SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12
Manpower Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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MANPOWER INC.
5301 NORTH IRONWOOD ROAD
MILWAUKEE, WISCONSIN 53217
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 30, 2002
To the Shareholders of Manpower Inc.:
The 2002 Annual Meeting of Shareholders of Manpower Inc. (the "Company")
will be held at the Bradley Pavilion of the Marcus Center for the Performing
Arts, 929 North Water Street, Milwaukee, Wisconsin, on April 30, 2002, at 10
a.m., local time, for the following purposes:
(1) To elect three directors to serve until 2005 as Class III directors;
(2) To approve a performance-based incentive compensation arrangement for
the Company's Chief Executive Officer and the Company's Chief Financial
Officer;
(3) To consider approval of a shareholder proposal on non-audit services if
properly presented at the annual meeting; and
(4) To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on February 28, 2002 are
entitled to notice of and to vote at the Annual Meeting and at all adjournments
thereof.
HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES MUST BE PRESENT IN PERSON
OR BY PROXY IN ORDER FOR THE ANNUAL MEETING TO BE HELD. THEREFORE, SHAREHOLDERS
ARE URGED TO DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ENVELOPE WHETHER OR NOT THEY EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON. IF
YOU ATTEND THE ANNUAL MEETING AND WISH TO VOTE YOUR SHARES PERSONALLY, YOU MAY
DO SO BY REVOKING YOUR PROXY AT ANY TIME PRIOR TO THE VOTING THEREOF.
Michael J. Van Handel, Secretary
March 29, 2002
MANPOWER INC.
5301 NORTH IRONWOOD ROAD
MILWAUKEE, WISCONSIN 53217
MARCH 29, 2002
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Manpower Inc.
(the "Company") for use at the Annual Meeting of Shareholders to be held at 10
a.m., local time, on April 30, 2002, or at any postponement or adjournment
thereof (the "Annual Meeting"), for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting will
be held at the Bradley Pavilion of the Marcus Center for the Performing Arts,
929 North Water Street, Milwaukee, Wisconsin.
The expenses of printing and mailing proxy material, including expenses
involved in forwarding materials to beneficial owners of stock, will be paid by
the Company. No solicitation other than by mail is contemplated, except that
officers or employees of the Company or its subsidiaries may solicit the return
of proxies from certain shareholders by telephone. In addition, the Company has
retained Georgeson Shareholder Communications Inc. to assist in the solicitation
of proxies for a fee of approximately $7,000 plus expenses.
Only shareholders of record at the close of business on February 28, 2002
(the "Record Date") are entitled to notice of and to vote the shares of common
stock, $.01 par value (the "Common Stock"), of the Company registered in their
name at the Annual Meeting. As of the Record Date, the Company had outstanding
76,265,051 shares of its Common Stock. The presence, in person or by proxy, of a
majority of the shares of the Common Stock outstanding on the Record Date will
constitute a quorum at the Annual Meeting. Abstentions and broker non-votes,
which are proxies from brokers or nominees indicating that such persons have not
received instructions from the beneficial owners or other persons entitled to
vote shares as to a matter with respect to which brokers or nominees do not have
discretionary power to vote, will be treated as present for purposes of
determining the quorum. Abstentions and broker non-votes will not be counted as
voting on any matter at the Annual Meeting. Each share of Common Stock entitles
its holder to cast one vote on each matter to be voted upon at the Annual
Meeting.
This Proxy Statement, Notice of Meeting and the accompanying proxy card,
together with the Company's Annual Report to Shareholders, including financial
statements for its fiscal year ended December 31, 2001, are being mailed to
shareholders of the Company commencing on or about March 29, 2002.
IF THE ACCOMPANYING PROXY CARD IS PROPERLY SIGNED AND RETURNED TO THE
COMPANY AND NOT REVOKED, IT WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS
CONTAINED THEREIN. EACH SHAREHOLDER MAY REVOKE A PREVIOUSLY GRANTED PROXY AT ANY
TIME BEFORE IT IS EXERCISED BY WRITTEN NOTICE OF REVOCATION OR BY SUBMITTING A
DULY EXECUTED PROXY BEARING A LATER DATE TO THE SECRETARY OF THE COMPANY.
ATTENDANCE AT THE ANNUAL MEETING WILL NOT, IN ITSELF, CONSTITUTE REVOCATION OF A
PROXY. UNLESS OTHERWISE DIRECTED, ALL PROXIES WILL BE VOTED FOR THE ELECTION OF
EACH OF THE INDIVIDUALS NOMINATED TO SERVE AS CLASS III DIRECTORS BY THE BOARD
OF DIRECTORS, FOR THE APPROVAL OF THE PERFORMANCE-BASED INCENTIVE COMPENSATION
ARRANGEMENT FOR THE COMPANY'S CHIEF EXECUTIVE OFFICER AND THE COMPANY'S CHIEF
FINANCIAL OFFICER, AGAINST THE SHAREHOLDER PROPOSAL ON NON-AUDIT SERVICES, AND
AS RECOMMENDED BY THE BOARD OF DIRECTORS WITH REGARD TO ALL OTHER MATTERS OR, IF
NO SUCH RECOMMENDATION IS GIVEN, IN THEIR OWN DISCRETION.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table lists as of the Record Date information as to the
persons believed by the Company to be beneficial owners of more than 5% of its
outstanding Common Stock:
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNERS BENEFICIAL OWNERSHIP CLASS(1)
------------------- -------------------- ----------
FMR Corp................................................ 9,884,340(2) 13.0%
Edward C. Johnson 3d
Abigail P. Johnson
82 Devonshire Street
Boston, Massachusetts 02109
Pacific Financial Research, Inc......................... 8,769,200(3) 11.5%
9601 Wilshire Boulevard, Suite 800
Beverly Hills, California 90210
Wellington Management Company, LLP...................... 7,373,350(4) 9.7%
75 State Street
Boston, Massachusetts 02109
---------------
(1) Based on 76,265,051 shares of Common Stock outstanding as of the Record
Date.
(2) This information is based on a Schedule 13G dated February 14, 2002. FMR
Corp. has sole voting power with respect to 998,310 shares held and sole
dispositive power with respect to 9,884,340 shares held. Mr. Johnson owns
12.0% of the aggregate outstanding voting stock of FMR Corp. and has sole
dispositive power with respect to 9,884,340 shares held. Ms. Johnson owns
24.5% of the aggregate outstanding voting stock of FMR Corp. and has sole
dispositive power with respect to 9,884,340 shares held.
(3) This information is based on a Schedule 13G dated February 13, 2002. Pacific
Financial Research, Inc. has sole voting power with respect to 8,147,500
shares held, no voting power with respect to 621,700 shares held and sole
dispositive power with respect to 8,769,200 shares held.
(4) This information is based on a Schedule 13G dated February 14, 2002.
Wellington Management Company, LLP has shared voting power with respect to
6,841,350 shares held and shared dispositive power with respect to 7,373,350
shares held.
2
1. ELECTION OF DIRECTORS
The Company's directors are divided into three classes, designated as Class
I, Class II and Class III, with staggered terms of three years each. The term of
office of directors in Class III expires at the Annual Meeting. The Board of
Directors proposes that the nominees described below, all of whom are currently
serving as Class III directors, be elected as Class III directors for a new term
of three years ending at the 2005 Annual Meeting of Shareholders and until their
successors are duly elected and qualified.
Dudley J. Godfrey, Jr. and Marvin B. Goodman, whose terms as Class III
directors expire at the Annual Meeting, will not be standing for reelection to
the Board of Directors. With the retirement of Messrs. Godfrey and Goodman, the
Board of Directors will have nine members.
Nominees receiving the largest number of affirmative votes cast will be
elected as directors up to the maximum number of directors to be chosen at the
election. Accordingly, any shares not voted affirmatively, whether by
abstention, broker non-vote or otherwise, will not be counted as affirmative
votes cast for any director.
PRINCIPAL OCCUPATION
NAME AND DIRECTORSHIPS
---- --------------------
NOMINEES FOR DIRECTORS -- CLASS III
Edward J. Zore....................... President and Chief Executive Officer of The Northwestern
Age 56 Mutual Life Insurance Company, the nation's largest seller
of individual life insurance, since June, 2001. President of
Northwestern Mutual from March, 2000 to June, 2001.
Executive Vice President, Life and Disability Income
Insurance, of Northwestern Mutual from 1998 to 2000.
Executive Vice President, Chief Financial Officer and Chief
Investment Officer of Northwestern Mutual from 1995 to 1998.
Prior thereto, Chief Investment Officer and Senior Vice
President of Northwestern Mutual. Also a Trustee of
Northwestern Mutual and a Director of Northwestern Mutual
Series Fund, Inc. and Mason Street Funds, Inc. A director of
the Company since July, 2000.
J. Thomas Bouchard................... Senior Vice President, Human Resources of International
Age 61 Business Machines from 1994 to 2000. Senior Vice President
and Chief Human Resources Officer of U.S. West Inc. from
1989 to 1994. Also a director of Health Net, Inc. and
Nordstrom fsb. A director of the Company since May, 2001.
Rozanne L. Ridgway................... Chair, Baltic American Enterprise Fund since 1994. Co-Chair
Age 66 of The Atlantic Council of the United States, an association
to promote better understanding of international issues,
from 1993 to 1996 and President from 1989 to 1992. A member
of the U.S. Foreign Service from 1957 to 1989, including
assignments as Ambassador for Oceans and Fisheries Affairs,
Ambassador to Finland, Ambassador to the German Democratic
Republic and Assistant Secretary of State for European and
Canadian Affairs. Also a director of The Boeing Company,
Emerson Electric Co., Minnesota Mining and Manufacturing
Company, the New Perspective Fund, Sara Lee Corporation, and
a trustee of the National Geographic Society and the Center
for Naval Analyses. A director of the Company since
February, 2002.
3
PRINCIPAL OCCUPATION
NAME AND DIRECTORSHIPS
---- --------------------
CONTINUING DIRECTORS
CLASS I DIRECTORS (TERM EXPIRING 2003)
Dennis Stevenson..................... Chairman of Pearson plc, a multimedia company and Chairman
Age 56 of HBOS plc, a banking institution. A director of the
Company for more than five years.
John R. Walter....................... Retired President and Chief Operating Officer of AT&T Corp.
Age 55 from November, 1996 to July, 1997. Chairman, President and
Chief Executive Officer of R.R. Donnelley & Sons Company, a
print and digital information management, reproduction and
distribution company, from 1989 through 1996. Also a
director of Abbott Laboratories, Jones Lang LaSalle, Deere &
Company, Applied Graphics Technologies and SNP Corporation
of Singapore. A director of the Company since October, 1998.
Jeffrey A. Joerres................... Chairman of the Company since May, 2001, and President and
Age 42 Chief Executive Officer of the Company since April, 1999.
Senior Vice President -- European Operations and Marketing
and Major Account Development from July, 1998 to April,
1999. Senior Vice President -- Major Account Development of
the Company from November, 1995 to July, 1998. A director of
Artisan Funds, Inc. and Johnson Controls Inc. A director of
the Company since April, 1999.
CLASS II DIRECTORS (TERM EXPIRING 2004)
J. Ira Harris........................ Chairman of J. I. Harris & Associates, a consulting firm,
Age 63 and Vice Chairman of The Pritzker Organization, LLC, a
merchant banking investment management services firm, since
January, 1998. Senior Managing Director of the investment
banking firm of Lazard Freres & Co. LLC until December,
1997. A director of the Company for more than five years.
Terry A. Hueneke..................... Executive Vice President of the Company since 1996. Senior
Age 59 Vice President -- Group Executive of the Company's former
principal operating subsidiary from 1987 until 1996. A
director of the Company for more than five years.
Willie D. Davis...................... President of All Pro Broadcasting Incorporated, a radio
Age 67 broadcasting company located in Los Angeles, California,
since 1977. A director of Alliance Bank Co., Dow Chemical
Company, Kmart Corporation, MGM Grand Inc., Sara Lee
Corporation, Strong Funds, MGM Inc., Wisconsin Energy, Inc.,
Johnson Controls Inc., Checkers Inc. and Bassett Furniture.
A director of the Company since May, 2001.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors has standing Audit, Executive Compensation,
Executive Performance Compensation, Executive, and Nominating and Governance
Committees. The Board of Directors held six meetings during 2001. The Board of
Directors took action by written consent once during 2001. Each director
attended at least 75% of the full board meetings and meetings of committees on
which each served in 2001, except for Mr. Stevenson, who attended four of six
meetings of the Board of Directors, and Mr. Davis, who attended at least 75% of
the full board and Nominating and Governance Committee meetings and one of three
Audit Committee meetings held subsequent to his appointment to the Board of
Directors.
4
The Audit Committee consists of Messrs. Zore (Chairman), Bouchard, Davis,
Goodman and Harris. Messrs. Zore, Bouchard, Davis, Goodman and Harris are
"independent" within the meaning of the listing standards of the New York Stock
Exchange. The functions of the Audit Committee include: (i) nominating and
recommending to the Board of Directors the selection of the independent auditors
for the annual audit; (ii) monitoring the independence of the outside auditors;
(iii) reviewing the planned scope of the annual audit and approving the fee
arrangements with the independent auditors; (iv) reviewing the financial
statements to be included in the Company's Annual Report on Form 10-K,
significant adjustments proposed by the independent auditors, accounting changes
and the quality of the Company's reported earnings; (v) making a recommendation
to the Board of Directors regarding inclusion of the audited financial
statements in the Company's Annual Report on Form 10-K; (vi) meeting privately
on a periodic basis with the independent auditors to review the adequacy of the
Company's internal controls; (vii) reviewing recommendations by the independent
auditors resulting from the audit to ensure that appropriate actions are taken
by management; (viii) reviewing matters of disagreement between management and
the independent auditors; (ix) monitoring the Company's internal audit and
accounting management and controls; (x) monitoring the Company's policies and
procedures regarding compliance with the Foreign Corrupt Practices Act and
conflicts of interest; and (xi) monitoring any litigation involving the Company
which may have a material financial impact on the Company or relate to matters
entrusted to the Audit Committee. The Board of Directors has adopted a charter
for the Audit Committee. The Audit Committee held four meetings during 2001. The
Audit Committee did not take action by written consent during 2001.
The Executive Compensation Committee consists of Messrs. Godfrey
(Chairman), Bouchard, Goodman, and Walter. The functions of this Committee are
to: (i) establish the compensation of Mr. Joerres, the President and Chief
Executive Officer of the Company, and until February, 2002 was responsible for
establishing the compensation of Mr. Hueneke, the Executive Vice President of
the Company, subject to ratification by the Board of Directors; (ii) approve the
compensation, based on the recommendations of the senior executive officers, of
certain other senior executives of the Company and its subsidiaries; (iii)
periodically review the compensation of other senior managers of the Company and
its subsidiaries; (iv) serve as the administrative committee for the Company's
stock option and stock purchase plans; and (v) administer the Company's
corporate senior management incentive plans. Certain performance-based
compensation for executive officers must also be approved by the Executive
Performance Compensation Committee as discussed below. The Executive
Compensation Committee held six meetings and took action by written consent once
during 2001.
The Executive Performance Compensation Committee consists of Messrs.
Goodman and Bouchard. The Executive Performance Compensation Committee acts as
the compensation committee of outside directors under Section 162(m) of the
Internal Revenue Code ("IRC"). The Executive Performance Compensation Committee
did not meet in 2001, but took action by written consent once during 2001.
The Executive Committee consists of Messrs. Joerres, Godfrey and Walter.
This Committee may exercise full authority in the management of the business and
affairs of the Company's Board of Directors when the Board of Directors is not
in session, except to the extent limited by Wisconsin law, the Company's
Articles of Incorporation or By-Laws, or as otherwise limited by the Board of
Directors. Although the Committee has very broad powers, in practice it acts
only infrequently to take formal action on a specific matter when it would be
impractical to call a meeting of the Board of Directors. The Executive Committee
did not meet or take action by written consent in 2001.
The Nominating and Governance Committee consists of Messrs. Harris
(Chairman), Godfrey, Davis, Walter and Zore. The functions of this Committee are
to: (i) recommend nominees to stand for election at annual shareholders
meetings, to fill vacancies on the Board of Directors and to serve on committees
of the Board of Directors; (ii) establish procedures and assist in identifying
candidates for Board membership; (iii) review the qualifications of candidates
for Board membership; (iv) review compensation arrangements in effect for
non-management members of the Board of Directors and recommend changes deemed
appropriate; (v) establish and review, for recommendation to the Board of
Directors, guidelines and policies on the size and composition of the Board, the
structure, composition and functions of the Board committees, and other
significant corporate governance principles and procedures; (vi) undertake
additional activities within the
5
scope of the primary functions of the Committee as the Committee or the Board of
Directors may determine. The Nominating and Governance Committee will consider
candidates nominated by shareholders in accordance with the Company's By-Laws.
The Nominating and Governance Committee met five times in 2001. The Nominating
and Governance Committee took action by written consent once during 2001.
REMUNERATION OF DIRECTORS
Directors of the Company who are not employees of the Company or any of its
subsidiaries, are currently entitled to an annual fee of $50,000, inclusive of a
retainer and all meeting and committee fees. In addition, each director is
reimbursed for travel expenses incurred in connection with attending Board of
Directors and committee meetings. In lieu of receiving payment of part or all
fees in cash, directors may elect, except for Mr. Stevenson who is required to
elect, to receive an option to purchase shares of the Company's Common Stock
under the 1994 Executive Stock Option and Restricted Stock Plan (the "1994
Plan"). For each full year for which all such cash fees are waived, a director
receives an option over 10,000 shares of the Company's Common Stock, which
number is adjusted based on the price per share of the Company's Common Stock on
the date of election relative to $28.00 for grants prior to November 5, 2001 and
$28.38 for grants on or after November 5, 2001. The per share purchase price for
each option awarded is equal to the fair market value of the Company's Common
Stock on the date of grant. Options granted under the 1994 Plan in place of cash
fees are exercisable for the vested portion during the director's tenure and a
limited period thereafter. In November 2001, Messrs. Harris and Zore agreed, and
Mr. Stevenson was required, to accept stock options under the 1994 Plan in lieu
of all of their cash fees through November 2006, Mr. Bouchard agreed to accept
stock options under the 1994 Plan in lieu of 75% of his cash fees through
November 2006, Mr. Davis agreed to accept stock options under the 1994 Plan in
lieu of 50% of his cash fees through November 2006, Mr. Godfrey agreed to accept
stock options under the 1994 Plan in lieu of 100% of his cash fees through
November 2002, Mr. Goodman elected to receive his fees through November 2002 in
cash, and Mr. Walter agreed to accept stock options under the 1994 Plan in lieu
of 50% of his cash fees through November 2002. In March 2002, Ms. Ridgway agreed
to accept stock options under the 1994 Plan in lieu of 50% of her cash fees
through November 2006. In addition, each director receives an annual option
grant over 5,000 shares of Common Stock under the 1994 Plan as additional
compensation for service on the Board of Directors. Such options are exercisable
during the director's tenure and a limited period thereafter.
Certain information with respect to Messrs. Godfrey and Walter is set forth
under "EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION,"
below.
6
SECURITY OWNERSHIP OF MANAGEMENT
Set forth in the table below, as of the Record Date, are the shares of the
Company's Common Stock beneficially owned by each director and nominee, each of
the named executive officers, and all directors and executive officers of the
Company as a group and the shares of the Company's Common Stock that could be
acquired within 60 days of the Record Date by such persons.
COMMON STOCK
NAME OF BENEFICIALLY RIGHT TO ACQUIRE PERCENT OF
BENEFICIAL OWNER OWNED(1) COMMON STOCK(1) CLASS(2)
---------------- ------------ ---------------- ----------
Jeffrey A. Joerres.............................. 184,735 147,575(3) *
Michael J. Van Handel........................... 61,917 47,237(3) *
J. Thomas Bouchard.............................. 16,434 14,434(4) *
Willie D. Davis................................. 12,493 12,493(4) *
Dudley J. Godfrey, Jr........................... 99,833(5) 63,333(4) *
Marvin Goodman.................................. 55,374(6) 52,374(4) *
J. Ira Harris................................... 98,333(7) 63,333(4) *
Terry A. Hueneke................................ 82,909 76,500(3) *
Rozanne L. Ridgway.............................. -- -- *
Dennis Stevenson................................ 95,558 63,333(4) *
John R. Walter.................................. 190,208 190,208(3)(4) *
Edward J. Zore.................................. 22,757 22,757(4) *
All Directors and Executive Officers as a
group......................................... 920,551 753,577 1.2%
---------------
(1) Except as indicated below, all shares shown in this column are owned with
sole voting and investment power. Amounts shown in the Right to Acquire
Common Stock column are also included in the Common Stock Beneficially Owned
column.
(2) No person named in the table beneficially owns more than 1% of the
outstanding shares of Common Stock. The percentage is based on the column
entitled Common Stock Beneficially Owned.
(3) Common Stock that may be acquired within 60 days of the Record Date through
the exercise of stock options.
(4) Includes the vested portion of options held under the 1991 Directors Stock
Option Plan and the 1994 Executive Stock Option and Restricted Stock Plan.
(5) Includes 500 shares held by Mr. Godfrey's spouse and 500 shares held in
trust.
(6) Includes 1,000 shares held by Mr. Goodman's spouse.
(7) Includes 35,000 shares held in a living trust for the benefit of Mr. Harris.
7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table (the "Summary Compensation Table") sets forth the
compensation for the past three years of each of the Company's named executive
officers:
ANNUAL
COMPENSATION LONG TERM COMPENSATION
--------------------------------------------- ----------------------------------
AWARDS PAYOUTS
----------------------- --------
SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND COMPENSATION STOCK OPTIONS/ PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) AWARDS($) SARS(#) ($) ($)(2)
------------------ ---- --------- -------- ------------ ---------- ---------- ------- ------------
J.A. Joerres............... 2001 $700,000 -- $ 3,324 -- 65,300 --(4) $25,000
Chairman, President and 2000 700,000 $587,549 3,997 -- 65,500 $524,893 7,000
Chief Executive Officer 1999(3) 568,493 200,000 16,085 $350,000 150,000 -- 7,183
T. A. Hueneke.............. 2001 $350,000 $216,455 -- -- -- -- $25,000
Executive Vice 2000 350,000 723,611 $ 3,997 -- -- -- 23,867
President 1999 350,000 678,913 16,085 -- 105,000 -- --
M. J. Van Handel........... 2001 $340,000 -- -- -- 15,950 --(4) $16,302
Senior Vice President 2000 310,000 $254,228 -- -- 15,500 $137,131 12,010
-- Chief Financial 1999 225,000 180,000 -- -- 50,000 -- 3,804
Officer and Secretary
---------------
(1) "Other Annual Compensation" includes the discount associated with purchases
of Common Stock under the Manpower 1990 Employee Stock Purchase Plan. The
Manpower 1990 Employee Stock Purchase Plan is available to all U.S.
employees (meeting certain qualifying standards) and employees in certain
other countries and is described below. See "Stock Purchase Plans."
(2) "All Other Compensation" consists of the dollar value of the Company's
contribution to accounts under the Company's Nonqualified Savings Plan.
(3) Mr. Joerres was appointed President and Chief Executive Officer of the
Company effective April 30, 1999.
(4) No payouts were made under the 2000 Corporate Senior Management Incentive
Plan for the performance cycle beginning on January 1, 2000 and ending on
December 31, 2001. In February 2002, this plan was terminated. In connection
with the termination of this plan, no payouts will be made under this plan
for performance cycles ending after December 31, 2001.
EMPLOYEE STOCK OPTION AND RESTRICTED STOCK PLANS
The Company maintains several plans pursuant to which incentive and
non-statutory stock options, restricted stock and SARs (stock appreciation
rights) have been granted in the past and/or may be granted in the future.
Participation is generally limited to full-time employees of the Company or its
subsidiaries. The option exercise price of all options granted under the
Company's plans to executive officers of the Company has been 100% of the
closing market price on the New York Stock Exchange as reported in the Midwest
Edition of The Wall Street Journal for the business day immediately prior to the
date of grant. Directors of the Company who are not full-time employees may
participate in the 1994 Executive Stock Option and Restricted Plan, as described
on page 6 hereof.
8
The following table summarizes certain information concerning option grants
to the named executive officers of the Company during 2001:
OPTION/SAR GRANTS IN FISCAL 2001
GRANT DATE
INDIVIDUAL GRANTS VALUE
------------------------------------------------------------- ------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE GRANT
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION DATE PRESENT
NAME GRANTED (#) FISCAL YEAR ($/SH)(1) DATE VALUE ($)(2)
---- ------------ ------------ --------- ---------- ------------
Jeffrey A. Joerres............. 65,300(3) 9.0% 31.78 3/12/11 $507,381
Terry A. Hueneke............... -- -- -- -- --
Michael J. Van Handel.......... 15,950(3) 2.2% 31.78 3/12/11 $123,932
---------------
(1) All options were granted at 100% of the fair market value on the date of
grant.
(2) Present value is determined by using the Black-Scholes option pricing model.
The Grant Date Present Value is based on a nine-year option life. Other
assumptions used for the Black-Scholes option pricing model include a
risk-free rate of return of 4.92%, a volatility factor of 17.10% and a
dividend yield of 0.50% during the option life. The resulting value derived
from the Black-Scholes model was reduced for each grant by 33.0% for lack of
marketability and liquidity.
(3) These options were granted on March 12, 2001 and become exercisable as to
25% of the number of shares covered by the option on each of the first four
anniversaries of the date of grant.
The following table summarizes for each of the named executive officers the
number of shares of Common Stock acquired upon exercise of options during the
fiscal year ended December 31, 2001, the dollar value realized upon exercise of
options, the total number of shares of Common Stock underlying unexercised
options held at December 31, 2001 (exercisable and unexercisable), and the
aggregate dollar value of in-the-money, unexercised options held at December 31,
2001 (exercisable and unexercisable). Value realized upon exercise is the
difference between the fair market value of the underlying Common Stock on the
exercise date and the exercise or base price of the option. Value of
unexercised, in-the-money options at fiscal year-end is the difference between
its exercise price and the fair market value of the underlying Common Stock as
of December 31, 2001, which was $33.71 per share. These values, unlike any
amounts which may be set forth in the column headed "value realized" have not
been, and may never be, realized. The underlying options have not been, and may
not be, exercised. The actual gains, if any, on exercise will depend on the
value of the Company's Common Stock on the date of exercise. There can be no
assurance that these values will be realized.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR 2001
AND FY-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END(#) AT FY-END($)
SHARES ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
Jeffrey A. Joerres..... -- -- 116,250 269,425 $1,041,716 $1,878,122
Terry A. Hueneke....... -- -- 71,000 84,000 1,064,972 942,890
Michael J. Van
Handel............... -- -- 37,875 92,075 363,008 354,459
LONG-TERM INCENTIVE PLANS
In March 2002, the 2000 Corporate Senior Management Incentive Plan was
terminated. As a result, no future payouts will be made under this plan for
performance cycles ending after December 31, 2001.
9
STOCK PURCHASE PLANS
The Company has adopted and maintains several employee stock purchase plans
designed to encourage employees to purchase Company Common Stock. The plans are
broad-based and are available to all U.S. employees (including qualifying
temporary employees) and employees in certain other countries. The plans
generally provide that employees accumulate funds through payroll deductions
over a prescribed offering period (one to seven years) and are entitled to
purchase shares at a discount (a maximum of 15%) from the market price at the
beginning and/or end of the offering period. No more than $25,000 of stock,
measured by the market price as of the beginning of the offering period, may be
purchased by any participating employee in any year.
PENSION PLANS
The Company maintains a broad-based qualified, noncontributory defined
benefit pension plan for eligible U.S. employees (the "Qualified Plan"). The
Company has also established a nonqualified, deferred compensation plan to
provide retirement benefits for management and other highly compensated
employees in the U.S. who are ineligible to participate in the Qualified Plan
(together with the "Qualified Plan," the "U.S. Pension Plans"). Certain of the
Company's foreign subsidiaries maintain various pension and retirement plans.
None of the Company's executive officers have participated in such foreign
plans.
Under the U.S. Pension Plans, a pension is payable upon retirement at age
65, or upon earlier termination if certain conditions are satisfied. As of
February 29, 2000, the U.S. Pension Plans were frozen, and the pension benefits
due to employees in the plan on that date were frozen. The pension benefit is
based on years of credited service as of February 29, 2000 and the lesser of (i)
the average annual compensation received during the last five consecutive
calendar years prior to retirement, for employees already retired on February
29, 2000, or as of February 29, 2000, for employees not then retired, or (ii)
$261,664. Compensation covered by the plans is base salary or hourly wages,
unless paid entirely on a commission basis, in which case commissions of up to
$20,000 per calendar year are taken into account. Bonuses, overtime pay or other
kinds of extra compensation are not considered. Upon retirement at age 65 or
later, Messrs. Joerres and Van Handel will be entitled to an aggregate annual
benefit equal to $11,882 and $14,472, respectively.
EMPLOYMENT AND OTHER AGREEMENTS
Messrs. Joerres and Van Handel have each entered into employment agreements
with the Company which were amended and restated as of February, 2002.
Under his agreements, Mr. Joerres is entitled to receive an annual base
salary of $700,000 or more as determined by the Executive Compensation Committee
and incentive compensation in accordance with an incentive compensation plan
administered by the Executive Compensation Committee, subject to ratification by
the Board of Directors. If Mr. Joerres' employment is terminated by the Company
for other than Cause (as defined in the agreement) or by Mr. Joerres for Good
Reason (also defined in the agreement), Mr. Joerres is entitled to receive: (i)
all base compensation and other benefits to which he was entitled through his
date of termination, including a prorated bonus; (ii) one year of base
compensation, plus the highest incentive bonus paid to him during the prior
three years or due for the current year (three times this total amount plus a
gross-up to cover any "golden parachute" tax if termination is in connection
with a change of control); and (iii) certain other benefits as specified in the
agreement.
Under his agreements, Mr. Van Handel is entitled to receive an annual base
salary of $340,000 or more as determined by the Executive Compensation Committee
and incentive compensation in accordance with an incentive compensation plan
administered by the Executive Compensation Committee. Mr. Van Handel's current
base salary is $400,000 per year. If Mr. Van Handel's employment is terminated
by the Company for other than Cause (as defined in the agreement) or by Mr. Van
Handel for Good Reason (also defined in the agreement), Mr. Van Handel is
entitled to receive: (i) all base compensation and other benefits to which he
was entitled through his date of termination, including a prorated bonus; (ii)
one year of base compensation, plus the highest incentive bonus paid to him
during the prior three years (three times this total amount plus a
10
gross-up to cover any "golden parachute" tax if termination is in connection
with a change of control); and (iii) certain other benefits as specified in the
agreement.
Mr. Hueneke served as Executive Vice President pursuant to an agreement
under which he received an annual base salary of $350,000 and an annual
incentive bonus based on the Company's Specified Operating Unit Profits (as
defined in the agreement). If Mr. Hueneke's employment had been terminated for
other than Cause (as defined in the agreement), Mr. Hueneke would have been
entitled to receive: (i) all base compensation and other benefits to which he
was entitled through his date of termination, including a prorated bonus; (ii)
two years of base compensation plus the greater of (a) the highest incentive
bonus paid to him during the prior five years and (b) the incentive bonus which
would have otherwise been paid to him for the year of termination; and (iii)
certain other benefits as specified in the agreement.
Effective February 28, 2002, Mr. Hueneke's full-time employment with the
Company ended. Mr. Hueneke has entered into an agreement with the Company
pursuant to which he relinquished his responsibility for Company operations in
the United States and Canada and agreed to continue to assist the Company as a
part-time employee through the orientation of his successor and the subsequent
transition of management responsibilities for the Company's operations in Latin
America and the Asia Pacific region. The initial period of part-time employment
expires February 28, 2003, but may be extended for an additional period of up to
one year. Pursuant to the agreement, the Company has agreed to pay Mr. Hueneke
his base salary and incentive bonus through February 28, 2002, plus a separation
benefit in a lump sum amount equal to $1,520,234 in accordance with the terms of
his employment agreement. In addition, the Company has agreed to pay Mr. Hueneke
compensation at the rate of $250,000 per year during the initial period of
part-time employment, plus a bonus to be determined at the discretion of the
Company's Chief Executive Officer. Mr. Hueneke has agreed not to compete with
the Company or solicit employees to leave the Company's employment during the
period of employment and for two years after the date of his complete
termination of employment, and to release all claims relating to his employment
with the Company. Upon complete termination of his employment with the Company,
payment of Mr. Hueneke's benefits under the Company's retirement plan, deferred
compensation plan and non-qualified savings plan will be made or will begin, and
the Company will continue to provide medical and dental benefits to Mr. Hueneke.
On that date, Mr. Hueneke also will be considered to have terminated his
employment due to early retirement and all of the outstanding stock options held
by Mr. Hueneke will become fully exercisable and will remain exercisable for one
year following the date of complete termination of his employment with the
Company. In addition, the shares of Common Stock to which Mr. Hueneke is
entitled under the Company's Deferred Stock Plan will be distributed to Mr.
Hueneke on January 2 of the year following the year in which his employment with
the Company is completely terminated.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Executive Compensation Committee of the Board of Directors (the
"Committee") has furnished the following report on executive compensation.
Because certain matters related to performance-based compensation are approved
by the Executive Performance Compensation Committee of the Board of Directors
(the "Performance Compensation Committee"), that committee joins in the report
of the Committee.
The Committee presently consists of four non-employee directors. During
2001, the Committee was responsible for establishing the compensation of Mr.
Joerres, the Chairman of the Board, President and Chief Executive Officer of the
Company and Mr. Hueneke, Executive Vice President of the Company, subject to
ratification by the Board of Directors. Mr. Hueneke relinquished his
responsibility for Company operations in the United States and Canada in January
2002, but will continue to assist the Company through the orientation period for
his successor and the subsequent transition of management responsibilities for
the Company's operations in Latin America and the Asia Pacific region. In
addition, the Committee has responsibility to approve the compensation of other
senior executives, including Mr. Van Handel, Senior Vice President and Chief
Financial Officer, and for administration of the 2000 and 2002 Corporate Senior
11
Management Incentive Plans (discussed below). The Committee also has authority
to administer the Company's 1991 Executive Stock Option and Restricted Stock
Plan and 1994 Executive Stock Option and Restricted Stock Plan (with respect to
option grants to employees but not to directors), and to administer the
Company's 1990 Employee Stock Purchase Plan and Savings Related Share Option
Scheme, although it delegates to administrative committees the day-to-day
administration of such plans.
The Performance Compensation Committee presently consists of two
non-employee directors, both of whom are members of the Committee. This
committee has final authority to act as the compensation committee of outside
directors under Section 162(m) of the Internal Revenue Code, with final
responsibility for establishing, administering and certifying attainment of
performance goals under the regulations promulgated under that Section. These
include such actions under the 2000 and 2002 Corporate Senior Management
Incentive Plans as the Committee considers appropriate in recognition of the
requirements of that Section, as well as making grants of stock options where
appropriate in accordance with the requirements of that Section.
General Compensation Policies
The Committee's broad intent is to provide a total compensation program for
the Company's senior executives that serves to attract, retain and motivate
executives with the skills and experience required for the success of the
Company's business and that creates a commonality of interest between the senior
executives and the Company's shareholders. These objectives have been pursued
through a compensation structure that consists in general of three principal
components: base salary, annual incentive compensation and equity-based
compensation, including periodic grants of stock options and occasionally
restricted stock. The Committee believes that this approach creates both
short-term and long-term incentives for corporate management. As a result of
these policies, a high proportion of compensation for the Company's senior
executives is at risk through the annual incentive, generally based on formulas
tied to profitability of the Company and where appropriate the executive's
profit center, as well as stock options, which create a direct link between
long-term remuneration and shareholder return.
Base salary determinations are an important ingredient in attracting and
retaining quality personnel in a competitive market. Base salaries are set at
levels based generally on subjective factors, including the individual's level
of responsibility, experience and past performance record, as well as base
salary levels for comparable positions at other companies. These are some, but
not all, of the same companies as those included in the Standard & Poor's
Supercomposite Employment Services Index which is used as a peer group to
compare shareholder returns in the Performance Graph. As a large multinational
business, the Company competes for senior executive talent with large public and
private companies throughout the world, many of which are not in businesses
which directly compete with the Company.
The Committee also believes that a significant portion of compensation
should be directly related to and contingent upon Company profitability based on
objective performance criteria. Accordingly, it is the Company's general
practice that the executive officers of the Company as well as many other senior
executives of the Company and its subsidiaries participate in incentive
compensation arrangements based on formulas and other criteria tied to
profitability of the individual's profit center or the Company as a whole.
The Committee believes that it is important that the executive officers and
other key executives of the Company and its subsidiaries hold equity positions
in the Company. Stock option grants to executives permit them to hold equity
interests at more meaningful levels than they could through other alternatives,
such as stock purchase arrangements. Accordingly, while the Committee is
conscious of the dilutive effects of stock options on shareholders, it believes
that stock option grants at reasonable levels are an important component of
executive compensation. During 2001, options covering approximately 375,000
shares of Common Stock were granted under the Company's stock option plans to
approximately 39 employees, including two of the Company's three executive
officers. In addition, because of the nature of the Company's operations, the
Company's management believes, and the Committee agrees, that it is important
that stock options be granted periodically to a broad range of employees where
the options provide an important incentive. Although no such grant was made in
2001, approximately 735 employees received option grants in October, 2000 and
approximately 790 employees received option grants in February, 2002.
12
Corporate Senior Management Incentive Plans
In 2000, the Committee established the 2000 Corporate Senior Management
Incentive Plan for designated corporate executives of the Company. Participation
in the plan by Mr. Joerres was submitted to and approved by the shareholders at
the 2000 Annual Meeting of Shareholders. Mr. Van Handel was the only other
participant in this 2000 plan.
The Committee has recently adopted a new 2002 Corporate Senior Management
Incentive Plan to replace the 2000 plan beginning in 2002. Participation in the
annual performance-based incentive plan which is part of the 2002 plan by the
Chief Executive Officer and the Chief Financial Officer is being submitted to
the shareholders for approval at the Annual Meeting (see "Approval of a
Performance-Based Incentive Compensation Arrangement for the Company's Chief
Executive Officer and the Company's Chief Financial Officer" in this Proxy
Statement).
The 2000 plan included an annual cash incentive plan and a long-term
incentive compensation plan. Under the annual plan, the participating executive
was entitled to receive an annual award for any year based on the Company's
attainment of objective goals for growth in earnings per share and controlling
growth in net assets of the Company. The goals and award opportunities were
established at the beginning of each year by the Committee or, in the case of
the Chief Executive Officer, by the Performance Compensation Committee based on
the recommendation of the Committee.
Under the long-term incentive component of the 2000 plan, the participating
executive was entitled to receive an incentive award for each three-year period
beginning in 2000 and continuing with successive three-year cycles beginning in
later years based on achievement of a goal for improvement in cumulative
economic profit of the Company over the period. Again, the goal and the possible
award amount for attainment of the goal were established at the beginning of
each year by the Committee or, in the case of Mr. Joerres, by the Performance
Compensation Committee based on the recommendation of the Committee. At
inception, three cycles began simultaneously -- a one-year cycle for 2000, a
two-year cycle for 2000-2001, and a three-year cycle for 2000-2002.
The long-term incentive component of the 2000 plan also provided for annual
grants of stock options to participating executives. The number of shares for
each annual grant was determined under a formula based on the target award
levels established for the three concurrent cycles covering the year and the
value of the option grant. The target award levels and the value of the stock
option grant were determined by the Committee or, in the case of Mr. Joerres, by
the Performance Compensation Committee based on the recommendation of the
Committee. The number of shares covered by the option was set such that the
value of the option grant was equal to a fixed percentage of the aggregate
target award levels.
The new 2002 Corporate Senior Management Incentive Plan includes an annual
cash incentive plan and a provision for periodic grants of stock options. The
annual plan has two components. Under the first component, a participating
executive is entitled to receive an award for any year based on the Company's
attainment of objective goals for earnings per share and economic profit for the
year. A description of this component of the 2002 plan is included under
"Approval of a Performance-Based Incentive Compensation Arrangement for the
Company's Chief Executive Officer and the Company's Chief Financial Officer" in
this Proxy Statement.
The second component of the annual plan provides for the payment of a cash
incentive each year based on a participant's achievement of certain operating
objectives for the year. These operating objectives, and possible award
opportunities for achievement of the objectives, are established for each
participant at the beginning of the year by the Committee, and following the
close of the year the Committee determines whether the objectives have been
achieved and, if so, the amount of the award earned.
As indicated, the 2002 plan also provides for the periodic grant of stock
options to participating executives. The determination of whether such a grant
will be made and, if so, the number of shares to be covered by the option, is
made by the Committee or, in the case of the Chief Executive Officer or the
Chief Financial Officer, the Performance Compensation Committee based on the
recommendations of the Committee. Any such grants are made under the 1994
Executive Stock Option and Restricted Stock Plan.
13
The Committee determined to adopt the new 2002 Corporate Senior Management
Incentive Plan to replace the 2000 plan principally for the following reasons.
The Committee determined that the long-term incentive component under the 2000
plan, which provided for incentive awards based on achievement of a cumulative
economic profit goal for each three-year cycle, should be eliminated due to the
difficulty of setting realistic goals given the cyclicality inherent in the
Company's industry. The Committee found it desirable to simplify the overall
incentive compensation arrangement by eliminating this component and modifying
the annual plan measures to consist of an earnings per share goal and an
economic profit goal. Also, the Committee determined to adopt a more flexible
approach for the long-term component of the plan by replacing the stock option
grant formula, which was a feature of the 2000 plan, with Committee discretion.
Beginning with 2002, and subject to receipt of shareholder approval, the
Chief Executive Officer and the Chief Financial Officer will become participants
in the 2002 plan. At present, they will be the only two participants in such
plan. In connection with the Committee's adoption of the 2002 plan, Mr. Joerres
and Mr. Van Handel have agreed to waive any rights they may have under the 2000
plan.
Chief Executive Officer Compensation
Mr. Joerres' current base salary is $700,000 per year. This amount was
determined by the Committee based on its subjective evaluation of factors
including Mr. Joerres' level of responsibility and his skill and experience. Mr
Joerres' incentive award for 2001 was determined in accordance with the 2000
Corporate Senior Management Incentive Plan. Because the Company did not attain
the financial performance goals established under the annual award component of
that plan for Mr. Joerres for 2001, he did not receive an award for the year. In
addition, because the Company did not attain the financial performance goal
established under the long-term incentive compensation component of the plan for
the two-year cycle ending December 31, 2001, Mr. Joerres did not receive a
long-term incentive award for that cycle.
Under the terms of the 2000 plan, Mr. Joerres was granted an option in
March 2001 to purchase 65,300 shares of the Company's Common Stock. This grant
was made under the 1994 Executive Stock Option and Restricted Stock Plan. As
explained above, the number of shares covered by the option was determined under
a formula based on the target award levels established for the three concurrent
cycles under the long-term incentive component of the plan covering the year and
the value of the option grant. These target award levels were determined by the
Performance Compensation Committee, based on the recommendation of the
Committee, using a subjective evaluation of factors including Mr. Joerres' level
of responsibility, his skill, experience and performance, his past and current
total compensation and compensation opportunities, and compensation including
equity-based compensation of executives holding positions comparable to his
position at other companies. Such option has an exercise price equal to the fair
market value of the Common Stock on the date of grant and is not immediately
exercisable, but becomes exercisable over a four-year vesting period.
In February 2002, Mr. Joerres was granted an option by the Performance
Compensation Committee, based on the recommendation of the Committee, to
purchase 250,000 shares of the Company's Common Stock. In determining to make
this option grant and the number of shares covered by the option, the
Performance Compensation Committee and the Committee considered Mr. Joerres'
level of responsibility, his skill, experience and performance, the level of
stock option grants previously made to him, the value of the option, Mr.
Joerres' past and current total compensation and compensation opportunities, and
the compensation including equity-based compensation of executives who hold
positions comparable to his position at other companies. Such option will become
exercisable as follows: (i) for one-half of the total shares covered by the
options, the options will become exercisable as to 25% of the shares on each of
the next four anniversaries of the date of grant; (ii) for one-fourth of the
total shares covered by the options, the options will become exercisable on the
fifth anniversary of the date of grant or, if sooner, on the date that the
market price of the Company's common stock exceeds 175 percent of the exercise
price of the options; and (iii) for one-fourth of the total shares covered by
the options, the options will become exercisable on the fifth anniversary of the
date of grant or, if sooner, on the date that the market price of the Company's
common stock exceeds 200 percent of the exercise price of the options. In
considering future option grants to Mr. Joerres over the next two to three years
in particular, the Committee intends to take this option grant into account in
its evaluation of whether to make the future grant and, if so, the size of the
grant.
14
Other Executive Officers of the Company
The base salary and annual incentive of Mr. Hueneke have been determined on
the basis of his employment agreement. Mr. Hueneke's annual incentive award has
been determined under the employment agreement by measuring the total operating
unit profits (subject to certain adjustments) of certain regions in which the
Company conducts business over which Mr. Hueneke has responsibility for the
fiscal year against a graduated scale after exceeding a threshold level. As a
result of the fact that Mr. Hueneke had responsibility during 2001 for certain
additional regions which are not included in the annual incentive formula set
out in his employment agreement, the Committee granted him a discretionary award
for 2001 equal to $154,422, in addition to the $62,033 award required under the
agreement. This amount was determined by applying the formula in the agreement
as if these additional regions were included.
Mr. Van Handel's base salary for 2001 was $340,000. The Committee has
increased his base salary to $400,000 beginning in 2002. The amount of Mr. Van
Handel's base salary for 2001 and as increased for 2002 was determined by the
Committee based on its subjective evaluation of factors including Mr. Van
Handel's level of responsibility, his skill, experience and performance, and the
compensation levels of executives who hold positions that are comparable to his
at other companies. Mr. Van Handel's incentive award for 2001 was determined in
accordance with the 2000 Corporate Senior Management Incentive Plan. Because the
Company did not attain the financial performance goals established under the
annual award component of that plan for Mr. Van Handel for 2001, he did not
receive an annual award for the year. In addition, because the Company did not
attain the financial performance goal established under the long-term incentive
compensation component of the plan for the two-year cycle ending December 31,
2001, Mr. Van Handel did not receive a long-term incentive award for that cycle.
Under the terms of the 2000 plan, Mr. Van Handel was granted an option in
March 2001 to purchase 15,950 shares of the Company's Common Stock. This grant
was made under the 1994 Executive Stock Option and Restricted Stock Plan. As
explained previously, the number of shares covered by the option was determined
under a formula based on the target award levels established for the three
concurrent cycles under the long-term incentive component of the plan covering
the year and the value of the option grant. These target award levels were
determined by the Committee using a subjective evaluation of factors including
Mr. Van Handel's level of responsibility, his skill, experience and performance,
his past and total compensation and compensation opportunities, and compensation
including equity-based compensation of executives holding positions comparable
to his position at other companies. Such option has an exercise price equal to
the fair market value of the Common Stock on the date of grant and is not
immediately exercisable, but becomes exercisable over a four-year vesting
period.
In February 2002, Mr. Van Handel was granted an option by the Performance
Compensation Committee, based on the recommendation of the Committee, to
purchase 120,000 shares of the Company's Common Stock. In determining to make
this option grant and the number of shares covered by the option, the
Performance Compensation Committee and the Committee considered Mr. Van Handel's
level of responsibility, his skill, experience and performance, the level of
stock option grants previously made to him, the value of the option, Mr. Van
Handel's past and current total compensation and compensation opportunities, and
the compensation including equity-based compensation of executives who hold
positions comparable to his position at other companies. Such option will become
exercisable as follows: (i) for one-half of the total shares covered by the
options, the options will become exercisable as to 25% of the shares on each of
the next four anniversaries of the date of grant; (ii) for one-fourth of the
total shares covered by the options, the options will become exercisable on the
fifth anniversary of the date of grant or, if sooner, on the date that the
market price of the Company's common stock exceeds 175 percent of the exercise
price of the options; and (iii) for one-fourth of the total shares covered by
the options, the options will become exercisable on the fifth anniversary of the
date of grant or, if sooner, on the date that the market price of the Company's
common stock exceeds 200 percent of the exercise price of the options. In
considering future option grants to Mr. Van Handel over the next two to three
years in particular, the Committee intends to take this option grant into
account in its evaluation of whether to make the future grant and, if so, the
size of the grant.
15
Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public corporations for compensation over $1,000,000 for any fiscal
year paid to the corporation's chief executive officer and four other most
highly compensated executive officers in service as of the end of any fiscal
year. However, Section 162(m) also provides that qualifying performance-based
compensation will not be subject to the deduction limit if certain requirements
are met. Where necessary for covered executives, the Committee generally seeks
to structure compensation amounts and plans which meet the requirements for
deductibility under this provision. However, because of uncertainties as to the
application and interpretation of Section 162(m) and the regulations issued
thereunder, no assurance can be given, notwithstanding the efforts of the
Committee in this area, that compensation intended by the Committee to satisfy
the requirements for deductibility under Section 162(m) does in fact do so. In
addition, the Committee may implement compensation arrangements in certain cases
which do not satisfy these requirements for deductibility if it determines that
such arrangements are appropriate under the circumstances.
THE EXECUTIVE COMPENSATION COMMITTEE THE EXECUTIVE PERFORMANCE COMPENSATION COMMITTEE
Dudley J. Godfrey, Jr. (Chairman) Marvin B. Goodman
J. Thomas Bouchard J. Thomas Bouchard
Marvin B. Goodman
John R. Walter
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Dudley J. Godfrey, Jr. is a shareholder in Godfrey & Kahn, S.C., which is
general counsel to the Company.
The Company has retained Mr. Walter, through Ashlin Management Company, to
provide certain consulting services to the senior executive officers of the
Company. In 1999, the Company granted an option to Mr. Walter to purchase
175,000 shares of the Company's Common Stock in connection with this agreement
and in recognition of his agreement to serve as Chairman of the Company. As of
the Record Date, Mr. Walter had exercised the option with respect to 35,000
shares. During 2001, the Company paid Ashlin Management Company a fee in the
amount of $166,667 and reimbursed Mr. Walter's reasonable out-of-pocket
expenses. As of April 2001, the Company is no longer paying any fees to Ashlin
Management Company for the continuation of this agreement. Ashlin Management
Company is owned by Mr. Walter.
16
PERFORMANCE GRAPH
Set forth below is a graph for the periods ending December 31, 1996-2001
comparing the cumulative total shareholder return on the Company's Common Stock
with the cumulative total return of companies in the Standard & Poor's 400
Midcap Stock Index, the Standard & Poor's Supercomposite Employment Services
Index and the Standard & Poor's Midcap Commercial Services-Specialized Index.
The Company has determined to compare its cumulative total shareholder return to
the Standard & Poor's Supercomposite Employment Services Index rather than the
Standard & Poor's Midcap Commercial Services-Specialized Index because the
Standard & Poor's Midcap Commercial Services-Specialized Index was discontinued
as of December 31, 2001 and has not been replaced and the Standard & Poor's
Supercomposite Employment Services Index includes a significant number of the
largest domestic, publicly traded companies in the staffing industry. The
Company is included in the Standard & Poor's Supercomposite Employment Services
Index and the Company estimates that it constituted approximately 20% of the
total market capitalization of the companies included in the index as of
December 31, 2001. The graph assumes a $100 investment on December 31, 1996 in
the Company's Common Stock, the Standard & Poor's 400 Midcap Stock Index, the
Standard & Poor's Supercomposite Employment Services Index and the Standard &
Poor's Midcap Commercial Services-Specialized Index and assumes the reinvestment
of all dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG MANPOWER, S&P 400 MIDCAP STOCK INDEX,
S&P SUPERCOMPOSITE EMPLOYMENT SERVICES INDEX
AND S&P MIDCAP COMMERCIAL SERVICES-SPECIALIZED INDEX
[PERFORMANCE GRAPH]
S&P SUPERCOMPOSITE S&P MIDCAP
S&P 400 MIDCAP EMPLOYMENT SERVICES COMMERCIAL SERVICES-
MANPOWER STOCK INDEX INDEX SPECIALIZED INDEX
-------- -------------- ------------------- --------------------
1996 100.00 100.00 100.00 100.00
1997 110.00 130.00 120.00 124.00
1998 79.00 153.00 89.00 129.00
1999 119.00 174.00 81.00 117.00
2000 121.00 202.00 55.00 136.00
2001 108.00 199.00 50.00 136.00
DECEMBER 31,
--------------------------------------------
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----
Manpower................................................. $100 110 79 119 121 108
S&P 400 Midcap Stock Index............................... $100 130 153 174 202 199
S&P Supercomposite Employment Services Index............. $100 120 89 81 55 50
S&P Midcap Commercial Services-Specialized Index......... $100 124 129 117 136 136
17
2. APPROVAL OF A PERFORMANCE-BASED INCENTIVE COMPENSATION
ARRANGEMENT FOR THE COMPANY'S CHIEF EXECUTIVE OFFICER AND
THE COMPANY'S CHIEF FINANCIAL OFFICER
The Executive Compensation Committee of the Board of Directors has
established, and the Executive Performance Compensation Committee of the Board
of Directors has approved, a new 2002 Corporate Senior Management Incentive Plan
for designated corporate senior executives of the Company. This plan includes an
annual incentive arrangement which provides for the payment of annual awards to
Company executives participating in the plan based on the attainment of goals
relating to Company financial performance.
Subject to receipt of shareholder approval, the Chief Executive Officer and
the Chief Financial Officer of the Company will be eligible to participate in
this annual incentive arrangement beginning in 2002. In order to qualify for the
performance-based compensation exception under Section 162(m) of the Internal
Revenue Code and thereby avoid the potential nondeductibility of the
compensation paid under the arrangement to the Chief Executive Officer and the
Chief Financial Officer, the material terms of the performance goals under which
the compensation is to be paid must be disclosed to and subsequently approved by
the shareholders of the Company before the compensation is paid. Accordingly,
the material terms of the performance goals under such arrangement are being
submitted for shareholder approval. Participation by the Chief Executive Officer
and the Chief Financial Officer of the Company will take effect only if
shareholder approval is obtained.
The arrangement provides for the payment of annual awards based on the
Company's attainment of goals for earnings per share and economic profit for the
relevant year. Under the plan, the participating executive is assigned award
opportunities for threshold, target, and outstanding performance in the
attainment of each of these goals.
Earnings per share are the fully diluted earnings per share of the Company
and its subsidiaries on a consolidated basis. Economic profit is net operating
profit after taxes of the Company and its subsidiaries on a consolidated basis
less a capital charge. The capital charge is equal to adjusted capital employed
by the Company multiplied by a weighted average cost of capital. The weighted
average cost of capital is the weighted average of the Company's cost of equity
and cost of debt as determined by the Executive Performance Compensation
Committee, based on the recommendation of the Executive Compensation Committee,
for the relevant year.
The earnings per share and economic profit goals and award opportunities
for attainment of these goals are established each year by the Executive
Performance Compensation Committee, based on the recommendation of the Executive
Compensation Committee, at the beginning of the year. Depending upon the actual
performance of the Company for the year as measured against these goals, the
participating executive would be paid a cash award following the close of the
year. The maximum award that a participating executive may receive for any year
under the arrangement for attainment of the earnings per share and economic
profit goals is $3 million.
The arrangement is subject to variation with regard to the relative weight
assigned to the earnings per share and economic profit goals, including possible
elimination of one of the goals, in establishing award opportunities from year
to year.
The amounts, if any, which may be received by Mr. Joerres, the Chief
Executive Officer, and Mr. Van Handel, the Chief Financial Officer, under the
arrangement are not yet determinable. The amounts which Mr. Joerres and Mr. Van
Handel would have received for 2001 under the arrangement if it had been
effective for that year is not determinable because the earnings per share and
economic profit goals, and award opportunities for attainment of the goals, may
vary from year to year, and no such goals or award opportunities were
established for 2001. However, if such arrangement had been in place for 2001
and the earnings per share and economic profit goals were established using the
same methodology used to establish the 2002 earnings per share and economic
profit goals, and if the award opportunities for 2001 were the same as the award
opportunities for 2002, Mr. Joerres and Mr. Van Handel would not have earned
awards for 2001.
18
The 2002 Corporate Senior Management Incentive Plan, including the annual
bonus plan, may be amended in any manner without shareholder approval. Certain
amendments may, under Section 162(m) of the Internal Revenue Code, affect the
deductibility of payments under the plan to participating Company executives. No
such amendments are currently contemplated.
VOTE REQUIRED AND BOARD RECOMMENDATION
The affirmative vote of a majority of the votes cast on the proposal is
required to approve the proposal. Abstentions will not be counted as voting,
and, therefore, will have no impact on the approval of the proposal.
The Board of Directors recommends you vote FOR approval of the
performance-based incentive compensation arrangement for the Company's Chief
Executive Officer and the Company's Chief Financial Officer, and your proxy will
be so voted unless you specify otherwise.
AUDIT COMMITTEE REPORT
The Company has an Audit Committee composed of four directors who are
"independent" within the meaning of the listing standards of the New York Stock
Exchange. The Board of Directors adopted the current charter for the Audit
Committee in April 2000. The Audit Committee reviewed and confirmed its approval
of the charter in May 2001. In March 2002, the Audit Committee recommended
modifications to the charter in connection with its adoption of the Policy
Regarding Non-Audit Services, which is described below. The Board of Directors
adopted these modifications in March 2002. The charter sets forth the
responsibilities and powers of the Audit Committee with respect to the Company's
outside auditors, internal audit and accounting, conflicts of interest and other
reporting and disclosure obligations.
In 2001, the Audit Committee met four times. Over the course of these
meetings, the Audit Committee met with the Company's chief executive officer,
chief financial officer, other senior members of the finance department, the
director and the manager of internal audit, the Company's outside counsel and
the Company's independent auditors. During these meetings, the Audit Committee
reviewed and discussed:
- the Company's annual internal and external audit plans and the internal
and external staffing resources available to carry out the Company's
audit plans,
- internal audit results, including information technology systems audits,
and the status of items identified in prior audits,
- risk assessment in connection with structuring both the internal and
external audit plans,
- the Company's systems of internal controls,
- the impact of new accounting pronouncements,
- current tax matters affecting the Company, including reporting
compliance, audit activity, and tax planning,
- the status of pending litigation, and
- the Company's compliance with the Foreign Corrupt Practices Act and
ethical standards.
The Audit Committee met once in private session with the Company's
independent auditors and met three times in private session with the director of
internal audit. During the private session with the Company's independent
auditors, the Audit Committee confirmed that the independent auditors were
satisfied with the positions taken by management in the presentation of the
Company's financial results and that the independent auditors were satisfied
with the adequacy of the Company's internal controls. During the private
sessions with the Company's director of internal audit, the Audit Committee
reviewed and discussed the adequacy of the internal audit department's
resources, the level of management support and cooperation received by the
internal audit department, and management's response to recommendations of the
internal audit department.
19
In addition to the meetings discussed above, the chairman of the Audit
Committee reviewed with management and the Company's outside auditors the
Company's financial statements for each quarter of 2001 prior to the quarterly
release of earnings.
In February 2002, members of senior management reviewed and discussed the
audited financial statements for the fiscal year ended December 31, 2001 with
the Audit Committee. This discussion included the adoption of significant
accounting pronouncements, the disclosure of financing transactions and
acquisitions, and the application of accounting principles. At this meeting, the
Audit Committee also discussed with Arthur Andersen the matters required to be
discussed by Statement on Auditing Standards No. 61. This discussion included
management's application of accounting principles, overall observations from the
2001 audit, including the overall quality of earnings, financial statement risk
areas, and other required items.
The Audit Committee has reviewed the fees billed by Arthur Andersen to the
Company during 2001, which consist of the following:
Audit Fees. The aggregate fees billed for professional services rendered
by Arthur Andersen for both the audit of the Company's financial statements as
of and for the year ended December 31, 2001 and the review of the financial
statements included in the Company's Quarterly Reports on Form 10-Q were
$1,291,200. These fees were approved by the Audit Committee in December, 2001.
Financial Information Systems Design and Implementation Fees. Arthur
Andersen did not provide any financial information systems design and
implementation services to the Company during 2001. Financial information
systems design and implementation services are professional services for both
operating, or supervising the operation of, the Company's information systems or
managing its local area networks and designing or implementing a hardware or
software system that aggregates source data underlying the financial statements
or generates information that is significant to its financial statements taken
as a whole.
All Other Fees. The aggregate fees billed by Arthur Andersen during 2001
for non-audit and non-information systems related services were $3,006,171,
which included:
- $1,008,837 for tax compliance, tax return preparation and tax
consultation in various countries,
- $249,845 for cost reduction consulting in the U.S.,
- $399,525 for accounting and financial consultation, which included due
diligence services for acquisitions, securities law compliance and
finance staff augmentation,
- $663,585 for internal control services, which included assistance on
information technology systems reviews and assistance on audits of
foreign operations, and
- $684,379 for information technology systems consultation, which primarily
consisted of an enterprise resource planning vendor evaluation project in
the United Kingdom.
The Audit Committee has also received the written disclosures and the
letter from Arthur Andersen required by Independence Standards Board No. 1 and
discussed with Arthur Andersen the auditor's independence. In particular, at
three meetings during 2001 and at the meeting in February 2002 the Audit
Committee reviewed and discussed the significant categories of non-audit
services provided by Arthur Andersen to the Company during 2001 that are
described above and discussed the relationship between an audit partner's
compensation and the level of non-audit services provided to an audit client.
The Audit Committee has considered whether the provision of financial
information systems design and implementation services and other non-audit
services is compatible with Arthur Andersen's independence and satisfied itself
as to the auditor's independence. The Audit Committee believes that Arthur
Andersen has been objective and impartial in conducting the 2001 audit, and
believes that the provision of these services has not adversely affected the
integrity of the Company's auditing and financial reporting processes.
However, in recognition of the importance of maintaining investor
confidence in the Company's financial statements, the Audit Committee adopted a
Policy Regarding Non-Audit Services in March 2002 which is attached hereto as
Appendix A. The purpose of the policy is to designate the types of non-audit
services that may be provided to the Company by the independent auditors
retained by the Company each year to audit the
20
Company's financial statements. The policy will prohibit the Company's
independent auditors from providing any financial information systems design and
implementation services, information technology systems consultation and
internal audit services, including internal control services, which include the
types of services described under the fourth and fifth bullet points above. The
policy will also prohibit the Company from retaining its independent auditors to
provide the services specified under the rules and regulations of the Securities
and Exchange Commission. The policy is discussed in further detail under the
heading "3. Shareholder Proposal on Non-Audit Services."
In performing all of the functions described above, the Audit Committee
acts only in an oversight capacity. The Audit Committee does not complete its
reviews of the matters described above prior to the Company's public
announcements of financial results and, necessarily, in its oversight role, the
Audit Committee relies on the work and assurances of the Company's management,
which has the primary responsibility for the Company's financial statements and
reports, and of the independent auditors, who, in their report, express an
opinion on the conformity of the Company's annual financial statements to
generally accepted accounting principles.
In reliance on these reviews and discussions, and the report of the
independent auditors, the Audit Committee has recommended to the Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001.
THE AUDIT COMMITTEE
Edward J. Zore, Chairman
J. Thomas Bouchard
Willie D. Davis
Marvin B. Goodman
J. Ira Harris
INDEPENDENT AUDITORS
Arthur Andersen LLP, an independent public accounting firm, is serving as
the Company's independent auditors as of the date hereof, served as the
Company's principal accountant for the fiscal year ended December 31, 2001 and
has audited the Company (or its predecessors) since 1975. Given Arthur
Andersen's current circumstances, however, the Audit Committee has not
determined whether to recommend that the Board of Directors appoint Arthur
Andersen to audit the Company's financial statements for the fiscal year ending
December 31, 2002. The Company expects that representatives of Arthur Andersen
will attend the Annual Meeting and have the opportunity to make a statement if
they so desire, and will also be available to respond to appropriate questions.
3. SHAREHOLDER PROPOSAL ON NON-AUDIT SERVICES
The following proposal was submitted by the Massachusetts State Carpenters
Pension Fund, 350 Fordham Road, Wilmington, Massachusetts 01887, owner of 1,400
shares of Common Stock (the "Fund"). If a representative of the Fund who is
qualified under state law is present and submits the proposal for a vote, then
the proposal will be voted upon at the Annual Meeting. In accordance with
federal securities regulations, we have included the proposal and the supporting
statement exactly as submitted by the Fund. To ensure that readers can easily
distinguish between material provided by the Fund and material provided by the
Company, we have put a box around material provided by the Fund.
21
AUDITOR FEES PROPOSAL
Resolved, that the shareholders of Manpower Inc. ("Company") request that
the Board of Directors adopt a policy stating that the public accounting firm
retained by our Company to provide audit services, or any affiliated company,
should not also be retained to provide non-audit services to our Company.
STATEMENT OF SUPPORT: The role of independent auditors in ensuring the
integrity of the financial statements of public corporations is fundamentally
important to the efficient and effective operation of the financial markets. The
U.S. Securities and Exchange Commission recently stated:
Independent auditors have an important public trust. Investors must be
able to rely on issuers' financial statements. It is the auditor's
opinion that furnishes investors with critical assurance that the
financial statements have been subjected to a rigorous examination by an
objective, impartial, and skilled professional, and that investors,
therefore, can rely on them. If investors do not believe that an auditor
is independent of a company, they will derive little confidence from the
auditor's opinion and will be far less likely to invest in that public
company's securities. (Division of Corporate Finance, Staff Legal
Bulletin #14, 7/13/01) ("Bulletin #14")
It is critically important to the integrity of the auditing process and the
confidence of investors that those firms performing audits for public
corporations avoid business relationships that might compromise their
independence or raise the perception of compromised judgment. At the heart of
the challenge to auditor independence is the growing level of business and
financial relationships developing between audit firms and their clients.
Bulletin #14 identifies these growing business relationships that threaten
auditor independence:
Accounting firms have woven an increasingly complex web of business and
financial relationships with their audit clients. The nature of the
non-audit services that accounting firms provide to their audit clients
has changed, and the revenues from these services have dramatically
increased.
The growth of non-audit revenues represents a trend that has been
accelerating dramatically in the last several years, with non-audit fees for
consulting or advisory services exceeding audit fees at many companies. Our
Company is in the category of companies that pays its audit firm more for
non-audit advisory services than it does for audit services. The Company's most
recent proxy statement indicated that Arthur Andersen LLP billed $1,192,400 for
audit fees and $4,330,000 for Financial Information Systems Design and
Implementation Fees and all other fees during 2000.
We believe that this financial "web of business and financial
relationships" may at a minimum create the perception of a conflict of interest
that could result in a lack of owner and investor confidence in the integrity of
the Company's financial statements. As long-term shareowners, we believe that
the best means of addressing this issue is to prohibit any audit firm retained
by our Company to perform audit services from receiving payment for any
non-audit services performed by the firm. We urge your support for this
resolution designed to protect the integrity of the Company's auditing and
financial reporting processes.
STATEMENT IN OPPOSITION TO SHAREHOLDER PROPOSAL ON NON-AUDIT SERVICES
The Board of Directors of the Company recommends a vote "AGAINST" this
proposal for the following reasons:
The Company recognizes the importance of maintaining investor confidence in
its financial statements, and agrees that it should avoid any business and
financial relationships with its independent auditors that might compromise
their independence. The Company does not believe that it has had any such
relationships with its independent auditors. As disclosed in the Audit Committee
Report included in this proxy statement, during 2001 the Company retained its
independent auditors to provide audit services and non-audit services. The
non-audit services included tax compliance and consultation, cost reduction
consulting, accounting and financial consultation, internal control services and
information technology systems consultation. As indicated in its report, the
Audit Committee has considered whether the provision of these services is
compatible with
22
its auditors' independence and satisfied itself as to its auditors'
independence. Based on this conclusion, the Company believes that the provision
of these services has not affected its auditors' objectivity or impartiality,
has not compromised its auditors' independence and has not adversely affected
the integrity of the Company's auditing and financial reporting processes.
However, the Audit Committee has recently adopted a Policy Regarding
Non-Audit Services which is attached hereto as Appendix A. The purpose of the
policy is to designate the types of non-audit services that may be provided to
the Company by the independent auditors retained by the Company each year to
audit the Company's financial statements.
The policy will prohibit the Company's independent auditors from providing
any financial information systems design and implementation services,
information technology systems consultation and internal audit services,
including internal control services. The policy will also prohibit the Company
from retaining its independent auditors to provide services specified under the
rules and regulations of the Securities and Exchange Commission.
The policy does not provide for a complete prohibition against the
engagement of the Company's independent auditors to provide non-audit services
as proposed by the Fund. The Company has declined to adopt a policy providing
for a complete prohibition on non-audit services for the following reasons.
First, there are a number of services that are considered non-audit services,
but that are "audit-related" and that must be performed by the Company's
independent auditors in order for the Company to comply with its obligations
under the federal securities laws, such as reviewing registration statements,
issuing consents and assisting the Company in responding to comments on its
filings by the Securities and Exchange Commission. Second, the Company believes
that there are other types of non-audit services that the Company's auditors
should be allowed to perform for the Company in the Company's discretion if the
Company determines that the provision of such services does not compromise the
independence of its auditors. These are services that the Company's auditors can
often provide in a more efficient and cost-effective manner relative to other
service providers due to their expertise and their familiarity with the
Company's management, financial systems and financial statements. These types of
services include tax planning, compliance and reporting and due diligence
services in connection with mergers and acquisitions involving the Company.
Finally, the Company believes that effective and responsible management of
its operations requires the Company's officers and Board of Directors to have
access to the best available resources and the discretion to determine when and
under what circumstances to use those resources. This discretion, when exercised
to engage the Company's independent auditors to provide non-audit services, will
continue to be exercised in compliance with the Audit Committee's obligations to
ensure the independence of the Company's auditors, and will also be subject to
the enhanced reporting and disclosure guidelines included in the newly adopted
policy. The Company does not believe that retaining and exercising this
discretion will compromise the independence of the Company's auditors or
undermine the integrity of the Company's auditing and financial reporting
processes.
The affirmative vote of a majority of the votes cast on the proposal is
required to approve the proposal. Abstentions will not be counted as voting,
and, therefore, will have no impact on the approval of the proposal.
Accordingly, the Board of Directors recommends you vote AGAINST the
shareholder proposal on non-audit services and your proxy will be so voted
unless you specify otherwise.
SUBMISSION OF SHAREHOLDER PROPOSALS
In accordance with the Company's By-Laws, nominations, other than by or at
the direction of the Board of Directors, of candidates for election as directors
at the 2003 Annual Meeting of Shareholders and any other shareholder proposed
business to be brought before the 2003 Annual Meeting of Shareholders must be
received by the Company no later than January 30, 2003. To be considered for
inclusion in the proxy statement solicited by the Board of Directors,
shareholder proposals for consideration at the 2003 Annual Meeting of
Shareholders of the Company must be received by the Company at the Company's
principal executive offices by November 29, 2002. Such nominations or proposals
must be submitted to Mr. Michael J.
23
Van Handel, Secretary, Manpower Inc., 5301 North Ironwood Road, Milwaukee,
Wisconsin 53217. To avoid disputes as to the date of receipt, it is suggested
that any shareholder proposal be submitted by certified mail, return receipt
requested.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers to file reports with the Securities and Exchange
Commission disclosing their ownership, and changes in their ownership, of stock
in the Company. Copies of these reports must also be furnished to the Company.
Based solely on a review of these copies, the Company believes that during 2001
all filing requirements were met.
OTHER MATTERS
Although management is not aware of any other matters that may come before
the Annual Meeting, if any such matters should be presented, the persons named
in the accompanying proxy intend to vote such proxy in accordance with their
best judgment.
Shareholders may obtain a copy of the Company's Annual Report to the
Securities and Exchange Commission as filed on Form 10-K at no cost by writing
to Mr. Michael J. Van Handel, Secretary, Manpower Inc., 5301 North Ironwood
Road, Milwaukee, Wisconsin 53217.
By Order of the Board of Directors,
Michael J. Van Handel, Secretary
24
APPENDIX A
MANPOWER INC.
POLICY REGARDING NON-AUDIT SERVICES
I. PURPOSE
The purpose of this policy is to designate the types of non-audit services
that may be provided to Manpower Inc. (the "Company") by the independent
auditors retained by the Company each year to audit the Company's financial
statements, the approval process for retaining the independent auditors to
provide such services and the public disclosure of such services.
II. PROHIBITED SERVICES
A. The Company shall not retain its independent auditors to provide the
following non-audit services:
1. Financial information systems design and implementation services
and information technology systems consultation.
2. Internal audit services, including internal control services.
B. In addition to the services addressed in Section A, the Company shall
not retain its independent auditors to provide non-audit services that are
prohibited by Section 2-01(c)(4) of Regulation S-X, a copy of which is attached
hereto. [Note: Copy not provided with Proxy Statement.] The following list
summarizes these services (subject to the terms of Section 2-01(c)(4) of
Regulation S-X.)
1. Bookkeeping or other services related to the Company's accounting
records or financial statements.
2. Appraisal or valuation services or fairness opinions.
3. Actuarial services.
4. Management functions.
5. Services related to human resources.
6. Broker-dealer services.
7. Legal services.
III. PERMITTED SERVICES
A. With the prior approval of the Company's chief financial officer, the
Company is permitted to retain its independent auditors to provide the following
non-audit services:
1. Services related to tax planning, compliance and reporting.
2. Services related to reporting under and compliance with the federal
securities laws and the rules and regulations promulgated thereunder.
3. Services related to the Company's employee benefit plans, including
pension audits.
4. Due diligence services in connection with mergers and acquisitions
involving the Company.
5. Other services not prohibited under Section II above that do not
involve payments in excess of $75,000 for the engagement.
B. With the prior approval of either the Company's Audit Committee or the
Chairman of the Company's Audit Committee, the Company is permitted to retain
its independent auditors to provide non-audit services
A-1
not prohibited under Section II above and not otherwise permitted under Section
A that involve payments in excess of $75,000 for the engagement.
IV. DISCLOSURE
The proxy statement for each annual meeting of the Company's shareholders
shall, in addition to other required information, disclose in reasonable detail
the aggregate fees billed by the Company's independent auditors for the prior
fiscal year for each type of service provided to the Company pursuant to Section
III above.
V. REPORTING
The Company's chief financial officer shall prepare and submit on a
periodic basis to the Audit Committee a reasonably detailed statement of the
non-audit services provided to the Company by the independent auditors during
the period to which the statement relates and certify that no prohibited
services were provided to the Company by the independent auditors during such
period.
A-2
MANPOWER INC.
2002 CORPORATE SENIOR MANAGEMENT
INCENTIVE PLAN
EFFECTIVE JANUARY 1, 2002
MANPOWER INC. 2002 CORPORATE
SENIOR MANAGEMENT INCENTIVE PLAN
TABLE OF CONTENTS
PAGE
----
ARTICLE I - GENERAL PROVISIONS ......................................... 1
Section 1. Purpose of the Plan ..................................... 1
Section 2. Overview of the Plan .................................... 1
Section 3. Definitions ............................................. 2
Section 4. Plan Administration ..................................... 6
Section 5. Eligibility and Participation Guidelines ................ 6
ARTICLE II - ANNUAL BONUS PLAN - EPS AND ECONOMIC PROFIT GOALS ......... 7
Section 1. Performance Measures .................................... 7
Section 2. Performance Goals ....................................... 8
Section 3. Award Opportunities ..................................... 9
Section 4. Calculation of Awards ................................... 9
Section 5. Distribution of Awards .................................. 10
ARTICLE III - ANNUAL BONUS PLAN - OPERATING OBJECTIVES ................. 10
Section 1. Objectives and Award Opportunities ...................... 10
Section 2. Determination of Awards ................................. 10
Section 3. Distribution of Awards .................................. 10
ARTICLE IV - STOCK OPTIONS ............................................. 11
Section 1. Stock Option Grants ..................................... 11
Section 2. Stock Option Terms ...................................... 11
ARTICLE V - MISCELLANEOUS PROVISIONS ................................... 12
Section 1. Termination of Employment ............................... 12
Section 2. No Discretion to Increase Awards Otherwise Earned ....... 12
Section 3. Change of Control ....................................... 12
Section 4. No Guarantee of Employment .............................. 12
Section 5. Withholding Taxes ....................................... 13
Section 6. Amendment and Discontinuance of the Plan ................ 13
Section 7. Effective Date .......................................... 13
MANPOWER INC. 2002 CORPORATE
SENIOR MANAGEMENT INCENTIVE PLAN
ARTICLE I
GENERAL PROVISIONS
SECTION 1. PURPOSE OF THE PLAN
The Plan has several key objectives:
(a) to reinforce the Company's short-term and long-term business
strategy;
(b) to focus Company Executives on shareholder value creation;
(c) to reward Company Executives for performance and provide
opportunities to earn significant rewards for outstanding
performance; and
(d) to enable the Company to attract, retain and motivate Company
Executives.
SECTION 2. OVERVIEW OF THE PLAN
The Plan has two components - an annual bonus plan and periodic stock option
grants. The annual bonus plan is intended to focus Company Executives on
achievement of certain annual operating goals. The stock option component, in
combination with the annual bonus plan, is intended to focus Company Executives
on shareholder value creation and execution of the Company's business strategy
over the longer term by aligning Executives' interests with shareholders'
interests.
The Plan encourages and focuses Company Executives on shareholder value
creation. Shareholder value is defined as sustained improvement in the Company's
stock price over time. The Company can create shareholder value through both
short-term and long-term operating performance and growth.
Under the annual bonus plan component, incentives for improvement of operating
performance are focused primarily on improving earnings and economic profit of
the Company. At the beginning of each Plan Year, earnings per share and economic
profit goals for the year are established for Participants by the Compensation
Committee. Bonus amounts may be earned by Participants for the year based on the
Company's attainment of these goals. Growing earnings per share is one element
of improving operating performance. Economic profit is also an essential measure
to use as a benchmark for the Company because it is an all-inclusive measure
2002 Corporate Senior Management Incentive Plan
that captures both earnings growth and management of capital costs. In addition,
economic profit is highly correlated with shareholder value creation.
The annual bonus plan also includes an operating performance component under
which annual bonus amounts may be earned based on a Participant's achievement,
as determined by the Compensation Committee, of certain operating objectives
established at the beginning of the year. The operating performance component
allows the Company to recognize performance by Participants that may not be
reflected in an absolute earnings per share goal or economic profit goal.
The annual bonus plan component provides for cash awards to be determined
shortly after the end of each Plan Year based on achievement of the goals
established at the beginning of the year. In connection with the establishment
of the goals, each Participant is assigned threshold, target and outstanding
bonus opportunity levels.
The stock option component of the Plan provides for periodic grants to
Participants of options to purchase Company Common Stock. The stock option
component is designed to focus Participants on improving the Company's
performance over the long term by aligning their interests with the interests of
the shareholders of the Company in promoting growth in shareholder value.
SECTION 3. DEFINITIONS
As used herein, the following terms shall have the following meanings:
(a) Award - any bonus opportunity or stock option grant awarded under
the Plan.
(b) Cause - termination of employment by the Company for "Cause" will
mean termination upon (i) Participant's willful and continued
failure to substantially perform his or her duties with the Manpower
Group after a written demand for substantial performance is
delivered to the Participant that specifically identifies the manner
in which the Company believes that the Participant has not
substantially performed such duties and the Participant has failed
to resume substantial performance of such duties on a continuous
basis within ten days after receiving such demand, (ii) the
Participant's commission of any material act of dishonesty or
disloyalty involving the Manpower Group, (iii) the Participant's
chronic absence from work other than by reason of a serious health
condition, (iv) the Participant's commission of a crime which
substantially relates to the circumstances of his or her position
with the Manpower Group or which has material adverse effect on the
business of the Manpower Group, or (v) the willful engaging by the
Participant in conduct which is demonstrably and materially
injurious to the Manpower Group. For this purpose, no act, or
failure to act, by a Participant will be deemed "willful" unless
done, or omitted to be done, by the Participant not in good faith.
2
2002 Corporate Senior Management Incentive Plan
(c) Change of Control - will mean the first to occur of the following:
(1) the acquisition (other than from the Company), by any person,
entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange
Act")), directly or indirectly, of beneficial ownership
(within the meaning of Exchange Act Rule 13d-3) of more than
50% of the then outstanding shares of common stock of the
Company or voting securities representing more than 50% of the
combined voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of
directors; provided, however, that no Change of Control shall
be deemed to have occurred as a result of an acquisition of
shares of common stock or voting securities of the Company (A)
by the Company, any of its subsidiaries, or any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any of its subsidiaries or (B) by any other
corporation or other entity with respect to which, following
such acquisition, more than 60% of the outstanding shares of
the common stock, and voting securities representing more than
60% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election
of directors, of such other corporation or entity are then
beneficially owned, directly or indirectly, by the persons who
were the Company's shareholders immediately prior to such
acquisition in substantially the same proportions as their
ownership, immediately prior to such acquisition, of the
Company's then outstanding common stock or then outstanding
voting securities, as the case may be; or
(2) any merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which
results in more than 60% of the outstanding shares of the
common stock, and voting securities representing more than 60%
of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, of the surviving or consolidated corporation being
then beneficially owned, directly or indirectly, by the
persons who were the Company's shareholders immediately prior
to such acquisition in substantially the same proportions as
their ownership, immediately prior to such acquisition, of the
Company's then outstanding common stock or then outstanding
voting securities, as the case may be; or
(3) any liquidation or dissolution of the Company or the sale or
other disposition of all or substantially all of the assets of
the Company; or
3
2002 Corporate Senior Management Incentive Plan
(4) individuals who, as of January 1, 2002, constitute the Board
of Directors of the Company (as of such date, the "Incumbent
Board") cease for any reason to constitute at least a majority
of such Board; provided, however, that any person becoming a
director subsequent to such date whose election, or nomination
for election by the shareholders of the Company, was approved
by at least a majority of the directors then comprising the
Incumbent Board shall be, for purposes of this letter,
considered as though such person were a member of the
Incumbent Board but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest which was
(or, if threatened, would have been) subject to Exchange Act
Rule 14a-11; or
(5) the Company shall enter into any agreement (whether or not
conditioned on shareholder approval), providing for or
contemplating, or the Board of Directors of the Company shall
approve and recommend that the shareholders of the Company
accept, or approve or adopt, or the shareholders of the
Company shall approve, any acquisition that would be a Change
of Control under clause (i), above, or a merger or
consolidation that would be a Change of Control under clause
(ii), above, or a liquidation or dissolution of the Company or
the sale or other disposition of all or substantially all of
the assets of the Company; or
(6) whether or not conditioned on shareholder approval, the
issuance by the Company of common stock of the Company
representing a majority of the outstanding common stock, or
voting securities representing a majority of the combined
voting power of the outstanding voting securities of the
Company entitled to vote generally in the election of
directors, after giving effect to such transaction.
Following the occurrence of an event which is not a Change of
Control whereby there is a successor holding company to the Company,
or, if there is no such successor, whereby the Company is not the
surviving corporation in a merger or consolidation, the surviving
corporation or successor holding company (as the case may be), for
purposes of this definition, shall thereafter be referred to as the
Company.
(d) Common Stock - the common stock of the Company with a par value of
$0.01 per share.
(e) Compensation Committee - the Executive Compensation Committee of the
Board of Directors of the Company.
4
2002 Corporate Senior Management Incentive Plan
(f) Code - the Internal Revenue Code of 1986, as it may be amended from
time to time, and any proposed, temporary or final Treasury
Regulations promulgated thereunder.
(g) Company - Manpower Inc., a Wisconsin corporation.
(h) Economic Profit - as defined in Section 1 of Article II.
(i) EPS - as defined in Section 1 of Article II.
(j) Executives - all Participants for a given Plan Year. Pertains to
corporate executives and not country managers.
(k) Good Reason - means with respect to any Participant the occurrence
of any one or more of the following without the consent of the
Participant:
(1) the assignment to the Participant of a position which
represents a material reduction from the then existing
position of the Participant, or the assignment to the
Participant of duties, other than incidental duties,
inconsistent with the position of the Participant from time to
time, provided the Participant objects to such assignment by
written notice to the Company within twenty (20) business days
after it is made and the Company fails to cure, if necessary,
within ten (10) business days after such notice is given;
(2) any material violation by the Company of any agreement between
the Participant and the Company which remains uncured ten (10)
business days after the Participant gives written notice to
the Company which specifies the violation; or
(3) the Participant being required by the Company to change the
location of the Participant's principal office to one in
excess of seventy-five (75) miles from the Company's home
office in Glendale, Wisconsin, provided the Participant's
employment with the Manpower Group is terminated within ninety
(90) days after any such change of location.
(l) Manpower Group - the Company and its direct and indirect
subsidiaries.
(m) Participant - any Company employee who is a corporate senior
executive officer of the Company who is designated by the
Compensation Committee (subject to Section 4 of Article I) to
participate in the Plan.
(n) Performance Compensation Committee - the Executive Performance
Compensation Committee of the Board of Directors of the Company.
5
2002 Corporate Senior Management Incentive Plan
(o) Plan - 2002 Corporate Senior Management Incentive Plan.
(p) Plan Year - each yearly period commencing on January 1st of each
year during the term of the Plan.
(q) Stock Option and Restricted Stock Plan - the 1994 Executive Stock
Option and Restricted Stock Plan of the Company or any successor
plan.
SECTION 4. PLAN ADMINISTRATION
(a) Power and authority of the Compensation Committee:
The Compensation Committee shall administer the Plan. The
Compensation Committee is authorized to interpret the Plan, to adopt
such rules and regulations, as it may from time to time deem
necessary for the effective operation of the Plan, and to act upon
all matters relating to the granting of Awards under the Plan. Any
determination, interpretation, construction or other action made or
taken pursuant to the provisions of the Plan by or on behalf of the
Compensation Committee shall be final, binding and conclusive for
all purposes and upon all persons including, without limitation, the
Company and Executives and their respective successors in interest.
(b) Performance Compensation Committee:
Notwithstanding the foregoing, in recognition of the requirements of
Section 162(m) of the Code, the Compensation Committee may require
in the case of any proposed Participant (i) that such Participant's
participation in the Plan and the performance goals and award
opportunities established for such Participant for any Plan Year
under the annual bonus plan component of the Plan, or the grant of
any stock options in accordance with Article IV of the Plan, shall
be subject to the approval of the Performance Compensation
Committee, and (ii) that the payment or distribution of any amount
under the annual bonus plan component shall be subject to the prior
certification by the Performance Compensation Committee that the
relevant performance goals have been attained. The Compensation
Committee shall itself take the actions indicated, in lieu of action
by the Performance Compensation Committee, if at the time of the
action the Compensation Committee is comprised solely of two or more
"outside directors" under Section 162(m) of the Code.
SECTION 5. ELIGIBILITY AND PARTICIPATION GUIDELINES
(a) Criteria for participation in the Plan:
In selecting Participants, the Compensation Committee shall take
into account the degree to which the proposed Participant can have
an impact on the short-term
6
2002 Corporate Senior Management Incentive Plan
and long-term operating performance and growth of the Company and
such other criteria as it deems relevant.
(b) Renewal of participation:
The Compensation Committee reserves the right to remove any Plan
Participant from the Plan at any time. Plan participation in one
year does not guarantee participation in subsequent Plan Years.
ARTICLE II
ANNUAL BONUS PLAN - EPS AND ECONOMIC PROFIT GOALS
SECTION 1. PERFORMANCE MEASURES
(a) EPS is fully diluted earnings per share of the Company and its
subsidiaries on a consolidated basis.
(b) Economic Profit is net operating profit after taxes of the Company
and its subsidiaries on a consolidated basis less a capital charge.
(1) Net operating profit after taxes is defined as net operating
profit minus taxes.
(i) Net operating profit equals earnings before income
taxes:
- plus interest expense,
- plus loss on sale of accounts receivable,
- less interest income.
(ii) Taxes equal net operating profit multiplied by the
effective tax rate as shown in the Company's audited
financial statements.
(2) Capital charge is defined as adjusted capital employed
multiplied by a weighted average cost of capital.
(i) Adjusted capital employed equals capital employed plus
or minus capital adjustments.
- Capital employed equals total shareholders'
equity:
- plus long-term debt,
- plus short-term borrowings,
- plus current maturities of long-term debt,
- plus advances under securitization
facilities,
7
2002 Corporate Senior Management Incentive Plan
- plus accumulated intangible amortization.
- Capital adjustments are:
- those adjustments required to exclude the
effect of foreign exchange rate fluctuations
on the above capital employed items, as
reflected in the adjusted capital employed
report maintained on a monthly basis by the
Company,
- those adjustments required to exclude the
effect of any other items recorded in other
comprehensive income, and
- for any acquisitions closed after January 1,
2002, having a total purchase price of more
than $3 million, an adjustment to defer and
ratably phase in the impact of the purchase
price increasing capital employed over the
36-month period following the date of
closing.
Adjusted capital employed will be calculated based on
the average of the monthly ending balances of each of
the capital employed items, as shown in the financial
records of the Company and its subsidiaries.
(ii) The weighted average cost of capital is the weighted
average of the Company's cost of equity and cost of debt
as determined by the Compensation Committee at the time
it establishes the performance goals for any Plan Year,
as described below.
SECTION 2. PERFORMANCE GOALS
No later than 90 days after the beginning of any Plan Year, the Compensation
Committee shall set an EPS and an Economic Profit goal for the year (subject to
Section 4 of Article I). In determining these goals and the corresponding bonus
opportunity levels described below, the Compensation Committee shall seek to
align the potential to receive bonus amounts with shareholder value creation and
long-term shareholder expectations while taking into account the Company's
annual opportunities, economic and industry conditions, and the need to provide
competitive compensation opportunities for Participants. The goals may vary from
year to year.
(a) Threshold goal - The minimum level of performance for which a bonus
amount will be earned will be established as the threshold goal.
Achieving the threshold goal will yield the threshold opportunity
level.
8
2002 Corporate Senior Management Incentive Plan
(b) Target goal - The expected level of performance will be established
as the target goal. Achieving the target goal will yield the target
opportunity level.
(c) Outstanding goal - An outstanding level of performance will be
established as the outstanding goal. Achieving the outstanding goal
will yield the outstanding opportunity level.
SECTION 3. AWARD OPPORTUNITIES
At the time the performance goals are established, the Compensation Committee
shall set the bonus opportunities corresponding to each of the EPS and Economic
Profit goals for each Participant for the Plan Year (subject to Section 4 of
Article I).
(a) Target opportunity will equal a dollar amount determined by the
Compensation Committee.
(b) Threshold opportunity will equal a dollar amount, which will be less
than the target opportunity, determined by the Compensation
Committee.
(c) Outstanding opportunity will equal a dollar amount, which will be
greater than the target opportunity, determined by the Compensation
Committee.
Notwithstanding any other provision of this Plan to the contrary, the maximum
bonus amount any Participant will be entitled to receive for any Plan Year
resulting from achievement of EPS and/or Economic Profit goals under this
Article II is $3,000,000.
SECTION 4. CALCULATION OF AWARDS
The bonus amounts under this Article II for each Plan Year will be determined
based on actual performance relative to the pre-established EPS and Economic
Profit goals. Except as otherwise provided above, EPS and Economic Profit for
the year shall be based on the audited consolidated financial statements of the
Company and its subsidiaries.
Actual performance at the target goal will result in 100% of the target
opportunity.
Except as otherwise determined by the Committee at the beginning of the Plan
Year, performance between the target goal and outstanding goal will result in a
payout that is linearly interpolated between the target and outstanding
opportunities. The amount of the bonus amounts under this Article II shall be
capped, and therefore performance in excess of the outstanding goal will result
in the outstanding opportunity.
Except as otherwise determined by the Committee at the beginning of the Plan
Year, performance between the threshold goal and target goal will result in a
payout that is linearly interpolated between the threshold and target
opportunities. Performance that is below the threshold goal will result in no
bonus amount.
9
2002 Corporate Senior Management Incentive Plan
Notwithstanding the foregoing, the Compensation Committee may in its discretion
reduce the amount of any bonus amount otherwise determined under the foregoing
criteria to reflect any extraordinary items, repurchases of Common Stock, or
such other items as it may deem relevant.
SECTION 5. DISTRIBUTION OF AWARDS
The annual bonus amounts earned for the Plan Year under this Article II shall be
distributed in cash as soon as possible after the amounts have been determined
(subject to Section 4 of Article I), but in no event beyond 90 days after the
end of the Plan Year.
Participants may elect to defer a portion of any annual bonus amounts under this
Article II in accordance with the terms of the Company's Nonqualified Savings
Plan.
ARTICLE III
ANNUAL BONUS PLAN - OPERATING OBJECTIVES
SECTION 1. OBJECTIVES AND AWARD OPPORTUNITIES
No later than 90 days after the beginning of any Plan Year, the Compensation
Committee shall establish operating objectives for the year for each Participant
and bonus opportunities for each Participant for achievement of such objectives.
In establishing the bonus opportunities, the Compensation Committee will set
target and outstanding opportunities expressed as dollar amounts.
SECTION 2. DETERMINATION OF AWARDS
Following the close of the Plan Year, the Compensation Committee shall determine
whether a bonus amount has been earned under this Article III, and if so the
level of such bonus amount, based on its assessment of the Participant's
performance in achieving the pre-established operating objectives. Such bonus
amounts may range from zero to the pre-established outstanding opportunity.
SECTION 3. DISTRIBUTION OF AWARDS
The annual bonus amounts earned for the Plan Year under this Article III shall
be distributed in cash as soon as possible after the amounts have been
determined, but in no event beyond 90 days after the end of the Plan Year.
Participants may elect to defer a portion of any annual bonus amounts under this
Article III in accordance with the terms of the Company's Nonqualified Savings
Plan.
10
2002 Corporate Senior Management Incentive Plan
ARTICLE IV
STOCK OPTIONS
SECTION 1. STOCK OPTION GRANTS
Each Participant shall be eligible to receive from time to time a grant of an
option to purchase shares of Common Stock. Any such grant shall be made at the
discretion of the Compensation Committee (subject to Section 4 of Article I). In
determining whether to make such a grant to a Participant, the Compensation
Committee shall take into account the following factors:
(a) the level of stock option grants previously made to the Participant;
(b) the value of the proposed stock option grant, as determined by using
whichever methodology the Compensation Committee deems appropriate;
(c) the past and current total compensation and compensation
opportunities of the Participant;
(d) the compensation including equity-based compensation of executives
who hold positions that are comparable to the Participant at peer
companies; and
(e) such other factors as the Compensation Committee deems relevant.
It is anticipated that any such stock option grants will be made at the time of
the first meeting of each calendar year of the Compensation Committee.
Notwithstanding the foregoing, in recognition of the requirements of Section
162(m) of the Code, for any Participant the Compensation Committee may require
that the grant of any option to purchase Common Stock under this Article IV
shall be subject to the approval of, and only made by, the Performance
Compensation Committee. However, if the Compensation Committee is comprised
solely of two or more "outside directors" under that Section at the time of the
proposed grant, such grant shall be subject to the approval of, and made by, the
Compensation Committee.
SECTION 2. STOCK OPTION TERMS
Any stock option grant under this Article IV shall be made under, and subject to
the terms of, the Stock Option and Restricted Stock Plan. The exercise price of
such option shall be determined by the Compensation Committee (or the
Performance Compensation Committee, as the case may be); provided however, that
such exercise price shall not be less than 100 percent of the Market Price (as
defined in the Stock Option and Restricted Stock Plan) on the business day
immediately preceding the date of grant of such stock option. Such option shall
have such other terms as the Compensation Committee shall determine.
11
2002 Corporate Senior Management Incentive Plan
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 1. TERMINATION OF EMPLOYMENT
(a) If a Participant's employment is terminated by the Company for Cause
or by the Participant other than for Good Reason, the Participant
will forfeit all rights to any bonus amounts under Articles II, III
or Section 3 of Article V of this Plan for the year in which
termination occurs.
(b) If a Participant's employment terminates by reason of the
Participant's disability or death or under any other circumstances
not specified in paragraph (a) of this Section 1, the Participant
will be entitled to receive, for the year in which termination
occurs, the bonus amounts otherwise determined under Articles II,
III or Section 3 of Article V of the Plan, but prorated for the
actual number of days the Participant was employed by the Manpower
Group during the year. However, the right to receive such prorated
amounts will be subject to satisfaction of such conditions as may be
imposed upon the Participant under any agreement between the
Participant and the Company.
SECTION 2. NO DISCRETION TO INCREASE AWARDS OTHERWISE EARNED
The Compensation Committee shall have no discretion to increase the amount of
any bonus amounts otherwise earned under Article II of this Plan or any other
Award which is otherwise earned based on the attainment of an objective
performance goal.
SECTION 3. CHANGE OF CONTROL
Upon a Change of Control, except as the relevant parties may otherwise agree,
the Plan will terminate and a Participant will be entitled to receive, for the
year in which the Change of Control occurs and in lieu of the bonus amounts
provided in Articles II and III of this Plan, a bonus equal to the amount of the
largest annual bonus awarded to the Participant for the three full calendar
years immediately preceding the Change of Control.
SECTION 4. NO GUARANTEE OF EMPLOYMENT
Participation in the Plan shall not give any Participant any right to be
retained in the employment of the Manpower Group. This Plan shall not affect any
right of the Company to terminate, with or without cause, any Participant's
employment at any time.
12
2002 Corporate Senior Management Incentive Plan
SECTION 5. WITHHOLDING TAXES
The Company shall have the right to withhold from any compensation payable to a
Participant, or to cause the Participant (or the executor or administrator of
his or her estate or his or her distributee) to make payment of, any federal,
state, local, or foreign taxes required to be withheld with respect to the
distribution of any Awards.
SECTION 6. AMENDMENT AND DISCONTINUANCE OF THE PLAN
The Compensation Committee may amend, alter, suspend or discontinue the Plan, as
it shall from time to time consider desirable. No such action shall adversely
affect the rights of any Participant under the Plan as of the time of such
action without the consent of the Participant.
SECTION 7. EFFECTIVE DATE
The effective date of the Plan is January 1, 2002.
13
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER ----------
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 AND Please mark
AGAINST PROPOSAL 3. your votes as X
indicated in
this example.
----------
1. ELECTION OF DIRECTORS
WITHHOLD NOMINEES: Edward J. Zore, J. Thomas Bouchard
FOR all nominees AUTHORITY and Rozanne L. Ridgway
listed to the right to vote for all
(except as marked nominees listed (INSTRUCTION: To withhold authority to vote for any individual
to the contrary) to the right nominee, write that nominee's name in the space provided below.)
[ ] [ ]
--------------------------------------------------
2. Approval of a performance-based incentive compensation 4. In their discretion, the Proxies are authorized to vote upon
arrangement for the Company's Chief Executive Officer and such other business as may properly come before the meeting.
the Company's Chief Financial Officer.
FOR AGAINST ABSTAIN Please sign exactly as name appears hereon. When shares are held
by joint tenants, both should sign. When signing as attorney,
[ ] [ ] [ ] executor, administrator, trustee, or guardian, please give full
title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership,
3. Approval of Shareholder Proposal on Non-Audit Services. please sign in partnership name by authorized person.
FOR AGAINST ABSTAIN Dated: , 2002
---------------------------------------
[ ] [ ] [ ]
----------------------------------------------
(Signature)
----------------------------------------------
(Signature if held jointly)
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
/\ FOLD AND DETACH HERE /\
MANPOWER INC.
ANNUAL MEETING
OF
MANPOWER INC. SHAREHOLDERS
TUESDAY, APRIL 30, 2002
10:00 A.M.
BRADLEY PAVILION OF THE MARCUS CENTER
FOR THE PERFORMING ARTS
929 NORTH WATER STREET
MILWAUKEE, WISCONSIN
====================================================================================================================================
AGENDA
------
- Elect three directors to serve until 2005 as Class III directors.
- Approve a performance-based incentive compensation arrangement for
the Company's Chief Executive Officer and the Company's Chief
Financial Officer.
- Consider approval of shareholder proposal on non-audit services.
- Transact such other business as may properly come before the meeting.
====================================================================================================================================
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF
MANPOWER INC.
The undersigned hereby appoints Jeffrey A. Joerres and Michael J. Van Handel
proxies, each with power to act without the other and with power of
substitution, and hereby authorizes them to represent and vote, as designated on
the other side, all the shares of stock of Manpower Inc. standing in the name of
the undersigned with all powers which the undersigned would possess if present
at the Annual Meeting of Shareholders of the Company to be held April 30, 2002
or any adjournment thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
/\ FOLD AND DETACH HERE /\
FINANCIAL HIGHLIGHTS
(in millions) 2001 2000
----------------------------------------------------------------------------------------------------
SYSTEMWIDE SALES (A) $ 11,779.1 $ 12,444.9
REVENUES FROM SERVICES $ 10,483.8 $ 10,842.8
OPERATING PROFIT $ 237.6 $ 311.0
(a) Represents total sales of Company-owned branches and franchises.