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]
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[ ] Preliminary Proxy Statement
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[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11c or Section 240.14a-12
CENTURY BUSINESS SERVICES, INC.
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(Name of Registrant as Specified In Its Charter)
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(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:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
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0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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CENTURY BUSINESS SERVICES, INC.
6480 ROCKSIDE WOODS BLVD., SOUTH, SUITE 330
CLEVELAND, OH 44131
April 1, 2003
Dear Stockholder:
We cordially invite you to attend the Annual Meeting of Stockholders of
Century Business Services, Inc., which will be held on Friday, May 16, 2003, at
11:00 a.m. EST, at The Embassy Suites Hotel, 5800 Rockside Woods Boulevard
North, Independence, Ohio 44131.
The matters to be considered at the meeting are described in the formal
notice and proxy statement on the following pages.
We encourage your participation at this meeting. Whether or not you plan to
attend in person, it is important that your shares be represented at the
meeting. Please review the proxy statement and sign, date and return your proxy
card in the enclosed envelope as soon as possible.
If you attend the meeting and prefer to vote in person, your proxy card can
be revoked at your request.
We appreciate your confidence in Century Business Services, Inc. and look
forward to the chance to visit with you at the meeting.
Very truly yours,
CENTURY BUSINESS SERVICES, INC.
/s/ Steven L. Gerard
Steven L. Gerard, Chairman of the
Board
CENTURY BUSINESS SERVICES, INC.
6480 ROCKSIDE WOODS BLVD., SOUTH, SUITE 330
CLEVELAND, OHIO 44131
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 2003
TO THE STOCKHOLDERS OF CENTURY BUSINESS SERVICES, INC.:
The Annual Meeting of Stockholders of Century Business Services, Inc.
("Century") will be held on Friday, May 16, 2003, at 11:00 a.m. EST, at The
Embassy Suites Hotel, 5800 Rockside Woods Boulevard North, Independence, Ohio
44131, for the following purposes:
1. To elect a class of two (2) Directors to the Board of Directors of
Century with terms expiring at the Annual Meeting in 2006;
2. To ratify the appointment of KPMG LLP as Century's independent
accountants for 2003; and,
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record on March 24, 2003 will be entitled to vote at
the meeting.
You are cordially invited to attend the Annual Meeting. Your vote is
important. WHETHER OR NOT YOU EXPECT TO ATTEND IN PERSON, YOU ARE URGED TO SIGN,
DATE AND MAIL THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE SO THAT YOUR SHARES
MAY BE REPRESENTED AND VOTED. The envelope enclosed requires no postage if
mailed within the United States. If you attend the meeting and prefer to vote in
person, your proxy card can be revoked at your request.
By Order of the Board of Directors,
/s/ Michael W. Gleespen
Michael W. Gleespen, Corporate
Secretary
Cleveland, Ohio
April 1, 2003
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT
IN THE ACCOMPANYING ENVELOPE AS SOON AS POSSIBLE
TABLE OF CONTENTS
PAGE
----
Voting Rights and Solicitation.............................. 3
Proposal No. 1 -- Election of Directors..................... 4
Proposal No. 2 -- Ratification of Appointment of Independent
Accountants............................................... 5
Security Ownership of Certain Beneficial Owners and
Management................................................ 6
Report of the Compensation Committee on Executive
Compensation.............................................. 9
Report of the Audit Committee............................... 10
Executive Compensation...................................... 12
Certain Relationships and Related Transactions.............. 14
Stockholder Return Performance Presentation................. 16
Section 16(a) Beneficial Ownership Reporting Compliance..... 16
Equity Compensation Plan Information........................ 17
Stockholder Proposals....................................... 17
Expenses of Solicitation.................................... 17
Other Matters............................................... 18
2
CENTURY BUSINESS SERVICES, INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
----------------------
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of Century Business Services, Inc. ("Century") of proxies
to be voted at the Annual Meeting of Stockholders (the "Annual Meeting") to be
held on Friday, May 16, 2003, and any adjournment or adjournments thereof, for
the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. The mailing of this proxy statement and accompanying form of proxy
to stockholders will commence on or about April 1, 2003.
VOTING RIGHTS AND SOLICITATION
Shares represented by properly executed proxies received on behalf of
Century will be voted at the meeting in the manner specified therein. If no
instructions are specified in a proxy returned to Century, the shares
represented thereby will be voted in favor of the election of the directors
listed in the enclosed proxy, and in favor of the appointment of KPMG LLP as
independent accountants for 2003. Any proxy may be revoked by the person giving
it at any time prior to being voted by attendance at the meeting or submitting a
subsequently signed and dated proxy.
Mr. Steven L. Gerard and Mr. Rick L. Burdick are designated as proxy
holders in the proxy card. They will vote for the election as directors of Mr.
Gary W. DeGroote and Mr. Harve A. Ferrill, who have been proposed by the Board
of Directors, and for the ratification of the appointment of KPMG LLP as
Century's independent accountants for 2003. If any other matters are properly
presented at the Annual Meeting for consideration, the proxy holders will have
discretion to vote on such matters in accordance with their best judgment. The
Board of Directors knows of no other matters to be presented at the meeting.
The Board of Directors established March 24, 2003 as the record date for
determining stockholders entitled to notice of and to vote at the Annual
Meeting. On the record date, Century had 95,409,243 shares of voting common
stock issued and outstanding. The common stock is the only class of capital
stock Century has outstanding. Only stockholders of record at the close of
business on the record date will be entitled to vote at the Annual Meeting. Each
share of common stock is entitled to one vote on each matter presented. The
holders of a majority of the total shares issued and outstanding, whether
present in person or represented by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting.
Abstentions and broker non-votes are counted for purposes of determining
whether a quorum is present for the transaction of business. Abstentions are
counted in tabulations, but not as an affirmative vote, of the votes cast on
proposals presented to stockholders. Broker non-votes, on the other hand, are
not counted for purposes of determining whether a proposal has been approved.
The affirmative vote of the holders of a majority of the votes cast at the
meeting is necessary for the election of directors and for approval of any other
matter scheduled for vote.
3
ELECTION OF DIRECTORS
PROPOSAL NO. 1 (ITEM 1 ON PROXY CARD)
Century's Certificate of Incorporation divides the Board of Directors into
three classes of directors, with one class to be elected for a three-year term
at each annual meeting of stockholders. The Board of Directors currently
consists of six members, with two members' terms expiring at this Annual
Meeting. If elected at the Annual Meeting, the nominees listed below will serve
until the Annual Meeting of Stockholders in 2006, or until their successors are
duly elected and qualified. All other directors will continue as such for the
term to which they were elected. Although the Board of Directors does not
contemplate that any of the nominees will be unable to serve, if such a
situation arises prior to the Annual Meeting, the persons named in the enclosed
proxy will vote for the election of another person as may be nominated by the
Nominating and Governance Committee of the Board of Directors.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors, upon nomination by the Nominating and Governance
Committee, recommends a vote FOR the election of the nominees for election as
directors listed below.
DIRECTORS STANDING FOR ELECTION
EXPIRATION OF
PROPOSED
NAME AGE SINCE TERM
---- --- ----- -------------
Gary W. DeGroote*........................................... 47 2002 2006
Harve A. Ferrill............................................ 70 1996 2006
--------------------
* Mr. Gary W. DeGroote was appointed by Resolution of the Board of
Directors at its October 10, 2002 meeting to serve out the remaining term
of his father, Michael G. DeGroote, who is the beneficial owner of
greater than 10% of outstanding Century stock, and whose resignation for
health reasons was accepted by the Board of Directors at a special
meeting held on October 10, 2002.
DIRECTORS WHOSE TERMS CONTINUE
EXPIRATION OF
CURRENT
NAME AGE SINCE TERM
---- --- ----- -------------
Rick L. Burdick............................................. 51 1997 2004
Steven L. Gerard............................................ 57 2000 2004
Joseph S. DiMartino......................................... 59 1997 2005
Richard C. Rochon........................................... 45 1996 2005
Set forth below is biographical information for the individuals nominated
to serve as directors and each person whose term of office as a director will
continue after the Annual Meeting.
NOMINEES FOR DIRECTORS
Gary W. DeGroote has served as a Director of Century since October, 2002,
when he was elected as an outside director to serve the remaining term of his
father, Michael G. DeGroote, who resigned from the Board for health reasons. Mr.
DeGroote is the President of GWD Management, Inc., a private Canadian
diversified investment holding company founded in 1980 with an office in
Burlington, Ontario. Mr. DeGroote also serves as a Director and Officer of other
private companies. From 1976 to 1989, Mr. DeGroote held several positions with
Laidlaw, Inc., a public waste services and transportation company, ending as
Vice-President and Director in 1989. From 1991 to 1994, Mr. DeGroote served as
President of Republic Environmental Systems Ltd., and Director of Republic
Industries, Inc. He is currently a Director of Capital Environmental Resources
Inc.
4
Harve A. Ferrill has served as a Director of Century since October, 1996,
when he was elected as an outside director. Mr. Ferrill served as Chief
Executive Officer and Chairman of Advance Ross Corporation, a company that
provides tax refunding services from 1992 to 1996. Mr. Ferrill served as
President of Advance Ross Corporation from 1990 to 1992. Since 1996, Advance
Ross Corporation has been a wholly-owned subsidiary of Cendant Corporation. Mr.
Ferrill has served as President of Ferrill-Plauche Co., Inc., a private
investment company, since 1982.
CONTINUING DIRECTORS
Rick L. Burdick has served as a Director of Century since October 1997,
when he was elected as an outside director. In October 2002, he was elected by
the Board as Vice Chairman, a non-officer position. Mr. Burdick has been a
partner at the law firm of Akin Gump Strauss Hauer & Feld, LLP since April 1988.
Mr. Burdick also serves on the Board of Directors of AutoNation, Inc.
Steven L. Gerard was elected by the Board of Directors to serve as its
Chairman on October 10, 2002, following the resignation of Michael G. DeGroote
for health reasons. He was appointed Chief Executive Officer and Director on
October 12, 2000. Mr. Gerard was Chairman and CEO of Great Point Capital, Inc.,
a provider of operational and advisory services from 1997 to October 2000. From
1991 to 1997, he was Chairman and CEO of Triangle Wire & Cable, Inc. and its
successor, Ocean View Capital, Inc. Mr. Gerard's prior experience includes 16
years with Citibank, N.A. in various senior corporate finance and banking
positions, including ultimately Senior Managing Director, responsible for the
risk management of Citibank's commercial and investment banking activities in
the United States, Europe, Australia and Japan. Further, Mr. Gerard served seven
years with the American Stock Exchange, where he last served as Vice President
of the Securities Division. Mr. Gerard also serves on the Boards of Directors of
The Fairchild Company, Inc., Lennar Corporation, Joy Global, Inc. and Timco
Aviation Services, Inc.
Joseph S. DiMartino has served as a Director of Century since November
1997, when he was elected as an outside director. Mr. DiMartino has been
Chairman of the Board of The Dreyfus Family of Mutual Funds since January 1995.
Mr. DiMartino served as President, Chief Operating Officer and Director of The
Dreyfus Corporation from October 1982 until December 1994 and also served as a
director of Mellon Bank Corporation. Mr. DiMartino also serves on the Boards of
Directors of The Newark Group, Levcor International, and the Muscular Dystrophy
Association.
Richard C. Rochon has served as a Director of Century since October 1996,
when he was elected as an outside director. Mr. Rochon is Chairman and CEO of
Royal Palm Capital Partners, a private investment and management fund. From 1985
to February 2002, Mr. Rochon served in various capacities with, and most
recently as President of, Huizenga Holdings, Inc., a management and holding
company owned by H. Wayne Huizenga. Mr. Rochon also has served as a director,
since September 1996, and as Vice Chairman since April 1997, of Boca Resorts,
Inc., an owner and operator of luxury resort properties in South Florida. Mr.
Rochon also serves on the Board of Directors of Citizens Bancshares of South
Florida. From 1979 until 1985 Mr. Rochon was employed as a certified public
accountant by the public accounting firm of Coopers & Lybrand, L.L.P.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
PROPOSAL NO. 2 (ITEM 2 ON PROXY CARD)
The Audit Committee of the Board of Directors, has approved and recommends
the appointment of KPMG LLP, independent accountants, to audit the consolidated
financial statements of Century and its subsidiaries for the year ending
December 31, 2003. This appointment was made subject to the approval of
Century's stockholders. KPMG LLP has been serving Century in this capacity since
1997. Century has been advised that no member of KPMG LLP had any direct
financial interest or material indirect financial interest in Century or any of
its subsidiaries or, during the past three years, has had any connection with
Century or any of its subsidiaries in the capacity of promoter, underwriter,
voting trustee, director, officer or employee. Century has been advised that no
other relationship exists between KPMG and Century that impairs KPMG's status as
independent accountants with respect to Century within the meaning of the
Federal securities laws administered by the Securities and Exchange Commission
and the requirements of the Independence Standards Board.
5
Representatives of KPMG LLP will be present at the Annual Meeting and will
have the opportunity to make a statement, if they so desire, and respond to
appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR the ratification by the
stockholders of this appointment.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL STOCKHOLDERS
The following table shows the beneficial ownership of Century common stock
as of March 24, 2003, by (1) each person known by Century to own beneficially 5%
or more of Century's common stock, (2) each director, (3) each executive officer
named in the Summary Compensation Table (see "Executive Compensation") and (4)
all directors and executive officers of Century as a group.
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT
OF BENEFICIAL OWNER(1) OWNERSHIP(2) OF CLASS
---------------------- ------------ --------
Michael G. DeGroote(3)...................................... 14,788,098(4) 15.49%
Huizenga Investments L.P.(5)................................ 5,422,222(6) 5.70%
Steven L. Gerard............................................ 930,428(7) *
Rick L. Burdick............................................. 194,034(8) *
Gary W. DeGroote............................................ 188,110(9) *
Joseph S. DiMartino......................................... 145,000(10) *
Harve A. Ferrill............................................ 117,500(11) *
Richard C. Rochon........................................... 165,555(12) *
Jerome P. Grisko, Jr. ...................................... 276,100(13) *
Ware H. Grove............................................... 96,000(14) *
Leonard Miller.............................................. 161,644(15) *
Robert A. O'Byrne........................................... 419,727(16) *
All directors and executive officers as a group (10
persons).................................................. 2,694,098 2.82%
Total Shares Outstanding 95,409,243
---------------
* Less than 1%
(1) Except as otherwise indicated in the notes below, the mailing address of
each entity, individual or group named in the table is 6480 Rockside Woods
Boulevard, South, Suite 330, Cleveland, OH 44131, and each person named has
sole voting and investment power with respect to the shares of common stock
beneficially owned by such person.
(2) Share amounts and percentages shown for each person in the table include
shares of common stock that are not outstanding but may be acquired upon
exercise of all options and warrants exercisable within 60 days of March
24, 2003.
(3) Mr. Michael G. DeGroote beneficially owns his shares of common stock
through Westbury (Bermuda) Ltd., a Bermuda corporation controlled by him.
Westbury (Bermuda) Ltd. is located at Victoria Hall, 11 Victoria Street,
P.O. Box HM 1065, Hamilton, HMEX Bermuda.
(4) Consists of 14,733,098 shares of common stock owned of record by Westbury
(Bermuda) Ltd., and options to purchase 55,000 shares of common stock
granted to Mr. DeGroote under the Century Employee's Stock Option Plan (the
"Century Option Plan") that are exercisable within 60 days of March 24,
2003.
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(5) Information is based upon the amended Schedule 13G, filed with the
Securities and Exchange Commission on February 14, 2003. The address of
Huizenga Investments Limited Partnership, a limited partnership controlled
by Mr. H. Wayne Huizenga, is P.O. Box 50102, Henderson, Nevada 89106.
(6) Consists of 5,422,222 shares of common stock owned of record by Huizenga
Investments Limited Partnership.
(7) Consists of 13,762 shares of common stock owned of record by Mr. Gerard and
options to purchase 916,666 shares of common stock granted to Mr. Gerard
under the Century Employee's Stock Option Plan (the "Century Option Plan")
which are exercisable within 60 days of March 24, 2003.
(8) Consists of 9,034 shares of common stock owned of record by Mr. Burdick and
options to purchase 185,000 shares of common stock granted under the
Century Option Plan that are exercisable within 60 days of March 24, 2003.
(9) Consists of 21,100 shares of common stock owned of record by GWD
Management, Inc., of which Mr. DeGroote is the sole director and
shareholder; 112,000 shares of common stock held in a fixed irrevocable
trust and options to purchase 55,000 shares of common stock granted under
the Century Option Plan that are exercisable within 60 days of March 24,
2003. Gary W. DeGroote is the son of Michael G. DeGroote, who is the
beneficial owner of greater than 10% of outstanding Century stock.
(10) Consists of 35,000 shares of common stock owned of record by Mr. DiMartino
and options to purchase 110,000 shares of common stock granted under the
Century Option Plan that are exercisable within 60 days of March 24, 2003.
(11) Consists of 7,500 shares of common stock owned of record by The Harve A.
Ferrill Trust U/A 12/31/69 and options to purchase 110,000 shares of common
stock granted under the Century Option Plan that are exercisable within 60
days of March 24, 2003.
(12) Consists of 55,555 shares of common stock owned of record by WeeZor I
Limited Partnership, a limited partnership controlled by Mr. Rochon, and
options to purchase 110,000 shares of common stock granted to Mr. Rochon
under the Century Option Plan that are exercisable within 60 days of March
24, 2003.
(13) Consists of 3,500 shares of common stock owned of record by Mr. Grisko and
options to purchase 272,600 shares of common stock granted under the
Century Option Plan that are exercisable within 60 days of March 24, 2003.
(14) Consists of 6,000 shares of common stock owned of record by Mr. Grove and
options to purchase 90,000 shares of common stock granted under the Century
Option Plan that are exercisable within 60 days of March 24, 2003.
(15) Consists of 53,644 shares of common stock owned of record by Mr. Miller,
60,000 shares of common stock owned of record by the Miller Family
Partnership, and options to purchase 48,000 shares of common stock granted
under the Century Option Plan that are exercisable within 60 days of March
24, 2003.
(16) Consists of 265,017 shares of common stock owned of record by Mr. O'Byrne
and options to purchase 112,700 shares of common stock granted under the
Century Option Plan held in Mr. O'Byrne's name and 42,010 shares of common
stock held by MRCP, L.C., a Missouri Limited Company in which Mr. O'Byrne
has a 25% interest, all of which are exercisable within 60 days of March
24, 2003.
DIRECTORS' MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors conducted five regular meetings and one special
telephonic meeting during 2002. Each director attended in person at least 75% of
the aggregate of all meetings of the Board and Committees of the Board.
Committees of the Board of Directors. During 2002, the Board of Directors
had an Audit Committee, a Compensation Committee, and an Executive Management
Committee. On February 12, 2003, the Board formed a
7
Nominating and Governance Committee. The following is a description of the
committees of the Board of Directors:
The members of the Audit Committee are Messrs. Burdick, Ferrill (Chairman)
and Rochon. The Audit Committee conducted five regular meetings and four special
telephonic meetings during 2002. The Audit Committee is responsible for hiring
the Company's independent accountants and reviews issues raised by the
accountants as to the scope of their audit and their audit report, including
questions and recommendations that arise relating to Century's internal
accounting and auditing control procedures. The Audit Committee operates under a
written Charter, revised and adopted by the Board of Directors in 2003, a copy
of which is attached to this Proxy Statement.
The members of the Compensation Committee are Messrs. Ferrill, DiMartino
(Chairman) and Rochon. The Compensation Committee conducted three regular
meetings and one telephonic meeting during 2002. The Compensation Committee
reviews and makes recommendations to the Board of Directors with respect to
compensation of Century's executive officers, including salary, bonus and
benefits. The Compensation Committee also administers Century's stock option
plan.
The members of the Executive Management Committee were Messrs. Michael
DeGroote, Gerard, Grisko and Grove. Following Mr. DeGroote's resignation, the
Committee was reconstituted to include Messrs. Gerard, Burdick and Grisko. The
Executive Management Committee approved five Unanimous Written Consents in Lieu
of Meeting of The Executive Management Committee of Century Business Services,
Inc. during 2002. The Executive Management Committee is empowered with the same
authority as the full Board of Directors to take any action including the
authorization of any transaction in the amount of $10 million or less. With
respect to acquisition or divestiture of assets, consisting of entities of
assets, the Executive Management Committee has the power to execute and deliver
documents in the name and on behalf of the Company, to issue shares of Common
Stock of the Company and to take all actions necessary for the purpose of
effecting acquisition of core assets or divestments of non-core assets,
consisting of entities of assets, so long as all members of the Executive
Management Committee approve the transaction and the total consideration to be
paid to or by the Company in connection with the acquisition or divestiture of
the assets does not exceed $10 million. The Executive Management Committee does
not have the power or authority of the Board of Directors to approve or adopt or
recommend to the shareholders any action or matter expressly required by the
Delaware General Corporation Law to be submitted to shareholders for approval;
adopt, amend or repeal any Bylaw of the Company; fill or approve Board or Board
committee vacancies; declare or authorize the payment of dividends; fix
compensation for service on the Board or any committee thereof; and elect
executive officers of the Company.
The Nominating and Governance Committee consists of Messrs. Burdick
(Chairman), Ferrill and DiMartino. The Nominating Committee is newly formed in
2003 to propose and recommend candidates for the Board, review Board committee
responsibilities and composition, review the effectiveness of the Board and of
Company management, and to monitor the Company's corporate governance policies
and practices. The Committee is composed of independent directors as that term
is defined by the rules and regulations of the NASDAQ Stock Market.
DIRECTOR COMPENSATION
Directors who are employees of Century are not paid any fees or additional
compensation for service as members of the Board of Directors or any of its
committees. Directors who are not employees of Century receive a $25,000 annual
retainer fee, as well as a fee of $1,000 for each meeting of the Board of
Directors attended. In addition, directors who are committee members receive a
fee of $1,000 for each committee meeting attended. The Audit Committee Chairman
receives an additional annual grant of $5,000, and remaining Committee Chairmen
receive annual grants of $3,000 each. In addition, an annual award of 5,000
immediately exercisable stock options has been awarded to continuing
non-employee directors. Upon appointment, directors receive an additional
immediately exercisable award of 50,000 stock options.
8
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 2002 and continuing
through 2003 are Messrs. DiMartino (Chairman), Ferrill and Rochon. Neither of
Messrs. DiMartino, Ferrill, or Rochon is or has been an officer or employee of
Century. There are no compensation committee interlock relationships with
respect to Century.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Committee was established to: (a) review and approve the Company's
stated compensation philosophy, strategy and structure and assist the Board in
ensuring that a proper system of long-term and short-term compensation is in
place to provide performance-oriented incentives to management, and that
compensation plans are appropriate and competitive and properly reflect the
objectives and performance of management and the Company; (b) discharge the
Board's responsibilities relating to compensation of the executive officers of
the Company and its subsidiaries; (c) evaluate the Company's Chief Executive
Officer and set his or her remuneration package; (d) evaluate the other
executive officers of the Company and set their remuneration packages; (e)
prepare an annual report on executive compensation for inclusion in the
Company's annual proxy statement; (f) make recommendations to the Board with
respect to incentive-compensation plans and equity-based plans; and (g) perform
such other functions as the Board may from time to time assign to the Committee.
In the past year the Committee reassessed the compensation structure of the
Company. The Committee commissioned compensation studies to provide it with data
and analysis useful in restructuring compensation in order to maximize
shareholder value and to retain and recruit qualified management and staff. This
process lead to adjustments in the compensation levels of several executive
officers, and to the adoption of new compensation methodologies. As a result of
its efforts, the Committee has refined its compensation philosophy and strategy.
Compensation Policy Statement
The general CBIZ policy is to pay compensation that is competitive to total
median compensation provided at comparable financial service and professional
service firms similar in size and complexity to CBIZ. Compensation paid to
individuals will be determined based on the discretionary judgment of the
Compensation Committee and senior Company management. This means:
- Salaries will be targeted at the median based on an individual's
performance, experience and unique value. Those executives and managers
whose performance is exceptional, or who have long experience,
considerable knowledge, or have a focused skill that would be difficult
to replace may be targeted above the median. Those who demonstrate the
ability to meet their job requirements, and have been in their position
at least three years, may be paid approximately the median. Those who
have been in their position less than three years may generally be paid
below the median, absent exceptional performance or relevant career
experience outside CBIZ. According to these general principles, pay may
range between 80% to 120% of the median. The companies used to determine
current market practices may include other financial and professional
service companies of comparable size and complexity. Median ranges may be
estimated by discretionary means, including adjustment to reflect CBIZ'
relative revenue size. Annual increases may be kept at or below national
averages and, over time, efforts will be made to limit the fixed portion
of total cash compensation and increase the amount available under
incentive plans.
- The Company will strive to provide annual incentive award opportunities
that equal market median when financial and individual goals are
achieved. Award programs will be designed to provide compensation above
the median of the marketplace when company and individual performance is
significantly above goals, and below the median when performance fails to
meet goals. For 2003 performance, the Committee has elected to grant
Qualified Performance-Based Awards to a pre-defined group of senior
executives--including the Chief Executive Officer--pursuant to Section 7
of the Century Business Services, Inc. 2002 Stock Incentive Plan. The
performance goals are based on benchmark goals tied to the Company's
earnings per share ("EPS"). The actual compensation award amounts for
2003 will be based on actual EPS. If actual EPS equals a predetermined
target level, each awardee will receive an amount
9
equal to his or her target award. The award will be less than the target
award if actual EPS is below the target level, and will be greater if
actual EPS is above the target. No award will be paid if the actual EPS
is less than a predetermined floor level of earnings per share. A maximum
award will be achieved if the EPS reaches or exceeds a ceiling goal.
- Stock options and direct stock grants may be granted by the Committee to
provide a reward opportunity for those management and other key employees
who have performed well in the prior year, and who can impact the profit
and loss goals of the Company. The long-term objective is to provide
stock option and restricted stock grants that offer similar opportunities
for compensation that those offered at comparable financial and
professional service firms that are similar in size to CBIZ.
- Total compensation will reflect an individual's performance and
potential. Performance will be measured in accordance with an
individual's goals and objectives as well as their contribution to CBIZ'
corporate goals and initiatives. Such factors as team work, new product
innovation, aggressiveness, mentoring and personal development will
strongly influence the non-quantitative portion of compensation awards.
Chief Executive Officer Compensation
The Compensation of the Chief Executive Officer is largely determined by
the pre-negotiated terms of his contract described in the "Executive
Compensation" section stated below. This contract was renewed and increases in
both the base and bonus compensation of the CEO were awarded as a result Mr.
Gerard's successes in corporate debt reduction, continuing office consolidation,
cross-serving program results, and operations expense reduction.
Executive Compensation Deductibility
Century intends that amounts paid pursuant to Century's compensation plans
will generally be deductible compensation expenses. The Compensation Committee
does not currently anticipate that the amount of compensation paid to executive
officers will exceed the amounts specified as deductible pursuant to Section
162(m) of the Internal Revenue Code of 1986, as amended.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Joseph S. DiMartino, Chairman
Harve A. Ferrill
Richard C. Rochon
REPORT OF THE AUDIT COMMITTEE
The Board of Directors maintains an Audit Committee comprised of three of
the Company's outside directors. The Board of Directors and the Audit Committee
believe that the Audit Committee's current member composition satisfies the
current rule of the National Association of Securities Dealers, Inc. ("NASD")
that governs audit committee composition, including the requirement that audit
committee members all be "independent directors" as that term is defined by NASD
Rule 4200 (a)(14).
The Audit Committee closely monitored developments in corporate governance
arising from the adoption of the Sarbanes-Oxley Act. In response, the Audit
Committee has amended its Charter to reflect those portions of the Act and
attendant rules promulgated by the Securities and Exchange Commission ("SEC").
In addition, the Charter was amended to incorporate portions of proposed SEC
rules that the Committee members believe merit early adoption. Over the next
year, the Audit Committee anticipates that additional changes to its Charter
will be made as the SEC and the NASDAQ Stock Market adopt additional rules
bearing on the duties and activities of the Committee. In addition, the Audit
Committee expects that its membership may change as new standards defining the
independence of an audit committee member become effective under SEC and NASDAQ
rules.
The Audit Committee oversees the Company's financial process on behalf of
the Board of Directors. Management has the primary responsibility for the
consolidated financial statements and the reporting process
10
including the systems of internal controls. In fulfilling its oversight
responsibilities, the Audit Committee reviewed the audited consolidated
financial statements with management including a discussion of the quality, not
just the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the consolidated
financial statements.
The Audit Committee received, reviewed, and adopted management's report
assessing the Company's internal controls over financial reporting.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
consolidated financial statements with generally accepted accounting principles,
their judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Audit Committee under generally accepted auditing standards, including
Statement on Auditing Standards No. 61. In addition, the Audit Committee has
discussed with the independent auditors the auditors' independence from
management and the Company including the matters in the written disclosures and
the letter from the independent auditors required by the Independence Standards
Board Standard No. 1.
The Audit Committee discussed with the Company's independent auditors the
overall scope, plans and results of their audit activities. The Audit Committee
meets with the independent auditors, and the Head of the Company's Internal
Audit staff, with and without management present, to discuss the results of
their examinations, their evaluations of the Company's internal controls, and
the overall quality of the Company's financial reporting.
The Audit Committee held nine meetings during fiscal 2002. The Company
incurred the following fees for services performed by KPMG LLP in fiscal 2002:
Audit Fees
Fees for the fiscal year 2002 audit and the review of Forms 10-Q billed
through December 31, 2002 were $562,500.
All Other Fees
Audit-related fees of $83,520 were billed for the year ended December 31,
2002. Audit related fees consisted principally of an audit of the financial
statements of the employee benefit plan and an SAS 70 internal control review
engagement for a subsidiary, Century Retirement Services, Inc.
Aggregate fees billed for all other services rendered by KPMG LLP for the
year ended December 31, 2002 were $18,600, representing other non-audit fees
related to tax consultation and tax compliance.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board has approved)
that the audited consolidated financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2002 for filing with
the Securities and Exchange Commission. The Audit Committee and the Board have
also recommended, subject to stockholder approval, the reappointment of KPMG LLP
as independent auditors.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Harve A. Ferrill, Chairman
Rick L. Burdick
Richard C. Rochon
11
EXECUTIVE COMPENSATION
The following table provides a summary of compensation for the Chief
Executive Officer during fiscal year 2002 and the four other most highly
compensated officers who were serving as executives of Century on December 31,
2002.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION AWARDS
-----------------------
ANNUAL COMPENSATION SECURITIES SECURITIES
-------------------- OTHER ANNUAL UNDERLYING UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION WARRANTS OPTIONS
--------------------------- ---- -------- --------- ------------ ---------- ----------
Steven L. Gerard 2002 510,417 300,000(1) 133,165(2) 0 0
Chief Executive Officer/Chairman 2001 500,000 250,000(1) 96,986(2) 0 250,000(3)
2000 109,971 150,000 0 0 1,000,000(4)
Jerome P. Grisko, Jr. 2002 350,000 75,000 6,133(5) 0 125,000(6)
President & COO 2001 350,000 100,000 5,858(5) 0 210,000(7)
2000 293,670 50,000 5,871(5) 0 100,000(8)
Ware H. Grove 2002 260,000 75,000 6,576(5) 0 75,000(6)
Sr. Vice President and CFO 2001 240,000 100,000 3,962(9) 0 0
2000 13,692 0 342(9) 0 75,000(10)
Leonard Miller 2002 350,000 50,000 6,440(11) 0 100,000(6)
Sr. Vice President 2001 350,000 100,000 5,100(12) 0 70,000(7)
2000 286,236 0 5,100(12) 0 0
Robert A. O'Byrne 2002 300,000 75,000 5,940(11) 0 100,000(6)
Sr. Vice President 2001 250,000 100,000 7,310(11) 0 120,000(7)
2000 254,220 0 5,100(12) 0 30,000(13)
---------------
(1) Mr. Gerard's contract specifies a bonus of at least $150,000 per year.
(2) Includes payment for life insurance policy, commuting costs and automobile
adjustments, and employer matching 401(K) contributions.
(3) Bonus for 2001 performance. Consists of options that are exercisable on
01/01/2002 and remain exercisable for a six-year period from the date of
the grant.
(4) Consists of options that vest 33 1/3% annually beginning October 11, 2001,
and remain exercisable for a six-year period from the date of the grant.
(5) Includes payment for automobile adjustments and employer matching 401(K)
contributions.
(6) Consists of options that vest 20% annually beginning April 5, 2003, and
remain exercisable for a six-year period from date of grant.
(7) Consists of options that vest 20% annually beginning March 7, 2002, and
remain exercisable for a six-year period from grant date.
(8) Consists of options that vested March 6, 2000, and remain exercisable for a
six-year period from the date of the grant.
(9) Includes payment for automobile adjustments.
(10) Consists of 38,000 options exercisable as of December 12, 2000, and 37,000
options exercisable as of December 12, 2001, and remain exercisable for a
six-year period from the grant date.
(11) Includes payment for insurance premiums and employer matching 401(K)
contributions.
(12) Includes payment for employer-matching 401(K) contributions.
(13) Consists of options that vest 20% annually beginning March 1, 2001, and
remain exercisable for a six-year period from the date of the grant.
12
Employment Agreements
Century is a party to employment agreements with Messrs. Gerard, Grisko and
Grove. The employment agreements provide for annual base salaries of $500,000,
$300,000, and $240,000, respectively. Mr. Gerard's contract was for an initial
term of three years, with automatic annual one-year extensions beginning on the
year 2002 anniversary of the execution of the agreement in the absence of
termination. Base salary may be increased by the Board, and for each of years
2001, 2002, and 2003, the agreement provides for a bonus of at least $150,000,
with bonus increases based upon achievement of performance goals established by
the Compensation Committee. Pursuant to the contract, Century granted Mr. Gerard
a nonqualified stock option to acquire 1,000,000 shares of common stock at the
fair market value of the stock at the date of granting. The options vest in
increments of 33 1/3% on each of the first, second and third anniversaries of
the date of the grant. Other compensation includes an automobile allowance,
participation in Century welfare, pension and incentive benefit plans,
maintenance of a term life insurance policy, and reimbursement for travel and
housing expenses.
If the agreement is terminated by Century without cause or by Mr. Gerard
for reasons such as a change of control of Century, Mr. Gerard is entitled to
(1) his base salary and vacation pay through the date of termination, (2) a cash
payment equal to two times the sum of his then current base salary and average
bonus paid in the three year period preceding the year of termination, (3)
maintenance of health and life insurance coverage, and (4) other amounts due
through the date of termination. If the agreement is terminated by Century with
cause or by Mr. Gerard without good reason, as defined by the contract, Mr.
Gerard is entitled to (1) his base salary and vacation pay through the date of
termination, and (2) other amounts due through the date of termination.
The contract contains restrictive covenants that obligate Mr. Gerard to (1)
maintain Century's confidential information, (2) return company information or
other personal and intellectual property, (3) abide by a one-year noncompetition
term, (4) honor a two-year employee nonsolicitation term, (5) comply with a
one-year customer, investor, and client non-solicitation term, and (6) avoid
disparagement of the company.
Mr. Grisko's contract provides for a one-time bonus of $50,000, and an
immediately vested, nonqualified stock option to acquire 75,000 shares of common
stock at the fair market value of the stock at the date of granting. Other
compensation includes all benefits generally available to senior level
executives of Century, such as an automobile allowance, and participation in
Century welfare, pension and incentive benefit plans.
In addition, the contract provides for the payment of severance upon
termination without cause (including termination resulting from a change of
control), or upon a request by the Chairman of the Board that Mr. Grisko resign.
Severance would include (1) a cash payment of two-times Mr. Grisko's base salary
at the time of termination, (2) continued participation for two years in Century
health and welfare benefit plans, (3) immediate vesting of, and ability to
exercise, any unvested but previously granted stock options, and (4) receipt of
title to any company vehicle then in use by Mr. Grisko.
The contract contains restrictive covenants that obligate Mr. Grisko to (1)
maintain Century's confidential information, (2) return company information or
other personal and intellectual property, (3) abide by a two-year employee,
customer, and supplier nonsolicitation and noninterference term, and (4) avoid
disparagement of the company.
Mr. Grove's contract provides for discretionary bonuses, and a nonqualified
stock option to acquire 75,000 shares of common stock at the fair market value
of the stock at the date of granting. The option to acquire 38,000 of the total
vested immediately upon grant. The remaining options vest upon the first
anniversary of the date of the grant. Other compensation includes all benefits
generally available to senior level executives of Century, such as an automobile
allowance, and participation in Century welfare, pension and incentive benefit
plans.
In addition, the contract provides for the payment of severance upon
termination without cause, or upon voluntary termination due to a change of
control. Severance would include (1) continued payment for a period of one year
of Mr. Grove's base salary at the time of termination, and (2) continued
participation for one year in Century health and welfare benefit plans.
The contract contains restrictive covenants that obligate Mr. Grove to (1)
maintain Century's confidential information, (2) return company information or
other personal and intellectual property, (3) abide by a one-year
13
non-compete, and one-year employee, customer, and supplier nonsolicitation and
noninterference term, and (4) avoid disparagement of the company.
OPTIONS GRANTED DURING 2002
The following table sets forth as to each of the named executive officers
information with respect to option grants during 2002: (1) the number of shares
of common stock underlying options granted, (2) the percentage that such options
represent of all options granted to officers and employees during the year, (3)
the exercise price, (4) the expiration date and (5) the potential realizable
value of such options. It should be noted that the actual value of the options
may be significantly different from the value shown in the assumptions, and the
value actually realized, if any, will depend upon the excess of the market value
of the common stock over the option exercise price at the time of exercise.
Century granted no warrants to its executive officers during 2002.
OPTION GRANTS DURING 2002 POTENTIAL REALIZABLE VALUE
------------------------------------------------ AT ASSUMED ANNUAL RATES
NUMBER OF % OF TOTAL OF STOCK PRICE APPRECIATION
SECURITIES OPTIONS FOR OPTION TERM
UNDERLYING GRANTED EXERCISE ----------------------------
OPTIONS EMPLOYEES PRICE PER EXPIRATION AT 5% ANNUAL AT 10% ANNUAL
GRANTED IN 2002 SHARE DATE GROWTH RATE GROWTH RATE
---------- ---------- --------- ---------- ------------ -------------
Steven L. Gerard...... 0 0.00% -- $ 0 $ 0
Jerome P. Grisko...... 125,000 4.66% 3.45 04/05/2008 $146,666 $332,736
Ware H. Grove......... 75,000 2.79% 3.45 04/05/2008 $ 88,000 $199,641
Leonard Miller........ 100,000 3.73% 3.45 04/05/2008 $117,333 $266,189
Robert A. O'Byrne..... 100,000 3.73% 3.45 04/05/2008 $117,333 $266,189
OPTION EXERCISES AND VALUES FOR 2002
The following table sets forth information as to each of the named
executive officers with respect to option exercises during 2002 and the status
of their options at December 31, 2002: (1) the number of shares of common stock
acquired upon exercise of options during the year, (2) the aggregate dollar
value realized upon the exercise of such options, (3) the total number of
securities underlying exercisable and unexercisable options at December 31, 2002
and (4) the aggregate dollar value of in-the-money exercisable and unexercisable
options at December 31, 2002.
AGGREGATED OPTION EXERCISES DURING 2002
AND OPTION VALUES AT DECEMBER 31, 2002
NUMBER OF SECURITIES
NO. OF SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED(1)
ACQUIRED OPTIONS AT IN-THE-MONEY OPTIONS
UPON VALUE DECEMBER 31, 2002 AT DECEMBER 31, 2002
EXERCISE OF REALIZED --------------------------- ---------------------------
NAME OPTION ON EXERCISE EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------- ----------- ----------- ------------- ----------- -------------
Steven L. Gerard..... 0 0 916,667 333,333 $1,295,834 $506,666
Jerome P. Grisko,
Jr. ............... 0 0 192,200 309,800 $ 47,040 $188,160
Ware H. Grove........ 0 0 75,000 75,000 $ 26,868 $107,472
Leonard Miller....... 0 0 14,000 156,000 $ 105,000 $ 0
Robert A. O'Byrne.... 0 0 56,400 225,100 $ 15,680 $ 62,720
---------------
(1) In-the-Money calculation: NASDAQ closing price at 12/31/02 = $2.6500.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following is a summary of certain agreements and transactions between
or among CBIZ and certain related parties. It is CBIZ' policy to enter into
transactions with related parties on terms that, on the whole, are no less
favorable than those that would be available from unaffiliated parties. Based on
CBIZ' experience and the
14
terms of its transactions with unaffiliated parties, it is the Board of
Directors' belief that the transactions described below met these standards at
the time of the transactions.
A number of the businesses acquired since October 1996 are located in
properties owned indirectly by and leased from persons employed by CBIZ. In the
aggregate, CBIZ paid approximately $0.8 million, $1.5 million and $1.5 million
for the years ended 2002, 2001 and 2000, respectively, under such leases which
management believes were at market rates. No executive officer or director of
the Company has an ownership interest in such properties.
Rick L. Burdick, a director of CBIZ, is a partner of Akin Gump Strauss
Hauer & Feld LLP (Akin Gump). Akin Gump performed legal work for CBIZ during
2002, 2001 and 2000 for which the firm received $119,064, $68,540 and $116,000
from CBIZ, respectively.
CBIZ and/or its subsidiaries maintain joint-referral relationships and
service agreements with licensed CPA firms under which CBIZ subsidiaries provide
administrative services (including office, bookkeeping, accounting, and other
administrative services, preparing marketing and promotion materials, and
leasing of administrative and professional staff) in exchange for a fee. A
number of CBIZ employees own interests in the independent companies maintaining
administrative services agreements with CBIZ. No executive officer or director
of the Company has an ownership interest in such companies.
Robert A. O'Byrne, Senior Vice President, Benefits & Insurance, was
indebted to CBIZ in the amount of $250,000 at December 31, 2002 and $325,000 at
December 31, 2001. Likewise, CBIZ was indebted to the former shareholders of
RDOB/GNG, of which Mr. O'Byrne is a shareholder, for $420,000 at December 31,
2002. Mr. O'Byrne also has an interest in a partnership that receives
commissions from CBIZ that are paid to certain eligible benefits and insurance
producers in accordance with a formal program to provide benefits in the event
of death, disability, retirement or other termination. The note and the program
were both in existence at the time CBIZ acquired the former company, of which
Mr. O'Byrne was an owner.
CBIZ has divested several operations during 2002, in an effort to
rationalize the business and sharpen the focus on non-strategic businesses. In
accordance with this strategy, CBIZ has sold and may sell in the future
businesses to former employees or shareholders. Management believes these
transactions were priced at market rates, competitively bid, and entered into at
arm's length terms and conditions.
15
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a performance graph comparing the cumulative total
stockholder return on Century's common stock, based on its market price, with
the cumulative total return of companies in the S&P 500 Index and a Peer Group.
The graph assumes the reinvestment of dividends for the period beginning
December 31, 1997 through the year ended December 31, 2002.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG CENTURY BUSINESS SERVICES, INC.,
THE S&P 500 INDEX, AND A PEER GROUP**
CENTURY BUSINESS
SERVICES, INC. S&P 500 PEER GROUP
---------------- ------- ----------
12/97 100.00 100.00 100.00
12/98 83.33 128.58 119.48
12/99 48.92 155.64 179.62
12/00 6.52 141.46 195.35
12/01 13.33 124.65 146.38
12/02 15.36 97.10 138.46
12/97 12/98 12/99 12/00 12/01 12/02
---------------------------------------------------
Century Business Services, Inc. 100.00 83.33 48.92 6.52 13.33 15.36
S&P 500 100.00 128.58 155.64 141.46 124.65 97.10
Peer Group 100.00 119.48 179.62 195.35 146.38 138.46
* $100 invested on 12/31/97 in stock or index-including reinvestment of
dividends. Fiscal year ending December 31.
** The Peer Group consists of Probusiness Services, Inc., H&R Block, Inc.,
Arthur J Gallagher & Co., New Ceridian Corp., Brown & Brown, Inc., Paychex
Inc., Answerthink, Inc., and American Express Co.
Copyright(C) 2002, Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. All rights reserved. www.researchdatagroup.com/S&P.htm
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Century's officers and directors, and persons who own more than 10% of a
registered class of Century's equity securities, to file reports of ownership
and changes in ownership with the Securities and Exchange Commission (the
"SEC"). Officers, directors and greater than 10% stockholders are required by
the SEC regulations to furnish Century with copies of all Section 16(a) reports
they file.
Century believes that during the 2002 fiscal year, its officers, directors
and 10% stockholders complied with all Section 16(a) filing requirements, with
the exception of three late reports. Mr. Michael G. DeGroote did not report the
sale of 40 shares on July 31, 2002 until August 12, 2002 due to the inadvertence
of his personal staff. Option awards for Messrs. Burdick and Gary W. DeGroote on
November 5, 2002 were not filed until December 9, 2002 due to the inadvertence
of the Corporate Secretary. In making these statements, Century has
16
relied upon examination of the copies of Forms 3, 4 and 5 provided to the
company and the written representations of its directors and officers.
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information about our equity compensation
plans as of December 31, 2002. All outstanding awards relate to our common
stock.
A B C
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
FUTURE ISSUANCE UNDER
EQUITY COMPENSATION
NUMBER OF SECURITIES TO BE PLANS (EXCLUDING
ISSUED UPON EXERCISE OF WEIGHTED AVERAGE EXERCISE SECURITIES REFLECTED IN
PLAN CATEGORY OUTSTANDING OPTIONS PRICE OF OUTSTANDING OPTIONS COLUMN A)
Equity compensation plans
approved by shareholders 10,947,866(1) $4.81 4,065,254(2)
Equity compensation plans
not approved by
shareholders 0 0 0
Total 10,947,866 $4.81 4,065,254
(1) Consists of 13,120 option awards under the 1991 Employee Stock Option Plan
and 10,934,746 option awards under the Century Business Services, Inc. 2002
Stock Incentive Plan.
(2) All remaining shares available for grant are subject to the Century Business
Services, Inc. 2002 Stock Incentive Plan.
STOCKHOLDER PROPOSALS
Any proposals of stockholders intended to be presented at the 2004 Annual
Meeting of Stockholders must be received by Century for inclusion in the proxy
statement and form of proxy relating to the meeting not later than December 1,
2003. It is suggested that proponents submit their proposals by certified mail,
return receipt requested. Pursuant to Rule 14a-4(c)(1) under the Securities
Exchange Act of 1934 if any stockholder proposal intended to be presented at the
2004 Annual Meeting without inclusion in our proxy statement for such meeting is
received at our principal office after February 16, 2003, then a proxy will have
the ability to confer discretionary authority to vote on such proposal. Detailed
information for submitting resolutions will be provided upon written request to
Century's Corporate Secretary at Century Business Services, Inc., 6480 Rockside
Woods Blvd., South, Suite 330, Cleveland, Ohio 44131, Attention: Corporate
Secretary. No stockholder proposals were received for inclusion in this proxy
statement.
EXPENSES OF SOLICITATION
Century will bear the expense of preparing and mailing the materials in
connection with the solicitation of proxies, as well as the cost of
solicitation. Fifth Third Bancorp ("Fifth Third Bank") has been retained by
Century to assist in the solicitation of proxies. Fifth Third Bank, which has a
contract to act as the transfer agent for Century, will not be paid any
additional fees for these services. Fifth Third Bank will receive reimbursement
of out-of-pocket expenses it incurs in connection with its efforts. In addition,
Century will reimburse brokers, nominees, banks and other stockholders of record
for their expenses incurred in forwarding proxy materials to beneficial owners.
Century expects that the solicitation of proxies will be primarily by mail, but
directors, officers and employees of Century may solicit proxies by personal
interview, telephone or telecopy. These persons will receive no additional
compensation for such services.
Century's Annual Report on Form 10-K for the year ended December 31, 2002,
including financial statements and a Letter to Stockholders is being mailed to
all stockholders entitled to vote at the Annual Meeting. The Annual Report does
not constitute a part of the proxy solicitation material. CENTURY WILL MAIL
ADDITIONAL COPIES OF ITS ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER
17
31, 2002, TO EACH STOCKHOLDER OR BENEFICIAL OWNER OF SHARES OF COMMON STOCK
WITHOUT CHARGE UPON SUCH PERSON'S WRITTEN REQUEST TO THE INVESTOR RELATIONS
DEPARTMENT AT CENTURY'S EXECUTIVE OFFICES AT 6480 ROCKSIDE WOODS BOULEVARD,
SOUTH, SUITE 330, CLEVELAND, OHIO 44131.
OTHER MATTERS
Management does not intend to present any other items of business and knows
of no other matters that will be brought before the Annual Meeting. However, if
any additional matters are properly brought before the Annual Meeting, it is
intended that the shares represented by proxies will be voted with respect
thereto in accordance with the judgment of the persons named in such proxies.
The accompanying form of proxy has been prepared at the direction of the
Board of Directors and is sent to you at the request of the Board of Directors.
The Board of Directors has designated the proxies named therein.
By Order of the Board of Directors,
/s/ Michael W. Gleespen
Michael W. Gleespen, Corporate
Secretary
Cleveland, Ohio
April 1, 2003
18
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF CENTURY BUSINESS SERVICES, INC.
This Charter identifies the purpose, composition, meeting requirements,
committee responsibilities, annual evaluation procedures and investigations and
studies of the Audit Committee (the "COMMITTEE") of the Board of Directors (the
"BOARD") of Century Business Services, Inc., a Delaware corporation (the
"COMPANY").
I. PURPOSE
The Committee has been established to: (a) assist the Board in its
oversight responsibilities regarding (1) the integrity of the Company's
financial statements, (2) the Company's compliance with legal and regulatory
requirements, (3) the independent accountant's qualifications and independence
and (4) the performance of the Company's internal audit function; (b) prepare
the report required by the United States Securities and Exchange Commission (the
"SEC") for inclusion in the Company's annual proxy statement; (c) retain and
terminate the Company's independent accountant; (d) approve audit and non-audit
services to be performed by the independent accountant; and (e) perform such
other functions as the Board may from time to time assign to the Committee. In
performing its duties, the Committee shall seek to maintain an effective working
relationship with the Board, the independent accountant, the internal auditors
and management of the Company.
II. COMPOSITION
The Committee shall be composed of three members (including a Chairman),
all of whom shall be "independent directors," as such term is defined in the
effective rules and regulations of the SEC and the NASDAQ Stock Market, unless a
member of the Committee is exempt from the independence requirements under the
effective rules and regulations of the SEC and the NASDAQ Stock Market. The
members of the Committee and the Chairman shall be selected by the Board and
serve at the pleasure of the Board. A Committee member (including the Chairman)
may be removed at any time, with or without cause, by the Board. The Board may
designate one or more independent directors as alternate members of the
Committee, who may replace any absent or disqualified member or members at any
meetings of the Committee. No person may be made a member of the Committee if
his or her service on the Committee would violate any restriction on service
imposed by any effective rule or regulation of the SEC or any securities
exchange or market on which shares of the common stock of the Company are
traded. All members of the Committee shall have a working familiarity with basic
finance and accounting practices, and at least one member of the Committee shall
have accounting or related financial management expertise. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Company or an outside consultant. The
Chairman shall maintain regular communication with the chief executive officer,
chief financial officer, the lead partner of the independent accountant and the
manager of the internal audit.
Except for Board and Committee fees, a member of the Committee shall not be
permitted to accept any fees paid directly or indirectly for services as a
consultant, legal advisor or financial advisor or any other fees as prohibited
by the effective rules of the SEC and the NASDAQ Stock Market. In addition, no
member of the Committee may be an affiliated person of the Company or any of its
subsidiaries. Members of the Committee may receive their Board and Committee
fees in cash, Company stock or options or other in-kind consideration as
determined by the Board or the Compensation Committee, as applicable, in
addition to all other benefits that other directors of the Company receive. No
director may serve on the Committee, without the approval of the Board, if such
director simultaneously serves on the audit committee of more than three public
companies.
III. MEETING REQUIREMENTS
The Committee shall meet as necessary, but at least four times each year,
to enable it to fulfill its responsibilities. The Committee shall meet at the
call of its Chairman, preferably in conjunction with regular Board meetings. The
Committee may meet by telephone conference call or by any other means permitted
by law or the Company's Bylaws. A majority of the members of the Committee shall
constitute a quorum. The
19
Committee shall act on the affirmative vote of a majority of members present at
a meeting at which a quorum is present. Without a meeting, the Committee may act
by unanimous written consent of all members. The Committee shall determine its
own rules and procedures, including designation of a Chairman pro tempore, in
the absence of the Chairman, and designation of a secretary. The secretary need
not be a member of the Committee and shall attend Committee meetings and prepare
minutes. The Committee shall keep written minutes of its meetings, which shall
be recorded or filed with the books and records of the Company. Any member of
the Board shall be provided with copies of such Committee minutes if requested.
The Committee may ask members of management, employees, outside counsel,
the independent accountant or others whose advice and counsel are relevant to
the issues then being considered by the Committee, to attend any meetings and to
provide such pertinent information as the Committee may request.
The Chairman of the Committee shall be responsible for leadership of the
Committee, including preparing the agenda, presiding over Committee meetings,
making Committee assignments and reporting the Committee's actions to the Board
from time to time (but at least once each year) as requested by the Board.
As part of its responsibility to foster free and open communication, the
Committee should meet periodically with management, the internal auditors and
the independent accountant in separate executive sessions to discuss any matters
that the Committee or any of these groups believe should be discussed privately.
In addition, the Committee or at least its Chairman should meet with the
independent accountant and management quarterly to review the Company's
financial statements prior to their public release consistent with the
provisions set forth below in Section IV. The Committee may also meet from time
to time with the Company's investment bankers, investor relations professionals
and financial analysts who follow the Company.
IV. COMMITTEE RESPONSIBILITIES
In carrying out its responsibilities, the Committee's policies and
procedures should remain flexible to enable the Committee to react to changes in
circumstances and conditions so as to ensure the Company remains in compliance
with applicable legal and regulatory requirements. In addition to such other
duties as the Board may from time to time assign, the Committee shall have the
following responsibilities:
A. Oversight of the Financial Reporting Processes
1. In consultation with the independent accountant and the internal
auditors, review the integrity of the organization's financial
reporting processes, both internal and external.
2. Review and approve all related-party transactions.
3. Consider the independent accountant's judgments about the quality and
appropriateness of the Company's accounting principles as applied in
its financial reporting. Consider alternative accounting principles
and estimates.
4. Annually review major issues regarding the Company's auditing and
accounting principles and practices and its presentation of financial
statements, including the adequacy of internal controls and special
audit steps adopted in light of material internal control
deficiencies.
5. Discuss with management and legal counsel the status of pending
litigation, taxation matters, compliance policies and other areas of
oversight applicable to the legal and compliance area as may be
appropriate.
6. Meet at least annually with the chief financial officer, the internal
auditors and the independent accountant in separate executive
sessions.
7. Review all analyst reports and press articles about the Company's
accounting and disclosure practices and principles.
8. Review all analyses prepared by management and the independent
accountant of significant financial reporting issues and judgments
made in connection with the preparation of the Company's financial
statements, including any analysis of the effect of alternative
generally accepted accounting
20
principle ("GAAP") methods on the Company's financial statements and
a description of any transactions as to which management obtained
Statement on Auditing Standards No. 50 letters.(1)
9. Review with management and the independent accountant the effect of
regulatory and accounting initiatives, as well as off-balance sheet
structures, on the Company's financial statements.
B. Review of Documents and Reports
1. Review and discuss with management and the independent accountant the
Company's annual audited financial statements and quarterly financial
statements (including disclosures under the section entitled
"Management's Discussion and Analysis of Financial Condition and
Results of Operation") and any reports or other financial information
submitted to any governmental body, or the public, including any
certification, report, opinion or review rendered by the independent
accountant, considering, as appropriate, whether the information
contained in these documents is consistent with the information
contained in the financial statements and whether the independent
accountant and legal counsel are satisfied with the disclosure and
content of such documents. These discussions shall include
consideration of the quality of the Company's accounting principles
as applied in its financial reporting, including review of audit
adjustments (whether or not recorded) and any such other inquires as
may be appropriate. Based on the review, the Committee shall make its
recommendation to the Board as to the inclusion of the Company's
audited consolidated financial statements in the Company's annual
report on Form 10-K.
2. Review and discuss with management and the independent accountant
earnings press releases, as well as financial information and
earnings guidance provided to analysts and rating agencies. The
Committee should discuss in advance each earnings release and
generally discuss the types of information to be disclosed and the
type of presentation to be made in any earnings release or guidance.
The failure to do so is not a violation of the Committee's Charter if
circumstances do not permit the Committee to meet in advance of an
earnings release.
3. Review the regular internal reports to management prepared by the
internal auditors and management's response thereto.
4. Review reports from management, the internal auditors and the
independent accountant on the Company's subsidiaries and affiliates,
compliance with the Company's code(s) of conduct or ethics,
applicable law and insider and related party transactions.
5. Review with management and the independent accountant any
correspondence with regulators or government agencies and any
employee complaints or published reports that raise material issues
regarding the Company's financial statements or accounting policies.
6. Prepare the report required by the rules of the SEC to be included in
the Company's annual proxy statement.
7. Submit the minutes of all meetings of the Committee to, or discuss
the matters discussed at each Committee meeting with, the Board.
8. Review any restatements of financial statements that have occurred or
were recommended. Review the restatements made by other clients of
the independent accountant.
C. Independent Accountant Matters
1. Interview and retain the Company's independent accountant,
considering the accounting firm's independence and effectiveness and
approve the engagement fees and other compensation to be paid to the
independent accountant. The Committee shall pre-approve, as required
by effective rule of the
---------------
(1) SAS No. 50 provides performance and reporting standards for written reports
from accountants with respect to the application of accounting principles to new
transactions and financial products or regarding specific financial reporting
issues.
21
SEC or the NASDAQ Stock Market, non-audit engagements of and fees to be paid to
the Company's independent accountant.
2. On an annual basis, the Committee shall evaluate the independent
accountant's qualifications, performance and independence. To assist
in this undertaking, the Committee shall require the independent
accountant to submit a report (which report shall be reviewed by the
Committee) describing (a) the independent accountant's internal
quality-control procedures, (b) any material issues raised by the
most recent internal quality-control review, or peer review, of the
accounting firm or by any inquiry or investigations by governmental
or professional authorities (within the preceding five years)
respecting one or more independent audits carried out by the
independent accountant, and any steps taken to deal with any such
issues and (c) all relationships the independent accountant has with
the Company and relevant third parties to determine the independent
accountant's independence. In making its determination, the Committee
shall consider not only auditing and other traditional accounting
functions performed by the independent accountant, but also
consulting, legal, information technology services and other
professional services rendered by the independent accountant and its
affiliates. The Committee shall also consider whether the provision
of any of these non-audit services is compatible with the
independence standards under the guidelines of the SEC and of the
Independence Standards Board and shall approve in advance any
non-audit services to be provided by the independent accountant.
3. Review on an annual basis the experience and qualifications of the
senior members of the audit team. Discuss the knowledge and
experience of the independent accountant and the senior members of
the audit team with respect to the Company's industry. The Committee
shall ensure the regular rotation of the lead audit partner and audit
review partner as required by law and consider whether there should
be a periodic rotation of the Company's independent accountant.
4. Review the performance of the independent accountant and terminate
the independent accountant when circumstances warrant.
5. Establish and periodically review hiring policies for employees or
former employees of the independent accountant.
6. Review with the independent accountant any problems or difficulties
the auditor may have encountered and any "management" or "internal
control" letter provided by the independent accountant and the
Company's response to that letter. Such review should include:
(a) any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to
required information and any disagreements with management;
(b) any accounting adjustments that were proposed by the independent
accountant that were not agreed to by the Company;
(c) communications between the independent accountant and its national
office regarding any issues on which it was consulted by the audit
team and matters of audit quality and consistency;
(d) any changes required in the planned scope of the internal audit;
and
(e) the responsibilities, budget and staffing of the Company's
internal audit function.
7. Communicate with the independent accountant regarding (a) alternative
treatments of financial information within the parameters of GAAP,
(b) critical accounting policies and practices to be used in
preparing the audit report and (c) such other matters as the SEC and
the NASDAQ Stock Market may direct by rule or regulation.
8. Periodically consult with the independent accountant out of the
presence of management about internal controls and the fullness and
accuracy of the organization's financial statements.
9. Oversee the independent accountant relationship by discussing with
the independent accountant the nature and rigor of the audit process,
receiving and reviewing audit reports and ensuring that the
22
independent accountant has full access to the Committee (and the
Board) to report on any and all appropriate matters.
10. Discuss with the independent accountant prior to the audit the
general planning and staffing of the audit.
11. Obtain a representation from the independent accountant that Section
10A of the Securities Exchange Act of 1934 has been followed.
D. Internal Audit Control Matters
1. Discuss with management policies with respect to risk assessment and
risk management. Although it is management's duty to assess and
manage the Company's exposure to risk, the Committee should discuss
guidelines and policies to govern the process by which risk
assessment and management is handled and review the steps management
has taken to monitor and control the Company's risk exposure.
2. Establish regular and separate systems of reporting to the Committee
by each of management, the independent accountant and the internal
auditors regarding any significant judgments made in management's
preparation of the financial statements and the view of each as to
appropriateness of such judgments.
3. Following completion of the annual audit, review separately with each
of management, the independent accountant and the internal auditors
any significant difficulties encountered during the course of the
audit, including any restrictions on the scope of work or access to
required information.
4. Review with the independent accountant, the internal auditors and
management the extent to which changes or improvements in financial
or accounting practices have been implemented. This review should be
conducted at an appropriate time subsequent to implementation of
changes or improvements, as decided by the Committee.
5. Advise the Board about the Company's policies and procedures for
compliance with applicable laws and regulations and the Company's
code(s) of conduct.
6. Establish policies and procedures regarding the receipt, retention
and treatment of complaints received by the issuer regarding
accounting, internal accounting controls or auditing matters, and the
confidential, anonymous submission by employees of the issuer of
concerns regarding questionable accounting or auditing matters.
7. Periodically discuss with the chief executive officer and chief
financial officer (a) significant deficiencies in the design or
operation of the internal controls that could adversely affect the
Company's ability to record, process, summarize and report financial
data and (b) any fraud that involves management or other employees
who have a significant role in the Company's internal controls.
8. Enforce the policy that no officer, director or any person acting
under their direction shall fraudulently influence, coerce,
manipulate or mislead the independent accountant for purposes of
rendering the Company's financial statements materially misleading.
E. Evaluation of Internal Auditors
1. Review activities, organizational structure and qualifications of the
internal auditors.
2. Review and concur in the appointment, replacement, reassignment or
dismissal of the manager of internal auditing.
23
3. Consider and review with management and the manager of internal
auditing:
(a) significant findings during the year and management's responses
thereto;
(b) any difficulties encountered in the course of internal audits,
including any restrictions on the scope of the internal auditors' work
or access to required information;
(c) any changes required in the planned scope of the internal auditors'
audit plan;
(d) the internal auditors' budget and staffing; and
(e) The internal auditors' compliance with The Institute of Internal
Auditors' Standards for the Professional Practice of Internal Auditing.
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Company's financial statements are complete and accurate and
are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent accountant.
V. ANNUAL EVALUATION PROCEDURES
The Committee shall annually assess its performance to confirm that it is
meeting its responsibilities under this Charter. In this review, the Committee
shall consider, among other things, (a) the appropriateness of the scope and
content of this Charter, (b) the appropriateness of matters presented for
information and approval, (c) the sufficiency of time for consideration of
agenda items, (d) frequency and length of meetings and (e) the quality of
written materials and presentations. The Committee may recommend to the Board
such changes to this Charter as the Committee deems appropriate.
VI. INVESTIGATIONS AND STUDIES
The Committee shall have the authority and sufficient funding to retain
special legal, accounting or other consultants (without seeking Board approval)
to advise the Committee. The Committee may conduct or authorize investigations
into or studies of matters within the Committee's scope of responsibilities as
described herein, and may retain, at the expense of the Company, independent
counsel or other consultants necessary to assist the Committee in any such
investigations or studies. The Committee shall have sole authority to negotiate
and approve the fees and retention terms of such independent counsel or other
consultants.
VII. MISCELLANEOUS
Nothing contained in this Charter is intended to expand applicable
standards of liability under statutory or regulatory requirements for the
directors of the Company or members of the Committee. The purposes and
responsibilities outlined in this Charter are meant to serve as guidelines
rather than as inflexible rules and the Committee is encouraged to adopt such
additional procedures and standards as it deems necessary from time to time to
fulfill its responsibilities. This Charter, and any amendments thereto, shall be
displayed on the Company's web site and a printed copy of such shall be made
available to any shareholder of the Company who requests it.
Adopted by the Audit Committee and approved
by the Board of Directors on February 12, 2003.
24
VOTE BY TELEPHONE
Have your proxy card available when you call the TOLL-FREE number 1-800-542-1160
using a touch-tone phone. You will be prompted to enter your Control Number
found on the reverse side, then you can follow the simple prompts that will be
presented to you to record your vote.
VOTE BY INTERNET
Have your proxy card available when you access the WEBSITE
HTTP://WWW.VOTEFAST.COM. You will be prompted to enter your Control Number, then
you can follow the simple prompts that will be presented to you to record your
vote.
VOTE BY MAIL
Please mark, sign and date your proxy card and return it in the postage-paid
envelope provided or return it to: Corporate Trust Services, P.O. Box 535800,
Pittsburgh, Pennsylvania 15230.
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VOTE BY TELEPHONE VOTE BY INTERNET VOTE BY MAIL
Call TOLL-FREE using a Access the WEBSITE and Return your proxy
touch-tone phone cast your vote in the POSTAGE-PAID
1-800-542-1160 HTTP://WWW.VOTEFAST.COM envelope provided
-----------------------------------------------------------------------------------------------
VOTE 24 HOURS A DAY, 7 DAYS A WEEK!
YOUR TELEPHONE AND INTERNET VOTE MUST BE RECEIVED BY 11:59 P.M. EASTERN DAYLIGHT
TIME ON MAY 15, 2003 TO BE COUNTED IN THE FINAL TABULATION.
Your Control Number is printed on the reverse side.
YOUR TELEPHONE AND INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR
SHARES IN THE SAME MANNER AS IF YOU HAD MARKED, SIGNED DATED AND RETURNED YOUR
PROXY CARD.
CENTURY BUSINESS SERVICES, INC.
6480 ROCKSIDE WOODS BLVD. SOUTH, SUITE 330
CLEVELAND, OHIO 44131
ANNUAL MEETING OF STOCKHOLDERS, MAY 16, 2003
THE UNDERSIGNED STOCKHOLDER OF CENTURY BUSINESS SERVICES, INC. (THE
"COMPANY") HEREBY APPOINTS STEVEN L. GERARD AND RICK L. BURDICK AND EITHER OF
THEM, WITH POWER OF SUBSTITUTION AND REVOCATION, TO REPRESENT AND VOTE ALL THE
SHARES OF COMMON STOCK OF THE COMPANY HELD OF RECORD BY THE UNDERSIGNED AT THE
2003 ANNUAL MEETING AND ANY ADJOURNMENT(S) THEREOF.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE REVERSE SIDE, UNMARKED
PROXIES WILL BE VOTED IN FAVOR OF EACH OF THE MATTERS LISTED ON THE REVERSE
SIDE. THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTER REFERRED
TO IN ITEM (3). THIS PROXY IS REVOCABLE AT ANY TIME BEFORE IT IS EXERCISED.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF MEETING AND
PROXY STATEMENT DATED APRIL 1, 2003 FOR THE ANNUAL MEETING OF STOCKHOLDERS.
(SEE REVERSE SIDE TO VOTE)
CENTURY BUSINESS SERVICES, INC.
C/O CORPORATE TRUST SERVICES
MAIL DROP 10AT66-4129
38 FOUNTAIN SQUARE PLAZA
CINCINNATI, OH 45202
NAME APPEARS
R.S. ROWE & COMPANY, INC; JOB NO. 11633; PROOF OF 3-24-03
& (781) 849-9700; (212) 926-2444; (800) 324-6202; FAX NO. (781) 849-9740
EMAIL ADDRESS: RSROWE@INTERSERVE.COM
PM6/5TH-3RD/CENTBIZ-PROXY
YOUR CONTROL NUMBER IS:
You are now able to cast your vote by using a touch-tone telephone or by using
the internet.
Instructions for voting are on the reverse side. Your Control Number for voting
is noted above.
FOLD AND DETACH HERE
.................................................................................
CENTURY BUSINESS SERVICES, INC. 2003 ANNUAL MEETING
1. ELECTION OF DIRECTORS: [ ] FOR ALL NOMINEES LISTED BELOW. [ ] WITHHOLD AUTHORITY to vote for all
nominees listed below.
(01) Gary W. DeGroote, (02) Harve A. Ferrill
INSTRUCTION: To withhold authority to vote for any individual nominee, write the nominees name in the space below.
----------------------------------------------------------------------------------------------------------------------------
2. Ratification of the appointment of KPMG LLP as independent accountants for
fiscal year 2003.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Upon such other business as may come before said meeting, or any adjournment
thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
NAME APPEARS DATED: , 2003
--------------------------------------
(SIGNATURE OF STOCKHOLDER)
--------------------------------------
(SIGNATURE OF STOCKHOLDER)
(PLEASE SIGN EXACTLY AS YOUR NAME OR
NAMES APPEAR OPPOSITE. ALL JOINT
OWNERS SHOULD SIGN. WHEN SIGNING IN A
FIDUCIARY CAPACITY OR AS A CORPORATE
OFFICER, PLEASE GIVE YOUR FULL TITLE
AS SUCH.)