has
served as Managing General Partner of Matrix Partners, a venture capital
partnership, since 1982. Mr. Ferri also sits on the boards of directors of
Applix, Inc., a software development company, BancTec, Inc., and VideoServer,
Inc., a provider of video conferencing systems.
JOHN A. KOEHLER
Age: 52
JOHN KOEHLER has served as President and Chief Executive Officer and as a
director of the Company since March 1994 when TechForce converted from a
partnership to a corporation. From August 1993 to March 1994, Mr. Koehler was a
partner of the Company when it was still a partnership. Mr. Koehler served as
Vice President and General Manager of Syncordia Corporation, a wholly-owned
subsidiary of British Telecommunications PLC from February 1991 to August 1993
and as Executive Vice President of AT&T Paradyne, a data communications company,
from
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September 1982 to December 1990.
BERTIL D. NORDIN
Age: 64
BERTIL NORDIN has served as a director of TechForce since October 1994, and
served as a consultant to the Company from July 1994 to December 1997. From 1981
to 1993, Mr. Nordin served as Chief Executive Officer of Digital Communications
Associates, a data communications equipment and software manufacturer, and as
Chairman of its board of directors from 1984 to 1994.
RICHARD D. TADLER
Age: 42
RICHARD TADLER has served as a director of the Company since March 1994. He
has held the position of Managing Director of TA Associates, Inc., a
Boston-based private venture capital firm since January 1994. He was a General
Partner of TA Associates from August 1987 to December 1993.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE ELECTION AS DIRECTORS OF THE
NOMINEES NAMED ABOVE.
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Company's Board of Directors held twelve regular and special meetings
in 1998. During 1998, the Board had an Audit Committee and a Compensation
Committee. No director attended less than 75% of the aggregate number of
meetings of the Board and the committees of the Board on which he served that
were held during his term as a director of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS. The Compensation Committee of the
Board of Directors consisted of Messrs. Nordin and Ferri, with Mr. Nordin
serving as Chairman. Mr. Nordin and Mr. Ferri are both non-employee directors of
the Company. The Compensation Committee establishes remuneration levels for
officers of the Company, reviews management organization and development,
reviews significant employee benefit programs and establishes and administers
executive compensation programs. The Compensation Committee held one meeting in
1998.
The Audit Committee of the Board of Directors consisted of Messrs. Tadler
and Nordin. The Audit Committee recommends to the Board of Directors the
independent public accountants to be selected to audit the Company's annual
financial statements and approves any special assignments given to such
accountants. The Audit Committee also reviews the planned scope of the annual
audit, any changes in accounting principles and the effectiveness and efficiency
of the Company's internal accounting staff. The Audit Committee held one meeting
in 1998.
DIRECTOR COMPENSATION. Outside directors are paid a retainer of $7,500 per
year plus $1,000 per meeting. The Company also has a 1995 Outside Directors
Stock Option Plan (the "Outside Directors Plan") pursuant to which outside
directors are automatically granted options to
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purchase 5,000 shares of Common Stock when they join the Board and 1,000 shares
of Common Stock annually thereafter. In addition, Messrs. Ferri, Nordin and
Tadler each received options to purchase 6,667 shares of Common Stock in
connection with their service as directors prior to the Company's adoption of
the Outside Directors Plan. Messrs. Nordin and Bassett were also parties to
consulting agreements with the Company prior to 1998. See "Compensation
Committee Interlocks and Insider Participation."
EXECUTIVE OFFICERS
The executive officers of the Company serve at the discretion of the Board
of Directors and presently include Mr. Koehler, Jerrel W. Kee and James
Macchiarola. Set forth below is certain biographical information furnished to
the Company by Messrs. Kee and Macchiarola. See "Information Regarding Nominees
For Directors" for information regarding Mr. Koehler.
JERREL W. KEE
Age: 44
JERREL KEE joined the Company in July 1994 as Vice President - Finance and
Chief Financial Officer and was made Senior Vice President - Finance in January
1996. He has served as Secretary and Treasurer of the Company since January
1995. From November 1990 to July 1994, Mr. Kee served in various capacities
including Director of Finance, Vice President of Finance and Chief Financial
Officer of Syncordia. Mr. Kee also served as Director of Finance at Telecom
U.S.A. from January 1990 to November 1990.
JAMES J. MACCHIAROLA
Age 50
JAMES MACCHIAROLA joined the Company in October 1994 as Director of
Administration and has served as Vice President of Operations since January
1996. From 1984 to 1989, Mr. Macchiarola served as Vice President of
Administration for AT&T Paradyne. From 1990 to 1994, Mr. Macchiarola served in
various consulting capacities and in 1994 served as Director of Administration
for Racal - Datacom, Inc.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors, executive officers and persons who own
beneficially more than 10% of the Company's Common Stock to file reports of
ownership and changes in ownership of such stock with the Securities and
Exchange Commission (the "SEC") and the National Association of Securities
Dealers, Inc. Directors, executive officers and greater than 10% shareholders
are required by SEC regulations to furnish the Company with copies of all such
forms they file. To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written representations that
no other reports were required, its directors, executive officers and greater
than 10% shareholders complied during 1998 with all applicable Section 16(a)
filing requirements.
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BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information concerning (i) those persons
known by management of the Company to own beneficially more than 5% of the
Company's outstanding Common Stock, (ii) the directors of the Company, (iii) the
executive officers named in the Summary Compensation Table included elsewhere
herein, and (iv) all current directors and executive officers of the Company as
a group. Except as otherwise indicated in the footnotes below, such information
is provided as of April 5, 1999. According to rules adopted by the SEC, a person
is the "beneficial owner" of securities if he or she has or shares the power to
vote them or to direct their investment or has the right to acquire beneficial
ownership of such securities within 60 days through the exercise of an option,
warrant or right, the conversion of a security or otherwise. Except as otherwise
noted, the indicated owners have sole voting and investment power with respect
to shares beneficially owned. An asterisk in the percent of class column
indicates beneficial ownership of less than 1% of the outstanding Common Stock.
<TABLE>
<CAPTION>
Amount and Nature of
Name of Beneficial Owner Beneficial Ownership Percent of Class
- ------------------------ -------------------- ----------------
<S> <C> <C>
EXECUTIVE OFFICERS AND DIRECTORS
John A. Koehler(1) 794,657 9.6%
Paul J. Ferri(2) 158,894 1.9%
Jerrel W. Kee(3) 123,790 1.5%
James J. Macchiarola(4) 71,562 *
Bertil D. Nordin(5) 25,796 *
Richard D. Tadler(6) 2,739 *
William E. Bassett(7) 9,062 *
All current directors and executive officers as a group
(7 persons)(8) 1,186,500 14.4%
OTHER SHAREHOLDERS
TA Associates Group(9) 1,820,745(10) 22.0%
Alan J. Kaufman(11) 439,400 5.3%
</TABLE>
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(1) The business address of Mr. Koehler is that of the Company. Mr. Koehler's
figures include 52,187 shares of Common Stock subject to options
exercisable by or within 60 days of April 5, 1999. Mr. Koehler's figures
also include 97,000 shares of Common Stock which he gifted to his spouse
on March 18, 1997. Pursuant to the Exchange Act rules, Mr. Koehler may be
deemed to share voting and investment power with respect to these 97,000
shares. However, Mr. Koehler disclaims beneficial ownership of such
shares.
(2) Mr. Ferri's figures include 6,229 shares of Common Stock subject to
options exercisable by or within 60 days of April 5,1999.
(3) Mr. Kee's figures represent shares of Common Stock subject to options
exercisable by or within 60 days of April 5, 1999.
(4) Mr. Macchiarola's figures represent shares of Common Stock subject to
options exercisable by or within 60 days of April 5, 1999.
(5) Mr. Nordin's figures include 6,229 shares of Common Stock subject to
options exercisable by or within 60 days of April 5, 1999.
(6) Mr. Tadler holds a pecuniary interest in such shares of Common Stock
through TA Venture Investors Limited Partnership.
(7) Mr. Bassett's figures include 3,062 shares of Common Stock subject to
options exercisable by or within 60 days of April 5, 1999.
(8) The figures for all current directors and executive officers as a group
include 263,059 of Common Stock subject to options exercisable by or
within 60 days of April 5, 1999.
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(9) Advent VII L.P., Advent Atlantic and Pacific II L.P., Advent New York
L.P., Advent Industrial II L.P. and TA Venture Investors Limited
Partnership are part of an affiliated group of investment partnerships
collectively referred to as the TA Associates Group. Mr. Tadler, a
director of the Company, is a Managing Director of TA Associates, Inc.
which is the sole General Partner of TA Associates VII L.P., TA Associates
VI L.P. and TA Associates AAP II Partners L.P. TA Associates VII L.P. is
the sole General Partner of Advent VII L.P. TA Associates VI L.P. is the
sole General Partner of Advent New York L.P. and Advent Industrial II L.P.
TA Associates AAP II Partners L.P. is the sole General Partner of Advent
Atlantic and Pacific II L.P. Mr. Tadler is a General Partner of TA Venture
Investors Limited Partnership. TA Associates, Inc. exercises sole voting
and investment power with respect to all of the shares held of record by
the named investment partnerships with the exception of those shares held
by TA Venture Investors Limited Partnership. Principals and employees of
TA Associates, Inc. (including Mr. Tadler) comprise the General Partners
of TA Venture Investors Limited Partnership. In such capacity, Mr. Tadler
may be deemed to share voting and investment power with respect to 19,394
shares held of record by TA Venture Investors Limited Partnership. Mr.
Tadler disclaims beneficial ownership of such shares, except to the extent
2,739 shares as to which he holds a pecuniary interest.
(10) Includes 1,301,241 shares of Common Stock (15.7% of class) held by Advent
VII L.P., 266,910 shares of Common Stock (3.2% of class) held by Advent
Atlantic and Pacific II L.P., 130,123 shares of Common Stock (1.6% of
class) held by Advent New York L.P., 96,848 shares of Common Stock (1.2%
of class) held by Advent Industrial II L.P. and 19,394 (less than one
percent of class) held by TA Venture Investors Limited Partnership. These
numbers were derived from American Stock Transfer & Trust Company, the
Company's transfer agent. The business address of Advent VII L.P. is
Advent VII L.P., c/o TA Associates, 125 High Street, Suite 2500, Boston,
Massachusetts 02110. The total figure for TA Associates Group also
includes 6,229 shares of Common Stock held by TA Venture Investors Limited
Partnership subject to options exercisable by or within 60 days of April
5, 1999.
(11) Includes 383,900 shares of Common Stock held by Alan J. Kaufman, 7,000
shares of Common Stock held by Gloria Kaufman, 10,000 shares of Common
Stock held by Kenneth Kaufman, 15,000 shares of Common Stock held by Laura
Kaufman, 18,500 shares of Common Stock held by Thomas R. Kaufman and 5,000
shares of Common Stock held by Victoria S. Kaufman. The business address
of Alan J. Kaufman is 5500 Hohman Avenue, Suite 2A, Hammond, Indiana,
46320. The numbers reported were derived from Schedule 13D, executed by
Alan J. Kaufman, Gloria Kaufman, Laura Kaufman, Thomas R. Kaufman and
Victoria S. Kaufman on August 12, 1997 and filed with the Securities and
Exchange Commission on August 13, 1997, and represents the best
information available at this time.
EXECUTIVE COMPENSATION
PURSUANT TO SEC RULES FOR PROXY STATEMENT DISCLOSURE OF EXECUTIVE
COMPENSATION, THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF THE
COMPANY HAS PREPARED THE FOLLOWING REPORT ON EXECUTIVE COMPENSATION. THE
COMMITTEE CONSIDERS THIS REPORT TO CLEARLY DESCRIBE THE CURRENT EXECUTIVE
COMPENSATION PROGRAM OF THE COMPANY, INCLUDING THE UNDERLYING PHILOSOPHY OF THE
PROGRAM AND THE SPECIFIC PERFORMANCE CRITERIA ON WHICH EXECUTIVE COMPENSATION IS
BASED. THIS REPORT ALSO DISCUSSES IN DETAIL THE COMPENSATION PAID TO THE
COMPANY'S CHIEF EXECUTIVE OFFICER, MR. JOHN A. KOEHLER, DURING 1998.
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report by the Compensation Committee of the Board of Directors (the
"Committee") discusses the Committee's compensation objectives and policies
applicable to the Company's executive officers. The report reviews the
Committee's policy generally with respect to the compensation of all executive
officers as a group for fiscal 1998 and specifically reviews the compensation
established for the Company's Chief Executive Officer as reported in the Summary
Compensation Table. The Committee is composed entirely of non-employee directors
of the Company.
COMPENSATION PHILOSOPHY
The Company's executive compensation program has three objectives: (1) to
align the interests of the executive officers with the interests of the
Company's shareholders by basing a significant portion of an executive's
compensation on the Company's performance; (2) to attract and retain highly
talented and productive executives; and (3) to provide incentives for superior
performance by the Company's executives. To achieve these objectives, the
Committee has crafted a program that consists of base salary, short-term
incentive compensation in the form of a cash bonus, and long-term incentive
compensation in the form of stock options. The Company's primary goal is to
provide for a modest base salary component while also providing for higher
short-term and long-term incentive rewards and bonuses based on the Company's
performance. These compensation elements are in addition to the general benefit
programs which are offered to all of the Company's employees.
Each year, the Committee reviews the Company's executive compensation
program. In its review, the Committee studies the compensation packages for
executives in comparable roles performing at comparable levels at other
companies in the same or related industries, competitiveness of the Company's
executive compensation program, and the Company's financial performance for the
previous fiscal year. The Committee also gauges the success of the compensation
program in achieving its objectives in the previous year and considers the
Company's overall performance objectives.
Each element of the Company's executive compensation program is discussed
below.
BASE SALARIES
The Committee annually reviews the base salaries of the Company's executive
officers. The base salaries for the Company's executive officers for fiscal 1998
were established by the Committee at the beginning of that fiscal year. In
addition to considering the factors listed in the foregoing section that support
the Company's executive compensation program generally, the Committee reviews
the responsibilities of the specific executive position and the experience and
knowledge of the individual in that position. The Committee also measures
individual performance based upon a number of factors, including a measurement
of the Company's historic and recent financial performance, the individual's
contribution to that performance, the individual's performance on non-financial
goals and other contributions of the individual to the Company's success, and
gives each of these factors relatively equal weight without confining its
analysis to a rigorous formula. As is typical of most corporations, the actual
payment of base
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salary is not strictly conditioned upon the achievement of any predetermined
performance targets.
INCENTIVE COMPENSATION
Cash bonuses established for executive officers are intended to motivate an
individual to strive to achieve the Company's financial and operational
performance goals or to otherwise incent an individual to aim for a high level
of achievement on behalf of the Company in the coming year. The Committee does
not have a formula for determining bonus payments, but establishes general
target bonus levels for executive officers at the beginning of the fiscal year
based in relatively equal measures upon the Committee's subjective assessment of
the Company's projected revenues and other operational and individual
performance factors and may adjust these targets during the year.
LONG-TERM INCENTIVE COMPENSATION
The Company's long-term incentive compensation plan for its executive
officers is based upon the Company's 1995 Stock Incentive Plan. The Company
believes that placing a substantial portion of its executives' total
compensation in the form of stock options achieves three objectives: (1) it
aligns the interests of the Company's executives directly with those of the
Company's shareholders; (2) it gives executives a significant long-term interest
in the Company's success; and (3) it helps the Company retain key executives. In
establishing this long-term compensation plan in the form of stock option
grants, in fiscal 1998 the Board primarily considered the executives' past
performance and the degree to which an incentive for long-term performance would
benefit the Company. All options were granted at fair market value in fiscal
1998, and it is the Committee's policy to continue to do so unless particular
circumstances warrant a below-market grant.
BENEFITS
The Company believes that it must offer a competitive benefits program to
attract and retain all of its full-time employees. Accordingly, the Company
provides the same medical and other benefits to its executive officers that are
generally available to its other employees.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Chief Executive Officer's compensation is based on the same elements
and measures of performance as is the compensation for the Company's other
executive officers. Mr. Koehler was paid a base salary of $197,000 for fiscal
1998 based on the same factors underlying the base salaries of the other
executive officers. This represented an increase of $7,000 or 3.6% in Mr.
Koehler's base salary from his previous year's base salary of $190,000 as a cost
of living adjustment. In granting Mr. Koehler's incentive bonus, the Committee
recognized that while the Company did not meet its original revenue or profit
goals for 1998, it did significantly exceed its revised third and fourth quarter
revenue and pre-tax profit goals. The Company also made significant progress in
meeting other goals including continued growth of Custom PC Services to a
multi-customer operation that reduces the single customer risk of that business
unit and leverages its infrastructure, development and expansion of new service
offerings such as TechCare(sm) Network Management and the introduction of
consulting services on a paid basis into the marketplace, and a successful
mid-year reorganization of the sales department, resulting in lower costs and
improved
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profitability during the last six months of the year. Because of his successful
management of these activities and the leadership he exhibited during the
Company's first and second quarter downturn, the Committee awarded Mr. Koehler
an executive bonus of $196,000 for 1998. The Company also granted Mr. Koehler
additional stock options under the Company's 1995 Stock Incentive Plan to
purchase up to 25,000 shares of the Company's Common Stock at a price per share
exercise price of $7.75. The options vest 25% after the end of the first year
and then ratably per quarter over the second through fourth years.
SECTION 162(m) OF THE INTERNAL REVENUE CODE
It is the responsibility of the Committee to address the issues raised by
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
The revisions to this Code section made certain non-performance based
compensation in excess of $1,000,000 to executives of public companies
non-deductible to such companies beginning in 1994. The Committee has reviewed
these issues and has determined that it is not necessary for the Company to take
any action at this time with regard to these issues.
Submitted by: THE COMPENSATION COMMITTEE
BERTIL D. NORDIN
PAUL J. FERRI
THE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION SHALL NOT BE
DEEMED TO BE INCORPORATED BY REFERENCE AS A RESULT OF ANY GENERAL INCORPORATION
BY REFERENCE OF THIS PROXY STATEMENT OR ANY PART HEREOF INTO THE COMPANY'S 1998
ANNUAL REPORT TO SHAREHOLDERS OR ITS ANNUAL REPORT ON FORM 10-K.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board of Directors currently
consists of Messrs. Ferri andNordin.
Mr. Nordin was a party to a consulting agreement with the Company. Mr.
Nordin's agreement provided for a retainer of $3,000 per month from September 1,
1994 to September 1, 1995 and was amended to provide for a retainer of $1,500
per month for a one-year term beginning on September 1, 1995. The agreement was
subject to annual renewal and was renewed on September 1, 1996 for another
one-year term, and extended through December 31, 1997. Effective January 1,
1998, the agreement was amended to a daily fee arrangement of $1,000 per day,
based upon need and actual usage.
Mr. Bassett was a party to a consulting agreement with the Company. Mr.
Bassett's agreement provided a retainer of $1,500 per month for a one-year term
beginning on May 1, 1997. The agreement was amended on January 1, 1998 to a
daily fee arrangement of $1,000 per day, based upon need and actual usage.
During 1998, the Compensation Committee did not include any member of the
Board of Directors who at that time served as an officer or employee of the
Company. During 1998, no executive officer of the Company served as a member of
the board of directors of any entity which had executive officers who served on
the Company's Board of Directors during that year.
-10-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Compensation Committee Interlocks and Insider Participation" for
disclosure regarding "Certain Relationships and Related Transactions."
EXECUTIVE OFFICER COMPENSATION
TABLE I - SUMMARY COMPENSATION TABLE
The following table presents certain information required by the SEC
relating to various forms of compensation awarded to, earned by or paid to the
Company's Chief Executive Officer and the two most highly compensated executive
officers other than the Chief Executive Officer who earned more than $100,000
during 1998. Such executive officers are hereinafter referred to as the
Company's "Named Executive Officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
------------
Annual Compensation Securities
------------------------------------- Underlying
Other Annual Options All Other
Name and Principal Position(s) Year Salary Bonus Compensation (# of Shares) Compensation
- ----------------------------- ---- ------ ----- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
John A. Koehler................ 1998 $197,000(1) $196,000 --- 25,000 $3,648(2)
Chief Executive Officer and 1997 $189,893(3) $75,000 --- 50,000 $50,190(4)
President 1996 $175,000(5) $89,583(6) --- 25,000 $56,979(7)
Jerrel W. Kee.................. 1998 $164,919(8) $102,000 --- 10,000 $2,098(9)
Senior Vice President 1997 $159,917(10) $50,000 --- 40,000 $1,341(11)
and Chief Financial Officer 1996 $150,000(12) $86,193(13) --- 10,000 $1,275(14)
James J. Macchiarola........... 1998 $154,925(15) $96,000 --- 25,000 $1,726(16)
Corporate Vice President and 1997 $149,779(17) $42,000 --- 60,000 $1,751(18)
General Manager-Operations 1996 $117,846(19) $30,000 --- 10,000 $1,163(20)
</TABLE>
- ---------
(1) Includes $10,000 deferred at the election of the Named Executive Officer
pursuant to the Company's 401(k) Retirement Plan (the "401(k)").
(2) Includes matching contributions to the Company's 401(k) ("Matching
Contributions") of $2,295 and life insurance premiums of $1,354 paid by
the Company on behalf of the Named Executive Officer.
(3) Includes $8,546 deferred at the election of the Named Executive Officer
pursuant to the Company's 401(k) Retirement Plan (the "401(k)").
(4) Includes matching contributions to the Company's 401(k) ("Matching
Contributions") of $1,212, life insurance premiums of $1,224 paid by the
Company on behalf of the Named Executive Officer and $47,754 for
reimbursement of moving expenses and related taxes in connection with the
Named Executive Officer's relocation from Atlanta, Georgia to Clearwater,
Florida.
(5) Includes $7,000 deferred at the election of the Named Executive Officer
pursuant to the Company's 401(k).
(6) Includes a $64,583 relocation allowance paid in connection with the
relocation of the Company's corporate headquarters from Atlanta, Georgia
to Clearwater, Florida.
(7) Includes Matching Contributions of $1,750, life insurance premiums of $741
paid by the Company on behalf of the Named Executive Officer and $54,488
for reimbursement of moving expenses in connection with the Named
Executive Officer's relocation from Atlanta, Georgia to Clearwater,
Florida.
(8) Includes $10,000 deferred at the election of the Named Executive Officer
pursuant to the Company's 401(k).
(9) Includes Matching Contributions of $1,710 and life insurance premiums of
$388 paid by the Company on behalf of the Named Executive Officer.
(10) Includes $9,500 deferred at the election of the Named Executive Officer
pursuant to the Company's 401(k).
(11) Includes Matching Contributions of $984 and life insurance premiums of
$357 paid by the Company on behalf of the Named Executive Officer.
(12) Includes $9,500 deferred at the election of the Named Executive Officer
pursuant to the Company's 401(k).
(13) Includes a $61,193 relocation allowance paid in connection with the
relocation of the Company's corporate headquarters from Atlanta, Georgia
to Clearwater, Florida.
(14) Includes Matching Contributions of $918 and life insurance premiums of
$357 paid by the Company on behalf of the Named Executive Officer.
(15) Includes $10,000 deferred at the election of the Named Executive Officer
pursuant to the Company's 401(k).
(16) Includes Matching Contributions of $1442 and life insurance premiums of
$283 paid by the company on behalf of the Named Executive Officer.
(17) Includes $9,500 deferred at the election of the Named Executive Officer
pursuant to the Company's 401(k).
(18) Includes Matching Contributions of $1,298 and life insurance premiums of
$453 paid by the company on behalf of the Named Executive Officer.
(19) Includes $9,500 deferred at the election of the Named Executive Officer
pursuant to the Company's 401(k).
(20) Includes Matching Contributions of $710 and life insurance premiums of
$453 paid by the company on behalf of the Named Executive Officer.
-11-
<PAGE>
TABLE II - OPTION GRANTS IN FISCAL 1998
This table presents information regarding options granted to the Company's
Named Executive Officers during fiscal 1998 to purchase shares of the Company's
Common Stock. The Company has no outstanding stock appreciation rights ("SARs")
and granted no SARs during fiscal 1998. In accordance with SEC rules, the table
shows the hypothetical "gains" or "option spreads" that would exist for the
respective options based on assumed rates of annual compound stock price of 5%
and 10% from the date the options were granted over the full option term.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------
No. of % of Total Potential Realizable
Securities Options Exercise Value at Assumed
Underlying Granted to or Base Annual Rates of Stock
Options Employees Price Expiration Price Appreciation
Name Granted During Year ($/Share) Date for the Option Term
- ---- ------- ----------- --------- ---- --------------------
5% 10%
-------- --------
<S> <C> <C> <C> <C> <C> <C>
John A. Koehler............. 25,000 5.2% $7.75 3/2/2008 $121,848 $308,788
Jerrel W. Kee............... 10,000 2.1% $ 7.75 3/2/2008 $48,739 $123,515
James J. Macchiarola........ 25,000 5.2% $ 7.75 3/2/2008 $121,848 $308,788
</TABLE>
TABLE III-OPTION EXERCISES IN FISCAL 1998 AND FISCAL 1998 YEAR-END OPTION VALUES
None of the Company's Named Executive Officers exercised any stock options
during fiscal 1998. The following table shows the number of shares of Common
Stock subject to exercisable and unexercisable stock options held by each of the
Named Executive Officers as of December 31, 1998. The table also reflects the
values of such options based on the positive spread between the exercise price
of such options and $6.19 which was the closing sales price of a share of Common
Stock reported by the Nasdaq National Market on December 31, 1998 (the last
trading day prior to the end of the Company's fiscal year).
<TABLE>
<CAPTION>
Number of
Securities
Underlying
Unexercised Value of Unexercised
Shares Options at In-the-Money
Acquired Year-End (#) Options at Year-End(1)
on Exercise Value ----------------------------- ---------------------------
Name (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John A. Koehler 0 0 31,250 68,750 $ 0(2) 0(2)
Jerrel W. Kee 0 0 101,167 58,833 $465,517 $103,483
James J. Macchiarola 0 0 47,000 78,000 $ 29,805 $98,395
- ---------------------------
</TABLE>
(1) The value of unexercised in-the-money options at December 31, 1998 is
calculated as follows: [(Per Share Closing Sales Price on December 31,
1997) - (Per Share Exercise Price)] x Number of Shares Subject to
Unexercised Options. The closing sales price reported by the Nasdaq
National Market of the Company's Common Stock for December 31, 1998 was
$6.19 per share.
(2) The per share value of the exercised and unexercised options at December
31, 1998 is above the closing sales price reported by the Nasdaq National
Market of the Company's Common Stock for December 31, 1998 of $6.19 per
share.
-12-
<PAGE>
NON-COMPETITION AND NON-DISCLOSURE AGREEMENT
Mr. Koehler has executed a Non-Competition and Non-Disclosure Agreement
with the Company. Under the terms of the agreement, if Mr. Koehler is terminated
without cause (as defined in the agreement), he shall receive six months
severance pay at his base salary. The agreement requires Mr. Koehler to keep
confidential any confidential or proprietary information or trade secrets of the
Company. All items prepared by Mr. Koehler, or which are disclosed to or come
into the possession of him, remain the sole and exclusive property of the
Company. Mr. Koehler must deliver the originals and all copies of such items
that are in his possession, custody or control, and any other property belonging
to the Company, to the Company upon request. Pursuant to the Agreement, Mr.
Koehler assigns to the Company and its successors, assigns or designees all of
his rights to any invention, patent, trademark, copyright, code, program, system
or method that he develops during the course of his employment or with the use
of the Company's time, materials or facilities. The agreement also prohibits Mr.
Koehler from soliciting customers or employees of the Company on his own behalf
or in the service or on behalf of others.
-13-
<PAGE>
STOCK PERFORMANCE GRAPH
The following indexed line graph indicates the Company's total return to
shareholders from December 14, 1995, the date on which the Company's Common
Stock began trading on the Nasdaq National Market, to December 31, 1998, as
compared to the total return for (i) the Nasdaq Stock Market - US Index; and
(ii) a peer group of six competitors of the Company that are also traded on the
Nasdaq Stock Market for the same period. The Company has decided to introduce
the peer group of six competitors to its Stock Performance Graph to better
reflect the performance of the Company's Common Stock against similar companies
in its industry. The calculations in the graph assume (a) an $100 investment on
December 14, 1995, in each of the Company's Common Stock and each index and (b)
dividend reinvestment.
[GRAPHIC OMITTED]
CUMMULATIVE TOTAL RETURN
------------------------------------
12/14/95 12/95 12/96 12/97 12/98
TECHFORCE CORPORATION 100 80 68 55 56
PEER GROUP 100 103 89 92 107
NASDAQ STOCK MARKET (U.S.) 100 101 125 153 215
-14-
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
Annual Meeting. However, if any other matters are properly brought before the
Annual Meeting, the persons appointed in the accompanying proxy intend to vote
the Shares represented thereby in accordance with their best judgment.
SOLICITATION OF PROXIES
The cost of the solicitation of proxies on behalf of the Company will be
borne by the Company. The Company has engaged American Stock Transfer & Trust
Company to assist it in the proxy solicitation process and will pay such firm
approximately $300 for its services (exclusive of postage fees). In addition,
directors, officers and other employees of the Company may, without additional
compensation except reimbursement for actual expenses, solicit proxies by mail,
in person or by telecommunication. The Company will reimburse brokers,
fiduciaries, custodians and other nominees for out-of-pocket expenses incurred
in sending the Company's proxy materials to, and obtaining instructions relating
to such materials from, beneficial owners.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Any proposal that a shareholder may desire to have included in the
Company's proxy materials for presentation at the 2000 annual meeting of
shareholders must be received by the Company at its executive offices at 5741
Rio Vista Drive, Clearwater, Florida 33760, Attention: Mr. Jerrel W. Kee, on or
prior to December 20, 1999.
ANNUAL REPORT
The Company's 1998 Annual Report to Shareholders (which is not part of the
Company's proxy soliciting material) is being mailed to the Company's
shareholders with this proxy statement.
By order of the Board of Directors,
John A. Koehler
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Clearwater, Florida
April 19, 1999
-15-
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
TECHFORCE CORPORATION
The undersigned shareholder(s) of TechForce Corporation, a Georgia corporation
(the "Company"), hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated April 19, 1999, and hereby
appoints John A. Koehler and Jerrel W. Kee, or either of them, proxies and
attorneys-in-fact, with full power of substitution, on behalf and in the name of
the undersigned, to represent the undersigned at the 1999 Annual Meeting of
Shareholders of the Company to be held at 11:00 a.m. Eastern Standard Time on
Wednesday, May 19, 1999 at the Company's headquarters, 5741 Rio Vista Drive,
Clearwater, FL 33760 and at any adjournment(s) or postponement(s) thereof, and
to vote all shares of Common Stock which the undersigned would be entitled to
vote if then and there personally present, on the matters set forth on the
reverse.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
<PAGE>
PLELASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
TECHFORCE CORPORATION
MAY 19, 1999
/arrow/ Please Detatch and Mail in the Envelope Provided/arrow/
<TABLE>
<CAPTION>
<S> <C> <C> <C>
A[X] Please mark your
votes as in this
example
WITHHOLD authority
FOR all nominees to vote for all
(listed at right, except)
as indicated below
(1) To elect the [ ] [ ] Nominees: William E. Bassett (2)In their discretion to vote upon
nominee listed Paul J. Ferri such other matter or matters
at right to serve John A. Koehler that may properly come before
as directors of the Company for the ensuing year: Bertil D. Nordin the meeting of any adjournment(s)
Instruction: To withhold authority for any individual Richard D. Tadler or postponement(s) thereof.
nominee or nominees as to whom you wish to withhold PLEASE COMPLETE, DATE, SIGN AND
authority in the space below: RETURN THIS PROXY PROMPTLY.
____________________________________________________ THIS PROXY, WHEN PROPERLY EXECUTED,
WILL BE VOTED IN ACCORDANCE WITH THE
DIRECTORS GIVEN BY THE UNDERSIGNED
SHAREHOLDER(S). IF NO DIRECTION IS
MADE, IT WILL BE VOTED FOR THE
DIRECTOR NOMINEES NAMED IN PROPOSAL
(1) ABOVE FOR PROPOSAL (2) ABOVE AND
AS THE PROXIES DEEM ADVISABLE ON SUCH
OTHER MATTERS AS MAY COME BEFORE THE
MEETING.
Signature____________________ ___________________________________________________________________ Dated:_______________, 1999
Signature (if held jointly) Title or authority (if applicable)
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. IF SHARES ARE REGISTERED IN
MORE THAN ONE NAME, THE SIGNATURE FOR ALL SUCH PERSONS ARE REQUIRED. A
CORPORATION SHOULD SIGN IN THE FULL CORPORATE NAME, BY A DULY AUTHORIZED
OFFICER, AFIXING HIS OR HER TITLE. TRUSTEES, GUARDIANS, EXECUTORS AND
ADMINISTRATORS SHOULD SIGN IN THEIR OFFICIAL CAPACITY, GIVING THEIR FULL TITLE
AS SUCH. IF A PARTNERSHIP, PLEASE SIGN IN THE PARTNERSHIP NAME BY AN AUTHORIZED
PERSON.
</TABLE>
