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SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 sec. 240.14a-11(c) or sec. 240.14a-12
KFORCE.COM, INC.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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KFORCE.COM, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 18, 2001
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Dear Shareholder:
On Monday, June 18, 2001, kforce.com, Inc. will hold its 2001 Annual Meeting of
Shareholders at the Wyndham Harbour Island Hotel, 725 South Harbour Island
Boulevard, Tampa, Florida 33602. The Board of Directors cordially invite all
shareholders to attend the meeting which will begin at 9:00 a.m., eastern time.
We are holding this meeting to:
1. Elect three Class I directors to hold office for a three year term
expiring in 2004;
2. Approve an amendment to kforce's Articles of Incorporation to change
the name of the company from kforce.com, Inc. to Kforce Inc.; and
3. Attend to other business properly presented at the meeting.
Your Board of Directors has selected April 11, 2001, as the record date for
determining shareholders entitled to vote at the meeting.
This proxy statement, proxy card and kforce's 2000 Annual Report to Shareholders
are being mailed on or about May 1, 2001. EACH SHAREHOLDER, EVEN THOUGH HE MAY
NOT PLAN TO ATTEND THE ANNUAL MEETING, IS REQUESTED TO SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT WITHOUT DELAY IN THE ENCLOSED POSTAGE PAID
ENVELOPE. IF YOU NEED FURTHER ASSISTANCE, PLEASE CONTACT KFORCE INVESTOR
RELATIONS AT (813) 251-1700.
BY ORDER OF THE BOARD OF DIRECTORS
William L. Sanders
Secretary
Tampa, Florida
May 1, 2001
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TABLE OF CONTENTS
Page
QUESTIONS AND ANSWERS....................................... 1
PROPOSALS YOU MAY VOTE ON................................... 3
Proposal 1. Election of Directors.................... 3
Proposal 2. Approval of an Amendment to the kforce
Articles of Incorporation to change our
name from kforce.com, Inc. to Kforce
Inc. .................................... 5
STOCK OWNERSHIP............................................. 6
Directors and Other Named Executive Officers......... 6
Shareholders......................................... 6
Section 16(a) Beneficial Ownership Reporting
Compliance.......................................... 7
Independent Auditors................................. 7
AUDIT COMMITTEE REPORT...................................... 8
DIRECTORS AND EXECUTIVE OFFICERS............................ 10
EXECUTIVE COMPENSATION...................................... 13
Summary Compensation Table........................... 13
Option Grants During Fiscal Year 2000................ 14
Option Exercises During Fiscal Year 2000 and Fiscal
Year End Option Values.............................. 15
Employment and Severance Contracts................... 15
Compensation Committee Interlocks and Insider
Participation....................................... 16
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION..... 16
Compensation Policy.................................. 16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............. 18
KFORCE STOCK PRICE PERFORMANCE GRAPH........................ 20
SHAREHOLDER PROPOSALS....................................... 21
OTHER MATTERS............................................... 21
APPENDIX A.................................................. A-1
APPENDIX B.................................................. B-1
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QUESTIONS AND ANSWERS
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Q: WHY DID YOU SEND ME THIS PROXY STATEMENT?
A: We sent you this proxy statement and the enclosed proxy card because the
Board of Directors (the "Board") is soliciting your proxy to vote your shares
at the Annual Meeting. This proxy statement summarizes information that we
are required to provide to you under the rules of the Securities and Exchange
Commission ("SEC") and which is designed to assist you in voting.
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Q: WHEN IS THE ANNUAL MEETING AND WHERE WILL IT BE HELD?
A: The Annual Meeting will be held on Monday, June 18, 2001, at 9:00 a.m. at The
Wyndham Harbour Island Hotel, 725 South Harbour Island Boulevard, Tampa,
Florida 33602.
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Q: WHAT MAY I VOTE ON?
A: (1) The election of three Class I directors to hold office for a three-year
term expiring in 2004; and
(2) Approval of an amendment to kforce's Articles of Incorporation to change
our name to Kforce Inc.
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Q: HOW DOES KFORCE'S BOARD RECOMMEND I VOTE ON THE PROPOSALS?
A: The Board recommends a vote FOR each of the proposals.
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Q: WHO IS ENTITLED TO VOTE?
A: Only those who owned kforce common stock at the close of business on April
11, 2001 (the "Record Date"), are entitled to vote at the Annual Meeting.
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Q: HOW DO I VOTE?
A: You may vote your shares either in person or by proxy. Whether you plan to
attend the meeting and vote in person or not, we urge you to complete the
enclosed proxy card and return it promptly in the enclosed envelope. If you
return your signed proxy card but do not mark the boxes showing how you wish
to vote, your shares will be voted FOR the proposals. You have the right to
revoke your proxy at any time before the meeting by:
(1) notifying kforce's Corporate Secretary;
(2) voting in person; or
(3) returning a later-dated proxy card.
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Q: HOW MANY SHARES CAN VOTE?
A: As of the Record Date, 35,318,652 shares of kforce common stock were issued
and outstanding. Every holder of kforce common stock is entitled to one vote
for each share held.
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Q: WHAT IS A "QUORUM"?
A: A "quorum" is a majority of the outstanding shares. They may be present at
the meeting or represented by proxy. There must be a quorum for the meeting
to be held and a proposal must receive more than 50% of the shares voting to
be adopted. If you submit a properly executed proxy card, even if you abstain
from voting, then you will be considered part of the quorum. However,
abstentions are not counted in the tally of votes FOR or AGAINST a proposal.
A WITHHELD vote is the same as an abstention. If a broker, bank, custodian,
nominee or other record holder of kforce common stock indicates on a proxy
that it does not have discretionary authority to vote certain shares on a
particular matter, the shares held by that record holder (referred to as
"broker non-votes") will also be counted as present and considered part of a
quorum but will not be counted in the tally of votes FOR or AGAINST a
proposal.
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Q: HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?
A: Although we do not know of any business to be considered at the Annual
Meeting other than the proposals described in this proxy statement, if any
other business is properly presented at the Annual Meeting, your signed proxy
card gives authority to David L. Dunkel, kforce's Chief Executive Officer and
William L. Sanders, kforce's Senior Vice President, Secretary and Chief
Financial Officer, or either of them, to vote on such matters at their
discretion.
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Q: WHEN ARE THE SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING OF
SHAREHOLDERS DUE?
A: All shareholder proposals to be considered for inclusion in next year's proxy
statement must be submitted in writing to William L. Sanders, Corporate
Secretary, kforce.com, Inc., 120 West Hyde Park Place, Suite 150, Tampa,
Florida 33606, by December 31, 2001.
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Q: WHO WILL PAY FOR THIS PROXY SOLICITATION?
A: We will pay all the costs of soliciting these proxies. In addition to mailing
proxy solicitation material, our directors and employees may also solicit
proxies in person, by telephone or by other electronic means of
communication. We will also reimburse brokerage houses and other custodians,
nominees and fiduciaries for their reasonable out-of-pocket expenses for
forwarding proxy and solicitation materials to our shareholders.
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PROPOSALS YOU MAY VOTE ON
PROPOSAL 1. ELECTION OF DIRECTORS
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The Board has nine directors who are divided into three classes serving
staggered three-year terms. The current terms of the three classes of directors
expire in 2001 (Class I directors), 2002 (Class II directors) and 2003 (Class
III directors). At the Annual Meeting, you and the other shareholders will elect
three individuals to serve as directors until the 2004 Annual Meeting. The Board
has nominated Richard M. Cocchiaro, Ralph E. Struzziero and Howard W. Sutter to
stand for election at the Annual Meeting for Class I director seats. Detailed
information on each nominee is provided on pages 10-12. Each of the nominees for
director is a current member of the Board. Mr. Struzziero was appointed to the
Board in October 2000 to fill a vacancy created by the resignation of Wayne D.
Emigh from the Board in July 2000. Mr. Emigh's resignation from the Board was
not the result of any disagreement on any matter relating to our operations,
policies or practices.
The individuals named as proxies will vote the enclosed proxy for the
election of Messrs. Cocchiaro, Struzziero and Sutter unless you direct them to
withhold your votes. If any nominee becomes unable or unwilling to stand for
election, the Board may reduce its size or designate a substitute. If a
substitute is designated, proxies voting for the original nominee will be cast
for the substituted nominee.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES
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The full Board considers all major decisions. However, the Board has
established the following four standing committees so that certain important
areas can be addressed in more depth than may be possible in a full Board
meeting:
- - COMPENSATION COMMITTEE. The Compensation Committee reviews and approves
compensation plans covering executive officers and other key management
employees; reviews the competitiveness of our total compensation practices;
determines the annual base salaries and incentive awards to be paid to
executive officers and approves the annual salaries of all executive officers
and certain other key management employees; and reviews and approves hiring
and severance arrangements with executive officers. The members are W. R.
Carey, Jr., Todd W. Mansfield and Gordon Tunstall. The Compensation Committee
held two meetings in 2000.
- - AUDIT COMMITTEE. The Audit Committee assists the Board in fulfilling its
responsibility for the safeguarding of assets and oversight to the quality and
integrity of our accounting and reporting practices and such other duties as
directed by the Board. The Audit Committee recommends to the Board the
selection and retention of the independent accountants who audit our financial
statements; reviews our financial statements with management and the
independent auditor; periodically discusses with management and the auditors
the quality and adequacy of our internal controls; discusses with the
independent auditors their independence from management and kforce, including
the matters in the written disclosures required by the Independence Standards
Board; considers the compatibility of non-audit services with the auditor's
independence; periodically discusses with management and our legal counsel the
status of pending litigation; and periodically reports on the Audit
Committee's activities to our full Board
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and issues a summary report. The members are John N. Allred, W. R. Carey, Jr.,
Gordon Tunstall and Karl Vogeler. The Audit Committee held five meetings in
2000. Each member of the Audit Committee is independent within the meaning of
Rule 4200(a)(15) of the National Association of Securities Dealers listing
standards. The Audit Committee's responsibilities are more fully set forth in
a written charter, a copy of which is attached as Appendix A to this proxy
statement.
- - NOMINATION COMMITTEE. The Nomination Committee makes recommendations to the
Board regarding the size and composition of the Board. The Nomination
Committee establishes procedures for the nomination process, recommends
candidates for election to our Board and nominates officers for election by
the Board. The members are W.R. Carey, Jr., David L. Dunkel and Karl Vogeler.
The Nomination Committee held no meetings in 2000. The Nomination Committee
will consider nominees for the Board that are proposed by the shareholders.
Any shareholder who wishes to recommend a prospective nominee for the Board
for the Nomination Committee's consideration may do so by giving the
candidate's name and qualifications in writing to William L. Sanders,
Corporate Secretary, 120 West Hyde Park Place, Suite 150, Tampa, Florida
33606.
- - EXECUTIVE COMMITTEE. The Executive Committee has the authority to act in place
of the Board on all matters which would otherwise come before the Board,
except for such matters which are required by law or by our Articles of
Incorporation or Bylaws to be acted upon exclusively by the Board. The members
are David L. Dunkel, Todd W. Mansfield and Gordon Tunstall. The Executive
Committee held one meeting in 2000.
The Board met seven times during 2000. Each director attended more than 75%
of the total number of meetings of the Board and Committees on which he served.
COMPENSATION OF DIRECTORS
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Directors who are not employees receive an annual retainer of $15,000 plus
$1,000 for each Board meeting attended with a duration of 30 minutes or longer,
and $1,000 for each committee meeting attended. All committee chairmen receive
an additional $5,000 per year. Directors are given the choice of receiving stock
options in lieu of cash for their annual retainer. All non-employee directors
also receive a yearly grant of options to purchase 5,000 shares of our common
stock and receive reimbursement of out-of-pocket expenses incurred in connection
with meetings of the Board. No director who is an employee receives separate
compensation for services rendered as a director. During 2000, non-
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employee directors received options to purchase shares of kforce common stock as
set forth in the table below.
2000 STOCK OPTION GRANTS TO NON-EMPLOYEE DIRECTORS
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NUMBER OF SECURITIES EXERCISE OR
NAME UNDERLYING OPTIONS GRANTED BASE PRICE EXPIRATION DATE
---- -------------------------- ----------- ---------------
John N. Allred.................. 7,623 $11.438 5/05/2010
W.R. Carey, Jr.................. 8,497 11.438 5/05/2010
Wayne D. Emigh(1)............... 5,000 11.438 5/05/2010
Todd W. Mansfield............... 5,000 11.438 5/05/2010
Ralph Struzziero................ 5,000 2.407 10/20/2010
Gordon Tunstall................. 5,000 11.438 5/05/2010
Karl Vogeler.................... 5,000 11.438 5/05/2010
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(1) Mr. Emigh's options were cancelled in July 2000 in connection with his
resignation from the Board.
VOTE REQUIRED; RECOMMENDATION
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The three nominees for election as Class I directors will be elected at the
meeting by a plurality of all the votes cast at the meeting, meaning that the
three nominees for Class I director who receive the most votes will be elected.
A properly executed proxy marked "Withhold Authority" with respect to the
election of one or more directors will not be voted with respect to the director
or directors indicated, although it will be counted for purposes of determining
whether there is a quorum. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF
THE NOMINEES FOR ELECTION AS DIRECTOR.
PROPOSAL 2. APPROVAL OF AN AMENDMENT TO THE KFORCE ARTICLES OF INCORPORATION
TO CHANGE OUR NAME FROM KFORCE.COM, INC. TO KFORCE INC.
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The Board has adopted, subject to shareholder approval, an amendment to the
kforce Articles of Incorporation (the "Amendment") to change our name from
kforce.com, Inc. to Kforce Inc. The proposed form of Amendment is attached to
this proxy statement as Appendix B. Please review Appendix B carefully in
conjunction with this proxy statement. We believe our new name more accurately
reflects our mix of services.
VOTE REQUIRED; RECOMMENDATION
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The affirmative vote of the holders of a majority of our shares present and
entitled to vote at the Annual Meeting is required for approval of the
Amendment. Neither abstentions nor broker non-votes are counted in determining
whether this proposal has been approved. The Board believes that changing our
name from kforce.com, Inc. to Kforce Inc. is in our best interest. THEREFORE,
THE BOARD HAS UNANIMOUSLY APPROVED, AND RECOMMENDS TO YOU, THE APPROVAL OF THE
AMENDMENT.
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STOCK OWNERSHIP
The following table shows the amount of kforce common stock beneficially
owned (unless otherwise indicated) as of April 11, 2001 by (1) any person who is
known by us to be the beneficial owner of more than 5% of the outstanding shares
of our common stock, (2) our directors, (3) our executive officers named in the
Summary Compensation Table below, and (4) all of our directors and executive
officers as a group.
Shares of kforce
Common Stock
Beneficially Owned
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Number(1)(2) Percent
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DIRECTORS AND OTHER NAMED EXECUTIVE OFFICERS
David L. Dunkel................................... 3,396,069 9.40%
John N. Allred.................................... 76,858 *
W.R. Carey, Jr.................................... 98,497 *
Richard M. Cocchiaro.............................. 1,778,380 4.92%
Kenneth R. Graham................................. 0 *
Joseph J. Liberatore.............................. 124,306 *
Todd W. Mansfield................................. 31,000 *
Ken W. Pierce..................................... 5,156 *
William L. Sanders................................ 155,338 *
Lawrence J. Stanczak.............................. 114,419 *
Ralph E. Struzziero............................... 133,165 *
Howard W. Sutter.................................. 1,671,069 4.62%
A. Gordon Tunstall................................ 71,000 *
Karl A. Vogeler................................... 41,201 *
All directors and executive officers as a group
(14 persons).................................... 7,689,228 21.28%
SHAREHOLDERS
Berger Small Cap Value Fund....................... 3,637,010 10.06%
210 University Boulevard, Suite 900
Denver, Colorado 80206
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* Less than 1% of the outstanding common stock
(1) Includes the number of shares subject to purchase pursuant to currently
exercisable options or options exercisable within 60 days of April 11, 2001
as follows: Mr. Dunkel, 258,400; Mr. Allred, 45,718; Mr. Carey, 98,497; Mr.
Cocchiaro, 6,967; Mr. Liberatore, 69,973; Mr. Mansfield, 31,000; Mr. Pierce,
4,000; Mr. Sanders, 129,600; Mr. Stanczak, 61,318; Mr. Sutter, 24,753; Mr.
Tunstall, 71,000; Mr. Vogeler, 20,000.
(2) Includes 50,712 shares as to which beneficial ownership is disclaimed as
follows: Mr. Dunkel, 31,712 (shares held by current spouse); and Mr.
Cocchiaro, 19,000 (shares held by spouse). Also includes 1,315,618 shares as
to which voting and/or
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investment power is shared or controlled by another person and as to which
beneficial ownership is not disclaimed, as follows: Mr. Dunkel, 1,269,231
(shares held by former spouse); Mr. Cocchiaro, 39,400 (shares held by
mother); Mr. Struzziero, 1,987 (shares held by spouse); and Mr. Sutter,
5,000 (shares held by spouse).
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
kforce directors, executive officers and persons holding more than ten percent
of our common stock to file reports of ownership and changes in ownership of the
common stock with the SEC. The directors, officers and ten percent shareholders
are required by the SEC regulations to furnish us with copies of all Section
16(a) reports that they file. The SEC has designated specific due dates for
these reports and we must identify in this proxy statement those persons who did
not file these reports when due.
Based solely on our review of copies of the reports received by us and
written representations from certain reporting persons, we believe that only Mr.
Cocchiaro failed to timely file a Form 4 during fiscal 2000. All other
directors, executive officers and persons holding more than 10% of our common
stock were in compliance with their filing requirements.
INDEPENDENT AUDITORS
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Our consolidated financial statements for the year ended December 31, 2000
have been audited by Deloitte & Touche, LLP, independent auditors. The Board has
selected Deloitte & Touche, LLP as the independent auditor to perform our audit
for the current year ending December 31, 2001. A representative of Deloitte &
Touche, LLP will be present at the annual meeting of shareholders in order to
respond to appropriate questions and to make any other statement deemed
appropriate.
AUDIT FEES
The aggregate fees billed by Deloitte & Touche, LLP for professional
services rendered in connection with the audit of our financial statements
included in our Annual Report on Form 10-K for fiscal year 2000, as well as for
the review of our financial statements included in our Quarterly Reports on Form
10-Q during fiscal year 2000 totaled $152,275.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The aggregate fees billed by Deloitte & Touche, LLP for information
technology services during fiscal year 2000 totaled $240,323.
ALL OTHER FEES
No other fees were billed by Deloitte & Touche, LLP for professional
services rendered during fiscal year 2000 other than fees for the services
referenced in the above captioned "Audit Fees" and "Financial Information
Systems Design and Implementation Fees."
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The Audit Committee considered whether Deloitte & Touche, LLP's provision
of the above non-audit services is compatible with maintaining such firm's
independence.
PREVIOUS INDEPENDENT ACCOUNTANTS
On August 3, 2000, we dismissed PricewaterhouseCoopers LLP, which had
previously served as our independent accountants for the audits of our financial
statements at December 31, 1999, and for each of the two years then ended. The
reports of PricewaterhouseCoopers LLP on our financial statements for the fiscal
years ended December 31, 1999, and December 31, 1998, contained no adverse
opinion or disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles. Our Audit Committee and Board
participated in and approved the decision to change independent accountants on
July 21, 2000. In connection with its audit for the fiscal years ended December
31, 1999, and December 31, 1998, and the period from January 1, 2000, through
August 9, 2000, there were no disagreements with PricewaterhouseCoopers LLP on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP, would have caused
PricewaterhouseCoopers LLP to make reference to such disagreements in their
report on the financial statements for such periods. During the fiscal years
ended December 31, 1999, and December 31, 1998, and the period from January 1,
2000, through August 9, 2000, there were no "reportable events" as that term is
defined in Item 304(a)(1)(v) of Regulation S-K.
We requested that PricewaterhouseCoopers LLP provide us with a letter
addressed to the SEC stating whether or not it agreed with the above statements.
PricewaterhouseCoopers LLP furnished us with such a letter, dated August 8,
2000, a copy of which was filed by us as Exhibit 16.1 to a Current Report on
Form 8-K filed on August 9, 2000 with the SEC.
NEW INDEPENDENT ACCOUNTANTS
On August 3, 2000, we engaged Deloitte & Touche, LLP as our new independent
accountants. Deloitte & Touche LLP's engagement was approved by our Audit
Committee and Board on July 21, 2000.
AUDIT COMMITTEE REPORT
kforce's Audit Committee serves as the representative of the Board for
general oversight of kforce's financial accounting and reporting process, system
of internal control and audit process. kforce's management has primary
responsibility for preparing kforce's financial statements and its financial
reporting process. kforce's independent accountants, Deloitte & Touche, LLP, are
responsible for expressing an opinion on the conformity of kforce's audited
financial statements to generally accepted accounting principles.
In this context, the Audit Committee reports as follows:
1. The Audit Committee has reviewed and discussed the audited
financial statements with kforce's management.
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2. The Audit Committee has discussed with the independent accountants
the matters required to be discussed by SAS 61 (Codification of Statements
on Auditing Standard, AU 380).
3. The Audit Committee has received the written disclosures and the
letter from the independent accountants required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees) and
has discussed with the independent accountants their independence.
4. Based on the review and discussion referred to in paragraphs (1)
through (3) above, the Audit Committee recommended to kforce's Board, and
the Board has approved, that the audited financial statements be included
in kforce's Annual Report on Form 10-K for the fiscal year ended December
31, 2000, for filing with the Securities and Exchange Commission.
Submitted by the Audit Committee
Karl Vogeler (Chairman)
John N. Allred
W. R. Carey, Jr.
Gordon Tunstall
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DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information as of April 11, 2001, concerning our
executive officers, continuing directors, and nominees for re-election as
directors.
Year First
Became a
Name Position(s) Age Director
---- ---------------------------------- --- ----------
David L. Dunkel................... Chairman, Chief Executive Officer, 47 1994
and Director
John N. Allred.................... Director 54 1998
W.R. Carey, Jr. .................. Director 53 1995
Richard M. Cocchiaro*............. Director (nominee for a term 46 1994
expiring in 2004)
Joseph J. Liberatore.............. Senior Vice President and Chief 38 --
Sales Officer
Todd W. Mansfield................. Director 43 1997
Ken W. Pierce..................... Chief Marketing Officer 43 --
William L. Sanders................ Senior Vice President, Secretary 54 --
and Chief Financial Officer
Lawrence J. Stanczak.............. Senior Vice President and Chief 52 --
Operations Officer
Ralph E. Struzziero*.............. Director (nominee for a term 56 2000
expiring in 2004)
Howard W. Sutter*................. Vice President and Director 52 1994
(nominee for a term expiring in
2004)
Gordon Tunstall................... Director 57 1995
Karl Vogeler...................... Director 58 1998
Fred T. Williams.................. Chief Information Officer 48 --
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* Standing for election.
DAVID L. DUNKEL has served as kforce's Chairman, Chief Executive Officer
and a director since its formation in 1994, and also served as kforce's
President from August 1994 until January 1998. Prior to August 1994, he served
as President and Chief Executive Officer of Romac-FMA, one of kforce's
predecessors, for 14 years. Mr. Dunkel's prior experience includes three years
service as an accountant with Coopers & Lybrand in Boston, Massachusetts.
JOHN N. ALLRED has served as a director of kforce since April 1998. Mr.
Allred has served as President of A.R.G., Inc., a provider of temporary and
permanent physicians located in the Kansas City area since January 1994. Prior
to that time, Mr. Allred served in various capacities with Source Services
Corporation ("Source") prior to its merger with kforce in 1998, including Branch
Manager of the Kansas City branch (1976-1983), Regional Vice President
(1983-1987) and Vice President (1987-1994). Mr. Allred served as a director of
Source from August 1992 until November 1993 and was again elected as a
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director in September 1994. Prior to joining Source, Mr. Allred held various
positions, including Manager of Data Processing Services and Systems Analyst
with Systec Data Management.
W. R. CAREY, JR. has served as a director of kforce since October 1995. He
is currently the Chairman and Chief Executive Officer of Corporate Resource
Development, Inc., an Atlanta, Georgia based sales and marketing consulting and
training firm which began in 1981 and assists some of America's largest firms in
design, development, and implementation of strategic and tactical product
marketing. Mr. Carey serves on the Board of Directors of both Outback
Steakhouse, Inc. and Crosswalk.com, Inc. and is also the National Chairman of
the Council of Growing Companies.
RICHARD M. COCCHIARO has served as a director of kforce since its formation
in August 1994. He currently serves as a Vice President of National Accounts
(since 2000) and served as the Vice President of Strategic Alliances for
kforce.com Interactive (1999) and National Director of Strategic Solutions
within kforce's Emerging Technologies group (1994-1999). Prior to August 1994,
he was a Vice President with Romac-FMA and Division President of Romac-FMA's
Chicago Search Division (1985-1994) and Romac-FMA's Tampa Search Division
(1981-1985). Mr. Cocchiaro's prior experience includes service as an accountant
with Coopers & Lybrand in Boston.
JOSEPH J. LIBERATORE has served as kforce's Senior Vice President since
June 2000 and Chief Sales Officer since September 2000. Prior to this, he served
as President of kforce.com Interactive (1999-2000), as Regional Vice President
for kforce's Southeast and Mid-Atlantic region (1996-1999), and Vice President
of kforce's Tampa IT Search (1994-1996).
TODD W. MANSFIELD has served as a director of kforce since April 1997.
Since July 1999, Mr. Mansfield has been Chief Executive Officer of The Crosland
Group, Inc., a diversified regional investment and development company
headquartered in Charlotte, North Carolina. Previously, Mr. Mansfield was
Managing Director of Security Capital Group Incorporated and responsible for
operating oversight of the company's private equity investments in Europe
(1997-1999). Prior to this, Mr. Mansfield was with The Walt Disney Company,
where he was Executive Vice President of the Disney Development Company and the
President of The Celebration Company (1986-1997).
KEN W. PIERCE has served as kforce's Chief Marketing Officer responsible
for the development and implementation of an integrated strategic marketing and
communications plan since December 1999. Prior to joining kforce, he was Senior
Vice President of Marketing for Homestead Village, Inc., a $1.2 billion extended
stay lodging company (1997-1999) and held the positions of Senior Financial
Analyst and Vice President of Relationship Marketing for Bass Hotels and Resorts
(1982-1997).
WILLIAM L. SANDERS has served as kforce's Chief Financial Officer
responsible for the finance, accounting, treasury, legal, tax, investor
relations, facilities and human resource functions as well as kforce's Senior
Vice President and Secretary since April 1999. Prior to joining kforce, he was
Chief Financial Officer and Treasurer of Old Kent Financial Corporation, a
regional commercial bank (1997-1998), and the Chief Financial Officer and
Treasurer of Bank Plus Corporation, a savings bank (1995-1997). Mr. Sanders'
prior experience also includes serving as a partner with Deloitte & Touche. Mr.
Sanders holds Bachelor and Master degrees from Southern Illinois University.
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LAWRENCE J. STANCZAK has served as kforce's Senior Vice President since
June 2000 and Chief Operations Officer since September 2000. Prior to September
2000, he served as kforce's Senior Vice President, Operations (2000), as Vice
President, Operations (1999-2000), and as kforce's Vice President, Business
Development (1998-1999). Mr. Stanczak also served as Vice President, Operations
(1995-1998) and Managing Director (1994-1995) with Source.
RALPH E. STRUZZIERO has served as a director of kforce since October 2000.
Since 1995, Mr. Struzziero has operated an independent business consulting
practice and since 1997 has served as an adjunct professor at the University of
Southern Maine. Mr. Struzziero previously served as Chairman (1990-1994) and
President (1980-1994) of Romac & Associates, Inc., one of kforce's predecessors.
HOWARD W. SUTTER has served as kforce's Vice President and a director since
its formation in August 1994. Prior to August 1994, Mr. Sutter served as Vice
President of Romac-FMA (1984-1994), and Division President of Romac-FMA's South
Florida location (1982-1994). Mr. Sutter's prior experience includes three years
as Vice President and Controller of a regional airline and six years as an
accountant with Coopers & Lybrand in Philadelphia.
GORDON TUNSTALL has served as a director of kforce since October 1995. He
is the founder of, and for more than 18 years has served as President of,
Tunstall Consulting, Inc., a provider of strategic consulting and financial
planning services. Mr. Tunstall is also currently a director of Orthodontic
Centers of America, Inc., a manager of orthodontic practices; Advanced Lighting
Technologies, a specialty lighting manufacturer; and Horizon Medical Products, a
medical device manufacturing and distribution company.
KARL VOGELER has served as a director of kforce since April 1998. Mr.
Vogeler also served as a Director of Source (1994-1998). Prior to his
retirement, Mr. Vogeler was a litigation partner with the law firm of Thompson,
Coe, Cousins & Irons in Dallas, Texas (1989-1998). Mr. Vogeler's previous
business experience includes serving as Branch Manager of the Dallas, Texas
office of Source Edp, as Project Manager and Senior Systems Analyst of Republic
National Bank of Dallas, N.A., and Systems Engineer for Electronic Data Systems,
Inc.
FRED T. WILLIAMS has served as kforce's Chief Information Officer
responsible for refining, optimizing and executing its technology strategy since
June 2000. Prior to this, Mr. Williams served as kforce's Vice President of
Application Services (1999-2000). Prior to joining kforce, Mr. Williams was
Director of Internet Services for AEGON Special Markets Group, Inc., an
insurance company (1999) and Director of Electronic Commerce at Tech Data
Corporation, a technology company (1994-1999).
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EXECUTIVE COMPENSATION
Presented below is certain information concerning total compensation earned
or paid to: (1) the Chief Executive Officer; (2) the four other most highly
compensated executive officers whose annual salaries and bonuses exceeded
$100,000 during 2000; and (3) one additional officer whose annual salary and
bonus exceeded $100,000 during 2000 but who was not an executive officer at the
end of fiscal year 2000 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
The following table sets forth certain compensation information for the
Named Executive Officers.
ANNUAL LONG-TERM COMPENSATION
COMPENSATION(1) ----------------------
FISCAL -------------------- SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(2) BONUS UNDERLYING OPTIONS COMPENSATION(3)
- --------------------------- ------ --------- -------- ---------------------- ---------------
David L. Dunkel............... 2000 $500,000 $ 0 480,000 $ 0
Chief Executive Officer 1999 350,000 0 392,000 160,107
1998 280,000 280,000 100,000 181,710
Joseph J. Liberatore.......... 2000 $310,000 $ 0 158,200 $ 0
Senior Vice President and 1999 245,000 131,965 50,000 5,000
Chief Sales Officer 1998 125,000 372,352 10,000 1,900
Ken W. Pierce................. 2000 $210,641 $ 50,000 20,000 $100,000
Chief Marketing Officer 1999 -- -- -- --
1998 -- -- -- --
William L. Sanders............ 2000 $350,000 $ 0 238,000 $ 0
Senior Vice President, 1999 189,423 0 200,000 0
Secretary and 1998 -- -- -- --
Chief Financial Officer
Lawrence J. Stanczak.......... 2000 $225,000 $102,562 55,115 $ 0
Senior Vice President and 1999 175,000 200,000 36,000 0
Chief Operations Officer 1998 160,000 197,540 15,000 37,472
Kenneth R. Graham(4).......... 2000 $ 84,375 $ 0 99,500 $463,722
Former Chief Information 1999 185,000 30,000 36,000 1,850
Officer 1998 170,000 65,000 16,000 1,900
- ------------------------------
(1) The aggregate amount of perquisites and other personal benefits received by
the Named Executive Officer in addition to the amounts shown as Salary and
Bonus, if any, did not exceed the lesser of $50,000 or 10% of the total
annual salary and bonus reported for each Named Executive Officer and has
therefore been omitted.
(2) Includes any amount deferred by the executive pursuant to our deferred
compensation plan.
(3) Includes annual premiums paid by us for cross purchase split dollar life
insurance policies for Mr. Dunkel. See "Certain Relationships and Related
Transactions." Also includes the amount contributed by us to the account of
each Named Executive Officer under our deferred compensation plan. With
respect to Mr. Graham, $325,000 of the amount shown constitutes severance
pay. See "Executive Compensation --
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Employment and Severance Contracts." With respect to Mr. Pierce, the amount
shown constitutes relocation costs paid by us.
(4) Mr. Graham was not an employee at the end of fiscal year 2000.
OPTION GRANTS DURING FISCAL YEAR 2000
- --------------------------------------------------------------------------------
The following table sets forth information concerning options granted to
the Named Executive Officers during fiscal year 2000:
Potential Realizable Value
At Assumed Annual Rates
Of
Stock Price Appreciation
For
2000 Stock Option Grants(1) Option Term(2)
- ------------------------------------------------------------------------------------- ---------------------------
Percent of 2000
Options Options Granted Exercise or Expiration Assumed Assumed
Name Granted to Employees Base Price Date Rate 5% Rate 10%
- ---- ------- --------------- ----------- ---------- ------------ ------------
David L. Dunkel................ 200,000 9.07% $13.438 1/01/2010 $1,690,217 $4,283,342
200,000 9.07% 15.25 2/03/2010 1,918,129 4,860,915
80,000 3.63% 15.25 3/31/2001 70,827 142,590
Joseph J. Liberatore........... 50,000 2.27% 13.438 1/01/2010 422,554 1,070,836
68,200 3.09% 15.25 2/03/2010 654,082 1,657,572
40,000 1.81% 15.25 3/31/2001 35,413 71,295
Ken W. Pierce.................. 20,000 0.91% 15.25 2/04/2010 191,813 486,091
William L. Sanders............. 100,000 4.54% 13.438 1/01/2010 845,109 2,141,671
98,000 4.45% 15.25 2/03/2010 939,883 2,381,848
40,000 1.81% 15.25 3/31/2001 35,413 71,295
Lawrence J. Stanczak........... 30,000 1.36% 13.438 1/01/2010 253,533 642,501
25,115 1.14% 15.25 2/03/2010 240,869 610,409
Kenneth R. Graham(3)........... 25,000 1.13% 13.438 1/01/2010 211,277 535,418
49,500 2.25% 15.25 2/03/2010 474,737 1,203,076
25,000 1.13% 15.25 3/31/2001 22,133 44,559
- ------------------------------
(1) Each of these options was granted pursuant to the kforce Stock Incentive
Plan and is subject to the terms of this plan. As long as the optionee
maintains continuous employment with us, (1) all of the options with an
expiration date in 2010 vest according to the following schedule: end of
year 1-20%; end of year 2-30%; and end of year 3-50%; and (2) all of the
options with an expiration date in 2001 were cancelled because stock price
performance targets were not achieved.
(2) Potential gains are net of the exercise price but before taxes associated
with the exercise. Amounts represent hypothetical gains that could be
achieved for the respective options if they were exercised at the end of the
option term. The assumed 5% and 10% rates of stock appreciation are based on
appreciation from the exercise price per share. These rates are provided in
accordance with the rules of the SEC and do not represent our estimate or
projection of our future common stock price. Actual gains, if any, on stock
option exercises are dependent on our future financial performance, overall
stock market conditions and the option holder's continued employment through
the vesting period.
(3) All of Mr. Graham's options were cancelled on August 15, 2000, in connection
with his separation of employment.
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OPTION EXERCISES DURING FISCAL YEAR 2000 AND FISCAL YEAR END OPTION VALUES
- --------------------------------------------------------------------------------
The following table provides information related to options exercised by
the Named Executive Officers during fiscal year 2000 and the number and value of
options held at year end. There are no outstanding stock appreciation rights.
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-The-Money Options at
December 31, 2000 December 31, 2000(1)
Shares --------------------------- ---------------------------
Acquired on Value
Name Exercise (#) Realized(2) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ----------- ----------- ------------- ----------- -------------
David L. Dunkel -- $ -- 128,400 763,600 $ -- $ --
Joseph J. Liberatore -- -- 41,333 175,200 -- --
Ken W. Pierce -- -- 0 20,000 -- --
William L. Sanders -- -- 60,000 438,000 -- --
Lawrence J. Stanczak -- -- 42,795 91,415 -- --
Kenneth R. Graham 40,000 72,500 -- -- -- --
- ------------------------------
(1) The closing price for kforce common stock as reported on the Nasdaq National
Market on December 31, 2000, was $3.0625. Value of unexercisable and
exercisable options is calculated on the basis of the difference between the
option exercise price and $3.0625 multiplied by the number of shares of
kforce common stock to which the exercise relates.
(2) Value realized is calculated based on the difference between the option
exercise price and the closing market price of kforce common stock on the
date of exercise multiplied by the number of shares to which the exercise
relates.
EMPLOYMENT AND SEVERANCE CONTRACTS
- --------------------------------------------------------------------------------
We are a party to employment agreements with Messrs. Dunkel, Liberatore,
Pierce, Sanders, and Stanczak effective March 1, 2000. These agreements are for
a period of two years and 364 days for Messrs. Dunkel, Liberatore and Sanders,
and two years for Messrs. Pierce and Stanczak, and provide for an annual base
salary and certain other benefits. The annual base salaries for fiscal 2001 for
Messrs. Dunkel, Liberatore, Pierce, Sanders, and Stanczak are $500,000,
$310,000, $225,000, $350,000 and $300,000, respectively. Each employment
agreement provides that the executive is entitled to severance if his employment
is terminated by us "without cause" or if the executive resigns for "good
reason" (as defined in the employment agreements). In such case, the executive
would receive his full compensation from the date of termination for a period of
2 years and 364 days with respect to Mr. Dunkel, two years with respect to
Messrs. Sanders and Liberatore and one year with respect to Messrs. Pierce and
Stanczak. The employment agreements also provide that upon a change in control
of our company, in conjunction with a termination of the executive "without
cause" or the executive's resignation for "good reason," each executive would be
entitled to receive an immediate lump sum payment equal to 2.99 times the
executive's annual salary plus the average of the last three years bonuses with
respect to Messrs. Dunkel, Sanders and Liberatore, and two times the executive's
annual salary plus the average of the last two years bonuses with respect to
Messrs. Pierce and Stanczak, subject to certain limitations. In general, a
change in control is defined by the employment agreements to be any
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replacement of 50% or more of the directors that follows and is directly or
indirectly the result of certain extraordinary corporate occurrences, such as a
merger or other business combination involving kforce, a tender offer for kforce
stock, a solicitation of proxies other than by our management or the Board, or
an acquisition by a person or group of 25% or more of kforce stock (excluding
certain acquisitions by us, certain of our benefit plans, entities controlled by
us and acquisitions by David L. Dunkel or his family members). Each agreement
contains a covenant not to compete, which continues for two years following any
termination.
We were also a party to an employment agreement with Mr. Graham effective
March 1, 2000. Pursuant to Mr. Graham's employment agreement, upon termination
we paid him $325,000, which represents one year of his base salary and average
bonus for the past two years. In connection with the employment agreement, Mr.
Graham also entered into a noncompetition agreement with us that prohibits him
from disclosing certain information and limits his ability to compete with or
otherwise interfere with our business for a period of two years following his
termination.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
- --------------------------------------------------------------------------------
During 2000, the Compensation Committee consisted of Messrs. Carey,
Mansfield and Tunstall. No member of the Compensation Committee is currently or
was formerly an officer or an employee of kforce or its subsidiaries.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following Report of the Compensation Committee and the performance
graph included elsewhere in this proxy statement do not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other filing by kforce under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent kforce specifically incorporates this
Report or the performance graph by reference in such filings.
COMPENSATION POLICY
- --------------------------------------------------------------------------------
The Compensation Committee is composed of three outside directors of the
Board who are not employees of kforce. The Compensation Committee met two times
during 2000.
kforce continues to be committed to maximizing shareholder value through
superior business growth, financial performance success, and realized
shareholder gains. In the measurement of kforce's performance on these criteria,
the Compensation Committee's comparison group includes enterprises directly
involved with e-commerce, as well as the traditional staffing companies.
Because kforce intends to be a high performer, both on a comparative and
absolute basis, its compensation strategy seeks to provide realized pay levels
at the third quartile among its peer comparison group. If performance falls
short of kforce's demanding goals for business growth, on various financial
measures, and in terms of shareholder realized gains - then so too will the
compensation paid to its executive officers. In essence, kforce
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seeks to provide substantial pay opportunities to be realized if it attains
substantial performance success particularly as it relates to stock price gains.
Much of the Compensation Committee's activities in 2000 were focused upon
matters related to the issuance of stock options. Although kforce's stock
declined during 2000, as was the case for most transitional staffing companies,
the Compensation Committee and kforce still believe that employees who are stock
option recipients are more likely to: (1) identify with shareholders interests,
(2) personally commit to a rigorous standard of work and service to our clients
and (3) remain in the employ of kforce.
In 2000, the Compensation Committee approved salary adjustments, bonus and
stock option awards for the fiscal year 1999, and the bonus criteria for fiscal
2000. In reviewing the salaries of senior executives, market data provided to
kforce by its independent compensation consultant, William M. Mercer,
Incorporated, was considered in relation to kforce's adopted compensation
strategy, its growth due to the Source acquisition, and the Chief Executive
Officer's assessment of the long-term contribution of the individual executive
officers other than himself.
As it pertains to the annual bonuses for the Chief Executive Officer and
the Chief Financial Officer, the Compensation Committee based the 2000 bonus
amount solely upon the realized gain in kforce's stock price. No bonus was paid
to the Chief Executive Officer or Chief Financial Officer as related to 2000
performance results. This treatment was supported by the Chief Executive Officer
and Chief Financial Officer in recognition of the fact that kforce's stock
price, like that of most of its competitors, suffered a deterioration in value
over the year.
As it pertains to the compensation of the Chief Executive Officer, Mr.
Dunkel's compensation results from his participation in the same compensation
program as the other executives of kforce. In determining his base salary,
annual incentive opportunity, and other longer-term incentive opportunities, the
Compensation Committee reviewed the compensation paid to Chief Executive
Officers of comparable companies as provided to the Compensation Committee by
its independent consultant for compensation matters.
In making the salary determination for Mr. Dunkel, the Compensation
Committee also considered his long-term contribution to kforce and the expansion
of his duties and responsibilities as a result of kforce's internal growth and
acquisition of Source and the assumption of the additional role as President of
kforce in 1999. The Compensation Committee and Mr. Dunkel agreed that enhanced
stock based compensation is desired to further link the executive officers to
the returns provided to our shareholders. As a consequence, stock options were
central to the compensation provided to the Chief Executive Officer and other
officers in 2000.
Submitted by the Compensation Committee
Todd W. Mansfield (Chairman)
W. R. Carey, Jr.
Gordon Tunstall
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Until April 2000, we leased office space from a limited partnership in
which Messrs. Dunkel, Sutter and Cocchiaro, our officers and directors, are
limited partners. The limited partnership sold the office building in May 2000.
Payments under the lease during 2000 while the office building was owned by the
limited partnership totaled $121,053. We believe the lease payments are
comparable to those that would be made to an unrelated third party.
In 1993, we entered into a split dollar and cross-purchase split dollar
life insurance agreement with Mr. Dunkel and his estate. We entered into similar
agreements with Messrs. Sutter and Cocchiaro and their estates in 1995. The
purpose of these arrangements was to protect the Company from the possibility of
a large block of kforce common stock being offered for sale on the open market
to the potential detriment of kforce's stock price in the event of the
unexpected death of one of the principles. In consideration of this benefit,
kforce paid part of the life insurance policy premiums on behalf of the officers
and their estates. In the event of death, the proceeds of the policies would be
used to purchase the deceased's stock from their estate, thereby decreasing the
likelihood that the estates of such persons would find it necessary to sell
large blocks of stock in a short period of time. We have been granted a security
interest in the cash value and death benefit of each policy equal to the amount
of the cumulative premium payments made by us. These insurance policies were
substantially restructured in 1999 such that all related party receivables owed
to us and related to these policies can be satisfied by a redemption of the cash
value in the policies that will accumulate over a period of time and we will no
longer have any interest in the executives' policies upon repayment. The length
of time necessary to accumulate sufficient cash values in the policies to
satisfy all related party receivables is dependent upon certain market factors,
and is currently estimated to take six to seven years. Also, the determination
of when and whether to satisfy the related party receivables from policy cash
values must be made by the agreement of the policy owner and us. The total
premiums paid during 2000 were $62,214.60. However, these premiums were funded
from the redemption of cash values from the restructured policies, did not
require any payment from us and did not increase any related party receivables.
We expect that we will be required to make premium payments in the future.
During 2000, we and an entity owned by Mr. Dunkel participated in cross
lease agreements for the lease of aircraft owned by us on one hand and Mr.
Dunkel's entity on the other. We believe that the lease payments it made to and
received from Mr. Dunkel's entity were comparable to the lease payments that
would be paid to and by an unrelated third party. For aircraft leases during
2000, we paid Mr. Dunkel's entity $124,792 for the lease of its aircraft, and
Mr. Dunkel's entity paid us $21,569 for the lease of our aircraft.
In February 1999 we entered into a consulting agreement with MLDJ, Inc., a
company solely owned by Mr. Dunkel's spouse, a former senior executive officer
of kforce. This agreement was terminated by us on July 1, 2000. The agreement
provided for $30,000 monthly payments by us for sales and marketing related
consulting services, which payments were adjusted upwards or downwards based on
certain performance criteria set forth in the consulting agreement. Under the
terms of the consulting agreement, MLDJ Inc. also provided recruiting services,
and was responsible for the recruitment of 30 candidates in 2000 for our
Leadership Development Program which is modeled after similar programs at a
number of Fortune 500 corporations. During 2000, we paid a total of
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$370,980 to MLDJ under the consulting agreement. We believe that the terms of
the consulting agreement were no less favorable than we would have been able to
obtain from an unrelated third party.
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KFORCE STOCK PRICE PERFORMANCE GRAPH
The following graph is a comparison of the cumulative total returns for
kforce common stock as compared with the cumulative total return for the Nasdaq
Stock Market (U.S.) Index and the average performance of a group consisting of
our peer corporations on a line-of-business basis. The cumulative return was
computed by dividing the difference between the price of kforce common stock at
the end and the beginning of the measurement period (December 31, 1995 to
December 31, 2000) by the price of kforce common stock at the beginning of the
measurement period. The total return calculations are based upon an assumed $100
investment on December 31, 1995. The comparisons in the graph below are based on
historical data and are not intended to forecast the possible future performance
of kforce common stock.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
NASDAQ STOCK
MARKET (US NEW INDUSTRY PEER OLD INDUSTRY PEER
KFORCE.COM, INC. COMPANIES) GROUP(1) GROUP(1)(2)
---------------- ------------ ----------------- -----------------
1995 100 100 100 100
1996 187.2 123 128.6 117.9
1997 416 159.7 184.8 164.7
1998 378.7 212.5 170.1 155.3
1999 228.7 394.8 161.9 137.3
2000 52.1 237.4 159.2 154.4
OLD INDUSTRY PEER GROUP NEW INDUSTRY PEER GROUP
- ----------------------- -----------------------
kforce.com, Inc. CDI Corporation
Alternative Resources Corporation Ciber Inc.
Interim Services, Inc.(3) Hall Kinion Corporation
Kelly Services, Inc. Kelly Services, Inc.
Manpower, Inc. Manpower, Inc.
On Assignment, Inc. Metro Information Services, Inc.
Robert Half International, Inc. On Assignment, Inc.
Robert Half International, Inc.
Spherion Corporation(3)
- ------------------------------
(1) For comparison purposes, an old industry peer group used in prior years has
been included; the new industry peer group includes five members of the old
industry peer group as well as four new members. We changed our industry
peer group to include more companies with an emphasis in information
technology staffing, which is more representative of our competitors.
(2) The figures in the Old Industry Peer Group Index have been restated to
exclude Olsten Corporation because it was acquired in March 2000 by a
company that is not among our peers.
(3) Interim Services, Inc. changed its name to Spherion Corporation in July
2000.
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SHAREHOLDER PROPOSALS
Shareholders interested in presenting a proposal for consideration at our
annual meeting of shareholders in 2002 may do so by following the procedures
prescribed in Rule 14a-8 under the Securities Exchange Act of 1934 and our
bylaws. To be eligible for inclusion, shareholder proposals must be received by
kforce's Corporate Secretary no later than December 30, 2001. The Board will
review any proposal from eligible shareholders that it receives by that date and
will determine whether any such proposal will be included in our proxy materials
for 2002.
OTHER MATTERS
As of the date of this proxy statement, we know of no business that will be
presented for consideration at the Annual Meeting other than the items referred
to above. If any other matter is properly brought before the meeting for action
by shareholders, proxies in the enclosed form returned to us will be voted in
accordance with the judgment of the proxy holder.
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APPENDIX A
KFORCE.COM, INC.
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
JANUARY 26, 2001
ROLE AND INDEPENDENCE
- --------------------------------------------------------------------------------
The audit committee of the board of directors of kforce.com, Inc. (the
"Company") assists the board in fulfilling its responsibility for the
safeguarding of assets and oversight to the quality and integrity of the
accounting, auditing and reporting practices of the Company and such other
duties as directed by the board. Members of the audit committee shall be elected
annually by the full board and shall hold office until the earlier of: (1) the
election of their respective successors (2) the end of their service as a
director of the Company (whether through resignation, removal, expiration of
term or death); or (3) their resignation from the committee. The full board
shall designate one member as the chairman. The membership of the audit
committee shall consist of at least three independent directors who are
generally knowledgeable in financial and auditing matters, including at least
one member with accounting or related financial management expertise. Each
member shall be free of any relationship that, in the opinion of the board,
would interfere with their individual exercise of independent judgment. No
person shall be deemed independent if he is an employee of the Company. The
audit committee is expected to maintain free and open communication (including
private executive sessions at least annually) with the independent accountants,
the internal auditors, and management of the Company. In discharging this
oversight role, the committee is empowered to investigate any matter brought to
its attention, with full power to retain outside counsel or other experts for
this purpose. This charter shall be reviewed annually for possible revision.
RESPONSIBILITIES
- --------------------------------------------------------------------------------
The audit committee's primary responsibilities shall be:
- - A recommendation to the board for the selection and retention of the
independent accountant who audits the financial statements of the Company. In
so doing, the audit committee will discuss and consider the independent
accountant's written affirmation that it is in fact independent, will discuss
the nature and rigor of the audit process, will receive and review all reports
and will provide to the independent accountants full access to the audit
committee (and the board) to report on any and all appropriate matters.
- - Provision of guidance and oversight to the internal audit function of the
Company (if any) including review of the organization, plans and results of
such activity.
- - Review of financial statements with management and the independent auditor. It
is anticipated that these discussions may include quality of earnings,
discussions of significant items subject to estimate, consideration of the
suitability of accounting principles, audit adjustments (whether or not
recorded) and such other inquiries as may be deemed appropriate by the audit
committee.
A-1
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- - Periodic discussion with management and the auditors of the quality and
adequacy of the Company's internal controls.
- - Periodic discussion with management and legal counsel of the status of pending
litigation, taxation matters and disclosures under applicable securities laws
or other areas of special concern, as may be deemed appropriate by the
committee.
- - Periodic reporting on audit committee activities to the full board and
issuance annually of a summary report (including appropriate oversight
conclusions) that may be suitable for submission to the shareholders.
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APPENDIX B
ARTICLES OF AMENDMENT
OF THE ARTICLES OF INCORPORATION OF
KFORCE.COM, INC.
Pursuant to Section 607.1003 and 607.1006 of the Florida Business
Corporation Act, the Articles of Incorporation of kforce.com, Inc. (the
"Corporation"), are hereby amended according to these Articles of Amendment:
FIRST: The name of the Corporation is kforce.com, Inc.
SECOND: Article I of the Articles of Incorporation shall be amended in its
entirety to read as follows:
"The name of the Corporation shall be Kforce Inc."
THIRD: The foregoing amendment was unanimously approved by the directors
of the Corporation on January 26, 2001, and thereafter, was approved by the vote
of a sufficient number of the holders of outstanding shares of stock of the
Corporation present and entitled to vote at a duly convened annual meeting of
the shareholders called in accordance with Section 607.0701, Florida Statutes on
June 18, 2001.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
day of June, 2001.
KFORCE.COM, INC.
By:
-------------------------------------
William L. Sanders
Secretary
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DETACH HERE
KFORCE.COM, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints DAVID L. DUNKEL and WILLIAM L. SANDERS,
or either of them, each with power of substitution and revocation, as the proxy
or proxies of the undersigned to represent the undersigned and vote all shares
of the Common Stock of kforce.com, Inc., that the undersigned would be entitled
to vote if personally present at the Annual Meeting of Shareholders of
kforce.com, Inc., to be held at the Wyndham Harbour Island Hotel, 725 South
Harbour Island Boulevard, Tampa, Florida 33602, on June 18, 2001, at 9:00 a.m.,
and at any adjournments thereof, upon the matters set forth on the reverse side
and more fully described in the Notice and Proxy Statement for the meeting and,
in their discretion, upon all other matters that may properly come before the
meeting.
The Annual Meeting may be held as scheduled only if a majority of the
shares outstanding are represented at the meeting by attendance or proxy.
Accordingly, please complete this proxy, and return it promptly in the enclosed
envelope.
THE SHARES OF KFORCE.COM, INC. COMMON STOCK COVERED BY THIS PROXY WILL BE VOTED
IN ACCORDANCE WITH THE CHOICES MADE. WHEN NO CHOICE IS MADE, THIS PROXY WILL BE
VOTED FOR ALL LISTED NOMINEES FOR DIRECTOR, FOR PROPOSAL 2 AND AS THE
PROXYHOLDERS DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Has your Address changed? If so, please write your new address below.
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29
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE.
KFORCE.COM, INC. 1. Election of Directors, Nominees:
Mark box at right if you will attend the [ ] For All With- For All
Annual Meeting. Class I Richard M. Cocchiaro Nominees hold Except
Ralph E. Struzziero [ ] [ ] [ ]
Mark box at right if an address change has been [ ] Howard W. Sutter
noted on the reverse side of this card.
INSTRUCTIONS: To withhold authority to vote for one or more of the nominees
listed above, mark the "For All Except" box and strike a line through the
CONTROL NUMBER: name(s) of the nominee(s). Your shares will be voted for the remaining
RECORD DATE SHARES: nominee(s).
Please be sure to sign and date this Proxy. For Against Abstain
2. Approval of an amendment to [ ] [ ] [ ]
- -------------------------------------------- the Articles of Incorporation of
kforce.com, Inc. to change the
Date: company's name to Kforce Inc.
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Please date and sign exactly as your name(s) appear on your shares. If signing
for estates, trusts, partnerships, corporations or other entities, your title or
- -------------------------------------------- capacity should be stated. If shares are held jointly, each holder should sign.
Shareholder sign here
- --------------------------------------------
Co-owner sign here