SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Soliciting Material Pursuant to
sec.240.14a-11(c) or sec.240.14a-12
[X] Definitive Proxy Statement [ ] Confidential, for Use of the
Commission Only
[ ] Definitive Additional Materials (as permitted by Rule 14a-6(e)(2))
Business Resource Group
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required.
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14a-6(i)(3).
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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:
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(4) Date Filed:
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held March 23, 2000
TO THE SHAREHOLDERS OF BUSINESS RESOURCE GROUP:
Notice is hereby given that the Annual Meeting of Shareholders of
Business Resource Group, a California corporation, will be held at the
Double Tree Hotel, 2050 Gateway Place, San Jose, California 95110, on
Thursday, March 23, 2000, at 1:30 p.m., local time, for the following
purposes:
1. To elect the following directors to serve for the ensuing year or
until their successors are elected: George Kelly, Brian D. McNay,
John W. Peth, Harry S. Robbins and Jeffrey D. Tuttle.
2. To ratify the appointment of Deloitte & Touche LLP as the
independent auditors for the Company for the fiscal year ending
October 31, 2000.
3. To transact such other business as may properly come before the
meeting or any postponement or adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on February 14,
2000 will be entitled to notice of and to vote at the Annual Meeting or
any adjournment thereof.
All shareholders are cordially invited to attend the Annual Meeting in
person. However, regardless of whether you expect to attend the Annual
Meeting in person, you are urged to mark, date, sign and return the
enclosed proxy card as promptly as possible in the postage-prepaid
envelope provided in order to ensure your representation and the presence
of a quorum at the Annual Meeting. If you send in your proxy card and
then decide to attend the Annual Meeting to vote your shares in person,
you may still do so. Your proxy is revocable in accordance with the
procedures set forth in the Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
John W. Peth
President and Chief Executive Officer
San Jose, California
February 22, 2000
IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE
REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE AS PROMPTLY AS POSSIBLE. IF YOU ATTEND
THE MEETING AND SO DESIRE, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN
PERSON. THANK YOU FOR ACTING PROMPTLY.
[LOGO]
PROXY STATEMENT
FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of the Board of Directors of
Business Resource Group, a California corporation, for use at the Annual
Meeting of Shareholders to be held Thursday, March 23, 2000 at 1:30 p.m.,
local time, or at any postponement or adjournment thereof, for the
purposes set forth in this Proxy Statement and in the accompanying Notice
of Annual Meeting of Shareholders. The Annual Meeting will be held at the
Double Tree Hotel, 2050 Gateway Place, San Jose, California 95110. The
Company's principal executive offices are located at 2150 N. First
Street, Suite 101, San Jose, California 95131. The Company's principal
telephone number at that location is (408) 325-3200.
This Proxy Statement, the enclosed proxy card and the Company's Annual
Report to Shareholders for the fiscal year ended October 31, 1999,
including financial statements, were first mailed to all shareholders
entitled to vote at the Annual Meeting on or about February 22, 2000.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Company
(Attention: Inspector of Elections) a written notice of revocation or a
duly executed proxy bearing a later date or by attending the Annual
Meeting and voting in person.
Record Date; Voting Securities
The close of business on February 14, 2000 has been fixed as the
record date for determining the holders of shares of Common Stock of the
Company entitled to notice of and to vote at the Annual Meeting. At the
close of business on the record date, the Company had approximately
5,253,474 shares of Common Stock outstanding held of record by
approximately 1,224 shareholders.
Voting and Solicitation
Votes cast by proxy or in person at the Annual Meeting will be
tabulated by the Inspector of Elections with the assistance of the
Company's transfer agent. The Inspector of Elections will also determine
whether a quorum is present.
Holders of Common Stock on the Record Date are entitled to one vote
per share on all matters and are entitled to cumulate votes for the
election of directors, subject to the conditions described below.
Every shareholder voting for the election of directors may cumulate
such shareholder's votes and give one candidate a number of votes equal
to the number of directors to be elected multiplied by the number of
shares held by such shareholder or distribute the shareholder's votes on
the same principle among as many candidates as the shareholder chooses,
provided that votes cannot be cast for more than the number of directors
authorized by the Company's Bylaws. However, no shareholder shall be
entitled to cumulate votes unless the candidate's name has been placed in
nomination prior to the voting and the shareholder, or any other
shareholder, has given notice at the meeting, prior to the voting of the
intention to cumulate the shareholder's votes. On all other matters, each
share of Common Stock has one vote.
Except with respect to the election of directors, and except in
certain other specific circumstances, the affirmative vote of a majority
of shares represented and voting with respect to a particular item at a
duly held meeting at which a quorum is present (which shares voting
affirmatively also constitute a majority of the required quorum) is
required under California law for approval of proposals presented to
shareholders. In general, California law also provides that a quorum
consists of a majority of the shares entitled to vote, represented either
in person or by proxy. The Inspector of Elections will treat abstentions
as shares that are present and entitled to vote for purposes of
determining the presence of a quorum, but as not voting for purposes of
determining the approval of any matter submitted to the shareholders for
a vote.
The shares represented by the proxies received, properly marked,
dated, signed and not revoked, will be voted at the Annual Meeting.
Where such proxies specify a choice with respect to any matter to be
acted upon, the shares will be voted in accordance with the
specifications made. Any returned proxy that is in the form of the
enclosed proxy but that is not marked as to a particular item will be
voted FOR the election of directors, FOR ratification of the appointment
of the designated independent auditors and as the proxy holders deem
advisable on other matters that may come before the meeting, as the case
may be, with respect to the item not marked. If a broker indicates on
the enclosed proxy or its substitute that it does not have discretionary
authority as to certain shares to vote on a particular matter ("broker
non-votes"), those shares will not be considered as voting with respect
to that matter. While there is no definitive specific statutory or case
law authority in California concerning the proper treatment of
abstentions and broker non-votes, the Company believes that the
tabulation procedures to be followed by the Inspector of Elections are
consistent with the general statutory requirements in California
concerning voting of shares and determination of a quorum.
The solicitation of proxies will be conducted by mail and the Company
will bear all attendant costs. These costs will include the expense of
preparing and mailing proxy solicitation materials for the Annual Meeting
and reimbursements paid to brokerage firms and other persons representing
beneficial owners of shares of the Company's common stock for their
expenses in forwarding solicitation materials regarding the Annual
Meeting to beneficial owners. Proxies may be solicited by certain of the
Company's directors, officers and regular employees, without additional
compensation, personally or by telephone, facsimile or telegram.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees
The Company's Bylaws currently provide for five directors. At the
Annual Meeting five directors are to be elected to serve until the next
Annual Meeting of Shareholders or until their respective successors are
elected and qualified. Unless otherwise instructed, the proxy holders
will vote the proxies received by them FOR the Company's five nominees
named below, all of whom are presently directors of the Company. In the
event that any nominee of the Company is unable or unwilling to serve as
a director at the time of the Annual Meeting, the proxies may be voted
for the balance of those nominees named and for any substitute nominee
who shall be designated by the present Board or the proxy holders to fill
the vacancy, or for the balance of the nominees named without nomination
of a substitute, or the size of the Board may be reduced in accordance
with the Bylaws of the Company. The Board does not believe that any of
the persons named below will be unable or unwilling to serve as a nominee
or as a director if elected. In the event that additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them in such a manner in accordance with cumulative
voting as will assure the election of as many of the nominees listed
below as possible, and, in such event, the specific nominees to be voted
for will be determined by the proxy holders. Assuming a quorum is
present, the five nominees for director receiving the greatest number of
votes cast at the Annual Meeting will be elected. The term of office of
each person elected as a director will continue until the next Annual
Meeting of Shareholders or until his or her successor has been elected
and qualified.
In voting for directors, each shareholder is entitled to cast that
number of votes equal to the number of directors to be elected multiplied
by the number of shares of Common Stock held by that shareholder. Such
votes may be cast for one candidate or distributed in any manner among
the nominees for directors provided that votes may not be cast for more
than five candidates. However, the right to cumulate votes in favor of
one or more candidates may not be exercised unless the candidate or
candidates have been nominated prior to the voting, and a shareholder has
given notice at the Annual Meeting, prior to the voting, of the
shareholder's intention to cumulate such shareholder's votes. If any one
shareholder gives such notice, all shareholders may cumulate their votes
for candidates in nomination. The persons authorized to vote shares
represented by proxies in the enclosed form will (if authority to vote
for the election of directors is not withheld) have full discretion and
authority to vote cumulatively and to allocate votes among any or all of
the nominees as they may determine or, if authority to vote for a
specified candidate or candidates has been withheld, among those
candidates for whom authority to vote has not been withheld.
The nominees' names, ages as of February 14, 2000, and certain
information about them are set forth below:
<TABLE>
<CAPTION>
Director
Name of Nominee Age Position with the Company Since
- ---------------------- ---- ------------------------------------- --------
<S> <C> <C> <C>
George Kelly 65 Director 2000
Brian D. McNay........ 43 Director, Executive Vice President 1987
of Sales
John W. Peth.......... 51 Director, President and Chief 1995
Executive Officer
Harry S. Robbins...... 51 Director 1995
Jeffrey D. Tuttle....... 43 Director, Executive Vice President 1987
of Marketing
</TABLE>
There is no family relationship between any director or executive officer
of the Company.
Mr. Kelly has served as a member of the Board since January 2000. Mr.
Kelly is a retired partner of Deloitte & Touche LLP, where he worked for
thirty years until his retirement in June 1989. Mr. Kelly is also a
director of Micrel, Inc. an integrated circuits manufacturer and a
director of Ion Systems, Inc., a private company. Mr. Kelly received his
BS in Business Administration in 1959 from Pennsylvania State University,
and an MBA from the University of California at Berkeley in 1961.
Mr. McNay has served as Executive Vice President of Sales since April
1995, and as a member of the Board since the Company's inception in April
1987. Mr. McNay also served as President between April 1987 and April
1995. Mr. McNay was also the founder and owner of Business Interiors, a
sole proprietorship sold to the Company in April 1987. In addition, Mr.
McNay served as a sales executive at various office furniture dealerships
from 1979 to 1986, including the Contract Source Center, the Contract
Office Group and Design Performance.
Mr. Peth has served as President and Chief Executive Officer since
December 1997 and as a member of the Board since April 1995. He also
served as Chief Financial Officer of the Company from December 1997 to
February 1998 and was a consultant to the Company from July 1997 to
December 1997. From June 1996 to March 1997, Mr. Peth served as Acting
President and Chief Executive Officer of Tab Products Co., an office
filing and furniture systems manufacturer and distributor. From April
1991 until June 1997, Mr. Peth served as Executive Vice President and
Chief Operating Officer of TAB. From August 1984 to April 1991, Mr. Peth
served as the managing partner of the San Jose region of Deloitte &
Touche LLP and one of its predecessor public accounting firms. Mr. Peth
is also a director of Aspect Communications Corporation, a provider of
customer relationship management solutions. Mr. Peth received his BA
degree in Economics in 1970 from the University of California at Santa
Barbara, and an MBA from the University of California at Los Angeles in
1972.
Mr. Robbins has served as a member of the Board since May 1995. Since
October 1999, Mr. Robbins has served as Chairman of the Board of
Symphonix Devices, Inc., an implantable hearing device company. From
March 1994 to October 1999, Mr. Robbins served as President, Chief
Executive Officer and Chairman of the Board of Symphonix Devices, Inc.
From January 1991 to December 1993, Mr. Robbins was President and a
member of the Board of Directors of Cardiorhythm, an electrophysiology
catheter company. From September 1986 to December 1990, Mr. Robbins
served in a variety of positions at Laserscope, a surgical systems
company, including Executive Vice President, Vice President of Sales,
Marketing and Service and Director of Sales. Mr. Robbins received his BA
degree from Pennsylvania State University in 1969.
Mr. Tuttle has served as Executive Vice President of Marketing since
April 1995, and as a member of the Board since the Company's inception in
1987. Mr. Tuttle also served as Vice President of Sales between April
1987 and April 1995. From 1978 to 1987, Mr. Tuttle served as a sales
executive with KBM Office Furniture, an office furniture dealership. He
received his BS degree in Marketing in 1980 from Santa Clara University.
Board Meetings and Committees
The Board held a total of four formal meetings during the fiscal year
ended October 31, 1999. Mr. Robbins attended fewer than 75% of the
aggregate number of meetings of the Board of Directors. The Board has an
Audit Committee and a Compensation Committee. No director attended fewer
than 75% of the aggregate number of meetings of the committees of the
Board on which he serves during fiscal 1999. The Board does not have a
nominating committee or a committee performing the functions of a
nominating committee.
The Audit Committee currently consists of Mr. Robbins and Mr. Kelly,
who was appointed as a member of such committee in January 2000 when he
became a member of the Board. The Audit Committee held one formal
meeting during the fiscal year ended October 31, 1999. The Audit
Committee recommends engagement of the firm of certified public
accountants to audit the financial statements of the Company and monitors
the effectiveness of the audit effort, the Company's financial and
accounting organization and its system of internal accounting controls.
The Compensation Committee currently consists of Mr. Robbins and Mr.
Kelly, who was appointed as a member of such committee in January 2000
when he became a member of the Board. The Compensation Committee held
one formal meeting during the fiscal year ended October 31, 1999. The
Compensation Committee's functions are to establish and administer the
Company's policies regarding annual executive salaries and cash
incentives and long-term equity incentives, and make recommendations to
the Board regarding the Company's executive compensation policy.
Compensation of Directors
Non-employee members of the Board are eligible to receive a retainer
of $2,000 per quarter, $500 for each Board meeting attended and $250 for
each committee meeting attended, and may be reimbursed for costs of
attending Board and Committee meetings. In addition, non-employee members
of the Board receive options to purchase shares of the Company's Common
Stock pursuant to the 1995 Directors' Stock Option Plan. The 1995
Directors' Stock Option Plan provides for the grant of non-statutory
stock options to non-employee directors of the Company at an exercise
price equal to the fair market value of the Company's Common Stock on the
date of grant. Each non-employee member of the Board is automatically
granted an option to purchase 20,000 shares of Common Stock on the date
on which such person first becomes a director, whether through election
by the shareholders of the Company or appointment by the Board of
Directors to fill a vacancy. Thereafter, on the first calendar day of the
Company's fiscal year, each non-employee director is automatically
granted an option to purchase 5,000 shares of Common Stock if, on such
date, he or she has served on the Board for at least three months.
Options granted under the 1995 Directors' Stock Option Plan have a term
of ten years. The options granted upon initial election to the Board
become exercisable cumulatively to the extent of 25% of the shares
subject to the option on each of the first four anniversaries of the date
of grant. The options granted annually become exercisable in full on the
fourth anniversary of the date of grant. Directors who are employees of
the Company do not receive any additional compensation for their services
as a director.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR ALL OF THE NOMINEES
LISTED ABOVE.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board has selected Deloitte & Touche LLP, independent auditors, to
audit the financial statements of the Company for the fiscal year ending
October 31, 2000 and recommends that the shareholders vote FOR
ratification of such appointment. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection.
Deloitte & Touche LLP has audited the financial statements of the Company
since 1994. Representatives of Deloitte & Touche LLP are expected to be
present at the meeting and will have the opportunity to make a statement
if they desire to do so. They are also expected to be available to
respond to appropriate questions.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS FOR THE
COMPANY.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the
Company's Common Stock as of January 31, 2000 as to (i) each of the
Company's directors, (ii) each person known by the Company to own
beneficially more than five percent of the Company's Common Stock, (iii)
each of the executive officers named in the Summary Compensation Table of
this Proxy Statement, and (iv) all directors and executive officers as a
group.
<TABLE>
<CAPTION>
Shares Beneficially
---------------------------
Percent
of
Owned(1)(2) Total
Number Class
------------ ---------
<S> <C> <C>
Jeffrey D. Tuttle......................... 960,000 18.3%
Brian D. McNay............................ 633,390 12.1%
John W. Peth.............................. 414,125 (3) 7.3%
John M. Palmer............................ 95,313 (4) 1.8%
Harry S. Robbins.......................... 25,000 (5) *
George Kelly 2,000 *
Bay Area Micro-Cap Fund, L.P. 326,400 (6) 6.2%
1151 Bay Laurel Drive
Menlo Park, CA 94025
Heartland Advisors........................ 661,100 (7) 12.6%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Ronda Lee McNay........................... 631,390 (8) 12.1%
200 Summerhill Drive
Santa Cruz, California 95066
Royce & Associates, Inc. 495,900 (9) 9.5%
1414 Avenue of the Americas
New York, NY 10019
T. Rowe Price Associates, Inc............. 360,000 (10) 6.9%
100 East Pratt Street
Baltimore, Maryland 21202
All directors and executive officers
as a group (6 persons).................. 2,129,828 (11) 40.0%
</TABLE>
* Less than 1%
(1) To the Company's knowledge, the persons named in the table have
sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them, subject to
community property laws where applicable and the information
contained in the footnotes to this table. Unless otherwise
indicated, the address of each of the named individuals is: c/o
Business Resource Group, 2150 No. First Street, Suite 101, San
Jose, California 95131.
(2) In computing the number of shares beneficially owned by a person
and the percentage ownership of that person, shares of Common Stock
subject to options or warrants held by that person that are
currently exercisable or exercisable within 60 days after January
31, 2000 are deemed outstanding. Such shares, however, are not
deemed outstanding for the purpose of computing the percentage
ownership of any other person.
(3) Includes the following number of shares subject to stock options
exercisable within 60 days of January 31, 1999: 403,125.
(4) Includes the following number of shares subject to stock options
exercisable within 60 days of January 31, 1999: 90,313.
(5) Includes the following number of shares subject to stock options
exercisable within 60 days of January 31, 1999: 25,000.
(6) Based solely on information contained in the Schedule 13G dated
February 7, 2000 filed by the named shareholder with the Securities
and Exchange Commission.
(7) Based solely on information contained in the Schedule 13G dated
January 18, 2000 filed by the named shareholder with the Securities
and Exchange Commission.
(8) Based solely on information contained in the Stipulation and Order
Re: Family Support filed November 10, 1998 in the Superior Court of
the State of California in and for the County of Santa Cruz.
(9) Based solely on information contained in the Schedule 13G dated
February 2, 2000 filed by the named shareholder with the Securities
and Exchange Commission.
(10) Based solely on information contained in the Schedule 13G
dated February 4, 2000 filed by the named shareholder with the
Securities and Exchange Commission.
(11) Includes the following number of shares subject to stock
options exercisable within 60 days of January 31, 1999: Mr. Palmer,
90,313; Mr. Peth, 403,125: Mr. Robbins, 25,000; all directors and
officers as a group, 518,438.
Notwithstanding anything to the contrary 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 might
incorporate future filings, including this Proxy Statement, in whole or
in part, the following report and the Performance Graph on page 10 shall
not be incorporated by reference into any such filings.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following is a report of the Compensation Committee of the Board
of Directors (the "Compensation Committee") describing the compensation
policies applicable to the Company's executive officers and other
compensation matters during the fiscal year ended October 31, 1999. The
Compensation Committee is responsible for establishing and monitoring the
general compensation policies and compensation plans of the Company, as
well as the specific compensation levels for executive officers.
Executive officers who are also directors have not participated in
deliberations or decisions involving their own compensation. All
decisions relating to executive compensation are also reviewed by the
full Board.
General Compensation Policy
The Company's compensation policy is designed to attract and retain
qualified key executives to contribute to the Company's growth and long-
term success. It is the objective of the Compensation Committee to have
a portion of each executive's compensation contingent upon the Company's
performance as well as upon the individual's personal performance.
Accordingly, each executive officer's compensation package is comprised
of three elements: (i) base salary which reflects individual performance
and expertise; (ii) variable bonus awards payable in cash and tied to the
achievement of certain performance goals that the Board establishes from
time to time for the Company; and (iii) long-term stock-based incentive
awards which are designed to strengthen the mutuality of interests
between the executive officers and the Company's shareholders.
The summary below describes in more detail the factors which the
Compensation Committee considers in establishing each of the three
primary components of the compensation package provided to the executive
officers.
Base Salary
The level of base salary is established primarily on the basis of the
individual's qualifications and relevant experience, the strategic goals
for which he or she has responsibility, the compensation levels at
companies which compete with the Company for business and executive
talent, and the incentives necessary to attract and retain qualified
management. Base salary is adjusted as necessary each year to take into
account the individual's performance and to maintain a competitive salary
structure. The Company's overall performance plays a significant role in
the determination of base salary. See also "Compensation of Other
Executives" below.
Cash-Based Incentive Compensation
Cash bonuses are awarded to executive officers on the basis of their
success in achieving designated individual goals and the Company's
success in achieving specific company-wide goals, such as customer
satisfaction, revenue growth and earnings growth. See also "Compensation
of Other Executives" below.
Long-Term Incentive Compensation
The Company has utilized its stock option plans to provide executive
and other key employees with incentives to maximize long-term shareholder
value. Grants under the Company's stock option plans by the Compensation
Committee take the form of stock options designed to give the recipient a
significant equity stake in the Company and thereby closely align his or
her interests with those of the Company's shareholders. Factors
considered in making such awards include the individual's position in the
Company, his or her performance and responsibilities, and internal
comparability considerations. See also "Report on Repriced Stock Options
for Employees of the Company."
Each option grant allows the executive officer to acquire shares of
Common Stock at a fixed price per share (the fair market value on the
date of grant) over a specified period of time (up to five years). The
options typically vest in periodic installments over a four-year period,
contingent upon the executive officer's continued employment with the
Company. Accordingly, the option will provide a return to the executive
officer only if he or she remains in the Company's service, and then only
if the market price of the Common Stock appreciates over the option term.
Compensation of the Chief Executive Officer
John W. Peth has served as the Company's President and Chief Executive
Officer since December 1997. Mr. Peth received $225,000 in base salary
actually paid for the period from November 1, 1998 to October 31, 1999,
and he received a performance bonus in the amount of $110,000.
The factors discussed above in "Base Salaries," "Cash-Based Incentive
Compensation," and "Long-Term Incentive Compensation" were also applied
in establishing the amounts of Mr. Peth's salary and bonus and number of
shares subject to his stock option grant. Mr. Peth's compensation was
the result of arm's length negotiation between the Company and Mr. Peth
and was approved by the Compensation Committee. Significant factors in
establishing Mr. Peth's compensation included: (i) an assessment of the
scope of his responsibilities; (ii) an evaluation of Mr. Peth's level of
experience; and (iii) a review of the compensation of Chief Executive
Officers for competitive companies in the office furniture industry. See
also "Summary Compensation Table" below
.
Compensation of Other Executives
The President and Chief Executive Officer annually assesses the
performance of all other executive officers and recommends compensation
increases to the Compensation Committee based on a number of factors,
such as performance evaluations, comparative data and other relevant
factors. The Compensation Committee then reviews and approves increases,
if any, for each executive officer.
During fiscal 1998, the Compensation Committee changed the
compensation structure of Messrs. McNay and Tuttle, the Company's
Executive Vice President of Sales and Vice President of Marketing,
respectively, from a primarily commission-based compensation plan to a
base salary and bonus arrangement based upon corporate performance.
Messrs. McNay and Tuttle continue to be responsible for their own sales
to customers.
During fiscal 1997, Messrs. McNay and Tuttle were compensated by
commissions earned on their respective sales of the Company's products
and services and participated in the same commission plan as other
Company sales personnel. The Company's commission structure limited
sales representatives who hold more than five percent of the Company's
outstanding Common Stock (or options therefor) to a maximum commission
level of $480,000 per fiscal year. Mr. McNay obtained the maximum
commission level during fiscal 1997.
Neither Mr. McNay nor Mr. Tuttle received any stock option grants
during fiscal 1999, as the Compensation Committee did not believe such
action was necessary given their existing ownership positions in the
Company.
Deductibility of Executive Compensation
The Compensation Committee has considered the impact of Section 162(m)
of the Internal Revenue Code adopted under the Omnibus Budget
Reconciliation Act of 1993, which section disallows a deduction for any
publicly-held corporation for individual compensation exceeding $1
million in any taxable year for the Chief Executive Officer and four
other most highly compensated executive officers, respectively, unless
such compensation meets the requirements for the "performance-based"
exception to Section 162(m). As the cash compensation paid by the
Company to each of its executive officers is expected to be below $1
million annually and the Compensation Committee believes that options
granted under the Company's 1995 Stock Option Plan to such officers will
meet the requirements for qualifying as performance-based, the
Compensation Committee believes that Section 162(m) will not affect the
tax deductions available to the Company with respect to the compensation
of its executive officers. It is the Compensation Committee's policy to
qualify, to the extent reasonable, its executive officers' compensation
for deductibility under applicable tax law. However, the Company may
from time to time pay compensation to its executive officers that may not
be deductible.
COMPENSATION COMMITTEE
Harry S. Robbins
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are currently no employee directors serving on the Compensation
Committee and no member of the Compensation Committee or executive
officers of the Company has a relationship that would constitute an
interlocking relationship with executive officers or directors of another
entity.
See "Proposal No. 1 - Election of Directors - Compensation of
Directors" for a discussion of certain information with respect to all
non-employee directors, including directors serving on the Compensation
Committee.
PERFORMANCE GRAPH
The following graph compares, for the period that the Company's Common
Stock has been registered under Section 12 of the Securities Exchange Act
of 1934, as amended, (which commenced June 27, 1995), the cumulative
total shareholder return for the Company, the CRSP Total Return Index for
the Nasdaq Stock Market (U.S. companies), and a group consisting of
publicly-traded U.S. companies in the Company's industry. The industry
group companies consist of four companies compiled from Standard & Poor's
CompuStat as follows: Hon Industries, Kimball International, Herman
Miller, Inc. and TAB Products Co. Measurement points are June 27, 1995
and the last trading day of the Company's fiscal years ended October 31,
1999, October 31, 1998, October 31, 1997, October 31, 1996 and October
31, 1995. The graph assumes that $100 was invested on June 27, 1995 (at
the initial offering price of $7.00 per share) in the Common Stock of the
Company, the CRSP Index and the industry group companies, and further
assumes reinvestment of dividends. The stock price performance on the
following graph is not necessarily indicative of future stock price
performance.
<TABLE>
<CAPTION>
Measurement Period
PEER
(Fiscal Period Covered) BRG NASDAQ GROUP
--------- --------- ---------
<S> <C> <C> <C>
06/27/95...................... 100 100 100
10/31/95...................... 68 113 105
10/31/96...................... 57 134 145
10/31/97...................... 56 176 254
10/31/98...................... 33 197 223
10/31/99...................... 52 328 238
</TABLE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the compensation earned by the Company's
Chief Executive Officer and all other executive officers of the Company
for the fiscal year ended October 31, 1999, and the compensation received
by each such individual for the Company's two prior fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
-------------------------------
Annual Compensation Awards Payouts
------------------------------------- --------------------- ---------
Other Securities All
Annual Restricted Underlying Other
Compen- Stock Options/ LTIP Compensa-
Fiscal Bonus sation Awards SARS Payouts tion
Name & Principal Position Year Salary($) (1) ($) ($) (#)(2) ($) ($)(3)
- ----------------------------------- ------- --------- --------- --------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John W. Peth 1999 $225,000 $110,000 -- -- -- $18,300
President and Chief Executive 1998 $206,250 $80,000 -- -- 400,000 -- $16,544
Officer(4) 1997 -- -- -- -- 55,000 -- --
Brian D. McNay 1999 $525,000 $110,000 -- -- -- -- $18,300
Executive Vice President of 1998 $515,000 $80,000 -- -- -- -- $5,680
Sales 1997 -- $480,000 -- -- -- -- $4,337
John M. Palmer 1999 $144,324 $110,000 -- -- 50,000 -- $8,305
Chief Operating Officer, 1998 $96,028 $60,000 -- -- 125,000 -- $5,603
Vice President, Finance and 1997 -- -- -- -- -- -- --
Chief Financial Officer(5)
Jeffrey Tuttle 1999 $300,000 $110,000 -- -- -- -- $18,300
Executive Vice President of 1998 $271,485 $80,000 -- -- -- -- $5,680
Marketing 1997 -- $381,801 -- -- -- -- $4,337
</TABLE>
__________
(1) Stated amounts for fiscal 1999 and fiscal 1998 include amounts earned
by Mr. Peth, Mr. McNay, Mr. Tuttle and Mr. Palmer as performance
bonuses under the provisions of the Company's fiscal 1999 and fiscal
1998 Top Management Bonus Program. In fiscal 1997 the stated amounts
include amounts earned by Mr. McNay and Mr. Tuttle as sales
commissions, and exclude amounts paid during each referenced year
relating to amounts earned in prior years. During fiscal 1997 Company
sales representatives, including Messrs. McNay and Tuttle, who hold
more than five percent of the Company's outstanding Common Stock (or
options therefore) were limited to a maximum commission level of
$480,000 per fiscal year.
(2) All options were granted at an exercise price equal to the fair market
value as reported on the Nasdaq Stock Market on the date of grant.
(3) Stated amounts for fiscal 1999, 1998 and 1997 represent the Company's
contributions to its 401(k) plan for the benefit of the named
executives and automobile expense allowances in the following amounts:
401(k) plan contributions - Mr. Peth ($2,400, $1,969 and $0), Mr.
McNay ($2,400, $2,500 and $2,250), Mr. Palmer ($2,305, $1,488 and $0)
and Mr. Tuttle ($2,400, $2,500 and $2,250); automobile expense
allowances - Mr. Peth ($15,900, $14,575 and $0), Mr. McNay ($15,900,
$3,180 and $2,087), Mr. Palmer ($6,000, $4,115 and $0) and Mr. Tuttle
($15,900, $3,180 and $2,087).
(4) Mr. Peth joined the Company as President and Chief Executive Officer
in December 1997.
(5) Mr. Palmer joined the Company as Vice President, Finance and Chief
Financial Officer in February 1998. Mr. Palmer was appointed Chief
Operating Officer in August 1999.
STOCK OPTION GRANTS IN FISCAL YEAR 1999
The following table sets forth information for the executive officers
named in the Summary Compensation Table in this Proxy Statement with
respect to grants of options to purchase Common Stock of the Company made
in the fiscal year ended October 31, 1999 and the value of all options
held by such executive officers on October 31, 1999.
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------
Percent Potential Realizable
of Total Value at Assumed
Number of Options/SAR's Annual Rates of
Securities Granted Stock Price
Underlying to Exercise Appreciation for
Options/SAR's Employees of Base Expir- Option Term(1)
Granted in Fiscal Price ation ---------------------
Name (#) Year(%)(2) ($/sh)(3) Date 5%($) 10%($)
- ------------------ ------------ ------------ --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
John W. Peth...... -- -- -- -- -- --
Brian D. McNay.... -- -- -- -- -- --
John M. Palmer.... 50,000 (4) 21.3% $3.00 8/12/04 $44,442 $91,577
Jeffrey Tuttle.... -- -- -- -- -- --
</TABLE>
(1) There is no assurance provided to any executive officer or any other
holder of the Company's securities that the actual stock price
appreciation over the five-year option term will be at the assumed
levels set forth in the table or at any other defined level. Unless
the market price of the Common Stock appreciates over the option term,
no value will be realized from the option grants made to the executive
officers.
(2) The Company granted stock options to employees for an aggregate of
235,100 shares of Common Stock during the 1998 fiscal year.
(3) The exercise price may be paid in cash, in shares of Common Stock
valued at fair market value on the exercise date or through an
exercise procedure involving a same-day sale of the purchased shares.
The Company may also finance the option exercise by loaning the
optionee sufficient funds to pay the exercise price for the purchased
shares and the federal and state income tax liability incurred by the
optionee in connection with such exercise.
(4) Such option is exercisable ratably over 48 months from the date of
grant. See also "Aggregated Option Exercises in Fiscal 1999 and Fiscal
Year-End Option Values".
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1999 AND
FISCAL YEAR-END OPTION VALUES
The following table sets forth information relating to exercises of
stock options by the executive officers named in the Summary Compensation
Table in this Proxy Statement during the fiscal year ended October 31,
1999, and the value of unexercised stock options as of October 31, 1999.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares Fiscal Year End (#)Fiscal Year End ($)
Acquired Value ----------------- -----------------
on Realized Exercisable/ Exercisable/
Name Exercise ($) Unexercisable Unexercisable (1)
- --------------------- --------- ---------- ----------------- -----------------
<S> <C> <C> <C> <C>
John W. Peth.......... -- -- 367,917/117,083 $220,443/$70,182
Brian D. McNay........ -- -- -- --
John M. Palmer........ -- -- 78,125/96,875 $45,313/$65,625
Jeffrey Tuttle........ -- -- -- --
</TABLE>
(1) Based on the $3.6875 per share closing price of the Company's Common
Stock on The Nasdaq National Market on October 31, 1999 less the exercise
price of the options.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Non-employee members of the Company's Board of Directors are eligible
to receive cash compensation and options to purchase shares of Common
Stock in connection with their service on the Board. See "Proposal No. 1
- - Election of Directors - Compensation of Directors."
The Company has entered into indemnification agreements with each of
its directors and officers, which may require the Company, among other
things, to indemnify them against certain liabilities that may arise by
reason of their status or service as directors or officers, to advance
their expenses incurred as a result of any proceeding against them as to
which they could be indemnified, and to obtain directors' and officers'
liability insurance if available on reasonable terms.
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
own more than ten percent of a registered class of the Company's equity
securities, to file certain reports of ownership with the Securities and
Exchange Commission. Such executive officers, directors and shareholders
are also required by SEC rules to furnish the Company with copies of all
Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons, the Company
believes that its officers, directors and ten percent shareholders
complied with all Section 16(a) filing requirements for the fiscal year
ended October 31, 1999, except Form 4 required to be filed by Ronda Lee
McNay in December 1998 and Heartland Advisors.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Shareholder proposals for inclusion in the Company's Proxy Statement
and form of proxy relating to the Company's Annual meeting of
Shareholders for the year 2001 must be received by October 25, 2000. If
the Company is not notified of a shareholder proposal by January 8, 2001,
then the proxies held by management of the Company may provide the
discretion to vote against such shareholder proposal, even though such
proposal is not discussed in the Proxy Statement. Shareholder proposals
should be addressed to the President and Chief Executive Officer of the
Company at the Company's principal executive offices as set forth herein.
OTHER MATTERS
The Board of Directors knows of no other matters to be submitted to
the meeting. If any other matters properly come before the meeting or any
postponement(s) or adjournment(s) thereof, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they
represent as the Board of Directors may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
JOHN W. PETH
President and Chief Executive Officer
Dated: February 22, 2000
San Jose, California
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF BUSINESS RESOURCE GROUP
2000 ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of Business Resource Group, a California
corporation, hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders and Proxy Statement, each dated February 22, 2000 and
hereby appoints John W. Peth and John M. Palmer or either of them,
proxies and attorneys-in-fact, with full power to each of substitution,
on behalf and in the name of the undersigned to represent the undersigned
at the 2000 Annual Meeting of Shareholders of Business Resource Group to
be held on March 23, 2000 at 1:30p.m., local time, at the Double Tree
Hotel, 2050 Gateway Place, San Jose, California 95110 and at any
postponement or adjournment 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 below:
SEE REVERSE SIDE
<PAGE>
<TABLE>
<S> <C> <C> <C>
Please mark your
[X] votes as in this
example
FOR all nominees WITHHOLD authority to
listed to the right vote for all nominees
(except as indicated) listed to the right
1. Election of / / / / Nominees: George Kelly
Directors Brian D. McNay
John W. Peth
Harry S. Robbins
Jeffrey D. Tuttle
If you wish to withhold authority to vote for any individual
nominee, strike a line through that nominee's name in the list
to the right.
FOR AGAINST ABSTAIN
2. Proposal to approve the appointment of Deloitte & Touche / / / / / /
LLP as the independent auditors of the Company for the
fiscal year ending October 31, 2000.
</TABLE>
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED AS FOLLOWS: (1) FOR THE ELECTION OF DIRECTORS
AND (2) FOR RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS
INDEPENDENT AUDITORS, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER
MATTERS AS MAY COME BEFORE THE MEETING.
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. IF THE STOCK IS
REGISTERED IN THE NAMES OF TWO OR MORE PERSONS, EACH SHOULD SIGN.
EXECUTORS, ADMINISTRATORS, TRUSTEES, GUARDIANS AND ATTORNEYS-IN-FACT
SHOULD ADD THEIR TITLES. IF SIGNER IS A CORPORATION, PLEASE GIVE FULL
CORPORATE NAME AND HAVE A DULY AUTHORIZED OFFICER SIGN, STATING TITLE. IF
SIGNER IS A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED
PERSON.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
SIGNATURE(S) DATE
SIGNATURE(S) DATE
NOTE: (This Proxy should be marked, dated, signed by the shareholder(s)
exactly as his or her name appears herein, and returned promptly in the
enclosed envelope. Persons signing in a fiduciary capacity should so
indicate. If shares are held by joint tenants or as community property,
both should sign.)
[OH&S LETTERHEAD]
February 22, 2000
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
Attn: Filing Desk, Stop 1-4
BUSINESS RESOURCE GROUP
DEFINITIVE PROXY MATERIALS
Ladies and Gentlemen:
Pursuant to Regulation 14A of the Securities Exchange Act of 1934, as
amended, and Rules 101(a)(3) and 309(b) of Regulation S-T of the
Securities Act of 1933, as amended, we hereby transmit for the
information of the Securities and Exchange Commission (the "Commission")
and staff (the "Staff") on behalf of Business Resource Group (the
"Company") the following documents concerning the Company's definitive
proxy materials:
1. Cover page as required by Rule 14a-6(m); and
2. One (1) definitive copy of the Notice of Annual Meeting of
Stockholders, Proxy Statement and Proxy Card to be used in
connection with the Company's Annual Meeting.
Please contact the undersigned at (650) 614-7466 if you have any
questions.
Sincerely,
/s/ Peter Cohn
Enclosures
cc w/out encl.: John W. Peth
Lori Fuller
