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:
/x/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14(a)-12
UNIFORCE SERVICES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(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:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
-2-
UNIFORCE SERVICES, INC.
415 Crossways Park Drive
Woodbury, New York 11797
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Uniforce Services, Inc.
Please take notice that the Annual Meeting of Shareholders of Uniforce
Services, Inc., a New York corporation (the "Company"), will be held at The
Garden City Hotel, 45 Seventh Street, Garden City, New York on Tuesday, June 10,
1997 at 10:00 A.M. for the following purposes:
1. To elect a board of six directors for a term of one
year.
2. To approve amendments to the 1991 Stock Option Plan
of the Company.
3. To consider and act upon a proposal to amend the
Company's Certificate of Incorporation to authorize
the issuance by the Company of up to 2,000,000 shares
of Preferred Stock.
4. To ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the year ending December 31,
1997.
5. To transact such other business as may properly come
before the meeting or any adjournment or adjournments
thereof.
The Board of Directors has fixed the close of business on April 23,
1997 as the record date for the purpose of determining the shareholders entitled
to notice of, and to vote at, the meeting.
YOU ARE EARNESTLY REQUESTED, WHETHER OR NOT YOU PLAN TO BE PRESENT AT
THE MEETING, TO MARK, DATE, SIGN AND RETURN PROMPTLY THE ACCOMPANYING PROXY IN
THE ENCLOSED ENVELOPE TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
UNITED STATES.
You may revoke your proxy for any reason at any time prior to the
voting thereof, and if you attend the meeting in person you may withdraw the
proxy and vote your own shares.
By Order of the Board of Directors,
DIANE J. GELLER,
Secretary
Woodbury, New York
April 29, 1997
ANNUAL MEETING OF SHAREHOLDERS
OF
UNIFORCE SERVICES, INC.
PROXY STATEMENT
The proxy accompanying this proxy statement (the "Proxy Statement") is
solicited by the Board of Directors (the "Board of Directors") of Uniforce
Services, Inc., a New York corporation (the "Company"), for use at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held at The Garden City
Hotel, 45 Seventh Street, Garden City, New York on Tuesday, June 10, 1997 at
10:00 A.M. and at any adjournment or adjournments thereof. All proxies in the
accompanying form that are properly executed and duly returned will be voted in
accordance with the instructions specified therein. If no instructions are
given, such proxies will be voted in accordance with the recommendations of the
Board of Directors as indicated in this Proxy Statement. A proxy may be revoked
at any time prior to its exercise by written notice to the Company, by
submission of another proxy bearing a later date or by voting in person at the
Annual Meeting. Such revocation will not affect a vote on any matters taken
prior thereto. The mere presence at the Annual Meeting of the person appointing
a proxy will not revoke the appointment. A majority of the outstanding shares
will constitute a quorum at the Annual Meeting. Abstentions and broker non-votes
are counted for purposes of determining the presence or absence of a quorum for
the transaction of business. Abstentions are counted in tabulations of the vote
cast on proposals presented to shareholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
The approximate date of mailing of this Proxy Statement and the
accompanying proxy to shareholders is April 30, 1997.
VOTING SECURITIES -- RECORD DATE
Only holders of the Company's Common Stock, $.01 par value (the "Common
Stock"), of record at the close of business on April 23, 1997 will be entitled
to notice of and to vote at the Annual Meeting or at any adjournment or
adjournments thereof. On that date, [3,033,543] shares of Common Stock were
issued and outstanding. Each outstanding share entitles the holder thereof to
one vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information at April 23, 1997 as
to the Common Stock beneficially owned by directors, certain executive officers
and all directors and certain executive officers of the Company as a group and
by certain principal shareholders. Unless otherwise indicated, the address of
each person listed below is 415 Crossways Park Drive, Woodbury, New York 11797.
Number of Shares and Nature Percent of
Name and Address of Beneficial Owner of Beneficial Ownership(1) Class(2)
------------------------------------ -------------------------- --------
John Fanning(3)....................................... 1,845,180(4) 59.9%
Dimensional Fund Advisors Inc.(5)..................... 221,400(5) 7.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Rosemary Maniscalco .................................. 72,451(6) 2.3%
Harry V. Maccarrone.................................. 42,752(7) 1.4%
Gordon Robinett....................................... 8,970(8) (9)
John H. Brinckerhoff III.............................. 6,108(8) (9)
Joseph A. Driscoll.................................... 7,000(8) (9)
Diane J. Geller....................................... 0 ----
Directors and executive officers as a group (7 1,982,461(10) 61.7%
persons) ..........................................
(1) Each beneficial owner named below exercises sole voting and dispositive
power with respect to the shares beneficially owned.
(2) Includes the shares of Common Stock subject to options (exercisable
within 60 days after the Record Date) held by each of the named
individuals or the directors and executive officers as a group for
purposes of calculating the respective percentages of Common Stock
owned by such individuals or by the directors and executive officers as
a group.
(3) Under the rules and regulations of the Securities and Exchange
Commission, Mr. Fanning may be deemed a "control person" of the
Company.
(4) Includes 45,250 shares of Common Stock subject to options.
(5) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 221,400 shares of
Common Stock as of December 31, 1996, all of which shares are held in
portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
(6) Represents 72,452 shares of Common Stock subject to options.
(7) Includes 41,693 shares of Common Stock subject to options.
-2-
(8) Includes 6,000 shares of Common Stock subject to options.
(9) Less than 1% of the number of outstanding shares of Common Stock at
April 23, 1997.
(10) Includes an aggregate of 177,395 shares of Common Stock subject to
options.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Annual Meeting, six directors are to be nominated for election,
to serve until the 1998 Annual Meeting of Shareholders and until their
respective successors are duly elected and qualify. Unless a proxy shall specify
that it is not to be voted for the directors, it is intended that the shares of
Common Stock represented by each duly executed and returned proxy will be voted
in favor of the election as directors of the persons named below.
Each of the persons named below is at present a director of the Company
and was elected at the 1996 Annual Meeting of Shareholders. If any nominee is
not a candidate for election at the meeting, an event which the Board of
Directors does not anticipate, the proxies will be voted for a substitute
nominee and for the others named below. The affirmative vote of the holders of a
plurality of the shares of Common Stock present, in person or by proxy, is
required for the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES.
Name and Age Principal Occupation(1) Director Since(2)
------------ ----------------------- -----------------
John Fanning (65)....................... Chairman of the Board, President and 1961
Chief Executive Officer of the Company
Rosemary Maniscalco (56)................ Executive Vice President and Chief 1983
Operating Officer of the Company(3)
Harry V. Maccarrone (49)................ Vice President Finance, Chief Financial 1989
Officer and Treasurer of the Company
John H. Brinckerhoff III (68)........... Stockbroker, Brokers Transaction Services, 1983
Inc.(4)
Gordon Robinett (61).................... Vice Chairman and a Director of 1981
Command Security Corporation, security
consultants(5)
Joseph A. Driscoll (57)................. Financial Consultant/Certified Public 1992
Accountant(6)
-3-
- -------------------
(1) Except as stated below, the nominees' principal occupations have been
their respective principal occupations for at least five years.
(2) Directors' tenure includes their period of service as directors of the
Company's predecessor.
(3) Ms. Maniscalco became Chief Operating Officer of the Company in June
1992.
(4) Mr. Brinckerhoff was a Vice President of Peter Rogen International,
corporate consultants, from before 1992 until November 1994.
(5) Mr. Robinett retired as Vice President - Finance and Treasurer of the
Company effective May 1, 1989.
(6) Mr. Driscoll has been self-employed in such capacities since July 1991.
From 1988 until his retirement from such firm, he was a partner of KPMG
Peat Marwick LLP, certified public accountants, and also served as a
director thereof from 1987 to 1990. Prior to 1987, Mr. Driscoll was the
managing partner of the New York office of KMG Main Hurdman, a
predecessor of KPMG Peat Marwick LLP.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During the Company's past fiscal year, the Board of Directors held six
meetings. Each director attended every meeting. Each director received a fee of
$1,000 for each meeting attended in person. In addition, pursuant to the
Directors Stock Option Plan, each director who is not an employee of the Company
was granted an option to purchase 1,000 shares of Common Stock on January 1,
1996 and will be granted an option to purchase an additional 1,000 shares of
Common Stock on each January 1 so long as he remains a director.
The Audit Committee of the Board of Directors is charged with reviewing
the Company's consolidated financial statements and accounting policies,
resolving potential conflicts of interest, receiving and reviewing the
recommendations of the Company's independent auditors, and conferring with the
Company's independent auditors with respect to the training and supervision of
internal accounting personnel and the adequacy of internal accounting controls.
Messrs. Brinckerhoff, Driscoll and Fanning are the members of the Audit
Committee. During 1996, the Audit Committee held one meeting. All members of the
Audit Committee attended such meeting.
The Compensation Committee of the Board of Directors consists of
Messrs. Fanning, Brinckerhoff and Robinett. The Compensation Committee
recommends to the Board of Directors the compensation for the Company's
executive officers and other key employees. The Compensation Committee did not
meet during 1996, although the members thereof conferred informally from time to
time during the year.
The Company does not presently have a nominating committee, the
customary functions of such committee being performed by the entire Board of
Directors.
-4-
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years indicated, all
compensation awarded to, earned by or paid to the chief executive officer (the
"CEO") of the Company (Mr. John Fanning, Chairman of the Board and President of
the Company) and the other most highly compensated executive officers of the
Company other than the CEO whose salary and bonus exceeded $100,000 (three
individuals, the "named executive officers") for one or more of the fiscal years
presented.
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
----------------------- ---------------------------
Securities All Other All Other
Underlying Compensation Compensation
Name and Principal Position Year Salary Bonus Options (#) (1) (2)
- ------------------------------ ----- ---------- ----------- ------------ ------------ --------------
John Fanning..................... 1996 $225,000 $223,905(3) -- $8,603 $4,000
Chairman of the Board, President 1995 225,000 153,834(4) -- 4,499 4,000
and Chief Executive Officer 1994 191,668 119,630(5) -- 2,875 2,000
Rosemary Maniscalco.............. 1996 $178,366 $141,604(6) 69,401 $11,025 $4,000
Executive Vice President and 1995 175,000 169,236(7) -- 4,365 4,000
Chief Operating Officer 1994 177,019 194,353(8) -- 2,655 2,000
Harry V. Maccarrone.............. 1996 $152,615 $25,000(9) 23,134 $3,695 $4,000
Vice President Finance, Treasurer 1995 138,837 25,000(9) -- 2,951 4,000
and Chief Financial Officer 1994 133,752 25,000(9) -- 2,006 2,000
Diane J. Geller.................. 1996 $132,282 $15,000(9) -- $2,976 $4,000
Secretary 1995 118,651 15,000(9) -- 2,524 4,000
1994 114,303 15,000(9) -- 1,715 2,000
- ------------------
(1) Such amount represents payments (including interest thereon)
contributed by the Company under a Deferred Compensation Plan.
(2) Such compensation represents directors fees. Perquisites and other
personal benefits, securities or property received by each executive
officer did not exceed the lesser of $50,000 or 10% of such executive
officer's annual salary and bonus.
(3) Such amount represents incentive compensation of $198,905 and a
discretionary bonus of $25,000.
(4) Such amount represents incentive compensation of $128,834 and a
discretionary bonus of $25,000.
(5) Such amount represents incentive compensation of $94,630 and a
discretionary bonus of $25,000.
(6) Such amount represents additional compensation of $25,000 based upon
the terms of her employment agreement, incentive compensation of
$49,687, a discretionary bonus of $25,000 and sales compensation of
$41,917. See "--Employment Agreements."
-5-
(7) Such amount represents additional compensation of $25,000 based upon
the terms of her employment agreement, incentive compensation of
$32,613, a discretionary bonus of $25,000 and sales compensation of
$86,623. See "-- Employment Agreements."
(8) Such amount represents additional compensation of $25,000 based upon
the terms of her employment agreement, incentive compensation of
$19,894, a discretionary bonus of $25,000 and sales compensation of
$124,459. See "-- Employment Agreements."
(9) Such amount represents a discretionary bonus.
OPTION GRANTS DURING 1996 FISCAL YEAR
The following table provides information related to options to purchase
Common Stock granted to the named executive officers during 1996. The Company
currently does not have any plans providing for the grant of stock appreciation
rights.
Potential Realizable
Value at Assumed Rates
of Stock Price
Appreciation for Option
Individual Grants Term(2)
- -------------------------------------------------------------------------------- -------------------------
% of Total
Number of Options Exercise
Securities Granted to or Base
Underlying Employees in Price
Name Option(#)(1) Fiscal Year ($/Sh)(2) Expiration Date 5% 10%
- ------------------- ------------- ------------- --------- ----------------- --------- -----------
Rosemary Maniscalco 69,401 57.3% $11.25 February 19, 2006 $491,017 $1,244,332
Harry V. Maccarrone 23,134 19.1% $11.25 February 19, 2006 $163,675 $414,783
- -----------
(1) The option exercise price may be paid in shares of Common Stock owned
by the executive, in cash, or a combination of any of the foregoing, as
determined by the Stock Option Committee administering the Company's
stock option plans. The exercise price is equal to the fair market
value of the Common Stock on the date of grant.
(2) The potential realizable value portion of the foregoing table
illustrates values that might be realized upon exercise of the options
immediately prior to the expiration of their term, assuming the
specified compounded rates of appreciation on the Company's Common
Stock over the term of the options. These numbers do not take into
account provisions of certain options providing for termination of the
option following termination of employment, non-transferability or
differences in vesting periods. Regardless of the theoretical value of
an option, its ultimate value will depend upon the market value of the
Common Stock at a future date, and that value will depend on a variety
of factors, including the overall condition of the stock market and the
Company's results of operations and financial condition. There can be
no assurance that the values reflected in this table will be achieved.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table provides information related to options exercised
by the named executive officers during 1996 and the number and value of options
held by the named executive officers at fiscal year end.
-6-
Common
Stock Value Number of Securities Underlying
Acquired on Realized Unexercised Options at FY-End Value of Unexercised In-the-
Name Exercise (#) ($) (#) Money Options at FY-End ($)(1)
- --------------------- ------------ --------- ------------------------------ ------------------------------
Exercisable Unexercisable Exercisable Unexercisable
-------------- -------------- -------------- --------------
John Fanning............ -- -- 45,250 29,750 $927,625 $609,875
Rosemary Maniscalco..... $8,330 $170,765 55,101 81,800 1,129,571 1,676,900
Harry V. Maccarrone..... 1,059 21,710 35,909 19,900 736,135 407,950
Diane J. Geller......... -- -- 0 2,550 0 52,275
(1) Based on the closing price of a share of Common Stock on December 31,
1996 of $20.50, as reported on the National Association of Securities
Dealers, Inc. Automated Quotation System ("Nasdaq") National Market.
EMPLOYMENT AGREEMENTS
Under an employment agreement dated as of January 26, 1984, as amended
through January 1, 1997, between the Company and John Fanning, Mr. Fanning is
employed as Chief Executive Officer and President for a term that will expire on
December 31, 1997. Mr. Fanning receives a base salary of $250,000, increased
from $225,000 effective January 1, 1997. Such agreement also provides for
incentive compensation equal to 5% of the Company's "pre-tax operating income"
(as defined therein) in excess of $2,500,000 but not in excess of $3,000,000,
plus 3.5% of such income in excess of $3,000,000.
Under an employment agreement dated as of May 1, 1993, as amended
through January 1, 1997, between the Company and Rosemary Maniscalco, Ms.
Maniscalco is employed as Executive Vice President and Chief Operating Officer
for a term that will expire on December 31, 1997 and thereafter shall be
extended for successive one-year periods unless either party notifies the other
party at least 90 days prior to December 31, 1997, or the expiration of any such
subsequent one-year term. Ms. Maniscalco receives a base salary of $225,000 per
annum (increased from $175,000, effective January 1, 1997) and (i) incentive
compensation equal to 5% of the Company's "pretax operating income" (as defined
in such agreement) in excess of $2,500,000 but not in excess of $3,000,000, plus
1% of such income in excess of $3,000,000; and (ii) sales compensation based
upon (A) the sales of, and/or licensing fees actually paid by, licensed offices
of the Company acquired by it or converted to the Uniforce system as a direct
result of Ms. Maniscalco's sales efforts and (B) the gross profit of offices
located within the United States that are acquired by the Company with respect
to sales of such offices derived from sales of the Company's PrO Unlimited
product line. In all events, the aggregate of base salary, incentive
compensation and sales compensation in respect of any full fiscal year may not
be less than $250,000.
In addition, the Company has entered into arrangements with Ms.
Maniscalco and Mr. Maccarrone under which Ms. Maniscalco is entitled to receive
a cash bonus of $780,761 and Mr. Maccarrone is entitled to receive a cash bonus
of $260,257, each payable to the extent of 10% thereof on January 11, 1999, to
the extent of 30% thereof on January 11, 2000 and as to the balance thereof on
January 11, 2001, provided that the recipient is then employed by the Company.
The cash bonus installments are subject to acceleration in the event of the
recipient's death, the merger of the Company, the sale of all or substantially
all of the Company's assets or a change of control of the Company.
-7-
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee determines the cash and other incentive
compensation, if any, excluding stock options, to be paid to the Company's
executive officers and key employees. The Compensation Committee currently
consists of Messrs. Fanning, Robinett and Brinckerhoff. In addition, each of the
stock option plans is administered by a committee (the "Stock Option Committee")
appointed by the Board of Directors. The Stock Option Committee currently
consists of Messrs. Robinett, Brinckerhoff and Driscoll, each of whom is a
Non-Employee Director, within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended ("Rule 16b-3"), and an Outside Director, within
the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), of the Company.
COMPENSATION PHILOSOPHY
The Compensation Committee's executive compensation philosophy is to
base management's pay, in part, on the achievement of the Company's annual and
long-term performance goals, to provide competitive levels of compensation, to
recognize individual initiative, achievement and length of service to the
Company, and to assist the Company in attracting and retaining qualified
management. The Compensation Committee and the Stock Option Committee also
believe that the potential for equity ownership by management is beneficial in
aligning management's and shareholders' interests in the enhancement of
shareholder value. Section 162(m) of the Code generally prohibits a publicly
held corporation, such as the Company, from claiming a deduction on its federal
income tax return for compensation in excess of $1 million paid for a given
fiscal year to the chief executive officer (or person acting in that capacity)
at the close of the corporation's fiscal year and the four most highly
compensated officers of the corporation other than the chief executive officer,
at the end of the corporation's fiscal year. However, the $1 million
compensation deduction limitation does not apply to "performance-based
compensation." The Company is seeking shareholder approval with regard to
amendments to its 1991 Stock Option Plan to enable compensation received by
executive officers in connection with the exercise of options granted under such
plan to qualify as "performance-based compensation." No amendments are required
for the Company's other stock option plans. See "Proposal No. 2 -- Approval of
Amendments to the 1991 Stock Option Plan of the Company."
SALARIES
Base salaries for the Company's executive officers are determined
initially by evaluating the responsibilities of the position held and the
experience of the individual, and by reference to the competitive marketplace
for management talent, including a comparison of base salaries for comparable
positions at comparable companies within the Company's industry. Several of such
companies are in the Company's Peer Group as described under "Common Stock
Performance." The Company believes that its salaries are comparable to those of
its competitors. Annual salary adjustments are determined by evaluating the
competitive marketplace, the performance of the Company, the performance of the
executive particularly with respect to the ability to manage growth of the
Company, the length of the executive's service to the Company and any increased
responsibilities assumed by the executive. The Company has employment agreements
with each of Mr. Fanning and Ms. Maniscalco, which set the base salary for such
individuals.
-8-
ANNUAL BONUSES AND INCENTIVE COMPENSATION
The Company from time to time considers the payment of bonuses and
incentive compensation to its executive officers, although with the exception of
Ms. Maniscalco and Mr. Fanning, no bonus or incentive compensation is currently
provided pursuant to a formal plan or employment agreement. Most of Ms.
Maniscalco's incentive compensation and bonus is determined in accordance with
the terms of her employment agreement. See "-- Employment Agreements."
With respect to the Company's executive officers and upper-middle
managers, bonuses are determined annually by the Compensation Committee and are
generally based, first, upon the level of achievement by the Company of its
strategic and operating goals and, second, upon the level of personal
achievement by participants. The achievement of goals by the Company includes,
among other things, the performance of the Company as measured by return on
assets. The achievement of personal goals includes the actual performance of the
Company for which the executive officer or manager has responsibility as
compared to the planned performance thereof, the level of cost savings achieved
by such executive officer or manager, other individual contributions, the
ability to manage and motivate reporting employees and the achievement of
assigned projects. During 1996 the Company awarded aggregate bonuses to Ms.
Maniscalco, Mr. Maccarrone and Ms. Geller of $25,000, $25,000 and $15,000,
respectively. As indicated under "-- Stock Option Plans" below, certain of the
named executive officers were awarded stock options in 1996.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Fanning's base salary of $225,000 in 1996 was based upon the terms
of his employment agreement and the factors described in the "Salaries"
paragraph above. The Company believes Mr. Fanning's salary is comparable to the
salaries of chief executive officers of companies reviewed by the Company. In
addition, Mr. Fanning can receive incentive compensation in accordance with the
terms of his employment agreement. See "-- Employment Agreements." Mr. Fanning
also received a discretionary bonus of $25,000 for 1996. Discretionary bonuses
to Mr. Fanning are based upon the factors described in "Annual Bonuses and
Incentive Compensation."
STOCK OPTION PLANS
In 1996, the Stock Option Committee awarded stock options to purchase
an aggregate of 69,401 shares and 23,134 shares to Ms. Maniscalco and Mr.
Maccarrone, respectively. It is the philosophy of the Stock Option Committee
that stock options should be awarded only to key employees of the Company to
promote long-term interests between such employees and the Company's
shareholders and to assist in the retention of such employees.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
John Fanning, the Company's Chairman of the Board, President and Chief
Executive Officer, and Gordon Robinett, the former Vice President - Finance and
Treasurer of the Company until 1989, participated in deliberations of the
Company's Compensation Committee concerning executive officer compensation.
-9-
Compensation Committee: John Fanning
Gordon Robinett
John H. Brinckerhoff III
COMMON STOCK PERFORMANCE
The following graph compares the total cumulative return (assuming
dividends are reinvested) on the Company's Common Stock during the five fiscal
years ended December 31, 1996 with the cumulative return on the Nasdaq Market
Index and a Peer Group Index. The Peer Group selected by the Company consists of
Olsten Corp., Joule Inc., Butler International Inc., Kelly Services, Inc., Staff
Builders Inc. and the Company.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG UNIFORCE SERVICES, INC.,
NASDAQ MARKET INDEX AND PEER GROUP INDEX
Company Fiscal Year Ending
- --------------------------------------- -------------------------------------------------------------------------------------
1991 1992 1993 1994 1995 1996
------ ------ ------ ------ ------ -----
Uniforce Services, Inc. 100 92.88 100.16 150.35 167.52 314.62
Peer Group 100 146.48 134.16 141.31 159.21 133.91
Broad Market 100 100.98 121.13 127.17 164.96 204.98
ASSUMES $100 INVESTED ON JAN. 1, 1991
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDED DEC. 31, 1996
-10-
PROPOSAL NO. 2
APPROVAL OF AMENDMENTS TO THE 1991 STOCK OPTION PLAN OF THE COMPANY
On March 14, 1997, the Board of Directors adopted, and proposed that
the shareholders approve, amendments to the Company's 1991 Stock Option Plan
(the "Plan"), which, in substance, provide, among other things, (i) that the
Plan be administered by a committee of "non-employee directors" within the
meaning of Rule 16b-3 and "outside directors" within the meaning of Section
162(m) of the Code and that the Plan otherwise complies with Rule 16b-3 and (ii)
limitations on the number of shares subject to options granted under the Plan to
enable (a) compensation realized upon the exercise of options granted under the
Plan to be regarded as "performance-based" under Section 162(m) of the Code and
(b) such compensation to be deductible without regard to the limits of Section
162(m) of the Code. Such amendments are collectively referred to herein as the
"Amendments." The full text of the provisions of the Plan that are being amended
is described below.
The Plan provides for the grant to directors, officers and employees of
options to purchase an aggregate of 500,000 shares of Common Stock.
The Board of Directors believes it is in the Company's and its
shareholders' best interests to approve the Amendments because they will (i)
enable compensation attributable to stock options received under the Plan to
qualify as "performance-based" for the purposes of Section 162(m) of the Code
and (ii) enable the Plan to comply with Rule 16b-3. At the present time, in
light of current compensation levels of the Company's executive officers, it is
not expected that the $1 million threshold of Section 162(m) of the Code will be
reached with respect to the salary and bonus to be paid to any individuals in
1997. In addition, in connection with adopting the Amendments, certain
conforming definitional changes have been made to the Plan. Options previously
granted to the Company's chief executive officer and the four most highly
compensated executive officers other than the CEO under the Plan will be
cancelled if the Amendments to the Plan are not approved.
The following are the proposed Amendments to the Plan:
A. The following paragraph shall be added to the end of Section 1,
"Purposes."
The Company intends that the Plan meet the requirements of
Rule 16b-3 and that transactions of the type specified in
subparagraphs (c) to (f) inclusive of Rule 16b-3 by officers
and directors of the Company pursuant to the Plan will be
exempt from the operation of Section 16(b) of the Exchange
Act. Further, the Plan is intended to satisfy the
performance-based compensation exception to the limitation on
the Company's tax deductions imposed by Section 162(m) of the
Code. In all cases, the terms, provisions, conditions and
limitations of the Plan shall be construed and interpreted
consistent with the Company's intent as stated in this Section
1.
B. The following sentence shall be added to the end of Section 3,
"Administration."
In the event that for any reason the Committee is unable to
act or if the Committee at the time of any grant, award or
other acquisition under the Plan of options or Shares does not
consist of two or more Non-Employee
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Directors, then any such grant, award or other acquisition may
be approved or ratified in any other manner contemplated by
subparagraph (d) of Rule 16b-3.
C. The following sentence shall be added to the end of Section 5,
"Limitations on Shares Subject to the Plan."
The maximum number of Shares that may be subject to options
granted under the Plan to any individual in any calendar year
shall not exceed 100,000, and the method of counting such
Shares shall conform to any requirements applicable to
performance-based compensation under Section 162(m) of the
Code.
D. The following paragraph shall be added to the end of Section 6,
"Terms and Conditions of Options."
If an option granted to the Company's Chief Executive Officer
or to any of the Company's other four most highly compensated
officers is intended to qualify as "performance-based"
compensation under Section 162(m) of the Code, the exercise
price of such option shall not be less than 100% of the Fair
Market Value of a Share on the date such option is granted.
In addition, the Plan has also been amended to permit the grant of
non-qualified options to directors. See "-- Aggregated Option Exercises in Last
Fiscal Year and Fiscal Year End Option Values" for a table of the current
options held by the CEO and the named executive officers at fiscal year end.
ADMINISTRATION
The Plan, as amended, will be administered by a Stock Option Committee,
consisting of not less than two members of the Board of Directors of the Company
who are "non-employee directors" within the meaning of Rule 16b-3 and "outside
directors" within the meaning of Section 162(m) of the Code. The members of the
Stock Option Committee are appointed by the Board of Directors and serve at the
pleasure of the Board of Directors. Currently, the members of the Stock Option
Committee are Messrs. Robinett, Brinckerhoff and Driscoll.
REGISTRATION OF SHARES
The Company has filed a registration statement under the Securities Act
of 1933, as amended, with respect to the shares of Common Stock underlying
options granted pursuant to the Plan.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the shares of
Common Stock present, in person or by proxy, is required for approval of the
proposed amendments to the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ADOPTION OF THE
PROPOSED AMENDMENTS TO THE PLAN. BROKER NON-VOTES
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AND PROXIES MARKED "ABSTAIN" WITH RESPECT TO THIS PROPOSAL WILL BE COUNTED
TOWARDS A QUORUM. ABSTENTIONS WILL BE COUNTED AS A VOTE AGAINST THIS PROPOSAL
AND BROKER NON-VOTES WILL NOT BE COUNTED FOR PURPOSES OF DETERMINING WHETHER
THIS PROPOSAL HAS BEEN APPROVED.
PROPOSAL NO. 3
APPROVAL OF THE PROPOSED AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO AUTHORIZE PREFERRED STOCK
The Board of Directors has approved an amendment to Paragraphs 4 and 5
of the Company's Certificate of Incorporation to authorize the issuance of up to
2,000,000 shares of Preferred Stock. The text of the proposed amendment is
attached hereto as Exhibit A and is incorporated herein by reference.
The Company is currently authorized to issue 10,000,000 shares of
Common Stock. As of April 23, 1997, [3,033,543] shares of Common Stock were
issued and outstanding, 2,084,243 shares of Common Stock were held in treasury,
and an additional __________ shares of Common Stock were reserved for issuance
upon exercise of outstanding stock options and for options that may be granted
in the future under the Plan and the Company's other stock option plans.
The Board of Directors believes that the authorization of the Preferred
Stock is in the best interests of the Company and its shareholders and believes
that it is advisable to authorize such shares and have them available in
connection with possible future transactions, such as financings, strategic
alliances, corporate mergers, acquisitions, possible funding of new product
programs or businesses and other uses not presently determinable and as may be
deemed to be feasible and in the best interests of the Company. In addition, the
Board of Directors believes that it is desirable that the Company have the
flexibility to issue shares of Preferred Stock without further shareholder
action, except as otherwise provided by law. The Company currently has no plans
to issue shares of Preferred Stock, should this proposal be approved by
shareholders.
It is not possible to determine the actual effect of the Preferred
Stock on the rights of the shareholders of the Company until the Board of
Directors determines the rights of the holders of a series of the Preferred
Stock. However, such effects might include (i) restrictions on the payment of
dividends to holders of the Common Stock; (ii) dilution of voting power to the
extent that the holders of shares of Preferred Stock are given voting rights;
(iii) dilution of the equity interests and voting power of holders of Common
Stock if the Preferred Stock is convertible into Common Stock; and (iv)
restrictions upon any distribution of assets to the holders of the Common Stock
upon liquidation or dissolution and until the satisfaction of any liquidation
preference granted to the holders of Preferred Stock.
The Board of Directors will make any determination to issue shares of
Preferred Stock based upon its judgment as to the best interests of the
shareholders and the Company. Although the Board of Directors has no present
intention of doing so, it could issue shares of Preferred Stock (within the
limits imposed by applicable law) that could, depending on the terms of such
series, make more difficult or discourage an attempt to obtain control of the
Company by means of a merger, tender offer, proxy contest or other means. When
in the judgment of the Board of Directors such action would be in the best
interests of the shareholders and the Company, the issuance of shares of
Preferred Stock could be used to create voting or other impediments or to
discourage persons seeking to gain control of the Company, for example, by the
sale of Preferred Stock to purchasers favorable to the Board of Directors. In
addition,
-13-
the Board of Directors could authorize holders of a series of Preferred Stock to
vote either separately as a class or with the holders of Common Stock, on any
merger, sale or exchange of assets by the Company or any other extraordinary
corporate transaction. The existence of the additional authorized shares could
have the effect of discouraging unsolicited takeover attempts. The issuance of
new shares could also be used to dilute the stock ownership of a person or
entity seeking to obtain control of the Company should the Board of Directors
consider the action of such entity or person not to be in the best interests of
the stockholders and the Company. Such issuance of Preferred Stock could also
have the effect of diluting the earnings per share and book value per share of
the Common Stock held by the holders of Common Stock.
While the Company may consider effecting an equity offering of
Preferred Stock in the future for the purposes of raising additional working
capital or otherwise, the Company, as of the date hereof, has no agreements or
understandings with any third party to effect any such offering and no
assurances are given that any offering will in fact be effected.
DISSENTERS' RIGHTS
Pursuant to the New York Business Corporation Law, the Company's
shareholders are not entitled to dissenters' rights of appraisal with respect to
the proposed amendment.
If the proposed amendment is approved, a Certificate of Amendment
amending the Certificate of Incorporation will be filed with the office of the
Secretary of State of the State of New York as promptly as practicable
thereafter and the authorization to issue Preferred Stock would become effective
on the date of such filing.
REQUIRED VOTE
The affirmative vote of the holders of a majority of all outstanding
shares of Common Stock entitled to vote at a meeting of shareholders, in person
or by proxy, is required for approval of the proposed amendment to the Company's
Certificate of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ADOPTION OF THE
PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION. BROKER
NON-VOTES AND PROXIES MARKED "ABSTAIN" WITH RESPECT TO THIS PROPOSAL WILL BE
COUNTED TOWARDS A QUORUM. ABSTENTIONS WILL BE COUNTED AS A VOTE AGAINST THIS
PROPOSAL AND BROKER NON-VOTES WILL NOT BE COUNTED FOR PURPOSES OF DETERMINING
WHETHER THIS PROPOSAL HAS BEEN APPROVED.
-14-
PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
It is proposed that the shareholders ratify the appointment by the
Board of Directors of KPMG Peat Marwick LLP as independent auditors of the
Company for the year ending December 31, 1997. KPMG Peat Marwick LLP has advised
the Company that a representative will be present at the Annual Meeting at which
time he will respond to appropriate questions submitted by shareholders and will
make such statements as he may desire.
Approval by the shareholders of the appointment of independent auditors
is not required, but the Board of Directors deems it desirable to submit this
matter to the shareholders. If a majority of the shareholders voting at the
meeting should not approve the selection of KPMG Peat Marwick LLP, the selection
of independent auditors will be reconsidered by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS OF THE COMPANY.
BROKER NON-VOTES AND PROXY CARDS MARKED "ABSTAIN" WITH RESPECT TO THIS PROPOSAL
WILL BE COUNTED TOWARDS A QUORUM. ABSTENTIONS WILL BE COUNTED AS A VOTE AGAINST
THIS PROPOSAL AND BROKER NON-VOTES WILL NOT BE COUNTED FOR PURPOSES OF
DETERMINING WHETHER THIS PROPOSAL HAS BEEN APPROVED.
GENERAL
The solicitation of proxies in the accompanying form is made by the
Board of Directors and the cost thereof will be borne by the Company. In
addition to the solicitation of proxies by use of the mails, some of the
officers, directors and other employees of the Company may also solicit proxies
personally or by mail, telephone or telegraph, but they will not receive
additional compensation for such services. Brokerage firms, custodians, banks,
trustees, nominees or other fiduciaries holding shares of Common Stock in their
names will be requested by the Company to forward proxy materials to their
principals and will be reimbursed for their reasonable out-of-pocket expenses in
such connection.
As of the date of this Proxy Statement, the Board of Directors is not
aware of any other matters to be presented for action, but if any other matters
properly come before the meeting, it is intended that the persons voting the
accompanying proxy will vote the shares represented thereby in accordance with
their best judgment.
It is important that proxies be returned promptly. Therefore, whether
or not you plan to attend the meeting in person, you are urged to mark, date,
execute and return your proxy in the enclosed envelope, to which no postage need
be affixed if mailed in the United States.
-15-
SHAREHOLDER PROPOSALS
Shareholder proposals in respect of matters to be acted upon at the
Company's 1998 Annual Meeting of Shareholders should be received by the Company
on or before January 1, 1998 in order that they may be considered for inclusion
in the Company's proxy materials.
By Order of the Board of Directors,
DIANE J. GELLER,
Secretary
Dated: April 30, 1997
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EXHIBIT A
Paragraph FOURTH shall be deleted in its entirety and the following new
Paragraph FOURTH shall be substituted in lieu thereof:
FOURTH: The aggregate number of shares which the Corporation
shall have authority to issue is twelve million (12,000,000),
consisting of ten million (10,000,000) shares of common stock having a
par value of one cent ($.01) per share, all of which are of the same
class and all of which are designated as common shares (the "Common
Stock"), and two million (2,000,000) shares of preferred stock (the
"Preferred Stock") having a par value of one cent ($.01) per share.
Paragraph FIFTH shall be amended to read in its entirety as follows:
FIFTH: a) Common Stock. Each share of Common Stock shall have
one vote for all corporate purposes, with no cumulative voting rights.
Each share of Common Stock shall have equal rights on dissolution,
corporate distribution and for all other corporate purposes.
b) Preferred Stock. The Board of Directors is expressly
authorized to provide for the issue of all or any shares of Preferred
Stock, without shareholder approval unless otherwise required by
applicable law, in one or more series, and to fix for each such series
such voting powers, full or limited, and such designations, preferences
and relative, participating, optional or special rights and such
qualifications, limitations or restrictions thereof as shall be stated
and expressed in the resolution or resolutions adopted by the Board of
Directors providing for the issue of such series and as may be
permitted by the Business Corporation Law of the State of New York.
-17-
UNIFORCE SERVICES, INC.
Proxy Solicited by the Board of Directors
for the
ANNUAL MEETING OF SHAREHOLDERS
June 10, 1997
KNOW ALL MEN BY THESE PRESENTS, that the undersigned shareholder of
UNIFORCE SERVICES, INC. (the "Company") does hereby constitute and appoint JOHN
FANNING, ROSEMARY MANISCALCO and HARRY MACCARRONE or any of them (each with full
power of substitution of another for himself) as attorneys, agents and proxies,
for and in the name, place and stead of the undersigned, and with all the powers
the undersigned would possess if personally present, to vote as instructed below
all of the shares of Common Stock of the Company that the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Company to be held
on Tuesday, June 10, 1997 at 10:00 A.M. local time at The Garden City Hotel, 45
Seventh Street, Garden City, New York, and at any adjournment or adjournments
thereof, all as set forth in the Notice of Meeting and Proxy Statement.
(See Reverse Side)
1. ELECTION OF A BOARD OF SIX DIRECTORS:
(INSTRUCTIONS: To
withhold authority to
vote for any
FOR all nominees WITHHOLD AUTHORITY individual nominee,
listed to the right to vote for strike a line through
(except as marked nominees listed to the nominee's name in
to the contrary) the right the list below.)
/ / / / J.H. Brinckerhoff III,
J.A. Driscoll,
J. Fanning,
H.V. Maccarrone,
R. Maniscalco,
G. Robinett
2. APPROVAL OF AMENDMENTS TO THE 1991 STOCK OPTION PLAN OF THE COMPANY
FOR ___ AGAINST ___ ABSTAIN _____
3. APPROVAL OF AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
TO AUTHORIZE THE ISSUANCE OF PREFERRED STOCK.
FOR ___ AGAINST ___ ABSTAIN _____
4. RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS
INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31, 1997.
FOR ___ AGAINST ___ ABSTAIN _____
5. In their discretion, the Proxies are authorized to vote upon such other
and further business as may properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH
THE INSTRUCTIONS GIVEN. IF NO SUCH INSTRUCTIONS ARE GIVEN, THE SHARES
REPRESENTED BY THE PROXY WILL BE VOTED IN FAVOR OF ELECTION OF THE
NOMINEES FOR DIRECTORS DESIGNATED BY THE BOARD OF DIRECTORS AND FOR
ITEMS 2, 3 AND 4.
Signature Date:
---------------------------- -------------------------
Note: Please sign exactly as your name appears hereon, and when signing as
attorney, executor, administrator, trustee or guardian, give your full title as
such. If signatory is a corporation, sign the full corporate name by duly
authorized officer. If shares are held jointly, each shareholder named should
sign.