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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
MODIS PROFESSIONAL SERVICES, 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:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[MPS LOGO APPEARS HERE]
MODIS PROFESSIONAL SERVICES, INC.
1 INDEPENDENT DRIVE
JACKSONVILLE, FLORIDA 32202
APRIL 21, 2000
DEAR MODIS PROFESSIONAL SERVICES, INC. SHAREHOLDER:
On behalf of the Board of Directors and management of Modis Professional
Services, Inc., I cordially invite you to attend the annual meeting of
shareholders (the "Annual Meeting") to be held at the Company's Headquarters,
1 Independent Drive, 2nd Floor Auditorium, Jacksonville, Florida on May 24,
2000 at 11:00 a.m., local time. The attached Notice of Annual Meeting and
Proxy Statement describe the formal business to be transacted at the Annual
Meeting.
In addition to the specific matters to be acted upon, there also will be a
report on the operations of the Company. Directors and officers of the Company
will be present to respond to shareholders' questions.
It is important that your shares be represented at the Annual Meeting.
Regardless of whether you plan to attend, you are requested to mark, sign,
date and promptly return the enclosed proxy in the envelope provided. If you
attend the Annual Meeting, which we hope you will do, you may vote in person
even if you have previously mailed a proxy card.
Sincerely,
/s/Derek E. Dewan
DEREK E. DEWAN,
Chairman of the Board of Directors,
President and Chief Executive
Officer
<PAGE>
MODIS PROFESSIONAL SERVICES, INC.
1 INDEPENDENT DRIVE
JACKSONVILLE, FLORIDA 32202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 24, 2000
TO THE HOLDERS OF COMMON STOCK:
PLEASE TAKE NOTICE that the annual meeting of shareholders (the "Annual
Meeting") of Modis Professional Services, Inc. (the "Company") will be held on
Wednesday, May 24, 2000 at 11:00 a.m., local time, at the Company's
Headquarters, 1 Independent Drive, 2nd Floor Auditorium, Jacksonville,
Florida.
The Annual Meeting will be held for the following purposes:
1. To elect five directors to serve terms scheduled to end in conjunction
with the next annual meeting of shareholders or until their successors are
elected and qualified; and
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
All shareholders are cordially invited to attend the Annual Meeting;
however, only shareholders of record at the close of business on April 3,
2000, are entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors,
/s/Marc M. Mayo
MARC M. MAYO,
SENIOR VICE PRESIDENT, SECRETARY AND
GENERAL COUNSEL
Dated: April 21, 2000
Jacksonville, Florida
REGARDLESS OF WHETHER YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE MARK,
SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE AS PROMPTLY AS POSSIBLE.
<PAGE>
MODIS PROFESSIONAL SERVICES, INC.
1 INDEPENDENT DRIVE
JACKSONVILLE, FLORIDA 32202
PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD MAY 24, 2000
INTRODUCTION
This Proxy Statement and the enclosed form of proxy are first being sent to
shareholders of Modis Professional Services, Inc., a Florida corporation (the
"Company"), on or about April 24, 2000, in connection with the solicitation by
the Company's Board of Directors of proxies to be used at the annual meeting
of shareholders (the "Annual Meeting") of the Company to be held on Wednesday,
May 24, 2000, at 11:00 a.m., local time, or at any adjournment thereof. The
Annual Meeting will be held at the Company's Headquarters, 1 Independent
Drive, 2nd Floor Auditorium, Jacksonville, Florida.
Only shareholders of record at the close of business on April 3, 2000 (the
"Record Date") will be entitled to notice of and to vote at the Annual Meeting
and any adjournments thereof. As of the Record Date, the Company had
outstanding 96,406,636 shares of Common Stock, par value $.01 per share (the
"Common Stock").
VOTING PROCEDURES
The Board of Directors has designated Derek E. Dewan and Michael D. Abney,
and each or either of them, as proxies to vote the shares of Common Stock
solicited on its behalf. If the enclosed form of proxy is executed and
returned, it may nevertheless be revoked at any time before it has been
exercised by: (i) giving written notice to the Secretary of the Company; (ii)
delivery of a later dated proxy; or (iii) attending the Annual Meeting,
notifying the Secretary of the Company or his delegate and voting in person.
The shares represented by the proxy will be voted in accordance with the
directions given unless the proxy is mutilated or otherwise received in such
form as to render it illegible. If sufficient votes in favor of the election
of directors are not received by the date of the Annual Meeting, the persons
named as proxies may propose one or more adjournments of the Annual Meeting to
permit further solicitation of proxies.
Each outstanding share of the Company's Common Stock is entitled to one
vote. The Company's Bylaws provide that a majority of shares entitled to vote
and represented in person or by proxy at a meeting of the shareholders
constitutes a quorum. The Company's Bylaws provide that directors are elected
by a plurality of the votes cast by the shares entitled to vote in the
election at a meeting at which a quorum is present. The Company's Bylaws
further provide that other matters are approved if affirmative votes cast by
the holders of the shares represented at a meeting at which a quorum is
present and entitled to vote on the subject matter exceed the votes opposing
the action, unless a greater number of affirmative votes or voting by classes
is required by the Florida Business Corporation Act or the Company's Articles
of Incorporation. Therefore, although abstentions and broker non-votes are
counted for quorum purposes, abstentions and broker non-votes generally have
no effect under Florida law. A broker non-vote occurs when a broker who holds
shares in street name for a customer does not have authority to vote on
certain non-routine matters under the rules of the New York Stock Exchange
because its customer has not provided any voting instructions on the matter.
Regarding the election of Directors, shares may be voted for or withheld
from each nominee. Abstentions and broker non-votes will have no affect on the
election of Directors.
Shareholders should specify their choices on the enclosed form of proxy. If
no specific instructions are given with respect to the matters to be acted
upon, the shares represented by a signed proxy will be voted "FOR" the
election of all nominees.
<PAGE>
ELECTION OF DIRECTORS
At the Annual Meeting, five individuals will be elected to serve as
directors of the Company for terms scheduled to end in conjunction with the
next annual meeting of shareholders or until their successors are duly elected
and qualified. Each nominee is presently available for election and is a
member of the Board of Directors. If any nominee should become unavailable,
which is not now anticipated, the persons voting the accompanying proxy may in
their discretion vote for a substitute.
Information concerning the Board of Directors' nominees, based on data
furnished by them, is set forth below. There are no family relationships
between any directors or executive officers of the Company.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE ELECTION
OF EACH OF THE FOLLOWING. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED
UNLESS SHAREHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
<TABLE>
<CAPTION>
Year First
Positions With the Company; Became
Principal Occupations during Director of
Name (Age) Past 5 Years; Other Directorships the Company
----------------------- ------------------------------------------ -----------
<C> <S> <C>
Derek E. Dewan (45)* President and Chief Executive Officer of 1994
the Company since January 1, 1994;
Director since January 28, 1994 (Chairman
since June 19, 1996); Partner with the
accounting firm of PricewaterhouseCoopers
LLP for more than five years prior to
joining the Company, most recently as the
managing partner of the Jacksonville,
Florida office. Mr. Dewan currently serves
on the Board of Directors of Transit
Group, Inc. and Epix Corp.
Peter J. Tanous (61)*.+ President of Lynx Investment Advisory, 1997
Inc. since 1984. Previously Executive Vice
President of Bank Audi (U.S.A.), Chairman
of Petra Capital Corporation, and First
Vice President and International Regional
Director with Smith Barney. Mr. Tanous
currently serves on the Board of Directors
of Cedars Bank, Kistler Aerospace
Corporation, Interstate Resources, Inc.,
and TechniFlite of America, Inc.
T. Wayne Davis (53)*.+ Private investor for the past five years; 1994
President and Chairman of the Board of
Tine W. Davis Family-WD Charities, Inc.;
President of Red Wing Properties, Inc.;
Director of Enstar Group, Inc., Winn-Dixie
Stores, Inc., Secured Document Systems,
Inc., and Associated Industries Insurance
Services, Inc. Mr. Davis also serves as
Chairman of the Board of Transit Group,
Inc.
John R. Kennedy (69)*.+ Retired as President, Chief Executive 1999
Officer and Director of Federal Paper
Board Company in 1996 after 44 years with
that company. Currently serves as a
Director of International Paper Company,
Spartech Corporation, Pioneer Companies,
Inc., and Chase Brass Industries, Inc. and
is Chairman of the Board of Trustees of
Georgetown University.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Year First
Positions With the Company; Became
Principal Occupations during Director of
Name (Age) Past 5 Years; Other Directorships the Company
----------------------- ------------------------------------------ -----------
<C> <S> <C>
Michael D. Abney (64)* Senior Vice President of the Company since 1997
March 1995 and Chief Financial Officer of
the Company since joining the Company in
November 1992. He is a certified public
accountant and was a partner with
PricewaterhouseCoopers LLP for 22 years
prior to joining the Company, most
recently as managing partner of
PricewaterhouseCoopers LLP's Jacksonville,
Florida office.
</TABLE>
- --------
* Member of the Nominating Committee.
. Member of the Audit Committee.
+ Member of the Compensation Committee.
BOARD OF DIRECTORS AND STANDING COMMITTEES. Regular meetings of the Board of
Directors are held approximately four times a year, with special meetings as
needed. During 1999, the Board of Directors held eleven (11) total meetings.
Each director attended at least 75% of the aggregate of: (i) all meetings of
the Board of Directors and (ii) all meetings of Board committees on which he
served during 1999.
The Board of Directors has established three standing committees: an Audit
Committee, a Compensation Committee, and a Nominating Committee which are
described below. Members of these committees are generally elected annually at
the regular Board of Directors meeting held in conjunction with the annual
shareholders meeting, but changes may be made at the Board's discretion at any
time.
AUDIT COMMITTEE. The Audit Committee is comprised of Messrs. Tanous
(Chairman), Davis and Kennedy, none of whom is an officer of the Company. Mr.
Tanous and Mr. Kennedy were added to this Committee on July 30, 1999 and
September 29, 1999, respectively, replacing former outside directors on the
Committee. Regular meetings of the Audit Committee are scheduled to be held
twice a year. The Audit Committee met two (2) times during 1999. The principal
responsibilities of and functions generally performed by the Audit Committee
are reviewing the Company's internal controls and the objectivity of its
financial reporting, monitoring the Company's Year 2000 Compliance Plan,
making recommendations regarding the Company's employment of independent
auditors and reviewing the annual audit with the auditors. On March 27, 2000,
based upon the recommendations of the Blue Ribbon Committee of the New York
Stock Exchange and in accordance with the Securities and Exchange Commission's
recent rulemaking regarding Audit Committees, the Audit Committee approved an
Audit Committee Charter, to be effective in June 2000, which states the
responsibilities of the Audit Committee. The Audit Committee Charter was then
approved by the entire Board.
COMPENSATION COMMITTEE. The Compensation Committee is comprised of Messrs.
Davis (Chairman), Kennedy and Tanous. Mr. Kennedy was appointed to the
Compensation Committee on September 29, 1999. During 1999, the Compensation
Committee met four times. This Committee has the responsibility of approving
the compensation arrangements for senior management of the Company, including
annual incentive compensation. It also recommends to the Board of Directors
adoption of any compensation plans in which officers and directors of the
Company are eligible to participate.
NOMINATING COMMITTEE. The Nominating Committee is comprised of Messrs.
Tanous (Chairman), Davis, Kennedy, Abney and Dewan. This committee met this
year as a full Board and nominated John Kennedy for membership on the Board.
This committee's principal responsibility is to investigate and nominate
potential members of the Board and it relies on the procedures in the
Company's Bylaws to consider nominees recommended by shareholders.
3
<PAGE>
PRINCIPAL SHAREHOLDERS AND SECURITIES
OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership as of April 3, 2000 of:
(i) each director and nominee for director, (ii) the Named Executive Officers,
as defined below, (iii) those persons known to the Company to be beneficial
owners of more than 5% of its outstanding Common Stock, and (iv) all directors
and executive officers as a group. Unless otherwise indicated, each of the
shareholders listed below exercises sole voting and dispositive power over the
shares.
<TABLE>
<CAPTION>
Shares Beneficially Owned
------------------------------
Name Number Percent(1)
---- --------------- --------------
<S> <C> <C>
Derek E. Dewan(2)............................. 3,733,101 3.74
T. Wayne Davis(3)............................. 312,067 *
Peter J. Tanous(4)............................ 45,001 *
John R. Kennedy(5)............................ 5,000 *
Michael D. Abney(6)........................... 1,078,456 1.11
Marc M. Mayo(7)............................... 200,000 *
Timothy D. Payne(8)........................... 303,000 *
George A. Bajalia(9).......................... 33,334 *
Massachusetts Financial Services Company(10).. 12,461,837 12.93
FMR Corp.(11)................................. 6,466,251 6.71
Legg Mason, Inc.(12).......................... 6,393,330 6.63
J. & W. Seligman & Co., Incorporated(13)...... 5,105,285 5.30
All directors and executive officers as a
group (8 persons)(14)........................ 5,709,959 5.62
</TABLE>
- --------
* Indicates less than 1%.
(1) Percentage is determined on the basis of 96,406,636 shares of Common
Stock outstanding as of April 3, 2000, plus shares of Common Stock deemed
outstanding pursuant to Rule 13d-3(d)(1) promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act").
(2) Mr. Dewan owns or has options to acquire a total of 4,233,100 shares of
Common Stock, including the 3,733,101 shares shown in the table above.
Mr. Dewan's 4,233,100 shares consist of: (i) 276,100 shares held in his
name (ii) 3,457,000 shares held pursuant to options that are exercisable
within 60 days of April 3, 2000; and (iii) 500,000 options that will vest
over the next two years.
(3) Mr. Davis beneficially owns or has options to acquire 345,400 shares of
Common Stock, including the 312,067 shares shown in the table above. Mr.
Davis' 345,400 shares consist of: (i) 130,000 shares held in his name;
(ii) 30,000 shares held by Tine W. Davis Family-WD Charities, Inc., a
foundation, over which Mr. Davis has sole voting and dispositive power;
(iii) 5,400 held in Mr. Davis' wife's name; (iv) 146,667 shares held
pursuant to options that are exercisable within 60 days of April 3, 2000;
and (v) options for 33,333 shares which vest over the next two years.
(4) Mr. Tanous owns or has options to acquire a total of 111,000 shares of
Common Stock, including the 45,001 shares shown in the table above. Mr.
Tanous' 111,000 shares consist of: (i) 1,000 shares held in his name;
(ii) 44,001 shares held pursuant to options that are exercisable within
60 days of April 3, 2000; and (iii) options for 65,999 shares which vest
over the next two years.
(5) Mr. Kennedy owns or has options to acquire 65,000 shares of Common Stock,
including the 5,000 shares shown in the table above. Mr. Kennedy's 65,000
shares consist of: (i) 5,000 shares held in his own name; and (ii)
options for 60,000 shares which vest over the next five years.
(6) Mr. Abney owns or has options to acquire a total of 1,111,789 shares of
Common Stock, including the 1,078,456 shares shown in the table above.
Mr. Abney's 1,111,789 shares consist of: (i) 36,320 shares held in his
name; (ii) 79,000 shares held in his wife's name; (iii) 6,469 shares held
in his son's name; (iv) 956,667 shares held pursuant to options that are
exercisable within 60 days of April 3, 2000; and (v) 33,333 options that
will vest over the next year.
4
<PAGE>
(7) Mr. Mayo owns or has options to acquire a total of 350,000 shares of
Common Stock, including the 200,000 shares shown in the table above. Mr.
Mayo's 350,000 shares consist of: (i) 200,000 shares held pursuant to
options that are exercisable within 60 days of April 3, 2000; and (ii)
150,000 options that will vest over the next three years.
(8) Mr. Payne owns or has options to acquire a total of 638,333 shares of
Common Stock, including the 303,000 shares included in the table above.
Mr. Payne's 638,333 shares consist of: (i) 303,000 shares held pursuant
to options that are exercisable within 60 days of April 3, 2000; and (ii)
335,333 options that will vest over the next two years.
(9) Mr. Bajalia owns or has options to acquire a total of 100,000 shares of
Common Stock, including the 33,334 shares included in the table above.
Mr. Bajalia's 100,000 shares consist of: (i) 33,334 shares held pursuant
to options that are exercisable within 60 days of April 3, 2000; and (ii)
66,666 options that will vest over the next two years.
(10) Based on information the Company obtained from Massachusetts Financial
Services Company's Schedule 13-G filed as of February 10, 2000, the
business address of Massachusetts Financial Services Company is 500
Boylston Street, Boston, Massachusetts 02116. Massachusetts Financial
Services Company reports to have sole voting power for 11,678,641 shares
of Common Stock and sole dispositive power for 12,461,837 shares of
Common Stock. The 12,461,837 shares of Common Stock are held by
Massachusetts Financial Services Company and certain other affiliates
that include the MFS Series Trust II-MFS Emerging Growth Stock Fund.
(11) Based on information the Company obtained from FMR Corp.'s Schedule 13-G
filed as of April 13, 1999, the business address of FMR Corp is 82
Devonshire Street, Boston, MA 02109. FMR Corp. reports to have sole
voting power for 123,900 shares of Common Stock and sole dispositive
power for 6,466,251 shares of Common Stock. These shares are held
through various subsidiaries and affiliates of FMR Corp., including
Fidelity Management & Research Company, an investment adviser to various
investment companies, Fidelity Management Trust Company, Edward C.
Johnson 3d and Abigail P. Johnson.
(12) Based on information the Company obtained from Legg Mason, Inc.'s
Schedule 13-G filed as of February 14, 2000, the business address of
Legg Mason, Inc. is 100 Light Street, Baltimore, MD 21202. Legg Mason
Inc. reports to have sole voting power for 4,800,000 shares of Common
Stock and shared dispositive power for 6,393,330 shares of Common Stock.
These shares are held by various subsidiaries of Legg Mason, Inc.,
including Legg Mason Fund Advisor, Inc., Legg Mason Wood Walker, Inc.,
Legg Mason Capital Management, Inc., Legg Mason Trust, fsb, and
Brandywine Asset Management, Inc., all as investment advisers.
(13) Based on information the Company obtained from J. & W. Seligman & Co.
Incorporated's ("JWS") Schedule 13-G filed as of February 10, 2000, the
business address of JWS is 100 Park Avenue, 8th Floor, New York, NY
10006. JWS reports to have shared voting power for 4,823,300 shares and
shared dispositive power for 5,105,285 shares. William C. Morris, as the
owner of a majority of the outstanding voting securities of JWS, may be
deemed to beneficially own the shares reported by JWS.
(14) Includes 5,140,669 held pursuant to options that are exercisable within
60 days of April 3, 2000.
5
<PAGE>
Notwithstanding anything to the contrary as set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, that incorporate future
filings, including this Proxy Statement, in whole or in part, the following
Compensation Committee Report and the Comparative Stock Performance shall not
be incorporated by reference into any such filings.
COMPENSATION COMMITTEE REPORT
The Company's overall compensation philosophy includes: attracting and
retaining quality executive talent; reinforcing strategic performance
objectives; and ensuring shared goals between the executive officers and
shareholders. Thus, there are three components to executive compensation: base
salary; incentive compensation; and equity participation.
BASE SALARY. In establishing the base salaries of executive officers,
attention is given to attracting and retaining quality management. The Company
looks to both the levels of compensation in the information technology and
professional services industry and the marketplace for executives with similar
experience and abilities to determine the amount of base compensation. The
Company's intent with respect to base compensation, which has been established
pursuant to employment agreements in the case of Messrs. Dewan, Abney, Mayo,
Payne and Bajalia that are described elsewhere in this Proxy Statement, is to
set the level commensurate with the total compensation level of the industry
and marketplace and emphasize incentive compensation and equity participation
based upon performance.
INCENTIVE COMPENSATION. During 1999, with advice from William M. Mercer
Company, the Compensation Committee adopted the Senior Executive Annual
Incentive Plan (the "Incentive Plan"). The purposes of the Incentive Plan are
to encourage management to focus on key corporate, business unit, and
individual performance objectives, to align management efforts and rewards
with shareholder interests, and to assist in the attraction and retention of
qualified management talent through a competitive compensation package. Under
the Incentive Plan, each Senior Executive Officer is assigned certain
financial and other targets and the incentive compensation is based, in large
part, upon the achievement by the Company, Business Unit and Senior Executive
Officer of such targets.
EQUITY PARTICIPATION. The Committee strongly believes that to encourage the
long-term growth of shareholders' value each executive officer must have some
form of equity participation. Thus, each of the executive officers
participates in stock ownership via either pre-existing ownership of stock or
via stock options. During fiscal 1999, pursuant to the Company's stock plans,
there were option or stock grants for 1,950,000 shares of common stock to
executive officers and 4,307,285 shares of common stock to other employees.
CHIEF EXECUTIVE OFFICER. Mr. Dewan has been President and Chief Executive
Officer of the Company since January 1, 1994. Since his arrival, the Company
has consistently increased revenues. Mr. Dewan's incentive compensation in
1999 was based upon the Incentive Plan as well as subjective factors
considered by the Compensation Committee. In light of the contributions Mr.
Dewan has made to the Company, including the substantial growth of the Company
during his tenure with the Company and the strategic direction with which he
has provided the Company, the Compensation Committee considers the amount of
Mr. Dewan's compensation for fiscal 1999 to be reasonable.
To the extent determinable and as one of the factors in its consideration of
compensation matters, the Compensation Committee considers the anticipated tax
treatment to the Company and to the executives of various payments and
benefits. Interpretations of and changes in the tax laws and other factors
beyond the Committee's control affect the deductibility of compensation.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
generally limits the corporate tax deduction for compensation paid to
executive officers named in the Summary Compensation Table to $1,000,000
unless certain requirements are met. The Committee believes that the Amended
and Restated 1995 Stock Option Plan complies with Section 162(m) and,
therefore, stock options and stock appreciation rights ("SARs") granted under
this plan would qualify for the corporate tax deduction.
6
<PAGE>
As it has done in the past, the Committee intends to design future
compensation awards for the executive officers subject to the deduction limit
so the corporate tax deduction is maximized without limiting the Committee's
flexibility to attract and retain qualified executives to manage the Company.
However, the Committee will not necessarily limit executive compensation to
that deductible under Section 162(m). The Committee will consider various
alternatives to preserving the deductibility of compensation payments and
benefits to the extent reasonably practicable and to the extent consistent
with its other compensation objectives.
The Committee exercises judgment and discretion in the information it
reviews and the analyses it considers. The Committee also obtained the advice
of an outside compensation consultant to assist it in making decisions
regarding executive compensation.
The foregoing report has been furnished by:
MODIS PROFESSIONAL SERVICES, INC.
COMPENSATION COMMITTEE
T. Wayne Davis, Chairman
Peter J. Tanous
John R. Kennedy
7
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total shareholder return (stock
price appreciation) on the Company's Common Stock with the cumulative total
return (stock price appreciation and reinvested dividends) on the S&P 500
index, and the common stock of seven companies in the information technology
and/or professional services staffing business (the "Self-Determined Peer
Group"), as described below, for the period beginning December 30, 1994 and
ending December 31, 1999 (the last trading date in the Company's 1999 fiscal
year), assuming the reinvestment of any dividends and assuming the investment
of $100 in each. The Company's Common Stock was traded on the Nasdaq National
Market until November 15, 1996, at which time it commenced trading on the New
York Stock Exchange under the symbol ASI. On September 27, 1998, the Company's
stock symbol on the New York Stock Exchange changed to MPS when it changed its
name to Modis Professional Services, Inc.
[GRAPH APPEARS HERE]
LEGEND
<TABLE>
<CAPTION>
CRSP Total Return Index for: 12/30/94 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99
- ---------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Modis Professional Services, Inc. 100.0 640.0 921.8 1,003.6 638.2 621.8
S&P 500 Stock 100.0 137.6 169.5 226.1 291.8 353.3
Self-Determined Peer Group 100.0 180.8 313.6 582.2 568.8 441.3
</TABLE>
Total return calculations for the Company, the S&P 500 Stocks, and the Self-
Determined Peer Group were prepared by the Center for Research in Security
Prices, The University of Chicago. The Self-Determined Peer Group is composed
of the stocks of certain companies selected by the Company in the information
technology and/or professional services staffing business, and includes the
following companies: CIBER, Inc., Data Processing Resources Corp., Metamor
Worldwide, Inc., Romac International, Inc., Computer Horizons Corp., Keane,
Inc., and Robert Half International, Inc. Total returns were calculated based
on cumulative total return, assuming the value of the investment in the
Company's Common Stock and in each index on December 30, 1994 was $100 and
that all dividends were reinvested. The indexes are reweighted daily, using
the market capitalization on the previous trading day. On December 16, 1999,
shares of Xpedior, Inc., a subsidiary of Metamor Worldwide, commenced trading
on NASDAQ following the IPO of such shares. No adjustment has
8
<PAGE>
been made to reflect such IPO. On August 30, 1999, Data Processing Resources
Corp. ("DPRC') was acquired by Compuware Corporation. If DPRC was not included
in the Self-Determined Peer Group, the year-end total return figures for the
periods shown above would have been 100.0, 180.8, 320.0, 600.3, 583.7 and
447.5, respectively.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or accrued by the
Company for services rendered during the fiscal years indicated to the
Company's Chief Executive Officer and to the Company's four most highly
compensated executive officers who were serving the Company as executive
officers on December 31, 1999 and whose total salary and bonus exceeded
$100,000 during the year ended December 31, 1999 (the "Named Executive
Officers"). The Company did not grant any stock appreciation rights or make
any long-term incentive plan payouts during the periods shown.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation Awards
-------------------
Annual Compensation Securities
------------------------ Underlying All Other
Year Salary($) Bonus($) Options/SARs Compensation($)
---- --------- --------- ------------------- ---------------
<S> <C> <C> <C> <C> <C>
Derek E. Dewan.......... 1999 500,000 500,000 1,450,000 48,282(1)
Chairman, President and 1998 350,000 3,700,000 500,000 50,808
Chief Executive Officer 1997 350,000 3,903,720 -- 30,066
Michael D. Abney........ 1999 250,000 125,000 400,000 --
Senior Vice President, 1998 200,000 740,000 100,000 --
Treasurer
and Chief Financial 1997 200,000 681,948 -- --
Officer
Marc M. Mayo............ 1999 250,000 175,000 100,000 --
Senior Vice President, 1998 200,000 600,000 150,000 --
Secretary
and General Counsel(2) 1997 183,333 200,000 100,000 --
Timothy D. Payne........ 1999 400,000 320,000 -- --
President, modis, 1998 250,000 556,704 500,000 --
Inc.(3)
1997 212,500 220,045 200,000 --
George A. Bajalia....... 1999 200,000 200,000 -- --
President Professional 1998 40,385 -- 100,000 --
Services Division(4) 1997 -- -- -- --
</TABLE>
- --------
(1) Comprised of $42,444 for life insurance premiums and $5,838 for
disability insurance premiums.
(2) Mr. Mayo is Senior Vice President, Secretary and General Counsel of the
Company. He has served as Senior Vice President and General Counsel since
February 1, 1997 and as Secretary since May 1998. Prior to his employment
with the Company, Mr. Mayo was with the law firm of Coffman, Coleman,
Andrews & Grogan in Jacksonville, Florida for fourteen years, the last
nine as partner. Mr. Mayo is 45 years old.
(3) Mr. Payne is President and Chief Operating Officer of modis, Inc., a
wholly owned subsidiary of the Company. He has served in this position
since March 1997. From 1994 until March 1997, Mr. Payne was President and
Chief Executive Officer of Openware Technologies, Inc., a systems
integrator which was acquired by the Company in June 1996. Mr. Payne is
41 years old.
(4) Mr. Bajalia is President and Chief Operating Officer of the Professional
Services Division of the Company. Mr. Bajalia joined the Company in
September 1998 as Senior Vice President--Corporate Development and
Operations. In March 1999 he was promoted to his current position. Prior
to joining the Company, Mr. Bajalia was employed for five years by
Wickes, Inc., most recently as Senior Vice President and Chief Financial
Officer. Wickes is a leading publicly traded supplier and manufacturer of
building materials. Mr. Bajalia is 42 years old.
9
<PAGE>
OPTIONS GRANTED IN LAST FISCAL YEAR.
The following table sets forth information concerning each grant of stock
options to the Named Executive Officers during the year ended December 31,
1999.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rate of
Stock Price Appreciation for
Individual Grants Option Term(2)
--------------------------------------------------------------- -----------------------------
Percent of Total
Number of Securities Options Granted to Exercise or
Underlying Options Employees in Fiscal Base Price Expiration
Name Granted Year ($/Sh)(1) Date 5% 10%
- ---- -------------------- ------------------- ----------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Derek E. Dewan.......... 1,450,000 23.17 14.625 1/01/09 $ 13,336,497 $ 33,797,301
Michael D. Abney........ 400,000 6.39 14.625 1/01/09 3,679,034 9,323,393
Marc M. Mayo............ 100,000 1.60 12.563 7/12/09 790,080 2,002,219
Timothy D. Payne........ -- -- -- -- -- --
George A. Bajalia....... -- -- -- -- -- --
</TABLE>
- --------
(1) All options were granted at the market value on the date of grant based
generally on the last sale price on the date of grant of the Company's
Common Stock.
(2) The dollar amounts under these calculations are the result of
calculations at the 5% and 10% rates set by the Securities and Exchange
Commission and, therefore, are not intended to forecast possible future
appreciation, if any, of the price of the Company's Common Stock or the
present or future value of the options.
The following table sets forth information regarding the number of options
exercised, the value realized on such exercises and the value of unexercised
options as of December 31, 1999, by each of the Named Executive Officers.
Aggregated Option Exercises in Last Fiscal
Year and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Securities In-the-Money
No. of Shares Underlying Unexercised Options at Fiscal
Acquired on Value Options at Fiscal Year End Year End
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable(1)
- ---- ------------- -------- -------------------------- ----------------------------
<S> <C> <C> <C> <C>
Derek E. Dewan.......... -- -- 3,123,667 / 833,333 $2,787,560 / --
Michael D. Abney........ 11,000 $100,870 923,334 / 66,666 908,000 / --
Marc M. Mayo............ -- -- 116,667 / 233,333 -- / $ 168,750
Timothy D. Payne........ -- -- 236,334 / 401,999 520,834 / 1,041,666
George A. Bajalia....... -- -- 33,334 / 66,666 104,169 / 208,331
</TABLE>
- --------
(1) The closing price of the Company's Stock on the New York Stock Exchange
on December 31, 1999, the last trading day of the Company's fiscal year,
was $14.25.
EMPLOYMENT AGREEMENTS
The Company entered into an amended and restated employment agreement
effective January 1, 1999 with Derek E. Dewan, the Company's President and
Chief Executive Officer, that provides for an annual base salary of $500,000,
plus incentive compensation under the Incentive Plan of between 50% and 125%
of base salary. If Mr. Dewan's employment is terminated by the Company for
reasons other than cause or by Mr. Dewan for good reason, the agreement
provides for any unvested options to become immediately vested and exercisable
10
<PAGE>
and for Mr. Dewan to receive a lump sum payment equal to three (3) times the
sum of (i) his base salary as of the date of termination, and (ii) the target
bonus opportunity under the Incentive Plan based on the target bonus
opportunity for the year of termination; plus (iii) employee and dependent
medical, dental and hospital benefits would continue to be provided at the
Company's expense (either group or individual policy) for a period of two
years following the date of termination. Any unvested options also will vest
upon a change in control. In addition, the employment agreement provides for
Mr. Dewan to receive a car allowance, life and disability insurance and
Company-paid club dues. Mr. Dewan's employment agreement expires on December
31, 2000, subject to an automatic one year renewal unless canceled by either
party in accordance with the terms of the Employment Agreement.
Effective January 1, 1999, the Company entered into a one-year employment
agreement with Michael D. Abney, the Company's Senior Vice President,
Treasurer and Chief Financial Officer that provides for an annual base salary
of $250,000 plus incentive compensation under the Incentive Plan of between
40% and 150% of base salary. Pursuant to the agreement, if Mr. Abney's
employment is terminated by the Company without cause or by Mr. Abney for good
reason, he will receive a lump sum payment equal to the sum of Mr. Abney's
base salary as of the date of termination and Mr. Abney's threshold bonus
opportunity under the Incentive Plan based on the threshold bonus opportunity
for the year of termination. In addition, in the event of his termination by
the Company without cause or by Mr. Abney for good reason, or if there is a
change in control of the Company, the agreement provides for the automatic
vesting of any unvested stock options held by Mr. Abney on such date. On
December 15, 1999, the Compensation Committee renewed Mr. Abney's Employment
Agreement for calendar year 2000.
Effective January 1, 1999, the Company entered into an employment agreement
with Marc M. Mayo, the Company's Senior Vice President, Secretary and General
Counsel, that provides for an annual base salary of $250,000 plus incentive
compensation under the Incentive Plan of between 25% and 100% of base salary.
Pursuant to the agreement, if Mr. Mayo's employment is terminated by the
Company without cause or by Mr. Mayo for good reason, he will receive a lump
sum payment equal to two (2) times the sum of (i) his base salary as of the
date of termination and (ii) his threshold bonus opportunity under the
Incentive Plan based on the threshold bonus opportunity for the year of
termination. In addition, in the event of termination by the Company without
cause or by Mr. Mayo with good reason, of if there is a change in control of
the Company, the agreement provides for the automatic vesting of any unvested
stock options held by Mr. Mayo on such date. The term of this Employment
Agreement expires December 31, 2000, subject to an automatic one year renewal
unless terminated by either party in accordance with the terms of the
Employment Agreement.
Effective January 1, 1999, the Company entered into an employment agreement
with Timothy D. Payne, the President and Chief Operating Officer of modis,
Inc., that provides for an annual base salary of $400,000 plus incentive
compensation under the Incentive Plan of between 30% and 160% of base salary.
Pursuant to the agreement, if Mr. Payne's employment is terminated by the
Company without cause or by Mr. Payne for good reason, he will receive a lump
sum payment equal to two (2) times the sum of (i) his base salary as of the
date of termination and (ii) his threshold bonus opportunity under the
Incentive Plan based on the threshold bonus opportunity for the year of
termination. In addition, in the event of termination by the Company without
cause or by Mr. Payne with good reason, of if there is a change in control of
the Company, the agreement provides for the automatic vesting of any unvested
stock options held by Mr. Payne on such date. The term of this Employment
Agreement expires December 31, 2000, subject to an automatic one year renewal
unless terminated by either party in accordance with the terms of the
Employment Agreement.
Effective January 1, 1999, the Company entered into an employment agreement
with George A. Bajalia, President and Chief Operating Officer of the
Professional Services Division, that provides for an annual base salary of
$200,000 plus incentive compensation under the Incentive Plan of between 30%
and 160% of base salary. Pursuant to the agreement, if Mr. Bajalia's
employment is terminated by the Company without cause or by Mr. Bajalia for
good reason, he will receive a lump sum payment equal to two (2) times the sum
of (i) his base salary as of the date of termination and (ii) his threshold
bonus opportunity under the Incentive Plan based on the threshold bonus
opportunity for the year of termination. In addition, in the event of
termination by the
11
<PAGE>
Company without cause or by Mr. Bajalia with good reason, of if there is a
change in control of the Company, the agreement provides for the automatic
vesting of any unvested stock options held by Mr. Bajalia on such date. The
term of this Employment Agreement expires December 31, 2000, subject to an
automatic one year renewal unless terminated by either party in accordance
with the terms of the Employment Agreement.
DIRECTOR'S COMPENSATION
FEES AND OTHER COMPENSATION. During 1999, each non-employee director
received from the Company an annual retainer (paid quarterly) of $25,000,
Committee chairs received an additional fee of $2,500, and attendance fees of
$1,000 per Board meeting ($500 for telephonic meetings), and $500 for
Committee meetings not held on the day of a regularly scheduled Board meeting.
AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR STOCK PLAN. The Company provides
a stock option plan for non-employee directors (the "Director Plan"). A total
of 1,600,000 shares of Common Stock are currently reserved for issuance under
the Director Plan. The Director Plan is administered by the full Board of
Directors.
The Director Plan provides for the issuance of non-qualified options to
purchase 60,000 shares of Common Stock to each new non-employee director, upon
first being appointed or elected, at an exercise price equal to the fair
market value of the stock on the date of grant. The options become exercisable
ratably over a five-year period. The awards have a term of ten years but are
only exercisable for a maximum of three years after the participant ceases to
be a director of the Company; however, if a participant ceases to be a
director within one year of initial appointment or election, the options
granted shall be canceled.
In addition, the Director Plan provides for the annual issuance of non-
qualified options to purchase 20,000 shares of Common Stock to each director,
upon reelection, at an exercise price equal to the fair market value of the
stock on the date of grant. The options become exercisable ratably over a
three-year period. The Board of Directors may also grant additional options to
non-employee directors from time to time as the Board may determine in its
discretion. The Board has agreed to assess the continued viability of this
Plan in light of proposed accounting changes which make the Director Plan
costlier to the Company. In the absence of continuing to award stock options,
the Board will consider other forms of equity participation for non-employee
directors.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee, which was formed in fiscal 1994, is presently
comprised of Messrs. Davis, Tanous and Kennedy. Mr. Davis, the Chairman of the
Company's Compensation Committee, is the Chairman of the Board of Transit
Group, Inc. Mr. Dewan serves on the Board of Directors of Transit Group, Inc.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is aware of no transactions involving the Company and current
directors, executive officers, and the holders of five percent (5%) of the
Company's Common Stock, or their related parties. The Audit Committee of the
Board of Directors is responsible for evaluating the appropriateness of all
related-party transactions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors and persons who beneficially
own more than 10% of a registered class of the Company's equity securities, to
file reports of securities ownership and changes in such ownership with the
Securities and Exchange Commission. Messrs. Dewan, Abney and Mayo
inadvertently failed to timely file a Form 5 to reflect exempt stock option
awards during 1999. Each of such persons have since filed the appropriate
form.
12
<PAGE>
INDEPENDENT CERTIFIED PUBLIC ACCOUNTS
The Company has selected the firm of PricewaterhouseCoopers LLP to serve as
the independent certified public accountants for the Company for the current
fiscal year ending December 31, 2000. That firm has served as the auditors for
the Company since 1992. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the Annual Meeting and will be accorded the
opportunity to make a statement, if they so desire, and to respond to
appropriate questions.
OTHER MATTERS
The Board of Directors does not know of any other matters to come before the
Annual Meeting; however, if any other matters properly come before the Annual
Meeting it is the intention of the persons designated as proxies to vote in
accordance with their best judgment on such matters. If any other matter
should come before the Annual Meeting, such matter will be approved if the
number of votes cast in favor of the matter exceeds the number opposed.
SHAREHOLDER PROPOSALS
Shareholders are hereby notified that if they wish a proposal to be included
in the Company's Proxy Statement and form of proxy relating to the 2001 annual
meeting, a written copy of their proposal must be received at the principal
executive offices of the Company no later than December 23, 2000. To ensure
prompt receipt by the Company, proposals should be sent certified mail return
receipt requested. Proposals must comply with the proxy rules relating to
shareholder proposals in order to be included in the Company's proxy
materials.
In accordance with the Company's Bylaws, shareholders who wish to submit a
proposal for consideration at the Company's 2001 annual meeting of
shareholders but who do not wish to submit the proposal for inclusion in the
Company's proxy statement pursuant to Rule 14a-8 as promulgated under the
Securities Exchange Act of 1934, must deliver a copy of their proposal to the
Company at its principal executive offices no later than December 23, 2000.
ANNUAL REPORT
A copy of the Company's Annual Report for the year ended December 31, 1999,
accompanies this Proxy Statement. Additional copies may be obtained by writing
to Tyra Tutor, Vice President, Office of the Chairman, at 1 Independent Drive,
Jacksonville, Florida 32202.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. The Company
does not expect to pay any compensation for the solicitation of proxies but
will reimburse brokers and other persons holding stock in their names, or in
the names of nominees, for their expenses for sending proxy material to
principals and obtaining their proxies. Certain officers and regular employees
of the Company or its subsidiaries, without additional compensation, may use
their personal efforts, by telephone or otherwise, to obtain proxies in
addition to solicitation by mail. Should the Company's management deem it
appropriate, the Company may also retain the services of Corporate
Communications, Inc. and/or Morrow & Co., Inc. to aid in the solicitation of
proxies for which the Company anticipates it would pay a fee not to exceed, in
the aggregate, $10,000 plus reimbursement of expenses.
Date: April 21, 2000
SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, POSTAGE FOR WHICH HAS BEEN PROVIDED.
YOUR PROMPT RESPONSE WILL BE APPRECIATED.
13
<PAGE>
MODIS PROFESSIONAL SERVICES, INC.
1 Independent Drive
Jacksonville, Florida 32202
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
KNOW ALL MEN BY THESE PRESENTS that I, the undersigned shareholder of Modis
Professional Services, Inc., a Florida corporation (the "Company"), do hereby
nominate, constitute, and appoint Derek E. Dewan and Michael D. Abney, or any
one or more of them, my true and lawful attorney(s) with full power of
substitution for me and in my name, place and stead, to vote all of the Common
Stock, par value $.01 per share, of the Company, standing in my name on its
books on April 3, 2000, at the Annual Meeting of its Shareholders to be held
in the Auditorium in the Modis Building, 1 Independent Drive, Jacksonville,
Florida on May 24, 2000, at 11:00 a.m., local time, or at any adjournment
thereof.
1. Election of the following nominees as directors:
Derek E. Dewan, Peter J. Tanous,
T. Wayne Davis, John R. Kennedy and Michael D. Abney.
<TABLE>
<S> <C>
[_] FOR all nominees listed [_] WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees listed
contrary)
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write that nominee's name(s) in the space provided below.)
- -------------------------------------------------------------------------------
(Continued on the other side)
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy, when properly
executed, will be voted in the
manner directed herein by the
undersigned shareholder. If you
sign without otherwise marking
the form, the securities will be
voted as recommended by the
Board of Directors on all
matters to be considered at the
meeting. Please sign exactly as
your name appears hereon. When
shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation,
please sign in full corporate
name by president or other
authorized officer. If a
partnership please sign in
partnership name by authorized
person. Make sure that the name
on your stock certificate(s) is
exactly as you indicate below.
---------------------------------
Signature
---------------------------------
Signature if jointly held
Dated: ____________________, 2000
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
SELF-ADDRESSED ENVELOPE.
