-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TaHhVhtUyqvfbn5LlWEgDBA/9D4hctq8xEMSmaWMUs0eHSpRyrkOOllNRqorT8vE klN/PBZXDg25l+dg4+tPZQ== 0000950144-99-004717.txt : 19990421 0000950144-99-004717.hdr.sgml : 19990421 ACCESSION NUMBER: 0000950144-99-004717 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990517 FILED AS OF DATE: 19990420 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STAFF LEASING INC CENTRAL INDEX KEY: 0001035185 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 650735612 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-22701 FILM NUMBER: 99597427 BUSINESS ADDRESS: STREET 1: 600 301 BLVD W STREET 2: STE 202 CITY: BRADENTON STATE: FL ZIP: 34205 BUSINESS PHONE: 9417484340 MAIL ADDRESS: STREET 1: 600 301 BLVD W STREET 2: STE 202 CITY: BRADENTON STATE: FL ZIP: 34205 DEF 14A 1 STAFF LEASING, INC. 1 SCHEDULE 14A (RULE 14A-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] 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
STAFF LEASING, INC. - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [ ] Fee paid previously with preliminary materials: [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: 2 (Staff Leasing, Inc. Logo) April 20, 1999 Dear Shareholder: You are cordially invited to attend the annual meeting of shareholders of Staff Leasing, Inc. to be held on Monday, May 17, 1999, at the offices of the Company in Bradenton, Florida, commencing at 9:00 a.m. At this meeting you will be asked to elect two Class II directors and one Class I director. It is important that your shares be represented at the meeting whether or not you are personally in attendance, and I urge you to sign, date, and return the enclosed proxy at your earliest convenience. Yours very truly, /s/ Charles S. Craig Charles S. Craig Chairman of the Board and Chief Executive Officer 3 STAFF LEASING, INC. NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 17, 1999 To the Shareholders of Staff Leasing, Inc.: Staff Leasing, Inc. will hold its annual meeting of shareholders at the offices of the Company at 600 301 Boulevard West, Bradenton, Florida, on Monday, May 17, 1999, at 9:00 a.m., Bradenton time, for the following purposes: (a) to elect two Class II directors to serve until the annual meeting of shareholders in 2002 and one Class I director to serve until the annual meeting of shareholders in 2000 or until their successors are elected and qualified; and (b) to transact such other business as may properly come before the meeting or any adjournment thereof. Only shareholders of record at the close of business on March 10, 1999, are entitled to notice of, and to vote at, the meeting or any adjournment thereof. A list of shareholders entitled to vote at the meeting will be available for examination at the offices of Staff Leasing, Inc., 600 301 Boulevard West, Suite 202, Bradenton, Florida, for ten days before the meeting. PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. No postage is required if the proxy card is mailed in the United States. Prompt response by our shareholders will reduce the time and expense of solicitation. By Order of the Board of Directors, /s/ Michael D. Craig Michael D. Craig, Secretary Bradenton, Florida April 20, 1999 4 STAFF LEASING, INC. 600 301 BOULEVARD WEST SUITE 202 BRADENTON, FLORIDA 34205 PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 17, 1999 Staff Leasing, Inc., a Florida corporation ("Staff Leasing" or the "Company"), furnishes this Proxy Statement to its shareholders in connection with the solicitation on behalf of the Board of Directors of the Company of proxies to be used at the annual meeting of shareholders of the Company to be held May 17, 1999. Proxies in the form enclosed will be voted at the meeting if properly executed, returned to the Company before the meeting, and not revoked. You may revoke the proxy at any time before it is exercised. The approximate date on which this Proxy Statement and the enclosed proxy card will first be sent to shareholders is April 21, 1999. The enclosed 1998 Annual Report of the Company does not form any part of the proxy solicitation material. ABOUT THE MEETING The presence, in person or by proxy, of the holders of a majority of the outstanding shares of the Company's common stock is necessary to constitute a quorum at the annual meeting of shareholders. Abstentions will be treated as shares of common stock that are present and entitled to vote for purposes of determining the presence of a quorum. In deciding all questions, a holder of common stock is entitled to one vote, in person or by proxy, for each share held in his name on the record date. The accompanying proxy, unless the shareholder otherwise specifies therein, will be voted (i) for the election as directors of the Company of the persons designated under the caption "Election of Directors -- Nominees for Director" and (ii) at the discretion of the proxy holders on any other matter that may properly come before the meeting or any adjournment thereof. To be elected a director, each nominee must receive a plurality of all the votes cast at the meeting for the election of directors. Any abstentions or broker non-votes will have no effect on the election of directors. Should any nominee become unable or unwilling to accept nomination or election, the proxy holders may vote for the election in his stead of any other person the Board of Directors may recommend. Where shareholders have appropriately specified how their proxies are to be voted, the proxies will be voted accordingly. If any other matter or business is brought before the meeting, the proxy holders may vote the proxies at their discretion. The Board of Directors does not know of any such other matter or business. 1 5 OUTSTANDING CAPITAL STOCK The record date for shareholders entitled to notice of, and to vote at, the annual meeting of shareholders is the close of business on March 10, 1999. At the close of business on that date, the Company had issued and outstanding and entitled to vote at the meeting 21,819,767 shares of common stock. The following table sets forth the beneficial ownership of the Company's common stock as of March 10, 1999, by each director, nominee for director, and executive officer; by each beneficial owner of more than 5% of the outstanding common stock of the Company; and by the directors and executive officers of the Company as a group:
NUMBER OF SHARES PERCENT OF NAME BENEFICIALLY OWNED(1) OUTSTANDING SHARES - ---- --------------------- ------------------ Charles S. Craig(2)................................ 4,730,183(3) 21.7% Paribas(4)......................................... 2,746,891(5) 12.0 George B. Beitzel.................................. 391,906(6) 1.8 Richard A. Goldman................................. 285,737(7) 1.3 Melvin R. Laird.................................... -- -- John E. Panning.................................... 270,155(8) 1.2 Elliot B. Ross..................................... 58,851 * Jonathan H. Kagan.................................. 58,728(9) * John Bilchak, Jr................................... 86,842(10) * Joyce Lillis McGill................................ 98,310(11) * Todd Davis......................................... -- -- Lisa Harris........................................ -- -- Directors and executive............................ 5,921,984(12) 27.1 officers as a group
- --------------- * Less than one percent. (1) Unless otherwise stated, the beneficial owner has sole voting and investment power over the shares indicated. (2) Mr. Craig's address is 600 301 Boulevard West, Bradenton, Florida 34205. (3) Includes 1,346 shares held by Mr. Craig's SEP plan; 2,739 shares held by his rollover IRA; 3,059,501 shares held by the C.S. Craig Family Limited Partnership. The sole general partner of the partnership is Craig Family Holdings, LLC, of which Mr. Craig is the sole member. Also includes 752,397 shares held by the 11/24/87 Trust FBO KC Craig and 752,397 shares held by the 12/17/86 Trust FBO NH Craig, with respect to which Mr. Craig shares voting and investment power. Also includes 156,178 shares held by C.S. Craig Family Foundation, Inc., of which Mr. Craig is president. Also includes 5,625 shares which Mr. Craig has the right to acquire through currently exercisable employee stock options. (4) The address of Paribas is Equitable Tower, 787 7th Avenue, New York, New York 10019. (5) Information from Schedule 13D filed April 8, 1999. Includes 1,323,521 shares held by Paribas Principal Incorporated and 425,000 shares held by Paribas North America, Inc. Also includes warrants to purchase 998,370 shares held by Paribas Principal Incorporated. (6) Includes 131,779 shares owned by Mary L. Beitzel, 108,612 shares owned by the Mary L. Beitzel Grantor Trust and 108,612 shares owned by the George Beitzel Grantor Trust. (7) Includes 22,583 shares held by the Trust FBO Zachary I. Goldman, 22,583 shares held by the Trust FBO Zoe A. Goldman, and 235,957 shares held by the Richard A. Goldman Intangible Asset Management Trust. Mr. Goldman disclaims beneficial ownership of the shares held by the Richard A. Goldman Intangible Asset Management Trust. Also includes 3,750 shares which Mr. Goldman has the right to acquire through currently exercisable employee stock options. (8) Includes 1,372 shares owned by Alyssa W. Panning, 1,372 shares owned by Rachael Panning, and 263,661 shares held by the John E. Panning Intangible Asset Management Trust. Mr. Panning disclaims beneficial ownership of the shares held by the John E. Panning Intangible Asset Management Trust. 2 6 Also includes 3,750 shares which Mr. Panning has the right to acquire through currently exercisable employee stock options. (9) Includes an aggregate of 330 shares held by Mr. Kagan's minor children. (10) Includes 2,500 shares which Mr. Bilchak has the right to acquire through currently exercisable employee stock options. (11) Includes 2,500 shares which Ms. McGill has the right to acquire through currently exercisable employee stock options. (12) See notes (1) through (11). COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Based upon a review of filings with the Securities and Exchange Commission and written representations that no other reports were required, the Company believes that all of the Company's directors, executive officers, and owners of more than 10% of the Company's common stock complied during 1998 with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934. ELECTION OF DIRECTORS The Board of Directors is divided into three classes, having three-year terms that expire in successive years. The term of office of directors in Class II expires at the 1999 annual meeting. The Board of Directors proposes that Elliot B. Ross and Jonathan H. Kagan be elected to Class II for a term of three years and until their successors are elected and qualified. There is currently a vacancy in the Class I directors. The Board of Directors proposes that Melvin R. Laird, who is currently a Class II director, be elected as a Class I director to serve until the 2000 annual meeting of shareholders. NOMINEES FOR DIRECTOR Melvin R. Laird, age 78, has served as a director of Staff Leasing since February 1997 and is a member of the Audit Committee, the Compensation Committee, and the Stock Option Committee. Former nine-term member of the United States Congress, Secretary of Defense, and counselor to the President of the United States, Mr. Laird is currently Senior Counselor for National and International Affairs of the Reader's Digest, and a member of the Public Oversight Board for the Accounting Profession for SEC registrants. Jonathan H. Kagan, age 42, has served as Managing Director of Centre Partners Management LLC, which was formed in December 1995 to manage investments on behalf of Centre Capital Investors II, L.P. and affiliated entities. Mr. Kagan has been a Managing Director of Corporate Advisers, L.P. since 1990. Mr. Kagan was a Managing Director of Lazard Freres & Co. LLC from 1985 to 1998. Mr. Kagan also serves as a director of Firearms Training Systems, Inc., Jeepers! Inc., and Hyco International, Inc. Elliot B. Ross, age 53, has been a director of Staff Leasing since March 1994. He is currently President of State Industrial Products, one of the largest privately held suppliers of commercial and industrial housecleaning and maintenance chemicals and supplies, and of Ross Consulting, Inc., a management consulting firm established in 1989. He was employed by ESSEF Corporation from February 1994 to December 1997, where he served as Chief Operating Officer. Before joining ESSEF Corporation, Mr. Ross was Co-Chairman of Inverness Castings Group from January 1988 to January 1994 and a partner at McKinsey & Company. 3 7 DIRECTORS CONTINUING IN OFFICE Class I Directors. The following Class I directors have terms ending in 2000: Charles S. Craig, age 48, has served as Chairman of the Board of Directors since November 1993. He assumed the additional position of Chief Executive Officer in July 1995. He currently serves as Chairman of the Executive Committee and a member of the Compensation Committee and Nominating Committee. Mr. Craig has been a Managing Director of Craig Capital Corporation ("Craig Capital") since 1988 and Chairman of CSG, Inc., the general partner of TCOM, LP, since 1989. An investor group organized by Craig Capital acquired Staff Leasing in 1993. He has served on the boards of CP Industries, Inc., Curtis Industries, Inc., Sinclair & Valentine, LP (Chairman), Schuylkill Metals Corporation, and NASCO, Inc. George B. Beitzel, age 70, has served as a director of the Company since November 1993. He currently serves as Chairman of the Audit and Compensation Committees of the Board of Directors and as a member of the Executive Committee. Mr. Beitzel is currently Chairman Emeritus of the Colonial Williamsburg Foundation and a director of Bankers Trust New York Corporation, Bitstream Inc., Computer Task Group, Inc., and Phillips Petroleum Company. Class III Directors. The following Class III directors have terms ending in 2001: Richard A. Goldman, age 42, has served as President and been a member of the three-person Office of the Chairman since January 1997. Mr. Goldman served as Senior Vice President of Risk Management and General Counsel of Staff Leasing from July 1995 to January 1997. In May 1997, Mr. Goldman was appointed by the late Governor Lawton Chiles to Florida's Board of Employee Leasing and became chairman of that board in February 1998. Before joining Staff Leasing, Mr. Goldman was a partner in the New York office of Dechert Price & Rhoads from April 1993 to July 1995. John E. Panning, age 48, has served as Chief Financial Officer and been a member of the three-person Office of the Chairman since January 1997. From August 1996 to December 1996, he served as Senior Vice President of Finance of Staff Leasing. Mr. Panning served as Senior Vice President of Sales of Staff Leasing from January 1995 to July 1996. Before joining Staff Leasing, Mr. Panning served as Chief Financial Officer of CityForest Corporation from March 1993 to November 1994. BOARD COMMITTEES The Board of Directors has appointed an Executive Committee, an Audit Committee, a Compensation Committee, a Stock Option Committee, and a Nominating Committee. The Executive Committee has and may exercise all of the powers and authority of the Board of Directors of the Company during the periods between regularly scheduled Board meetings to the fullest extent permitted under the bylaws of the Company and the Florida Business Corporation Act. The Audit Committee reviews the scope and results of the annual audit of the Company's consolidated financial statements conducted by the Company's independent accountants, the scope of other services provided by the Company's independent accountants, proposed changes in the Company's financial and accounting standards and principles, and the Company's policies and procedures with respect to its internal accounting, auditing and financial controls, and makes recommendations to the Board of Directors on the engagement of the independent accountants, as well as other matters that may come before it or as directed by the Board of Directors. The Compensation Committee administers the Company's compensation programs, and performs such other duties as may from time to time be determined by the Board of Directors. The Stock Option Committee administers the Staff Leasing, Inc. 1997 Stock Incentive Plan (the "Incentive Plan"). The Nominating Committee is responsible for nominating candidates for election to the Board of Directors of the Company. The Company's bylaws allow a shareholder to nominate directors by delivering written notice to the Company not more than 30 days before nor after the deadline for submitting shareholder proposals pursuant to Rule 14a-8 under the Securities Exchange Act of 1934. 4 8 BOARD AND COMMITTEE MEETINGS In 1998, the Board of Directors met seven times, the Audit Committee met three times, the Compensation Committee met once, the Stock Option Committee met or acted by written consent twice, and the Nominating Committee acted by written consent once. Each director attended and signed at least 75% of the total number of meetings and written consents of the Board and Committees on which he served. BOARD COMPENSATION Each non-employee director receives an annual fee of $10,000. In addition, on December 14, 1998, each non-employee director then in office was granted an option to purchase 5,000 shares of common stock at the exercise price of $11.625. These options have ten-year terms and vest in four equal annual installments. If, however, a director leaves office at the conclusion of a term for which he was elected or as a result of his death or disability, all unvested options will vest at that time. 5 9 EXECUTIVE COMPENSATION The following Report of the Compensation Committee and Stock Option Committee and the performance graphs included elsewhere in the proxy statement do not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report or the performance graphs by reference therein. REPORT OF THE COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE ON EXECUTIVE COMPENSATION The Compensation Committee and Stock Option Committee of the Board of Directors have furnished the following report on executive compensation for fiscal 1998. The Company's compensation program for executives consists of three key elements: - a base salary, - a performance-based annual bonus, and - periodic grants of stock options. The Committees believe that this three-part approach best serves the interests of the Company and its shareholders. It enables the Company to meet the requirements of the highly competitive environment in which the Company operates while ensuring that executive officers are compensated in a way that advances the long-term interests of shareholders. Under this approach, compensation for these officers involves a high proportion of pay that is "at risk" -- namely, the annual bonus and stock options. The variable annual bonus permits individual performance to be recognized on an annual basis, and is based, in significant part, on an evaluation of the contribution made by the officer to Company performance. Stock options relate a significant portion of long-term remuneration directly to stock price appreciation realized by all of the Company's shareholders. Base Salary. Base salaries for the Company's executive officers, as well as changes in such salaries, are based upon recommendations by the Chief Executive Officer, taking into account such factors as competitive industry salaries, a subjective assessment of the nature of the position, the contribution and experience of the officer, and the length of the officer's service. The Chief Executive Officer reviews all salary recommendations with the Compensation Committee, which then approves or disapproves the recommendations. Annual Bonus. A substantial portion of each executive officer's potential total compensation is in the form of a bonus. Before the beginning of the year, the Chief Executive Officer recommends targeted bonus amounts (as a percentage of base salary) for each executive officer for the coming year. These targets are reviewed by the Compensation Committee. Bonus payments, which must be approved by the Compensation Committee, are based on individual performance and Company performance. Stock Options. Stock options are granted to executive officers based on their positions and individual performance stock. Stock options provide incentive for the creation of shareholder value over the long term and aid significantly in recruiting and retention of executive officers. The Stock Option Committee considers recommendations of the Chief Executive Officer and approves all option grants. COMPENSATION OF CHIEF EXECUTIVE OFFICER In determining compensation for the Company's Chief Executive Officer, the Compensation Committee and Stock Option Committee consider the criteria described above for all executive officers and especially the impact of the Chief Executive Officer's leadership and creativity on achieving the Company's short-term and long-term goals. Although a member of the Compensation Committee, Mr. Craig does not participate in deliberations concerning his compensation. In deciding on Mr. Craig's salary, bonus, and stock option grant for 1998, the Compensation Committee and Stock Option Committee took into account Mr. Craig's contribution to the improved performance of the Company in 1998. 6 10 SECTION 162(M) OF THE INTERNAL REVENUE CODE Because the Company has not yet exceeded the $1,000,000 compensation threshold, the Compensation Committee has not yet adopted a policy with respect to section 162(m) of the Internal Revenue Code. Generally, that section limits the Company's ability to deduct compensation in excess of $1,000,000 to a particular executive officer in any year. The Compensation Committee will adopt a policy if the Company exceeds this amount. This report is submitted by: George B. Beitzel Charles S. Craig Melvin R. Laird COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Compensation Committee consists of Messrs. Beitzel, Craig, and Laird. Mr. Craig is Chairman and Chief Executive Officer of the Company. SUMMARY COMPENSATION TABLE The following table sets forth all compensation paid or accrued for services rendered to the Company and its subsidiaries for the last three fiscal years by the Chief Executive Officer and the five other highest-paid executive officers of the Company:
LONG-TERM COMPENSATION ------------------------------- ANNUAL COMPENSATION OTHER RESTRICTED NUMBER OF -------------------------- ANNUAL STOCK SHARES UNDERLYING NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) AWARD(S)(2) OPTIONS GRANTED - --------------------------- ---- -------- -------- --------------- ----------- ----------------- Charles S. Craig(3)....... 1998 $212,000 $197,250 44,176 Chief Executive Officer 1997 166,667 200,000 45,000 1996 $885,000 Richard A. Goldman........ 1998 162,000 121,500 29,413 President 1997 152,077 133,650 30,000 1996 131,976 74,250 12,475(4) $ 66,595(5)(6) John E. Panning........... 1998 162,000 121,500 29,413 Chief Financial Officer 1997 152,077 133,650 30,000 1996 132,000 74,250 66,595(6)(7) John Bilchak, Jr(8)....... 1998 142,000 97,500 20,447 Senior Vice President -- 1997 123,077 99,000 25,000 Benefits and Risk Management Joyce Lillis McGill....... 1998 142,000 87,500 20,447 Senior Vice President -- 1997 111,862 82,500 35,741(4) 262,873(6)(9) 20,000 Sales
- --------------- (1) Does not include perquisites and other personal benefits, securities or property which do not aggregate in excess of the lesser of either $50,000 or 10% of the total of annual salary and bonus reported for the named executive officer. (2) All long-term compensation identified in this column arises under the Company's restricted equity plan (the "Restricted Equity Plan"). The Restricted Equity Plan allowed the Company to issue equivalent of shares of common stock to its senior executive officers holding positions of Vice President or above. See "Certain Transactions." No awards were made under this plan after January 31, 1997. (3) In 1996, the Company paid to Craig Capital management fees of $375,000 and consulting fees of $510,000 in connection with the Company's 1996 private placement. Because Mr. Craig is the sole 7 11 shareholder of Craig Capital, these amounts are included as compensation to Mr. Craig in this table. Effective March 1997, the Company discontinued the payment of management fees to Craig Capital and employed Mr. Craig at an annual base salary of $200,000. (4) Relocation expense reimbursement. (5) Mr. Goldman was issued the equivalent of 31,120 shares on December 31, 1996 pursuant to the Restricted Equity Plan which vest 25% per year on the anniversary date of the original issuance. The remaining restricted portion of this issuance as of December 31, 1998, was 15,560 shares valued at $182,830. The Company also issued to Mr. Goldman the equivalent of 203,932 shares on June 1, 1995 pursuant to the Restricted Equity Plan, all of which shares are now vested. (6) Values of restricted equity before the Company's initial public offering are based on an independent third party appraisal. (7) Mr. Panning was issued the equivalent of 31,120 shares on December 31, 1996 pursuant to the Restricted Equity Plan which vest 25% per year on the anniversary date of the original issuance. The remaining restricted portion of this issuance as of December 31, 1998, was 15,560 shares valued at $182,830. The Company also issued to Mr. Panning the equivalent of 299,171 shares on January 1, 1995 pursuant to the Restricted Equity Plan, all of which shares are now vested. (8) The Company issued Mr. Bilchak the equivalent of 55,159 shares on January 15, 1996, and 31,120 shares on December 31, 1996, pursuant to the Restricted Equity Plan, which vest 25% per year on the anniversary date of the original issuances. The remaining restricted portion of these issuances as of December 31, 1998, was 43,140 shares, valued at $506,895. (9) The Company issued Ms. McGill the equivalent of 104,574 shares on January 31, 1997, under the Restricted Equity Plan which vest 25% per year on the anniversary date of the original issuance. The remaining restricted portion of this issuance as of December 31, 1998, was 52,287 shares, valued at $614,372. OPTION GRANTS IN 1997 The following table shows stock option grants during 1998 to the named executive officers:
% OF TOTAL OPTIONS GRANTED NUMBER OF TO OPTIONS EMPLOYEES EXERCISE PRICE EXPIRATION VALUE AT NAME GRANTED IN 1998 PER SHARE DATE GRANT DATE(1) - ---- --------- ---------- -------------- ---------- -------------- Charles S. Craig...................... 44,176 9.5% $11.625 12/14/08 $379,406 Richard A. Goldman.................... 29,413 6.3 11.625 12/14/08 252,614 John E. Panning....................... 29,413 6.3 11.625 12/14/08 252,614 John Bilchak, Jr...................... 20,447 4.4 11.625 12/14/08 175,609 Joyce Lillis McGill................... 20,447 4.4 11.625 12/14/08 175,609
- --------------- (1) The value of the option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%; expected volatility of 81.3%; risk-free interest rate of 5.3%; and expected life of six years. CERTAIN TRANSACTIONS The Company's Restricted Equity Plan was adopted when the Company operated as a limited partnership. The plan allowed the Company to issue, from time to time, the equivalent of shares of common stock to its executive officers holding positions of Vice President and above. The purchase price of these common stock equivalents was determined on the basis of the original purchase price of the common stock equivalents in the acquisition of the assets of the predecessor entities that operated the business now conducted by the Company. The Company lent the purchase price of these common stock equivalents to the participants in the plan on a recourse basis and at the rate upon which interest is imputed under the Internal Revenue Code. Upon completion of the Company's initial public offering, the common stock equivalents 8 12 issued under the plan were converted to shares of common stock. These shares are subject to forfeiture restrictions, which allow the Company to repurchase the "unvested" portion of these interests at a formula price upon termination of employment of the executive. The Restricted Equity Plan was terminated on February 28, 1997; provided that shares into which common stock equivalents issued pursuant to the plan were converted remain subject to its terms. During 1998, Messrs. Goldman and Bilchak, had outstanding loans from the Company with principal balances totaling $266,929 and $131,681, respectively, in connection with purchases under the Restricted Equity Plan, advances to pay taxes incurred when interests vested under the Restricted Equity Plan, and for purchases of other equity interests from the Company. These loans bore interest at rates ranging from 5.9% to LIBOR plus 4%. At December 31, 1998, the aggregate outstanding principal balance of these loans to Messrs. Goldman and Bilchak was $45,083 and zero, respectively. The loans to make purchases under the Restricted Equity Plan are due November 1, 2000, and the loans to purchase other equity interests are due March 31, 2001. STOCK PERFORMANCE CHART The following chart compares the return on the Company's common stock from June 25, 1997 through December 31, 1998, with the Nasdaq Stock Market (U.S.) Index and a Peer Group Index (defined below). The comparison assumes $100 was invested on June 25, 1997, at the initial public offering price in the Company's common stock and in the Nasdaq Stock Market (U.S.) Index and the Peer Group Index and assumes reinvestment of dividends and distributions. The Peer Group Index consists of the following professional employer organizations (PEOs): Administaff, Inc., TeamStaff, Inc. (formerly Digital Solutions, Inc.), Employee Solutions, Inc., TEAM America Corporation, and The Vincam Group, Inc.
Measurement Period Staff Leasing, Peer Group (Fiscal Year Covered) Inc. Nasdaq Index Index 6/25/97 100 100 100 12/31/97 111 109 110 12/31/98 68 152 80
9 13 SHAREHOLDER PROPOSALS Any proposals that shareholders of the Company desire to have presented at the 2000 annual meeting of shareholders must be received by the Company at its principal executive offices not later than December 23, 1999. The proxy or proxies designated by the Company will have discretionary authority to vote on any matter properly presented by a shareholder for consideration at the 2000 annual meeting of shareholders but not submitted for inclusion in the proxy statement for such meeting unless notice of the matter is received by the Company at its principal executive office not later than February 7, 2000, and certain other conditions of the applicable SEC rules are satisfied. MISCELLANEOUS Deloitte & Touche LLP acted as the Company's independent auditors for 1998. One or more representatives of Deloitte & Touche LLP will attend the annual meeting, will have an opportunity to make a statement and will respond to appropriate questions from shareholders. The Audit Committee has not yet appointed the independent auditors for 1999. The accompanying proxy is being solicited on behalf of the Board of Directors of the Company. The Company will bear the expense of preparing, printing, and mailing the proxy solicitation material and the form of proxy. In addition to use of the mail, proxies may be solicited by personal interview, telephone, and telegram by directors and regular officers and employees of the Company. Arrangements may also be made with brokerage houses and other custodians, nominees, and fiduciaries for the forwarding of solicitation material to the beneficial owners of stock held of record by such persons, and the Company may reimburse them for reasonable out-of-pocket expenses incurred by them in connection therewith. By Order of the Board of Directors, /s/ Michael D. Craig Michael D. Craig Secretary Bradenton, Florida April 20, 1999 10 14 STAFF LEASING, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY The undersigned appoints Charles S. Craig, Richard A. Goldman, and John E. Panning, and each of them, his proxies with full power of substitution, to vote all the shares of common stock of Staff Leasing, Inc. that the undersigned may be entitled to vote at the annual meeting of shareholders to be held May 17, 1999, and at any adjournment or postponement thereof, as indicated on the reverse side hereof. THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL NOMINEES FOR DIRECTOR LISTED ON THE REVERSE SIDE AND AT THE DISCRETION OF THE PROXIES ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING. (Continued and to be signed and dated on reverse side.) 1. Election of Directors: [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all nominees listed below [ ] *EXCEPTIONS Nominees: Melvin R. Laird, Jonathan H. Kagan, Elliot B. Rosa (INSTRUCTIONS: To withhold authority to vote FOR any individual nominee, mark the "Exceptions" box and write that nominee's name in the space provided below.) *Exceptions ------------------------------------------------------------------- Change of Address and or Comments Mark Here [ ] Please date this proxy and sign your name exactly as it appears hereon. When there is more than one owner, each should sign. When signing as an attorney, administrator, executor, guardian or trustee, please add your title as such. If executed by a corporation, the proxy should be signed by a duly authorized officer. Signature ------------------------------- Date ------------------------------------ Signature ------------------------------- Date ------------------------------------ Votes must be indicated [x] in Black or Blue Ink. (Please sign, date and return this proxy in the enclosed postage prepaid envelope) -----END PRIVACY-ENHANCED MESSAGE-----