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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SYKES ENTERPRISES, INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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[Red directional circle and halftone photos of men and women]
SYKES 1998 PROXY STATEMENT
REAL PEOPLE. REAL SOLUTIONS.
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(SYKES ENTERPRISES, INC. LOGO)
100 NORTH TAMPA STREET
SUITE 3900
TAMPA, FLORIDA 33602
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 30, 1998
---------------------
To the Shareholders of Sykes Enterprises, Incorporated:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of Sykes Enterprises, Incorporated (the "Company") will be held at the
Wyndham Harbour Island Hotel, 725 South Harbour Island Boulevard, Tampa,
Florida, on Thursday, April 30, 1998, at 10:00 a.m., Eastern Standard Time, for
the following purposes:
1. To elect three directors to hold office until the 2001 Annual
Meeting of Shareholders;
2. To amend the Company's Articles of Incorporation to expand the
indemnification provisions thereof to include all of the Company's officers
and directors, all of the officers and directors of all the Company's
domestic subsidiaries, and all persons rendering services to the Company's
foreign subsidiaries in capacities as officers and directors or in
equivalent, identical, or similar capacities;
3. To approve the adoption of the Company's 1997 Management Stock
Incentive Plan; and
4. To transact any other business as may properly come before the
Annual Meeting.
Only shareholders of record as of the close of business on March 2, 1998,
will be entitled to vote at the Annual Meeting or any adjournment or
postponement thereof. Information relating to the matters to be considered and
voted on at the Annual Meeting is set forth in the proxy statement accompanying
this Notice.
By Order of the Board of Directors,
/s/ Margery Bass
MARGERY BASS
Secretary
April 1, 1998
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE VOTE ON THE
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING BY COMPLETING THE ENCLOSED PROXY
AND MAILING IT PROMPTLY IN THE ENCLOSED ENVELOPE.
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(SYKES ENTERPRISES, INC. LOGO)
100 NORTH TAMPA STREET
SUITE 3900
TAMPA, FLORIDA 33602
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PROXY STATEMENT
FOR
1998 ANNUAL MEETING OF SHAREHOLDERS
---------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Sykes Enterprises, Incorporated
(the "Company") for the Annual Meeting of Shareholders (the "Annual Meeting") to
be held at the Wyndham Harbour Island Hotel, 725 South Harbour Island Boulevard,
Tampa, Florida, on Thursday, April 30, 1998, at 10:00 a.m., Eastern Standard
Time, or any adjournment thereof.
If the accompanying proxy form ("Proxy") is completed, signed, returned to
the Company, and not revoked, the shares represented thereby will be voted at
the Annual Meeting as directed by the shareholder. The giving of the Proxy does
not affect the right to vote in person should the shareholder be able to attend
the Annual Meeting. The shareholder may revoke the Proxy at any time prior to
the voting thereof.
The annual report to shareholders of the Company for the year ended
December 31, 1997, along with this Proxy Statement, are first being mailed on or
about April 1, 1998, to shareholders entitled to vote at the Annual Meeting.
SHAREHOLDERS ENTITLED TO VOTE
Only shareholders of record as of the close of business on March 2, 1998
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting.
At that date, there were 39,106,033 shares of common stock, $.01 par value per
share ("Common Stock"), outstanding and entitled to vote. Each outstanding share
of Common Stock is entitled to one vote on all matters submitted to a vote of
shareholders.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the inspector of elections appointed for the Annual Meeting, who will also
determine whether a quorum is present for the transaction of business. The
Company's Bylaws provide that a quorum is present if the holders of a majority
of the issued and outstanding shares of Common Stock entitled to vote at the
meeting are present in person or represented by proxy. Abstentions will be
counted as shares that are present and entitled to vote for purposes of
determining whether a quorum is present. Shares held by nominees for beneficial
owners will also be counted for purposes of determining whether a quorum is
present if the nominee has the discretion to vote on at least one of the matters
presented, even though the nominee may not exercise discretionary voting power
with respect to other matters and even though voting instructions have not been
received from the beneficial owner (a "broker non-
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vote"). Neither abstentions nor broker non-votes are counted in determining
whether a proposal has been approved.
Under Florida law, if a quorum exists, directors are elected by a plurality
of the votes cast by the shares entitled to vote in the election. The proposal
set forth herein to approve amending the Company's Articles of Incorporation to
expand the indemnification provisions thereof to include all of the Company's
officers and directors, all of the officers and directors of all the Company's
domestic subsidiaries, and all persons rendering services to the Company's
foreign subsidiaries in capacities as officers and directors or in equivalent,
identical, or similar capacities will be adopted if more than sixty-six and
two-thirds (66 2/3%) of the total votes present or represented and entitled to
vote at the Annual Meeting vote in favor of such proposal. The proposal set
forth herein to approve the adoption of the Company's 1997 Management Stock
Incentive Plan, will be adopted if a majority of the total votes present or
represented and entitled to vote at the Annual Meeting vote in favor of such
proposal.
Shareholders are requested to vote by completing the enclosed Proxy and
returning it signed and dated in the enclosed postage-paid envelope.
Shareholders are urged to indicate their votes in the spaces provided on the
Proxy. Proxies solicited by the Board of Directors of the Company will be voted
in accordance with the directions given therein. Where no instructions are
indicated, signed Proxies will be voted FOR each of the proposals listed in the
Notice of Annual Meeting of Shareholders which are set forth more completely
herein. Returning your completed Proxy will not prevent you from voting in
person at the Annual Meeting, should you be present and wish to do so.
Any shareholder giving a Proxy has the power to revoke it at any time
before it is exercised by, (i) filing with the Secretary of the Company written
notice thereof, (ii) submitting a duly executed Proxy bearing a later date, or
(iii) appearing at the Annual Meeting and giving the Secretary notice of his or
her intention to vote in person. Proxies solicited hereby may be exercised only
at the Annual Meeting and any adjournment thereof and will not be used for any
other meeting. Proxies solicited hereby will be returned to the Board of
Directors and will be tabulated by inspectors of election designated by the
Board of Directors who will not be employed by the Company or any of its
affiliates.
The cost of solicitation of Proxies by mail on behalf of the Board of
Directors will be borne by the Company. Proxies also may be solicited by
personal interview or by telephone, in addition to the use of the mails, by
directors, officers, and regular employees of the Company without additional
compensation therefor. The Company also has made arrangements with brokerage
firms, banks, nominees, and other fiduciaries to forward proxy solicitation
materials for shares of Common Stock held of record to the beneficial owners of
such shares. The Company will reimburse such record holders for their reasonable
out-of-pocket expenses.
PROPOSAL 1:
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THE FOLLOWING NOMINEES FOR ELECTION AS
DIRECTORS AND URGES EACH SHAREHOLDER TO VOTE "FOR" THE NOMINEES. PROXIES IN THE
ACCOMPANYING FORM WILL BE VOTED AT THE ANNUAL MEETING, UNLESS AUTHORITY TO DO SO
IS WITHHELD, IN FAVOR OF THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED BELOW.
The Company's Board of Directors is divided into three classes (designated
"CLASS I," "CLASS II," and "CLASS III"), as nearly equal as possible, with each
class serving three-year terms expiring at the third annual meeting of
shareholders after their elections. The term of the current CLASS II directors
expires at the 1998 Annual Meeting of Shareholders. Accordingly, three CLASS II
directors will be elected at the
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Annual Meeting to serve until their terms expire at the 2001 Annual Meeting of
Shareholders (in each case, until their respective successors are elected and
qualified). In the event any such nominee is unable to serve, the persons
designated as proxies will cast votes for such other person in their discretion
as a substitute nominee. The Board of Directors has no reason to believe that
the nominees named below will be unavailable, or if elected, will decline to
serve.
NOMINEES FOR DIRECTORS
CLASS II -- TERM EXPIRES AT THE 2001 ANNUAL MEETING
NAME AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ---- --- ------------------------------------------
H. Parks Helms............................ 62 H. Parks Helms has served as a director of the
Company since its inception in 1977 and is a member
of the Audit Committee. Mr. Helms is the Managing
Partner of the law firm of Helms, Cannon, Hamel &
Henderson in Charlotte, North Carolina. Mr. Helms
has held numerous political appointments and elected
positions, including as a member of the North
Carolina House of Representatives.
Adelaide A. (Alex) Sink................... 49 Adelaide A. (Alex) Sink was elected to the Company's
Board of Directors in June 1997 and is a member of
the Audit Committee. Ms. Sink is the President of
NationsBank Private Client Group nationwide. From
1993 until 1997, she was President of NationsBank
Florida. Ms. Sink serves on several community and
statewide volunteer boards in Florida.
Linda McClintock-Greco, M.D............... 43 Linda McClintock-Greco, M.D. is Chief Executive
Officer and Chief Medical Officer of Tampa General
HealthPlan, Inc. (HealthEase) and has spent the last
ten years in the health care industry as both a
private practitioner in Texas and a managed care
executive serving as the Regional Medical Director
with Humana Health Care Plan. Dr. McClintock-Greco
serves on the Board of Directors of the Florida
Association of Managed Care Organizations (FAMCO)
currently acting as Treasurer. Dr. McClintock-Greco
also serves on the board of several charitable
organizations.
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DIRECTORS WHOSE TERMS OF OFFICE CONTINUE
CLASS I -- TERM EXPIRES AT THE 1999 ANNUAL MEETING
NAME AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ---- --- ------------------------------------------
Gordon H. Loetz........................... 48 Gordon H. Loetz was elected to the Company's Board
of Directors in 1993 and was a member of the Audit
Committee until October 1997 when he resigned prior
to becoming an officer of the Company. He joined the
Company in November 1997 as Executive Vice President
and Chief Operating Officer. In 1982, Mr. Loetz
founded Comprehensive Financial Services, a
financial investment advisory company and he most
recently served as the President of CFS Insurance
Agency, Inc.
Ernest J. Milani.......................... 68 Ernest J. Milani was elected to the Board of
Directors of the Company in April 1996 and is a
member of the Compensation Committee and became a
member of the Stock Option Committee April 1, 1998.
From 1970 until 1996, Mr. Milani held various
positions with CDI Corporation, a publicly-held
provider of engineering and technical services, most
recently as President of CDI Corporation Northeast
and CDI Technical Services Ltd., both of which are
subsidiaries of CDI Corporation.
Iain A. Macdonald......................... 53 Iain A. Macdonald was elected to the Board of
Directors of the Company in March 1998, to fill the
unexpired term of David E. Garner. Prior to joining
the Company's board, Mr. Macdonald served as a
director of McQueen International Ltd. from 1996
until its acquisition by the Company. From 1984
until 1995, Mr. Macdonald was Chairman of
ComputerGroup plc, a supplier of personal computers,
networks, and related services. In 1989,
ComputerGroup was acquired by SHL Systemhouse, Inc.,
and then was subsequently acquired by MCI in 1996.
Prior thereto and until 1983, Mr. Macdonald was UK
Divisional Marketing Support Manager for IBM United
Kingdom, Ltd. Mr. Macdonald also serves on the Board
of Directors of Frederick's Dairies, Ltd.; Signs &
Labels, Ltd.; Lincoln Software, Ltd.; and Warthog
Software, Ltd.
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CLASS III -- TERM EXPIRES AT THE 2000 ANNUAL MEETING
NAME AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ---- --- ------------------------------------------
John H. Sykes............................. 61 John H. Sykes has been Chairman of the Board of
Directors, President, and Chief Executive Officer of
the Company since its inception in 1977. Previously,
Mr. Sykes was Senior Vice President of CDI
Corporation, a publicly-held technical services
firm.
Furman P. Bodenheimer, Jr................. 68 Furman P. Bodenheimer, Jr. was elected to the Board
of Directors of the Company in 1991 and is a member
of the Compensation and Stock Option Committees. Mr.
Bodenheimer has been President and Chief Executive
Officer of Zickgraf Enterprises, Inc. and Nantahala
Lumber in Franklin, North Carolina since 1991. Prior
thereto and until 1988, Mr. Bodenheimer was
President of First Citizens Bank and Vice Chairman
of First Citizens Mortgage Company and First Title
Insurance Company. From 1988 to 1991, Mr.
Bodenheimer was a consultant to financial
institutions.
R. James Stroker.......................... 51 R. James Stroker has served as a director of the
Company since 1990 and is a member of the
Compensation and Stock Option Committees. Mr.
Stroker is Judge of the Ninth Judicial Circuit of
the State of Florida and has over 21 years of
judicial experience. Mr. Stroker also serves on the
Board of Directors of the University of Orlando Law
School. Mr. Stroker is the son-in-law of Mr. Sykes.
PROPOSAL 2:
APPROVAL OF THE AMENDMENT TO THE COMPANY'S
ARTICLES OF INCORPORATION
THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF THE AMENDMENT TO THE
COMPANY'S ARTICLES OF INCORPORATION TO EXPAND THE INDEMNIFICATION PROVISIONS
THEREOF TO INCLUDE ALL OF THE OFFICERS AND DIRECTORS OF THE COMPANY AND EACH OF
ITS DOMESTIC SUBSIDIARIES AND ALL PERSONS RENDERING SERVICES TO THE COMPANY'S
FOREIGN SUBSIDIARIES IN CAPACITIES AS OFFICERS AND DIRECTORS OR IN EQUIVALENT,
IDENTICAL, OR SIMILAR CAPACITIES AND URGES EACH SHAREHOLDER TO VOTE "FOR" THE
AMENDMENT. EXECUTED AND UNMARKED PROXIES IN THE ACCOMPANYING FORM WILL BE VOTED
AT THE ANNUAL MEETING IN FAVOR OF THE APPROVAL OF THE AMENDMENT.
At the July 24, 1997 Board of Directors meeting, the Board broadened the
indemnification provisions in the Company's Bylaws to include all of the
officers and directors of the Company and its domestic subsidiaries and all
persons rendering services to the Company's foreign subsidiaries in capacities
as officers and directors or in equivalent, identical, or similar capacities.
The amendment to the Bylaws, however, is not effective unless the amendment to
expand the class of persons entitled to indemnification in the Articles of
Incorporation is approved by the shareholders. The amendment is attached to this
Proxy Statement as Exhibit A.
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The Board has concluded that it is in the best interest of the Company to
expand the scope of officers and directors entitled to be indemnified by the
Company. Without the amendment, the indemnification provisions in the Company's
Bylaws and Articles of Incorporation provide for indemnification of only the
Company's directors and executive officers. The Board believes that expanding
the scope of officers and directors entitled to be indemnified to include all
officers and directors of the Company and its domestic and foreign subsidiaries
assists the Company in attracting, motivating, and retaining such persons. The
amendment would not expand the circumstances in which officers and directors are
indemnified but only would expand the class of persons entitled to
indemnification. If the amendment is approved, the expanded class of officers
and directors would be indemnified for events preceding the adoption of the
amendment. However, the Company is not aware of any existing or anticipated
legal proceedings or other specific matters with respect to which the expanded
class of officers and directors would be indemnified as a result of the adoption
of the amendment.
For the reasons described above, the Board has determined that the
amendment to the Company's Articles of Incorporation is advisable and voted to
recommend it to the Company's shareholders for approval. If the amendment is
approved by the Company's shareholders, the Company will file Articles of
Amendment to the Company's Articles of Incorporation to that effect with the
Florida Department of State. Upon acceptance of that filing, the amendment would
become effective.
PROPOSAL 3:
APPROVAL OF THE ADOPTION OF THE
COMPANY'S 1997 MANAGEMENT STOCK INCENTIVE PLAN
THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF THE COMPANY'S 1997
MANAGEMENT STOCK INCENTIVE PLAN (THE "1997 PLAN") AND URGES EACH SHAREHOLDER TO
VOTE "FOR" THE APPROVAL. EXECUTED AND UNMARKED PROXIES IN THE ACCOMPANYING FORM
WILL BE VOTED AT THE ANNUAL MEETING IN FAVOR OF APPROVING THE 1997 PLAN.
GENERAL
At the October 15, 1997 Board of Directors meeting, the Board of Directors
adopted the 1997 Plan, subject to shareholder approval. The purpose of the 1997
Plan is to reward key officers and managers of the Company for superior service,
to induce such persons to remain in the employ of the Company, to provide
incentives to enhance such persons' performance, and to encourage such persons
to secure or increase their stock ownership of the Company. The Company expects
to continue its practice of making stock options an important part of the total
compensation program for the Company's officers and managers. The 1997 Plan,
however, is designed to more closely link management pay to the Company's
performance and thus shareholder interests.
PERFORMANCE-BASED ACCELERATED VESTING
The Plan is a hybrid of a performance-based option plan and a traditional
stock option plan such as the Company's 1996 Employee Stock Option Plan. Options
to be granted under the 1997 Plan will vest when certain performance objectives
are satisfied. These performance objectives may include earnings growth, return
on equity, the requirement that certain stock price levels be reached, or other
goals. Unlike a true performance-based plan, however, options to be granted
under the 1997 Plan eventually will vest after a longer time frame (within the
ten-year option term) if the performance objectives have not previously been
satisfied. A fixed vesting date before the end of the ten-year option term is a
condition to maintaining conventional accounting treatment for these options.
Without a fixed vesting date, such as with true performance-based
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plans, the Company would have to recognize a charge to earnings equal to the
gain in share price over the option exercise price until the performance goal is
satisfied multiplied by the number of shares under those options. This
accounting treatment potentially could result in adverse fluctuations in the
Company's earnings.
Accordingly, options to be granted under the 1997 Plan will link the
ability to exercise the option to the achievement of business targets for the
Company in the form of performance objectives, thus focusing management on
business performance that creates shareholder value. At the same time, these
options will avoid the earnings charge associated with true performance-based
plans.
ADMINISTRATION OF THE 1997 PLAN
The 1997 Plan will be administered by the Compensation Committee of the
Board of Directors, which is composed of two or more "non-employee directors" in
accordance with the requirements of Rule 16b-3 promulgated pursuant to Section
16(b) of the Securities Act of 1934. The Compensation Committee will be
responsible for establishing the performance objectives as well as the other
terms and conditions of option grants under the 1997 Plan. The Compensation
Committee has not made a determination with respect to any option grants under
the 1997 Plan.
SHARES SUBJECT TO OPTIONS
The 1997 Plan permits options to be granted to purchase up to 4,000,000
shares of Common Stock. To the extent that options granted under the 1997 Plan
expire or terminate without having been exercised in full, the Common Stock
subject thereto will become available for further options under the 1997 Plan.
Provision is made under the 1997 Plan for appropriate adjustment in the number
of shares of Common Stock covered by the 1997 Plan and by each option granted
thereunder and the related option price, in the event of any change in the
Common Stock by reason of a stock dividend, merger, reorganization, stock split,
recapitalization, combination, exchange of shares, or otherwise.
ELIGIBLE EMPLOYEES
The Committee may grant options under the 1997 Plan to officers and
managers of the Company or its subsidiaries. Approximately 300 officers and
managers of the Company will be eligible to participate in the 1997 Plan.
STOCK OPTIONS
The Compensation Committee will establish the terms and conditions of the
options granted under the 1997 Plan subject to certain limitations specified in
the 1997 Plan. Only non-qualified stock options may be granted under the 1997
Plan, and incentive stock options may not be granted. The exercise price of any
option granted must be no less than the fair market value of the Common Stock on
the date that the option is granted. For purposes of the 1997 Plan, the "fair
market value" of the Common Stock is defined as the average of the highest
reported bid and lowest reported asked prices on the NASDAQ National Market.
The term of each option granted under the 1997 Plan shall be as determined
by the Compensation Committee, provided that the term of any option may not
exceed ten years. In addition, the 1997 Plan permits the Compensation Committee
to establish the performance objectives with respect to option grants that will
cause the vesting period to accelerate. These performance objectives include
criteria based on pre-tax earnings, operating earnings, after-tax earnings,
return on investment, earnings value added, earnings per
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share, revenues, cash flow, return on assets, return on capital, return on
equity, return on sales, operating margin, or total shareholder return or stock
price appreciation.
Payment of the option price may be made in cash or by delivery of shares of
Common Stock equivalent in fair market value to the option price. Upon exercise
of any option, the optionee must pay in full the option price for the shares of
Common Stock being purchased.
Options granted under the 1997 Plan are not transferable other than by will
or by the laws of descent and distribution. During the lifetime of an optionee,
his or her option will be exercisable only by him or her and only while
continuously employed by the Company or one of its subsidiaries; or, if after
termination of employment, either within (i) 30 days of a termination other than
for cause, or by reason of the optionee's death, retirement, or permanent
disability; or (ii) three months after termination of employment by reason of
the optionee's death, retirement, or permanent disability, but only if and to
the extent that the option was exercisable on the last day of such employment.
If an optionee is terminated for cause, all rights to any options under the 1997
Plan will terminate immediately.
FEDERAL INCOME TAX CONSEQUENCES
No taxable income is realized by an optionee and no tax deduction is
available to the Company upon the grant of a non-qualified stock option
(incentive stock options cannot be granted under the 1997 Plan). The exercise of
a non-qualified option will result in the recognition of ordinary income by the
optionee at the time of exercise in an amount equal to the excess of the fair
market value of the Common Stock acquired at such time over the exercise price
for the option. The Company will generally be entitled to a deduction in the
same amount and at the same time as ordinary income is recognized by the
optionee. A subsequent disposition of the Common Stock by the optionee will
typically give rise to capital gain or loss to the extent the amount realized
from the sale differs from the optionee's tax basis, which is usually the fair
market value of the Common Stock acquired on the date of exercise. This capital
gain or loss will be a long-term gain or loss if the Common Stock sold had been
held for more than one year after the date of exercise.
BOARD OF DIRECTORS
GENERAL
The Board of Directors held seven meetings during the year ended December
31, 1997. The Board of Directors also took certain actions by unanimous written
consent in lieu of a meeting, as permitted by Florida law. During 1997, the
Audit Committee met two times, the Compensation Committee met four times, and
the Stock Option Committee met one time. All directors attended all meetings of
the Board of Directors and all committees on which they served during the year
ended December 31, 1997, except as follows: Mr. Loetz did not attend one Board
of Directors meeting; Ms. Sink did not attend one Board of Directors meeting
since joining the Board of Directors; and Mr. Milani did not attend one
Compensation Committee meeting.
DIRECTOR COMPENSATION
Directors who are executive officers of the Company receive no compensation
as such for service as members of either the Board of Directors or any
committees of the Board. Directors who are not executive officers of the Company
receive (subsequent to the Annual Meeting) an annual fee of $5,000, payable in
cash or shares of Common Stock based on the fair market value of the Common
Stock on the date of payment at the election of each director, plus $1,000 per
Board and committee meeting attended. The outside directors
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also receive options to purchase Common Stock under the Company's 1996
Non-Employee Director Stock Option Plan.
Mr. Milani and the Company entered into a one-year consulting agreement on
April 1, 1996 providing for an annual fee of $100,000. This one-year consulting
agreement was renewed on the same terms effective April 1, 1997. The agreement
requires Mr. Milani to provide certain technical consulting services to the
Company as requested by the Company. The agreement terminated March 30, 1998,
and was not renewed.
COMMITTEES OF THE BOARD
The Board of Directors has established committees whose responsibilities
are summarized as follows:
Audit Committee. The Audit Committee is comprised of Mr. Helms and
Ms. Sink and is responsible for reviewing the independence, qualifications,
and activities of the Company's independent certified accountants and the
Company's financial policies, control procedures, and accounting staff. The
Audit Committee recommends to the Board the appointment of the independent
certified public accountants and reviews and approves the Company's
financial statements. The Audit Committee is also responsible for the
review of transactions between the Company and any Company officer,
director, or entity in which a Company officer or director has a material
interest. Mr. Loetz resigned from the Audit Committee in October 1997 prior
to commencing employment with the Company.
Compensation Committee. The Compensation Committee is comprised of
Messrs. Bodenheimer, Milani, and Stroker and is responsible for
establishing the compensation of the Company's directors, officers, and
other managerial personnel, including salaries, bonuses, termination
arrangements, and other executive officer benefits.
Stock Option Committee. The Stock Option Committee is comprised of
Messrs. Bodenheimer, Milani, and Stroker and is responsible for granting
stock options under the 1996 Plan. Mr. Milani was not a member of the Stock
Option Committee prior to the termination of his consulting agreement with
the Company and joined the committee as of April 1, 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee was established in connection with the
Company's initial public offering in April 1996. The members of the Compensation
Committee are Messrs. Bodenheimer, Milani, and Stroker. Except for Mr. Sykes, no
officer or employee of the Company has participated in deliberations of the
Board of Directors concerning executive officer compensation.
Mr. Milani and the Company entered into a one-year consulting agreement on
April 1, 1996, providing for an annual fee of $100,000. This one-year consulting
agreement was renewed on the same terms effective April 1, 1997. The agreement
requires Mr. Milani to provide certain technical consulting services to the
Company as requested by the Company. The agreement terminated March 30, 1998,
and was not renewed.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
During the year ended December 31, 1997, the executive officers and
directors of the Company filed with the Securities and Exchange Commission (the
"Commission") on a timely basis all required reports relating to transactions
involving equity securities of the Company beneficially owned by them. The
Company has relied solely on the written representation of its executive
officers and directors and copies of the reports they have filed with the
Commission in providing this information.
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PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of the Record Date with respect to, (i) each of the
Company's directors, (ii) each of the Company's executive officers named in the
Summary Compensation Table below, (iii) all directors and executive officers of
the Company as a group, and (iv) each person known by the Company to own
beneficially more than 5% of the Common Stock. Except as otherwise indicated,
each of the shareholders listed below has sole voting and investment power over
the shares beneficially owned.
BENEFICIALLY OWNED
--------------------
NAME SHARES PERCENT
- ---- ---------- -------
John H. Sykes(1)............................................ 18,599,149 47.6%
Scott J. Bendert(2)......................................... 48,150 *
John L. Crites, Jr.(3)...................................... 22,500 *
John D. Bray(4)............................................. 3,775 *
H. Parks Helms(5)........................................... 4,723 *
Gordon H. Loetz(6).......................................... 7,723 *
Ernest J. Milani(6)......................................... 9,073 *
R. James Stroker(7)......................................... 4,448 *
Furman P. Bodenheimer, Jr.(7)............................... 10,500 *
Adelaide A. Sink(8)......................................... 1,500 *
Iain A. Macdonald(8)........................................ -- --
John D. Gannett, Jr.(9)..................................... 69,946 *
David E. Garner(10)......................................... -- --
Linda McClintock-Greco...................................... -- --
All directors and executive officers as a group (14)
persons................................................... 18,747,487 48.0%
- ---------------
* Less than 1.0%
(1) Includes the following shares over which Mr. Sykes retains voting and
investment power: (i) 18,211,392 shares owned by Mr. Sykes through Jopar
Investments Limited Partnership, a North Carolina limited partnership in
which Mr. Sykes is the sole limited partner and the sole shareholder of the
limited partnership's sole general partner; and (ii) 387,757 shares owned
by various trusts for the benefit of Mr. Sykes' children. Excludes 7,950
shares owned by Mr. Sykes' wife, as to which Mr. Sykes disclaims beneficial
ownership. Mr. Sykes' business address is 100 North Tampa Street, Suite
3900, Tampa, Florida 33602.
(2) Includes 45,000 shares of Sykes Common Stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
(3) Includes 22,500 shares of Sykes Common Stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Excludes 22,500 shares of Sykes Common Stock issuable upon the exercise of
non-exercisable stock options.
(4) Includes 3,750 shares of Sykes Common Stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Excludes 3,750 shares of Sykes Common Stock issuable upon the exercise of
non-exercisable stock options.
(5) Excludes 7,500 shares of Sykes Common Stock issuable upon the exercise of
non-exercisable stock options.
(6) Includes 7,500 shares of Sykes Common Stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Excludes 7,500 shares of Sykes Common Stock issuable upon the exercise of
non-exercisable stock options.
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(7) Includes 3,750 shares of Sykes Common Stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Excludes 11,250 shares of Sykes Common Stock issuable upon the exercise of
non-exercisable stock options.
(8) Excludes 5,000 shares of Sykes Common Stock issuable upon the exercise of
non-exercisable stock options.
(9) Includes 69,946 shares of Sykes Common Stock issuable upon the exercise of
stock options that are exercisable within 60 days of the Record Date.
Excludes 69,948 shares of Sykes Common Stock issuable upon the exercise of
non-exercisable stock options.
(10) Excludes 762,000 shares of Sykes Common Stock issuable upon the exercise of
non-exercisable stock options.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation
paid to or earned by the Company's President and Chief Executive Officer and
each of the Company's five other most highly compensated executive officers who
earned more than $100,000 for the years ended December 31, 1997, 1996, and 1995.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL ------------
COMPENSATION OTHER SECURITIES
------------------- ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2) OPTIONS COMPENSATION(2)
- --------------------------- ---- -------- -------- --------------- ------------ ---------------
John H. Sykes.............. 1997 $300,000 $ -- $ -- -- $ 27,495
President and Chief 1996 300,000 -- -- -- 22,682
Executive Officer 1995 165,000 368,578 -- -- 24,573
Scott J. Bendert........... 1997 $123,846 $ 43,750 $ -- -- $ 6,435
Senior Vice President -- 1996 107,692 50,000 -- 45,000 3,235
Finance, Treasurer, and 1995 89,716 20,000 -- -- 4,257
Chief Financial Officer
John D. Bray............... 1997 $108,942 $ 16,000 $ -- -- $ 3,099
Senior Vice President -- 1996 80,279 20,625 -- 7,500 367
Human Resources and
Administration(3)
David E. Garner............ 1997 $150,000 $ -- $ -- -- $ 10,282
Senior Vice President(4) 1996 150,000 86,600 -- -- 8,488
1995 150,000 79,166 -- 762,000 9,321
John D. Gannett, Jr........ 1997 $150,000 $ -- $ -- -- $ 3,435
Senior Vice President(5) 1996 150,000 40,000 -- 139,894 7,165
1995 69,806 25,000 -- -- 175,000
John L. Crites, Jr......... 1997 $120,000 $ -- $ -- -- $ 3,062
Vice President and
General Counsel(6) 1996 88,134 -- -- 45,000 719
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(1) Does not include the value of the perquisites provided to certain of the
named executive officers which in the aggregate did not exceed the lesser of
$50,000 or 10% of such officer's salary and bonus.
(2) Represents contributions to the Sykes Enterprises, Incorporated Employees'
Savings Plan and Trust and excess group term life insurance.
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(3) The information presented for Mr. Bray includes his salary and all other
compensation since joining the Company during 1996.
(4) Mr. Garner is no longer employed by the Company and currently is a director
and an officer of the Company's joint venture, Sykes HealthPlan Services,
Inc.
(5) Mr. Gannett rejoined the Company in July 1995. "All Other Compensation" for
1995 consists solely of payments for consulting services and pursuant to
severance agreements entered into with Mr. Garnnett in 1991. Mr. Gannett is
no longer employed by the Company and currently is an officer of the
Company's joint venture, Sykes HealthPlan Services, Inc.
(6) The information presented for Mr. Crites includes his salary and all other
compensation since joining the Company during 1996.
The following table sets forth information with respect to grants of stock
options during 1997 to the executive officers named in the Summary Compensation
Table.
OPTIONS GRANTED LAST YEAR
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
INDIVIDUAL STOCK PRICE APPRECIATION FOR
GRANTS OPTION TERM
--------------------------------------------------------------------- -----------------------------
PERCENTAGE OF
NUMBER OF TOTAL
SECURITIES OPTIONS MARKET PRICE
UNDERLYING GRANTED TO EXERCISE OR OF UNDERLYING
OPTIONS EMPLOYEES BASE PRICE SECURITY ON EXPIRATION
NAME GRANTED(#) IN 1997 ($/SHARE) DATE OF GRANT DATE 0%($) 5%($) 10%($)
- ---- ---------- ------------- ----------- ------------- ---------- ------- ------- -------
John H. Sykes........ -- -- -- -- -- -- -- --
Scott J. Bendert..... -- -- -- -- -- -- -- --
John D. Bray......... -- -- -- -- -- -- -- --
David E. Garner...... -- -- -- -- -- -- -- --
John D. Gannett,
Jr................. -- -- -- -- -- -- -- --
John L. Crites,
Jr................. -- -- -- -- -- -- -- --
The following table sets forth information with respect to the aggregate
stock option exercises by the executive officers named in the Summary
Compensation Table during 1997 and the year-end value of unexercised options
held by such executive officers.
AGGREGATE OPTION EXERCISES
LAST YEAR AND YEAR-END OPTION VALUES
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT YEAR END(#) AT YEAR END(1)
ACQUIRED ON ------------------------------ ---------------------------
NAME EXERCISE(#) VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------------- -------------- ------------- ----------- -------------
John H. Sykes........... -- $ -- -- -- $ -- $ --
Scott J. Bendert........ 15,000 484,125 -- 45,000 -- 877,500
John D. Bray............ 2,500 80,750 -- 7,500 -- 146,250
David E. Garner......... -- -- -- 762,000 -- 14,859,000
John D. Gannett, Jr..... 46,631 1,505,005 -- 139,894 -- 2,727,933
John L. Crites, Jr...... 15,000 484,125 -- 45,000 -- 877,500
- ---------------
(1) Based upon the closing sale price of $19.50 per share of common stock on
December 31, 1997, as reported in the Nasdaq National Market.
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EMPLOYMENT AGREEMENTS
John H. Sykes. On January 1, 1996, the Company entered into an employment
agreement with John H. Sykes, the Company's Chairman of the Board, President,
and Chief Executive Officer. The employment agreement provides for an initial
term of five years with an annual base salary of $300,000. Thereafter, the
agreement automatically renews for successive two-year terms, unless terminated
by either party, with the base salary increasing by at least 30% subsequent to
the initial term and at least 15% for any subsequent automatic renewal term. Mr.
Sykes is also entitled to a performance bonus up to 100% of his base salary
based on the Company's achievement of specified levels of income before income
taxes as determined by the Compensation Committee and to participate in such
bonus programs and other benefit plans as are generally made available to other
executive officers of the Company.
If the agreement is terminated by the Company for any reason other than Mr.
Sykes' death or disability or other than cause (as defined therein), the Company
shall pay Mr. Sykes a one-time severance payment equal to two times the total of
the full amount of Mr. Sykes' annual base salary in effect at the time of such
termination plus Mr. Sykes' average annual bonus and other compensation for the
prior three years (or such shorter period if the agreement is in effect for less
than three years). During the two-year period following termination of
employment, Mr. Sykes shall not, in any area in which the Company's business is
then conducted, directly or indirectly compete with the Company.
The agreement also provides for a one-time severance payment, in lieu of
any other severance payment, equal to three times the total of the full amount
of Mr. Sykes' annual base salary then in effect plus Mr. Sykes' average annual
bonus and other compensation for the prior five years (or such shorter period if
the employment agreement is in effect for less than five years) upon a "change
of control" of the Company if, (i) Mr. Sykes is terminated from employment prior
to the end of the term of the agreement (except if terminated for cause), or
(ii) Mr. Sykes elects to terminate his employment with the Company under certain
circumstances. A "change of control" shall be deemed to have occurred if, (i)
any person (other than Mr. Sykes) beneficially owns 20% or more of the
outstanding shares of voting capital stock; (ii) the sale or transfer of greater
than 50% of the book value of the Company's assets; (iii) the merger,
consolidation, share exchange, or reorganization of the Company as a result of
which the holders of all of the shares of capital stock of the Company as a
group would receive less than 50% of the voting power of the capital stock of
the surviving corporation; (iv) the adoption of a plan of liquidation or the
approval of the dissolution of the Company; (v) the commencement of a tender
offer which, if successful, would result in a change of control; or (vi) a
determination by the Board of Directors, in view of then current circumstances
or impending events, that a change of control has occurred or is imminent.
Gordon H. Loetz. On November 10, 1997, the Company entered into a one-year
employment agreement with Gordon H. Loetz, providing for an annual base salary
of $400,000. Upon termination, the agreement provides for a one-year non-compete
period in return for the Company paying, under certain circumstances, biweekly
amounts totaling up to $400,000 for such one-year period. Mr. Loetz is
prohibited from directly or indirectly competing with the Company during such
one-year period in any area in which the Company's business is conducted. Mr.
Loetz is also entitled to a performance bonus based upon his achievement of
specified goals and to participate in such bonus programs and other benefit
plans as are generally made available to other executive officers of the
Company.
Scott J. Bendert. On March 1, 1996, the Company entered into a two-year
employment agreement with Scott J. Bendert, providing for an annual base salary
of $110,000. The agreement automatically renews for successive one-year terms,
unless terminated by either party, and provides that if the agreement is
terminated
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for any reason other than death, disability, or cause (as defined therein), the
Company shall pay Mr. Bendert a severance payment equal to $110,000, payable in
accordance with the Company's standard payment practices, in consideration of
Mr. Bendert's agreement to refrain from competing directly or indirectly with
the Company for a period of one year in any area in which the Company's business
is then conducted. The agreement provides that if it is terminated by the
Company for cause or by Mr. Bendert, during a period of one year following
termination of employment, Mr. Bendert will not, in any area in which the
Company's business is then conducted, directly or indirectly compete with the
Company, and the Company shall not be required to pay the severance payment. Mr.
Bendert also is entitled to a performance bonus up to 35% of his base salary
based upon the Company's achievement of specified levels of income before income
taxes and upon his achievement of specified goals as determined by the
Compensation Committee, and to participate in such bonus programs and other
benefit plans as are generally made available to other executive officers of the
Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION
Under rules of the Commission, the Company is required to provide certain
information concerning compensation provided to the Company's chief executive
officer and its executive officers. The disclosure requirements for the
executive officers include the use of tables and a report of the Committee
responsible for compensation decisions for the named executive officers
explaining the rationale and considerations that led to those compensation
decisions. Therefore, the Compensation Committee of the Board of Directors has
prepared the following report for inclusion in this Proxy Statement.
COMPENSATION COMMITTEE ROLE
The Compensation Committee of the Board of Directors and the Stock Option
Committee are responsible for separate aspects of the Company's compensation
program for its executive officers, including the named executive officers. The
Compensation Committee is responsible for making recommendations to the Board of
Directors concerning the salaries of executive officers. The Compensation
Committee is also responsible for overseeing other forms of cash compensation
and benefits to other senior officers. The Compensation Committee's
responsibilities include reviewing salaries, benefits and other compensation of
senior officers, and making recommendations to the full Board of Directors with
respect to these matters. The Stock Option Committee is responsible for making
stock option grants under the Company's stock option plans to executive officers
of the Company.
COMPENSATION PHILOSOPHY
The Company's compensation is designed to maintain executive compensation
programs and policies that enable the Company to attract and retain the services
of highly qualified executives. In addition to base salaries, executive
compensation programs and policies consisting of discretionary cash bonuses and
periodic grants of stock options are designed to reward and provide incentives
for individual contributions as well as overall Company performance.
The Compensation Committee monitors the operation of the Company's
executive compensation policies. In 1996, the Company implemented the
recommendations of independent compensation consultants that were retained by
the Company to assess the effectiveness of the Company's executive compensation
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programs by comparing the Company's compensation programs to various other
companies with similar growth characteristics to those of the Company. Key
elements of the Company's compensation program consists of base salary,
discretionary annual cash bonuses, and periodic grants of stock options. The
Company's policies with respect to these elements, including the basis for the
compensation awarded the Company's chief executive officer, are discussed below.
While the elements of compensation described below are considered separately,
the Compensation Committee takes into account the full compensation package
offered by the Company to the individual, including health care and other
insurance benefits and contributions made by the Company under the Company's
Split Dollar Plan. See "Split Dollar Plan."
Base Salaries. The Company has established competitive annual base
salaries for all executive officers, including the named executive officers. The
annual base salaries for each of the Company's executive officers, including the
Company's chief executive officer, reflect both the recommendations of the
Company's compensation consultants and the subjective judgment of the
Compensation Committee based on the consideration of the executive officer's
position with the Company, the executive officer's tenure, the Company's needs,
and the executive officer's individual performance, achievements, and
contributions to the growth of the Company.
Mr. Sykes annual base salary as the Company's chief executive officer is
currently $300,000. The Compensation Committee believes that this annual base
salary is below what it should be and is not consistent with the salary range
established for this position based on the Compensation Committee's discussions
with outside consultants, the factors noted above, and Mr. Sykes' prior
experience and managerial expertise, his knowledge of the Company's operations,
and the industry in which it operates. The Compensation Committee will continue
to review the total annual compensation package which Mr. Sykes receives.
Annual Bonus. The Company's executive officers are eligible for an annual
cash bonus under the Company's Bonus Program. The Bonus Program provides for the
discretionary payment of annual incentive awards to key employees, including
executive officers of the Company, pursuant to a formula related to the
Company's operating goals and personal performance goals. Payments under the
Bonus Program are discretionary and are subject to certain limitations.
Stock Options. Under the Plans, stock options may be granted to key
employees, including executive officers of the Company. The Plans are
administered by the Stock Option Committee in accordance with the requirements
of Rule 16b-3. [Rule 16b-3 generally requires transactions between the Company
and its officers and directors to be approved by a committee of outside
directors.]
The principal factors considered in determining the granting of stock
options to executive officers of the Company were the executive officer's tenure
with the Company, his or her total cash compensation for the prior year, the
executive officer's acceptance of additional responsibilities and his or her
contributions toward the Company's attainment of strategic goals. All stock
options granted to executive officers of the Company under the Plans were made
at fair market value on the date of grant (as calculated under the 1996 Plan)
and were not exercisable for a vesting period of one to three years following
the date of grant.
During the year ended December 31, 1997, no options to purchase shares of
Common Stock under the Plans were granted to Mr. Sykes.
SECTION 162(M) LIMITATIONS
Under Section 162(m) of the Internal Revenue Code, a tax deduction by
corporate taxpayers, such as the Company, is limited with respect to the
compensation of certain executive officers, unless such compensation
15
19
is based upon performance objectives meeting certain regulatory criteria or is
otherwise excluded from the limitation. Based upon the Compensation Committee's
commitment to link compensation with performance as described in this report,
the Compensation Committee currently intends to qualify compensation paid to the
Company's executive officers for deductibility by the Company under Section
162(m).
COMPENSATION COMMITTEE
FURMAN P. BODENHEIMER
ERNEST J. MILANI
R. JAMES STROKER
February 28, 1998
The report of the Compensation Committee shall not be deemed incorporated
by reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934 (together, the "Acts"), except to the extent
that the Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.
16
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STOCK PRICE PERFORMANCE GRAPH
The following graph presents a comparison of the cumulative total
shareholder return on the Common Stock with the cumulative total return on the
Nasdaq Stock Market (U.S.) Index and the Nasdaq Computer and Data Processing
Index since the Company's initial public offering on April 29, 1996. This graph
assumes that $100 was invested on April 29, 1996 in the Company's common stock,
the Nasdaq Stock Market (U.S.) Index, and the Nasdaq Computer and Data
Processing Index.
Nasdaq Stock Nasdaq Computer
Measurement Period Sykes Enterprises, Market (U.S.) and Data
(Fiscal Year Covered) Inc. Index Processing Index
4/29/96 $100.00 $100.00 $100.00
12/31/96 $312.50 $109.00 $106.00
12/31/97 $243.75 $133.22 $129.69
There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the graph
above. The Company does not make or endorse any predictions as to the future
stock performance.
The stock price performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Acts, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under the Acts.
17
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INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Coopers & Lybrand LLP as the Company's
independent auditors for 1998 A representative of Coopers & Lybrand LLP will be
present at the Annual Meeting. Such representative will be available to respond
to appropriate questions and may make a statement if he so desires.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals which shareholders intend to present at the 1999 Annual Meeting
of Shareholders must be received by the Company no later than December 1, 1998,
to be eligible for inclusion in the proxy material for that meeting.
OTHER MATTERS
Management knows of no matter to be brought before the Annual Meeting which
is not referred to in the Notice of Annual Meeting. If any other matters
properly come before the Annual Meeting, it is intended that the shares
represented by Proxy will be voted with respect thereto in accordance with the
judgment of the persons voting them.
By Order of the Board of Directors,
/s/ Margery Bass
MARGERY BASS
Secretary
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EXHIBIT A
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION THE COMPANY'S ARTICLES
OF INCORPORATION TO EXPAND THE INDEMNIFICATION PROVISIONS THEREOF TO INCLUDE ALL
OF THE COMPANY'S OFFICERS AND DIRECTORS, ALL OF THE OFFICERS AND DIRECTORS OF
ALL THE COMPANY'S DOMESTIC SUBSIDIARIES, AND ALL PERSONS RENDERING SERVICES TO
THE COMPANY'S FOREIGN SUBSIDIARIES IN CAPACITIES AS OFFICERS AND DIRECTORS OR IN
EQUIVALENT, IDENTICAL, OR SIMILAR CAPACITIES.
ARTICLE 6
INDEMNIFICATION
6.1 Provision of Indemnification. The Corporation shall, to the fullest
extent permitted or required by the FBCA, including any amendments thereto (but
in the case of any such amendment, only to the extent such amendment permits or
requires the Corporation to provide broader indemnification rights than to such
amendment), indemnify all of the Corporation's officers and directors, all of
the officers and directors of all of the Corporation's domestic subsidiaries,
and all persons rendering services to the Corporation's foreign subsidiaries in
capacities as officers and directors or in equivalent, identical, or similar
capacities (hereinafter collectively the "Officers" and "Directors" of the
Corporation), against any and all liabilities and advance any and all reasonable
Expenses incurred thereby in any proceeding to which any such Director or
Officer is a Party or in which such Director or Officer is deposed or called to
testify as a witness because he or she is or was a Director or Officer of the
Corporation or any of the Corporation's domestic or foreign subsidiaries. The
rights to indemnification granted hereunder shall not be deemed exclusive of any
other rights to indemnification against Liabilities or the advancement of
Expenses which a Director or Officer may be entitled under any written
agreement, Board of Director's resolution, vote of shareholders, the FBCA, or
otherwise. The Corporation may, but shall not be required to, supplement the
foregoing rights to indemnification against Liabilities and advancement of
Expenses by the purchase of insurance on behalf of any one or more of its
Directors or Officers, whether or not the Company would be obligated to
indemnify or advance expenses to such Director or Officer under this Article.
For purposes of this Article, the term "Directors" includes former directors of
the Corporation or any of the Corporation's domestic or foreign subsidiaries and
any director who is or was serving at the request of the Corporation or any of
the Corporation's domestic or foreign subsidiaries as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise, including without limitation, any employee benefit plan (other
than in the capacity as an agent separately retained and compensated for the
provisions of goods or services to the enterprise, including without limitation,
attorneys at law, accountants, and financial consultants). The term "Officers"
includes all of those individuals who are or were at any time officers of the
Corporation or any of the Corporation's domestic or foreign subsidiaries and not
merely those individuals who are or were at any time "executive officers" of the
Corporation or any of the corporation's domestic or foreign subsidiaries as
defined in Securities and Exchange Commission Rule 3b-7 promulgated under the
Securities Exchange Act of 1934, as amended. All of the capitalized terms used
in this Article 6 and not otherwise defined herein have the meaning set forth in
Section 607.0850 of the FBCA. The provisions of this Article 6 are intended
solely for the benefit of the indemnified parties described herein, their heirs
and personal representatives, and shall not create any rights in favor of third
parties. No amendment to or repeal of this Article 6 shall diminish the rights
of indemnification provided for herein prior to such amendment or repeal.
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[corporate logo]
24
SYKES ENTERPRISES, INCORPORATED
1997 MANAGEMENT STOCK INCENTIVE PLAN
1. ESTABLISHMENT. SYKES ENTERPRISES, INCORPORATED (the
"Company"), hereby establishes a stock incentive plan for its officers and
managers, as described herein, which shall be known as "SYKES ENTERPRISES,
INCORPORATED 1997 MANAGEMENT STOCK INCENTIVE PLAN" (the "Plan"). It is intended
that performance-accelerated non-qualified stock options may be granted under
the Plan.
2. PURPOSE. The purpose of the Plan is to reward certain officers
and certain managers for superior service to the Company, or any of its
subsidiaries, to induce such persons to remain in the employ of the Company, to
provide incentives to enhance such persons' performance, and to encourage such
persons to secure or increase, on reasonable terms, their stock ownership in the
Company. The Board of Directors of the Company (the "Board") believes that the
Plan will promote continuity of management, increased incentive and personal
interest in the welfare of the Company by those who are primarily responsible
for shaping and carrying out the long-range plans of the Company and secure its
continued growth and financial success.
3. DEFINITIONS.
3.1. "Board" shall mean the Board of Directors of the
Company, as the same shall change from time to time.
3.2. "Code" shall mean the Internal Revenue Code of 1986,
as amended.
3.3. "Fair Market Value" shall mean the average of the
highest reported bid and lowest reported asked prices as furnished by the
National Association of Securities Dealers, Inc. through NASDAQ on the date of
determination.
3.4. "Performance Objectives" shall mean such performance
criteria as is determined by the Committee (as defined below) or the Board and
which will qualify the related Stock Option as performance-based compensation
under Section 162(m) of the Code. Such Performance Objectives shall be equal to
a desired level or levels for any fiscal period, year or years of any or a
combination of the following criteria on an absolute or relative basis, and,
where applicable, measured before or after interest, depreciation, amortization,
service fees, extraordinary items and/or special items: (i) pre-tax earnings,
(ii) operating earnings, (iii) after-tax earnings, (iv) return on investment,
(v) earnings value added, (vi) earnings per share, (vii) revenues, (viii) cash
flow or cash flow return on investment, (ix) return on assets or return on net
assets, (x) return on capital, (xi) return on equity, (xii) return on sales,
(xiii) operating margin or (xiv) total shareholder return or stock price
appreciation, or such other non-financial criteria as determined by the
Committee; provided that with respect to certain participants, the Performance
Objectives may be based upon divisional rather than consolidated results, or a
combination of the two.
25
3.5. "Stock Options" shall mean performance-contingent
non-qualified stock options as more fully described in Section 8 hereunder.
4. EFFECTIVE DATE OF THE PLAN. The effective date of the Plan is
the date of its adoption by the Board of Directors of the Company, subject to
the approval and ratification of the Plan by the shareholders of the Company
within twelve (12) months of the effective date, and any and all awards made
under the Plan prior to such approval shall be subject to such approval.
5. STOCK SUBJECT TO PLAN. Subject to adjustment in accordance
with the provisions of Section 12, common stock, one cent ($.01) par value per
share, not to exceed four million (4,000,000) shares, may be issued pursuant to
the Plan. Such shares shall be authorized and unissued shares. If any Stock
Options expire, are canceled, or terminate for any reason(s) without having been
exercised in full, the shares subject to the unexercised portion thereof shall
again be available for the purposes of the Plan.
6. ADMINISTRATION.
6.1. Committee. The Plan shall be administered by the
Compensation Committee (the "Committee") of the Board, consisting of not less
than two (2) directors, each of whom shall qualify as a "non-employee director"
within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any successor rule or regulation, and an
"outside director" within the meaning of Section 162(m) of the Code, and the
Treasury Regulations promulgated thereunder. If at any time the Committee shall
not be in existence or not consist of directors who are qualified as
"non-employee directors" and "outside directors" as defined above, the Board
shall administer the Plan. To the extent permitted by applicable law, the Board
may, in its discretion, delegate to another committee of the Board or to one or
more senior officers of the Company any or all of the authority and
responsibility of the Committee with respect to Stock Options to Participants
(as defined in Section 7 hereunder) other than Participants who are subject to
the provisions of Section 16 of the Exchange Act ("Section 16 Participants"). To
the extent that the Board has delegated to such other committee or one or more
officers the authority and responsibility of the Committee, all references to
the Committee herein shall include such other committee or one or more officers.
6.2. Authority of the Committee. The Committee shall have
authority to grant Stock Options to any Participants (as defined in Section 7
hereunder) under the Plan. Subject to the express provisions of the Plan, the
Committee shall have complete authority to establish such rules and regulations
as it deems necessary or advisable for the proper administration of the Plan,
and, in its discretion, to determine the individuals to whom, and the time or
times at which Stock Options shall be granted, the exercise periods, limitations
on exercise, the number of shares to be subject to each Stock Option and any
other terms, limitations, conditions and restrictions on Stock Options as the
Committee, in its discretion, deems appropriate. In making such determinations,
the Committee may take into account the nature of the services rendered by the
respective individuals, their present and potential contributions to the success
of the
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Company or its subsidiaries, and such other factors as the Committee in its
discretion shall deem relevant. The Committee shall also have complete authority
to interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective Stock
Options agreements (which need not be identical), to waive any conditions or
restrictions with respect to any Stock Option and to make all other
determinations necessary or advisable for the administration of the Plan. The
Committee determinations on the matters referred to in this Section 6.2 shall be
conclusive.
6.3. No Liability. No member or former member of the Board
or Committee shall be liable for any action or inaction or determination made in
good faith with respect to the Plan or any Stock Option. To the maximum extent
permitted by applicable law and by the Company's Articles of Incorporation and
Bylaws, each such person shall be indemnified and held harmless by the Company
against any cost or expense and liability arising out of any act or omission to
act in connection with the Plan.
7. ELIGIBILITY. Stock Options may be granted to officers and
managers of the Company, or any of its subsidiaries, rendering bona fide
services to the Company, or any of its subsidiaries ("Participants") under the
Plan.
8. GRANTS OF STOCK OPTIONS.
8.1. Grant. Subject to the provisions of the Plan, the
Committee may grant to Participants performance-accelerated non-qualified stock
options (collectively "Stock Options") in such amounts as the Committee shall
determine. Subject to the provisions hereof, the Committee shall have full
discretion to determine the terms and conditions (including vesting and
exercise) of all Stock Options. Stock Options may be granted under the Plan to
such Participants as the Committee shall determine in its sole discretion, based
upon Performance Objectives.
8.2. Outside Exercise Period. The Committee shall
establish an exercise period within which the Stock Options must be vested and
exercisable (the "Outside Exercise Period"). The Outside Exercise Period must
have commenced and terminated within ten (10) years from the date of grant of
the Stock Option.
8.3. Acceleration. The Committee shall, in its sole
discretion specify Performance Objectives which shall cause the vesting and
exercise period of such Stock Options to accelerate (the "Accelerated Exercise
Period"). The Accelerated Exercise Period must terminate within ten (10) years
from the date of grant of the Stock Option.
8.4. Option Price. The per share option price of a Stock
Option, as determined by the Committee, shall never be less than the Fair Market
Value of the shares on the date of grant of the Stock Option.
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9. EXERCISE OF OPTIONS.
9.1. Manner of Exercise. The Committee shall prescribe the
manner in which a Participant may exercise a Stock Option which is not
inconsistent with the provisions of this Plan. A Stock Option may be exercised,
subject to limitations on its exercise, from time to time, only by (i) providing
written notice of intent to exercise the Stock Option with respect to a
specified number of shares, and (ii) payment in full to the Company of the
option price at the time of exercise. Payment of the option price may be made
(i) by delivery of cash and/or securities of the Company having a then Fair
Market Value equal to the option price, or (ii) by delivery (including by fax)
to the Company or its designated agent of an executed irrevocable option
exercise form together with irrevocable instructions to a broker-dealer to sell
or margin a sufficient portion of the shares and deliver the sale or margin loan
proceeds directly to the Company to pay for the option price.
9.2. Prerequisites of Exercise. All certificates for
shares of stock delivered pursuant to the exercise of any Stock Option shall be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the Plan or the rules, regulations and other requirements
of the Securities and Exchange Commission and any applicable federal or state
securities laws, and legends may be put on any such certificates to make
appropriate reference to such restrictions. As a condition to the exercise of
any Stock Option under the Plan, the Committee may require a Participant to
execute a lock-up agreement as requested by the Company's underwriters. Each
Stock Option shall be subject to the requirement that, if at any time (i) the
registration or qualification of shares relating to such Stock Option on any
securities exchange or under any state or federal securities laws, or (ii) the
approval of any securities exchange or regulatory body, is necessary or
desirable as a precondition to issuance to, the issuance of shares in connection
therewith may not be consummated unless such listing, registration,
qualification or approval shall have been effected.
10. TRANSFERABILITY OF STOCK OPTIONS. Except as otherwise
specifically provided by the Committee, Stock Options are not transferable
otherwise than by will or the laws of descent and distribution, and may be
exercised during the life of the Participant only by the Participant.
11. TERMINATION OF EMPLOYMENT.
11.1. Termination Without Cause. Unless otherwise
determined by the Committee or provided in the Stock Option agreement granted to
a Participant, in the event a Participant chooses to voluntarily leave the
employ of the Company for any reason other than retirement with the consent of
the Committee, or is terminated or dismissed from employment with the Company,
other than for Cause, as defined below, the Participant shall have thirty (30)
days from the date of termination to exercise any Stock Option which has vested
as of the first (1st) day of the calendar year of the Participant's termination.
The Committee may cancel a Stock Option if, during the thirty (30) day period
referred to above, the Participant engages in employment or activities contrary,
in the opinion of the Committee, to the best interests of the Company.
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11.2. Termination for Cause. In the event a Participant is
terminated or dismissed for Cause, all rights to exercise any Stock Option shall
terminate immediately unless otherwise determined by the Committee or provided
in the Stock Option agreement granted to such Participant.
For the purpose of this Section "Cause" shall mean:
(i) the continued failure by the Participant to
substantially perform his duties with the Company (other than any such failure
resulting from his incapacity due to physical or mental illness);
(ii) the engaging by the Participant in conduct
which is demonstrably and materially injurious to the Company, monetarily or
otherwise; or
(iii) any "cause" defined in the Participant's
employment agreement with the Company, if any.
11.3. Death or Retirement. If Participant's cessation of
employment with the Company is due to Participant's death or Participant's
retirement with the consent of the Company, Participant, or his/her beneficiary
may, at any time within three (3) months after such cessation of employment,
exercise any portion of a Stock Option which is vested on the date of cessation
of employment (portions of the Stock Option vesting in the year of death or
retirement shall be pro-rated for any partial year the Participant is employed).
The Committee may cancel all or part of the Stock Option if, during the three
(3) month period after Participant's retirement, as referred to above, the
Participant engages in employment or activities contrary, in the opinion of the
Committee, to the best interests of the Company. The Committee shall determine
in each case whether a termination of employment shall be considered a
retirement with the consent of the Company and subject to applicable law. The
Committee shall also determine whether a leave of absence shall constitute a
termination of employment. Any determinations of the Committee shall be final
and conclusive unless overruled by the Board.
12. CAPITAL ADJUSTMENT PROVISIONS. In the event of any change in
the shares of common stock of the Company by reason of a stock split,
reorganization, merger, consolidation, spin-off, recapitalization, split-up,
combination or exchange of shares, or otherwise, the aggregate number and class
of shares available under this Plan, the number and class of shares subject to
each outstanding Stock Option, and the exercise price for shares subject to each
outstanding Stock Option, shall be appropriately adjusted by the Committee,
whose determination shall be conclusive.
13. TERMINATION AND AMENDMENT OF PLAN. The Plan shall terminate
ten years from the effective date as defined in Section 4, unless sooner
terminated as hereinafter provided. The Board may at any time terminate the
Plan, or amend the Plan as it shall deem advisable including (without limiting
the generality of the foregoing) any amendments deemed by the Board to be
necessary or advisable to assure the Company's deduction under Section 162(m) of
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the Code for all Stock Options granted under the Plan, to assure conformity with
any requirements of other state or federal laws or regulations; provided,
however, that shareholder approval of any amendment of the Plan shall also be
obtained if otherwise required by (i) the Code or any rules promulgated
thereunder (in order to enable the Company to comply with the provisions of
Section 162(m) of the Code) or (ii) the listing requirements of any principal
securities exchange or market on which the shares are then traded (in order to
maintain the listing or quotation of the shares thereon). No termination or
amendment of the Plan may, without the consent of the Participant, adversely
affect the rights of such Participant under any Stock Option previously granted.
14. RIGHTS OF PARTICIPANTS. Nothing in this Plan or in any Stock
Options shall interfere with or limit in any way the right of the Company to
terminate any Participant's employment at any time, nor confer upon any
Participant any right to continue in the employ of the Company.
15. RIGHTS AS A SHAREHOLDER. A Participant shall have no rights as
a shareholder with respect to shares covered by any Stock Option until the date
of issuance of the stock certificate to such Participant and only after such
shares are fully paid. No adjustment will be made for dividends or other rights
for which the record date is prior to the date such stock is issued.
16. TAX WITHHOLDING. The Company may deduct and withhold from any
cash otherwise payable to a Participant such amount as may be required for the
purpose of satisfying the Company's obligation to withhold Federal, state or
local taxes in connection with any Stock Option. Further, in the event the
amount so withheld is insufficient for such purpose, the Company may require
that the Participant pay to the Company upon its demand or otherwise make
arrangements satisfactory to the Company for payment of such amount as may be
requested by the Company in order to satisfy its obligation to withhold any such
taxes.
A Participant may be permitted to satisfy the Company's withholding tax
requirements by electing to have the Company withhold shares of stock otherwise
issuable to the Participant. The election shall be made in writing and shall be
made according to such rules and in such form as the Committee may determine.
17. MISCELLANEOUS. The grant of any Stock Option under the Plan
may also be subject to other provisions as the Committee determines appropriate,
including, without limitation, provisions for (a) one or more means to enable
Participants to defer recognition of taxable income relating to Stock Options,
which means may provide for a return to a Participant on amounts deferred as
determined by the Committee; (b) the purchase of stock under Stock Options in
installments; and (c) compliance with federal or state securities laws and stock
exchange or market requirements.
18. AGREEMENTS. Stock Options granted pursuant to the Plan shall
be evidenced by written agreements in such forms as the Committee shall from
time to time adopt.
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19. GOVERNING LAW. The Plan and all determinations made and
actions taken pursuant thereto shall be governed by and construed in accordance
with the internal laws of the State of Florida.
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APPENDIX
SYKES ENTERPRISES, INCORPORATED
Annual Meeting of Shareholders, April 30, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned shareholder of Sykes Enterprises, Incorporated (the
"Company") hereby appoints John H. Sykes and Scott J. Bendert as Proxies, each
with the power to appoint a substitute, and hereby authorizes them to vote all
such shares of the Company as to which the undersigned is entitled to vote at
the Annual Meeting of Shareholders of the Company and at all adjournments
thereof, to be held at the Wyndham Harbour Island Hotel, 725 South Harbour
Island Boulevard, Tampa, Florida on Thursday, April 30, 1998 at 10:00 a.m.
Eastern Standard Time, in accordance with the following instructions.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS SPECIFIED. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED IN ITEM 1 AND FOR ITEMS
2 and 3.
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
- --------------------------------------------------------------------------------
SYKES ENTERPRISES, INCORPORATED 1998 ANNUAL MEETING
1. ELECTION OF DIRECTORS: 1 - H. PARKS HELMS 2 - ADELAIDE A. (Alex) SINK 3 - LINDA McCLINTOCK-GRECO, M.D.
(Instructions: To withhold authority to vote for any indicated nominee, write the number(s) of the
nominee(s) in the box provided to the right.)
2. To amend the Company's Articles of Incorporation to expand the
indemnification provisions thereof to include all of the Company's officers and
directors, all of the officers and directors of all the Company's domestic
subsidiaries, and all persons rendering services to the Company's foreign
subsidiaries in capacities as officers and directors or in equivalent,
identical, or similar capacities.
3. To approve the adoption of the Company's 1997 Management Stock Incentive
Plan.
4. In their discretion, the proxies are authorized to vote upon such other business as may properly come before this
Meeting or any adjournments or postponements thereof.
Address Change? Date
Mark Box [ ] ---------------------------------------------------
Indicate changes below:
[ ] FOR [ ] WITHHOLD AUTHORITY
- ----------------> [ ]
[ ]
[ ] FOR [ ] AGAINST [ ] ABSTAIN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
NO. OF SHARES
[ ]
[ ]
[ ]
SIGNATURE(S) IN BOX
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. WHEN SHARES ARE HELD BY JOINT TENANTS,
BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, OR PARTNER, PLEASE
GIVE FULL TITLE, AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATION NAME BY PRESIDENT
OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.