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.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 20, 1997
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 20, 1997
at 11 o'clock in the forenoon, Eastern Daylight Time, for the following
purposes:
1. To elect Directors as set forth in the accompanying Proxy Statement.
2. To ratify the appointment of Price Waterhouse LLP as independent
accountants.
3. 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 24, 1997 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 25, 1997
999 West Big Beaver Road
Troy, Michigan 48084-4782 EUGENE L. HARTWIG
Secretary
KELLY SERVICES, INC.
999 West Big Beaver Road
Troy, Michigan 48084-4782
April 25, 1997
PROXY STATEMENT
1997 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 20, 1997 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 25, 1997. 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 the
directors, designated Proposal 1 on the proxy, FOR the proposal to ratify the
selection of independent accountants, designated Proposal 2 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 (including 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 24, 1997, the outstanding number of
voting securities (exclusive of treasury shares) was 3,581,924 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, 1997, 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) Class
- ----------------- ------------------------ -----
W. R. Kelly ......................................... 2,189,840(b) 61.1
999 W. Big Beaver Road
Troy, Michigan 48084
T. E. Adderley ...................................... 1,024,726(c) 28.6
999 W. Big Beaver Road
Troy, Michigan 48084
First Chicago NBD Corporation. ...................... 195,091(d) 5.4
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) All shares directly held. Because of his substantial stockholdings, Mr.
Kelly may be deemed to be a "control person" of the Company under
applicable regulations of the Securities and Exchange Commission.
(c) Includes 952,100 shares directly held; 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) Based upon a report filed by First Chicago NBD Corporation with the
Securities and Exchange Commission on Schedule 13G upon which the company
relies for the information presented. The report indicates that the
number of shares of common stock owned by the reporting person are:
123,141, sole voting power; 71,825, shared voting power; 110,328, sole
dispositive power; and 84,263, shared dispositive power.
2
Set forth in the following table are the beneficial holdings of the
Class A and Class B common stock on March 1, 1997, on the basis described
above, of each director and the nominees for election, and all directors and
officers as a group.
Class A Common Stock Class B Common Stock
----------------------------- -------------------------------
Number of Shares Percent Number of Shares Percent
Directors and and Nature of of and Nature of of
Nominees Beneficial Ownership Class Beneficial Ownership Class
------------- --------------------- ------- --------------------- -------
W. R. Kelly ......................................... 14,770,661(a) 42.8 2,189,840(d) 61.1
T. E. Adderley ...................................... 3,294,223(b)(c) 9.6 1,024,726(e) 28.6
M. A. Fay, O.P....................................... 0 * 0 *
C. V. Fricke ........................................ 4,392 * 781 *
H. E. Guenther ...................................... 3,402 * 875 *
V. G. Istock ........................................ 2,175 * 875 *
B. J. White ......................................... 800 * 0 *
All Directors and
Executive Officers as
a group ........................................... 18,243,646(c) 52.9 3,218,624 89.9
* Less than 1%
(a) All shares directly held except 568,324 shares owned by Mr. Kelly's wife,
in which he disclaims beneficial interest.
(b) Includes 703,372 shares directly held; 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.
(c) Includes shares which the individuals have a right to acquire through the
exercise of stock options within 60 days.
(d) See footnote (b) to first table.
(e) See footnote (c) 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 four
meetings during the last fiscal year.
The Board of Directors has a standing Audit Committee, composed of
Messrs. Fricke, Guenther, Istock and White, which held four meetings in 1996.
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.
During 1996 the Board of Directors did not have a nominating committee.
The Compensation Committee whose functions are described in the Compensation
Committee Report on page 5 of this Proxy Statement held five meetings in 1996
and is composed of Messrs. Fricke, Guenther and White.
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, except for Mr. Kelly who missed satisfying 75 percent
attendance by one meeting.
Compensation of Directors
Directors of the Company who are not salaried officers are paid an
annual retainer fee of $21,000, 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 Messrs.
Fricke, Guenther and White, each of whom is an outside 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 1996, 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, will be 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 has reviewed the nondeductibility of executive compensation
in excess of $1 million as required under Section 162(m) of the Internal
Revenue Code. At the Annual Meeting of Stockholders held on May 21, 1996 a
proposal was approved setting forth performance-based, objective criteria
governing whether performance shares awarded under the Company's Performance
Incentive Plan will be subject to forfeiture in whole or in part over the
award period. The Company's purpose in securing such approval was to preserve
the Company's tax deduction for awards of such performance shares made to its
Chief Executive Officer and those executives at or above $150,000 in base
salary whose annual compensation may in the future exceed $1 million.
In order to encourage substantial stock ownership by the Company's
senior executives so as to align their interests more closely with the
stockholders' interests, 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, 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 1996 compensation of Mr. Adderley
as the Company's Chief Executive Officer.
Annual Compensation
Annual cash compensation for executive officers consists of base
salaries and, for 1996, short-term incentive awards earned under the
Company's Short-Term Incentive Plan. 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 Industry Index presented in the performance graph in the Company's
Proxy Statement. Base salaries are targeted to correspond generally with the
median of the range of salaries in the surveys consulted.
Competitive assessments incorporate benchmarking against companies
having similar revenue, not 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.
For 1996, Mr. Adderley received a 5.4 percent salary increase from
$650,000 to $685,000 to bring his annualized base salary more in line with
the median base salaries of chief executive officers of other companies of
comparable size.
Annual incentive awards for executive officers paid under the
Short-Term Incentive Plan required that the Company achieve a certain level
of pre-tax earnings as established by the Committee at its March 1996
meeting. Because the Company exceeded the threshold pre-tax earnings
objective established for 1996, the Committee approved short-term incentive
awards based upon a percentage of the individual executive's target award
combined with an assessment of unit performance.
Mr. Adderley's 1996 Short-Term Incentive Plan Award was based entirely
on the Company's pre-tax earnings performance as described above. Based upon
the award payout schedule established at the time the pre-tax earnings target
was set, Mr. Adderley's award was determined to be $292,000.
Awards for other executive officers, including the four executive
officers named in the accompanying table ("Named Executives"), were
determined based on the Company's pre-tax earnings results combined with an
assessment of their unit performance, except for Messrs. Barranco and
Thompson whose awards were based entirely on the Company's pre-tax earnings.
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 senior executives, Restricted Stock Awards and long-term
Performance Share Awards, are currently the only type of awards outstanding
under the Performance Incentive Plan.
During 1996, a review of compensation components for chief executive
officers in companies of similar size indicated that Mr. Adderley's
compensation was substantially below competitive levels. As
6
a result, the Committee during 1996 recommended that Mr. Adderley be awarded
a Non-Qualified Stock Option to purchase 69,000 shares of Class A common
stock and an Incentive Stock Option to purchase 3,000 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. Decisions
regarding the size of individual grants take into consideration the number of
outstanding, unexercised shares available to the individual compared to the
targeted guideline of the number of shares for the respective management
level of the employee.
In 1996, Mr. Adderley and 12 of the most senior officers of the
Company were granted long-term Performance Share Awards 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
earnings per share over the 1996-1998 performance cycle. The award in Mr.
Adderley's case was for 12,000 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.
HAROLD E. GUENTHER
CEDRIC V. FRICKE
B. JOSEPH WHITE
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
------------------- ------------------------------
Restricted Securities
Name and Stock Underlying All Other
Principal Position Year Salary Bonus Award(s)($)(1) Options (#) Compensation(2)
------------------ ---- ------ ----- ---------------- ----------- -----------------
T. E. Adderley 1996 $676,250 $292,000 72,000 $106,657
President and Chief 1995 650,000 241,000 $442,500 30,000 170,064
Executive Officer 1994 590,000 531,000 381,500 22,000 112,320
R. G. Barranco 1996 $395,000 $127,000 30,000 $ 30,060
Executive Vice President, 1995 380,000 106,000 $191,750 15,000 35,160
Operations 1994 323,334 206,000 163,500 12,000 25,400
R. E. Thompson 1996 $395,000 $127,000 30,000 $ 30,060
Executive Vice President, 1995 380,000 106,000 $191,750 15,000 35,160
Administration 1994 323,334 206,000 163,500 12,000 24,380
R. H. McNabb(3) 1996 $287,500 $ 68,000 15,000 $ 20,850
Senior Vice President- 1995 241,333 60,000 $ 94,400 8,000 16,663
Business Solutions and 1994 69,323 36,400 84,000 7,000 3,267
General Manager
P. K. Geiger 1996 $267,500 $ 72,000 15,000 $ 19,710
Senior Vice President and 1995 249,583 61,000 $ 94,400 8,000 20,914
Chief Financial Officer 1994 200,000 99,000 90,750 7,000 13,239
- ----------------
(1) Restricted Shares of the Company's Class A common stock, which vest in
three equal annual installments beginning one year after the date of grant,
were awarded in May 1995 and May 1994. 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 1995 and 1994, respectively, were: T.
E. Adderley, 15,000 and 14,000; R. G. Barranco, 6,500 and 6,000; R. E.
Thompson, 6,500 and 6,000; R. H. McNabb, 3,200 and 3,000; P. K. Geiger,
3,200 and 3,000. Dividends are payable on Restricted Shares.
At December 31, 1996, 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 value
8
of these shares, based upon the $27.00 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 ...................................... 29,000 $783,000
R. G. Barranco ...................................... 12,500 337,500
R. E. Thompson ...................................... 12,500 337,500
R. H. McNabb ........................................ 6,200 167,400
P. K. Geiger ........................................ 6,200 167,400
(2) 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 contributions of $51,622,
$99,204 and $65,520 for 1996, 1995 and 1994, respectively, made because
he would have earned a greater benefit had he remained under a defined
benefit Retirement Plan which was terminated December 31, 1988.
(3) Mr. McNabb became an employee of the Company in 1994 and resigned
effective March 28, 1997.
Option Grants in 1996
The following table shows all grants of stock options to the officers
named in the Summary Compensation Table above in 1996. The exercise price of
all such options was the fair market value on the date of grant except that
the option for 3,000 shares granted to Mr. Adderley at $34.10 was at 110% of
the fair market value of $31.00 on the date of the grant. With respect to
this option for 3,000 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 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
- ---------------------------------------------------------------------------
Potential Realizable Value at
Number of Assumed Annual Rates of Stock
Securities % of Total Price Appreciation for Option Term
Underlying Options ----------------------------------
Options Granted to
Granted Employees Exercise or Expiration
Name (#) in Fiscal Year Base Price Date 0% 5% 10%
---- ---------- -------------- ---------- ---- -- -- ---
T. E. Adderley .. 3,000 $34.10 03/18/01 0 $ 28,264 $ 62,455
69,000 31.00 03/18/06 1,345,206 3,409,015
------ ---------- ---------
72,000 15.77 $1,373,470 $3,471,470
R. G. Barranco .. 3,000 $31.00 03/18/06 0 $ 58,487 $ 148,218
27,000 31.00 03/18/06 526,385 1,333,962
------ ---------- ---------
30,000 6.57 $ 584,872 $1,482,180
R. E. Thompson .. 3,000 $31.00 03/18/06 0 $ 58,487 $ 148,218
27,000 31.00 03/18/06 526,385 1,333,962
------ ---------- ---------
30,000 6.57 $ 584,872 $1,482,180
R. H. McNabb .... 3,000 $31.00 03/18/06 0 $ 58,487 $ 148,218
12,000 31.00 03/18/06 233,949 592,872
------ ---------- ---------
15,000 3.29 $ 292,436 $ 741,090
P. K. Geiger .... 3,000 $31.00 03/18/06 0 $ 58,487 $ 148,218
12,000 31.00 03/18/06 233,949 592,872
------ ---------- ---------
15,000 3.29 $ 292,436 $ 741,090
9
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 $31.00 (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 $50.50 and $80.41, respectively, as of the
expiration date of their options.
Option Exercises During 1996 and Year-End Option Values
The following table shows stock option exercises during 1996 by each of
the officers named in the Summary Compensation Table and the value of
unexercised options at December 31, 1996:
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 36,900 118,100 $ 0 $ 0
R. G. Barranco .. 0 0 16,200 54,800 $5,400 $3,600
R. E. Thompson .. 0 0 16,200 54,800 $5,400 $3,600
R. H. McNabb .... 0 0 4,400 25,600 $ 0 $ 0
P. K. Geiger .... 0 0 6,900 27,600 $2,250 $2,250
Long-Term Incentive Plans -- Awards in Last Fiscal Year Table
The following table provides information on performance share awards
made by the Company in 1996 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 1996-1998 0 12,000 12,000
R. G. Barranco .. 5,000 1996-1998 0 5,000 5,000
R. E. Thompson .. 5,000 1996-1998 0 5,000 5,000
R. H. McNabb .... 2,500 1996-1998 0 2,500 2,500
P. K. Geiger .... 2,500 1996-1998 0 2,500 2,500
- ----------------
(1) Each performance share awarded in 1996 consisted of one share of the
Company's Class A Common Stock, contingently granted and earned based on
the Company's cumulative earnings per share over the three year 1996-1998
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.
10
Performance Graph
The following graph compares the cumulative total return of the
Company's Class A common stock, with that of the NASDAQ Stock Market Index, a
Peer Group Index, and the S&P Services (Commercial & Consumer) Index for the
five years ended December 31, 1996. The graph assumes an investment of $100
on January 1, 1991 and that all dividends were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN Kelly
Services, NASDAQ Stock Market Index, Peer Group Index
and S&P Services (Commercial & Consumer) Index
[ PERFORMANCE GRAPH ]
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
Kelly Services 100 142 115 117 121 121
NASDAQ Stock Market Index 100 116 134 131 185 227
Peer Group Index (See note 1) 100 116 143 204 241 268
S&P Services (Commercial & Consumer) (See note 2) 100 99 96 88 119 123
Notes:
1. The Peer Group Index consists of other U.S. temporary help service companies
selected by the Company which have a stock market capitalization of more
than $100,000,000. The index includes: CDI Corp., Manpower Inc., Olsten
Corp., and Robert Half International Inc. (all of which are traded on the
NYSE).
2. The S&P Services (Commercial & Consumer) Index, formerly known as the S&P
Specialized Services Index, consists of the following service companies: H &
R Block Inc., CUC International Inc., Dun & Bradstreet Corp., HFS Inc., and
Service Corp. International.
11
Matters to be Brought Before the Meeting
Election of Directors
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 seven (7).
The Board of Directors recommends that the three (3) nominees named
below be elected to serve as Directors. Each of the nominees will serve for a
three (3) year term ending at the Annual Meeting of Stockholders held after
the close of the fiscal year ended January 2, 2000.
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 Directors (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 Directors 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 nominees and for each person whose term of
office as a Director will continue after the meeting as of March 1, 1997,
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
------------ ------------- ---------- --------
Nominees for Election as Director to be Elected for a Three-Year Term
M. A. Fay, O.P. ..... President of the University of Detroit Mercy;
Age 62 Director of First Chicago NBD Corporation.
C. V. Fricke ......... 1997 Professor Emeritus, University of Michigan-Dearborn 1978
Age 68
V. G. Istock ......... 1997 Chairman, President and Chief Executive Officer of 1991
Age 56 First Chicago NBD Corporation; Chairman and Chief
Executive Officer of First National Bank of Chicago;
and Chairman and Chief Executive Officer of NBD Bank,
Michigan
Directors Continuing in Office
T. E. Adderley(a)(b) . 1998 President and Chief Executive Officer of the Company; 1962
Age 63 Director of Detroit Edison Company; Director of
First Chicago NBD Corporation.
H. E. Guenther ...... 1998 Retired Senior Vice President, Kemper Financial 1985
Age 69 Services, Inc.
W. R. Kelly .......... 1999 Chairman of the Board of the Company 1952
Age 91
B. J. White .......... 1999 Dean and Professor of Business Administration of the 1995
Age 49 University of Michigan School of Business
Administration; Director of Equity Residential
Property Trust; Director of Falcon Building
Products, Inc.; Director of Union Pump Co., Inc.
(a) Mr. Adderley is a director and executive officer of all subsidiaries of the
Company.
(b) Mr. Adderley is the son of Mr. Kelly.
12
Relationship with Independent Accountants
Proposal 2
The Board of Directors of the Company has appointed the firm of Price
Waterhouse LLP as independent accountants of the Company for the current
fiscal year ending December 28, 1997, 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 Price Waterhouse LLP as independent accountants for the
year 1997 be approved. If stockholders fail to approve this proposal, the
Board will reconsider the appointment of Price Waterhouse LLP as independent
accountants for the year 1997.
The proposal to ratify the appointment of Price Waterhouse LLP will be
carried if it 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 19, 1997.
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 December 29, 1996,
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
EUGENE L. HARTWIG
Secretary
13
[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 20, 1997
The undersigned hereby appoints as Proxies William R. Kelly, Terence E.
Adderley, and Eugene L. Hartwig, 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 24,
1997 at the Annual Meeting of Stockholders to be held on May 20, 1997 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 REVERSE 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, this 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
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date______________________
________________________________ ________________________________
Stockholder sign here Co-owner sign here
1. Election of Directors.
With- For All
For hold Except
/ / / / / /
M.A. Fay, O.P.
C.V. Fricke
V.G. Istock
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through that particular nominee's
name. Your shares will be voted for the remaining nominee(s).
For Against Abstain
2. Ratify the appointment of Price Waterhouse
LLP as independent accountants. / / / / / /
3. 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
