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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
MODIS PROFESSIONAL SERVICES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
[MODIS PROFESSIONAL SERVICES LOGO]
MODIS PROFESSIONAL SERVICES, INC.
1 INDEPENDENT DRIVE
JACKSONVILLE, FLORIDA 32202
APRIL 26, 2001
DEAR MODIS PROFESSIONAL SERVICES, INC. SHAREHOLDER:
On behalf of the Board of Directors and management of Modis Professional
Services, Inc. (the "Company"), we cordially invite you to attend the annual
meeting of shareholders (the "Annual Meeting") to be held on Wednesday, May
30, 2001, at The Lodge and Club at Ponte Vedra Beach, 607 Ponte Vedra
Boulevard, Ponte Vedra Beach, Florida 32082, at 9:00 a.m., local time. The
attached Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted at the Annual Meeting.
In addition to the specific matters to be acted upon, there also will be a
report on the operations of the Company. Directors and officers of the Company
will be present to respond to shareholders' questions.
It is important that your shares be represented at the Annual Meeting.
Regardless of whether you plan to attend, you are requested to mark, sign,
date and promptly return the enclosed proxy in the envelope provided. If you
attend the Annual Meeting, which we hope you will do, you may vote in person
even if you have previously mailed a proxy card.
Sincerely,
/s/ Derek E. Dewan
/s/ Timothy D. Payne
DEREK E. DEWAN TIMOTHY D. PAYNE
Chairman of the Board of Directors President and Chief Executive
Officer
MODIS PROFESSIONAL SERVICES, INC.
1 INDEPENDENT DRIVE
JACKSONVILLE, FLORIDA 32202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 30, 2001
TO THE HOLDERS OF COMMON STOCK:
PLEASE TAKE NOTICE that the annual meeting of shareholders (the "Annual
Meeting") of Modis Professional Services, Inc. (the "Company") will be held on
Wednesday, May 30, 2001 at 9:00 a.m., local time, at The Lodge and Club at
Ponte Vedra Beach, 607 Ponte Vedra Boulevard, Ponte Vedra Beach, Florida
32082.
The Annual Meeting will be held for the following purposes:
1. To elect ten directors to serve terms scheduled to end in conjunction with
the next annual meeting of shareholders or until their successors are
elected and qualified;
2. To approve the adoption of the 2001 Employee Stock Purchase Plan; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
All shareholders are cordially invited to attend the Annual Meeting;
however, only shareholders of record at the close of business on April 4,
2001, are entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors,
/s/ Marc M. Mayo
MARC M. MAYO,
SENIOR VICE PRESIDENT, SECRETARY AND
GENERAL COUNSEL
Dated: April 26, 2001
Jacksonville, Florida
REGARDLESS OF WHETHER YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE MARK,
SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE AS PROMPTLY AS POSSIBLE.
MODIS PROFESSIONAL SERVICES, INC.
1 INDEPENDENT DRIVE
JACKSONVILLE, FLORIDA 32202
PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD MAY 30, 2001
INTRODUCTION
This Proxy Statement and the enclosed form of proxy are first being sent to
shareholders of Modis Professional Services, Inc., a Florida corporation (the
"Company"), on or about April 30, 2001, in connection with the solicitation by
the Company's Board of Directors of proxies to be used at the annual meeting
of shareholders (the "Annual Meeting") of the Company to be held on Wednesday,
May 30, 2001, at 9:00 a.m., local time, or at any adjournment thereof. The
Annual Meeting will be held at The Lodge and Club at Ponte Vedra Beach, 607
Ponte Vedra Boulevard, Ponte Vedra Beach, Florida 32082.
Only shareholders of record at the close of business on April 4, 2001 (the
"Record Date") will be entitled to notice of and to vote at the Annual Meeting
and any adjournments thereof. As of the Record Date, the Company had
outstanding 96,731,561 shares of Common Stock, par value $.01 per share (the
"Common Stock").
VOTING PROCEDURES
The Board of Directors has designated Derek E. Dewan and Timothy D. Payne,
and each or either of them, as proxies to vote the shares of common stock
solicited on its behalf. If the enclosed form of proxy is executed and
returned, it may nevertheless be revoked at any time before it has been
exercised by: (i) giving written notice to the Secretary of the Company; (ii)
delivery of a later dated proxy; or (iii) attending the Annual Meeting,
notifying the Secretary of the Company or his delegate and voting in person.
The shares represented by the proxy will be voted in accordance with the
directions given unless the proxy is mutilated or otherwise received in such
form as to render it illegible. If sufficient votes in favor of the election
of directors are not received by the date of the Annual Meeting, the persons
named as proxies may propose one or more adjournments of the Annual Meeting to
permit further solicitation of proxies.
Each outstanding share of Common Stock is entitled to one vote. The
Company's Bylaws provide that a majority of shares entitled to vote and
represented in person or by proxy at a meeting of the shareholders constitutes
a quorum. The Company's Bylaws provide that directors are elected by a
plurality of the votes cast by the shares entitled to vote in the election at
a meeting at which a quorum is present. The Company's Bylaws further provide
that other matters (including Proposal Two--Approval of the Adoption of the
2001 Employee Stock Purchase Plan) are approved if affirmative votes cast by
the holders of the shares represented at a meeting at which a quorum is
present and entitled to vote on the subject matter exceed the votes opposing
the action, unless a greater number of affirmative votes or voting by classes
is required by the Florida Business Corporation Act or the Company's Articles
of Incorporation. Therefore, although abstentions and broker non-votes are
counted for quorum purposes, abstentions and broker non-votes generally have
no effect under Florida law. A broker non-vote occurs when a broker who holds
shares in street name for a customer does not have authority to vote on
certain non-routine matters under the rules of the New York Stock Exchange
because its customer has not provided any voting instructions on the matter.
Regarding the election of Directors, shares may be voted for or withheld
from each nominee. Abstentions and broker non-votes will have no effect on the
election of Directors.
Shareholders should specify their choices on the enclosed form of proxy. If
no specific instructions are given with respect to the matters to be acted
upon, the shares represented by a signed proxy will be voted "FOR" the
election of all nominees and "FOR" approval of the adoption of the 2001
Employee Stock Purchase Plan.
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Annual Meeting, ten individuals will be elected to serve as directors
of the Company for terms scheduled to end in conjunction with the next annual
meeting of shareholders or until their successors are duly elected and
qualified. Each nominee is presently available for election and is a member of
the Board of Directors. If any nominee should become unavailable, which is not
now anticipated, the persons voting the accompanying proxy may in their
discretion vote for a substitute.
Information concerning the Board of Directors' nominees, based on data
furnished by them, is set forth below. There are no family relationships
between any directors or executive officers of the Company.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE ELECTION
OF EACH OF THE FOLLOWING. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED
UNLESS SHAREHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
Year First
Positions With the Company; Became
Principal Occupations during Director of
Name (Age) Past 5 Years; Other Directorships the Company
---------------------- ------------------------------------------- -----------
Derek E. Dewan (46)* Chairman of the Board of the Company since 1994
June 1996; President and Chief Executive
Officer of the Company from January 1, 1994
to November 1, 2000 and March 1, 2001,
respectively; Director since January 28,
1994; Partner with the accounting firm of
Coopers & Lybrand LLP (now
PricewaterhouseCoopers LLP) for more than
five years prior to joining the Company,
most recently as the managing partner of
the Jacksonville, Florida office. Mr. Dewan
currently serves on the Board of Directors
of Transit Group, Inc. and Epix Corp.
Timothy D. Payne (42) President and Chief Executive of the 2000
Company since November 1, 2000 and March 1,
2001, respectively; Director since November
10, 2000; President and Chief Operating
Officer of Modis, Inc., a subsidiary of the
Company, from March 1997 to December, 2000;
from 1994 until March 1997, President and
Chief Executive Officer of Openware
Technologies, Inc., a systems integrator
which was acquired by the Company in June
1996.
George A. Bajalia (43) Chief Operating Officer of the Company 2000
since March 1, 2001; Director since
November 10, 2000; Chief Executive Officer
of the Prolianz division from November 1,
2000 until the present; Senior Vice
President--Corporate Development and
Operations from December 15, 1998 until
being named President and Chief Operating
Officer of the Prolianz division; for five
years prior to joining the Company was
employed by Wickes, Inc., a publicly traded
supplier and manufacturer of building
materials, most recently as Senior Vice
President and Chief Financial Officer.
Peter J. Tanous (62)*. President of Lynx Investment Advisory, Inc. 1997
since 1984. Previously Executive Vice
President of Bank Audi (U.S.A.), Chairman
of Petra Capital Corporation, and First
Vice President and International Regional
Director with Smith Barney. Mr. Tanous
currently serves on the Board of Directors
of Cedars Bank, Kistler Aerospace
Corporation, Interstate Resources, Inc.,
and TechniFlite of America, Inc.
2
Year First
Positions With the Company; Became
Principal Occupations during Director of
Name (Age) Past 5 Years; Other Directorships the Company
-------------------------- --------------------------------------- -----------
T. Wayne Davis (54).+ Private investor for the past five 1994
years; President and Chairman of the
Board of Tine W. Davis Family-WD
Charities, Inc.; President of Red Wing
Properties, Inc.; Director of Enstar
Group, Inc., Winn-Dixie Stores, Inc.,
Secured Document Systems, Inc., and
Associated Industries Insurance
Services, Inc. Mr. Davis also serves as
Chairman of the Board of Transit Group,
Inc.
John R. Kennedy (70).+ Retired as President, Chief Executive 1999
Officer and Director of Federal Paper
Board Company in 1996 after 44 years
with that company; Currently serves as
a Director of International Paper
Company, Spartech Corporation, Pioneer
Companies, Inc., and Chase Brass
Industries, Inc. and is Chairman of the
Board of Trustees of Georgetown
University.
Michael D. Abney (65) Retired as Senior Vice President and 1997
Chief Financial Officer of the Company
on December 31, 2000; Senior Vice
President of the Company from March
1995 and Chief Financial Officer of the
Company from November 1992. He is a
certified public accountant and was a
partner with Coopers & Lybrand, LLP
(now PricewaterhouseCoopers LLP) for 22
years prior to joining the Company,
most recently as managing partner of
PricewaterhouseCoopers LLP's
Jacksonville, Florida office.
William M. Isaac (57)*. Chairman of The Secura Group, a 2000
consulting firm providing advisory
services to financial institutions
since 1986, and Chairman of Secura
Burnett, LLC, an executive search firm
servicing financial institutions since
1992; Senior Partner with the law firm
of Arnold & Porter in Washington, D.C.
from 1986 to 1993; Chairman of the
Federal Deposit Insurance Corporation
("FDIC") from August 1981 to October
1985, member of the Board of the FDIC
from 1978 through 1985.
George J. Mitchell (67)* Special counsel to the law firm of 2000
Verner, Liipfert, Bernhard, McPherson &
Hand in Washington, D.C. and senior
counsel to the firm of Preti, Flaherty,
Beliveau & Pachios in Portland, Maine;
United States Senator for fifteen years
commencing in 1980; Senate Majority
Leader from 1989 to 1995. Senator
Mitchell is a member of the boards of
directors of Casella Waste Systems,
Inc., FedEx Corp., Staples, Inc.,
Starwood Hotels & Resorts, Unilever,
UNUM Provident, US Tech Ventures, the
Walt Disney Company, and Xerox
Corporation.
Michael L. Huyghue (39)+* Senior Vice President of Football 2000
Operations for the Jacksonville Jaguars
NFL football franchise. Mr. Huyghue
joined the Jaguars in 1994 as Vice
President of Football Operations and
was promoted to his current position in
1996. Prior to joining the Jaguars,
Mr. Huyghue was Vice President of
Administration and General Counsel for
the Detroit Lions NFL football
franchise in 1992, Vice President of
Administration and General Counsel of
the World League and General Manager of
the Birmingham Fire football franchise
in 1991 and from 1987 to 1990 was labor
relations counsel to the NFL's
Management Council.
3
- --------
*Current member of the Nominating Committee.
.Current member of the Audit Committee.
+Current member of the Compensation Committee.
BOARD OF DIRECTORS AND STANDING COMMITTEES. Regular meetings of the Board of
Directors are held approximately four times a year, with special meetings as
needed. During 2000, the Board of Directors held seven (7) meetings. Due to a
prior commitment, Senator Mitchell was unable to attend the one (1) meeting
held during 2000 following his appointment to the Board. Each other director
attended at least 75% of the aggregate of: (i) all meetings of the Board of
Directors and (ii) all meetings of Board committees on which he served during
2000.
The Board of Directors has established three standing committees: an Audit
Committee, a Compensation Committee, and a Nominating Committee which are
described below. Members of these committees are generally elected annually by
the Board of Directors, but changes may be made at the Board's discretion at
any time.
AUDIT COMMITTEE. The Audit Committee was comprised of Messrs. Tanous
(Chairman), Davis and Kennedy during 2000. Mr. Isaac was added to the
committee in December 2000. Regular meetings of the Audit Committee are
scheduled to be held four times a year. The Audit Committee met five (5) times
during 2000. The principal responsibilities of and functions generally
performed by the Audit Committee are reviewing the Company's internal controls
and the objectivity of its financial reporting, making recommendations
regarding the Company's employment of independent auditors and reviewing the
annual audit with the auditors. On March 27, 2000, based upon the
recommendations of the Blue Ribbon Committee of the New York Stock Exchange
and in accordance with the Securities and Exchange Commission's recent
rulemaking regarding Audit Committees, the Audit Committee approved an Audit
Committee Charter effective in June 2000 which states more specifically the
responsibilities of the Audit Committee. The Audit Committee Charter has been
approved by the entire Board. A copy of the Audit Committee Charter is
attached to this Proxy Statement as an Appendix.
COMPENSATION COMMITTEE. The Compensation Committee was comprised of Messrs.
Davis (Chairman), Kennedy and Tanous during 2000. Mr. Huyghue was added to the
committee and Mr. Tanous left the committee in December 2000. During 2000, the
Compensation Committee met five (5) times. This Committee has the
responsibility of approving the compensation arrangements for senior
management of the Company, including annual incentive compensation. It also
recommends to the Board of Directors adoption of any compensation plans in
which officers and directors of the Company are eligible to participate.
NOMINATING COMMITTEE. The Nominating Committee was comprised of Messrs.
Tanous (Chairman), Dewan, Kennedy, Davis and Abney during 2000. This Committee
met as the entire Board this year and nominated Messrs. Isaac, Mitchell,
Huyghue, Payne and Bajalia for membership on the Board. This Committee's
principal responsibility is to investigate and nominate potential members of
the Board. This Committee relies on the procedures in the Company's Bylaws to
consider nominees recommended by shareholders. For 2001, this Committee will
be comprised of Messrs. Tanous (Chairman), Dewan, Huyghue, Isaac and Mitchell.
PROPOSAL TWO
APPROVAL OF THE ADOPTION OF THE
2001 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors has adopted the 2001 Employee Stock Purchase Plan,
which we refer to as the "Purchase Plan," subject to approval by shareholders.
The Purchase Plan, which is intended to qualify under Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"), permits eligible
employees of the Company to purchase Common Stock on favorable terms through
accumulated payroll deductions, and thereby provide the benefit of the
incentive created by stock ownership. The Company seeks to attract, retain,
and
4
motivate the best available personnel, to provide additional incentives to
employees of the Company and its subsidiaries to promote the success of the
business as measure by the value of its shares, and generally to increase the
commonality of interests among employees and other shareholders.
Because the Purchase Plan is intended to qualify as an "employee stock
purchase plan" under Section 423 of the Code, the provisions of the Purchase
Plan will be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
The following is a summary of the principal features of the Purchase Plan.
This description is qualified in its entirety by the terms of the Purchase
Plan, a copy of which was filed electronically with the Securities and
Exchange Commission with this proxy statement.
Shares Available for Issuance Under the Purchase Plan
If adopted, an aggregate of 1,000,000 shares of Common Stock will be
reserved for issuance and available for purchase under the Purchase Plan,
subject to adjustment in the event of a stock split, stock dividend or other
similar change in the Common Stock or the capital structure of the Company.
The shares of Common Stock available for purchase under the Purchase Plan may
be acquired by the Company in the open market or in privately negotiated
transactions or newly issued shares.
Administration
The Purchase Plan is administered by the Board of Directors or a committee
appointed by the Board of Directors. Until otherwise changed, the Purchase
Plan will be administered by the Compensation Committee of the Board of
Directors.
Eligible Participants
All employees of the Company and any designated subsidiary are eligible to
participate, except individuals who have been employed for less than six (6)
months, individuals who customarily work less than 20 hours per week,
individuals who customarily work for the Company for not more than 5 months
per year and individuals who would own 5% or more of the Common Stock, taking
outstanding options and shares owned by certain related parties into account.
Eligible employees may become participants by completing an enrollment form
authorizing payroll deductions. As of March 31, 2001, approximately 7,863
employees, including 5 executive officers, would have been eligible to
participate in the Purchase Plan.
Plan Operation
Under the Purchase Plan, the Company will conduct a series of offerings of
our Common Stock. Each offering will continue for a six (6) month period. The
offering periods will continue under the Purchase Plan until the Purchase Plan
is terminated or the Common Stock remaining available under the Purchase Plan
is insufficient to make an offer to all eligible employees, whichever occurs
first.
At the end of each offering period, the entire amount of accumulated payroll
deductions in a participating employee's account will automatically be used to
purchase, at the applicable purchase price, shares of Common Stock. The
purchase price for any given offering period will be 85% of the fair market
value of a single share of Common Stock on either the first day of the
offering period or the last day of the offering period, whichever value is
lower. No brokerage fees will be charged to participating employees in
connection with the acquisition of Common Stock under the Purchase Plan. The
purchase price determines the total number of shares of Common Stock which may
be purchased with the accumulated payroll deductions for the offering period.
During any calendar year, no participating employee may accrue options to
purchase shares through the Purchase Plan having an aggregate fair market
value in excess of $25,000. In addition, a participating employee may not make
purchases through the Purchase Plan if he or she is, or if such purchases
would cause him or her to become, the owner of 5% or more of the outstanding
Common Stock of the Company.
5
Payroll deductions may range from 1% to 10% of a participating employee's
compensation for a payroll period. In determining compensation, the Company
includes all gross cash compensation, such as wages, salary, incentives,
bonuses, commissions and overtime earnings paid to the employee by us or a
participating subsidiary before any contributions the employee makes to any
deferred compensation, cafeteria, or similar plan.
Transferability
No rights or accumulated payroll deductions of a participant under the
Purchase Plan may be assigned, transferred, pledged or otherwise disposed of
in any way other than by will, the laws of descent or distribution or by
designation of a beneficiary as provided in the Purchase Plan. Any attempt by
a participating employee to transfer his or her rights under the Purchase Plan
may be treated by the Company as an election to withdraw from the Purchase
Plan.
Termination of Participation
Employees may end their participation in the offering at any time during the
offering period, and participation ends automatically on the date the employee
terminates employment with the Company or a participating subsidiary. Upon the
termination of an employee's participation in the Purchase Plan, any remaining
payroll deductions are refunded to the employee.
Amendment and Termination
The Board of Directors may at any time and for any reason terminate,
suspend, or amend the Purchase Plan. Except as provided in the Purchase Plan,
no such termination will affect options previously granted, provided that an
offering period may be terminated by the Board of Directors if the Board
determines that the termination of the offering period is in the best interest
of the Company and its shareholders. Except as provided in the Purchase Plan,
no amendment may make any change in any previously granted option that
adversely affects the rights of any participating employee. The Company will
obtain shareholder approval of any amendment to the Purchase Plan to the
extent necessary to comply with Section 423 of the Code or any successor rule
or provision or any other applicable law or regulation, in such a manner and
to such a degree as required. Unless terminated sooner, the Purchase Plan will
terminate on June 1, 2011.
Certain Federal Income Tax Information
The Purchase Plan and the rights of participating employees to make
purchases under the Purchase Plan are intended to qualify under the provisions
of Sections 421 and 423 of the Code. Generally, no federal income tax
consequences will arise at the time an employee purchases Common Stock under
the Purchase Plan. If an employee disposes of Common Stock purchased under the
Purchase Plan less than one year after the Common Stock is transferred to him
or her and within 2 years of the grant date, the employee will be deemed to
have received compensation taxable as ordinary income for the taxable year in
which the disposition occurs in the amount of the difference between the fair
market value of the Common Stock at the time of transfer to the employee and
the amount paid by the employee for the Common Stock. The amount of the
ordinary income recognized by the employee will be added to the employee's
basis in the Common Stock for purposes of determining capital gain or loss
upon the disposition of the Common Stock by the employee.
If an employee does not dispose of the Common stock purchased under the
Purchase Plan until at least one year after the Common Stock is transferred to
him or her and at least 2 years after the grant date, the employee will be
deemed to have received compensation taxable as ordinary income for the
taxable year in which the disposition occurs in an amount equal to the lesser
of (a) the excess of the fair market value of the Common Stock on the date of
disposition over the purchase price paid by the employee, or (b) the excess of
the fair market value of the Common Stock on the grant date over the purchase
price paid by the employee. The amount of the ordinary income recognized by
the employee will be added to the employee's basis in the Common Stock for
purposes of determining capital gain or loss upon the disposition of the
Common Stock by the employee. If an employee dies before disposing of the
Common Stock purchased under the Purchase Plan, he or she will be
6
deemed to have received compensation taxable as ordinary income in the taxable
year closing with the employee's death in an amount equal to the lesser of
clauses (a) or (b) as set forth in the first sentence of this paragraph. The
employee will not realize any capital gain or loss at death.
The Company will generally not be entitled to a deduction with respect to
the Common Stock purchased by an employee under the Purchase Plan, unless the
employee disposes of the Common Stock within one year after the date the
Common Stock is transferred to the employee or within 2 years of the grant
date.
The foregoing summary of the federal income tax consequences of Purchase
Plan transactions is based upon federal income tax laws in effect on the date
of this Proxy Statement. This summary does not purport to be complete, and
does not discuss foreign, state or local tax consequences.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" PROPOSAL TWO.
PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY IN
THEIR PROXIES A CONTRARY CHOICE.
PRINCIPAL SHAREHOLDERS AND SECURITIES
OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership as of April 16, 2001 of:
(i) each director and nominee for director, (ii) the Named Executive Officers,
as defined below, (iii) those persons known to the Company to be beneficial
owners of more than 5% of its outstanding Common Stock and (iv) all directors
and executive officers as a group. Unless otherwise indicated, each of the
shareholders listed below exercises sole voting and dispositive power over the
shares.
Shares Beneficially Owned
------------------------------
Name Number Percent(1)
---- --------------- --------------
Derek E. Dewan(2)............................ 1,653,100 1.69%
T. Wayne Davis(3)............................ 372,068 *
Peter J. Tanous(4)........................... 105,668 *
John R. Kennedy(5)........................... 60,001 *
Michael D. Abney(6).......................... 220,539 *
William Isaac(7)............................. 0 *
George J. Mitchell(8)........................ 0 *
Michael Huyghue(9)........................... 6,500 *
Timothy D. Payne(10)......................... 210,000 *
George A. Bajalia(11)........................ 170,667 *
Marc M. Mayo(12)............................. 201,000 *
Massachusetts Financial Services
Company(13)................................. 12,500,813 12.79
Ross Financial(14)........................... 8,012,500 8.20
Legg Mason Inc.(15).......................... 6,381,985 6.53
All directors and executive officers as a
group (13 persons)(16)...................... 3,057,405 3.09
- --------
* Indicates less than 1%.
(1) Percentage is determined on the basis of 97,741,561 shares of Common
Stock outstanding as of April 16, 2001, plus shares of Common Stock
deemed outstanding pursuant to Rule 13d-3(d)(1) promulgated under the
Securities Exchange Act of 1934, as amended (the "1934 Act").
(2) Mr. Dewan's shares consist of: (i) 286,100 shares held in his name; (ii)
407,000 shares represented by options exercisable within 60 days of April
4, 2001; and (iii) 960,000 restricted shares that will vest in 5 years.
Mr. Dewan will receive vested options to purchase 3,750,000 shares under
the Exchange Plan (described below) on or about August 13, 2001.
7
(3) Mr. Davis beneficially owns or has options to acquire 445,400 shares of
Common Stock, including the 372,068 shares shown in the table above. Mr.
Davis' shares consist of: (i) 130,000 shares held in his name; (ii)
30,000 shares held by Tine W. Davis Family-WD Charities, Inc., a
foundation, over which Mr. Davis has sole voting and dispositive power;
(iii) 5,400 held in Mr. Davis' wife's name; (iv) 206,668 shares held
pursuant to options that are exercisable within 60 days of April 4, 2001;
and (v) options for 73,332 shares which vest over the next 2 years.
(4) Mr. Tanous owns or has options to acquire a total of 203,000 shares of
Common Stock, including the 105,668 shares shown in the table above. Mr.
Tanous' shares consist of: (i) 3,000 shares held in his name; (ii)
102,668 shares held pursuant to options that are exercisable within 60
days of April 4, 2001; and (iii) options for 97,332 shares which vest
over the next 2 years.
(5) Mr. Kennedy owns or has options to acquire 188,000 shares of Common
Stock, including the 60,001 shares shown in the table above. Mr.
Kennedy's shares consist of: (i) 8,000 shares held in his own name;
(ii) 52,001 shares held pursuant to options that are exercisable within
60 days of April 4, 2001; and (iii) options for 127,999 shares which vest
over the next 4 years.
(6) Mr. Abney's shares consist of: (i) 33,820 shares held in his name; (ii)
79,000 shares held in his wife's name; (iii) 7,719 shares held in his
son's name; and (iv) 100,000 shares held pursuant to options that are
exercisable within 60 days of April 4, 2001. Mr. Abney will receive
vested options to purchase 890,000 shares under the Exchange Plan on or
about August 13, 2001.
(7) Mr. Isaac has options to acquire 60,000 shares of Common Stock which vest
over the next 5 years.
(8) Mr. Mitchell has options to acquire 100,000 shares of Common Stock which
vest over the next 5 years.
(9) Mr. Huyghue owns 2,500 shares held in his own name and 4,000 shares in his
wife's name. Mr. Huyghue also has options to acquire 60,000 shares of
Common Stock which vest over the next 5 years.
(10) Mr. Payne's shares consist of: (i) 10,000 shares held in his own name;
and (ii) 200,000 restricted shares which vest when the market price for
the Common Stock closes at $8.00 per share for ten (10) consecutive days.
Mr. Payne will receive vested options to purchase 470,667 shares under
the Exchange Plan on or about August 13, 2001 which vest over 3 years.
(11) Mr. Bajalia owns or has options to acquire a total of 304,000 shares of
Common Stock, including the 170,667 shares included in the table above.
Mr. Bajalia's shares consist of: (i) 4,000 shares held in his own name;
(ii) 66,667 shares held pursuant to options that are exercisable within
60 days of April 4, 2001; (iii) options for 133,333 shares which vest
over the next 3 years; and (iv) 100,000 restricted shares which vest over
the next 3 years.
(12) Mr. Mayo's shares consist of 1,000 shares held in his own name and
200,000 options exercisable within 60 days of April 4, 2001. Mr. Mayo
will receive options to purchase 316,667 shares under the Exchange Plan
on or about August 13, 2001, of which 283,334 will be vested and 33,333
of which will vest over the next 3 years.
(13) Based on information the Company obtained from Massachusetts Financial
Services Company's Schedule 13-G/A filed as of February 12, 2001, the
business address of Massachusetts Financial Services Company is 500
Boylston Street, Boston, Massachusetts 02116. Massachusetts Financial
Services Company reports to have sole voting power for 11,970,397 shares
of Common Stock and sole dispositive power for 12,500,813 shares of
Common Stock. The 12,500,813 shares of Common Stock are held by
Massachusetts Financial Services Company and certain other affiliates
that include the MFS Series Trust II-MFS Emerging Growth Stock Fund.
(14) Based on information the Company obtained from Ross Financial
Corporation's Schedule 13-G/A filed as of January 22, 2001, the business
address of Ross Financial Corporation is P.O. Box 31363-SMB, Micro
Commerce Center, Grand Cayman, Cayman Islands, BWI. Ross Financial
Corporation reports to have sole voting power for 8,012,500 shares of
Common Stock and sole dispositive power for 8,012,500 shares of Common
Stock.
8
(15) Based on information the Company obtained from Legg Mason Inc.'s Schedule
13-G/A filed as of March 14, 2001, the business address of Legg Mason
Inc. is 100 Light Street, Baltimore, MD 21202. Legg Mason Inc. reports to
have sole voting power for 5,226,500 shares of Common Stock and shared
dispositive power for 6,381,985 shares of Common Stock. These shares are
held by various subsidiaries of Legg Mason, Inc., including Legg Mason
Funds Management, Inc., Legg Mason Wood Walker, Inc., Legg Mason Capital
Management, Inc., Legg Mason Trust, fsb and Brandywine Asset Management,
Inc., all as investment advisers.
(16) Includes 1,135,004 shares held pursuant to options that are exercisable
within 60 days of April 17, 2001.
The Company adopted the 2001 Voluntary Stock Option Exchange Plan (the
"Exchange Plan") in an effort to improve the retention and incentive aspects
of the Company's Amended and Restated 1995 Stock Option Plan (the "Plan"), and
to provide a mechanism to return shares to the Plan for future issuance
without further dilution to existing shareholders. All current employees who
received options under the Plan or who received special grants outside the
Plan since the Plan was adopted were eligible to participate in the Exchange
Plan. The Exchange Plan allowed eligible option holders to voluntarily cancel
existing options in exchange for new options to be issued no earlier than
August 13, 2001. Vested options that were cancelled will be re-granted on a
one-for-one basis and will be completely vested upon re-grant. Unvested
options that were cancelled will be re-granted on a one-for-two basis and will
vest in equal annual installments over a three year period from the date of
re-grant.
COMPENSATION COMMITTEE REPORT
The following Compensation Committee Report and Comparative Stock
Performance does not constitute soliciting material and should not be deemed
filed or incorporated by reference into any other Company filing under the
Securities Act of 1933 or the Securities and Exchange Act of 1934, except to
the extent that the Company specifically requests that the information be
treated as soliciting material or specifically incorporates this Report or
Comparative Stock Performance by reference therein.
The Company's overall compensation philosophy includes: attracting and
retaining quality executive talent; reinforcing strategic performance
objectives; and ensuring shared goals between the executive officers and
shareholders. Thus, there are three components to executive compensation: base
salary; incentive compensation; and equity participation.
BASE SALARY. In establishing the base salaries of executive officers,
attention is given to attracting and retaining quality management. The Company
looks to both the levels of compensation in the information technology and
professional services industry and the marketplace for executives with similar
experience and abilities to determine the amount of base compensation. The
Company's intent with respect to base compensation, which has been established
pursuant to employment agreements in the case of Messrs. Dewan, Abney, Payne,
Bajalia and Mayo that are described elsewhere in this Proxy Statement, is to
set the level commensurate with the total compensation level of the industry
and marketplace and emphasize incentive compensation and equity participation
based upon performance. These employment agreements were recommended by
outside compensation consultants and legal counsel prior to their
implementation in 1999 and have been amended and restated where appropriate to
reflect the individuals' new positions with the Company.
INCENTIVE COMPENSATION. During 1999, with advice from William M. Mercer
Company, the Compensation Committee adopted the Senior Executive Annual
Incentive Plan (the "Incentive Plan"). The purposes of the Incentive Plan are
to encourage management to focus on key corporate, business unit, and
individual performance objectives, to align management efforts and rewards
with shareholder interests, and to assist in the attraction and retention of
qualified management talent through a competitive compensation package. Under
the Incentive Plan, each Senior Executive Officer is assigned certain
financial and other targets and the incentive compensation is based, in large
part, upon the achievement by the Company, business unit and Senior Executive
Officer of such targets.
9
EQUITY PARTICIPATION. The Committee strongly believes that, to encourage the
long-term growth of shareholders' value, each executive officer must have some
form of equity participation. Thus, each of the executive officers
participates in stock ownership via either pre-existing ownership of stock or
via stock options. During 2000, pursuant to the Company's stock plans, there
were option or restricted stock grants for 400,000 shares of Common Stock to
executive officers and 2,485,768 shares of Common Stock to other employees.
CHIEF EXECUTIVE OFFICER. Mr. Dewan was President of the Company until
November 2000 and Chief Executive Officer of the Company during all of 2000.
Mr. Dewan received no incentive compensation in 2000. Mr. Dewan's base
compensation of $500,000 was set by agreement and the Compensation Committee
considers the amount of Mr. Dewan's compensation for services during 2000 to
be reasonable. In connection with Mr. Payne's appointment to be President of
the Company effective November 2000 and Chief Executive Officer effective as
of March 1, 2001, the Compensation Committee agreed to grant Mr. Dewan an
option to purchase 100,000 shares of Common Stock and to pay Mr. Dewan under
certain of the termination provisions of his employment agreement, in exchange
for which Mr. Dewan terminated that employment agreement. As a result,
pursuant to Mr. Dewan's employment agreement, all unvested options held by Mr.
Dewan became immediately vested and exercisable. Also pursuant to his
employment agreement, Mr. Dewan was to have received a lump sum payment equal
to three (3) times the sum of: (i) his base salary as of the date of
termination, and (ii) the target bonus opportunity under the Incentive Plan
based on the target bonus opportunity for the year of termination. In lieu of
such cash payment, Mr. Dewan has agreed to accept 960,000 restricted shares of
the Common Stock that will vest on the fifth anniversary of their grant unless
there is a change in control of the Company, Mr. Dewan dies or is disabled,
Mr. Dewan is removed from the Board, or certain other events occur, in which
case all restricted shares will immediately vest. This arrangement was
approved by the Compensation Committee of the Board of Directors on March 30,
2001.
To the extent determinable and as one of the factors in its consideration of
compensation matters, the Compensation Committee considers the anticipated tax
treatment to the Company and to the executives of various payments and
benefits. Interpretations of and changes in the tax laws and other factors
beyond the Committee's control affect the deductibility of compensation.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
generally limits the corporate tax deduction for compensation paid to
executive officers named in the Summary Compensation Table to $1,000,000
unless certain requirements are met. The Committee believes that the Amended
and Restated 1995 Stock Option Plan complies with Section 162(m) and,
therefore, stock options, restricted shares and stock appreciation rights
("SARs") granted under this plan up to the annual aggregate limit of 500,000
shares would qualify for the corporate tax deduction.
As it has done in the past, the Committee intends to design future
compensation awards for the executive officers subject to the deduction limit
so the corporate tax deduction is maximized without limiting the Committee's
flexibility to attract and retain qualified executives to manage the Company.
However, the Committee will not necessarily limit executive compensation to
that deductible under Section 162(m). The Committee will consider various
alternatives to preserving the deductibility of compensation payments and
benefits to the extent reasonably practicable and to the extent consistent
with its other compensation objectives.
The Committee exercises judgment and discretion in the information it
reviews and the analyses it considers. The Committee also obtained the advice
of an outside compensation consultant to assist it in making decisions
regarding executive compensation.
The foregoing report has been furnished by:
MODIS PROFESSIONAL SERVICES, INC.
COMPENSATION COMMITTEE
T. Wayne Davis, Chairman
Peter J. Tanous
John R. Kennedy
10
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total shareholder return (stock
price appreciation) on the Common Stock with the cumulative total return
(stock price appreciation and reinvested dividends) on the S&P 500 index, and
the common stock of nine companies in the information technology, e-business
solutions, and/or professional services staffing business (the "New Self-
Determined Peer Group"), and the common stock of five companies in the
information technology and/or professional services staffing business (the
"Old Self-Determined Peer Group"), as described below, for the period
beginning December 29, 1995 and ending December 29, 2000 (the last trading
date in the Company's 2000 fiscal year), assuming the reinvestment of any
dividends and assuming the investment of $100 in each. The Common Stock was
traded on the Nasdaq National Market until November 15, 1996, at which time it
commenced trading on the New York Stock Exchange under the symbol ASI. On
September 27, 1998, the Company's stock symbol on the New York Stock Exchange
changed to MPS when it changed its name to Modis Professional Services, Inc.
[CHART LOGO]
Total Return
Index for: 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99 12/29/00
-------- -------- -------- -------- -------- --------
Modis Professional
Services, Inc. 100.00 144.0 156.8 99.7 97.2 28.1
S&P 500 Stocks 100.00 123.2 164.4 212.1 256.8 233.9
New Self-Determined
Peer Group 100.00 177.5 301.5 288.9 546.1 137.0
Old Self-Determined
Peer Group 100.00 187.3 374.2 364.4 267.6 209.3
Total return calculations for the Company, the S&P 500 Stocks, the New Self-
Determined Peer Group, and the old Self-Determined Peer Group were prepared by
the Center for Research in Security Prices, The University of Chicago. The New
Self-Determined Peer Group is composed of the stocks of certain companies
selected by the Company in the information technology, e-business solutions,
and/or professional services staffing business, and includes the following
companies: CDI Corp., Cambridge Technology Partners, Inc., Computer Horizons
Corp., Keane, Inc., kforce.com, Inc., On Assignment, Inc., Robert Half
International, Inc., Sapient Corp. and Scient Corp. The Old Self-Determined
Peer Group is composed of the stocks of certain companies selected by the
Company in the information technology and/or professional services staffing
business, and includes the following companies: Computer Horizons Corp.,
CIBER, Inc., kforce.com, Inc. (formerly Romac International, Inc.), Computer
Horizons Corp., Keane, Inc., and Robert Half International, Inc. The Company
believes that the New Self-Determined Peer Group better reflects the increased
importance of the Company's professional services staffing and e-business
solutions businesses. In addition, the Old Self-Determined Peer
11
Group has lost a number of members due to their consolidation with other
companies and the Company believes that the remaining companies do not
constitute a broad enough presentation of the Company's current competitors
and peers. Total returns were calculated based on cumulative total return,
assuming the value of the investment in the Common Stock and in each index on
August 16, 1994 was $100 and that all dividends were reinvested. The indexes
are reweighted daily, using the market capitalization on the previous trading
day.
EXECUTIVE COMPENSATION
The Company's executive officers are Timothy D. Payne, President and Chief
Executive Officer; George A. Bajalia, Chief Operating Officer and President
and Chief Executive Officer of the Prolianz division; Robert P. Crouch, Senior
Vice President, Chief Financial Officer and Treasurer; Marc M. Mayo, Senior
Vice President, Secretary and General Counsel; and John L. Marshall III,
Senior Vice President--Group Services, Deputy General Counsel and Assistant
Secretary.
Mr. Crouch has served as Senior Vice President and Chief Financial Officer
since January 1, 2001. Mr. Crouch joined the Company in November 1995 as
Director of Financial Reporting and in June 1997, was promoted to Vice
President and Controller. Mr. Crouch was named Chief Accounting Officer in
2000. From 1992 to November 1995, he was employed by Arthur Andersen LLP as a
certified public accountant. Mr. Crouch is 32 years old.
Mr. Mayo has served as Senior Vice President and General Counsel since
February 1, 1997 and as Secretary since May 1998. Prior to his employment with
the Company, Mr. Mayo was with the law firm of Coffman, Coleman, Andrews &
Grogan in Jacksonville, Florida for fourteen years, the last nine as partner.
Mr. Mayo is 46 years old.
Mr. Marshall has served as Senior Vice President--Group Services, Deputy
General Counsel and Assistant Secretary since February 7, 2001. Mr. Marshall
joined the Company in August 1998 as Vice President and Associate General
Counsel. From March 1993 until 1998, Mr. Marshall was an attorney in the AT&T
Law Department, from 1995 as Senior Attorney. From 1988 until 1993, he was an
associate with the law firm of King & Spalding in Atlanta, Georgia. Mr.
Marshall is 37 years old.
12
The following table summarizes the compensation paid or accrued by the
Company for services rendered during the fiscal years indicated to the
Company's Chief Executive Officer and to the Company's four most highly
compensated executive officers who were serving the Company as executive
officers on December 31, 2000 and whose total salary and bonus exceeded
$100,000 during the year ended December 31, 2000 (the "Named Executive
Officers"). The Company did not grant any stock appreciation rights or make
any long-term incentive plan payouts during the periods shown.
SUMMARY COMPENSATION SCHEDULE
Long-Term
Annual Compensation Compensation Awards
------------------------ ---------------------------
Securities
Restricted Underlying All Other
Year Salary($) Bonus($) Stock Award(s) Options/SARs Compensation($)
---- --------- --------- -------------- ------------ ---------------
Derek E. Dewan.......... 2000 500,000 -- -- 100,000 49,478(1)
Chairman, President
(until 1999 500,000 500,000 -- 1,450,000 48,282
Nov. 2000) and Chief 1998 350,000 3,700,000 -- 500,000 50,808
Executive Officer
Michael D. Abney........ 2000 250,000 -- -- -- --
Senior Vice President 1999 250,000 125,000 -- 400,000 --
and Chief Financial
Officer 1998 200,000 740,000 -- 100,000 --
Timothy D. Payne........ 2000 400,000 1,500,000 -- -- --
President, Modis 1999 387,589 339,105 -- -- --
(President and Chief
Operating 1998 250,000 556,704 -- 500,000 --
Officer of the Company
Effective Nov. 2000)
George A. Bajalia....... 2000 221,692 162,900 100,000 100,000 --
President and Chief
Executive 1999 200,000 200,000 -- -- --
Officer of Prolianz 1998 40,385 -- -- 100,000 --
Marc M. Mayo............ 2000 250,000 -- -- 200,000 --
Senior Vice President 1999 250,000 175,000 -- 100,000 --
and General Counsel 1998 200,000 600,000 -- 150,000 --
- --------
(1) Comprised of $43,640 for life insurance premiums and $5,838 for disability
insurance premiums.
13
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table sets forth information concerning each grant of stock
options to the Named Executive Officers during the year ended December 31,
2000.
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term(2)
--------------------------------------------------------------- -----------------------------
Percent of Total
Number of Securities Options Granted to Exercise or
Underlying Options Employees in Fiscal Base Price Expiration
Name Granted Year ($/Sh)(1) Date 5% 10%
- ---- -------------------- ------------------- ----------- ---------- -------------- --------------
Derek E. Dewan.......... 100,000 3.47 $4.88 11/01/10 $ 306,586 $ 776,949
Michael D. Abney........ 0 -- -- -- -- --
Timothy D. Payne........ 0 -- -- -- -- --
George A. Bajalia....... 100,000 3.47 $4.25 11/01/10 267,280 677,341
Marc M. Mayo............ 200,000 6.93 $8.06 5/01/10 1,014,093 2,569,910
- --------
(1) All options were granted at the market value on the date of grant based
generally on the last sale price on the date of grant of the Common
Stock.
(2) The dollar amounts under these calculations are the result of
calculations at the 5% and 10% rates set by the Securities and Exchange
Commission and, therefore, are not intended to forecast possible future
appreciation, if any, of the price of the Common Stock or the present or
future value of the options.
The following table sets forth information regarding the number of options
exercised, the value realized on such exercises and the value of unexercised
options as of December 31, 2000, by each of the Named Executive Officers.
Aggregated Option Exercises in Last Fiscal
Year and Fiscal Year-End Option Values
Value of Unexercised
Number of Securities In-the-Money
No. of Shares Underlying Unexercised Options at Fiscal
Acquired on Value Options at Fiscal Year End Year End
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable(1)
- ---- ------------- -------- -------------------------- ----------------------------
Derek E. Dewan.......... 0 0 4,957,000 / -- -- / --
Michael D. Abney........ 0 0 956,667 / 33,333 -- / --
Timothy D. Payne........ 0 0 470,667 / 167,666 -- / --
George A. Bajalia....... 0 0 66,667 / 133,333 -- / --
Marc M. Mayo............ 0 0 433,334 / 116,666 -- / --
- --------
(1) The closing price of the Company's Stock on the New York Stock Exchange
on December 29, 2000, the last trading day of the Company's fiscal year,
was $4.125.
EMPLOYMENT AGREEMENTS
During 2000, Mr. Dewan's employment with the Company was governed by an
Amended and Restated Employment Agreement effective January 1, 1999, that
provided for an annual base salary of $500,000, plus targeted incentive
compensation under the Incentive Plan of 100% of base salary. In connection
with Mr. Payne's appointment to be President of the Company effective November
2000 and Chief Executive Officer effective as of March 1, 2001, the
Compensation Committee agreed to grant to Mr. Dewan an option to purchase
100,000 shares of Common Stock and to pay Mr. Dewan under certain of the
termination provisions of his employment agreement, in return for which Mr.
Dewan terminated that employment agreement. As a result, pursuant to
Mr. Dewan's employment agreement, all unvested options held by Mr. Dewan
became immediately vested and exercisable. Also pursuant to his employment
agreement, Mr. Dewan was to have received a lump sum payment
14
equal to three (3) times the sum of: (i) his base salary as of the date of
termination, and (ii) the target bonus opportunity under the Incentive Plan
based on the target bonus opportunity for the year of termination. In lieu of
such cash payment, Mr. Dewan has agreed to accept 960,000 restricted shares of
Common Stock that will vest on the fifth anniversary of their grant, unless
there is a change in control of the Company, Mr. Dewan dies or is diabled, Mr.
Dewan is removed from the Board, or certain other events occur, in which case
all restricted shares shall immediately vest. Mr. Dewan continues to be
employed by the Company at the pleasure of the Board at an annual salary of
$200,000. This agreement does not provide for any incentive compensation and
Mr. Dewan receives no Board fees.
During 2000, Mr. Abney's employment with the Company was governed by an
employment agreement that provided for an annual base salary of $250,000 plus
targeted incentive compensation under the Incentive Plan of 100% of base
salary. Pursuant to the agreement, if Mr. Abney's employment was terminated by
the Company without cause or by Mr. Abney for good reason, he would have
received a lump sum payment equal to the sum of Mr. Abney's base salary as of
the date of termination and Mr. Abney's threshold bonus opportunity under the
Incentive Plan based on the threshold bonus opportunity for the year of
termination. In addition, in the event of his termination by the Company
without cause or by Mr. Abney for good reason, or if there was a change in
control of the Company, the agreement provided for the automatic vesting of
any unvested stock options held by Mr. Abney on such date. This employment
agreement has been terminated and Mr. Abney continues to be employed by the
Company at the pleasure of the Board at an annual salary of $100,000. This
agreement does not provide for any incentive compensation and Mr. Abney
receives no Board fees.
Effective November 1, 2000, the Company entered into an Amended and Restated
Employment Agreement with Timothy D. Payne that provides for an annual base
salary of $500,000 plus targeted incentive compensation under the Incentive
Plan of 100% of base salary. Pursuant to the agreement, if Mr. Payne's
employment is terminated by the Company without cause or by Mr. Payne for good
reason, he will receive a lump sum payment equal to three (3) times the sum of
(i) his base salary as of the date of termination and (ii) his target bonus
opportunity under the Incentive Plan based on the target bonus opportunity for
the year of termination. In addition, in the event of termination by the
Company without cause or by Mr. Payne with good reason, of if there is a
change in control of the Company, the agreement provides for the automatic
vesting of any unvested stock options held by Mr. Payne on such date. The term
of this employment agreement expires every December 31st, subject to an
automatic one year renewal unless terminated by either party in accordance
with the terms of the employment agreement. The terms of Mr. Payne's
restricted stock agreement provide for the immediate vesting of all unvested
restricted shares upon a change in control of the Company or termination of
his employment without cause.
Effective November 1, 2000, the Company entered into an Amended and Restated
Employment Agreement with George A. Bajalia that provides for an annual base
salary of $300,000 plus targeted incentive compensation under the Incentive
Plan of 80% of base salary. Pursuant to the agreement, if Mr. Bajalia's
employment is terminated by the Company without cause or by Mr. Bajalia for
good reason, he will receive a lump sum payment equal to two (2) times the sum
of (i) his base salary as of the date of termination and (ii) his threshold
bonus opportunity under the Incentive Plan based on the threshold bonus
opportunity for the year of termination. In addition, in the event of
termination by the Company without cause or by Mr. Bajalia with good reason,
of if there is a change in control of the Company, the agreement provides for
the automatic vesting of any unvested stock options held by Mr. Bajalia on
such date. The term of this employment agreement expires every December 31st,
subject to an automatic one year renewal unless terminated by either party in
accordance with the terms of the employment agreement. The terms of Mr.
Bajalia's restricted stock agreement provide for the immediate vesting of all
unvested shares upon a change in control of the Company or termination of his
employment without cause.
Effective January 1, 1999, the Company entered into an employment agreement
with Marc M. Mayo that provides for an annual base salary of $250,000 plus
targeted incentive compensation under the Incentive Plan of 80% of base
salary. Pursuant to the agreement, if Mr. Mayo's employment is terminated by
the Company without cause or by Mr. Mayo for good reason, he will receive a
lump sum payment equal to two (2) times the sum of
15
(i) his base salary as of the date of termination and (ii) his threshold bonus
opportunity under the Incentive Plan based on the threshold bonus opportunity
for the year of termination. In addition, in the event of termination by the
Company without cause or by Mr. Mayo with good reason, of if there is a change
in control of the Company, the agreement provides for the automatic vesting of
any unvested stock options held by Mr. Mayo on such date. The term of this
employment agreement is automatically renewed every December 31st, unless
terminated by either party in accordance with the terms of the employment
agreement.
DIRECTORS' COMPENSATION
FEES AND OTHER COMPENSATION. During 2000, each non-employee director
received from the Company an annual retainer (paid quarterly) of $25,000,
Committee chairs received an additional fee of $2,500, and attendance fees of
$1,000 per Board meeting ($500 for telephonic meetings), and $500 for
Committee meetings not held on the day of a regularly scheduled Board meeting.
AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR STOCK PLAN. The Company provides
a stock option plan for non-employee directors (the "Director Plan"). A total
of 1,600,000 shares of Common Stock are currently reserved for issuance under
the Director Plan. The Director Plan is administered by the full Board of
Directors.
The Director Plan provides for the issuance of non-qualified options to
purchase 60,000 shares of Common Stock to each new non-employee director, upon
first being appointed or elected, at an exercise price equal to the fair
market value of the stock on the date of grant. The options become exercisable
ratably over a five-year period. The awards have a term of ten years but are
only exercisable for a maximum of three years after the participant ceases to
be a director of the Company; however, if a participant ceases to be a
director within one year of initial appointment or election, the options
granted shall be canceled.
In addition, the Director Plan provides for the annual issuance of non-
qualified options to purchase 20,000 shares of Common Stock to each director,
upon reelection, at an exercise price equal to the fair market value of the
stock on the date of grant. The options become exercisable ratably over a
three-year period. The Board of Directors may also grant additional options to
non-employee directors from time to time as the Board may determine in its
discretion. The Board has agreed to assess the continued viability of this
Plan in light of proposed accounting changes which make the Director Plan
costlier to the Company. In the absence of continuing to award stock options,
the Board will consider other forms of equity participation for non-employee
directors.
In November 2000, the unaffected members of the Board awarded options to
purchase 100,000 shares of Common Stock under their discretionary authority
under the Plan to Messrs. Tanous, Davis and Kennedy for their valuable
services during their tenure as directors. Senator Mitchell was awarded an
option to purchase an additional 40,000 shares of Common Stock in connection
with his appointment to the Board.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee, which was formed in fiscal 1994, is presently
comprised of Messrs. Davis, Tanous, Kennedy and Huyghue. Mr. Davis, the
Chairman of the Company's Compensation Committee, is the Chairman of the Board
of Transit Group, Inc. Mr. Dewan serves on the Board of Directors of Transit
Group, Inc.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 2001 the Company and Senator Mitchell entered into a consulting services
agreement whereby Senator Mitchell will provide consulting services with
respect to a variety of matters affecting the Company's business operations
and development efforts. Senator Mitchell will receive payments of $50,000 for
such services in 2001, subject to a maximum additional amount of $50,000
depending upon the success of Senator Mitchell's consulting services. On March
1, 2001, Mr. Payne executed a promissory note in favor of the Company in the
16
principal amount of $1,500,000. Mr. Payne voluntarily returned 167,666 options
to purchase shares of Common Stock in consideration of the loan from the
Company. The note matures on January 1, 2003 and bears interest at the rate of
4.86% per annum. Principal and interest that would otherwise come due from
time to time under the note will be forgiven if Mr. Payne is in the employ of
the Company (including its subsidiaries and affiliates) on such date, Mr.
Payne's employment is terminated without cause by the Company or for good
reason by Mr. Payne, Mr. Payne dies or is disabled, or there is a change in
control of the Company. Mr. Payne's promissory note was approved by
Compensation Committee of the Board of Directors. All of the members of the
Compensation Committee are "independent" as such term is used in standards
established by the New York Stock Exchange ("NYSE").
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors and persons who beneficially
own more than 10% of a registered class of the Company's equity securities, to
file reports of securities ownership and changes in such ownership with the
Securities and Exchange Commission. Mr. Huyghue inadvertantly failed to file a
Form 4 report for two transactions in which he or his wife purchased Common
Stock during 2000 and he will file an amended Form 5 for 2000 for those
transactions. The Company is not aware of any failure to timely file any
report required by Section 16(a).
REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other Company filing under the Securities Act of 1933 or the Securities and
Exchange Act of 1934, except to the extent that the Company specifically
requests that the information be treated as soliciting material or
specifically incorporates this report by reference therein.
During fiscal 2000, the Audit Committee of the Board of Directors developed
a charter for the Audit Committee, which was approved by the full Board on
March 27, 2000. The complete text of the charter, which reflects standards set
forth in new SEC regulations and NYSE rules, is reproduced in Exhibit C to
this proxy statement. During the year, the Board of Directors examined the
composition of the Audit Committee in light of the adoption by the NYSE of new
rules governing Audit Committees. Based upon this examination, the Board
confirmed that all members of the Audit Committee are "independent" and
"financially literate" within the meaning of the NYSE's new rules as
interpreted by the Board and within the meaning of the Company's Audit
Committee Charter. In addition, a number of Audit Committee members have
sufficient accounting and financial management experience, as the Board
interprets those terms in its best judgment.
The Audit Committee's primary responsibilities fall into three broad
categories:
(1) The Audit Committee is charged with monitoring the preparation of
quarterly and annual financial reports by the Company's management, including
discussions with management and the Company's outside auditors about draft
annual financial statements and key accounting and reporting matters;
(2) The Audit Committee is responsible for matters concerning the
relationship between the Company and its outside auditors, including
recommending their appointment or removal, reviewing the scope of their audit
services and related fees; as well as any other services being provided to the
Company, and determining whether the outside auditors are independent; and
(3) The Audit Committee oversees management's implementation of effective
systems of internal controls, including review, (with and without management
present) with internal and independent auditors, of such control systems as
well as policies relating to legal and regulatory compliance, ethics, and
conflicts of interests, and the activities and recommendations of the
Company's internal auditors.
17
In overseeing the preparation of the Company's financial statements, the
Audit Committee met with both management and the Company's outside auditors to
review and discuss all financial statements prior to their issuance. The Audit
Committee's review included discussion with the outside auditors of matters
required to be discussed pursuant to Statement on Auditing Standards No. 61
(Communication with Audit Committees).
With respect to the Company's outside auditors, the Audit Committee, among
other things, discussed with PricewaterhouseCoopers LLP matters relating to
its independence, including the disclosures made to the Audit Committee as
required by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), addressing all relationships between the
auditors and the Company that might bear on the auditors' independence. The
Audit Committee has considered such discussions and considered whether the
provision of services discussed below under "Audit and Accounting Related
Expenses--Financial Information Systems Design and Implementation Fees" and
"--All Other Fees" are compatible with maintaining PricewaterhouseCoopers
LLP's independence, and has satisfied itself that the provision of these
services is so compatible.
In reliance upon the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board approved) that
the audited financial statements be included in the Annual Report on Form 10-K
for the year ended December 31, 2000 for filing with the Securities and
Exchange Commission. The Audit Committee recommended, and the Board approved,
the retention of PricewaterhouseCoopers LLP as the Company's independent
auditors for the fiscal year ending December 31, 2001.
Audit and Accounting Related Expenses
During fiscal year 2000, PricewaterhouseCoopers LLP provided various audit,
audit related and non-audit services to the Company as follows:
(a) Audit Fees: Aggregate fees billed for professional services rendered for
the audit of the Company's fiscal year 2000 annual financial statements and
review of financial statements in the Company's Form 10 Q Reports. $533,864.
(b) Financial Information Systems Design and Implementation Fees: $0.00.
(c) All Other Fees: Includes fees associated with tax compliance and
advisory services and fees associated with registration statements and other
filings with the Securities and Exchange Commission: $3,978,195.
The Audit Committee of the Board has considered whether provision of the
services described in sections (b) and (c) above is compatible with
maintaining the independent accountant's independence and has determined that
such services have not adversely affected PricewaterhouseCoopers LLP's
independence.
Audit Committee Members
Peter J. Tanous (Chairman) T. Wayne Davis John R. Kennedy William M. Isaac
INDEPENDENT CERTIFIED PUBLIC ACCOUNTS
The Company has selected the firm of PricewaterhouseCoopers LLP to serve as
the independent certified public accountants for the Company for the current
fiscal year ending December 31, 2001. That firm has served as the auditors for
the Company since 1992. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the Annual Meeting and will be accorded the
opportunity to make a statement, if they so desire, and to respond to
appropriate questions.
18
OTHER MATTERS
The Board of Directors does not know of any other matters to come before the
Annual Meeting; however, if any other matters properly come before the Annual
Meeting it is the intention of the persons designated as proxies to vote in
accordance with their best judgment on such matters. If any other matter
should come before the Annual Meeting, such matter will be approved if the
number of votes cast in favor of the matter exceeds the number opposed.
SHAREHOLDER PROPOSALS
Shareholders are hereby notified that if they wish a proposal to be included
in the Company's Proxy Statement and form of proxy relating to the 2001 annual
meeting, a written copy of their proposal must be received at the principal
executive offices of the Company no later than December 27, 2001. To ensure
prompt receipt by the Company, proposals should be sent certified mail return
receipt requested. Proposals must comply with the proxy rules relating to
shareholder proposals in order to be included in the Company's proxy
materials.
In accordance with the Company's Bylaws, shareholders who wish to submit a
proposal for consideration at the Company's 2001 annual meeting of
shareholders but who do not wish to submit the proposal for inclusion in the
Company's proxy statement pursuant to Rule 14a-8 as promulgated under the
Securities Exchange Act of 1934, must deliver a copy of their proposal to the
Company at its principal executive offices no later than December 27, 2001.
ANNUAL REPORT
A copy of the Company's Annual Report for the year ended December 31, 2000
accompanies this Proxy Statement. Additional copies may be obtained by writing
to Tyra Tutor, Vice President--Corporate Finance and Business Development, at
1 Independent Drive, Jacksonville, Florida 32202.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. The Company
does not expect to pay any compensation for the solicitation of proxies but
will reimburse brokers and other persons holding stock in their names, or in
the names of nominees, for their expenses for sending proxy material to
principals and obtaining their proxies. Certain officers and regular employees
of the Company or its subsidiaries, without additional compensation, may use
their personal efforts, by telephone or otherwise, to obtain proxies in
addition to solicitation by mail. Should the Company's management deem it
appropriate, the Company may also retain the services of Corporate
Communications, Inc. and/or Morrow & Co., Inc. to aid in the solicitation of
proxies for which the Company anticipates it would pay a fee not to exceed, in
the aggregate, $10,000 plus reimbursement of expenses.
Date: April 26, 2001
SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, POSTAGE FOR WHICH HAS BEEN PROVIDED.
YOUR PROMPT RESPONSE WILL BE APPRECIATED.
19
Appendix A
Modis Professional Services, Inc.
Audit Committee Charter
Organization
There shall be a committee of the board of directors to be known as the
audit committee, whose members are independent of management of the
corporation and are free of any relationship that, in the opinion of the board
of directors, would interfere with their exercise of independent judgment as a
committee member.
Independence
For purpose of serving on the audit committee, a member will not be
considered to be independent unless they have no relationship with the
corporation that may interfere with the exercise of their independence from
management and the corporation. Specifically, the member:
. Shall not have been employed by the corporation or any of its affiliates
for the current year or any of the past three years;
. Shall not have accepted any compensation from the corporation or any of
its affiliates other than compensation for board service or benefits
under a tax qualified plan (taking into account the materiality of the
relationship to the director such that it is judged that the
relationship does not interfere with the director's service of
independent judgment);
. Shall not be a member of the immediate family of an individual who is,
or has been in any of the past three years, employed by the corporation
or any of its affiliates as an executive officer;
. Shall not have a direct business relationship with the Company (e.g., as
a consultant) and shall not be a partner, a controlling shareholder or
executive officer of any organization that has a business relationship
with the Company unless the Company's board of directors determines that
the relationship does not interfere with the director's exercise of
independent judgment;
. Shall not be employed as an executive officer of another company where
any of the corporation's executives served on the company's compensation
committee.
Qualifications and Composition
The composition and qualifications of the audit committee shall be as
follows:
Number of members--The audit committee shall consist of at least three
members, all of whom qualified under the above independent rules.
Financial literacy--All audit committee members shall be financially
literate, as interpreted by the board.
Accounting or related financial management expertise--At least one audit
committee member shall have accounting or financial management expertise,
as interpreted by the board. For purposes of this committee, a person shall
be deemed as having the appropriate expertise based on a professional
certification in accounting, or other comparable experience or background
resulting in the individual's financial background resulting in the
individual's sophistication, including being or having been a chief
executive, chief financial, or other senior officer with financial
oversight responsibilities.
Statement of Policy
The audit committee shall provide assistance to the corporate directors in
fulfilling their responsibilities to the shareholders, potential shareholders,
and the investment community relating to corporate accounting, financial
reporting practices, and the quality and the integrity of the financial
reports of the corporation. In so doing, it is the responsibility of the audit
committee to maintain free and open means of communication between the
directors, the independent auditors, and the financial management of the
corporation.
A-1
Responsibilities
In carrying out its responsibilities, the audit committee believes its
policies and procedures shall be a working document subject to annual review
and approval, in order to best react to changing conditions and to ensure to
the directors and shareholders that the accounting and reporting practices of
the corporation are in accordance with all applicable requirements and are of
the highest quality.
In carrying out these responsibilities, the audit committee will:
. Recommend the selection of the independent auditor for approval by the
board of directors to audit the financial statements of the corporation,
and approve the discharge of the independent auditor, where appropriate.
. Communicate to the recommended independent auditor that they are
ultimately accountable to the audit committee and the board of
directors, as representative of the shareholders, and that the board of
directors has the ultimate authority and responsibility to select,
evaluate, and where appropriate, replace the independent auditor.
. Meet annually with the independent auditor and financial management of
the corporation to review the scope of the annual audit for the current
year and the audit procedures to be utilized, and at the conclusion
thereof, review such audit, including any comments or recommendations of
the independent auditor.
. Review with the independent auditor, the company's internal auditor, as
well as financial and accounting personnel, the adequacy and
effectiveness of the accounting and financial controls of the
corporation, and elicit any recommendations for the improvements of such
internal control procedures or particular areas where new or more
detailed controls or procedures would be more desirable. Particular
emphasis should be given to the adequacy of such internal controls to
expose any payments, transactions, or procedures that be deemed illegal
or otherwise improper.
. Obtain from the independent auditors on an annual basis a formal written
statement delineating all relationships between the auditor and the
company; and, engage in a dialogue with the independent auditors with
respect to any disclosed relationships or services that may affect the
objectivity and independent of the auditor and/or make recommendations
to the board of directors take appropriate actions to ensure the
independence of said outside independent auditors.
. Review the internal audit function of the corporation, the proposed
audit plan for the coming year, and the coordination of such plans with
the independent auditors.
. Receive prior to each meeting, a summary of findings from completed
internal audits and a progress report on the proposed internal audit
plan for the year, with explanations of any deviations from original
plan.
. Submit minutes of all meeting of the audit committee to, or discuss the
matters discussed at each committee meeting with, the board of
directors.
. Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose, if,
in its judgment, that is appropriate.
. Prepare a report for inclusion in the company's annual proxy statement
that the audit committee has adopted a formal written charter and that
the committee has satisfied its responsibilities during the year in
compliance with its charter.
. Discuss with the independent auditor the auditor's judgment about the
quality, not just the acceptability of the company's accounting
principles used in its financial reporting. The discussion should
include such issues as the clarity of the company's financial
disclosures and the degree of aggressiveness or conservatism of the
company's accounting principles as well as the underlying estimates and
other significant decisions made by management in preparing various
financial disclosures which were reviewed by the outside auditors.
A-2
. Prepare a letter from the audit committee for inclusion in the company's
annual report to shareholders and the Form 10-K disclosing whether or
not, with respect to the prior fiscal year: (i) Management has reviewed
the audited financial statements with the audit committee, including a
discussion of the quality of the accounting principles applied and
significant judgments affecting the company's financial statements; (ii)
the independent auditors have discussed the matters required by SAS-61
with the audit committee including the outside auditor's judgment of the
quality of those principles as applied and judgments reference in (i)
above under the circumstances; (iii) the members of the audit committee
have discussed amongst themselves, without management or the outside
auditor present, the information disclosed to the audit committee and
described in (i) and (ii) above; and (iv) the audit committee, in
reliance on the review and discussions conducted with management and the
outside auditor pursuant to (i) and (ii) above, believe that the
company's financial statements are fairly presented in conformity with
generally accepted accounting principles (GAAP) in all material
respects.
. Require the company's independent auditor conduct an interim financial
review in accordance with SAS-71 prior to the company's filing of its
Form 10-Q. And, that the outside auditor discuss with the committee, or
at least its chairman, and a representative of financial management, the
matters discussed in AU Section 380, Communications with the Audit
Committee, prior to the filing of Form 10-Q, including significant
adjustments, management judgments and accounting estimates, significant
new accounting policies and/or disagreements with management.
. Prepare an annual written statement to the NYSE confirming:
The board has reviewed and approved the qualifications of the audit
committee;
The board has performed a review and re-evaluation of the audit
committee charter and;
The board shall submit a copy of the charter in any year it is
amended, and, at a minimum, once every three years.
A-3
MODIS PROFESSIONAL SERVICES, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 2001 Employee Stock
Purchase Plan of Modis Professional Services, Inc.
1. Purpose. The purpose of the Plan is to provide employees of the Company
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and its Designated Subsidiaries with an opportunity to purchase Common Stock of
the Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Code. The provisions of the Plan shall be construed so as to
extend and limit participation in a uniform and nondiscriminatory basis
consistent with the requirements of Section 423.
2. Definitions.
-----------
(a) "Account" shall mean the funds accumulated with respect to a
Participant as a result of authorized payroll deductions for the purpose of
purchasing Common Stock under this Plan. The funds allocated to a Participant's
Account shall remain the property of the Participant at all times, but may be
commingled with the general funds of the Company.
(b) "Administrator" shall mean the Board or any Committee designated
by the Board to administer the Plan pursuant to Section 12.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of the Board appointed by the Board
in accordance with Section 12 hereof. Any references to the Board in the Plan
shall be construed to include the Committee as well.
(f) "Common Stock" shall mean the common stock of the Company.
(g) "Company" shall mean Modis Professional Services, Inc., a Delaware
corporation.
(h) "Compensation" shall mean the total cash compensation (before
taxes) received by an Employee during an Offering Period from salary or wages.
Salary and wages shall include, but not be limited to, overtime pay, bonuses,
holiday pay, vacation pay, and short-term disability payments. Salary reduction
contributions made by the Employee under any plan maintained by the Company or a
Subsidiary pursuant to Code Section 125 or 401(k) shall also be included in
Compensation. Compensation shall not include payments under any other form of
equity or fringe benefit program, or compensation attributable to the vesting of
any restricted stock or exercise of a stock option.
(i) "Designated Subsidiary" shall mean any Subsidiary selected by the
Administrator as eligible to participate in the Plan.
(j) "Effective Date" shall mean June 1, 2001.
(k) "Eligible Employee" shall mean any individual who is a common law
employee of the Company or any Designated Subsidiary whose customary employment
with the Company or Designated Subsidiary is at least twenty (20) hours per week
and more than five (5) months in any calendar year and who meets the
requirements of Section 3. For purposes of the Plan, the employment relationship
shall be treated as continuing intact while the individual is on sick leave or
other leave of absence approved by the Company. Where the period of leave
exceeds 90 days and the individual's right to reemployment is not guaranteed
either by statute or by contract, the employment relationship shall be deemed to
have terminated on the 91st day of such leave.
(l) "Fair Market Value" shall mean, as of any Trading Day, the closing
sales price for such Common Stock (or the closing bid, if no sales were
reported) as quoted on the New York Stock Exchange or any other established
stock exchange or national market system, including without limitation the
Nasdaq National Market, as reported in The Wall Street Journal or such other
source as the Board deems reliable.
(m) "Offering Date" shall mean the first Trading Day of each Offering
Period.
(n) "Offering Period" shall mean a three-month, six-month or other
period as determined by the Board or Committee; provided, however, that in no
event shall the Offering Period extend for a period of longer than 27 months.
The first Offering Period shall commence on the Plan's first Offering Date,
which shall be as soon as administratively practicable after the Effective Date,
and end on the Purchase Date.
(o) "Option" means a right granted under this Plan to an Eligible
Employee to purchase shares of Common Stock of the Company. On the Offering
Date, this Plan shall be deemed to have granted to the Participant an Option for
as many full shares of Common Stock as the Participant will be able to purchase
with the payroll deductions credited to his or her account during participation
in that Offering Period. The Option shall expire on the Purchase Date.
(p) "Participant" means an Eligible Employee who enrolls in the Plan
pursuant to Section 4.
(q) "Plan" shall mean the 2001 Employee Stock Purchase Plan.
(r) "Purchase Date" means the last Trading Day of each Offering
Period.
(s) "Purchase Price" shall mean 85% of the Fair Market Value of a
share of Common Stock on the Offering Date or on the Purchase Date, whichever is
lower; provided however, that the Purchase Price may be adjusted by the Board or
Committee pursuant to Section 15.
(t) "Subsidiary" shall mean any subsidiary corporation (other than the
Company) in an unbroken chain or corporations beginning with the Company, as
described in Code Section 424(f).
(u) "Trading Day" shall mean a day on which national stock exchanges
and the Nasdaq System are open for trading.
3. Eligibility. Any Eligible Employee of the Company or a Designated
-----------
Subsidiary who has completed six (6) months with the Company prior to an
Offering Date is eligible to participate in the Plan. Notwithstanding the
foregoing, no otherwise Eligible Employee may become a Participant for an
Offering Period to the extent that, immediately following the grant of the
Option, such Eligible Employee (or any
2
other person whose stock would be attributed to such Eligible Employee pursuant
to Section 424(d) of the Code) would own capital stock of the Company and/or
hold outstanding options to purchase such stock possessing five percent (5%) or
more of the total combined voting power or value of all classes of the capital
stock of the Company or of any Subsidiary, or (ii) to the extent that his or her
rights to purchase stock under all employee stock purchase plans of the Company
and its subsidiaries accrues at a rate which exceeds Twenty-Five Thousand
Dollars ($25,000) worth of stock (determined at the fair market value of the
shares at the time such option is granted) for each calendar year in which such
option is outstanding at any time.
4. Enrollment. An Eligible Employee who meets the requirements of Section 3
----------
may become a Participant by enrolling in the Plan on a date prescribed by the
Board or Committee prior to an applicable Offering Date, a completed payroll
deduction authorization and Plan enrollment form.
5. Participation.
-------------
(a) An Eligible Employee may authorize payroll deductions at the rate
of any whole percentage of the Employee's Compensation, not to exceed 10% of
Compensation. All payroll deductions may be held by the Company and commingled
with other corporate funds. No interest shall be paid or credited to the
Participant with respect to such payroll deductions. A Participant may not make
any additional payments into such Account.
(b) To the extent necessary to comply with Code Section 423(b)(8) and
Section 3 hereof, a Participant's payroll deductions may be decreased to zero
percent (0%) at any time during an Offering Period.
(c) At the termination of each Offering Period, the Company shall
automatically re-enroll the Participant in the next Offering Period, and the
balance in the Participant's Account shall be used for Option exercises in the
next Offering Period, unless the Participant has advised the Company otherwise.
(d) Other than a termination of participation in accordance with
Section 7, a Participant may not change or alter the rate of his or her payroll
deductions once an Offering Period has commenced.
6. Exercise of Option.
------------------
(a) Each Employee who is a Participant on the Purchase Date of an
Offering Period shall be deemed to have exercised his or her Option on such date
and shall be deemed to have purchased from the Company the maximum number of
full shares at the applicable Purchase Price which may be purchased with the
accumulated payroll deductions in his or her Account. No fractional shares shall
be purchased; any payroll deductions accumulated in a Participant's Account
which are not sufficient to purchase a full share shall be retained in the
Account for the subsequent Offering Period, subject to earlier withdrawal by the
Participant as provided in Section 7 hereof. Any other funds left over in a
Participant's Account after the Purchase Date shall be returned to the
Participant.
(b) At the time the Option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the Participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the Option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the Participant's
Compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make
3
available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Participant.
(c) If the Board or Committee determines that, on a given Purchase
Date, the number of shares with respect to which Options are to be exercised may
exceed (i) the number of shares of Common Stock that were available for sale
under the Plan on the Offering Date of the applicable Offering Period, or (ii)
the number of shares available for sale under the Plan on such Purchase Date,
the Board or Committee may in its sole discretion (x) provide that the Company
shall make a pro rata allocation of the shares of Common Stock available for
purchase on such Offering Date or Purchase Date, as applicable, in as uniform a
manner as shall be practicable and as it shall determine in its sole discretion
to be equitable among all Participants exercising Options to purchase Common
Stock on such Purchase Date, and continue all Offering Periods then in effect,
or (y) provide that the Company shall make a pro rata allocation of the shares
available for purchase on such Offering Date or Purchase Date, as applicable, in
as uniform a manner as shall be practicable and as it shall determine in its
sole discretion to be equitable among all Participants exercising Options to
purchase Common Stock on such Purchase Date, and terminate any or all Offering
Periods then in effect pursuant to Section 16 hereof. The Company may make pro
rata allocation of the shares available on the Offering Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares for issuance under the Plan by the Company's
stockholders subsequent to such Offering Date.
7. Withdrawal/Termination of Participation.
---------------------------------------
(a) A Participant may withdraw from an Offering, in whole but not in
part, at any time prior to the Purchase Date of the Offering Period by
delivering to the Company a notice of withdrawal, in which event the Company
will refund the entire balance of the Participant's Account to Participant as
soon as reasonably practicable thereafter.
(b) A Participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the Participant
withdraws.
8. Shares Reserved for Plan. Subject to adjustment upon changes in
------------------------
capitalization of the Company as provided in Section 15 hereof, there shall be
reserved for issuance and purchase by Participants under the Plan an aggregate
of 1,000,000 shares of Common Stock. Shares subject to the Plan shall be
authorized but unissued shares, or treasury shares, at the discretion of the
Board. Shares needed to satisfy the needs of the Plan may be newly issued by
the Company or acquired by purchases at the expense of the Company on the open
market or in private transactions. Shares of Common Stock that are issued under
the Plan or that are subject to outstanding Options will be applied to reduce
the maximum number of shares of Common Stock remaining available for issuance
under the Plan. Any shares of Common Stock that are subject to an Option that
is terminated unexercised will automatically again become available for issuance
under the Plan.
9. Evidence of Stock Ownership. Promptly following the end of each Offering
---------------------------
Period, the Company will issue the number of shares of Common Stock purchased by
the Participant for such Offering Period, registered in the name of the
Participant or, if the Participant so directs on his or her enrollment
agreement, in the names of the Participant and his or her spouse. The Board may
determine, in its sole discretion, the manner of delivery of shares of Common
Stock purchased under the Plan, which may be by electronic account entry into
new or existing brokerage or other accounts, delivery of physical stock
certificates or such other means as the Board deems appropriate.
4
10. Termination of Employment. Upon termination of employment or loss of
-------------------------
eligibility to participate in the Plan for any reason whatsoever, including but
not limited to death or retirement, the balance in the Account of a Participant
shall be paid to the Participant or his or her estate.
11. Rights as Shareholder. No Participant shall have any right as a
---------------------
shareholder with respect to any shares of Common Stock until the shares have
been purchased and the Participant becomes the holder of record of shares of
Common Stock pursuant to Section 9 of the Plan. Except as otherwise provided
under the Plan, no adjustment will be made for dividends or distributions with
respect to Options as to which there is a record date preceding the date the
Participant becomes the holder of record of such shares, except as the Board may
determine in its sole discretion.
12. Administration. The Board shall appoint a Committee consisting of at
--------------
least two members who will service for such period of time as the Board may
specify and who may be removed by the Board at any time. The Committee shall be
vested with full and exclusive discretionary authority to construe, interpret
and apply the terms of the Plan, to determine eligibility and to adjudicate all
disputed claims filed under the Plan. Any decision reduced to writing and signed
by a majority of the members of the Committee shall be fully effective as if it
had been made at a meeting of the Committee duly held. Every finding, decision
and determination made by either the Board or Committee shall, to the full
extent permitted by law, be final and binding upon all parties. No Board or
Committee member shall be liable for any action or determination made in good
faith with respect to the Plan or any Option granted thereunder.
13. Transferability. Neither payroll deductions credited to a Participant's
---------------
Account nor any rights with regard to the exercise of an Option or to receive
shares of Common Stock under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way by the Participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds from
an Offering Period in accordance with Section 7 hereof.
14. Reports. Statements of each Participant's Account shall be given to
-------
Participants at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares of Common Stock
purchased and the remaining cash balance, if any.
15. Changes in Capitalization. In the event of a reorganization,
-------------------------
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, offerings of rights, or any other change in the structure of the
common shares of the Company, the Board may make such adjustment, if any, as it
may deem appropriate in the number, kind, and the price of shares available for
purchase under the Plan, and in the number of shares which a Participant is
entitled to purchase.
16. Amendment or Termination.
------------------------
(a) The Administrator may at any time and for any reason terminate or
amend the Plan. Except as otherwise provided in the Plan, no such termination
can affect Options previously granted, provided that an Offering Period may be
terminated by the Administrator on any Purchase Date if the Administrator
determines that the termination of the Offering Period or the Plan is in the
best interests of the Company and its stockholders. Except as provided in
Section 15 and this Section 16 hereof, no amendment may make any change in any
Option theretofore granted which adversely affects the rights of any
Participant. To the extent necessary to comply with Section 423 of the Code (or
any successor rule or provision or any other applicable law, regulation or stock
exchange rule), the Company shall obtain stockholder approval in such a manner
and to such a degree as required.
5
(b) In the event the Administrator determines that the ongoing
operation of the Plan may result in unfavorable financial accounting
consequences, the Board may, in its discretion and, to the extent necessary or
desirable, modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to:
(i) increasing the Purchase Price for any Offering Period
including an Offering Period underway at the time of the change in Purchase
Price;
(ii) shortening any Offering Period so that Offering Period ends on
a new Purchase Date, including an Offering Period underway at the time of the
Board action; and
(iii) allocating shares.
Such modifications or amendments shall not require stockholder approval or the
consent of any Plan Participants.
17. Notices. All notices or other communications by a Participant to the
-------
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form and manner specified by the Company at the
location, or by the person, designated by the Company for the receipt thereof.
18. Conditions Upon Issuance of Shares.
----------------------------------
(a) Shares shall not be issued with respect to an Option unless the
exercise of such option and the issuance and delivery of such shares pursuant
thereto shall comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) As a condition to the exercise of an option, the Company may
require the Participant exercising such Option to represent and warrant at the
time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is required
by any of the aforementioned applicable provisions of law.
19. Designation of Beneficiary. A Participant may file with the Company a
--------------------------
written designation of a beneficiary who is to receive shares of Common Stock
and cash, if any, under the Plan in the event of such Participant's death prior
to delivery of such shares or cash to such Participant. In the event of the
death of a Participant who has not filed a designation of beneficiary with the
Company, (a) the Company will deliver such shares of Common Stock and cash to
the executor or administrator of the estate of the Participant, or (b) if to the
Company's knowledge no such executor or administrator has been appointed, the
Company, in its sole discretion, may deliver such shares of Common Stock and
cash to the spouse or to any one or more dependents or relatives of the
Participant or, if no spouse, dependent or relative is known to the Company, to
such other person as the Company may designate.
20. No Employment Rights. The Plan does not, directly or indirectly, create
--------------------
any right for the benefit of any Employee or class of Employees to purchase any
shares under the Plan, or create in any Employee or class of Employees any right
with respect to continuation of employment by the Company
6
or any of its Subsidiaries, and it shall not be deemed to interfere in any way
with the Company or Subsidiary's right to terminate, or otherwise modify, an
Employee's employment at any time.
21. Governing Law. The Plan shall be construed and administered in
-------------
accordance with the laws of the State of Florida.
22. Successors and Assigns. The Plan will be binding upon and inure to the
----------------------
benefit of the successors and permitted assigns of the Company.
23. Term of Plan. The Plan shall become effective on the date determined by
------------
the Board, subject to approval by the Company's shareholders. It shall continue
in effect until the earliest to occur of: (a) the date the Plan is terminated
pursuant to Section 16, or (b) ten years from the effective date of the Plan.
7
MODIS PROFESSIONAL SERVICES, INC.
1 Independent Drive
Jacksonville, Florida 32202
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
KNOW ALL MEN BY THESE PRESENTS that I, the undersigned shareholder of Modis
Professional Services, Inc., a Florida corporation (the "Company"), do hereby
nominate, constitute, and appoint Derek E. Dewan and Timothy D. Payne, or any
one or more of them, my true and lawful attorney(s) with full power of
substitution for me and in my name, place and stead, to vote all of the Common
Stock, par value $.01 per share, of the Company, standing in my name on its
books on April 4, 2001, at the Annual Meeting of its Shareholders to be held
at The Lodge and Club at Ponte Vedra, 607 Ponte Vedra Boulevard, Ponte Vedra
Beach, Florida, on May 30, 2001, at 9:00 a.m., local time, or at any
adjournment thereof.
1. Election of the following nominees as directors:
Derek E. Dewan, Timothy D. Payne, George A. Bajalia, Peter J. Tanous, T. Wayne
Davis, John R. Kennedy, Michael D. Abney, William M. Isaac, George J. Mitchell
and Michael L. Huyghue
[_] FOR all nominees listed [_] WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all nominees listed
(INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write that nominee's name(s) in the space provided below.)
- -------------------------------------------------------------------------------
(Continued on the other side)
2.Approval of the adoption of the 2001 Employee Stock Purchase Plan ("Purchase
Plan"):
[_] FOR [_] AGAINST [_] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy, when properly exe-
cuted, will be voted in the man-
ner directed herein by the un-
dersigned shareholder. IF YOU
SIGN WITHOUT OTHERWISE MARKING
THE FORM, THE SECURITIES WILL BE
VOTED AS RECOMMENDED BY THE
BOARD OF DIRECTORS ON ALL MAT-
TERS TO BE CONSIDERED AT THE
MEETING. Please sign exactly as
your name appears hereon. When
shares are held by joint ten-
ants, both should sign. When
signing as attorney, executor,
administrator, trustee or guard-
ian, 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 au-
thorized person. Make sure that
the name on your stock certifi-
cate(s) is exactly as you indi-
cate below.
---------------------------------
Signature
---------------------------------
Signature if jointly held
Dated: ____________________, 2001
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
SELF-ADDRESSED ENVELOPE.