UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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CENTURY BUSINESS SERVICES, INC.
6050 OAK TREE BOULEVARD SOUTH, SUITE 500
CLEVELAND, OH 44131
April 8, 2005
Dear Stockholder:
We cordially invite you to attend the Annual Meeting of Stockholders of
Century Business Services, Inc., which will be held on Thursday, May 12, 2005,
at 11:00 a.m. EDT, at Park Center Plaza II located at 6150 Oak Tree Boulevard
South, Lower Level, Cleveland, 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. Alternatively, you may vote
via Internet or by telephone in accordance with the procedures set out on the
proxy card.
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.
6050 OAK TREE BOULEVARD SOUTH, SUITE 500
CLEVELAND, OHIO 44131
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 12, 2005
TO THE STOCKHOLDERS OF CENTURY BUSINESS SERVICES, INC.:
The Annual Meeting of Stockholders of Century Business Services, Inc. will
be held on May 12, 2005, at 11:00 a.m. EDT, at Park Center Plaza II located at
6150 Oak Tree Boulevard South, Lower Level, Cleveland, Ohio 44131, for the
following purposes:
1. To elect three (3) of a class of three (3) Directors to the Board of
Directors of Century with terms expiring at the Annual Meeting in 2008;
2. To change the corporate name from Century Business Services, Inc. to
CBIZ, Inc.; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record on March 25, 2005 will be entitled to vote at
the meeting. This notice and proxy statement, a proxy and voting instruction
card, and the 2004 Annual Report are being distributed on or about April 8,
2005.
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. Alternatively, you may
vote via Internet or by telephone in accordance with the procedures set out on
the proxy card.
By Order of the Board of Directors,
/s/ Michael W. Gleespen
Michael W. Gleespen, Corporate
Secretary
Cleveland, Ohio
April 8, 2005
PLEASE SIGN AND DATE THE ENCLOSED PROXY
AND RETURN IT IN THE ACCOMPANYING ENVELOPE,
OR VOTE BY INTERNET OR TELEPHONE AS SOON AS POSSIBLE
TABLE OF CONTENTS
PAGE
----
Voting Rights and Solicitation.............................. 3
Proposal No. 1 -- Election of Directors..................... 4
Proposal No. 2 -- Name Change and Amendment to Certificate
of Incorporation ......................................... 6
Security Ownership of Certain Beneficial Owners and
Management................................................ 7
Report of the Compensation Committee on Executive
Compensation.............................................. 11
Report of the Audit Committee............................... 12
Executive Compensation...................................... 15
Certain Relationships and Related Transactions.............. 17
Stockholder Return Performance Presentation................. 19
Section 16(a) Beneficial Ownership Reporting Compliance..... 19
Stockholder Proposals....................................... 20
Expenses of Solicitation.................................... 20
Other Matters............................................... 21
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," "CBIZ" or
"the Company") of proxies to be voted at the Annual Meeting of Stockholders (the
"Annual Meeting") to be held on Thursday, May 12, 2005, 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 March 25,
2005.
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 change of the Company's name
from Century Business Services, Inc. to CBIZ, Inc. 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. Rick L. Burdick and Mr. Harve A. Ferrill are designated as proxy
holders in the proxy card. They will vote for the election as directors of
Messrs. Joseph S. DiMartino, Richard C. Rochon, and Donald V. Weir, who have
been nominated by the Board of Directors; and for the change of the corporate
name from Century Business Services, Inc. to CBIZ, Inc. 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 25, 2005 as the record date for
determining stockholders entitled to notice of and to vote at the Annual
Meeting. On the record date, Century had 75,924,991 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 the
certificate of amendment of the Company's amended and restated certificate of
incorporation changing the Company's name to CBIZ, Inc.
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 eight members, with three 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 2008, 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
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
---- --- ----- -------------
Joseph S. DiMartino......................................... 61 1997 2008
Richard C. Rochon........................................... 47 1996 2008
Donald V. Weir.............................................. 63 2003 2008
DIRECTORS WHOSE TERMS CONTINUE
EXPIRATION OF
CURRENT
NAME AGE SINCE TERM
---- --- ----- -------------
Harve A. Ferrill............................................ 72 1996 2006
Gary W. DeGroote............................................ 49 2002 2006
Todd J. Slotkin............................................. 52 2003 2006
Rick L. Burdick............................................. 53 1997 2007
Steven L. Gerard............................................ 59 2000 2007
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
Joseph S. DiMartino has served as a Director of CBIZ since November 1997,
when he was elected as an independent director. Mr. DiMartino has been Chairman
of the Board of the Dreyfus Family of 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 Board of Directors
of LEVCOR International, Inc. (formerly Carlyle Industries, Inc.), The Newark
Group, and the Muscular Dystrophy Association.
Richard C. Rochon has served as a Director of CBIZ since October 1996, when
he was elected as an independent director. Mr. Rochon is Chairman and Chief
Executive Officer of Royal Palm Capital Partners, a private investment and
management firm. Mr. Rochon serves as a director with Bancshares of Florida
(BOFL), a Florida Banking Corporation. He is also a director of Devcon
International (DEVC), a materials and aggregates and electronic securities
company. Mr. Rochon is Chairman of the Board of Sunair, Inc. (SNR), a specialty
radio communications and pest control company. 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
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owned by H. Wayne Huizenga. Mr. Rochon was a former director of Boca Resorts,
Inc. from 1996 through 2004. From 1979 until 1985, Mr. Rochon was employed as a
certified public accountant by the public accounting firm of Coopers & Lybrand,
L.L.P.
Donald V. Weir has served as a Director of CBIZ since September 2, 2003,
when he was appointed by the Board as an independent director. Mr. Weir has
served as financial consultant with Sanders Morris Harris for the past four
years. Prior to this Mr. Weir was CFO and director of publicly-held Deeptech
International and two of its subsidiaries, Tatham Offshore and Leviathan Gas
Pipeline Company, both of which were publicly-held companies. Prior to his
employment with Deeptech, Mr. Weir worked for eight years with Sugar Bowl Gas
Corporation, as Controller and Treasurer and later in a consulting capacity. Mr.
Weir was associated with Price Waterhouse, an international accounting firm,
from 1966 to 1979.
CONTINUING DIRECTORS
Harve A. Ferrill has served as a Director of CBIZ since October 1996, when
he was elected as an independent 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 serves as
a Director of Horny Toad, Inc., a manufacturer of sports clothing.
Gary W. DeGroote has served as a Director of CBIZ since October, 2002, when
he was elected as an independent 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. 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 Waste Services, Inc.
Todd Slotkin has served as a Director of CBIZ since September 2, 2003, when
he was appointed by the Board as an independent director. Mr. Slotkin serves as
Executive Vice President and CFO of MacAndrews and Forbes Holdings, and as
Executive Vice President and CFO of publicly owned MYF Worldwide (NYSE:MFW).
Prior to joining MacAndrews & Forbes in 1992, Mr. Slotkin spent 17 years with
Citicorp, ultimately serving as senior managing director and senior credit
officer. Mr. Slotkin serves on the Board of Managers of Spectaguard and the
Board of Directors of TransTech Pharma; formerly served as director of CalFed
Bank; and is Chairman and co-founder of the Food Allergy Institute.
Rick L. Burdick has served as a Director of CBIZ since October 1997, when
he was elected as an independent 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 serves on the Board of Directors of AutoNation, Inc.
Steven L. Gerard was elected by the Board to serve as its Chairman in
October, 2002. He was appointed Chief Executive Officer and Director in October,
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. 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
Fairchild Company, Inc., Lennar Corporation, TIMCO Aviation Services, Inc. and
Joy Global, Inc.
5
NAME CHANGE AND AMENDMENT TO CERTIFICATE OF INCORPORATION
PROPOSAL NO. 2 (ITEM 2 ON PROXY CARD)
On May 12, 2005 our board of directors will adopt, subject to stockholder
approval at the Annual Meeting, a resolution approving an amendment to our
Amended and Restated Certificate of Incorporation to change the name of the
Company from "Century Business Services, Inc." to "CBIZ, Inc." The name change
will become effective when the Certificate of Amendment to our Amended and
Restated Certificate of Incorporation is filed with the Secretary of State of
the State of Delaware. If our stockholders approve the name change, we will file
the Certificate of Amendment promptly after the Annual Meeting. A copy of the
Certificate of Amendment is attached to this proxy statement as Appendix A.
We believe the change of the Company's name to CBIZ, Inc. is consistent
with our comprehensive, integrated branding and advertising campaign to enhance
the Company's unified image as the premier source of a wide range of business
services for corporate America and will enable the Company to foster greater
name recognition in the marketplace. We believe the name change will also enable
the Company to take better advantage of its federal trademark, "CBIZ", in
marketing of the services provided by the Company's operating units.
Stockholders will not be required to submit their stock certificates for
exchange following the name change. Stock certificates bearing the "Century
Business Services, Inc." or "International Alliance Services, Inc." names will
continue to be valid certificates and will evidence ownership of the same number
of shares of our common stock after the name change. Following the effective
date of the Amendment, all new stock certificates issued by the Company will be
printed using the new name, CBIZ, Inc.
The affirmative vote of a majority of our issued and outstanding common
stock is required to approve the change of the Company's name to "CBIZ, Inc."
Abstentions and broker non-votes will be counted as present for purposes of
determining if a quorum is present but will have the same effect as a negative
vote on the proposal.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR the name change and further
amendment of our Amended and Restated Certificate of Incorporation.
6
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the beneficial ownership of Century common stock
as of March 25, 2005, 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)...................................... 15,241,198(4) 20.0%
Cardinal Capital Management LLC............................. 4,617,199(5) 6.08%
Dimensional Fund Advisors Inc. ............................. 4,209,794(6) 5.54%
Steven L. Gerard............................................ 1,281,654(7) 1.68%
Rick L. Burdick............................................. 150,034(8) *
Gary W. DeGroote............................................ 194,100(9) *
Joseph S. DiMartino......................................... 101,000(10) *
Harve A. Ferrill............................................ 73,500(11) *
Richard C. Rochon........................................... 121,555(12) *
Todd J. Slotkin............................................. 56,000(13) *
Donald V. Weir.............................................. 56,000(14) *
Jerome P. Grisko, Jr. ...................................... 410,965(15) *
Ware H. Grove............................................... 144,600(16) *
Leonard Miller.............................................. 184,244(17) *
Robert O'Byrne.............................................. 522,156(18) *
All directors and executive officers as a group (12
persons).................................................. 3,295,808 4.34%
Total Shares Outstanding 75,924,991
---------------
* Represents less than 1% of total number of outstanding shares.
(1) Except as otherwise indicated in the notes below, the mailing address of
each entity, individual or group named in the table is 6050 Oak Tree
Boulevard, South, Suite 500, Cleveland, Ohio 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 may
include shares purchased in the marketplace, restricted shares, and shares
of common stock that are not outstanding but may be acquired upon exercise
of those options exercisable within 60 days of March 25 2005. All
restricted shares may be voted by the recipient upon award, but
restrictions do not immediately lapse; unrestricted ownership of restricted
stock occurs only upon the lapse of restrictions.
(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 15,250,278 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 Amended and Restated Century Business
Services, Inc. 2002 Stock Incentive Plan (the "Century Option Plan").
(5) The principal address of Cardinal Capital Management, LLC is One Fawcett
Place, Greenwich, CT 06830.
(6) The principal address of Dimensional Fund Advisors, Inc. is 1299 Ocean
Avenue, 11 Floor, Santa Monica, CA 90401.
7
(7) Consists of 15,654 shares of common stock owned of record by Mr. Gerard;
10,000 shares of restricted stock; and options to purchase 1,256,000 shares
of common stock granted to Mr. Gerard under the Century Option Plan.
(8) Consists of 9,034 shares of common stock owned of record by Mr. Burdick,
6,000 shares of restricted stock, and options to purchase 135,000 shares of
common stock granted under the Century Option Plan.
(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; 6,000 shares of restricted stock; and options to purchase 55,000
shares of common stock granted under the Century Option Plan. Gary W.
DeGroote is the son of Michael G. DeGroote, who is the beneficial owner of
greater than 10% of outstanding Century common stock.
(10) Consists of 35,000 shares of common stock owned of record by Mr. DiMartino;
6,000 shares of restricted stock; and options to purchase 60,000 shares of
common stock granted under the Century Option Plan.
(11) Consists of 7,500 shares of common stock owned of record by The Harve A.
Ferrill Trust U/A 12/31/69; 6,000 shares of restricted stock; and options
to purchase 60,000 shares of common stock granted under the Century Option
Plan.
(12) Consists of 55,555 shares of common stock owned of record by WeeZor I
Limited Partnership, a limited partnership controlled by Mr. Rochon; 6,000
shares of restricted stock; and options to purchase 60,000 shares of common
stock granted to Mr. Rochon under the Century Option Plan.
(13) Consists of options to purchase 50,000 shares of common stock granted to
Mr. Slotkin under the Century Option Plan and 6,000 shares of restricted
stock.
(14) Consists of options to purchase 50,000 shares of common stock granted to
Mr. Weir under the Century Option Plan and 6,000 shares of restricted
stock.
(15) Consists of 5,565 shares of common stock owned of record by Mr. Grisko;
8,000 shares of restricted stock; and options to purchase 397,400 shares of
common stock granted under the Century Option Plan.
(16) Consists of 6,000 shares of common stock owned of record by Mr. Grove;
7,000 shares of restricted stock; and options to purchase 131,600 shares of
common stock granted under the Century Option Plan.
(17) 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, 7,000 shares of restricted stock; and options to purchase
63,600 shares of common stock granted under the Century Option Plan.
(18) Consists of 265,546 shares of common stock owned of record by Mr. O'Byrne;
7,000 shares of restricted stock; 42,010 shares of common stock held by
MRCP, L.C., a Missouri Limited Company in which Mr. O'Byrne has a 25%
interest; and options to purchase 207,600 shares of common stock granted
under the Century Option Plan.
DIRECTORS' MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors conducted four regular meetings and one telephonic
meeting during 2004. In addition, there were two unanimous written consents in
lieu of a meeting of the Board of Directors, dated March 10, and April 12, 2004.
Each director attended in person at least 75% of the aggregate of all meetings
of the Board and Committees of the Board, in accordance with the Company's
expectations. The Company does not have a formal policy regarding directors'
attendance at annual stockholders meetings. Nevertheless, the Company strongly
encourages and prefers that directors attend regular and special board meetings
as well as the annual meeting of stockholders in person, although attendance by
teleconference is considered adequate. The Company recognizes that attendance of
the Board members at all meetings may not be possible, and excuses absences for
good cause.
Communication with the Board of Directors. Security holders are permitted
to communicate with the members of the Board by forwarding written
communications to the CBIZ Corporate Secretary at the company's headquarters in
Cleveland. The Corporate Secretary will present all communications, as received
and without screening, to the Board at its next regularly scheduled meeting.
8
Committees of the Board of Directors. The Board of Directors has an Audit
Committee, a Compensation Committee, a Nominating and Governance Committee, and
an Executive Management Committee, all of which were active during 2004. The
Board of Directors has determined that all members of the Audit Committee,
Compensation Committee and Nominating and Governance Committee meet the
definition of "independence" set forth in Rule 4200(a)(15) of the NASDAQ Stock
Market listing standards. The following is a description of the committees of
the Board of Directors:
The members of the Audit Committee are Messrs. Ferrill (Chairman), Rochon,
and Weir. Century's Board of Directors has determined that the Audit Committee
members meet the independence standards set forth in Rule 10A-3(b)(1) of the
Securities Exchange Act of 1934, as amended. In addition, the Board has
determined that Mr. Rochon and Mr. Weir are "audit committee financial experts,"
as that term is defined by the rules and regulations of the Securities and
Exchange Commission (the "SEC"), and meet the financial sophistication
requirements of the NASDAQ Stock Market. The Audit Committee conducted four
regular meetings and nine special telephonic meetings during 2004. In addition,
the Audit Committee acted through one Action in Writing in Lieu of a Meeting of
the Audit Committee. The Audit Committee appoints the Company's independent
registered public accounting firm ("independent accountants" or "independent
auditor") and reviews issues raised by the independent 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 adopted by the Board of Directors, a copy of which is available on the
Investor Relations page of the Company's website, www.cbiz.com, or by writing to
us at Attention: Investor Relations Department, 6050 Oak Tree Boulevard South,
Suite 500, Cleveland, Ohio 44131.
The members of the Compensation Committee are Messrs. DiMartino (Chairman),
Rochon and Slotkin. The Compensation Committee conducted three regular meetings
and one special telephonic meeting during 2004. 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
incentive-compensation plans and equity-based plans. The Charter of the
Compensation Committee is available on the Investor Relations page of the
Company's website, www.cbiz.com, or by writing to us at Attention: Investor
Relations Department, 6050 Oak Tree Boulevard South, Suite 500, Cleveland, Ohio
44131.
The Nominating and Governance Committee was created by the Board on
February 12, 2003, and its duties were established in its Charter adopted at
that time. The members of the Nominating and Governance Committee are Messrs.
Burdick (Chairman), DiMartino, Ferrill, Rochon, Slotkin and Weir. No candidates
were recommended by beneficial owners of more than 5% of the company's voting
common stock within the last year. The Committee conducted one regular meeting
in 2004. The Committee was formed 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's Charter
is available on the Investor Relations page of the Company's website,
www.cbiz.com, or by writing to us at Attention: Investor Relations Department,
6050 Oak Tree Boulevard South, Suite 500, Cleveland, Ohio 44131.
The Committee's process for identifying and evaluating candidates to be
nominated as directors consists of reviewing with the Board the desired
experience, mix of skills and other qualities to assure appropriate Board
composition; conducting candidate searches and inquiries; recommending to the
Board, with the input of the Chief Executive Officer, qualified candidates for
the Board who bring the background, knowledge, experience, skill sets and
expertise that would strengthen the Board; and selecting appropriate candidates
for nomination. The Nominating and Governance Committee and the Board have
determined that a director should have the following characteristics: (1) the
ability to comprehend the strategic goals of the Company and to help guide the
Company towards the accomplishment of those goals; (2) a history of conducting
his/her personal and professional affairs with the utmost integrity and
observing the highest standards of values, character and ethics; (3) the
availability for in-person or telephonic participation in Board or Committee
meetings, as well as the Annual Meeting of stockholders; (4) the willingness to
demand that the Company's officers and employees insist upon honest and ethical
conduct throughout the Company; (5) knowledge of, and experience with regard to
at least some of: loans and securities, including any lending and financing
activities related thereto, public company regulations imposed
9
by the Securities and Exchange Commission and the NASDAQ Stock Market, amongst
others, portfolio and risk management, the major geographic locations within
which the Company operates, sound business practices, accounting and financial
reporting, and one or more of the principal lines of business in which the
Company is engaged; and, (6) the ability to satisfy criteria for independence
established by the Securities and Exchange Commission and the NASDAQ Stock
Market, as they may be amended from time to time.
The Nominating and Governance Committee will consider any candidate
recommended by a stockholder, provided that the stockholder mails a
recommendation to the Corporate Secretary at the Company's Headquarters, prior
to the deadline for Stockholder Proposals, that contains the following: (1) the
recommending stockholder's name and contact information; (2) the candidate's
name and contact information; (3) a brief description of the candidate's
background and qualifications; (4) the reasons why the recommending stockholder
believes the candidate would be well suited for the Board; (5) a statement by
the candidate that the candidate is willing and able to serve on the Board; (6)
a statement by the recommending stockholder that the candidate meets the
criteria established by the Board; and, (7) a brief description of the
recommending stockholder's ownership of common stock of the Company and the term
during which such shares have been held. In making its discretionary
determination whether to nominate a candidate who had been recommended by a
stockholder, the Nominating and Governance Committee will consider, among other
things, (a) the appropriateness of adding another director to the Board, or of
replacing a currently sitting director, (b) the candidate's background and
qualifications, and other facts and circumstances identified in the Committee's
Charter.
The members of the Executive Management Committee are Messrs. Burdick,
Gerard, and Grisko. The Executive Management Committee held one telephonic
meeting and approved sixteen Unanimous Written Consents in Lieu of Meeting of
The Executive Management Committee of Century Business Services, Inc. during
2004. 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
acquisitions or divestitures, the 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 acquisitions or divestments, so long as all members of the Committee
approve the transaction and the total consideration to be paid to or by the
Company in connection with the acquisition or divestiture does not exceed $10
million. The Committee does not have the power or authority of the Board of
Directors to approve or adopt or recommend to the stockholders any action or
matter expressly required by the Delaware General Corporation Law to be
submitted to stockholders 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.
Century has a Code of Professional Conduct and Ethics Guide that applies to
every director, officer, and employee of the Company. The Code of Professional
Conduct and Ethics Guide is available on the Investor Relations page of the
Company's website, www.cbiz.com, or by writing to us at Attention: Investor
Relations Department, 6050 Oak Tree Boulevard South, Suite 500, Cleveland, Ohio
44131.
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 $1,500 for each meeting of the Board of
Directors attended. In addition, directors who are committee members receive a
fee of $1,500 for each committee meeting attended. The Audit Committee Chairman
receives an additional annual grant of $10,000, and remaining committee Chairmen
receive annual grants of $5,000 each. In addition, an annual award of 3,000
shares of restricted stock is awarded to continuing non-employee directors. Upon
appointment, directors receive an immediately exercisable award of 50,000 stock
options.
10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 2004 and continuing
through 2005 are Messrs. DiMartino (Chairman), Rochon and Slotkin. None of
Messrs. DiMartino, Rochon or Slotkin 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 its senior management 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 order to document these purposes, and to keep CBIZ
stockholders apprised of the Committee's goals and duties, the Compensation
Committee has authorized the Company to post the Compensation Committee Charter
on the investor relations portion of the Company's internet website, at
www.cbiz.com.
In the past year the Committee continued its ongoing efforts to assess the
compensation structure of the Company. The Committee again commissioned a
compensation study, similar in scope to that completed in 2003, for the purpose
of identifying compensation adjustments for the Company's officers and senior
management that would further the Committee's goals to maximize stockholder
value and to retain and recruit qualified management and staff. The Committee
implemented additional changes in executive officer and senior management
compensation that were compatible with the findings of the study and consistent
with the Committee's goals.
Compensation Policy Statement
The general CBIZ policy is to pay compensation that is competitive to total
compensation provided at comparable financial service and professional service
firms similar in size and complexity to CBIZ. Compensation paid to individual
officers and senior management will be determined based on the discretionary
judgment of the Compensation Committee with input from 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% and 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 2004 performance, the Committee
11
granted Qualified Performance-Based Awards to a pre-defined group of
senior executives--including the Chief Executive Officer--pursuant to
Section 7 of the Amended and Restated Century Business Services, Inc.
2002 Stock Incentive Plan. The performance goals were based on benchmark
goals tied to the Company's earnings per share from continuing operations
("EPS"). The compensation award amounts for 2004 were based on EPS
targets as well. In 2005, the Committee has adjusted the EPS targets and
award levels for certain senior management in charge of
revenue-generating lines of business. As in 2004, however, if EPS from
continuing operations equals a predetermined target level, each awardee
will receive an amount equal to his or her target award. The award will
be less than the target award if EPS is below the target level, and will
be greater if EPS is above the target. No award will be paid if the 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 restricted 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. In 2004, the Committee
implemented a restricted stock program which the Company is permitted to
maintain under the Amended and Restated Century Business Services, Inc.
2002 Stock Incentive Plan. The long-term objective of CBIZ's stock-based
compensation methodology 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's
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 at continuing
levels of both base and bonus compensation. Both restricted stock and options
were awarded as a result of Mr. Gerard's successes in exceeding the significant
list of goals established by the Committee and the Board. In 2004, a universal
life policy was acquired to replace the prior term life policy.
Executive Compensation Deductibility
Century intends that amounts paid pursuant to Century's compensation plans
generally will 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
Richard C. Rochon
Todd Slotkin
REPORT OF THE AUDIT COMMITTEE
The Board of Directors maintains an Audit Committee comprised of three of
the Company's independent 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).
12
The Audit Committee closely monitors developments in corporate governance,
including those arising from the adoption of the Sarbanes-Oxley Act and rules
related to the Act. The Audit Committee's Charter and the Company's Code of
Professional Conduct and Ethics Guide reflect those portions of the Act and
attendant rules promulgated by the SEC and the NASDAQ Stock Market. The Audit
Committee anticipates that additional changes to its Charter may be necessary
from time to time if the SEC and the NASDAQ Stock Market adopt additional rules
bearing on the duties and activities of the Committee. At the request of the
Audit Committee, the Audit Committee Charter and Code of Professional Conduct
and Ethics Guide have been posted on the Investor Relations portion of the
Company's website, at www.cbiz.com.
The membership of the Audit Committee has not changed since the 2004 Audit
Committee Report. Mr. Ferrill continues as the Committee's Chairman, and both
Mr. Rochon and Mr. Weir continue as "audit committee financial experts," as
defined by the rules and regulations of the SEC, in light of their training,
experience and expertise.
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 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
Committee was very active throughout the year in monitoring management's efforts
to document and assess the Company's internal controls. It held repeated
meetings dedicated solely to monitoring the Company's progress and the
independent accountant's responses in this regard.
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, the effectiveness of internal controls over financial
reporting, 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 received
from the independent auditors required by the Independence Standards Board
Standard No. 1.
The Audit Committee discussed with the both the Company's internal auditor
and independent auditors the overall scope, plans and results of their audit
activities. The Audit Committee meet regularly throughout 2004 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 thirteen meetings during fiscal 2004. The Company
incurred the following fees for services performed by KPMG LLP in fiscal 2004:
Audit Fees
Fees for the fiscal year 2004 audit and the review of Forms 10-Q billed
through December 31, 2004 were $ . Fees for the fiscal year 2003 audit
and the review of Forms 10-Q billed through December 31, 2003 were $582,500.
Fees for the fiscal year 2002 audit and the review of Forms 10-Q billed through
December 31, 2002 were $562,500.
Audit-Related Fees
Audit-related fees of $17,000 were billed for the year ended December 31,
2004. Audit related fees consisted of an audit of the financial statements of
the employee benefit plan. Audit-related fees of $16,000 were billed for the
year ended December 31, 2003. Audit related fees consisted of an audit of the
financial statements
13
of the employee benefit plan. Audit-related fees of $83,500 were billed for the
year ended December 31, 2002. Audit-related fees consisted primarily of an audit
of the financial statements of the employee benefit plan and a SAS 70 internal
control review engagement for a subsidiary.
Tax Fees
Tax fees billed for all other services rendered by KPMG LLP for the year
ended December 31, 2004 were $3,320, representing fees related to tax
compliance. No other tax consulting services were incurred or billed during
fiscal year 2004. Tax fees billed for all other services rendered by KPMG LLP
for the year ended December 31, 2003 were $2,169, representing fees related to
tax compliance. No other tax consulting services were incurred or billed during
fiscal year 2003. Tax fees billed for services rendered by the Company's auditor
for the year ended December 31, 2002 were $18,600, representing fees related to
tax consultation and tax compliance.
All Other Fees
There were no fees billed for professional services by our independent
auditors during fiscal year 2004 or 2003 that are not included in one of the
above categories.
Pursuant to its Charter and the Sarbanes-Oxley Act of 2002, the Audit
Committee is responsible for pre-approving all services performed by the
Company's independent auditors, and certain services may not, under any
circumstances, be performed for the Company by its independent auditors. KPMG,
LLP, the Company's independent auditor, may not be engaged to perform for the
Company, and is prohibited from performing for the Company, any prohibited
service enumerated in the Sarbanes-Oxley Act of 2002, or in any other law or
regulation. In addition, the independent auditor is not permitted to perform
services for the Company, whether associated with audit or non-audit functions,
unless the services to be provided have been approved prior to their performance
by this Committee, except as may otherwise be provided by law or regulation.
However, certain non-prohibited services may be pre-approved by the Audit
Committee Chairman personally in advance of full Audit Committee consideration
and approval, provided, that each engagement total no more than Twenty Thousand
Dollars in fees prior to the next regularly scheduled meeting of the Audit
Committee, at which time the entire Audit Committee is required to consider and
either approve or reject the engagement, provided the engagement otherwise does
not appear reasonably likely to compromise KPMG LLP's independence.
The Audit Committee pre-approved all of the services described above under
Audit Fees, Audit-Related Fees and Tax Fees. 100% of the services described
above under Audit Fees, Audit-Related Fees and Tax Fees were approved by the
Audit Committee pursuant to 17 CFR 210.2-01(c)(7)(i)(C).
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, 2004 for filing with
the Securities and Exchange Commission. The Audit Committee has appointed KPMG
LLP as independent auditors of the Company for the year ending December 31,
2005.
AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS
Harve A. Ferrill, Chairman
Richard C. Rochon
Donald V. Weir
14
EXECUTIVE COMPENSATION
The following table provides a summary of compensation for the Chief
Executive Officer during fiscal year 2004 and the four other most highly
compensated officers who were serving as executives of Century on December 31,
2004.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION AWARDS
-----------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
------------------------ OTHER ANNUAL STOCK UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS OPTIONS
--------------------------- ---- ------- ------- ------------ ---------- ----------
Steven L. Gerard 2004 550,000 308,000(1) 252,768(2) 10,000(3) 30,000(4)
Chief Executive Officer/Chairman 2003 550,000 308,000(1) 125,172(2) 0 0
2002 510,417 300,000(1) 133,165(2) 0 0
Jerome P. Grisko, Jr. 2004 390,000 204,750 6,676(5) 8,000(3) 22,000(4)
President & COO 2003 375,000 150,000 6,611(5) 0 0
2002 350,000 100,000 6,133(5) 0 125,000(6)
Ware H. Grove 2004 310,000 130,200 6,734(5) 7,000(3) 18,000(4)
Sr. Vice President and CFO 2003 285,000 91,200 6,575(5) 0 20,000(7)
2002 260,000 100,000 6,576(5) 0 75,000(6)
Leonard Miller 2004 365,000 135,000 6,150(8) 7,000(3) 18,000(4)
Sr. Vice President 2003 365,000 100,000 6,000(8) 0 0
2002 350,000 100,000 6,440(9) 0 100,000(6)
Robert O'Byrne 2004 365,000 135,000 6,150(8) 7,000(3) 18,000(4)
Sr. Vice President 2003 335,000 132,200 6,439(9) 0 0
2002 300,000 101,000 5,940(9) 0 100,000(6)
---------------
(1) Mr. Gerard's employment agreement specifies a bonus of at least $150,000 per
year.
(2) Includes payment for life insurance policy, commuting costs, automobile
adjustments and employer matching 401(k) contributions.
(3) Consists of restricted shares having restrictions that lapse 33 1/3%
annually beginning May 4, 2007.
(4) Consists of options that vest 20% annually beginning May 4, 2005, and remain
exercisable for a six-year period from date of 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 May 16, 2004, and
remain exercisable for a six-year period from date of grant.
(8) Includes payment for employer matching 401(k) contribution.
(9) Includes payment for insurance premiums and employer matching 401(k)
contributions.
Employment Agreements
Century is a party to employment agreements with Messrs. Gerard, Grisko and
Grove. The employment agreements provide for annual base salaries of at least
$500,000, $300,000 and $240,000, respectively, subject to the adjustment by the
Compensation Committee of the Board of Directors.
Mr. Gerard's contract, executed October 11, 2000, was for an initial term
of three years, with automatic annual one-year extensions beginning on the year
2003 anniversary of the execution of the agreement in the absence of
termination. Mr. Gerard's base salary may be increased by the Board, and for
each of years 2001, 2002 and 2003, the agreement provided for a bonus of at
least $150,000, with bonus increases based upon
15
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. Those options vest in increments of 33 1/3% on
each of the first, second and third anniversaries of the date of the grant; to
date they are all vested. 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, and (3)
avoid disparagement of the company. In 2004, the Compensation Committee of the
Board replaced Mr. Gerard's term life policy with a universal life policy.
Mr. Grisko's contract, executed February 1, 2000, provides for a one-time
bonus of $50,000, and an immediately vested, nonqualified stock option to
acquire at least 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, executed December 12, 2000, 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.
38,000 of the shares underlying the 75,000 share option vested immediately upon
grant. The remaining options vested 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 non-compete, and one-year
employee, customer, and supplier nonsolicitation and noninterference term, and
(4) avoid disparagement of the company.
OPTIONS GRANTED DURING 2004
The following table sets forth as to each of the named executive officers
information with respect to option grants during 2004: (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
16
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 2004.
OPTION GRANTS DURING 2004 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 2004 SHARE DATE GROWTH RATE GROWTH RATE
---------- ---------- --------- ---------- ------------ -------------
Steven L. Gerard...... 30,000 6.48% 4.30 05/04/10 $43,872 $99,531
Jerome P. Grisko...... 22,000 4.75% 4.30 05/04/10 $32,173 $72,990
Ware H. Grove......... 18,000 3.89% 4.30 05/04/10 $26,323 $59,719
Leonard Miller........ 18,000 3.89% 4.30 05/04/10 $26,323 $59,719
Robert D. O'Byrne..... 18,000 3.89% 4.30 05/04/10 $26,323 $59,719
OPTION EXERCISES AND VALUES FOR 2004
The following table sets forth information as to each of the named
executive officers with respect to option exercises during 2004 and the status
of their options at December 31, 2004: (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, 2004
and (4) the aggregate dollar value of in-the-money exercisable and unexercisable
options at December 31, 2004.
AGGREGATED OPTION EXERCISES DURING 2004
AND OPTION VALUES AT DECEMBER 31, 2004
NUMBER OF SECURITIES
NO. OF SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED(1)
ACQUIRED OPTIONS AT IN-THE-MONEY OPTIONS
UPON VALUE DECEMBER 31, 2004 AT DECEMBER 31, 2004
EXERCISE OF REALIZED --------------------------- ---------------------------
NAME OPTION ON EXERCISE EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------- ----------- ----------- ------------- ----------- -------------
Steven L. Gerard..... 0 0 1,250,000 30,000 $3,940,000 $ 1,800
Jerome P. Grisko,
Jr. ............... 0 0 293,000 181,000 $ 497,080 $307,290
Ware H. Grove........ 0 0 109,000 79,000 $ 266,390 $ 65,390
Leonard Miller....... 0 0 82,000 106,000 $ 155,260 $134,920
Robert D. O'Byrne.... 0 0 160,000 132,000 $ 262,960 $197,220
---------------
(1) The In-the-Money values are based on the closing price of the Company stock
as reported on the NASDAQ Stock Market on December 31, 2004, which was
$4.3600.
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 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 $1.3 million, $1.4 million, and $0.8 million
for the years ended 2004, 2003 and 2002, respectively, under such leases which
management believes were at market rates.
17
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
2004, 2003 and 2002 for which the firm received approximately $0.2 million, $0.2
million, and $0.1 million from CBIZ, respectively.
Robert A. O'Byrne, a Senior Vice President, 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 program was in existence at the time CBIZ acquired the former
company, of which Mr. O'Byrne was an owner.
CBIZ maintains joint-referral relationships and administrative service
agreements with independent licensed CPA firms under which CBIZ provides
administrative services in exchange for a fee. These firms are owned by licensed
CPAs who are employed by CBIZ' subsidiaries, and provide audit and attest
services to clients including CBIZ' clients. The CPA firms with which CBIZ
maintains service agreements operate as limited liability corporations, limited
liability partnerships or professional corporations. The firms are separate
legal entities with separate governing bodies and officers. CBIZ has no
ownership interest in any of these CPA firms, and neither the existence of the
administrative service agreements nor the providing of services thereunder is
intended to constitute control of the CPA firms by CBIZ. CBIZ and the CPA firms
maintain their own respective liability and risk of loss in connection with
performance of each of its respective services, and CBIZ does not believe that
its arrangements with these CPA firms result in additional risk of loss.
Although the service agreements do not constitute control, CBIZ is one of
the beneficiaries of the agreements and may bear certain economic risks. As
such, the CPA firms with which CBIZ maintains administrative service agreements
may qualify as variable interest entities under FASB Interpretation No. 46 (FIN
46), "Consolidation of Variable Interest Entities". The impact to CBIZ of this
accounting pronouncement is discussed in the notes to CBIZ' consolidated
financial statements included in the CBIZ Form 10-K filed for the year ended
December 31, 2004.
CBIZ also acted as guarantor on three letters of credit for a CPA firm with
which it has an affiliation. The letters of credit total $1.3 million and $0.7
million as of December 31, 2004, and December 31, 2003, respectively. In
accordance with FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others" and its amendments ("FIN 45-1" and "FIN 45-2"), CBIZ has
recognized a liability for the fair value of the obligations undertaken in
issuing these guarantees, which is recorded as other current liabilities in the
accompanying consolidated financial statements. CBIZ management does not expect
any material changes to result from these instruments as performance is not
expected to be required.
In 2002, CBIZ executed a note receivable with a CPA firm whose partner
group has since joined MHM, PC, a CPA firm with which CBIZ maintains an
administrative services agreement. The balance on the note at December 31, 2004
and 2003 was approximately $0.2 million and $0.2 million, respectively.
CBIZ divested several operations during 2004, 2003, and 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 stockholders. Management believes these
transactions were priced at market rates, competitively bid, and entered into at
arm's length terms and conditions.
18
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
consisting of American Express, Paychex, Brown & Brown, H&R Block, Arthur J.
Gallagher, Ceridian, and Answerthink.inc. The graph assumes the reinvestment of
dividends for the period beginning December 31, 1999 through the year ended
December 31, 2004.
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
---------------- ------- ----------
12/99 100 100 100
12/00 13.33 90.89 109.11
12/01 27.26 80.09 81.79
12/02 31.41 62.39 77.56
12/03 52.97 80.29 105.45
12/04 51.67 89.02 115.9
* $100 invested on 12/31/99 in stock or index-including reinvestment of
dividends. Fiscal year ending December 31.
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 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 2004 fiscal year, its officers, directors
and 10% stockholders complied with all Section 16(a) filing requirements. In
making these statements, Century has relied upon examination of the copies of
Forms 4 provided to the company and the written representations of its directors
and officers.
19
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information about our equity compensation
plans as of December 31, 2004. 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... 8,642,080(1) $3.33 5,346,936
Equity compensation plans
not approved by
shareholders............... 0 0 0
Total...................... 8,642,080 5,346,936
(1) Option and restricted stock awards under the Amended and Restated Century
Business Services, Inc. 2002 Stock Incentive Plan.
STOCKHOLDER PROPOSALS
Any proposals of stockholders intended to be presented at the 2006 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,
2005. It is suggested that proponents submit their proposals by certified mail,
return receipt requested, to the Corporate Secretary at the address provided
below. Pursuant to Rule 14a-4(c)(1) under the Securities Exchange Act of 1934 if
any stockholder proposal intended to be presented at the 2006 Annual Meeting
without inclusion in our proxy statement for such meeting is received at our
principal office after February 16, 2006, 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., 6050 Oak Tree Boulevard
South, Suite 500, 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. Computershare Investor Services, LLC's subsidiary, Georgeson
Shareholder Communications, Inc. ("Computershare") has been retained by Century
to assist in the solicitation of proxies. Computershare, which has a contract to
act as the transfer agent for Century, will not be paid any additional fees for
these services. Georgeson will be reimbursed for its broker search and mailing
expenses. Computershare 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, 2004,
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
31, 2004, 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 6050 OAK TREE BOULEVARD SOUTH,
SUITE 500, CLEVELAND, OHIO 44131.
20
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 8, 2005
21
APPENDIX A
CERTIFICATE OF AMENDMENT
OF THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CENTURY BUSINESS SERVICES, INC.
Century Business Services, Inc. (the "CORPORATION"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware,
DOES HEREBY CERTIFY:
FIRST: The name of the Corporation is Century Business Services, Inc. The
Corporation's original Certificate of Incorporation was filed with the Secretary
of State of the State of Delaware on June 16, 1987. The Corporation amended and
restated its Certificate of Incorporation by filing the Amended and Restated
Certificate of Incorporation with the Secretary of State of the State of
Delaware on August 7, 2000.
SECOND: In accordance with Section 242 of the General Corporation Law of
the State of Delaware, Article One of the Amended and Restated Certificate of
Incorporation is amended to read in its entirety as follows:
The name of the corporation is CBIZ, Inc.
THIRD: This amendment was duly adopted in accordance with the provisions
of Sections 141 and 228 of the General Corporation Law of the State of Delaware.
FOURTH: This Certificate of Amendment shall become effective upon filing
with the Secretary of State of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment as of the 23 day of May, 2005.
------------------------------------
Name: Michael W. Gleespen
Title: Corporate Secretary
A-1
[CBIZ LOGO] NNNNNNNNNNNN +
MMMMMMMMMMMM
000000000.000 ext
000000000.000 ext
000000000.000 ext
MR A SAMPLE 000000000.000 ext
DESIGNATION (IF ANY) 000000000.000 ext
ADD 1 000000000.000 ext
ADD 2 000000000.000 ext
ADD 3
ADD 4
ADD 5
ADD 6 C 1234567890 J N T
NNNNNNNNN !123456564525!
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Mark this box with an X if you have made
[ ] changes to your name or address details above.
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ANNUAL MEETING PROXY CARD
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A ELECTION OF DIRECTORS PLEASE REFER TO THE REVERSE SIDE FOR TELEPHONE AND INTERNET VOTING INSTRUCTIONS.
1. The Board of Directors recommends a vote FOR the listed nominees.
For Withhold
01 - Joseph S. DiMartino [ ] [ ]
02 - Richard C. Rochon [ ] [ ]
03 - Donald V. Weir [ ] [ ]
B ISSUES
The Board of Directors recommends a vote FOR the following proposals.
For Against Abstain
2. To change the corporate name from Century
Business Services, Inc. to CBIZ, Inc. and to [ ] [ ] [ ]
further amend the Amended and Restated Certificate of
Incorporation to record the name change.
3. Upon such other business as may properly come [ ] [ ] [ ]
before said meeting, or any adjournment thereof.
C AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR INSTRUCTIONS TO BE EXECUTED.
NOTE: Please sign EXACTLY as name appears on this card. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee, guardian or corporate officer, please give full title.
Signature 1 - Please keep signature within the box Signature 2 - Please keep signature within the box Date (mm/dd/yyyy)
-------------------------------------------------- -------------------------------------------------- -----------------
/ /
-------------------------------------------------- -------------------------------------------------- -----------------
1 U P X H H H P P P P 0052452 +
001CD40001 00EYCA
------------------------------------------------------------------------------------------------------------------------------------
PROXY - CENTURY BUSINESS SERVICES, INC.
------------------------------------------------------------------------------------------------------------------------------------
2005 ANNUAL MEETING
PARK CENTER PLAZA II
6150 OAK TREE BOULEVARD SOUTH, LOWER LEVEL
CLEVELAND, OHIO 44131
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING - MAY 12, 2005
Rick L Burdick and Harve A. Ferrill or any of them, each with the power of substitution, are hereby authorized to represent and vote
the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting
of Stockholders of Century Business Services, Inc. to be held on May 12, 2005, or at any postponement or adjournment thereof.
Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will
have authority to vote FOR the election of Mr. Joseph S. DiMartino, Mr. Richard C. Rochon and Mr. Donald V. Weir; FOR the
ratification of the name change from Century Business Services, Inc. to CBIZ, Inc.; and FOR Item 3, such other business as may
properly come before the Annual Meeting.
In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
(Continued and to be voted on reverse side.)
TELEPHONE AND INTERNET VOTING INSTRUCTIONS
YOU CAN VOTE BY TELEPHONE OR INTERNET! AVAILABLE 24 HOURS A DAY 7 DAYS A WEEK!
Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.
-------------------------------------------------------- --------------------------------------------------------
[ART] To vote using the Telephone (in the U.S. and Canada) [ART] To vote using the internet
-------------------------------------------------------- --------------------------------------------------------
o Call toll free 1-XXX-XXX-XXXX in the United States or Canada o Go to the following web site:
any time on a touch tone telephone. There is NO CHARGE to WWW.COMPUTERSHARE.COM/US/PROXY
you for the call.
o Follow the simple instructions provided by o Enter the information requested on your computer
the recorded message. screen and follow the simple instructions.
-------
C0123456789 12345
----------- -------
If you vote by telephone or the Internet, please DO NOT mail back this proxy card.
Proxies submitted by telephone or the Internet must be received by 1:00 a.m., Central Time, on XXXXXXX XX, 200X
THANK YOU FOR VOTING
[CBIZ LOGO] NNNNNNNNNNNN +
MMMMMMMMMMMM
000000000.000 ext
000000000.000 ext
000000000.000 ext
MR A SAMPLE 000000000.000 ext
DESIGNATION (IF ANY) 000000000.000 ext
ADD 1 000000000.000 ext
ADD 2 000000000.000 ext
ADD 3
ADD 4
ADD 5
ADD 6 C 1234567890 J N T
NNNNNNNNN !123456564525!
NNNNNN
Mark this box with an X if you have made
[ ] changes to your name or address details above.
------------------------------------------------------------------------------------------------------------------------------------
ANNUAL MEETING PROXY CARD
------------------------------------------------------------------------------------------------------------------------------------
A ELECTION OF DIRECTORS
1. The Board of Directors recommends a vote FOR the listed
nominees.
For Withhold
01-Joseph S. DiMartino [ ] [ ]
02-Richard C. Rochon [ ] [ ]
03-Donald V. Weir [ ] [ ]
B ISSUES
The Board of Directors recommends a vote FOR the following proposals.
For Against Abstain
2. To change the corporate name from Century [ ] [ ] [ ]
Business Services, Inc. to CBIZ, Inc. and to
further amend the Amended and Restated Certificate of
Incorporation to record the name change.
3. Upon such other business as may properly come [ ] [ ] [ ]
before said meeting, or any adjournment thereof.
C AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR INSTRUCTIONS TO BE EXECUTED.
NOTE: Please sign EXACTLY as name appears on this card. When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, guardian or corporate officer, please give full title.
Signature 1 - Please keep signature within the box Signature 2 - Please keep signature within the box Date (mm/dd/yyyy)
-------------------------------------------------- -------------------------------------------------- -------------------
/ /
-------------------------------------------------- -------------------------------------------------- -------------------
1 U P X H H H P P P P 005245 +
001CD40001 00EXNA
------------------------------------------------------------------------------------------------------------------------------------
PROXY - CENTURY BUSINESS SERVICES, INC.
------------------------------------------------------------------------------------------------------------------------------------
2005 ANNUAL MEETING
PARK CENTER PLAZA II
6150 OAK TREE BOULEVARD SOUTH, LOWER LEVEL
CLEVELAND, OHIO 44131
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING - MAY 12, 2005
Rick L Burdick and Harve A. Ferrill or any of them, each with the power of substitution, are hereby authorized to represent and vote
the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting
of Stockholders of Century Business Services, Inc. to be held on May 12, 2005, or at any postponement or adjournment thereof.
Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will
have authority to vote FOR the election of Mr. Joseph S. DiMartino, Mr. Richard C. Rochon and Mr. Donald V. Weir; FOR the
ratification of the name change from Century Business Services, Inc. to CBIZ, Inc.; and FOR Item 3, such other business as may
properly come before the Annual Meeting.
In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
(Continued and to be voted on reverse side.)