SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
REMEDYTEMP, INC.
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(Name of Registrant as Specified in Its Charter)
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REMEDYTEMP, INC.
101 ENTERPRISE
ALISO VIEJO, CA 92656
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 28, 2002
To the Shareholders of REMEDYTEMP, INC.
The 2002 Annual Meeting of Shareholders (the "Meeting") of RemedyTemp,
Inc., a California corporation (the "Company"), will be held at the Company's
corporate headquarters located at 101 Enterprise, Aliso Viejo, California, on
February 28, 2002, at 12 noon Pacific Standard Time for the following purposes:
1. To elect a Board of Directors of nine (9) directors to serve until
the next annual meeting of shareholders of the Company and until their
successors are elected and qualified; and
2. To transact such other business as may properly come before the
Meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. The Board of Directors of the Company has
fixed the close of business on January 7, 2002 as the record date for the
determination of shareholders entitled to notice of and to vote at the Meeting.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. YOU ARE
URGED TO SIGN, DATE AND OTHERWISE COMPLETE THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
IF YOU ATTEND THE MEETING AND WISH TO DO SO, YOU MAY VOTE YOUR SHARES IN PERSON
EVEN IF YOU HAVE SIGNED AND RETURNED YOUR PROXY CARD.
By Order of the Board of Directors
/s/ Cosmas N. Lykos
Cosmas N. Lykos
Vice President of Business Affairs,
General Counsel and Secretary
Aliso Viejo, California
January 18, 2002
REMEDYTEMP, INC.
101 ENTERPRISE
ALISO VIEJO, CA 92656
------------
PROXY STATEMENT FOR THE
2002 ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 28, 2002
This Proxy Statement and related materials are furnished in connection
with the solicitation of proxies by the Board of Directors (the "Board") of
RemedyTemp, Inc., a California corporation (the "Company"), for use at the
Company's 2002 Annual Meeting of Shareholders (the "Meeting") to be held on
February 28, 2002, at 12 noon Pacific Standard Time, and at any and all
postponements and adjournments of the Meeting. The Meeting will be held at the
Company's corporate headquarters located at 101 Enterprise, Aliso Viejo,
California 92656. This Proxy Statement and the accompanying form of proxy will
be first mailed to shareholders on or about January 18, 2002.
The cost of preparing, assembling and mailing the Notice of Annual
Meeting of Shareholders, this Proxy Statement and form of proxy and the cost of
soliciting proxies will be paid by the Company. Proxies may be solicited in
person or by telephone, telegraph or cable, and by personnel of the Company who
will not receive any additional compensation for such solicitation. The Company
will pay brokers or other persons holding stock in their names or the names of
their nominees for the reasonable expenses of forwarding soliciting material to
their principals.
VOTING
The Board has fixed the close of business on January 7, 2002 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Meeting. On that date, there were 7,757,497 shares of the Company's
Class A Common Stock ("Common Stock") outstanding. Each share of Common Stock is
entitled to one vote on any matter that may be presented for consideration and
action by the shareholders at the Meeting. Holders of the Company's Class B
Common Stock are not entitled to any vote in the election of directors or on any
other matters submitted to a shareholder vote except as to certain amendments to
the Company's Amended and Restated Articles of Incorporation (the "Articles of
Incorporation"), certain mergers and as otherwise required by law.
The holders of a majority of the shares of Common Stock outstanding on
the record date and entitled to be voted at the Meeting, present in person or by
proxy, will constitute a quorum for the transaction of business at the Meeting
and at any adjournments and postponements thereof. Abstentions and broker
non-votes are counted for the purpose of determining the presence or absence of
a quorum for the transaction of business, but have no legal effect on Proposal
No. 1, Election of Directors, which is determined by plurality.
Each shareholder entitled to vote may vote by proxy by using the proxy
card enclosed with this Proxy Statement. You can specify how you want your
shares voted on each proposal by marking the appropriate boxes on the proxy
card. The proposals are identified by number and identifying text on the proxy
card. Each proxy submitted by a shareholder will, unless otherwise directed by
the shareholder in the proxy, be voted according to the recommendation of the
Board on that proposal, as set forth later in this Proxy Statement. If a
shareholder has submitted a proxy appropriately directing how the shares
represented thereby are to be voted, such shares will be voted according to the
shareholder's direction. Any shareholder has the power to revoke his or her
proxy at any time before it is voted at the Meeting by submitting a written
notice of revocation to the Secretary or Assistant Secretary of the Company or
by filing a duly executed proxy bearing a later date. A proxy will not be voted
if the shareholder that executed it is present at the Meeting and elects to vote
the shares represented thereby in person.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth the following information as of January 7,
2002: (i) the number of shares of the Company's Class A Common Stock
beneficially owned by those known by the Company to be beneficial owners of more
than five percent (5%) of the outstanding shares of the Company's Class A Common
Stock; and (ii) the number of shares of the Company's Class A and Class B Common
Stock beneficially owned by each of the present directors, executive officers
named in the Summary Compensation Table on page 7 of this Proxy Statement, and
by all directors and executive officers of the Company as a group. On January 7,
2002, there were 7,757,497 shares of Class A Common Stock outstanding and
1,563,844 shares of Class B Common Stock outstanding. Unless otherwise stated,
and except for voting powers held jointly with a person's spouse, the persons
and entities named in the table have sole voting and investment power with
respect to all shares shown as beneficially owned by them. All information with
respect to beneficial ownership is based on filings made by the respective
beneficial owners with the Securities and Exchange Commission (the "Commission")
or information provided to the Company by such beneficial owners.
CLASS A CLASS B
COMMON STOCK: COMMON STOCK:
AMOUNT AND NATURE AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP (1) CLASS (%) OWNERSHIP (1)(2) CLASS (%)
---------------- ----------------- ---------- ----------------- ----------
William D. Cvengros (3)(4) 35,762 * -- --
James L. Doti (3)(4) 34,262 * -- --
Robert A. Elliott (4)(5) 32,762 * -- --
Mary George (4)(6) 11,282
Gunnar B. Gooding (7)(8) 28,335 * -- --
J. Michael Hagan (4)(9) 25,262 * -- --
Cosmas N. Lykos(8) 25,000 -- -- --
Robert E. McDonough, Sr. (4)(10) 2,089,867 26.9% 195,568 12.5%
101 Enterprise
Aliso Viejo, CA 92656
Paul W. Mikos (4)(11) 123,872 1.6% 935,395 59.8%
101 Enterprise
Aliso Viejo, CA 92656
Greg Palmer (4)(12)(13)(16) 227,604 2.9%
Alan M. Purdy (14)(15) 62,186 * -- --
John B. Zaepfel (3)(4) 32,762 * -- --
Royce and Associates 984,300 12.7% -- --
1414 Avenue of the Americas
Ninth Floor
New York, NY 10019
Fidelity Management & Research
Company 712,800 9.2% -- --
One Federal Street
Boston, MA 02110-2003
Putnam Investment Management, Inc. 609,613 7.9% -- --
One Post Office Square
Boston, MA 02110
Wasatch Advisors, Inc. 556,675 7.2% -- --
150 Social Hall Avenue
Salt Lake City, UT 84111
Wellington Management Co. LLP 464,100 6.0% -- --
75 State Street
19th Floor
Boston, MA 02109-1809
All directors and executive officers as
a group (13 persons) 2,753,956 35.5% 1,130,963 72.3%
------------
2
* Less than one percent (1%)
(1) The information contained in this table reflects "beneficial ownership"
as defined in Rule 13d-3 promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Shares not outstanding that
are subject to vested options, or options that vest and become
exercisable by the holder thereof within sixty (60) days of January 7,
2002 are deemed outstanding for the purposes of calculating the number
and percentage owned by such shareholder, but are not deemed outstanding
for the purpose of calculating the percentage owned by each other
shareholder listed. Unless otherwise noted, all shares listed as
beneficially owned by a shareholder are actually outstanding.
(2) Holders of Class B Common Stock are not entitled to any vote on matters
submitted to a shareholder vote except as to certain amendments to the
Articles of Incorporation, certain mergers and as otherwise required by
law. The Class B Common Stock automatically converts into Class A Common
Stock on a share-for-share basis upon the earliest to occur of (i) a
transfer to a non-affiliate of the holder thereof in a public offering
pursuant to an effective registration statement or Rule 144 promulgated
under the Securities Act of 1933, as amended, (ii) the death or legal
incapacity of Robert E. McDonough, Sr., or (iii) the tenth anniversary
of the closing of the Company's initial public offering.
(3) Includes 27,500 shares of Class A Common Stock that are issuable upon
exercise of vested non-employee director stock options and 2,500 shares
of Class A Common Stock that are issuable upon exercise of non-employee
director stock options that vest on the date of the Meeting if the
director remains a director until then.
(4) Includes shares held by certain trusts established for the benefit of
the shareholder and/or the shareholder's family.
(5) Includes 22,500 shares of Class A Common Stock that are issuable upon
exercise of vested non-employee director stock options and 2,500 shares
of Class A Common Stock that are issuable upon exercise of non-employee
director stock options that vest on the date of the Meeting if the
director remains a director until then.
(6) Includes 7,500 shares of Class A Common Stock that are issuable upon
exercise of vested non-employee director stock options and 2,500 shares
of Class A Common Stock that are issuable upon exercise of non-employee
director stock options that vest on the date of the Meeting if the
director remains a director until then.
(7) Includes 2,000 shares of Class A Common Stock that are issuable upon
exercise of vested stock options.
(8) Includes 25,000 shares of restricted stock that vest five years from the
grant date of December 19, 2001 or earlier if certain pre-established
performance goals have been met.
(9) Includes 17,500 shares of Class A Common Stock that are issuable upon
exercise of vested non-employee director stock options and 2,500 shares
of Class A Common Stock that are issuable upon exercise of non-employee
director stock options that vest on the date of the Meeting if the
director remains a director until then.
(10) Includes 86,667 shares of Class A Common Stock that are issuable upon
exercise of vested stock options.
(11) Includes 123,812 shares of Class A Common Stock that are issuable upon
exercise of vested stock options.
(12) Includes shares held in community property.
(13) Includes 120,174 shares of Class A Common Stock that are issuable upon
exercise of vested stock options.
(14) Includes 26,099 shares of Class A Common Stock that are issuable upon
exercise of vested stock options.
(15) Includes 35,000 shares of restricted stock that vest five years from the
grant date of December 19, 2001 or earlier if certain pre-established
performance goals have been met.
(16) Includes 100,000 shares of restricted stock that vest five years from
the grant date of December 19, 2001 or earlier if certain
pre-established performance goals have been met.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
In general, the Company's directors are elected at each annual meeting
of shareholders. Currently, the number of directors of the Company is nine (9).
Accordingly, at the Meeting, the Company's shareholders are being asked to elect
nine (9) directors to serve until the next annual meeting of shareholders and
until their successors are elected and qualified. The nominees receiving the
greatest number of votes at the Meeting up to the number of authorized directors
will be elected.
3
The nine (9) nominees for election as directors at the Meeting as set
forth in the following table are all incumbent directors. Each of the nominees
was re-elected at the Company's 2001 Annual Meeting of Shareholders except for
Mr. Palmer, who was elected as a director by the Board to fill a vacancy in
April, 2001. Each of the nominees has consented to serve as a director if
elected. Except to the extent that authority to vote for any directors is
withheld in a proxy, shares represented by proxies will be voted FOR such
nominees. In the event that any of the nominees for director should before the
Meeting become unable to serve if elected, shares represented by proxies will be
voted for such substitute nominees as may be recommended by the Company's
existing Board, unless other directions are given in the proxies. To the best of
the Company's knowledge, all the nominees will be available to serve.
The following biographical information is furnished with respect to the
nine (9) nominees for election at the Meeting as of January 18, 2002:
NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
------- --- -------------------- --------------
William D. Cvengros 53 Vice Chairman of PacketVideo Corporation 1996
James L. Doti 55 President of Chapman University 1996
Robert A. Elliott 62 Chairman of Elliott Investment Company 1997
Mary George 51 Chairman of Bell Sports, Inc. 1999
J. Michael Hagan 62 Advisor to and former President and Chief 1998
Executive Officer of Furon Company
Robert E. McDonough, Sr. 79 Vice Chairman of the Board of the Company 1978
Paul W. Mikos 57 Chairman of the Board of the Company 1993
Greg D. Palmer 45 President and Chief Executive Officer 2001
John B. Zaepfel 65 Chief Executive Officer of the Zaepfel Group 1995
William D. Cvengros has served as a director of the Company since August
1996. Since March 2001, Mr. Cvengros has served as Vice Chairman of PacketVideo
Corporation, a privately-held company providing wireless multi-media software
and services for mobile applications. From April 1999 to March 2001, Mr.
Cvengros served as Chairman of PacketVideo Corporation. From November 1994 until
April 2000, Mr. Cvengros served as the Chief Executive Officer, President and a
director of PIMCO Advisors Holdings L.P., a publicly traded investment
management firm (PIMCO Advisors). From February 1986 until November 1994, Mr.
Cvengros served as Chairman of the Board of Pacific Investment Management
Company (PIMCO). From January 1990 until November 1994, Mr. Cvengros was Vice
Chairman of the Board of Directors and Chief Investment Officer of Pacific Life
Insurance Company, formerly Pacific Mutual Life Insurance Company.
James L. Doti, Ph.D. has served as a director of the Company since July
1996. Since July 1991, Dr. Doti has served as the President of Chapman
University. Dr. Doti has been a member of the Chapman University faculty since
1974 and also holds the Donald Bren Chair in Business and Economics. He is a
member of the Board of Directors of Fleetwood Enterprises, Standard Pacific
Corporation and First American Financial Corporation.
Robert A. Elliott has served as a director of the Company since December
1997. Since 1988, Mr. Elliott has served as President and Chairman of Elliott
Investment Company. Prior to founding Elliott Investment Company, Mr. Elliott
served as the Chairman and Chief Executive Officer of VLI Corporation ("VLI"), a
publicly traded company specializing in the manufacturing and marketing of
personal care products from 1984 until 1987. Prior to joining VLI, Mr. Elliott
was a Vice President of Howmedica, Inc., a subsidiary of Pfizer, Inc. Mr.
Elliott is a member of the Board of Trustees of Chapman University and has also
served as a director of Polymer Technology Group since 1990.
Mary George has served as a director of the Company since November 1999.
Since October 1994, Ms. George has served as an officer of Bell Sports, Inc.,
including as its Chief Executive Officer from July 1998 until August 2000 and
has served as its Chairman since August 2000. Additionally, Ms. George has
served as a director of Bell Sports, Inc. since August 1998.
4
J. Michael Hagan has served as a director of the Company since March
1998. From 1991 until November 1999, Mr. Hagan served as Chairman of the Board
of Directors and Chief Executive Officer of Furon Company, having previously
served as President of Furon Company from 1980 to 1991. Since November 1999, Mr.
Hagan has served as director of Saint Gobain Corporation which acquired Furon in
November 1999. Mr. Hagan is also a director of Freedom Communications, Inc. and
Ameron, Inc. Since March 2000, Mr. Hagan has served as a trustee for each of the
following PIMCO Funds: Pacific Investment Management Series; PIMCO Commercial
Mortgage Securities Trust, Inc.; and PIMCO Variable Insurance Trust.
Robert E. McDonough, Sr. has served as Vice Chairman of the Board of the
Company since January 2001. He served as Chairman of the Board of the Company
from August 1978 until January 2001. Mr. McDonough founded the Company in 1965
and has been involved in the management, long-term operation and strategic
planning of the Company since that time. For 29 years, until May 1994, he served
as the Company's Chief Executive Officer. Mr. McDonough is the father-in-law of
Paul W. Mikos.
Paul W. Mikos has served in various positions in the Company since 1977,
including as President from 1985 until January 2001. Mr. Mikos has served as
Chairman of the Board of the Company since January 2001. He served as Chief
Executive Officer of the Company from January 1996 until January 2001 and has
been a director of the Company since May 1993. From May 1994 until January 1996,
he served as co-Chief Executive Officer of the Company. Prior to joining the
Company, Mr. Mikos worked for ARA as a Regional Sales Director from August 1976
until October 1977. From July 1968 until August 1976, Mr. Mikos worked for IBM
in sales management. Mr. Mikos is the son-in-law of Robert E. McDonough, Sr.
Greg Palmer has served as the Company's President and Chief Executive
Officer since January 2001. Prior to that time, Mr. Palmer served as the
Company's Executive Vice President and Chief Operations Officer from January
1998 to January 2001. From 1985 to December 1997, Mr. Palmer served in senior
level management positions in the southeast and northeast divisions and as
Senior Vice President in charge of managing operations in the western United
States for Olsten Corporation, formerly a provider of staffing and health care
services.
John B. Zaepfel has been a director of the Company since June 1995. From
1974 until 1985, Mr. Zaepfel was President and Chief Executive Officer of
Chartpak-Picket Industries, Inc., a wholly-owned subsidiary of The Times Mirror
Company. In 1985, Mr. Zaepfel founded CPG International, Inc., a graphics art
and engineering firm, and served as its President and Chief Executive Officer
from 1985 until its sale in 1989. Since 1989, Mr. Zaepfel has been Chief
Executive Officer of the Zaepfel Group, a private investment and consulting
firm. Since July 1999 Mr. Zaepfel has served as a director of the Troy Group,
Inc.
ELIMINATION OF CUMULATIVE VOTING
The Company's Amended and Restated Bylaws (the "Bylaws") provide that
when the Company becomes a "listed corporation" within the meaning of the
California Corporations Code (i.e., has at least 800 holders of its equity
securities as of the record date of the Company's most recent annual meeting of
shareholders), cumulative voting rights will be eliminated. The Company had more
than 800 shareholders on February 19, 1997. Consequently, cumulative voting
rights were eliminated on February 19, 1997.
BOARD COMMITTEES AND MEETINGS
The Audit Committee of the Board ("Audit Committee") currently consists
of Messrs. Cvengros, Elliott and Zaepfel (Chair). The Audit Committee meets with
the Company's independent accountants, makes recommendations to the Board
concerning the acceptance of the reports of such accountants and the accounting
policies and procedures of the Company, and reviews financial plans and
operating results of the Company. The Board has adopted a written charter for
the Audit Committee. The Audit Committee charter is included as Appendix A to
this Proxy Statement. The members of the Audit Committee are independent
directors as defined under the National Association of Securities Dealers'
listing standards.
The Leadership Development and Compensation Committee ("Compensation
Committee") of the Board currently consists of Dr. Doti, Ms. George (Chair) and
Mr. Hagan. The Compensation Committee sets the performance goals, annual salary
and incentive compensation of the Company's executive officers and its key
employees. Additionally, the Compensation Committee administers the Company's
1996 Amended and Restated Stock Incentive Plan and 1996 Employee Stock Purchase
Plan.
5
The Executive Committee of the Board ("Executive Committee") currently
consists of Mr. Cvengros, Mr. Elliott and Mr. Hagan (Chair). The Executive
Committee acts on behalf of the Board to mentor and review the performance of
the Company's Chief Executive Officer. The Executive Committee also meets with
the Company's Chief Executive Officer to provide certain strategic, shareholder
and organizational planning recommendations.
The Nominating Committee of the Board ("Nominating Committee") currently
consists of Mr. Cvengros, Dr. Doti and Mr. Elliott (Chair). The Nominating
Committee identifies, interviews and recommends to the Board potential new Board
members and makes recommendations to the Board regarding corporate governance
issues.
The Board acts as a committee of the whole with respect to nominations
for membership to the Board. The Nominating Committee will consider nominees
recommended by shareholders. A shareholder desiring to make such a
recommendation should submit the name, address, telephone number, and
qualifications of the proposed nominee in writing to the Company's Secretary and
must comply with the procedures set forth in Section 2.01(c) of the Company's
Bylaws.
During the Company's fiscal year ended September 30, 2001, there were
six (6) meetings of the Board, four (4) meetings of the Audit Committee, four
(4) meetings of the Compensation Committee, one (1) meeting of the Nominating
Committee, and ten (10) meetings of the Executive Committee. While a director,
all of the Board members attended or participated in more than 75% of the
aggregate of (i) the total number of meetings of the meetings of the Board, and
(ii) the total number of meetings held by all Committees of the Board on which
each such director served.
DIRECTORS' COMPENSATION
Directors who are also employees or officers of the Company receive no
extra compensation for their service on the Board. Pursuant to the Company's
Non-Employee Director Compensation and Deferral Plan, effective March 16, 1998
(the "Director Plan"), non-employee, non-officer directors receive an annual
retainer in the form of shares of Common Stock valued at $20,000 on the date of
their election or re-election to the Board (the "Director Shares"). Once issued,
the Director Shares are held in trust, on a deferred basis until a director is
no longer a director of the Company. The Director Shares are issued to such
trust no later than ten (10) business days after the next annual meeting of
shareholders following election or re-election, provided that the director has
remained a director during such time. Participation in the Director Plan is
mandatory. Additionally, the following cash fees are paid by the Company to each
non-employee, non-officer director per meeting attended: $2,000 per Board
meeting; $1,500 per Executive Meeting, with the Chair receiving $2,000; and $750
for each meeting of all other committees of the Board, with the Chair receiving
$1,000. Non-employee, non-officer directors also receive reimbursement for
out-of-pocket expenses relating to Company business.
Pursuant to the Company's 1996 Amended and Restated Stock Incentive Plan
(the "Incentive Plan"), each non-employee director of the Company automatically
receives, upon becoming a director, a one-time grant of an option to purchase up
to 5,000 shares of Common stock at an exercise price equal to the fair market
value of the Common Stock on the date of the option's grant. These non-employee
director options have a term of ten (10) years and become exercisable with
respect to fifty percent (50%) of the underlying shares on the grant date and
with respect to an additional fifty percent (50%) of the underlying shares on
the date of the next annual meeting of shareholders of the Company following the
grant date (or, if an annual meeting of shareholders occurs within six months
after the grant date, then on the date of the second annual shareholders'
meeting after the grant date), provided that the recipient has remained a
director since the grant date. In addition to an initial grant, each
non-employee director also will receive, upon each re-election to the Board, an
automatic grant of an option to purchase up to 2,500 additional shares of Common
Stock. These additional options will vest and become exercisable upon the
earlier to occur of (i) the first anniversary of the grant date, or (ii)
immediately prior to the annual meeting of shareholders of the Company next
following the grant date, if the director has served as a director from the
grant date to such earlier date. All non-employee director options will have a
term of ten (10) years and an exercise price equal to the fair market value of a
share of Common Stock on the date of grant. Vesting of non-employee director
options accelerates if the recipient of the option ceases to be a director of
the Company or its successor in connection with a change in control.
Grants of non-employee directors' options under the Incentive Plan count
against its current limit of 1,800,000 shares of Common Stock. Shares underlying
non-employee directors' options that expire or are terminated or canceled will
become available for further awards under the Incentive Plan. In the event that
a recipient of non-employee directors' options ceases to be a director of the
Company, all such options granted to the director will be exercisable, to the
extent they were exercisable at the date directorship ceased, for a period of
365 days or, if earlier, the expiration of the option according to its terms.
Vesting accelerates upon certain transactions including dissolution, merger and
change in control. The Incentive Plan provides that the exercise price may be
paid by Company loan or withholding of underlying stock, or deferred until
completion of broker-assisted exercise and sale transactions.
6
Pursuant to the amended terms of the Incentive Plan, each non-employee
director was awarded a non-employee directors' option to purchase 2,500 shares
of Common Stock on February 28, 2001 upon the directors' re-election to the
Board at the 2001 Annual Meeting.
RECOMMENDATION OF THE BOARD
The Board recommends that the shareholders vote FOR the nine (9)
nominees listed above. Proxies received will be so voted unless shareholders
specify otherwise in the proxy.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned for the last
three (3) fiscal years by (i) each person who served as the Company's Chief
Executive Officer ("CEO") during the fiscal year ended September 30, 2001, and
(ii) the Company's four (4) most highly compensated executive officers other
than the CEO who were serving as executive officers at the end of the fiscal
year ended September 30, 2001 (the "Named Executive Officers").
Long-Term
Compensation
Awards
Annual Compensation Securities
----------------------------- Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Options (#) Compensation ($)
------------------------------------------- ------------ ------------ ------------ ------------ -----------------
Greg Palmer (1) 2001 383,436 160,000 50,000 64,927
President and 2000 341,645 106,599 50,000 *
Chief Executive Officer 1999 330,906 135,907 50,000 *
Paul W. Mikos (2) 2001 2,167,490 -- -- 268,451
Chairman of the 2000 450,000 90,000 15,000 67,166
Board of Directors 1999 426,154 215,000 20,000 72,687
Robert E. McDonough, Sr. (3) 2001 410,000 160,000 -- 79,517
Vice Chairman of the 2000 409,948 160,000 10,000 84,221
Board of Directors 1999 430,385 190,000 20,000 92,555
Alan M. Purdy (4) 2001 235,346 89,918 5,000 37,903
Senior Vice President, 2000 226,397 91,267 10,000 69,238
Chief Financial Officer 1999 219,803 119,621 11,000 48,208
Gunnar B. Gooding 2001 179,520 46,614 15,000 *
Vice President, Human 2000 175,520 10,890 -- *
Resources and Legal Affairs 1999 170,562 -- -- *
Cosmas N. Lykos 2001 163,847 51,000 5,000 *
Vice President of Business 2000 145,064 42,000 4,000 *
Affairs, General Counsel and Secretary 1999 140,464 32,900 -- *
7
------------------
* Less than 10% of salary plus bonus.
(1) In January 2001, Mr. Palmer became the Company's CEO and President. 2001
Other Compensation includes $36,000 for country club membership dues.
(2) During the fiscal year ended September 30, 2001, Mr. Mikos served as the
Company CEO and President until January 2001. 2001 Annual Compensation
includes $1,800,000 pursuant to Mr. Mikos's Severance Agreement and
General Release with the Company (the "Severance Agreement"). 2001 Other
Compensation includes $227,820 in estimated costs for the related
benefits outlined in the Severance Agreement. 2000 Other Compensation
includes $26,688 in use of Company-owned vehicles and $34,684 in life
insurance premiums paid by the Company. 1999 Other Compensation includes
$37,844 in use of Company-owned vehicles and $22,307 in life insurance
premiums paid by the Company.
(3) 2000 Other Compensation includes $61,668 in life insurance premiums paid
by the Company. 1999 Other Compensation includes $26,565 in use of
Company-owned vehicles and $59,439 in life insurance premiums paid by
the Company.
(4) 2000 Other Compensation includes $35,625 in realized value in the
exercise of Company stock options granted under the Company's Incentive
Plan. 1999 Other Compensation includes $31,500 in realized value
in the exercise of Company stock options granted under the Company's
Incentive Plan.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding stock options
granted to the Named Executive Officers during the fiscal year ended September
30, 2001:
Individual Grants
----------------------------------------------------------------- Potential Realizable Value at
Number % of Total Assumed Annual Rates of Stock
of Securities Options Price Appreciation for
Underlying Granted to Exercise Of Option Term ($)(4)
Options Employees in Base Price Expiration -----------------------------
Name Granted (#)(1) Fiscal Year ($/share) (2) Date (3) 5% ($) 10% ($)
----------------------- -------------- ------------ ------------ ------------ ------------ ------------
Greg Palmer 50,000 24.2% $ 11.88 02/13/2011 373,400 946,250
Paul W. Mikos -- -- -- -- -- --
Robert E. McDonough, Sr -- -- -- -- -- --
Alan M. Purdy 5,000 2.4% $ 11.88 02/13/2011 37,340 94,625
Gunnar B. Gooding 15,000 7.3% $ 11.88 02/13/2011 112,020 283,875
Cosmas N. Lykos 5,000 2.4% $ 11.88 02/13/2011 37,340 94,625
------------
(1) All options set forth in the above table were granted under the
Incentive Plan. All of the option grants are exercisable with respect to
thirty-three and one third percent (33 1/3%) of the shares covered
thereby starting on the first anniversary of the grant date, and
thereafter with respect to an additional thirty-three and one third
percent (33 1/3%) of the shares covered thereby on each successive
anniversary date. The Incentive Plan is administered by the Compensation
Committee, which has broad discretion and authority to construe and
interpret the Incentive Plan and to modify outstanding options.
(2) The exercise price and tax withholding obligations related to the
exercise may be paid by delivery of already owned shares or by offset of
the underlying shares, subject to certain conditions. The Incentive Plan
permits the Compensation Committee to amend outstanding options;
provided, however, prior approval of the Company's shareholders is
required to lower the exercise price of outstanding options.
(3) All of the options were granted for a term of ten (10) years from the
grant date, subject to earlier termination upon certain events related
to termination of employment or a change in control of the Company.
(5) The potential realizable values listed are based on an assumption that
the market price of the Common Stock appreciates at the stated rate,
compounded annually, from the date of grant to the expiration date. The
five percent (5%) and ten percent (10%) assumed rates of appreciation
are determined by the rules of the Commission and do not represent the
Company's estimate of the future market value of the Common Stock.
Actual gains, if any, are dependent on the future market price of the
Common Stock.
8
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth the number of shares acquired on exercise
of stock options and the aggregate gains realized on exercise during the fiscal
year ended September 30, 2001 by the Named Executive Officers. The table also
sets forth the number of shares covered by exercisable and unexercisable options
held by such executives on September 30, 2001 and the aggregate gains that would
have been realized had these options been exercised on September 30, 2001, even
though these options were not exercised, and the unexercisable options could not
have been exercised, on that date.
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Options at Fiscal In-the-Money Options
on Value Year End (#) At Fiscal Year End ($)(1)
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
----------------- ------------ ------------ ------------ ------------- ------------ ------------
Greg Palmer -- -- 125,000 150,000 -- 6,250
Paul W. Mikos -- -- 123,872 -- -- --
Robert E. McDonough, Sr -- -- 71,667 23,333 -- --
Alan M. Purdy -- -- 49,099 15,333 -- 625
Gunnar B. Gooding -- -- 7,200 19,800 -- 1,875
Cosmas N. Lykos -- -- 8,534 12,466 -- 625
---------------------------
(1) These amounts represent the difference between the exercise price of the
in-the-money options and the market price of the Company's Common Stock
on September 28, 2001 (the last trading day of fiscal 2001). The closing
price of the Company's Common Stock on that day on the Nasdaq National
Market was $12.00. Options are in-the-money if the market value of the
shares covered thereby is greater than the option exercise price.
EMPLOYMENT CONTRACTS
The Company has an Amended and Restated Employment Agreement with Greg
Palmer that expires on October 1, 2006, pursuant to which the Company employs
Mr. Palmer as its President and CEO. The agreement provides for a base salary of
not less than $480,000 per year and an annual performance bonus of up to 60% of
Mr. Palmer's base salary based upon satisfaction of annual performance goals set
by the Compensation Committee. Additionally, under the agreement, the Company
granted to Mr. Palmer on December 16, 1997 an option grant to purchase up to
125,000 shares of Common Stock at $20.72, the fair market value of the Common
Stock on the grant date. Such grant vests and becomes exercisable at a rate of
twenty percent (20%) per year over a five (5) year period with the first twenty
percent (20%) exercisable on December 16, 1998. The grant, once vested, will
become exercisable until December 16, 2007. Under the agreement, Mr. Palmer
shall also receive from the Company a grant of 150,000 shares of restricted
stock of the Company pursuant to the terms set by the Compensation Committee of
the Board and the terms of the Company's Incentive Plan. Pursuant to the
agreement, if the Company terminates Mr. Palmer's employment as CEO without
cause, he shall be entitled to receive from the Company a lump-sum severance
payment of 1.6 times Mr. Palmer's annual base salary and maximum annual bonus
potential then in effect. Additionally, all granted options will vest
automatically and will remain exercisable for the balance of their term. If the
Company terminates Mr. Palmer's employment "for cause" (as defined in the
agreement), then all of the unexercised options, whether or not vested, shall
expire and become unexercisable as of the date of such for cause termination. In
the event that there are certain changes in control of the Company and Mr.
Palmer is terminated by the Company for any reason except for cause, he shall
receive a severance payment equal to 2.9 times his annual base salary and
maximum annual bonus potential then in effect (subject to certain tax
limitations) and all options granted shall become fully vested and exercisable
for the balance of their term.
9
The Company has an employment agreement with Robert E. McDonough, Sr.
that expires on December 4, 2004, pursuant to which the Company employs Mr.
McDonough as Vice Chairman of the Board. As amended on January 18, 2001, the
agreement provides for a base salary set annually by the Compensation Committee
until December 3, 2001; provided, however that Mr. McDonough's annual base
salary shall not be less than $390,000 and annual performance bonus in an amount
to be determined by the Compensation Committee based upon satisfaction of
certain performance goals set annually by the Compensation Committee. The amount
of Mr. McDonough's annual performance bonus shall be no less than $160,000 and
no more than 100% of Mr. McDonough's base salary until December 3, 2001.
Notwithstanding the aforementioned, effective December 4, 2001, the agreement
provides that Mr. McDonough shall receive total annual compensation of $250,000
until December 3, 2002, $200,000 until December 3, 2003 and $150,000 until
December 3, 2004. Additionally, pursuant to the terms of the agreement, the
Company shall pay McDonough's annual life insurance premiums not to exceed
$75,000 and Mr. McDonough is entitled to annual demand registration rights and
certain "piggyback" registration rights in future registrations by the Company
of its securities.
The Company has a Severance Agreement and General Release (the
"Severance Agreement") with Paul W. Mikos, the Company's Chairman of the Board
and former Chief Executive Officer and President. Pursuant to the Severance
Agreement, the Company shall provide the following severance benefits to Mr.
Mikos: (i) bi-weekly severance payments that total $1,800,000 over a two-year
period commencing July 17, 2001 (the "Severance Date"); (ii) payment of health
benefits and life and disability insurance premiums in effect on the Severance
Date, for a period of three (3) years and seventeen (17) days commencing on the
Severance Date; (iii) ownership of a 2000 Mercedes and 1996 Range Rover and
certain artwork; (iv) a lump sum of $30,000 for perquisites; and (v) vesting of
all granted options, which shall remain exercisable for the balance of their
term. Under the terms of the Severance Agreement, Mr. Mikos releases the Company
from any claims, known or unknown.
The Company has an agreement with Alan M. Purdy providing for a
severance payment of at least twenty-four (24) months' salary and bonus if
employment with the Company is terminated within twenty-four (24) months of
certain changes in ownership of the Company.
The Company has agreements with Gunnar B. Gooding and Cosmas N. Lykos
providing for a severance payment of one (1) year's base salary and bonus if
employment with the Company is terminated within twelve (12) months of certain
changes in ownership of the Company.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee consists of three (3) non-employee,
non-officer, directors and is responsible for setting and administering the
policies governing annual compensation and performance goals of the executive
officers of the Company.
Compensation Policies and Philosophy
The Compensation Committee believes that the compensation for the
executive officers of the Company should be designed to attract, motivate and
retain talented executives responsible for the success of the Company. The
Compensation Committee determines the executive officers' compensation levels
after examining competitive market levels of similarly situated temporary
staffing companies and based upon the achievement of pre-established objectives,
individual contribution to the Company and the financial performance of the
Company. The Compensation Committee strives to set a fair and competitive base
salary for each of its executive officers coupled with an incentive cash bonus
tied to annual performance-based individual and Company goals. Additionally, the
Company strives to link its executive officers' compensation with the financial
performance of the Company and align the financial interests of the executive
officers with those of the Company's shareholders by providing equity-based
long-term incentives in the form of stock option grants.
10
Compensation Components and Process
BASE SALARY. The base salary for each executive officer is determined at
levels considered appropriate for comparable positions at other similarly
situated temporary staffing companies.
PERFORMANCE BASED COMPENSATION. The Compensation Committee believes that
a substantial portion of the annual compensation of each executive officer
should be in the form of a cash bonus based on the satisfaction of certain
pre-established goals, including the financial performance of the Company. The
pre-established goals are a product of the Company's Management By Objective
Program ("MBO") in which the Compensation Committee establishes each executive
officer's goals after receiving input from each executive officer.
STOCK OPTIONS. The goal of the Company's stock option grants is to align
the interests of executive officers with the interests of the Company's
shareholders and to provide each executive officer with a significant incentive
to manage the Company from the perspective of an owner with an equity stake in
the business. The Compensation Committee determines the amount of stock options
according to the executive's position within the Company, recent performance,
potential for future responsibility and promotion, and comparable awards made to
individuals in similar positions within the staffing industry. It is the general
practice of the Company to grant stock options to executive officers when they
join the Company. The Compensation Committee believes that these initial grants
give the recipients a meaningful stake in the Company's long-term performance,
with any ultimate realization of significant value from those options being
commensurate with returns available on investments in the Company's Common
Stock. In addition to initial grants, the Compensation Committee has adopted a
policy of providing additional long-term incentives to the Company's executive
officers primarily through periodic stock option grants. The Compensation
Committee believes that these incentives are essential to the long-term success
of the Company and serve to align the interests of the Company's officers with
the interests of its shareholders. Options are exercisable in the future at the
fair market value at the time of grant, so that an executive officer granted an
option is rewarded only by the appreciation in price of the Company's Common
Stock. Such grants, if any, are generally determined by the Compensation
Committee after the end of a fiscal year with the input and recommendation of
the Company's CEO.
Executive Officer Compensation
In November 2001, the Compensation Committee granted bonuses to certain
executive officers based upon the executives' achievement of pre-established
individual MBOs and Company goals, which include the Company's financial
performance, based on revenue, income before income taxes, and net income. To
ensure that the Compensation Committee achieves its goal of setting competitive
compensation levels, the Compensation Committee referenced an analysis by an
independent compensation consultant, which concluded that the Company's
executive base salaries were competitive with other temporary staffing
companies, and that executive bonuses were competitive on a percentage basis to
the levels identified by surveys for other temporary staffing companies.
Regarding compensation to executive officers other than base salary and
cash bonuses, the Compensation Committee also administers the Company's
Incentive Plan, pursuant to which the Company may grant various stock-based
awards intended to compensate Company executive officers and align the interests
of recipients with the interests of the Company's shareholders. Through the year
ended September 30, 2001 (Fiscal 2001), only stock options and performance
grants have been granted under the Incentive Plan, although the Compensation
Committee has utilized other types of incentive awards available under the
Incentive Plan, including restricted stock grants, in the current fiscal year.
In Fiscal 2001, the Compensation Committee awarded certain executive officers
stock options based upon their respective work performance, level of
responsibility, initiative and achievement of individual MBOs and Company
performance goals. The options typically vest in periodic installments over a
three year period contingent upon the executive officer's continued employment
with the Company. Accordingly, the option will provide a return only if the
executive officer remains with the Company and only if the market price of the
Company's Common Stock appreciates over the option term.
11
CEO Compensation
The Compensation Committee set the performance goals, salary, bonus
amount and stock option grant for Fiscal 2001 of the Company's Chief Executive
Officer, Greg Palmer, with reference to market standards and satisfaction of
certain pre-established MBOs. For Fiscal 2001, Mr. Palmer's annual base salary
was $400,000. Mr. Palmer's incentive compensation for Fiscal 2001 consisted of a
cash bonus of $160,000 and an option grant to purchase up to 50,000 shares of
Common Stock (collectively, the "Incentive Compensation"). The option grant to
Mr. Palmer is exercisable in the future at the fair market value at the time of
such grant. The Compensation Committee based the Incentive Compensation
primarily on Mr. Palmer's satisfaction of his MBOs. Specifically, the MBOs were
based on quantitative and qualitative factors such as the Company's actual
financial performance, the attainment of certain direct office budgets, the
Company's stock performance compared to similar temporary staffing companies and
the implementation of the Company's strategic plan. The Company's actual
financial performance for Fiscal 2001 in total revenue, earnings per share and
its income before income taxes were all below the pre-established target levels.
As a result of the Company not achieving the aforementioned performance goals,
Mr. Palmer received no bonus for such goals. However, Mr. Palmer's continued
implementation of the Company's business strategies, including opening more
offices and improving the Profit Before Taxes for certain under-performing
offices, resulted in his satisfying certain performance goals and thus resulted
in the Compensation Committee's decision to set Mr. Palmer's Incentive
Compensation as stated above.
SUBMITTED BY THE COMPENSATION COMMITTEE:
James L. Doti
Mary George (Chair)
J. Michael Hagan
REPORT OF THE AUDIT COMMITTEE
The Audit Committee reviews the Company's financial reporting process on
behalf of the Board of Directors. The Company's management has the primary
responsibility for the financial statements and the reporting process. The
Company's independent auditors are responsible for expressing an opinion on the
conformity of our audited financial statements to generally accepted accounting
principles.
In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors the audited financial statements. The
Audit Committee has discussed with the independent auditors the matters required
to be discussed by Statement on Auditing Standards No. 61 (Communication with
Audit Committees). In addition, the Audit Committee has received from the
independent auditors the written disclosures required by Independence Standards
Board No. 1 (Independence Discussions with Audit Committees) and discussed with
them their independence from the Company and its management. The Audit Committee
has considered whether the independent auditors provision of non-audit services
to the Company is compatible with the auditor's independence. During the year
ended September 30, 2001, the Company's independent auditors charged the Company
the following: audit fees of $155,500, $0 for systems design/implementation
services; and $280,127 for all other fees.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board, and the Board has approved, that the audited
financial statements be included in the Company's Annual Report on SEC Form 10-K
for the year ended September 30, 2001, for filing with the Securities and
Exchange Commission.
SUBMITTED BY THE AUDIT COMMITTEE:
William D. Cvengros
Robert A. Elliott
John B. Zaepfel (Chairman)
12
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During fiscal year 2001, Ms. George, Mr. Cvengros, Dr. Doti and Mr.
Hagan all served as members of the Compensation Committee. Mr. Cvengros resigned
from the Compensation Committee in January 2001, and subsequently, the Board
appointed Ms. George to the Compensation Committee. No current member of the
Compensation Committee is a current or former officer or employee of the
Company. No executive officer of the Company served on the board of directors or
compensation committee of any entity that includes one or more members of the
Company's Board.
STOCK PERFORMANCE GRAPH
The stock performance graph set forth below compares the cumulative
total shareholder return on the Company's Common Stock for the period from
September 27, 1996 and ending on September 30, 2001 with the Nasdaq Stock Market
Composite Index, peer issuers in the temporary staffing industry and the Russell
2000 Index. The Company decided to compare its shareholder return with that of
the Russell 2000 Index because the Company believes that the Russell 2000 Index
includes companies with comparable market capitalization. The graph assumes that
$100 was invested on September 27, 1996 in the Company's Common Stock and each
index and that all dividends were reinvested. No cash dividends have been
declared on the Company's Common Stock. The comparisons in the graph are
required by the Commission and are not intended to forecast or be indicative of
possible future performance of the Company's Common Stock.
PERFORMANCE GRAPH
DATE REMEDYTEMP NASDAQ COMPOSITE STAFFING COMPOSITE(a) RUSSELL 2000 INDEX
09/27/96 $100.00 $100.00 $100.00 $100.00
09/26/97 113.29 137.27 132.00 133.19
09/25/98 111.39 139.44 102.52 107.86
10/03/99 71.20 227.82 81.10 128.43
10/01/00 60.52 302.47 118.28 158.47
09/30/01 60.76 123.63 78.02 124.86
(a) Staffing Composite Index consists of the following temporary staffing
companies: Modis Professional Services (formerly Accustaff), Spherion
(formerly Interim Services), Kelly Services, Manpower, On Assignment,
RemedyTemp, Inc., Robert Half International and Westaff (formerly
Western Staff).
------------------------------------------------------------------------------------------------------------------
9/27/96 9/26/97 9/25/98 10/03/99 10/01/00 9/30/01
------------------------------------------------------------------------------------------------------------------
RemedyTemp, Inc. $ 100 $113.29 $111.39 $ 71.20 $ 60.52 $ 60.76
Nasdaq Composite Index $ 100 $137.27 $139.44 $227.82 $302.47 $123.63
Russell 2000 Index $ 100 $133.19 $107.86 $128.43 $158.47 $124.86
Temporary Staffing Industry Index $ 100 $132.00 $102.52 $ 81.10 $118.28 $ 78.02
------------------------------------------------------------------------------------------------------------------
13
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, the
directors and officers of the Company and persons who own more than ten percent
(10%) of the Company's equity securities are required to report their initial
ownership of the Company's equity securities and any subsequent changes in that
ownership to the Commission and the Nasdaq National Market. Specific due dates
for these reports have been established, and the Company is required to disclose
in this Proxy Statement any late filings during the fiscal year ended September
30, 2001. To the Company's knowledge, based solely on its review of the copies
of such reports required to be furnished to the Company during the fiscal year
ended September 30, 2001, all of these reports were timely filed.
SHAREHOLDER PROPOSALS
Shareholders who wish to include proposals for action at the Company's
2003 Annual Meeting of Shareholders in next year's proxy statement and proxy
card must cause their proposals to be received in writing by the Company at its
address set forth on the first page of this Proxy Statement no later than
September 23, 2002. Such proposals should be addressed to the Company's
Secretary, and may be included in next year's proxy statement if they comply
with certain rules and regulations promulgated by the Commission. Additionally,
the proxy solicited by the Board for the 2003 Annual Meeting of Shareholders
will confer discretionary authority to vote on any shareholder proposal
presented at that meeting unless the Company is provided with notice of such
proposal no later than December 5, 2002.
OTHER MATTERS
The Board does not know of any other matters that are to be presented
for action at the Meeting. Should any other matters come before the Meeting or
any adjournments and postponements thereof, the persons named in the enclosed
proxy will have the discretionary authority to vote all proxies received with
respect to such matters in accordance with their judgment.
INDEPENDENT PUBLIC ACCOUNTANTS
By selection of the Board, the firm of PricewaterhouseCoopers LLP has
served as the Company's independent accountants since 1989. The Board has again
selected PricewaterhouseCoopers LLP to serve as the Company's independent
accountants for the fiscal year ending September 29, 2002. One or more
representatives of PricewaterhouseCoopers LLP are expected to be present at the
Meeting, will have an opportunity to make a statement if they so desire, and
will be available to respond to appropriate questions.
ANNUAL REPORT AND FORM 10-K
The Company's 2001 Annual Report to Shareholders has been mailed to
shareholders concurrently with this Proxy Statement, but such report is not
incorporated herein and is not deemed to be a part of this proxy solicitation
material. THE COMPANY WILL DELIVER TO ANY SHAREHOLDER, WITHOUT CHARGE, UPON
WRITTEN REQUEST, A COPY OF ITS ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS, SCHEDULES, AND LIST OF EXHIBITS. REQUESTS SHOULD BE SENT
TO REMEDYTEMP, INC., 101 ENTERPRISE, ALISO VIEJO, CALIFORNIA 92656, ATTENTION:
INVESTOR RELATIONS.
Aliso Viejo, California
January 18, 2002
SHAREHOLDERS ARE URGED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL, AND YOUR COOPERATION IS
APPRECIATED.
14
APPENDIX A
REMEDYTEMP, INC. CHARTER
FOR THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
1. Members. The Board of Directors shall appoint an Audit Committee of
the Board of Directors of at least three (3) members, consisting entirely of
"independent" directors of the Board, and shall designate one member as
chairperson. For purposes hereof, "independent" shall mean a director who meets
the NASD definition of "independence."
Each member of the Company's Audit Committee must be financially
literate and at least one member of the Audit Committee shall have accounting or
related financial management expertise, both as provided in the NASD rules.
2. Purposes, Duties, and Responsibilities. The Audit Committee shall
represent the Board of Directors in discharging its responsibilities relating to
the accounting, reporting, and financial practices of the Company and its
subsidiaries, and shall have general responsibility for surveillance of internal
controls and accounting and audit activities of the Company and its
subsidiaries. Specifically, the Audit Committee shall:
(i) Evaluate and recommend to the Board of Directors the firm of
independent certified public accountants to be appointed as auditor of
the Company, which firm shall be ultimately accountable to the Board of
Directors through the Audit Committee.
(ii) Review with the independent auditor their audit procedures,
including the scope, fees and timing of the audit, and the results of
the annual audit examination and any accompanying management letters.
(iii) Review with the independent auditor the written statement
from the auditor, required by Independence Standards Board Standard No.
1, concerning any relationships between the auditor and the Company or
any other relationships that may adversely affect the independence of
the auditor and, based on such review, assess the independence of the
auditor.
(iv) Review and discuss with management and the independent
auditor the Company's annual audited financial statements, including a
discussion of the auditor's judgment as to the quality of the Company's
accounting principles.
(v) Review with management and the independent auditor the
results of any significant matters identified as a result of the
independent auditor's interim review procedures prior to the filing of
each Form 10-Q or as soon thereafter as possible. The Audit Committee
Chair may perform this responsibility on behalf of the Audit Committee.
(vi) Review the adequacy of the Company's internal controls.
(vii) Review significant changes in the accounting policies of
the Company and accounting and financial reporting rule changes that may
have a significant impact on the Company's financial reports.
(viii) Review with the Company's counsel, any legal matter that
could have a significant impact on the Corporation's financial
statements
(ix) Review the adequacy of the Audit Committee Charter on an
annual basis, and recommend changes if the Committee determines changes
are appropriate.
3. Meetings. The Audit Committee shall meet as often as may be deemed
necessary or appropriate in its judgment, generally four (4) times each year,
either in person or telephonically. The Audit Committee shall meet in executive
session with the independent auditors at least annually. The Audit Committee
shall report to the full Board of Directors with respect to its meetings and
shall make such reports to shareholders as are required by applicable
regulations or as are deemed advisable in the Committee's judgment. The majority
of the members of the Audit Committee shall constitute a quorum.
15
REVOCABLE PROXY
REMEDYTEMP, INC.
101 ENTERPRISE
ALISO VIEJO, CALIFORNIA 92656
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby, revoking any proxy previously given, appoints Greg
Palmer and Alan M. Purdy, or either of them, each with full power of
substitution, as the lawful proxies of the undersigned and hereby authorizes
such persons to represent and to vote as designated on this proxy all shares of
the Class A Common Stock of RemedyTemp, Inc. which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Shareholders of
RemedyTemp to be held on February 28, 2002 and at any adjournments or
postponements thereof. The matters referred to on this proxy are described in
the Proxy Statement for RemedyTemp's Annual Meeting of Shareholders dated
February 28, 2002, which is being delivered herewith.
CONTINUED ON REVERSE - SIGN, DATE AND RETURN
SEE REVERSE
SIDE
A [X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
1. Election of Directors
FOR WITHHOLD
all nominees listed AUTHORITY
below (except as indicated to vote for all nominees
to the contrary below) listed below
[ ] [ ]
NOMINEES: William D. Cvengros, James L. Doti, Robert A. Elliott, Mary George,
J. Michael Hagan, Robert E. McDonough, Sr., Paul W. Mikos, Greg D.
Palmer and John B. Zaepfel
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name below.
-----------------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote upon such other
matters and to transact such other business as may properly come before the
2002 Annual Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE NOMINEES NAMED ABOVE FOR DIRECTOR.
The undersigned acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement for the 2002 Annual Meeting.
Please sign, date and promptly return this proxy card using the enclosed reply
envelope. Whether or not you plan to attend the 2002 Annual Meeting, you are
urged to executed date and return this proxy, which may be revoked at any time
prior to its use.
SIGNATURE(S) ________________________________ DATE ________________, 2002
Signature of Shareholder
SIGNATURE(S) ________________________________ DATE ________________, 2002
If Held Jointly
Please sign your name exactly as it appears hereon. When shares are held by
joint tenants both should sign. If you receive more than one proxy card, please
sign, date and return all cards received. When signed as attorney, executor,
administrators, trustee or guardian, please sign as such and give full title as
such. If a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.