SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
KELLY SERVICES, INC.
(Name of registrant as specified in its charter)
KELLY SERVICES, INC.
(Name of person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: ______
______________________________________________________________________
(2) Aggregate number of securities to which transaction applies: _________
______________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________________________________
(4) Proposed maximum aggregate value of transaction: _____________________
______________________________________________________________________
(5) Total fee paid:
______________________________________________________________________
[ ] Fee paid previsouly with preliminary materials:___________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid: _____________________________________________
(2) Form, schedule or registration statement no.: _______________________
(3) Filing party: _______________________________________________________
(4) Date filed: _________________________________________________________
[LOGO]
KELLY SERVICES, INC.
April 15, 1999
To Our Stockholders:
We are pleased to invite you to attend the Annual Meeting of
Stockholders of Kelly Services, Inc., which will be held at 11:00 a.m.,
Eastern Daylight Time, Monday, May 10, 1999, in the Auditorium located on the
First Floor of the Kelly Services Headquarters Building, 999 West Big Beaver
Road, Troy, Michigan.
Matters scheduled for consideration at this Meeting are the election of
a director, voting on a proposal to approve a Non-Employee Directors Stock
Option Plan and ratification of the appointment of PricewaterhouseCoopers LLP
as the independent public accountants for the Company for 1999.
The Meeting will also provide an opportunity to review with you the
business of the Company during 1998 and give you a chance to meet your
directors and officers.
Whether you plan to attend or not, please date, sign and return the
proxy card in the accompanying envelope. Your vote is important no matter how
many shares you own. If you do attend the Meeting and desire to vote in
person, you may do so even though you have previously submitted your proxy.
We look forward to seeing you at the Meeting.
Sincerely,
TERENCE E. ADDERLEY
Chairman, President and
Chief Executive Officer
[LOGO]
KELLY SERVICES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 10, 1999
To the Stockholders of
Kelly Services, Inc.
Notice is hereby given that the Annual Meeting of Stockholders of Kelly
Services, Inc., a Delaware corporation, will be held at the offices of the
Company, 999 West Big Beaver Road, Troy, Michigan 48084-4782, on May 10, 1999
at 11 o'clock in the forenoon, Eastern Daylight Time, for the following
purposes:
1. To elect a Director as set forth in the accompanying Proxy
Statement.
2. To consider and act upon a proposal to approve a Non-Employee
Directors Stock Option Plan.
3. To ratify the appointment of PricewaterhouseCoopers LLP as
independent accountants.
4. To transact any other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
Only holders of the Company's Class B common stock of record at the
close of business on March 22, 1999 will be entitled to notice of and to vote
at the Meeting.
To ensure a quorum, it is important that your proxy be mailed promptly
in the enclosed envelope, which requires no postage.
By Order of the Board of Directors
April 15, 1999
999 West Big Beaver Road
Troy, Michigan 48084-4782 GEORGE M. REARDON
Secretary
KELLY SERVICES, INC.
999 West Big Beaver Road
Troy, Michigan 48084-4782
April 15, 1999
PROXY STATEMENT
1999 ANNUAL MEETING OF STOCKHOLDERS
This statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Kelly Services, Inc.
(hereinafter called the "Company") for use at the Annual Meeting of
Stockholders of the Company to be held at the corporate offices of the
Company in Troy, Michigan on May 10, 1999 for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. The approximate date
on which this Proxy Statement and enclosed form of proxy are first being sent
to stockholders of the Company is April 15, 1999. If the enclosed form of
proxy is executed and returned by the stockholder, it may nevertheless be
revoked by the person giving it by written notice of revocation to the
Secretary of the Company, by submitting a later dated proxy or appearing in
person at the meeting any time prior to the exercise of the powers conferred
thereby.
If a proxy in the accompanying form is properly executed, returned to
the Company and not revoked, the shares represented by the proxy will be
voted in accordance with the instructions set forth thereon. If no
instructions are given with respect to the matters to be acted upon, the
shares represented by the proxy will be voted FOR the election of a director,
designated Proposal 1 on the proxy, FOR the proposal to approve a
Non-Employee Directors Stock Option Plan, designated Proposal 2, FOR the
proposal to ratify the selection of independent accountants, designated
Proposal 3 on the proxy, and on any other matters that properly come before
the Annual Meeting in the manner as set forth on the proxy. Abstentions (but
not broker non-votes) are counted for purposes of determining a quorum.
However, abstentions and broker non-votes are not counted as votes cast in
the tabulation of votes on any matter submitted to stockholders.
Stockholders on the record date will be entitled to one vote for each
share held.
At the close of business on March 22, 1999, the outstanding number of
voting securities (exclusive of treasury shares) was 3,567,329 shares of the
Class B common stock, having a par value of $1.00. Class B common stock is
the only class of the Company's securities with voting rights.
1
Securities Beneficially Owned by
Principal Stockholders and Management
Under regulations of the Securities and Exchange Commission, persons
who have power to vote or dispose of common stock of the Company, either
alone or jointly with others, are deemed to be beneficial owners of the
common stock.
Set forth in the following table are the beneficial holdings on March
1, 1999, on the basis described above, of each person known by the Company to
own beneficially more than five percent of the Class B common stock:
Name and Address Number of Shares Percent
of and Nature of of
Beneficial Owners Beneficial Ownership(a)(b) Class(b)
----------------- -------------------------- --------
T. E. Adderley ................... 3,214,566(c)(d) 90.1
999 W. Big Beaver Road
Troy, Michigan 48084
Bank One Corporation. ............ 2,384,514(e) 66.8
One First National Plaza
Chicago, Illinois 60670
(a) Nature of beneficial ownership of securities is direct unless otherwise
indicated by footnote. Beneficial ownership as shown in the table arises
from sole voting power and sole investment power unless indicated by
footnote.
(b) Because Securities and Exchange Commission attribution rules require
stock held in trust to be treated as beneficially held by each co-trustee
sharing voting power for the stock, the numbers of shares and percentages
shown total more than one hundred percent of the class.
(c) Includes 952,100 shares directly held; 2,189,840 shares in the William R.
Kelly Trust of which he is a co-trustee and has sole investment power and
has shared voting power with Bank One Corporation, the other co-trustee;
71,825 shares in an irrevocable trust, of which he is beneficiary; 625
shares held in five separate trusts of which he is co-trustee with sole
or shared voting and investment power, in which he has no equity
interest; and 176 shares owned by Mr. Adderley's wife, in which he
disclaims beneficial interest.
(d) Because of the shares in the William R. Kelly Trust of which he is a
co-trustee with Bank One Corporation and his own substantial
stockholdings, Mr. Adderley may be deemed to be a "control person" of the
Company under applicable regulations of the Securities and Exchange
Commission.
(e) Based upon a report filed by Bank One Corporation with the Securities and
Exchange Commission on Schedule 13G and upon subsequent information
received from Bank One Corporation upon which the Company relies for the
information presented. The report indicates that the 2,384,514 shares of
common stock held by Bank One Corporation are categorized as follows with
respect to voting power and dispositive power: Voting Power: sole voting
power; 122,224; shared voting power 2,262,290; Dispositive Power: sole
dispositive power 1,172; shared dispositive power 193,502; no dispositive
power 2,189,840.
2
Set forth in the following table are the beneficial holdings of the
Class A and Class B common stock on March 1, 1999, on the basis described
above, of each director and all directors and officers as a group
Class A Common Stock Class B Common Stock
----------------------------- -----------------------------
Number of Shares Percent Number of Shares Percent
and Nature of of and Nature of of
Directors Beneficial Ownership Class Beneficial Ownership Class
--------- -------------------- ----- -------------------- -----
T. E. Adderley ................... 15,095,060(a)(b) 46.8 3,214,566(c) 90.1
M. A. Fay, O.P. .................. 710 * 0 *
C. V. Fricke ..................... 4,802 * 781 *
V. G. Istock ..................... 2,885 * 875 *
B. J. White ...................... 1,510 * 0 *
All Directors and
Executive Officers as
a group ........................ 15,257,957(b) 47.3 3,216,457 90.2
* Less than 1%
(a) Includes 801,872 shares directly held; 11,702,337 shares in the William
R. Kelly Trust of which he is co-trustee and has sole investment power
and has shared voting power with Bank One Corporation, the other
co-trustee; 310,612 shares in an irrevocable trust, of which he is
beneficiary; 2,227,092 shares held in eleven separate trusts of which he
is co-trustee with sole or shared investment power, in which he has no
equity interest; 52,009 shares held by Mr. Adderley and his wife as
custodian for certain of his minor children under the Michigan Uniform
Gifts to Minors Act, in which he has no equity interest; 1,138 shares
owned by Mr. Adderley's wife, in which he disclaims beneficial interest.
(b) Includes shares which the individuals have a right to acquire through the
exercise of stock options within 60 days.
(c) See footnotes (c) and (d) to first table.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of common stock of the Company. Officers,
directors and greater than ten-percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
3
Board of Directors
The business, property and affairs of the Company are managed by the
Board of Directors, which establishes broad corporate policies and
performance objectives, but is not involved in the day-to-day operating
details. Regular meetings of the Board of Directors are held in each quarter
and special meetings are scheduled when required. The Board held seven
meetings during the last fiscal year.
The Board of Directors has a standing Audit Committee, composed of M.A.
Fay, C.V. Fricke, V.G. Istock and B.J. White, which held four meetings in
1998. The Audit Committee's purpose is to review the scope of the work and
fees of the independent accountants and to review with the independent
accountants their report or opinion on the Company's financial statements.
The Compensation Committee whose functions are described in the
Compensation Committee Report on page 5 of this Proxy Statement held five
meetings in 1998 and is composed of M.A. Fay, C.V. Fricke, V.G. Istock and
B.J. White. During 1998 the Board of Directors did not have a nominating
committee.
All of the Directors of the Company attended at least 75 percent of the
aggregate number of meetings of the Board of Directors and committees on
which each served.
Compensation of Directors
Directors of the Company who are not salaried officers are paid an
annual retainer fee of $25,000, a fee of $1,000 for each meeting of the Board
of Directors attended and a fee of $800 for each meeting of a committee of
the Board of Directors attended. In addition, under the Non-Employee Director
Stock Award Plan approved by the stockholders in 1995, each non-officer
Director receives an annual grant of shares of the Company's Class A common
stock equal in value to one-half of the Director's annual retainer fee.
4
COMPENSATION COMMITTEE REPORT
COVERING EXECUTIVE COMPENSATION
The Company's compensation program for executives is administered by
the Compensation Committee of the Board of Directors, consisting of B. Joseph
White, Maureen A. Fay, Cedric V. Fricke, and Verne G. Istock, each of whom is
an independent director. The Committee has responsibility for review and
final approval of all adjustments in salary and short-term incentive awards
for executives of the Company, including, with respect to 1998, administering
the Kelly Services, Inc. Short-Term Incentive Plan. The Committee also
administers the Kelly Services, Inc. Performance Incentive Plan (the
Company's long-term incentive plan) and makes recommendations with respect to
granting awards under such Plan subject to review and approval by a majority
of the full complement of those members of the Board of Directors who are
"disinterested persons" as that term is used in Rule 16b-3 of the Securities
and Exchange Commission.
Compensation Principles
The philosophy underlying the Company's executive compensation program
has the following goals: (a) to align key executive and management employees
with the Company's strategic and financial objectives; (b) to attract, retain
and motivate a management team of high quality; (c) to create incentives
which motivate employees to achieve continual growth and increasing
profitability of the Company; and (d) to promote appreciation of the common
interests of stockholders, executives, and key management employees.
Total compensation is directly related to the successful achievement of
the Company's performance objectives. Short-term objectives are established
on an annual basis, the achievement of which is rewarded annually. Long-term
objectives are linked to a two-to-five-year performance period, the
achievement of which will be rewarded accordingly. All compensation, other
than stock options and restricted stock awards, whether in the form of
salary, short-term incentive awards, grants of performance shares, or cash
equivalents, are based on successful accomplishment of periodically
established objectives reflecting the Company's business and financial goals.
Performance objectives, which are identified as short or long-term, provide
standards for the measurement of Company and unit performance. Some
performance objectives are Company-wide; others will vary, depending on
individual responsibilities, groups of employees, or particular projects and
plans.
The Company ordinarily seeks to provide performance-based compensation
that allows for maximum deductibility under Section 162(m) of the Internal
Revenue Code and related regulations. However, tax deductibility is only one
of many factors that must be considered in any final decision regarding
executive compensation. In order to best serve the Company and the interests
of its stockholders, the Company may determine that payment of non-deductible
compensation is necessary and appropriate to provide awards consistent with
the overall philosophy and objectives of the compensation programs.
The Company also seeks to encourage substantial stock ownership by the
Company's senior executives so as to align their interests more closely with
the stockholders' interests. In order to do so, the Committee has approved
share ownership guidelines as objectives to be worked toward by these
executives. The guideline for the Chief Executive Officer is ownership of
shares having a value five times his base salary; for executive vice
presidents, the guideline is four times base salary and for senior vice
presidents, three times base salary.
5
The following is a discussion of the major elements of the Company's
executive compensation program along with a description of the decisions and
actions taken by the Committee with regard to 1998 compensation of Mr.
Adderley as the Company's Chief Executive Officer.
Annual Compensation
Annual cash compensation for executive officers consists of base
salaries and cash incentive bonuses.
Base salaries for executive officers are targeted to be competitive
with the marketplace identified by national surveys of executive compensation
in which the Company periodically participates and which are recognized and
credible within the professional field of compensation management. Because
the Company competes for executive-level personnel beyond the temporary help
industry, the companies included in the surveys referred to above are not the
same as those included in the Peer Group Index used for performance graph
purposes above. Base salaries are targeted to correspond generally with the
median of the range of salaries in the surveys consulted.
Competitive assessments include reviewing salary survey data of
comparative companies, not necessarily in the temporary help industry, and
other relevant factors. Individual performance is also a factor in
determining base salary. The Committee is responsible for reviewing and
approving the annual salary increase budget for all officers.
In April 1998, Mr. Adderley received a 5.6 percent salary increase from
$720,000 to $760,000 to bring his annualized base salary more in line with
the median base salaries of chief executive officers of other companies of
comparable size.
Certain newly hired executives, including one of the executive officers
named in the accompanying table, were paid predetermined cash bonuses for
1998 as a recruiting inducement. The amounts of these bonuses were negotiated
with them before they joined the Company. All other 1998 cash bonuses to
executive officers (including Mr. Adderley) were cash incentive bonuses paid
pursuant to the Company's Short-Term Incentive Plan.
In accordance with that plan, in the first quarter of 1998 the
Committee established target and threshold goals relating to corporate
pre-tax earnings and a payout schedule for each executive showing a range of
potential bonus amounts the executive could receive under the plan, which
depended on the extent to which the Company's actual 1998 pre-tax earnings
met or exceeded the threshold. Mr. Adderley's entire potential bonus was tied
to this objectively determinable standard and a fixed percentage of the
potential bonus under the plan for each of the other executive officers also
was tied to this standard. The balances of the potential bonuses for the
other executive officers were tied to other performance goals, which also
were established by the Committee in the first quarter of the year. Those
goals were set in light of the particular functions and responsibilities of
the individual executives and, as permitted by the plan, related to
objectives the achievement of which requires subjective determination.
Because the Company's actual pre-tax earnings for 1998 exceeded the
threshold the Committee had established for the year, after the end of the
year the Committee approved a $414,000 cash bonus for Mr. Adderley and the
portions of the Short-Term Incentive Plan bonuses for other executive
officers that had been tied to pre-tax earnings, all in amounts determined by
their pre-established schedules for the level
6
of pre-tax earnings actually achieved. The remainder of the 1998 Short-Term
Incentive Plan bonuses paid to those other executive officers were determined
by the Committee after the end of the year based on subjective judgments of
the Committee concerning how successful they were in achieving their
individualized goals.
Long-Term Compensation
The long-term incentive compensation for executive officers can consist
of cash and stock-based awards made under the Company's Performance Incentive
Plan. Non-Qualified Stock Options, Incentive Stock Options, and, in the case
of certain executives, Restricted Stock Awards and Performance Share Awards,
are currently the only type of awards outstanding under the Performance
Incentive Plan.
During 1998, there was a review of compensation components for chief
executive officers in companies of similar size. As a result of that review,
the Committee during 1998 recommended that Mr. Adderley be awarded a
Non-Qualified Stock Option to purchase 69,500 shares of Class A common stock
and an Incentive Stock Option to purchase 2,500 shares of Class A common
stock to bring his total compensation package more in line with competitive
practice.
The decision to grant stock options is considered periodically by the
Committee during each year. Grants may be given to new hires, employees
promoted to new positions, and other key managers and executives as deemed
appropriate by the Committee. Grant size is determined based on a guideline
of option shares for each management level that is generally competitive with
the median level of grants awarded by companies of similar size.
In 1998, Mr. Adderley and the other most senior officers of the Company
were granted long-term Performance Share Awards and/or Restricted Shares of
the Company's Class A common stock under the Company's Performance Incentive
Plan. The Performance Share Awards will be earned based on the Company's
cumulative pre-tax earnings over the 1998-2000 performance cycle. The
Restricted Shares vest over a three to five year period. Mr. Adderley
received a Performance Award totaling 12,000 shares.
1998 was also the final year of the 1996-1998 Performance Share Award
cycle. Payments with respect to that cycle were made according to the
predetermined earnings per share criteria established by the Committee; Mr.
Adderley's payout was 8,400 shares.
Conclusion
The Committee believes that the Company's executive compensation
program, providing as it does for competitive base salaries along with short
and long-term incentive compensation opportunities, is an important factor in
motivating senior officers as well as maintaining an appropriate focus on
increasing stockholder value.
B. JOSEPH WHITE, Chair
MAUREEN A. FAY, O.P.
CEDRIC V. FRICKE
VERNE G. ISTOCK
7
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth all compensation paid or accrued for
services rendered to the Company and its subsidiaries for the last three
fiscal years by the Chief Executive Officer and the four highest-paid
executive officers of the Company:
Long-Term
Compensation
----------------------------------------------
Annual Compensation Awards Payouts
------------------- ------------------------------ -------------
Restricted Securities Long-Term
Name and Stock Underlying Incentive Plan All Other
Principal Position Year Salary Bonus Award(s)($)((1)) Options (#) Payouts($)(2) Compensation((2))
------------------ ---- ------ ----- ---------------- ----------- -------------- -----------------
T. E. Adderley 1998 $750,000 $414,000 72,000 $266,700 $ 71,580
Chairman, President and 1997 711,250 443,000 72,000 60,195
Chief Executive Officer 1996 676,250 292,000 72,000 106,657
C. T. Camden 1998 $462,500 $220,000 30,000 $ 44,450 $ 36,750
Executive Vice President, 1997 300,000 150,000 $231,280 30,000 20,880
Field Operations, 1996 205,000 48,000 12,000 15,080
Sales and Marketing
T. A. White 1998 $462,500 $220,000 30,000 $ 44,450 $ 36,750
Executive Vice President, 1997 306,250 150,000 $231,280 30,000 21,615
Quality, Service Delivery and 1996 230,000 54,000 12,000 18,350
Information Technology
R. E. Thompson 1998 $420,000 $170,000 27,000 $111,125 $ 37,200
Executive Vice President, 1997 415,000 200,000 30,000 32,520
Administration(4) 1996 395,000 127,000 30,000 30,060
W. K. Gerber 1998 $348,968 $220,000 $181,100 65,000 $ 74,045
Senior Vice President and
Chief Financial Officer(5)
- ----------------
(1) Restricted Shares of the Company's Class A common stock were awarded in
May 1998 and November 1997. The shares awarded in 1998 vest in five equal
annual installments beginning one year after the date of grant. The
shares awarded in November 1997 vest in four equal annual installments
beginning one year after the date of grant. The above amounts represent
the fair market value of the entire award for each executive officer at
the grant date. The number of shares awarded in 1998 were: W. K. Gerber,
5,000. The number of shares awarded in 1997 were: C. T. Camden, 8,000 and
T. A. White, 8,000. Dividends are payable on Restricted Shares.
At December 31, 1998, the aggregate number of Restricted Shares of the
Company's Class A common stock held by the executive officers named in
the Summary Compensation Table and the
8
value of these shares, based upon the $31.75 per share closing price of
the Company's Class A common stock on that date, were as follows:
Number of
Name Shares Value
---- --------- -----
T. E. Adderley ...................................... 0 $ 0
C. T. Camden ........................................ 6,000 190,500
T. A. White ......................................... 6,000 190,500
R. E. Thompson ...................................... 0 0
W. K. Gerber ........................................ 5,000 158,750
(2) Payment made in 1999 for the three year performance period ending
December 31, 1998.
(3) Represents Company contributions to non-qualified defined
contribution/deferred compensation plan for officers and certain other
management employees known as the Management Retirement Plan. The amount
reported above for Mr. Adderley includes a contribution of $51,622 for
1996 made because he would have earned a greater benefit had he remained
under a defined benefit Retirement Plan which was terminated December 31,
1988. The amount reported for Mr. Gerber includes a contribution of
$50,000 made as a recruiting inducement.
(4) In exchange for Mr. Thompson's March 31, 1999 retirement agreement
requiring him to provide continuing consultation and to observe covenants
against competition, the Company will pay him four months of base salary,
will continue his Performance Share award for the 1997-1999 cycle for
3,740 of the original 5,000 awarded shares (in proportion to his active
service during that cycle), and allow him a four-month post-retirement
exercise period for already-vested options on 17,400 shares of the
Company's Class A common stock.
(5) Mr. Gerber has been an employee of the Company since April 1998.
Option Grants in 1998
The following table shows all grants of stock options to the officers
named in the Summary Compensation Table above in 1998. The exercise price of
all such options was the fair market value on the date of grant except that
the option for 2,500 shares granted to Mr. Adderley at $38.43 was at 110% of
the fair market value of $34.94 on the date of the grant. With respect to
this option for 2,500 shares awarded to Mr. Adderley, fifty (50%) percent are
exercisable one year after the date grant with an additional twenty-five
(25%) percent exercisable on each of the next two anniversary dates of the
grant. Of the remaining options awarded, twenty (20%) percent are exercisable
one year after the grant date with an additional twenty (20%) percent
exercisable on each of the next four anniversary dates. Upon exercise of an
option, an officer purchases all or a portion of the shares covered by the
option by paying
9
the exercise price multiplied by the number of shares as to which the option
is exercised, either in cash or by surrendering common shares already owned
by the officer.
Individual Grants
--------------------------------------------------------------
Number of Potential Realizable Value at
Securities % of Total Assumed Annual Rates of Stock
Underlying Options Price Appreciation for Option Term
Options Granted to ----------------------------------
Granted Option Employees in Exercise or Expiration
Name (#) Type(1) Fiscal Year Base Price Date 0% 5% 10%
---- --------- ------- ------------ ----------- ---------- -- ---------- ----------
T. E. Adderley ....... 2,500 ISO $38.43 03/09/03 0 $ 26,544 $ 58,655
69,500 NQ 34.94 03/09/08 1,527,164 3,870,133
------ ---------- ----------
72,000 16.07 $1,553,708 $3,928,788
C. T. Camden ......... 2,500 ISO $34.94 03/09/08 0 $ 54,934 $ 139,213
27,500 NQ 34.94 03/09/08 604,273 1,531,347
------ ---------- ----------
30,000 6.70 $ 659,207 $1,670,560
T. A. White .......... 2,500 ISO $34.94 03/09/08 0 $ 54,934 $ 139,213
27,500 NQ 34.94 03/09/08 604,273 1,531,347
------ ---------- ----------
30,000 6.70 $ 659,207 $1,670,560
R. E. Thompson ....... 2,500 ISO $34.94 03/09/08 0 $ 54,934 $ 139,213
24,500 NQ 34.94 03/09/08 538,353 1,364,291
------ ---------- ----------
27,000 6.03 $ 593,287 $1,503,504
W. K. Gerber ......... 65,000 NQ 14.51 $36.22 05/19/08 0 $1,480,607 $3,752,148
The dollar amounts under the 5% and 10% columns in the table above are
the result of calculations required by the Securities and Exchange
Commission's rules and therefore are not intended to forecast possible future
appreciation of the stock price of the Company. As shown in the 0% column
above, no gain to the named officers or all employees is possible without
appreciation in the price of the Company's common stock, which will benefit
all stockholders. For example, in order for any of the named officers to
realize the potential values set forth in the 5% and 10% columns in the table
above with respect to the exercise price of $34.94 (the fair market value on
the date of the grant), the price per share of the Company's Class A common
stock would be approximately $56.91 and $90.63, respectively, as of the
expiration date of their options.
(1) Option type is either Incentive Stock Option (ISO) or Non-Qualified (NQ).
Option Exercises During 1998 and Year-End Option Values
The following table shows stock option exercises during 1998 by each of
the officers named in the Summary Compensation Table and the value of
unexercised options at December 31, 1998:
Number of
Securities Underlying
Unexercised Options Value of Unexercised In-the-Money
at Year End (#) Options at Year End
Shares Acquired --------------------------- ---------------------------------
Name on Exercise (#) Value Realized Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------------- ----------- ------------- ----------- -------------
T. E. Adderley ..... 0 0 108,150 184,850 $278,692 $275,658
C. T. Camden ....... 0 0 14,400 63,600 $ 33,840 $ 99,360
T. A. White ........ 0 0 23,100 65,400 $ 67,890 $106,560
R. E. Thompson ..... 0 0 23,400 77,400 $ 74,090 $126,360
W. K. Gerber ....... 0 0 0 65,000 $ 0 $ 0
10
Long-Term Incentive Plans -- Awards in Last Fiscal Year Table
The following table provides information on performance share awards
made by the Company in 1998 under the Company's Performance Incentive Plan.
Long-Term Incentive Plans -- Awards in Last Fiscal Year
Estimated Future Performance
Share Payouts Under Non-Stock
Number of Performance or Price Based Plans
Performance Other Period ------------------------------
Shares (1) Until Maturation Threshold Target Maximum
Name (#) or Payout (#) (#) (#)
---- ----------- ---------------- --------- ------ -------
T. E. Adderley ....... 12,000 1998-2000 0 12,000 12,000
C. T. Camden ......... 5,000 1998-2000 0 5,000 5,000
T. A. White .......... 5,000 1998-2000 0 5,000 5,000
R. E. Thompson ....... 4,000 1998-2000 0 4,000 4,000
W. K. Gerber ......... 0
- ----------------
(1) Each performance share awarded in 1998 consisted of one share of the
Company's Class A common stock, contingently granted and earned based on
the Company's cumulative earnings before tax over the three year
1998-2000 performance period. During the performance period, the shares
are issued and outstanding and the executive officer to whom the award
has been made has the right to receive dividends thereon. Shares issued
under awards are reported in the Summary Compensation Table for the year
of payout.
Performance Graph
The following graph compares the cumulative total return of the
Company's Class A common stock, with that of a Peer Group Index, the S&P
MidCap 400 Index, the NASDAQ Stock Market Index, and the Prior Peer Group
Index for the five years ended December 31, 1998. The graph assumes an
investment of $100 on December 31, 1993 and that all dividends were
reinvested.
11
The Peer Group Index consists of other publicly traded staffing
services companies including: CDI Corp., Interim Services Inc., Manpower
Inc., Norrell Corporation and Olsten Corporation. This Peer Group is new in
1998 and more accurately represents the Company's peers in the industry. The
Prior Group is displayed for comparison purposes and includes CDI Corp.,
Manpower Inc., Olsten Corporation and Robert Half International Inc. The
Company has changed its Peer Group to replace Robert Half International Inc.,
which is considered a specialized staffing services company, with Interim
Services Inc. and Norrell Corporation, each of which became a public company
in 1994. The Company has also changed its broad equity market index from the
NASDAQ Stock Market Index to the S&P MidCap 400 Index and displays both for
comparison purposes. The Company is a member of both broad equity market
indices; however, the S&P MidCap 400 Index is a closer representation of
companies with comparable market capitalizations.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Kelly Services, Inc., Peer Group Index,
S&P MidCap 400 Index, NASDAQ Stock Market Index
and Prior Peer Group Index
[graphic omitted]
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
Kelly Services, Inc. 100 102 105 105 121 131
Peer Group Index 100 135 152 156 176 118
S&P MidCap 400 Index 100 96 126 150 199 228
NASDAQ Stock Market Index 100 98 138 170 209 293
Prior Peer Group Index 100 143 169 188 250 207
12
Matters to be Brought Before the Meeting
Election of Director
Proposal 1
The Board of Directors is divided into three classes with each class
elected for a three-year term. Under the Certificate of Incorporation, the
Board of Directors shall consist of no fewer than five (5) and no more than
nine (9) members, the exact number of Directors to be determined from time to
time by the Board of Directors. The Board of Directors has fixed the number
of Directors constituting the whole Board at five (5).
The Board of Directors recommends that the nominee named below be
elected to serve as a Director. The nominee will serve for a three (3) year
term ending at the Annual Meeting of Stockholders held after the close of the
fiscal year ended December 30, 2001.
The shares represented by the enclosed form of proxy, when properly
executed by a stockholder of record, will be voted at the Annual Meeting, or
any adjournment thereof, as designated thereon if unrevoked at the time of
the meeting. If a nominee is unavailable for election for any reason on the
date of the election of the Director (which event is not anticipated), the
persons named in the enclosed form of proxy may vote for the election of a
person designated by a majority of the proxy attorneys present at the
meeting. The Director will be elected by a majority of the votes cast by
holders of Class B common stock who are present in person, or represented by
proxy, and entitled to vote at the Meeting.
The name and age of the nominee and for each person whose term of
office as a Director will continue after the meeting as of March 1, 1999,
their present occupations or employment during the past five years and other
data regarding them, based upon information received from the respective
individuals, are hereinafter set forth:
Year of Year First
Expiration of Principal Elected as
Name and Age Elective Term Occupation Director
------------ ------------- ---------- ----------
Nominee for Election as Director to be Elected for a Three-Year Term
B. J. White .......... 2002 Dean and Professor of Business Administration of the 1995
Age 51 University of Michigan Business School; Director of
Equity Residential Property Trust.
Directors Continuing in Office
T. E. Adderley(a) .... 2001 Chairman, President and Chief Executive Officer of 1962
Age 65 the Company; Director of DTE Energy Company.
M. A. Fay, O.P. ...... 2000 President of the University of Detroit Mercy; 1997
Age 64 Director of Bank One Corporation.
C. V. Fricke ......... 2000 Professor Emeritus, University of Michigan-Dearborn. 1978
Age 70
V. G. Istock ......... 2000 Chairman of Bank One Corporation; Director of Bank 1991
Age 58 One Corporation; Director of Masco Corporation.
(a) Mr. Adderley is a director and executive officer of all subsidiaries of
the Company.
13
APPROVAL OF
1999 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
Proposal 2
Introduction. On March 31, 1999, subject to the approval of the holders
of Class B common stock, the Board of Directors adopted a new stock option
plan for non-employee directors, designated as the Kelly Services, Inc. 1999
Non-Employee Directors Stock Option Plan (the "Directors Option Plan"), under
which the Board from time to time may make discretionary grants of options to
purchase shares of Class A common stock to non-employee directors. On the
same day, the Board also granted options under the plan to all directors
other than Mr. Adderley, subject to stockholder approval of the plan. A
summary of the principal features of the Directors Option Plan, as well as
information concerning the option grants already made and other matters
relevant to the proposal to approve the plan is provided below, and the full
text of the plan is annexed to this proxy statement as Exhibit A. Class B
stockholders are advised to review that text in its entirety as they
deliberate upon this proposal.
Summary of Plan Features
Purposes. The purposes of the plan are to assist the Company in
attracting and retaining individuals of exceptional ability to serve as its
directors and to more closely align their interests with those of the
Company's stockholders.
Administration. The plan is to be administered by the Board of
Directors, which has broad discretionary authority (within the parameters
specified in the plan), not only to determine when and to which eligible
persons plan options from time to time may be granted and determine the terms
of each option granted, but also to construe, interpret, and settle any
dispute concerning the plan or any granted option and to make any other
decision or take any other action that it deems necessary or desirable for
the administration or operation of the plan.
Eligibility. The only persons eligible for grants under the plan are
persons who, at the time of grant, are directors of the Company but are not
also employees of the Company or any affiliated entity. Currently, all of the
Company's incumbent directors other than Mr. Adderley, and no other person,
are eligible for grants under the plan.
Available Shares; Adjustments. Subject to adjustment as contemplated by
Section 7 of the plan, all options granted under it must be options to
purchase shares of Class A common stock, and the aggregate maximum number of
Class A shares that may be used for settlement of plan options is 100,000. If
an option granted under the plan terminates or expires without having been
exercised in full, the shares that were subject to the option immediately
beforehand would become available for new option grants under the plan.
Shares used for plan options may be either shares held in the Company's
treasury or new issuances, as the Board determines to be appropriate.
Option Exercise Prices. Subject to adjustment as contemplated by
Section 7 of the plan, the per share exercise price of each plan option must
be the Fair Market Value or higher of a share of Class A common stock at the
date the option is granted. Under the plan's definition, for as long as the
NASDAQ Stock Market continues to be the principal trading market for the
Class A common stock, the "Fair Market Value" of a share of Class A common
stock on a given grant date means the average of high and low sale prices for
such a share on that trading market on that date (or, if no such trading of
Class A common stock occurred on that date, on the next preceding date on
which such trading occurred).
14
Numbers of Covered Shares, First Exercisability, Expiration Dates, and
Termination of Plan Options. The plan affords the Board full discretion
(subject to the limits on available shares discussed above) to determine, at
the time of grant of an option, the number of shares that will be covered by
the option, the time at which the option (or any portion of it) first will
become exercisable, and the latest date on which it may be exercised (its
"expiration date"), except that no option granted under the plan may have an
expiration later than ten years after its grant. Each plan option will
terminate in its entirety on the earliest of (1) the third anniversary of the
date on which the grantee ceased to be a Company director, (2) the date on
which written notice of termination of the option is given to the former
director (or such later date as is specified in that notice), and (3) the
option's expiration date.
Exercising a Plan Option; Non-Transferability. A plan option may not be
exercised in whole or in part during the 30-day period following the date the
grantee ceases to be a Company director. Each option is non-transferable
except by will or the laws of descent and distribution and during the
grantee's lifetime may be exercised only by the grantee. To the extent then
exercisable, an option may be exercised in whole or in part only by giving
written notice of exercise in the manner contemplated in the plan and paying
in full in cash the aggregate exercise price for the number of shares for
which it is being exercised.
Duration of Plan; Amendments. If approved by the Class B stockholders
at the Annual Meeting, the plan thereafter will continue in effect until
terminated by the Board. The Board may at any time and from time to time
amend, modify, suspend, or terminate the plan, with or without shareholder
approval, except that no amendment or modification will be effective without
shareholder approval if such approval is then required by Rule 16b-3 or
applicable rules of any national securities exchange (including the NASDAQ
Stock Market) on which the Class A common stock is then principally traded,
and except that none of the foregoing actions by the Board shall adversely
affect any then outstanding plan option without the holder's consent.
Certain Tax Considerations
All options granted under the Directors Option Plan will be
nonqualified stock options (options that do not qualify as incentive stock
options under Section 422 of the Internal Revenue Code).
In general, under current Federal income tax law applicable to
nonqualified stock options, the grant of an option under the plan would not
be a taxable event for the grantee or a deductible event for the Company.
However, upon exercise of the option, the grantee would realize ordinary
compensation income measured by the excess of the fair market value of the
acquired shares at the time of exercise over the exercise price paid, and
(subject to normal Federal income tax law requirements concerning the
reasonableness of compensation deductions) the Company would be entitled to a
deduction equal to the income realized by the grantee. (The special deduction
limits of Section 162(m) of the Code should not present any deduction issues
for plan options given the plan's eligibility requirements and the
unlikelihood that any non-employee director will become one of the Company's
highest paid executive officers after grant of a plan option.) Upon a
subsequent sale of the shares acquired by exercising the option, the grantee
generally would realize a capital gain or loss (long-term or short-term
depending on the length of the holding period preceding disposition) equal to
the positive or negative difference between his or her basis in the shares
(which usually would be the market price of the shares at the time of
exercise) and the value of the consideration received in the sale.
15
Currently Outstanding and Possible Future Awards under the Plan
As indicated above, on the day the Directors Option Plan was adopted,
the Board also granted an option under the plan to each of the four incumbent
Company directors eligible to receive grants under the plan, subject to
approval of the plan by the Class B stockholders. Each of these options
covers 10,000 shares of Class A common stock, has a per share exercise price
of $26.35, is immediately exercisable in full (in whole or in part), and has
an expiration date of March 31, 2009. On April 9, 1999, the high and low
sales prices for a share of Class A common stock on the NASDAQ Stock Market
were $27.00 and $25.00, respectively; the last reported sale on that date was
at $25.125 per share.
None of the executives named in the Summary Compensation Table, none of
the Company's other executive officers, and no other employee of the Company
or its subsidiaries is eligible to receive any option under the plan. All of
the directors who received the March 31 grants will be eligible to receive
additional option grants under the plan in the future, as long as they
continue to be non-employee directors. However, due to the nature of the
plan, the future benefits that any one of them ultimately will receive under
the plan cannot be predicted in advance.
Vote Required for Approval and Recommendation
Shareholder approval of the Directors Option Plan is not required by
Delaware corporate law, but it is required by applicable NASDAQ rules.
Assuming the presence of a quorum, the proposal to approve the plan will be
carried if it receives the affirmative vote of the holders of a majority of
the shares of Class B common stock present in person or by proxy and entitled
to vote at the Annual Meeting. For this purpose, any abstention with respect
to such shares will have the same effect as a vote against the proposal, but
any such shares that are the subject of a broker non-vote will not be
considered to be present. Accordingly, broker non-votes will have no effect
on the outcome of the vote on this proposal.
If the plan is not approved, the options previously granted under it
will be of no effect, and no other options will be granted under it unless
and until such approval subsequently is obtained.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE 1999
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
Relationship with Independent Accountants
Proposal 3
The Board of Directors of the Company has appointed the firm of
PricewaterhouseCoopers LLP as independent accountants of the Company for the
current fiscal year ending January 2, 2000, subject to ratification by the
stockholders. This firm has served as independent accountants for the Company
for many years and is considered to be well qualified by the Board of
Directors. As in prior years, a representative of that firm will be present
at the Annual Meeting and will have the opportunity to make a statement and
to respond to appropriate questions.
It is recommended by the Board of Directors that the proposal to ratify
the appointment of PricewaterhouseCoopers LLP as independent accountants for
the year 1999 be approved. If stockholders fail to approve this proposal, the
Board will reconsider the appointment of PricewaterhouseCoopers LLP as
independent accountants for the year 1999.
The proposal to ratify the appointment of PricewaterhouseCoopers LLP
will be carried if it
16
receives the affirmative vote of the holders of a majority of the Company's
Class B common stock present in person or by proxy and entitled to vote at
the Annual Meeting.
Stockholder Proposals
Proposals of stockholders intended to be presented at the next Annual
Meeting must be received by the Secretary, Kelly Services, Inc., 999 West Big
Beaver Road, Troy, Michigan 48084, no later than December 9, 1999.
Other Matters
At the date of this Proxy Statement the Company knows of no matters,
other than the matters described herein, that will be presented for
consideration at the Meeting. If any other matters do properly come before
the Meeting, all proxies signed and returned by holders of the Class B common
stock, if not limited to the contrary, will be voted thereon in accordance
with the best judgment of the persons voting the proxies.
A copy of the Company's printed Annual Report as of January 3, 1999,
the close of the Company's latest fiscal year, has been mailed to each
stockholder of record. The expense of preparing, printing, assembling and
mailing the accompanying form of proxy and the material used in the
solicitation of proxies will be paid by the Company. In addition, the Company
may reimburse brokers or nominees for their expenses in transmitting proxies
and proxy material to principals.
It is important that the proxies be returned promptly. Therefore,
stockholders are urged to execute and return the enclosed form of proxy in
the enclosed postage prepaid envelope.
By Order of the Board of Directors
GEORGE M. REARDON
Secretary
17
EXHIBIT A
KELLY SERVICES, INC
1999 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
Section I -- Purposes
The purposes of this 1999 Non-Employee Directors Stock Option plan are
to assist the Company in attracting and retaining individuals of exceptional
ability to serve as its directors and to more closely align their interests
with those of the Company's shareholders.
Section 2 -- Certain Definitions
The following terms have the following respective meanings under the
Plan:
"Affiliated Entity" means any corporation, partnership, or other
business enterprise in which the Company directly or indirectly has a
significant equity interest under generally accepted accounting principles.
"Board" means the Board of Directors of the Company.
"Company" means Kelly Services, Inc.
"Fair Market Value" means, for any given date: (i) if the Shares are
then listed for trading on one or more national securities exchanges
(including for this purpose the NASDAQ "National Market"), the average of the
high and low sale prices for a Share on the principal such exchange on the
date in question (or, if no Share traded on such exchange on such date, the
next preceding date on which such trading occurred); (ii) if (i) is then
inapplicable but bid and asked prices for Shares are quoted through NASDAQ,
the average of the highest bid and lowest asked prices so quoted for a Share
on the date in question (or, if no prices for Shares were quoted on that
date, the next preceding date on which they were quoted); and (iii) if both
(i) and (ii) are inapplicable, the fair market value of a Share on the date
in question as determined in good faith by the Board.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"NASDAQ" means the National Association of Securities Dealers, Inc.
Automated Quotation System.
"Non-Employee Director" means a member of the Board who is not an
employee of the Company or any Affiliated Entity.
"Option" means an option to purchase Shares granted under the Plan.
"Plan" means this 1999 Non-Employee Directors Stock Option Plan.
"Rule 16b-3" means Securities and Exchange Commission Rule 16b-3 (or
any successor rule or regulation), as in effect and applicable to the Company
at a given time.
"Shares" means shares of the Company's Class A common stock, par value
$1.00 per share, or such other securities or other property as may become
subject to an Option pursuant to an adjustment made under Section 6 hereof.
A-1
Section 3 -- Administration
3.1 The Plan shall be administered by the Board, which shall have full
power and authority to prescribe and amend the forms of option agreements,
notices, and all other documents or instruments required under or determined
by the Board to be advisable with respect to the Plan, to establish, revise,
suspend, and waive such rules and procedures and appoint such agents as it
deems appropriate for the administration or operation of the Plan, to
construe and interpret the Plan, any option agreement, and any other
instrument or document relating to the plan or any Option, to decide any
question and settle any dispute which may arise in connection with the Plan
or any Option, and to make any other determination, and take any other action
that the Board deems necessary or desirable for the administration or
operation of the Plan. All interpretations, determinations, or other
decisions of the Board concerning the Plan or any Option shall be conclusive
and binding upon all interested parties.
3.2 Notwithstanding the foregoing or any other provision of the Plan to
the contrary, however, it being the intention that all Options shall satisfy
all then applicable criteria under Rule 16b-3, the Board shall have no
authority or discretion at any time to make any determination or take any
other action which would cause any Option then outstanding or which
thereafter may be granted to fail to meet such criteria.
Section 4 -- Eligibility
The only persons who shall be granted Options are those individuals who
at time of grant are Non-Employee Directors.
Section 5 -- Available Shares
Subject to adjustment as provided in Section 7, the aggregate maximum
number of Shares available for settlement of Options is 100,000, which Shares
may be either authorized and issued Shares acquired by the Company and held
in its treasury ("treasury shares") or authorized and unissued Shares. There
shall be reserved at all times for issuance under the Plan a number of Shares
equal to the aggregate maximum number of Shares that may be issued in
settlement of Options then outstanding and which thereafter may be granted
under the Plan, less the number of treasury shares then reserved for Options.
If an Option terminates or expires for any reason without having been
exercised in full, the Shares subject to the Option immediately prior to such
expiration or termination shall again become available for grants under the
Plan.
Section 6 -- Option Terms
6.1 Each Option shall be evidenced by a written option agreement in
form approved by the Board, which agreement shall identify the Option as one
granted under the Plan, the name of the grantee, and the date of grant, set
forth the number of Shares subject to the Option, the exercise price per
Share (which shall be the Fair Market Value of a Share on the grant date, or
higher), and, either expressly or by reference to the Plan, the other terms
and conditions of the Option; provided that, in the event of any
inconsistency between the Plan and the agreement, the terms of the Plan shall
govern.
6.2 The number of Shares subject to an Option, the time at which the
Option or any portion thereof first becomes exercisable (which may be the
date of grant) and the latest date on which the Option may be exercised (the
"expiration date") shall be as specified at the time of grant; provided,
however, that the expiration date of an Option shall be no later than ten
(10) years after the date of grant. Each Option
A-2
shall terminate in its entirety at the earlier of (i) the third anniversary
of the date on which the grantee ceased to be a Company director; (ii) the
date on which written notice of termination of the Option is given to the
former director or such later date as is specified in that notice; or (iii)
the expiration date of the Option. Each Option shall be non-transferable
except by will or the laws of descent and distribution, and during the
lifetime of the grantee may be exercised only by the grantee.
6.3 To the extent then exercisable, an Option may be exercised, in
whole or in part, by delivery to the Secretary of the Company (or any such
other Company officers or employees as the Board from time to time may
designate) of a written notice of exercise in form acceptable to the Board
and payment in full in cash of the aggregate exercise price for the number of
shares for which the Option is being exercised; provided, however, an Option
may not be exercised in whole or in part during the thirty (30) day period
following the date the grantee ceases to be a Company director.
Section 7 -- Adjustments
In the event of a reorganization or recapitalization, merger,
consolidation or similar transaction involving the Company, a stock-on-stock
dividend or split, spin-off, reverse split or combination of the Company's
Class A common stock, a rights offering, or any other change in the corporate
or capital structure of the Company affecting the Class A Common Stock, the
Board shall make such adjustments as it may deem appropriate in the number
and kind of shares which thereafter may be made subject to Options and in the
numbers and kind of shares covered by outstanding Options and the per share
exercise price of such Options. In the event of a merger, consolidation, or
combination in which the consideration issued with respect to Shares is a
combination of different types of property, the Board may designate the
property or combination of property to be received upon the exercise of each
such outstanding Option.
Section 8 -- Miscellaneous
8.1 The Board may at any time and from time to time amend, modify,
suspend or terminate the Plan, with or without the approval of shareholders
of the Company, except that: (i) no amendment or modification of the Plan
shall be effective without shareholder approval at any time at which such
approval is required, either by the applicable rules of any securities
exchange (including the NASDAQ National Market) on which Company stock is
then principally traded, or by Rule 16b-3; and (ii) none of the foregoing
actions by the Board shall adversely affect any then outstanding Option
without the holder's consent.
8.2 The Plan has been adopted by the Board subject to shareholder
approval by the holders of the Company's Class B common stock. All Options
granted prior to such shareholder approval shall be subject to such approval.
8.3 If at any time the Board shall determine that the listing,
registration, or qualification of any Shares upon any national securities
exchange or under any federal, state, local or foreign law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the issuance or delivery of Shares
pursuant to the Plan, then, notwithstanding any other provision of the Plan
to the contrary, no Shares shall be issued or delivered unless and until such
listing, registration, qualification, consent, or approval shall have been
effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the Board.
A-3
8.4 Neither the grantee of an Option, nor any other person to whom the
Option or the grantee's rights thereunder may pass, shall be, or have any
rights or privileges of, a holder of Shares in respect of any Shares subject
to such Option, unless and until it has been duly exercised and certificates
representing such Shares have been issued in the name of such grantee or
other person.
8.5 The Company shall have the right to require the holder of an Option
to make payments in cash upon the exercise of the Option, in connection with
any obligation of the Company to withhold taxes upon such exercise. Any such
required payment shall be a condition precedent to settlement of such Option.
8.6 The Plan and all actions taken under it shall be governed by the
internal laws of the State of Delaware.
A-4
[FRONT OF PROXY CARD]
KELLY SERVICES, INC.
999 West Big Beaver Road
Troy, Michigan 48084
Solicited by the Board of Directors
for the Annual Meeting of Stockholders on May 10, 1999
The undersigned hereby appoints as Proxies Terence E. Adderley, William K.
Gerber and George M. Reardon, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated on the
reverse side, all shares of Class B Common Stock of Kelly Services, Inc. (the
"Company") held of record by the undersigned on March 22, 1999 at the Annual
Meeting of Stockholders to be held on May 10, 1999 and any adjournments
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE
VOTED FOR SUCH PROPOSAL.
PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES OF AMERICA.
Please sign this Proxy exactly as your name(s) appear(s) on the books of the
Company. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where
more than one name appears, a majority must sign. If a corporation, the
signature should be that of an authorized officer who should state his or
her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_________________________ _________________________
_________________________ _________________________
_________________________ _________________________
- -------------------------------------------------------------------------------
[BACK OF PROXY CARD]
PLEASE MARK VOTES AS IN THIS EXAMPLE /X/
KELLY SERVICES, INC.
CLASS B COMMON STOCK
CONTROL NUMBER:
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date______________________
________________________________ ________________________________
Stockholder sign here Co-owner sign here
1. Election of Director.
With-
For hold
/ / / /
B.J. White
For Against Abstain
2. Approve Non-Employee Directors Stock Option
Plan. / / / / / /
For Against Abstain
3. Ratify the appointment of PricewaterhouseCoopers
LLP as independent accountants. / / / / / /
4. In their discretion, the proxies are authorized to vote upon any other
business that may properly come before the meeting.
Mark box at right if you wish only one Annual Report to be mailed to your
household. / /
Mark box at right if an address change or comment has been noted on the
reverse side of this card. / /
DETACH CARD
