<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
PERSONNEL GROUP OF AMERICA, 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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LOGO] PERSONNEL GROUP OF AMERICA, INC.
5605 CARNEGIE BOULEVARD, SUITE 500
CHARLOTTE, NORTH CAROLINA 28209
April 20, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders of Personnel Group of America, Inc. The Annual Meeting will be held
at the Hyatt Southpark Hotel, 5501 Carnegie Boulevard, Charlotte, North
Carolina, on Thursday, May 25, 2000, at 9:30 a.m., local time.
The Notice of Annual Meeting of Shareholders and Proxy Statement are
attached hereto. Also attached is a copy of the Company's 1999 Annual Report to
Shareholders. The matters to be acted upon by the shareholders are set forth in
the Notice of Annual Meeting and discussed in the Proxy Statement.
We would appreciate your signing, dating and returning the enclosed
proxy card in the envelope provided at your earliest convenience. If you choose
to attend the 2000 Annual Meeting, you may revoke your proxy and personally cast
your votes at the Annual Meeting.
We look forward to seeing you at the Annual Meeting.
Sincerely yours,
/s/ Ken R. Bramlett, Jr.
Ken R. Bramlett, Jr.
Chief Financial Officer
and Secretary
<PAGE> 3
PERSONNEL GROUP OF AMERICA, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 25, 2000
---------------
TO THE SHAREHOLDERS
OF PERSONNEL GROUP OF AMERICA, INC.
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders
(the "Annual Meeting") of Personnel Group of America, Inc., a Delaware
corporation (the "Company"), will be held at 9:30 a.m., local time, on May 25,
2000, at the Hyatt Southpark Hotel, 5501 Carnegie Boulevard, Charlotte, North
Carolina, for the following purposes:
(1) To elect three members to the Company's Board of Directors to serve
until the Annual Meeting of Shareholders in 2003 or until their successors are
duly elected and qualified;
(2) To consider and act upon a proposal to amend the Company's 1997
Employee Stock Purchase Plan;
(3) To ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent public accountants for 2000; and
(4) To transact such other business as may properly come before the
Annual Meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on March 31,
2000, as the record date for determining those shareholders entitled to notice
of, and to vote at, the Annual Meeting and any adjournments or postponements
thereof. A list of those shareholders may be examined at the principal executive
offices of the Company, 5605 Carnegie Boulevard, Suite 500, Charlotte, North
Carolina, during the 10-day period preceding the Annual Meeting.
Whether or not you expect to be present at the Annual Meeting, please
sign, date and return the enclosed proxy card in the enclosed pre-addressed
envelope as promptly as possible. No postage is required if mailed in the United
States.
By Order of the Board of Directors,
/s/ Ken R. Bramlett, Jr.
Ken R. Bramlett, Jr.
Chief Financial Officer
and Secretary
Charlotte, North Carolina
April 20, 2000
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE COMPANY'S ANNUAL MEETING IN PERSON.
THOSE SHAREHOLDERS WHO ARE UNABLE TO ATTEND ARE URGED TO EXECUTE AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO EXECUTE A PROXY
CARD MAY NEVERTHELESS ATTEND THE ANNUAL MEETING, REVOKE THEIR PROXY AND VOTE
THEIR SHARES IN PERSON.
<PAGE> 4
2000 ANNUAL MEETING OF SHAREHOLDERS
OF PERSONNEL GROUP OF AMERICA, INC.
---------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Personnel Group of America, Inc., a Delaware
corporation ("PGA" or the "Company"), of proxies from the holders of the
Company's Common Stock, par value $.01 per share (the "Common Stock"), for use
at the 2000 Annual Meeting of Shareholders of the Company to be held at the
Hyatt Southpark Hotel, 5501 Carnegie Boulevard, Charlotte, North Carolina, at
9:30 a.m., local time, on May 25, 2000, or at any adjournments or postponements
thereof (the "Annual Meeting"), pursuant to the enclosed Notice of Annual
Meeting of Shareholders. The approximate date that this Proxy Statement and the
enclosed form of proxy are first being sent or given to holders of Common Stock
is April 20, 2000. The Company's principal executive offices are located at 5605
Carnegie Boulevard, Suite 500, Charlotte, North Carolina 28209, and its
telephone number is (704) 442-5100.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy for the Annual Meeting does not preclude the
right to vote in person should any shareholder giving the proxy so desire.
Shareholders have a right to revoke their proxy at any time prior to the
exercise thereof, either in person at the Annual Meeting or by filing a written
revocation or duly executed proxy bearing a later date with the Company's
Secretary at Company headquarters.
The costs of preparing, assembling and mailing this Proxy Statement,
the Notice of Annual Meeting of Shareholders and the enclosed proxy will be
borne by the Company. In addition to the use of mail, employees of the Company
may solicit proxies personally and by telephone. The Company's employees will
receive no compensation for soliciting proxies other than their regular
salaries. The Company may request banks, brokers and other custodians, nominees
and fiduciaries to forward copies of the proxy material to their principals and
to request authority for the execution of proxies.
Except as otherwise noted herein, all share and per share information
relating to the Company's Common Stock contained in this Proxy Statement has
been adjusted to reflect the two-for-one stock split of the Common Stock
effected by the Company as a stock dividend on March 30, 1998.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's shareholders will consider and
vote upon the following matters:
(1) The election of three members to the Company's Board of
Directors to serve until the Annual Meeting of Shareholders in 2003 or
until their successors are duly elected and qualified;
(2) An amendment to the Company's 1997 Employee Stock Purchase
Plan;
(3) The ratification of the selection of
PricewaterhouseCoopers LLP as the Company's independent public
accountants for 2000; and
(4) The transaction of such other business as may properly
come before the Annual Meeting and any adjournments or postponements
thereof.
<PAGE> 5
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted (a) in favor of the election of the three director nominees named
below, (b) in favor of the amendment to the Company's 1997 Employee Stock
Purchase Plan and (c) in favor of the ratification of the selection of
PricewaterhouseCoopers LLP as the Company's independent public accountants. In
the event a shareholder specifies a different choice by means of the enclosed
proxy, his or her shares will be voted in accordance with the specifications so
made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on March 31, 2000,
as the record date (the "Record Date") for determining shareholders of the
Company entitled to notice of and to vote at the Annual Meeting. As of the
Record Date, there were 24,568,352 shares of Common Stock issued and
outstanding, all of which are entitled to one vote on all matters to be acted
upon at the Annual Meeting. Neither the Company's Certificate of Incorporation
nor Bylaws provide for cumulative voting rights.
The representation in person or by proxy of a majority of the issued
and outstanding shares of Common Stock entitled to vote will constitute a quorum
at the Annual Meeting. Abstentions and shares held by brokers with respect to
which voting authority is withheld by beneficial owners ("broker non-votes")
will be counted for the purpose of determining the presence or absence of a
quorum. Directors of the Company are elected by a plurality vote, and votes may
either be cast in favor of nominees or withheld. Withheld votes will be excluded
entirely from the vote and will have no effect on the outcome of the election.
Approval of the remaining proposals requires the affirmative vote of the holders
of a majority of the shares of Common Stock present in person or represented by
proxy and entitled to vote. On any such proposal, an abstention will have the
same effect as a negative vote but, because shares held by brokers will not be
considered entitled to vote on matters as to which the brokers withhold
authority, a broker non-vote will have no effect on the vote.
2
<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 2000 (except where
otherwise noted), the number and percentage of outstanding shares beneficially
owned by each person known by the Company to own beneficially more than 5% of
the Company's Common Stock, by each director and nominee for director of the
Company, by each person named in the Summary Compensation Table and by all
directors and existing executive officers of the Company as a group. Except as
otherwise indicated, each shareholder named has sole voting and investment power
with respect to such shareholder's shares.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF SHARES PERCENT OF COMMON
NAME AND ADDRESS* OF BENEFICIAL OWNER BENEFICIALLY OWNED STOCK OUTSTANDING
- ------------------------------------- ------------------ -----------------
<S> <C> <C>
Dresdner RCM Global Investors LLC........................... 2,704,300 (1) 11.0%
Dresdner RCM Global Investors U.S. Holdings LLC
Four Embarcadero Center, Suite 3000
San Francisco, California 94111-4189
Dresdner Bank AG
Jurgen-Ponto-Platz 1
6030 1 Frankfurt, Germany
J. & W. Seligman & Co. Incorporated......................... 1,365,686 (1) 5.6%
William C. Morris
100 Park Avenue
New York, New York 10017
Dimensional Fund Advisors, Inc.............................. 1,300,000 (1) 5.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
State of Wisconsin Investment Board......................... 1,300,000 (1) 5.3%
P.O. Box 7842
Madison, Wisconsin 53707
Edward P. Drudge, Jr........................................ 1,038,383 (2) 4.1%
James C. Hunt .............................................. 158,808 (2)(3) **
Ken R. Bramlett, Jr. ....................................... 86,158 (2)(4) **
Michael H. Barker........................................... 38,441 (2) **
Jackie Autry................................................ 9,399 (2) **
William T. McCarthy......................................... 7,335 (2) **
Kevin P. Egan .............................................. 78,174 (2)(5) **
James V. Napier............................................. 52,000 (2)(5)(6) **
J. Roger King............................................... 48,000 (2)(5) **
William J. Simione, Jr. .................................... 39,000 (2) **
Janice L. Scites ........................................... 13,500 (2) **
All directors and executive officers
as a group (9 persons).................................... 523,480 (2) 2.1%
</TABLE>
- -------------------------------
* Addresses are furnished only for beneficial owners of 5% of the Common Stock
** Less than one percent
(1) The amount and nature of the shares beneficially owned are as of
December 31, 1999, in the case of the beneficial owners other than J &
W Seligman & Co. Incorporated, and as of March 31, 2000, in the case of
J & W Seligman & Co. Incorporated, and are based on the most recent
Schedule 13G of each reporting person, or amendment thereto, on file
with the Company. Of the total shares reported, the Dresdner entities
reported sole voting power with respect to 2,350,600 of their shares
and sole dispositive power with respect to 2,067,200 of their shares;
J. & W. Seligman & Co. and William C. Morris, its majority shareholder,
reported shared voting power with respect to 870,000 of their shares
and shared dispositive powers with respect to all of their shares.
(2) Includes the following shares subject to stock options exercisable
within 60 days after March 31, 2000: Mr. Drudge--983,808; Mr.
Hunt--148,850; Mr. Bramlett--75,674; Mr. Barker--20,221; Ms. Autry --
7,275; Mr. McCarthy--0; Mr. Egan--31,000; Mr. Napier--31,000; Mr.
King--31,000; Mr. Simione--31,000; Ms. Scites--12,500; and all
directors and executive officers as a group--388,520. Mr. Drudge
retired as an officer and director of the Company in February 2000, and
Mr. McCarthy resigned as an officer and employee of the Company in
October 1999.
(3) Includes 1,120 shares held in the names of Mr. Hunt's spouse and
children.
(4) Includes 500 shares held in the name of Mr. Bramlett's spouse.
(5) Includes 5,000 restricted shares granted in July 1997 that vest 33 1/3%
on each of the first, second and third anniversaries of the grant date.
These shares will be fully vested in July 2000. See "Election of
Directors - Director Compensation."
(6) Includes 8,500 shares and options to purchase 15,500 shares over which
beneficial ownership has been transferred to Mr. King's ex-spouse under
the terms of a property settlement. Mr. King disclaims beneficial
ownership of these shares.
3
<PAGE> 7
PROPOSAL 1
ELECTION OF DIRECTORS
NOMINEES
The Company's Certificate of Incorporation and Bylaws provide for eight
directors who are divided into three classes. Directors serve for three-year
terms or until their successors are duly elected and qualified. Messrs. Egan and
King were re-elected as Class II directors at the Annual Meeting of Shareholders
in 1997 to serve as directors until this Annual Meeting of Shareholders. Ms.
Scites was appointed as a Class II director in August 1999 to fill a vacancy on
the Board and to serve as a director until this Annual Meeting as well. Messrs.
Napier and Simione were re-elected as Class III directors at the Annual Meeting
of Shareholders in 1998, and will serve in Class III for a term expiring at the
Annual Meeting of Shareholders in 2001, or until their successors have been duly
elected and qualified. Mr. Edward P. Drudge, Jr., was also elected as a Class
III director at the Annual Meeting of Shareholders in 1998, but recently retired
as an officer and director of the Company, leaving a vacancy in Class III.
Messrs. Hunt and Bramlett were re-elected as Class I directors at the Annual
Meeting of Shareholders in 1999, and will serve in Class I for a term expiring
at the Annual Meeting of Shareholders in 2002, or until their successors have
been duly elected and qualified. Messrs. Egan and King and Ms. Scites are the
sole nominees standing for election at this Annual Meeting and, if elected, will
serve in Class II for a term expiring at the Annual Meeting of Shareholders in
2003, or until their successors have been duly elected and qualified.
The Governance Committee of the Board of Directors makes nominations
for director candidates as permitted by the Company's Bylaws. The Company's
Bylaws prescribe the procedure a shareholder must follow to make nominations for
director candidates, as described below under "Proposals for 2001 Annual Meeting
of Shareholders." The Board of Directors has no reason to believe that any of
the board nominees will refuse to act or be unable to accept election. In the
event that a nominee for a directorship is unable to accept election or if any
unforeseen contingencies should arise, however, it is intended that proxies will
be voted for such other person or persons as may be designated by the Board of
Directors, unless it is directed by a proxy to do otherwise.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF
MESSRS. EGAN AND KING AND MS. SCITES FOR RE-ELECTION AS CLASS II DIRECTORS.
4
<PAGE> 8
OFFICERS AND DIRECTORS
The following table sets forth information as to the Company's current
executive officers, selected other corporate and divisional officers and
directors:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Kevin P. Egan(1)(2) 56 Chairman of the Board
James C. Hunt(3) 43 President, Chief Operating Officer and Director
Ken R. Bramlett, Jr.(3) 40 Senior Vice President, Chief Financial Officer,
Secretary and Director
Michael H. Barker(3) 45 President - Divisional Operations
Jackie Autry(3) 58 Senior Vice President California IT Operations
Donald Kierson 50 Senior Vice President Atlantic IT Operations
Craig Newbold 51 Senior Vice President Western IT Operations
Ann S. Fleming 57 Senior Vice President Central Commercial Staffing
Operations
Jeffrey B. Walker 40 Vice President Atlantic Commercial Staffing Operations
J. Roger King (1)(2) 59 Director
James V. Napier(1)(4) 63 Director
William J. Simione, Jr.(2)(4) 58 Director
Janice L. Scites (4) 49 Director
</TABLE>
- -------------------------
(1) Member of the Compensation Committee of the Board of Directors.
(2) Member of the Governance Committee of the Board of Directors.
(3) Messrs. Hunt, Bramlett and Barker and Ms. Autry are members of the
Office of the President. The Board formed the Office of the President
in February 2000 to manage the Company's day-to-day affairs during the
search for the Company's new Chief Executive Officer.
(4) Member of the Audit Committee of the Board of Directors.
Kevin P. Egan: Mr. Egan has served as Chairman of the Board since
February 2000, when Mr. Drudge announced his retirement, and as a director of
the Company since September 1995. Since October 1995, Mr. Egan has been
President of Tamarack Holdings, an investment company. From 1983 to September
1995, Mr. Egan served as President and Chief Operating Officer of PrimeNet
DataSystems, St. Paul, Minnesota, a provider of database and integrated
marketing services. Prior to forming PrimeNet in 1983, Mr. Egan was senior vice
president of Manpower Inc. from 1975 to 1983. Mr. Egan also previously held
marketing and management positions with the Graphic Services Division of 3M
Company and Transamerica Computer Co., London, England.
James C. Hunt: Mr. Hunt has served as President and Chief Operating
Officer of the Company since October 1999. Prior to that time, Mr. Hunt served
as Chief Financial Officer and Treasurer of the Company from March 1997 until
October 1999 and prior to that as a Senior Vice President from January 1997
until March 1997. Mr. Hunt has served as a director of the Company since March
1997. Prior to joining the Company in January 1997, Mr. Hunt spent 18 years with
Arthur Andersen LLP, a worldwide accounting and consulting firm, the last six
years as a partner.
Ken R. Bramlett, Jr.: Mr. Bramlett has served as Chief Financial
Officer and Treasurer of the Company since October 1999. Prior to that time, Mr.
Bramlett served as the Company's Senior Vice President and General Counsel from
October 1996 until October 1999. Mr. Bramlett has served as a director of the
Company since August 1997. Prior to joining the Company in October 1996, Mr.
Bramlett spent 12 years with Robinson, Bradshaw & Hinson, P.A., a Charlotte,
North Carolina law firm, the last six years as a partner. Mr. Bramlett also
serves on the board of directors of World Acceptance Corporation, a small loan
consumer finance company headquartered in Greenville, South Carolina.
Michael H. Barker: Mr. Barker has served as President - Divisional
Operations of the Company since October 1999. Prior to that time, Mr. Barker
served as President of Commercial Staffing Operations from January 1998 until
October 1999. Prior to joining the Company, Mr. Barker served as the Chief
Operations Officer for the Computer Group Division of IKON Technology Services,
a diversified technology company, for
5
<PAGE> 9
three years. Prior to that, Mr. Barker served as a regional Vice President for
Control Data, Inc., a systems integration company, for three years.
Jackie Autry: Ms. Autry has served as Senior Vice President California
IT Operations since October 1999, and as President of San Francisco-based
information technology services provider Computer Resources Group since January
1998. From 1993 until January 1998, Ms. Autry served as branch manager of
Computer Resources Group.
Computer Resources Group was acquired by the Company in June 1996.
Donald Kierson: Mr. Kierson has served as Senior Vice President
Atlantic IT Operations since October 1999. Prior to that time, Mr. Kierson
served as Chief Information Officer of the Company from January 1999 until
October 1999. From 1988 until December 1998, Mr. Kierson served in various sales
and administrative capacities for Richmond-based information technology services
provider Broughton Systems, the last year as President. Broughton Systems was
acquired by the Company in July 1996.
Craig Newbold: Mr. Newbold has served as Senior Vice President Western
IT Operations since February 1999. Except for the period May 1998 to February
1999, Mr. Newbold also has served as President of Seattle-based information
technology services provider BEST Consulting for the past seven years. The
Company acquired BEST Consulting in September 1996.
Ann S. Fleming: Ms. Fleming has served as Senior Vice President Central
Commercial Staffing Operations since October 1996 and as President of FirstWord
Staffing Services since September 1991. Prior to joining the Company, Ms.
Fleming spent nine years in the temporary help business with Manpower, Inc. and
Volt Information Services.
Jeffrey B. Walker: Mr. Walker has served as Vice President Atlantic
Commercial Staffing Operations since joining the Company in August 1998. Prior
to joining the Company, Mr. Walker served as Director of Corporate Accounts at
Olsten Corporation for three years. Prior to that, Mr. Walker served as a
Manager of Strategic Planning and Training for L.M. Berry Company, a BellSouth
Corporation subsidiary, for 13 years.
J. Roger King: Mr. King has served as a director of the Company since
September 1995. Mr. King retired on February 1, 1998, after a 28-year career
with PepsiCo, Inc. and its affiliates. Mr. King joined the Frito-Lay Division of
PepsiCo in 1969 and served in various personnel and employee relations positions
for PepsiCo, including Senior Vice President of Personnel of PepsiCo, from 1984
to 1995. Mr. King served as Senior Vice President of Human Resources of
Frito-Lay from June 1995 until his retirement.
James V. Napier: Mr. Napier has served as a director of the Company
since September 1995. Since November 1992, Mr. Napier has been the Chairman of
Scientific-Atlanta, Inc., a telecommunications company. Between 1988 and 1992,
Mr. Napier served as Chairman and Chief Executive Officer of The Commercial
Telephone Group, a telecommunications engineering and design company, and
between 1985 and 1986, served as Chief Executive Officer and President of HBO &
Company, Inc., a health care information services company. In addition to
serving on the boards of directors of the Company and Scientific-Atlanta, Mr.
Napier is a director of Engelhard Corporation, Vulcan Materials Company,
McKesson HBOC, Inc., Intelligent Systems Corporation and Westinghouse Air Brake
Company.
William J. Simione, Jr.: Mr. Simione has served as a director of the
Company since September 1995. Mr. Simione has served as Vice Chairman of the
Board of Directors and Executive Vice President of Simione Central Holdings,
Inc., which provides consulting services and information systems to the home
health care industry, since October 1996. He is a member of the Prospective
Payment Task Force, a Regulatory Affairs Subcommittee for the National
Association for Home Care, and is one of the Subcommittee's National
Reimbursement Consultants.
Janice L. Scites: Ms. Scites has served as a director of the Company
since August 1999. Since 1995, Ms. Scites has served in various management roles
with AT&T, initially as Vice President in its Business Customer Care and
Value-Added Services organizations and presently as Vice President in the
Internet
6
<PAGE> 10
Implementation Strategy Group. Prior to joining AT&T, Ms. Scites spent 13 years
with Phoenix Mutual Life Insurance Company and 5 years with Connecticut Mutual
Life Insurance Company.
During fiscal 1999, the Board of Directors held four regularly
scheduled meetings and took certain actions by unanimous written consent. All
incumbent directors had perfect attendance at (a) all meetings of the Board of
Directors held during 1999 and (b) all meetings of Board committees held during
1999 to the extent such directors served on such committees.
Messrs. Napier and Simione served as members of the Audit Committee of
the Board of Directors (the "Audit Committee") throughout 1999. Ms. Scites was
elected as a member of the Audit Committee in August 1999 and served as a member
of this committee throughout the remainder of 1999. The Audit Committee meets
with appropriate financial and legal personnel and independent public
accountants of the Company and reviews the internal controls of the Company and
the objectivity of its financial reporting. This Committee makes recommendations
to the Board of Directors with respect to the appointment of the independent
public accountants to serve as auditors in examining the corporate accounts of
the Company. The Company's independent public accountants periodically meet
privately with the Audit Committee and have access to the Audit Committee at any
time. The Audit Committee met twice during 1999.
Messrs. Egan, King and Napier served as members of the Compensation
Committee of the Board of Directors (the "Compensation Committee") during 1999.
The Compensation Committee reviews proposals regarding the establishment or
change of benefit plans, salaries and compensation of the executive officers and
other employees of the Company, advises management and makes recommendations to
the Board of Directors with respect thereto, and administers the Company's 1995
Equity Participation Plan and the Company's Management Incentive Compensation
Plan. The Compensation Committee met three times during 1999 and took a number
of actions by written consent.
Messrs. Egan, King and Simione served as members of the Governance
Committee of the Board of Directors (the "Governance Committee") during 1999.
The Governance Committee provides general oversight of the governance of the
Board of Directors, makes recommendations concerning Board size, make-up,
structure and compensation and from time to time recommends nominees for the
Board and its committees. The Governance Committee met once during 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Executive officers, directors and greater than 10% shareholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file. To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company during the fiscal year ended January 2,
2000, its executive officers and directors and any greater than 10% beneficial
owners complied with all applicable Section 16(a) filing requirements.
DIRECTOR COMPENSATION
Each non-employee director currently receives an annual retainer of
$10,000, and each such director who chairs a committee also receives an annual
retainer of $1,000. In addition, non-employee directors receive meeting fees of
$1,000 per board meeting attended and $500 per committee meeting attended, plus
reimbursement of expenses. The Company has implemented a deferred compensation
plan (the "Deferred Fee Plan") for the non-employee directors under which
participating directors may defer any or all of their retainer and meeting fees
for specified time periods. The Deferred Fee Plan is non-qualified for tax
purposes. Deferred fees under the Deferred Fee Plan earn interest at the prime
rate or, at each participating director's option, a return based on the
Company's stock price performance over time. Each non-employee director, except
for Mr. King, has elected to
7
<PAGE> 11
defer 100% of the retainer and meeting fees to which he or she otherwise would
be entitled in 2000 under the Deferred Fee Plan.
Each non-employee director also receives, upon joining the Board, an
initial option grant to purchase 12,500 shares of Common Stock, an additional
option grant to purchase 6,250 shares of Common Stock in each of the succeeding
two years, and an annual option grant to purchase 3,000 shares of Common Stock
in each year thereafter that such director remains on the Board. All of such
options are granted under the Company's 1995 Equity Participation Plan, which
requires that the exercise price for options granted under the plan equal the
fair market value of the Common Stock on the date of grant. In July 1997, each
of Messrs. Egan, King, Napier and Simione also received a special grant of 5,000
restricted shares of Common Stock. These shares vest in equal installments of 33
1/3% on each of the first, second and third anniversaries of the grant date, and
will be fully vested in July 2000. In February 2000, Mr. Egan received a special
grant of fully vested options to purchase 50,000 shares of Common Stock in
connection with his services as Chairman of the Board.
8
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth compensation information for fiscal
1999, 1998 and 1997 for those persons who were, except as otherwise noted, at
January 2, 2000, the Chief Executive Officer and the Company's other 1999
executive officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
---------------
ANNUAL COMPENSATION SECURITIES
-------------------- OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION OPTIONS(#)(1) COMPENSATION
- --------------------------- ------ ----- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Edward P. Drudge, Jr.(2)................. 1999 $395,066 $210,018 $ -- 50,000 $ --
Chairman and Chief Executive Officer 1998 373,750 485,825 -- 117,114(3) 24,903(4)
1997 347,942 439,671 -- 178,916(5) 22,415(6)
James C. Hunt............................ 1999 $279,527 $ 86,735 $ -- 52,296(7) $50,000(8)
President and Chief Operating Officer 1998 257,100 198,343 55,279(9) 56,846(3) --
1997 234,200 185,890 -- 164,680(5) 50,000(6)
Ken R. Bramlett, Jr...................... 1999 $215,360 $ 54,560 $ -- 38,796(7) $50,000(8)
Senior Vice President, Chief Financial 1998 198,722 148,964 -- 30,000 --
Officer and Treasurer 1997 177,623 57,750 -- 40,810(5) 50,000(6)
Michael H. Barker(10).................... 1999 $226,564 $ 21,000 $ -- 17,500 $ 8,863(8)
President - Divisional Operations 1998 200,694 67,503 48,746(11) 60,346(3) 7,462(4)
William T. McCarthy(12) 1999 $243,040 $ 43,701 $ -- -- $75,000(13)
President - Information Technology 1998 80,919 37,500 119,157(11) 78,617 2,356(4)
Operations
</TABLE>
(1) Except as set forth below, 1997, 1998 and 1999 option grants for each
of the named officers generally vest 25% on each of the first four
anniversaries of the grant dates.
(2) Mr. Drudge retired as an officer and director of the Company in
February 2000.
(3) Includes 17,114 options, 6,846 options and 6,846 options granted to Mr.
Drudge, Mr. Hunt and Mr. Barker, respectively, on December 31, 1998, in
lieu of a portion of their 1998 bonuses. See "Compensation Committee
Report on Executive Compensation." These options had an exercise price
of $17.53 and were vested 100% on the date of grant.
(4) Represents 1998 allocations to the Company's non-qualified
profit-sharing plan for the named officers and $500 in employee
matching contributions to Mr. Drudge's individual retirement account.
(5) Includes 78,916 options, 4,680 options and 10,810 options granted to
Mr. Drudge, Mr. Hunt and Mr. Bramlett, respectively, on December 31,
1997, in lieu of a portion of their 1997 bonuses. See "Compensation
Committee Report on Executive Compensation." These options had an
exercise price of $16.03 and were vested 100% on the date of grant.
(6) Represents 1997 allocations to the Company's non-qualified
profit-sharing plan for the named officers and $500 in employee
matching contributions to Mr. Drudge's individual retirement account.
(7) Includes 11,296 options granted to each of Mr. Hunt and Mr. Bramlett on
February 17, 1999, in lieu of a 1998 allocation for the named officers
to the Company's non-qualified profit sharing plan. These options were
granted at an exercise price of $13.28 and vest in accordance with the
normal vesting schedule for options granted in 1999.
(8) Represents 1999 allocations to the Company's non-qualified profit
sharing plan for the named officers.
(9) Represents reimbursement of country club initiation fees, including
gross-up to cover income taxes associated therewith.
(10) Mr. Barker joined the Company in January 1998.
(11) Represents reimbursement of moving expenses, including gross-up to
cover income taxes associated therewith.
(12) Mr. McCarthy joined the Company in September 1998 and resigned as an
officer and employee of the Company in October 1999.
(13) Represents severance payments under the named officer's employment
agreement.
9
<PAGE> 13
Option Grants Table. The following table sets forth certain information
concerning grants of stock options to the named officers during fiscal
1999:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------
NUMBER OF % OF TOTAL POTENTIAL REALIZABLE VALUE AT
SECURITIES OPTIONS ASSUMED ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO EXERCISE PRICE APPRECIATION FOR
OPTIONS EMPLOYEES OR BASE OPTION TERM
GRANTED IN FISCAL PRICE EXPIRATION -----------------------------
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
---- ---------- ---------- -------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Edward P. Drudge, Jr.(1) 25,000(2) 4.3% $ 5.31 9/28/09 $ 83,500 $211,500
25,000(2) 4.3 9.00 12/8/09 141,500 358,500
James C. Hunt 11,296(3) 1.9 13.28 2/17/09 94,322 239,023
20,000(2) 3.5 5.31 9/28/09 66,800 169,200
25,000(2) 4.3 9.00 12/8/09 141,500 358,500
Ken R. Bramlett, Jr. 11,296(3) 1.9 13.28 2/17/09 94,322 239,023
12,500(2) 2.2 5.31 9/28/09 41,750 105,750
15,000(2) 2.6 9.00 12/8/09 84,900 215,100
Michael H. Barker 7,500(2) 1.3 5.31 9/28/09 25,050 63,450
10,000(2) 1.7 9.00 12/8/09 56,600 143,400
William T. McCarthy(4) -- -- -- -- -- --
</TABLE>
- --------------------------
(1) Mr. Drudge retired as an officer and director of the Company in
February 2000.
(2) These options are currently 100% unvested, and will vest 25% per year
on each anniversary date of grant through 2003.
(3) These options are currently 25% vested, and will continue vesting 25%
per year on each anniversary date of grant through 2003.
(4) Mr. McCarthy resigned as an officer and employee of the Company in
October 1999.
10
<PAGE> 14
Option Year-End Value Table. The following table sets forth certain
information concerning unexercised options held as of the end of fiscal 1999:
FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-MONEY
UNEXERCISED OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)(1)
--------------------------------- ---------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Edward P. Drudge, Jr.(2) 983,808 263,000 $1,160,718 $ 154,750
James C. Hunt 148,850 131,796 0 130,050
Ken R. Bramlett, Jr. 75,674 84,294 0 80,500
Michael H. Barker 21,846 57,625 0 49,550
William T. McCarthy(3) 78,617 0 0 0
</TABLE>
- -------------------------
(1) The fair market value of the Common Stock used for these computations
was $10.25, which was the last sales price for the Common Stock on the
New York Stock Exchange on December 31, 1999.
(2) Mr. Drudge retired as an officer and director of the Company in
February 2000.
(3) Mr. McCarthy resigned as an officer and employee of the Company in
October 1999. Subsequent to December 31, 1999, all options shown for
Mr. McCarthy expired unexercised.
EMPLOYMENT AGREEMENTS
James C. Hunt is employed pursuant to the terms of an employment
agreement, dated as of January 2, 1997, which provides for his employment until
December 31, 2000, subject to automatic renewal for successive one-year periods
unless either the Company or Mr. Hunt has given notice of non-renewal six months
prior to expiration. The employment agreement currently provides for (i) an
annual base salary of $300,000 (subject to annual adjustment as determined by
the Compensation Committee) and (ii) the right to earn bonuses under the
Company's Management Incentive Compensation Plan. If Mr. Hunt's employment
agreement is terminated by the Company other than for cause or by Mr. Hunt upon
a change in terms and conditions of employment or following a change in control
of the Company, the Company must pay Mr. Hunt severance equal to 24 months'
salary and any unpaid bonus to which he would otherwise have been entitled, and
all unvested options to purchase Common Stock then held by Mr. Hunt become
immediately exercisable. The employment agreement contains a provision
prohibiting Mr. Hunt from competing with the Company or soliciting employees and
customers of the Company for a period of two years from the date Mr. Hunt's
employment with the Company ceases.
Ken R. Bramlett, Jr. is employed pursuant to the terms of an employment
agreement, dated as of October 7, 1996, which provides for his employment until
September 30, 2000, subject to automatic renewal for successive one-year periods
unless either the Company or Mr. Bramlett has given notice of non-renewal six
months prior to expiration. The employment agreement currently provides for (i)
an annual base salary of $240,000 (subject to annual adjustment as determined by
the Compensation Committee) and (ii) the right to earn bonuses under the
Company's Management Incentive Compensation Plan. If Mr. Bramlett's employment
agreement is terminated by the Company other than for cause or by Mr. Bramlett
upon a change in terms and conditions of employment or following a change in
control of the Company, the Company must pay Mr. Bramlett severance equal to 12
months' salary and any unpaid bonus to which he would otherwise have been
entitled, and all unvested options to purchase Common Stock then held by Mr.
Bramlett become immediately exercisable. The employment agreement contains a
provision prohibiting Mr. Bramlett from competing with the Company or soliciting
employees and customers of the Company for a period of two years from the date
Mr. Bramlett's employment with the Company ceases.
11
<PAGE> 15
Michael H. Barker is employed pursuant to the terms of an employment
agreement, dated as of January 19, 1998, which provides for his employment until
January 18, 2001, subject to automatic renewal for successive one-year periods
unless either the Company or Mr. Barker has given notice of non-renewal six
months prior to expiration. The employment agreement currently provides for (i)
an annual base salary of $240,000 (subject to annual adjustment as determined by
the Compensation Committee) and (ii) the right to earn bonuses under the
Company's Management Incentive Compensation Plan. If Mr. Barker's employment
agreement is terminated by the Company other than for cause or by Mr. Barker
upon a change in terms and conditions of employment or following a change in
control of the Company, the Company must pay Mr. Barker severance equal to 12
months' salary and any unpaid bonus to which he would otherwise have been
entitled, and all unvested options to purchase Common Stock then held by Mr.
Barker become immediately exercisable. The employment agreement contains a
provision prohibiting Mr. Barker from competing with the Company or soliciting
employees and customers of the Company for a period of two years from the date
Mr. Barker's employment with the Company ceases.
In 1999, the Compensation Committee of the Board of Directors adopted a
non-qualified, unfunded Supplemental Retirement Plan (the "SERP") for Mr. Edward
P. Drudge, Jr., who was then the Company's Chairman and Chief Executive Officer,
to replace a similar benefit that had been maintained for Mr. Drudge by the
Company's former parent. Under the terms of the SERP, Mr. Drudge was entitled to
receive an annual benefit for a period of 15 years following his retirement,
death, complete disability or a change of control (as defined in the SERP) of
the Company. The amount of the annual retirement benefit payable under the terms
of the SERP, which was based on Mr. Drudge's age at the time of his retirement,
was as follows: age 61--$50,000; 62--$100,000; 63--$150,000; 64--$200,000; and
65 and older--$250,000. In the event of Mr. Drudge's death, complete disability
or a change of control of the Company, the SERP provided for a maximum annual
benefit of $250,000.
In connection with Mr. Drudge's retirement from the Company in February
2000, Mr. Drudge and the Company entered into a retirement agreement, dated as
of February 13, 2000. As part of the retirement agreement, Mr. Drudge has agreed
to render consulting services to the Company on an as-needed basis until April
13, 2002. In exchange, the Company has agreed to provide the following benefits
to Mr. Drudge until April 13, 2002: continuation of his current annual base
salary of $385,000, continued coverage under the Company's health, dental and
life insurance plans and continued vesting of existing stock options on their
original vesting schedule (with the ability to exercise all vested options as of
April 13, 2002 for 90 days thereafter). In addition, the Company has agreed to
provide to Mr. Drudge a SERP benefit as if he had retired at the end of the
consulting period, at age 63, which would result in an annual benefit of
$150,000 payable for a term of 15 years beginning in April 2002. The Company and
Mr. Drudge also agreed that the maximum annual benefit payable under the SERP
under any circumstance would not exceed $150,000. The retirement agreement also
contains a provision prohibiting Mr. Drudge from competing with the Company or
soliciting employees or customers of the Company for the period ending February
13, 2004.
Prior to his resignation as an officer of the Company in October 1999,
Mr. William T. McCarthy was employed pursuant to the terms of an employment
agreement that provided for his employment as President of the Company's
Information Technology Operations. Under the terms of this employment agreement,
the Company was obligated to provide the following benefits following the
termination of Mr. McCarthy's employment: the continuation of his base salary of
$300,000 until December 2000, the payment of a pro rata portion of his 1999 cash
bonus and vesting of all outstanding stock options. The employment agreement
prohibits Mr. McCarthy from competing with the Company for a period of one year,
and from soliciting employees and customers of the Company for a period of two
years, following the termination of his employment.
12
<PAGE> 16
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
It is the Compensation Committee's responsibility to review and
recommend to the Board for approval the compensation of the Company's senior
officers. The goals of the Company's compensation program for senior officers
are to base compensation on the attainment of performance objectives, to
establish compensation levels that will enable the Company to attract and retain
talented individuals and to motivate them to achieve the Company's business
objectives, including increasing shareholder value. To achieve these goals, the
Company has established a compensation program consisting of three principal
components. These components are base salary, incentive bonus awards and
discretionary bonuses in the form of equity-based compensation consisting
primarily of qualified (or incentive) and non-qualified stock options. The
Company strives to structure its compensation program to enable it to attract,
retain and reward qualified senior management whose contributions are critical
to the Company's long-term success. In 1999, the Company engaged an executive
compensation consultant to assist in the structuring of its compensation program
for fiscal 2000.
BASE SALARY
The Company considers the sustained performance of its senior officers
in establishing base salaries. Among the factors considered are length of
service with the Company, individual performance, scope of responsibilities and
successful management of administrative or financial functions or operating
subsidiaries or divisions. The assessment of management performance focuses on
both qualitative (leadership and management qualities) and quantitative (growth
of revenues, operating earnings and earning per share, as well as the
containment of expenses) factors.
The Chief Executive Officer historically has evaluated the overall
performance of the other senior officers, including those officers named in the
Summary Compensation Table. Financial and business goals and objectives are
discussed with key executives, and periodic meetings of key executives are held
to discuss business strategies, financial and business performance, budgeting
matters and strategic planning matters. An executive's overall evaluation is a
combination of a qualitative review by fellow executives and the Chief Executive
Officer and a review of the extent to which pre-established business and
financial objectives have been obtained.
Base salaries for fiscal 1999 for all officers named in the Summary
Compensation Table were determined in accordance with the terms of employment
agreements in effect with such executives, as adjusted annually by the
Compensation Committee based on the factors mentioned above. The recommendation
for a particular base salary adjustment was determined primarily by the Chief
Executive Officer, based on the above factors, with no specified weight being
given to any particular performance factor, business or financial objective. The
recommendations were presented to the Compensation Committee, together with
industry data on executive compensation at comparable companies.
INCENTIVE BONUS AWARDS
Early in each fiscal year, the Compensation Committee establishes a
range of incentive bonus compensation that may be earned as part of each senior
officer's annual compensation. For fiscal 1999, incentive bonus compensation for
Mr. Drudge, Mr. Hunt and Mr. Bramlett was based on the Company's achievement of
pre-established annual earnings per share goals. The Committee believes that the
use of earnings per share targets in determining incentive bonus compensation
for these individuals is an appropriate way to directly align the interests of
the Company's executive officers and shareholders. Incentive bonus compensation
for Mr. Barker in fiscal 1999 was based on the achievement of pre-established
annual financial goals for Commercial Staffing Operations relating to increases
in earnings growth for those operations, relative to budget and prior year,
before interest and taxes and on certain other specified factors. The financial
and non-financial goals established for fiscal 1999 for the payment of incentive
compensation to all of the named officers were met only in part, and limited
bonuses were authorized subject to the terms of each individual's incentive
compensation plan.
13
<PAGE> 17
In 1997, the Compensation Committee implemented a program designed to
encourage designated senior officers of the Company to take a portion of their
annual incentive bonuses in the form of stock options. Under this program, each
designated officer may elect, prior to the end of each fiscal year, to receive a
set percentage (up to 50%) of his bonus for that year in the form of stock
options granted under the Company's 1995 Equity Participation Plan, the number
of options being granted in each case to be determined by a formula set by the
Committee. The Compensation Committee established this program for two main
reasons (in addition to the other factors considered below in the granting of
stock options generally). First, distributing stock options to selected senior
officers in lieu of cash bonuses enables the Company to conserve cash for
investment. Second, paying bonuses in stock options is consistent with one of
the Compensation Committee's stated goals of increasing the equity portion of
senior officer compensation and Company equity holdings by the senior officers
generally. None of the Company's executive officers elected to take a portion of
their 1999 cash bonuses in the form of stock options.
DISCRETIONARY BONUS AWARDS/EQUITY BASED COMPENSATION
One of the Compensation Committee's stated goals as discussed above is
to increase the equity portion of senior officers' compensation generally.
Accordingly, the Company also rewards its senior officers with discretionary
compensation awards, generally in the form of incentive stock options and
non-qualified stock options granted under the Company's 1995 Equity
Participation Plan. Through the granting of stock options, the Company seeks to
align the interests of key employees more closely with those of the Company's
shareholders by motivating and rewarding actions that lead to long-term value
creation for shareholders. In addition, the Company recognizes that stock
options are a necessary part of a competitive compensation program, which, as
discussed above, is designed to attract and retain qualified executives.
Historically, options granted to senior officers (other than options granted in
lieu of cash bonuses) have vested over a four-year period in order to encourage
executives and other key employees to remain in the employ of the Company and to
foster a long-term perspective.
In fiscal 1999, the Company used incentive stock options to achieve the
competitive compensation levels it determined to be necessary for the executive
officers named in the Summary Compensation Table. In addition, the Company
granted incentive options in fiscal 1999 to 731 other employees of the Company.
Most options granted vest over a four-year period and, accordingly, are a form
of long-term compensation.
All options are granted by the Compensation Committee, acting as the
stock option committee under the Company's 1995 Equity Participation Plan. In
determining the employees to whom options would be awarded and the size of the
option awards, the Committee received a recommended list of key employees that
was compiled primarily by the Chief Executive Officer, the division presidents
and the operating company presidents with a view toward a fair and equitable
distribution of options among the employee pool.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
The compensation of Edward P. Drudge, Jr., the Company's Chief
Executive Officer in 1999, was determined pursuant to the terms of his
employment agreement with the Company, as adjusted annually by the Compensation
Committee based on the factors described above. In fiscal 1999, Mr. Drudge's
employment agreement provided for a base annual salary, adjusted based on 1998
performance, and an incentive bonus based on 1999 earnings per share growth
during the year. Earnings per share from continuing operations rose to $0.99
during 1999, up 3% over 1998 but 18% below the consensus Wall Street estimates
for the 1999 Company's earnings per share at the beginning of the year. Because
these financial results met the financial goals established for determining the
payment of incentive compensation only in part, Mr. Drudge was paid a limited
cash bonus of $210,018 for 1999.
Also in 1999, the Compensation Committee granted 50,000 stock options
to Mr. Drudge, 25,000 options on September 28, 1999 and 25,000 options on
December 8, 1999. The 1999 awards were made by the Compensation Committee on the
basis of the factors set forth above under the heading "Discretionary Bonus
Awards/Equity Based Compensation."
14
<PAGE> 18
Mr. Drudge retired as an officer and director of the Company in
February 2000. The Board formed an Office of the President to manage the
Company's day-to-day affairs, and has begun a search for a new Chief Executive
Officer. The Office of the President consists of Messrs. Hunt, Bramlett and
Barker and Ms. Autry.
SECTION 162(m) OF THE INTERNAL REVENUE CODE
It is the Company's policy generally to design the Company's
compensation programs to comply with Section 162(m) of the Code, so that total
compensation paid to any employee will not exceed $1.0 million in any one year,
except for compensation payments in excess of $1.0 million that which qualify as
"performance-based." The Company intends to comply with other requirements of
the performance-based compensation exclusion under Section 162(m), including
option pricing requirements and requirements governing the administration of the
1995 Equity Participation Plan, so that the deductibility of compensation paid
to top executives thereunder is not expected to be disallowed.
Compensation Committee:
J. Roger King, Chairman
James V. Napier
Kevin P. Egan
15
<PAGE> 19
CORPORATE PERFORMANCE GRAPH
The following graph compares the cumulative total return on the
Company's Common Stock from the effective date of the Company's initial public
offering, September 25, 1995, to January 2, 2000, with the cumulative total
return of the S&P 400 Index and a peer group index selected by the Company (the
"Peer Group Index"), consisting of eight public companies that specialize in
providing personnel staffing services in the United States. All cumulative
returns assume the investment of $100 in each of the Company's Common Stock, the
S&P 400 Index, and the Peer Group Index on September 25, 1995, and assume the
reinvestment of dividends.
<TABLE>
<CAPTION>
9/25/95 12/95 12/96 12/97 12/98 12/99
------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Personnel Group of America, Inc. 100 104.46 172.32 235.71 250.00 146.43
S&P 400 100 103.89 123.83 163.77 187.41 215.00
Peer Group* 100 117.48 163.00 213.14 177.84 176.31
</TABLE>
*The Peer Group Index consists of the following companies: Interim
Services Inc., Modis Professional Services, Inc., Barrett Business Services,
Inc., Robert Half International Inc., Kelly Services, Inc., Manpower Inc.,
Metamor Worldwide, Inc. and Staffmark, Inc.
PROPOSAL 2
AMENDMENT OF THE 1997 EMPLOYEE STOCK PURCHASE PLAN
The Company's 1997 Employee Stock Purchase Plan (the "Stock Purchase
Plan") is intended to encourage employee participation in the ownership of the
Company by offering eligible employees of the Company and its subsidiaries an
opportunity to purchase the Company's Common Stock at a discount through payroll
deductions. The following summary description of the Stock Purchase Plan is
qualified in its entirety by reference to the text of the Stock Purchase Plan as
proposed to be amended, which is attached hereto as Exhibit A.
The Board of Directors has approved an amendment to the Stock Purchase
Plan, subject to shareholder approval, to increase the number of shares of
Common Stock reserved for purchase thereunder from 1,000,000
16
<PAGE> 20
shares to 2,000,000 shares. To date, approximately 774,302 shares have been
issued under the Stock Purchase Plan and, unless the number of shares available
under the Stock Purchase Plan is increased, the Company estimates that the
supply of presently available shares will be exhausted in the second or third
quarter of 2000.
Under the Stock Purchase Plan, eligible employees of the Company and
its subsidiaries may participate by electing to have payroll deductions made in
an amount of not less than 1% nor more than 7% of the employee's compensation,
provided that the Market Value (defined generally as the last reported sales
price of the Common Stock on a specified date) of Common Stock (determined at
the beginning of each three-month "Purchase Period") purchased in any year may
not exceed $25,000. All employees who meet specified criteria for hours worked
and months worked within a calendar year will be eligible to participate upon
completion of 180 days of continuing employment. However, any beneficial owner
of 5% or more of the Common Stock is not eligible to participate.
Eligible employees may elect to participate by delivering a completed
purchase agreement prior to the beginning of each Purchase Period. At the end of
each Purchase Period, each participant's payroll deductions are applied to
acquire Common Stock at a price equal to 85% of the Market Value of the Common
Stock on either the first day or the last day of the Purchase Period, whichever
is lower (the "Exercise Price"). Shares acquired under the Stock Purchase Plan
may not, except in the case of death or disability, be sold or otherwise
disposed of for at least six months after the last day of the Purchase Period in
which such shares were acquired.
Employees may voluntarily withdraw from participation in the Stock
Purchase Plan upon such advance notice as the Compensation Committee may
require. An employee's participation will cease upon termination of employment
for any reason, or otherwise if an employee no longer qualifies as an eligible
employee. Upon any withdrawal from participation, all payroll deductions not
applied to purchase Common Stock will be returned to the employee (except in the
case of certain inactive employees who are awaiting assignment).
The number of shares of Common Stock reserved for purchase under the
Stock Purchase Plan is currently 1,000,000. Except pursuant to an adjustment as
a result of a change in the Company's capital structure, the number of shares of
Common Stock reserved for purchase under the Stock Purchase Plan will not be
decreased as a result of a decrease in the number of shares outstanding. Such
reserved shares may be made available by the Company from either authorized and
unissued shares or treasury shares.
The Stock Purchase Plan is administered by the Compensation Committee,
which has the authority to make, adopt, construe and enforce rules not
inconsistent with the Stock Purchase Plan, to interpret the Stock Purchase Plan,
and to prescribe the contents of all forms and documents required in connection
with the Stock Purchase Plan. The Stock Purchase Plan may be amended in any
respect at any time by the Board of Directors, except that where shareholder
approval is necessary or desirable to comply with applicable law, in which case
such amendment will be conditioned on such approval. The Stock Purchase Plan may
be terminated at any time by the Board of Directors.
FEDERAL INCOME TAX CONSIDERATIONS
The Stock Purchase Plan is intended to qualify as an "employee stock
purchase plan" within the meaning of Section 423 of the Code, and it is intended
to comply with the provisions of Sections 421 and 424 of the Code as well.
Under the Code as currently in effect, there are no federal income tax
consequences in connection with the acquisition of Common Stock pursuant to the
Stock Purchase Plan until the year in which the participant sells or otherwise
disposes of the shares, or, if earlier, the year in which the participant dies.
If the shares are sold or otherwise disposed of prior to a participant's death,
then the income tax consequences will depend upon whether or not the shares are
sold within two years after the first business day (the "Offering Date") of the
applicable three-month period in which such shares were purchased.
17
<PAGE> 21
If the shares are sold or disposed of more than two years after the
applicable Offering Date, then the participant will recognize ordinary income in
an amount equal to the lesser of (i) 15% of the fair market value of the shares
on the applicable Offering Date or (ii) the amount by which the fair market
value of the shares at the time of such sale or disposition exceeds the amount
paid for the shares, and the Company will not be entitled to any income tax
deduction. If the shares are sold or otherwise disposed of within two years
after the applicable Offering Date, a participant will generally recognize
ordinary income in the amount by which the fair market value of the shares on
the applicable Exercise Date exceeds the amount paid for the shares, and the
Company will be entitled to a corresponding income tax deduction.
In the event of the death of a participant prior to a sale or other
disposition of the shares (whether or not within two years after the applicable
Offering Date), a participant will be subject to ordinary income tax in an
amount equal to the lesser of (i) 15% of the fair market value of the shares on
the applicable Offering Date, or (ii) the amount, if any, by which the fair
market value of the shares as of the date of death exceeds the amount actually
paid for the shares.
In any case, the participant may also have a capital gain or loss
(long-term or short-term depending upon the length of time the shares were held)
in an amount equal to the difference between the amount realized upon the sale
and the participant's adjusted tax basis in the shares (the amount paid for the
shares plus the amount of ordinary income which the participant must recognize
at the time of the sale or other disposition).
The affirmative vote of a majority of the outstanding shares of Common
Stock present in person or represented by Proxy at the Annual Meeting and
entitled to vote is required to approve the amendment to the Stock Purchase
Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF
THE AMENDMENT TO THE 1997 EMPLOYEE STOCK PURCHASE PLAN.
PROPOSAL 3
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, on the recommendation of the Company's Audit
Committee, has selected PricewaterhouseCoopers LLP ("PriceWaterhouseCoopers") as
the Company's independent public accountants for the year ending December 31,
2000. One or more representatives of PricewaterhouseCoopers will be present at
the Annual Meeting, will have the opportunity to make a statement if they desire
to do so and are expected to be available to respond to appropriate questions
from shareholders. The Company has been advised by PricewaterhouseCoopers that
the firm did not have any direct financial interest or any material interest in
the Company and its subsidiaries during the Company's most recent fiscal year.
Approval of the proposal to ratify the selection of
PricewaterhouseCoopers requires the affirmative vote of a majority of the
outstanding shares of Common Stock present in person or represented by proxy at
the Annual Meeting and entitled to vote. Should the shareholders vote
negatively, the Board of Directors will consider a change in independent public
accountants for the next fiscal year.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL
TO RATIFY THE SELECTION OF PRICEWATERHOUSE COOPERS AS THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000.
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PROPOSALS FOR 2001 ANNUAL MEETING OF SHAREHOLDERS
Shareholders who intend to present proposals for consideration at next
year's annual meeting are advised that any such proposal must be received by the
Secretary of the Company by no later than the close of business on December 21,
2000, if such proposal is to be considered for inclusion in the proxy statement
and proxy appointment form relating to that meeting. Only persons who have held
beneficially or of record at least $2,000 in market value, or 1% of the
outstanding Common Stock, for at least one year on the date the proposal is
submitted and who continue in such capacity through the meeting date are
eligible to submit proposals to be considered for inclusion in the Company's
proxy statement. In addition, the Company's bylaws prescribe procedures a
shareholder must follow to make nominations for director candidates or propose
any other business to be considered at an annual meeting. Shareholder
nominations for director candidates or other proper shareholder business will be
considered at an annual meeting or a special meeting of shareholders if the
shareholder (who must be, at the time of delivery of notice, a shareholder of
record) delivers to the Secretary of the Company a timely notice setting forth
the information specified in Section 14 of Article II of the Company's bylaws.
In the case of an annual meeting, such notice shall be considered timely if
delivered not earlier than the close of business on the 90th day, nor later than
the close of business on the 60th day, prior to the first anniversary of the
preceding year's annual meeting. If, however, the annual meeting date is more
than 30 days before or 60 days after the anniversary date of the preceding
year's annual meeting, the notice will be considered timely if delivered not
earlier than the close of business on the 90th day prior to such meeting nor
later than the close of business on the later of (i) the 60th day prior to such
meeting or (ii) the 10th day following the day on which the public announcement
of the date of such meeting is first made by the Company. In the case of a
special meeting, such notice shall be considered timely if delivered not earlier
than the close of business on the 90th day prior to such meeting nor later than
the close of business on the later of (i) the 60th day prior to such meeting or
(ii) the 10th day following the day on which public announcement is first made
of the special meeting date and the nominees proposed by the Board of Directors.
Any shareholder desiring a copy of the Company's bylaws will be furnished one
without charge upon written request to the Secretary.
OTHER BUSINESS
The Board knows of no other business to be brought before the Annual
Meeting. If, however, any other business should properly come before the Annual
Meeting, the persons named in the accompanying proxy will vote proxies as in
their discretion they may deem appropriate, unless they are directed by a proxy
to do otherwise.
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EXHIBIT A
PERSONNEL GROUP OF AMERICA, INC.
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
INTRODUCTION
Sec. 1.01 Statement of Purpose. The purpose of the Personnel Group of America,
Inc. Employee Stock Purchase Plan is to provide eligible employees of the
Company and its Subsidiaries, who wish to become stockholders, an opportunity to
purchase common stock of the Company. The Board of Directors of the Company
believes that employee participation in ownership will be to the mutual benefit
of both the employees and the Company.
Sec. 1.02 Internal Revenue Code Considerations. The Plan is intended to
constitute an "employee stock purchase plan" within the meaning of section 423
of the Internal Revenue Code of 1986, as amended.
ARTICLE II
DEFINITIONS
Sec. 2.01 "Board" means the Board of Directors of the Company.
Sec. 2.02 "Code" means the Internal Revenue Code of 1986, as amended.
Sec. 2.03 "Company" means Personnel Group of America, Inc., a Delaware
corporation.
Sec. 2.04 "Compensation" means the total remuneration paid, during the period of
reference, to an Employee by the Company or a Subsidiary, including regular
salary or wages, overtime payments, bonuses, commissions and vacation pay, to
which has been added (a) any elective deferral amounts by which the Employee has
had his current remuneration reduced for the purposes of funding a contribution
to any plan sponsored by the Company and satisfying the requirements of section
401(k) of the Code, and (b) any amounts by which the Employee's compensation has
been reduced pursuant to a compensation reduction agreement between the Employee
and the Company for the purpose of funding benefits through any cafeteria plan
sponsored by the Company meeting the requirements of section 125 of the Code.
There shall be excluded from "Compensation" for the purposes of the Plan,
whether or not reportable as income by the Employee, expense reimbursements of
all types, payments in lieu of expenses, the Company contributions to any
qualified retirement plan or other program of deferred compensation (except as
provided above), the Company contributions to Social Security or worker's
compensation, the costs paid by the Company in connection with fringe benefits
and relocation, including gross-ups, and any amounts accrued for the benefit of
Employee, but not paid, during the period of reference.
Sec. 2.05 "Compensation Committee" means the Compensation Committee of the
Board.
Sec. 2.06 "Continuous Service" means the period of time during which the
Employee has been employed by the Company or a Subsidiary and during which there
has been no interruption of Employee's employment by the Company. For this
purpose, periods during which an Employee is on Temporary Inactive Status shall
not be considered to be interruptions of Continuous Service. If determined by
the Compensation Committee, periods of service with an entity prior to its
becoming a Subsidiary shall be taken into account.
Sec. 2.07 "Effective Date" shall mean July 1, 1997 if, within 12 months of that
date, the Plan is or has been approved at a meeting of the stockholders of the
Company by the affirmative vote of the holders of the majority of the
outstanding Stock of the Company.
<PAGE> 24
Sec. 2.08 "Eligible Employee" means each person who:
(a) is an Employee whose customary employment is for more than 20 hours
per week and more than 5 months in any calendar year;
(b) is an Employee on the Effective Date, or otherwise has completed at
least 180 days of Continuous Service; and
(c) is not deemed for purposes of section 423 (b) (3) of the Code to
own capital stock possessing 5% or more of the total combined voting
power or value of all classes of capital stock of the Company.
Sec. 2.09 "Employee" means each person employed by the Company or a Subsidiary.
Sec. 2.10 "Exercise Date" means the last day of each Purchase Period.
Sec. 2.11 "Market Value" means, with respect to Stock, the fair market value of
such Stock, determined by such methods or procedures as shall be established
from time to time by the Compensation Committee; provided, however, that if the
Stock is listed on a national securities exchange or quoted in an interdealer
quotation system, the Market Value of such Stock on a given date shall be based
upon the last sales price or, if unavailable, the average of the closing bid and
asked prices per share of the Stock on such date (or, if there was no trading or
quotation in the Stock on such date, on the next preceding date on which there
was trading or quotation) as provided by one of such organizations.
Sec. 2.12 "Offering" means the offering of shares of Stock under the Plan.
Sec. 2.13 "Offering Date" means the first business day of each July, October,
January and April during which the Plan is in effect, or such dates as may
otherwise be specified by the Compensation Committee.
Sec. 2.14 "Participant" means each Eligible Employee who elects to participate
in the Plan.
Sec. 2.15 "Plan" means the Personnel Group of America, Inc. Employee Stock
Purchase Plan, as the same is set forth herein and as may hereafter be amended.
Sec. 2.16 "Purchase Agreement" means the document prescribed by the Compensation
Committee pursuant to which an Eligible Employee has enrolled to be a
Participant.
Sec. 2.17 "Purchase Period" means the period beginning on an Offering Date and
ending on the business day preceding the next following Offering Date.
Sec. 2.18 "Purchase Price" means such term as it is defined in Section 4.03
hereof.
Sec. 2.19 "Stock" means the common stock, $.01 par value, of the Company.
Sec. 2.20 "Stock Purchase Account" means a noninterest bearing account
consisting of all amounts withheld from an Employee's Compensation (or otherwise
paid into the Plan) for the purpose of purchasing shares of Stock for such
employee under the Plan, reduced by all amounts applied to the purchase of Stock
for such Employee under the Plan.
Sec. 2.21 "Subsidiary" shall mean a corporation described in section 424(f) of
the Code that has, with the permission of the Board, adopted the Plan.
Sec. 2.22 "Temporary Inactive Status" shall describe the status of a former
hourly Employee whose employment was terminated upon completion of an assignment
for the Company or a Subsidiary, for so long as such former Employee (i) remains
available for future assignments with the Company or a Subsidiary, (ii) has not,
directly or
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<PAGE> 25
indirectly, accepted an assignment from or a position with an entity
unaffiliated with the Company and its Subsidiaries, and (iii) otherwise remains
in good standing with the Company and its Subsidiaries.
ARTICLE III
ADMISSION TO PARTICIPATION
Sec. 3.01 Initial Participation. Any Eligible Employee may elect to be a
Participant and may become a Participant by executing and filing with the
Compensation Committee a Purchase Agreement at such time in advance and on such
forms as prescribed by the Compensation Committee. The effective date of an
Eligible Employee's participation shall be the Offering Date next following the
date on which the Compensation Committee receives from the Eligible Employee a
properly executed and timely filed Purchase Agreement. Participation in the Plan
will continue automatically from one Purchase Period to another unless notice to
the contrary is given pursuant to Section 3.02.
Sec. 3.02 Voluntary Discontinuance of Participation. Any Participant may
voluntarily withdraw from the Plan by filing a Notice of Withdrawal with the
Compensation Committee at such time in advance as the Compensation Committee may
specify. Upon such withdrawal, there shall be paid to the Participant the
amount, if any, standing to his credit in his Stock Purchase Account.
Sec. 3.03 Involuntary Discontinuance of Participation. If a Participant ceases
to be an Eligible Employee, the entire amount, if any, standing to the
Participant's credit in his Stock Purchase Account shall be refunded to him.
Notwithstanding the foregoing, should a Participant cease to be an Eligible
Employee by reason of acquiring Temporary Inactive Status, such Participant may
continue to participate through the end of the Purchase Period during which such
status was acquired with respect to payroll deductions attributable to the
portion of the Purchase Period prior to the time such status was acquired.
Sec. 3.04 Readmission to Participation. Any Eligible Employee who has previously
been a Participant, who has discontinued participation, and who wishes to be
reinstated as a Participant may again become a Participant for any subsequent
Purchase Period by executing and filing with the Compensation Committee, at such
time in advance as the Compensation Committee shall determine, a new Purchase
Agreement on forms provided by the Compensation Committee. Reinstatement to
Participant status shall be effective no earlier than the Offering Date that
occurs six months following the Exercise Date for the Purchase Period in which
the Eligible Employee discontinued participation.
ARTICLE IV
STOCK PURCHASE
Sec. 4.01 Reservation of Shares. There shall be 2,000,000 shares of Stock
reserved for the Plan, subject to adjustment in accordance with the antidilution
provisions hereinafter set forth. Except as provided in Section 5.02 hereof, the
aggregate number of shares that may be purchased under the Plan shall not exceed
the number of shares reserved for the Plan.
Sec. 4.02 Limitation on Shares Available. The maximum number of shares of Stock
that may be purchased for each Participant on an Exercise Date is the lower of
(a) the number of shares of Stock that can be purchased by applying the full
balance of his Stock Purchase Account to such purchase of shares at the Price
(as hereinafter determined), or (b) the Participant's proportionate part of the
maximum number of whole shares of Stock available within the limitation
established by the maximum aggregate number of such shares reserved for the
Plan, as stated in Section 4.01 hereof. Notwithstanding the foregoing, if any
person entitled to purchase shares pursuant to any offering hereunder would be
deemed for the purposes of section 423(b) (3) of the Code to own stock
(including any number of shares that such person would be entitled to purchase
hereunder) possessing 5% or
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<PAGE> 26
more of the total combined voting power or value of all classes of capital stock
of Company, the maximum number of shares that such person shall be entitled to
purchase pursuant to the Plan shall be reduced to that number which, when added
to the number of shares of Stock that such person is so deemed to own (excluding
any number of shares that such person would be entitled to purchase hereunder),
is one less than such 5%. Any portion of a Participant's Stock Purchase Account
that cannot be applied by reason of the foregoing limitation shall remain in the
Participant's Stock Purchase Account for application to the purchase of Stock on
the next Offering Date (unless withdrawn before that Offering Date).
Sec. 4.03 Purchase Price of Shares. The Purchase Price per share of the Stock
sold to Participants pursuant to any Offering shall be the sum of (a) 85% of the
Market Value of such share on the Offering Date on which such Offering commences
or on the Exercise Date on which such Offering expires, whichever is lower, and
(b) any transfer, excise or similar tax imposed on the transaction pursuant to
which such share of Stock is purchased. If the Exercise Date with respect to the
purchase of Stock is a day on which the Stock is selling ex-dividend but is on
or before the record date for such dividend, then for Plan purposes the Purchase
Price per share will be increased by an amount equal to the dividend per share.
In no event shall the Purchase Price be less than the par value of the Stock.
Sec. 4.04 Exercise of Purchase Privilege.
(a) Subject to the provisions of Section 4.02 above, if on the date of
the last paycheck of a Participant issued prior to any Exercise Date
there is a bank credit in the Participant's Stock Purchase Account,
there shall be purchased for the Participant at the Purchase Price of
the Purchase Period that expires on such Exercise Date the largest
number of whole shares of Stock as can be purchased with the entire
amount standing to the Participant's credit in his Stock Purchase
Account on such paycheck issue date. Each such purchase shall be deemed
to have occurred on the Exercise Date occurring at the close of the
Offering for which the purchase was made.
(b) Any amount remaining in the Stock Purchase Account on the Exercise
Date after the purchase of the maximum number of whole shares shall
remain in the Stock Purchase Account to the credit of the Participant
and be applied to purchase additional shares of Stock on subsequent
Exercise Dates.
(c) Notwithstanding anything contained herein to the contrary, a
Participant may not during any calendar year purchase shares of Stock
having an aggregate Market Value, determined at the time of each
Offering Date during such calendar year, of more than $25,000.
Sec. 4.05 Establishment of Stock Purchase Account. Each Participant shall
authorize payroll deductions from Compensation for the purposes of funding his
Stock Purchase Account. In the Purchase Agreement, each Participant shall
authorize a deduction from each payment of his Compensation during a Purchase
Period, which deduction shall be not less than 1% nor more than 7% of the gross
amount of such payment, subject to Section 4.04 (c). Subject to Section 3.02, a
Participant may not reduce or increase his payroll deduction rate during any
Purchase Period. However, a Participant may change the deduction to any
permissible level for any subsequent Offering by filing notice thereof at such
time preceding the Offering Date on which such subsequent Offering commences as
the Compensation Committee shall determine.
Sec. 4.06 Payment for Stock. The Purchase Price for all shares of Stock
purchased by a Participant under the Plan shall be paid out of the Participant's
Stock Purchase Account. As of each Exercise Date, the entire amount standing to
the credit of each Participant in his Stock Purchase Account on the date of the
last paycheck issued to the Participant prior to the Exercise Date in the
Purchase Period that expires on such Exercise Date shall be charged with the
aggregate Purchase Price of the shares of Stock purchased by such Participant on
the Exercise Date. No interest shall be paid or payable with respect to any
amount held in the Participant's Stock Purchase Account.
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<PAGE> 27
Sec. 4.07 Share Ownership; Issuance of Certificates.
(a) The shares purchased by a Participant on an Exercise Date shall,
for all purposes, be deemed to have been issued and/or sold at the
close of business on such Exercise Date. Prior to that time, none of
the rights or privileges of a stockholder of the Company shall inure to
the Participant with respect to such shares. All the shares of Stock
purchased under the Plan shall be delivered by the Company in a manner
as determined by the Compensation Committee.
(b) The Compensation Committee, in its sole discretion, may determine
that the shares of Stock shall be delivered by the Company (i) by
issuing and delivering to the Participant a certificate for the number
of whole shares of Stock purchased by such Participant on an Exercise
Date or during a calendar year, or (ii) by issuing and delivering a
certificate or certificates for the number of shares of Stock purchased
by all Participants on an Exercise Date or during a calendar year to a
member firm of the New York Stock Exchange which is also a member of
the National Association of Securities Dealers, as selected by the
Compensation Committee from time to time, which shares shall be
maintained by such member firm in separate brokerage accounts of each
participant, or (iii) by issuing and delivering a certificate or
certificates for the number of shares of Stock purchased by all
Participants on an Exercise Date or during the calendar year to a bank
or trust company or affiliate thereof, as selected by the Compensation
Committee from time to time, which shares shall be maintained by such
bank or trust company or affiliate in separate accounts for each
Participant or, if he designates on his Stock Purchase Agreement, in
his name jointly with his spouse, with right of survivorship. A
Participant who is a resident of a jurisdiction that does not recognize
such joint tenancy may have a certificate or account in his name as
tenant in common with his spouse, without right of survivorship. Such
designation may be changed by filing a notice thereof signed by the
Participant and his spouse. Such spouse shall be bound by all of the
terms and conditions of the Plan as if such spouse were a Participant.
Sec. 4.08 Restrictions on Resale. Stock acquired under the Plan may not be sold
or otherwise disposed of for at least six months after the Exercise Date on
which the shares were acquired, except in the case of death or disability. Any
Stock certificates delivered to a Participant prior to the expiration of such
six-month period shall contain a legend to reflect such restriction.
ARTICLE V
SPECIAL ADJUSTMENTS
Sec. 5.01 Shares Unavailable. If, on any Exercise Date, the aggregate funds
available for the purchase of Stock would purchase a number of shares in excess
of the number of shares then available for purchase under the Plan, the
following events shall occur:
(a) The number of shares that would otherwise be purchased by each
Participant shall be proportionately reduced on the Exercise Date in
order to eliminate such excess;
(b) The Plan shall automatically terminate immediately after the
Exercise Date as of which the supply of available shares is exhausted;
and
(c) Any amount remaining in the Stock Purchase Account of each of the
Participants shall be repaid to such Participants.
Sec. 5.02 Antidilution Provisions. The aggregate number of shares of Stock
reserved for purchase under the Plan, as hereinabove provided, and the
calculation of the Purchase Price per share may be appropriately adjusted to
reflect any increase or decease in the number of issued shares of Stock
resulting from a subdivision or consolidation of shares or other capital
adjustment, or the payment of a stock dividend, or other increase or decrease in
such shares, if effected without receipt of consideration by the Company. Any
such adjustment shall be made by the Compensation Committee acting with the
consent of, and subject to the approval of, the Board.
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<PAGE> 28
Sec. 5.03 Effect of Certain Transactions. Subject to any required action by the
stockholders, if the Company shall be the surviving or resulting corporation in
any merger or consolidation, or if the Company shall be merged for the purpose
of changing the jurisdiction of its incorporation, any Offering hereunder shall
pertain to and apply to the shares of stock of the Company or the survivor.
However, in the event of a dissolution or liquidation of the Company, or of a
merger or consolidation in which the Company is not the surviving or resulting
corporation, the Plan and any Offering hereunder shall terminate upon the
effective date of such dissolution, liquidation, merger or consolidation, and
the balance then standing to the credit of each Participant in his Stock
Purchase Account shall be returned to him.
ARTICLE VI
MISCELLANEOUS
Sec. 6.01 Nonalienation. The right to purchase shares of Stock under the Plan is
personal to the Participant, is exercisable only by the Participant during his
lifetime except as hereinafter set forth, and may not be assigned or otherwise
transferred by the Participant. Notwithstanding the foregoing, there shall be
delivered to the executor, administrator or other personal representative of a
deceased Participant such shares of Stock and such residual balance as may
remain in the Participant's Stock Purchase Account as of the date the
Participant's death occurs. However, such representative shall be bound by the
terms and conditions of the Plan as if such representative were a Participant.
Sec. 6.02 Administrative Costs. The Company shall pay all Administrative
expenses associated with the operation of the Plan. No Administrative charges
shall be levied against the Stock Purchase Accounts of the Participants.
Sec. 6.03 Collection of Taxes. The Company shall be entitled to require any
Participant to remit, through payroll withholding or otherwise, any tax that it
determines it is so obligated to collect with respect to the issuance of Stock
hereunder, or the subsequent sale or disposition of such Stock, and the
Compensation Committee shall institute such mechanisms as shall insure the
collection of such taxes.
Sec. 6.04 Compensation Committee. The Compensation Committee shall have the
authority and power to administer the Plan and to make, adopt, construe and
enforce rules and regulations not inconsistent with the provisions of the Plan.
The Compensation Committee shall adopt and prescribe the contents of all forms
required in connection with the administration of the Plan, including, but not
limited to the Purchase Agreement, payroll withholding authorizations,
withdrawal documents and all other notices required hereunder. The Compensation
Committee shall have the fullest discretion permissible under law in the
discharge of its duties. The Compensation Committee's interpretations and
decisions in respect of the Plan, the rules and regulations pursuant to which it
is operated, and the rights of Participants hereunder shall be final and
conclusive.
Sec. 6.05 Amendment of the Plan. The Board may amend the Plan without the
consent of stockholders or Participants, except that any such action shall be
subject to the approval of the Company's stockholders at or before the next
annual meeting of stockholders for which the record date is after such Board
action if such stockholder approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated quotation system on
which the Stock may then be listed or quoted, and the Board may otherwise, in
its discretion, determine to submit other such changes to the Plan to
stockholders for approval; provided, however, that, without the consent of an
affected Participant, no such action may materially impair the rights of such
Participant under any award theretofore granted to him.
Sec. 6.06 Termination of the Plan. The Plan shall continue in effect unless
terminated pursuant to action by the Board, which shall have the right to
terminate the Plan at any time without prior notice to any Participant and
without liability to any Participant. Upon the termination of the Plan, the
balance, if any, then standing to the credit of each Participant in his Stock
Purchase Account shall be refunded to him.
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<PAGE> 29
Sec. 6.07 Repurchase of Stock. The Company shall not be required to purchase or
repurchase from any Participant any of the shares of Stock that the Participant
acquired under the Plan.
Sec. 6.08 Notice. A Purchase Agreement and any notice that a Participant files
pursuant to the Plan shall be on the form prescribed by the Compensation
Committee and shall be effective only when received by the Compensation
Committee.
Sec. 6.09 Government Regulation. The Company's obligation to sell and to deliver
the Stock under the Plan is at all times subject to all approvals of any
governmental authority required in connection with the authorization, issuance,
sale or delivery of such Stock.
Sec. 6.10 Headings, Captions, Gender. The headings and captions herein are for
convenience of reference only and shall not be considered as part of the text.
The masculine shall include the feminine, and vice versa.
Sec. 6.11 Severability of Provisions; Prevailing Law. The provisions of the Plan
shall be deemed severable. In the event any such provision is determined to be
unlawful or unenforceable by a court of competent jurisdiction or by reason of a
change in an applicable statute, the Plan shall continue to exist as though such
provision had never been included therein (or, in the case of a change in an
applicable statute, had been deleted as of the date of such change). The Plan
shall be governed by the laws of the State of Delaware, to the extent such laws
are not in conflict with, or superseded by, federal law.
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<PAGE> 30
FRONT
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PERSONNEL GROUP OF AMERICA, INC.
REVOCABLE PROXY ANNUAL MEETING OF SHAREHOLDERS
to be held on May 25, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Kevin P. Egan, James C. Hunt and Ken R.
Bramlett, Jr. as Proxies, each with the power to appoint his substitute, and
hereby authorizes each of them to represent and to vote, as designated below,
all the shares of common stock of Personnel Group of America, Inc. (the
"Company") held of record by the undersigned on March 31, 2000, at the annual
meeting of shareholders to be held on May 25, 2000 or any adjournment thereof.
1. ELECTION OF THREE DIRECTORS
FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all
nominees listed below [ ]
(Instruction: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.)
Kevin P. Egan; J. Roger King; Janice L. Scites
2. PROPOSAL TO AMEND THE 1997 EMPLOYEE STOCK PURCHASE PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS as the Company's
independent public accountants
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Please sign and date on the reverse side and return in the
enclosed postage-prepaid envelope.
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BACK
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4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH DIRECTOR NOMINEE NAMED HEREIN
AND EACH PROPOSAL, AND THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTOR
NOMINEES NAMED HEREIN AND FOR EACH PROPOSAL UNLESS THE SHAREHOLDER DIRECTS
OTHERWISE, IN WHICH CASE IT WILL BE VOTED AS DIRECTED.
The undersigned acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement dated April 20, 2000, and revokes all proxies heretofore given by the
undersigned.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as 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.
, 2000
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Signature Dated
, 2000
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Signature if held jointly Dated
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
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