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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934: For the fiscal year ended December 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 1-10686
MANPOWER INC.
(Exact name of registrant as specified in its charter)
WISCONSIN 39-1672779
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5301 NORTH IRONWOOD ROAD
MILWAUKEE, WISCONSIN 53217
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 961-1000
Securities registered pursuant to Section 12(b) of the Act:
Name of Exchange on
Title of each class which registered
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Common Stock, $.01 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes X No
----- -----
The aggregate market value of the voting stock held by nonaffiliates of
the registrant was $2,813,069,432 as of June 28, 2002.
The aggregate market value of the voting stock held by nonaffiliates of
the registrant was $2,463,222,283 as of February 18, 2003. As of February 18,
2003, there were 77,241,213 of the registrant's shares of common stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II incorporate information by reference from the Annual
Report to Shareholders for the fiscal year ended December 31, 2002. Part III is
incorporated by reference from the Proxy Statement for the Annual Meeting of
Shareholders to be held on April 29, 2003.
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PART I
The terms "Manpower," "we," "our," "us," or "the Company" refer to
Manpower Inc. or Manpower Inc. and its consolidated subsidiaries, as appropriate
in the context.
ITEM 1. BUSINESS
Introduction and History
We are a global staffing leader delivering high-value staffing and
workforce management solutions worldwide. Through a system wide network of over
3,900 offices in 63 countries, we provide a wide range of human resource
services, including:
- professional, specialized, office and industrial staffing,
- temporary and permanent employee testing, selection, training and
development,
- internal audit, accounting, technology and tax services, and
- organizational-performance consulting.
We provide services to a wide variety of clients, none of which
individually comprise a significant portion of revenues within a given
geographic region or for us as a whole.
We have a comprehensive system of assessment/selection, training and
quality assurance used by our temporary staffing operations throughout the
world. The system has been developed through a combination of internally
designed and produced materials and materials purchased from external companies
through exclusive contracts. Modifications are made, as necessary, to reflect
differences in language, culture and business practices of each region or
country.
We were organized in 1991 as a holding company to acquire Manpower PLC,
which indirectly owned Manpower International Inc. Manpower International Inc.
was our primary operating subsidiary until June 30, 1996, when it was merged
into us. The predecessor of Manpower International Inc. was organized in 1948
and its shares were listed on the New York Stock Exchange in 1962.
Our principal executive offices are located at 5301 North Ironwood
Road, Milwaukee, Wisconsin 53217 (telephone: 414-961-1000).
Our Internet address is www.manpower.com. We make available through our Internet
website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, and amendments to those reports filed or furnished pursuant
to Section 13(a) of the Securities Exchange Act of 1934 as soon as reasonably
practicable after we electronically file such material with, or furnish it to,
the Securities and Exchange Commission.
OUR OPERATIONS
UNITED STATES
In the United States, our operations under the Manpower brand are
carried out through both branch and franchise offices. We had 734 branch and 367
franchise offices in the United States as of December 31, 2002. We provide a
number of central support services to our branches and franchises, which enable
us to maintain consistent service quality throughout the United States
regardless of whether an office is a branch or franchise. We provide customer
invoicing and payroll processing of our temporary employees for all branch
offices and a majority of our franchise offices through our Milwaukee
headquarters.
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Our franchise agreements provide the franchisee with the right to use
the Manpower(R) service mark and associated marks in a specifically defined
exclusive territory. In the United States, franchise fees range from 2-3% of
franchise sales. Our franchise agreements provide that in the event of a
proposed sale of a franchise to a third party, we have the right to repurchase
the franchise at the same price and on the same terms as proposed by the third
party. We frequently exercise this right and intend to continue to do so in the
future if opportunities arise with appropriate prices and terms.
In the United States, our Manpower branch operations are primarily
related to providing temporary employment services. During 2002, approximately
37% of our United States temporary staffing revenues were derived from placing
office staff, including contact center staff, 41% from placing industrial staff
and 22% from placing professional and technical staff.
We also conduct business in the United States under our Jefferson Wells
and Empower brands. These operations are discussed further in the "Other
Operations" section.
FRANCE
We are a leading temporary employment service provider in France. We
conduct our operations in France and the surrounding region through 980 branch
offices under the name of Manpower and 64 branch offices under the name Supplay.
The temporary services market in France is predominately industrial. In
2002, we derived approximately 70% of our revenue in France from the supply of
industrial staff, 15% from the supply of construction workers and 15% from the
supply of office staff.
EUROPE, MIDDLE EAST AND AFRICA (EXCLUDING FRANCE), OR EMEA
We are a leading supplier of human resource services throughout this
region and our largest operations are in the United Kingdom, Italy, Sweden,
Norway, The Netherlands, Germany and Spain. Collectively, we operate through
1,253 branch offices and 55 franchise offices in this region. Our franchise
offices are primarily located in Switzerland, where we own 49% of the franchise.
Manpower UK is a leading supplier of temporary employment services in
the United Kingdom. As of December 31, 2002, Manpower UK conducted operations in
the United Kingdom through a network of 126 branch offices and also by providing
on-site services to clients who have significant temporary staffing
requirements. During 2002, approximately 45% of Manpower UK's revenues were
derived from the supply of office staff, including contact center staff, 36%
from the supply of industrial staff, 10% from the supply of technical staff and
9% from the supply of field engineering solutions.
We also own Brook Street Bureau PLC, or Brook Street, which operates
through a total of 128 branch offices, separate from the Manpower brand. Brook
Street is based in the United Kingdom. Its core business is secretarial, office
and light industrial recruitment, with niche operations in accountancy, finance
and social care recruitment. Brook Street operates as a local network of
branches supported by a national head office and competes primarily with local
or regional independents. Portions of Brook Street's revenues are derived from
the placement of permanent staff, however the substantial majority of their
revenues are generated from temporary placements.
In January 2000, we acquired Elan Group Ltd., or Elan, a leading
provider of IT staffing solutions based in the United Kingdom. Elan operates
through 14 branch offices in the United Kingdom and 36 branch offices throughout
Europe and the Asia Pacific region. During 2002, Elan expanded its service
offerings to an increased number of European countries, and is currently
operating in 16 countries worldwide.
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OTHER OPERATIONS
We operate under the Manpower name through 390 branch offices and 24
franchise offices in the other markets of the world. The largest of these
operations are located in Japan, Australia and Mexico, all of which operate
through branch offices, and Canada, which operates through branch and franchise
offices. Other significant operations are located throughout Central and South
America and Asia. In most of these countries, we primarily supply temporary
workers to the industrial, general office and technical markets.
During 2000, we launched the Empower Group, or Empower, an independent
operating division, that provides organizational performance consulting services
to multi-national corporations worldwide. Empower is headquartered in London and
has over 25 branch offices in 12 countries worldwide. The largest operations are
located in Australia, Norway, Singapore, Sweden, the United Kingdom and the
United States.
During 2001, we acquired Jefferson Wells International, Inc., a
professional services provider of internal audit, accounting, technology and tax
services. It operates through a network of 36 branch offices throughout the
United States and Canada.
COMPETITION
The temporary employment services market throughout the world is highly
competitive and highly fragmented with more than 15,000 firms competing in the
industry throughout the world. In addition to us, the largest publicly owned
companies specializing in temporary employment services are Adecco, S.A.
(Switzerland), Vedior N.V. (Netherlands), Randstad Holding N.V. (Netherlands)
and Kelly Services, Inc. (U.S.).
Historically, in periods of economic prosperity, the number of firms
operating in the temporary staffing industry has increased significantly due to
the combination of a favorable economic climate and low barriers to entry.
Recessionary periods generally result in a reduction in the number of
competitors through consolidation and closures; however, historically this
reduction has proven to be for a limited time as the following periods of
economic recovery have led to a return in growth in the number of competitors.
In the temporary staffing industry, competition is often limited to
firms with offices located within a client's particular local market because
temporary employees (aside from certain employees in the professional services
segment) are generally unwilling to travel long distances. In most major
markets, competitors generally include many of the publicly traded companies and
numerous regional and local competitors, some of which may operate only in a
single market. Governmental entities or agencies, such as state employment
offices in the United Kingdom and many European countries may also compete in
some markets.
Since client companies rely on temporary employment firms having
offices within the local area in which they operate, competition varies from
market-to-market and country-to-country. In most areas, no single company has a
dominant share of the market. Many client companies use more than one temporary
employment services provider; however, in recent years, the practice of using a
limited number of temporary suppliers, a sole temporary supplier or a primary
supplier has become increasingly important among the largest clients. These sole
supplier relationships can have a significant impact on our revenue and
operating profit growth as volume reductions by such clients, whether related to
economic factors or otherwise, could have an adverse effect on our results in
any period.
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METHODS OF COMPETITION
Temporary staffing firms act as intermediaries in matching available
temporary workers to employer assignments. As a result, temporary staffing firms
compete both to recruit and retain a supply of workers and to attract clients to
employ temporary employees. Competition is generally limited to firms having
offices located in a specific local geographic market. Depending on the economy
of a particular market at any point in time, it may be necessary for us to place
greater emphasis on recruitment and retention of temporary workers or marketing
to clients. We recruit temporary workers through a wide variety of means,
principally personal referrals and advertisements and by providing an attractive
compensation package in jurisdictions where such benefits are not otherwise
required by law, including health insurance, vacation and holiday pay, incentive
and pension plans and a recognition program. We also use certain online
resources, through structured relationships, to help in our recruiting efforts.
Methods used to market temporary services to clients vary depending on
the client's perceived need for temporary workers, the local labor supply, the
length of assignment and the number of workers required. Depending on these
factors, we compete by means of quality of service provided, scope of service
offered and price. In the temporary staffing industry, quality is measured
primarily by the ability to effectively match an individual worker to a specific
assignment, as well as the rate of and promptness in filling an order. Success
in providing a high quality service is a function of the ability to access a
large supply of available temporary workers, select suitable individuals for a
particular assignment and, in some cases, train available workers in skills
required for an assignment.
An important aspect in the selection of a temporary worker for an
assignment is the ability of the temporary services firm to identify the skills,
knowledge, abilities, and personal characteristics of a temporary worker and
match their competencies or capabilities to an employer's requirements. We have
developed a variety of proprietary programs for identifying and assessing the
skill level of our temporary workers, which are used in selecting a particular
individual for a specific assignment. The programs include:
- Ultraskill(R)--for clerical skills,
- Sureskill -- for office automation skills such as word processing,
spreadsheet, and presentation graphics,
- Ultradex -- for several important light industrial skills,
- Predicta -- for critical general office skills,
- Teleskill -- for customer service and contact center skills,
- Linguaskill -- for language skills, and
- Phoneskill -- for verbal communication skills.
We have a strategic alliance with SHL Group PLC, or SHL, a leading
provider of psychometric testing products and related services for employee
selection, assessment and development. SHL is based in the United Kingdom and
its products are assisting us in expanding the level and range of services
provided to our clients.
We believe that our assessment systems enable us to offer a higher
quality service by increasing productivity, decreasing turnover and reducing
absenteeism.
It is also important to be able to access a large network of skilled
workers and to be able to "create" certain hard-to-find skills by offering
training to available workers. Our competitive position is enhanced by our being
able to offer a wide variety of skills, in some of the most important market
segments for temporary work, through the use of training systems.
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We have developed the Global Learning Center, or GLC, an on-line
university for our permanent employees and temporary workers. The GLC provides
skills training, assessment and other career-related services. Students of the
GLC have access to Skillware(R) training, which trains office workers on over 50
different applications from a variety of developers including Microsoft and
Lotus. Skillware(R) training is also available to prepare workers for positions
in contact centers, banks and other organizations where transaction processing
skills are required, and to improve general office skills such as spelling,
punctuation and keyboard skills. Students can also select from more than 1,500
courses in the areas of client server, programming, Internet development, and
business skills. The training prepares technical employees for certification
testing by guiding them through E-Commerce, Visual Basic, C++ Programming,
COBOL, JAVA, SAP, PowerBuilder, IEEE LAN Architecture and more. This training is
available in a number of different languages, including English, Finnish,
French, German, Greek, Italian, Japanese, Portuguese and Spanish.
We continue to evolve a thoughtful and comprehensive approach to our
web-based service offerings for candidates, employees, clients and prospective
clients. In doing so, we continue to evaluate the need to enhance existing
services or products, develop new products, or enter into key strategic
relationships with outside providers to offer optimal value propositions in our
market segments.
We currently use and offer UltraSource and the next generation of the
product, UltraSource 02, which are proprietary, Internet-based comprehensive
order management systems. These advanced web-based tools provide efficiency to
our major clients, subcontractors and internal operations by managing the order
workflow.
Although temporary staffing firms compete in a local market, for
administrative purposes, the largest clients demand national, and increasingly
global, arrangements. A large national or multi-national client will frequently
enter into non-exclusive arrangements with several firms, with the ultimate
choice among them being left to its local managers; this effectively limits
competition to the few firms, including us, with large branch networks. National
and multi-national arrangements, which generally have agreed-upon pricing or
mark-up on services performed, represented approximately 50% of our sales in
2002.
REGULATION
The temporary employment services industry is closely regulated in all
of the major markets in which we operate, except the United States and Canada.
Temporary employment service firms are generally subject to one or more of the
following types of government regulation:
- regulation of the employer/employee relationship between the firm
and its temporary employees,
- registration, licensing, record keeping and reporting requirements,
and
- substantive limitations on the operations or the use of temporary
employees by clients.
In many markets, the existence or absence of collective bargaining
agreements with labor organizations has a significant impact on our operations
and the ability of clients to use our services. In some markets, labor
agreements are structured on an industry-wide, rather than company-by-company,
basis. Changes in these collective labor agreements have occurred in the past
and are expected to occur in the future and may have a material impact on the
operations of temporary employment services firms, including us.
In many countries, including the United States and the United Kingdom,
temporary employment services firms are considered the legal employers of
temporary workers. Therefore, laws regulating the employer/employee
relationship, such as tax withholding or reporting, social security or
retirement, anti-discrimination and workers' compensation, govern the firm. In
other countries, temporary employment services firms, while not the direct legal
employer of temporary workers, are still responsible for collecting taxes and
social security deductions and transmitting such amounts to the taxing
authorities.
In many countries, particularly in continental Europe, entry into the
temporary employment market is restricted by the requirement to register with,
or obtain licenses from, a government agency. In addition, a wide variety of
ministerial requirements may be imposed, such as record keeping, written
contracts and reporting. The United States and Canada do not presently have any
form of national registration or licensing requirement.
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In addition to licensing or registration requirements, many countries
impose substantive restrictions on the use of temporary employment services.
Such restrictions include regulations affecting the types of work permitted, the
maximum length of a temporary assignment, wage levels or reasons for which
temporary workers may be employed. In some countries special taxes, fees or
costs are imposed in connection with the use of temporary workers. For example,
in France, temporary workers are entitled to a 10% allowance for the uncertain
duration of employment, which is eliminated if a full-time position is offered
to them within three days. In some countries, the contract of employment with
the temporary employee must differ from the length of assignment.
In the United States, we are subject to various federal and state laws
relating to franchising, principally the Federal Trade Commission's Franchise
Rules and analogous state laws. These laws and related rules and regulations
impose specific disclosure requirements. Virtually all states also regulate the
termination of franchises.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Legal Regulations" which is found in our 2002 Annual
Report to Shareholders and which is incorporated herein by reference.
TRADEMARKS
We maintain a number of registered trademarks, trade names and service
marks in the United States and certain other countries. We believe that many of
these marks and trade names, including Manpower(R), Ultraskill(R) and
Skillware(R), have significant value and are materially important to our
business. In addition, we maintain other intangible property rights.
EMPLOYEES
We had approximately 21,400 full-time equivalent employees as of
December 31, 2002. In addition, we estimate that we assign approximately 1.6
million temporary workers on a worldwide basis each year.
As described above, in most jurisdictions, we, as the employer of our
temporary workers or as otherwise required by applicable law, are responsible
for employment administration. This administration includes collection of
withholding taxes, employer contributions for social security or its equivalent
outside the United States, unemployment tax, workers' compensation and fidelity
and liability insurance, and other governmental requirements imposed on
employers. In most jurisdictions where such benefits are not legally required,
including the United States, we provide health and life insurance, paid holidays
and paid vacations to qualifying temporary employees.
FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
Note 15 to our consolidated financial statements sets forth the
revenues, operating unit profit and identifiable assets derived from each
segment and geographical area for the years ended December 31, 2002, 2001 and
2000. Such note is found in our 2002 Annual Report to Shareholders and is
incorporated herein by reference.
ITEM 2. PROPERTIES
Our international headquarters are in Glendale, Wisconsin, a suburb of
Milwaukee. We own, free of any material encumbrances, an 82,000 square foot
building and a 32,000 square foot building situated on a sixteen-acre site in
Glendale, Wisconsin. We also own additional properties at various other
locations, which are not material.
Most of our operations are conducted from leased premises and we do not
anticipate any difficulty in renewing these leases or in finding alternative
sites in the ordinary course of business.
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ITEM 3. LEGAL PROCEEDINGS
We are involved in litigation of a routine nature and various legal
matters, which are being defended and handled in the ordinary course of
business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
EXECUTIVE OFFICERS OF MANPOWER
NAME OF OFFICER OFFICE
Jeffrey A. Joerres Chairman of Manpower since May, 2001, and
Age 43 President and Chief Executive Officer
of Manpower since April, 1999. Senior Vice
President--European Operations and Marketing
and Major Account Development of Manpower from
July, 1998 to April, 1999. Senior Vice
President--Major Account Development of
Manpower from November, 1995 to July, 1998. A
director of Artisan Funds, Inc. and Johnson
Controls Inc. A director of Manpower since
April, 1999. An employee of Manpower since
July 1993.
Michael J. Van Handel Executive Vice President, Chief Financial
Age 43 Officer and Secretary of Manpower since
April, 2002. Senior Vice President, Chief
Financial Officer and Secretary of Manpower
from August, 1999 to April, 2002. Senior Vice
President, Chief Financial Officer, Treasurer
and Secretary of Manpower from July, 1998 to
August, 1999. Vice President, Chief Accounting
Officer and Treasurer of Manpower from
February, 1995 to July, 1998. An employee of
Manpower since May, 1989.
Barbara J. Beck Executive Vice President of Manpower - United
Age 42 States and Canadian Operations since January,
2002. Independent consultant from August, 2000
to January, 2002. Area Vice President and
General Manager of United States - West for
Sprint Corporation from February, 1996 to
August, 2000. An employee of Manpower since
January, 2002.
Jean-Pierre Lemonnier Executive Vice President of Manpower and
Age 44 President of Manpower France since April,
2002. Managing Director of Manpower France
from March, 2002 to April, 2002. Director of
Operations, Manpower France from April, 1998
to March, 2002. An employee of Manpower since
April, 1998.
Yoav Michaely Executive Vice President and Managing Director
Age 46 of Other Europe, Middle East and Africa for
Manpower since April, 2002. Senior Vice
President of Manpower and Managing Director -
European Region from December, 1999 to April,
2002. Regional Director - Southern Europe from
September, 1996 to December, 1999. An employee
of Manpower since 1985.
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OTHER INFORMATION
The Audit Committee of our Board of Directors has approved the
following non-audit services performed for us by our independent accountants,
PricewaterhouseCoopers LLP during 2002:
(a) assistance in the preparation and filing of certain international
tax returns;
(b) federal, state and international tax planning strategies;
(c) audits of our employee benefit plans;
(d) assistance with filing a claim for an excise tax refund;
(e) assistance with employment and staffing matters in various
countries;
(f) quality assurance services related to our generation of
remuneration survey data; and
(g) additional non-audit services that are permitted under our policy
regarding non-audit services and that do not involve payments in
excess of $50,000 in the aggregate.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The information required by this Item is set forth in our Annual Report
to Shareholders for the fiscal year ended December 31, 2002, under the heading
"Quarterly Data" (page 71) and "Corporate Information" (page 74), which
information is hereby incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is set forth in our Annual Report
to Shareholders for the fiscal year ended December 31, 2002, under the heading
"Selected Financial Data" (page 73), which information is hereby incorporated
herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this Item is set forth in our Annual Report
to Shareholders for the fiscal year ended December 31, 2002, under the headings
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Financial Measures" (pages 30 to 43 and page 72), which
information is hereby incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this Item is set forth in our Annual Report
to Shareholders for the fiscal year ended December 31, 2002, under the heading
"Significant Matters Affecting Results of Operations" (pages 40 to 42), which
information is hereby incorporated herein by reference.
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FORWARD-LOOKING STATEMENTS
Statements made in this report that are not statements of historical
fact are forward-looking statements. In addition, from time to time, we and our
representatives may make statements that are forward-looking. All
forward-looking statements involve risks and uncertainties. This section
provides you with cautionary statements identifying, for purposes of the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995,
important factors that could cause our actual results to differ materially from
those contained in forward-looking statements made in this report or otherwise
made by us or on our behalf. You can identify these forward-looking statements
by forward-looking words such as "expect", "anticipate", "intend", "plan",
"may", "will", "believe", "seek", "estimate", and similar expressions. You are
cautioned not to place undue reliance on these forward-looking statements.
The following are some of the factors that could cause actual results
to differ materially from estimates contained in our forward-looking statements:
- material changes in the demand from larger clients, including
clients with which we have national, multi-national, or
sole-supplier arrangements
- availability of temporary workers or workers with the skills
required by clients
- increases in the wages paid to temporary workers
- competitive market pressures, including pricing pressures
- our ability to successfully expand into new markets or offer new
service lines
- our ability to successfully invest in and implement information
systems
- unanticipated technological changes, including obsolescence or
impairment of information systems
- changes in client attitudes toward the use of staffing services
- government, tax or regulatory policies adverse to the employment
services industry
- general economic conditions in domestic and international markets
- interest rate and exchange rate fluctuations
- difficulties related to acquisitions, including integrating the
acquired companies and achieving the expected benefits
- impairments to the carrying value of acquisitions and other
investments resulting from poor financial performance
- factors disclosed below
- other factors that may be disclosed from time to time in our SEC
filings or otherwise
Some or all of these factors may be beyond our control. We caution you
that any forward-looking statement reflects only our belief at the time the
statement is made. We undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which the
statement is made.
ANY SIGNIFICANT ECONOMIC DOWNTURN COULD RESULT IN OUR CLIENTS USING
FEWER TEMPORARY EMPLOYEES, WHICH WOULD MATERIALLY ADVERSELY AFFECT OUR BUSINESS.
Because demand for temporary personnel services is sensitive to changes
in the level of economic activity, our business may suffer during economic
downturns. As economic activity begins to slow down, companies tend to reduce
their use of temporary employees before undertaking layoffs of their regular
employees, resulting in decreased demand for temporary personnel. Significant
declines in demand, and thus in revenues, can result in expense de-leveraging
which would result in lower profit levels.
THE WORLDWIDE STAFFING SERVICES INDUSTRY IS HIGHLY COMPETITIVE WITH
LIMITED BARRIERS TO ENTRY, WHICH COULD LIMIT OUR ABILITY TO MAINTAIN OR INCREASE
OUR MARKET SHARE OR PROFITABILITY.
The worldwide staffing services market is highly competitive with
limited barriers to entry, and in recent years has been undergoing significant
consolidation. We compete in markets throughout North America, South America,
Europe, Australia and Asia with full-service and specialized temporary service
agencies. Several of our competitors, including Adecco S.A., Vedior N.V.,
Randstad Holding N.V. and Kelly Services, Inc., have very substantial marketing
and financial resources. Price competition in the staffing industry is intense
and pricing pressures from competitors and clients are increasing. We expect
that the level of competition will remain high in the future, which could limit
our ability to maintain or increase our market share or profitability.
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GOVERNMENT REGULATIONS MAY RESULT IN PROHIBITION OR RESTRICTION OF
CERTAIN TYPES OF EMPLOYMENT SERVICES OR THE IMPOSITION OF ADDITIONAL LICENSING
OR TAX REQUIREMENTS THAT MAY REDUCE OUR FUTURE EARNINGS.
In many jurisdictions in which we operate, such as France, Germany and
Japan, the temporary employment industry is heavily regulated. For example,
governmental regulations in Germany restrict the length of contracts of
temporary employees and the industries in which temporary employees may be used.
In some countries, special taxes, fees or costs are imposed in connection with
the use of temporary workers. For example, temporary workers in France are
entitled to a 10% allowance for the precarious nature of employment, which is
eliminated if a full-time position is offered to them within three days. The
countries in which we operate may:
- create additional regulations that prohibit or restrict the types
of employment services that we currently provide;
- impose new or additional benefit requirements;
- require us to obtain additional licensing to provide staffing
services; or
- increase taxes, such as sales or value-added taxes, payable by
the providers of staffing services.
Any future regulations that make it more difficult or expensive for us to
continue to provide our staffing services may have a material adverse effect on
our financial condition, results of operations and liquidity.
OUR ACQUISITION STRATEGY MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS.
We acquired Elan Group Limited in 2000 for a total purchase price of
$146.2 million and we acquired Jefferson Wells International, Inc. in 2001 for a
purchase price of $174.0 million. In addition, we acquired and invested in other
companies during 2002 for a total consideration of $55.4 million, $33.5 million
of which was paid in cash. We may make acquisitions in the future. Our
acquisition strategy involves significant risks, including:
- difficulties in the assimilation of the operations, services and
corporate culture of acquired companies;
- over-valuation by us of acquired companies;
- insufficient indemnification from the selling parties for legal
liabilities incurred by the acquired companies prior to the
acquisitions; and
- diversion of management's attention from other business concerns.
In addition, future acquisitions would likely result in the incurrence
of additional debt or dilution, contingent liabilities, an increase in interest
expense and amortization expenses related to separately identified intangible
assets. In addition, possible impairment losses on goodwill and restructuring
charges could occur. Any of these items could have a material adverse effect on
our financial condition, results of operations and liquidity. For all of these
reasons, any future acquisitions or failure to effectively integrate acquired
companies could materially adversely affect our business.
11
OUR SUCCESS DEPENDS UPON OUR ABILITY TO ATTRACT, TRAIN AND RETAIN
QUALIFIED PERSONNEL.
We depend on our ability to attract and retain qualified temporary
personnel who possess the skills and experience necessary to meet the staffing
requirements of our clients. We must continually evaluate and upgrade our base
of available qualified personnel through recruiting and training programs to
keep pace with changing client needs and emerging technologies. Competition for
individuals with proven professional skills, particularly employees with
accounting and technological skills, is intense, and we expect demand for such
individuals to remain very strong for the foreseeable future. Qualified
personnel may not be available to us in sufficient numbers and on terms of
employment acceptable to us. Developing and implementing training programs
require significant expenditures and may not result in the trainees developing
effective or adequate skills. We may not be able to develop training programs to
respond to our clients' changing needs or retain employees who we have trained.
The failure to recruit, train and retain qualified temporary employees could
materially adversely affect our business.
WE MAY BE EXPOSED TO EMPLOYMENT-RELATED CLAIMS AND COSTS AND OTHER
LITIGATION THAT COULD MATERIALLY ADVERSELY AFFECT OUR BUSINESS, FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
We are in the business of employing people and placing them in the
workplaces of other businesses. Risks relating to these activities include:
- claims of misconduct or negligence on the part of our employees;
- claims by our employees of discrimination or harassment directed
at them, including claims relating to actions of our clients;
- claims related to the employment of illegal aliens or unlicensed
personnel;
- payment of workers' compensation claims and other similar claims;
- violations of wage and hour requirements;
- retroactive entitlement to employee benefits;
- errors and omissions of our temporary employees, particularly in
the case of professionals, such as accountants; and
- claims by our clients relating to our employees' misuse of client
proprietary information, misappropriation of funds, other
criminal activity or torts or other similar claims.
We may incur fines and other losses or negative publicity with respect
to these problems. In addition, some or all of these claims may give rise to
litigation, which could be time-consuming to our management team and costly and
could have a negative impact on our business. We cannot assure you that we will
not experience these problems in the future or that our insurance will be
sufficient in amount or scope to cover any of these types of liabilities.
We cannot assure you that our insurance will cover all claims that may
be asserted against us. Should the ultimate judgments or settlements exceed our
insurance coverage, they could have a material effect on our results of
operations, financial position and cash flows. We also cannot assure you that we
will be able to obtain appropriate types or levels of insurance in the future or
that adequate replacement policies will be available on acceptable terms, if at
all.
12
IF WE LOSE OUR KEY PERSONNEL, THEN OUR BUSINESS MAY SUFFER.
Our operations are dependent on the continued efforts of our officers
and executive management. In addition, we are dependent on the performance and
productivity of our local managers and field personnel. Our ability to attract
and retain business is significantly affected by local relationships and the
quality of service rendered. The loss of those key officers and members of
executive management who have acquired significant experience in operating a
staffing service on an international level may cause a significant disruption to
our business. Moreover, the loss of our key managers and field personnel may
jeopardize existing client relationships with businesses that continue to use
our staffing services based upon past relationships with these local managers
and field personnel. The loss of such key personnel could materially adversely
affect our operations, including our ability to establish and maintain client
relationships.
FOREIGN CURRENCY FLUCTUATIONS MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR
OPERATING RESULTS.
We conduct our operations in 63 countries and the results of our local
operations are reported in the applicable foreign currencies and then translated
into U.S. Dollars at the applicable foreign currency exchange rates for
inclusion in our consolidated financial statements. During 2002, approximately
80% of our revenues were generated outside of the United States, the majority of
which were generated in Europe. Furthermore, approximately $567 million of our
outstanding indebtedness as of December 31, 2002 was denominated in foreign
currencies. Because of devaluations and fluctuations in currency exchange rates
or the imposition of limitations on conversion of foreign currencies into U.S.
Dollars, we are subject to currency translation exposure on the profits of our
operations, in addition to economic exposure. This risk could have a material
adverse effect on our business, financial condition, cash flow and results of
operations in the future.
AS OF DECEMBER 31, 2002, WE HAD APPROXIMATELY $821.8 MILLION OF TOTAL
DEBT. THIS LEVEL OF DEBT COULD ADVERSELY AFFECT OUR OPERATING FLEXIBILITY AND
PUT US AT A COMPETITIVE DISADVANTAGE.
Our level of debt and the limitations imposed on us by our credit
agreements could have important consequences for investors, including the
following:
- we will have to use a portion of our cash flow from operations
for debt service rather than for our operations;
- we may not be able to obtain additional debt financing for future
working capital, capital expenditures or other corporate purposes
or may have to pay more for such financing;
- some or all of the debt under our current or future revolving
credit facilities may be at a variable interest rate, making us
more vulnerable to increases in interest rates;
- we could be less able to take advantage of significant business
opportunities, such as acquisition opportunities, and to react to
changes in market or industry conditions;
- we will be more vulnerable to general adverse economic and
industry conditions; and
- we may be disadvantaged compared to competitors with less
leverage.
The terms of our revolving credit facilities permit additional
borrowings, subject to certain conditions. If new debt is added to our current
debt levels, the related risks we now face could intensify.
13
We expect to obtain the money to pay our expenses, to repay borrowings
under our credit facilities and to repay our other debt primarily from our
operations. Our ability to meet our expenses thus depends on our future
performance, which will be affected by financial, business, economic and other
factors. We are not able to control many of these factors, such as economic
conditions in the markets where we operate and pressure from competitors. The
money we earn may not be sufficient to allow us to pay principal and interest on
our debt and to meet our other debt obligations. If we do not have enough money,
we may be required to refinance all or part of our existing debt, sell assets or
borrow additional funds. We may not be able to take such actions on terms that
are acceptable to us, if at all. In addition, the terms of our existing or
future debt agreements, including the revolving credit facilities and our
indentures, may restrict us from adopting any of these alternatives.
OUR FAILURE TO COMPLY WITH RESTRICTIVE COVENANTS UNDER OUR REVOLVING
CREDIT FACILITIES OR A FAILURE TO MAINTAIN AN "INVESTMENT GRADE" RATING ON OUR
DEBT COULD TRIGGER PREPAYMENT OBLIGATIONS.
Our failure to comply with the restrictive covenants under our
revolving credit facilities could result in an event of default, which, if not
cured or waived, could result in us being required to repay these borrowings
before their due date. If we are forced to refinance these borrowings on less
favorable terms, our results of operations and financial condition could be
adversely affected by increased costs and rates.
Certain of our financing agreements require us to maintain "investment
grade" credit ratings on our debt. As of February 25, 2003, we had such ratings
from Standard and Poors and Moody's Investors Service. If our ratings were
lowered, our accounts receivable securitization facility would need to be
re-negotiated or would no longer be available. In addition, a lowering of our
credit ratings could result in a portion or all of our zero-coupon convertible
debentures being converted into shares of our common stock.
THE HOLDERS OF OUR ZERO-COUPON CONVERTIBLE DEBENTURES COULD REQUIRE US
TO PURCHASE THE DEBENTURES.
The terms of the zero-coupon convertible debentures give holders of the
debentures the option to require us to purchase the debentures at the issue
price plus accreted original issue discount. Such holders can exercise this
option on the first, third, fifth, tenth, and fifteenth anniversary dates. The
next such option date is August 17, 2004. If the option were exercised, we would
be required to purchase all or a portion of the debentures through the issuance
of common stock, with available cash, or by financing the purchase using other
available facilities.
OUR ABILITY TO SERVICE OUR DEBT IS DEPENDENT ON THE PERFORMANCE OF OUR
SUBSIDIARIES.
Since we conduct a significant portion of our operations through our
subsidiaries, our cash flow and our consequent ability to service our debt
depends in part upon the earnings of our subsidiaries and the distribution of
those earnings, or upon loans or other payments of funds by those subsidiaries,
to us. The payment of dividends and the making of loans and advances to us by
our subsidiaries may be subject to statutory or contractual restrictions, depend
upon the earnings of those subsidiaries and be subject to various business
considerations.
THE PRICE OF OUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY, WHICH MAY
RESULT IN LOSSES FOR INVESTORS.
The market price for our common stock has been and may continue to be
volatile. For example, during the fiscal year ended December 31, 2002, the
prices of our common stock as reported on the New York Stock Exchange ranged
from a high of $42.97 to a low of $25.00. Our stock price can fluctuate as a
result of a variety of factors, including factors listed in these "Risk Factors"
and others, many of which are beyond our control. These factors include:
- actual or anticipated variations in our quarterly operating
results;
- announcement of new services by us or our competitors;
- announcements relating to strategic relationships or
acquisitions;
- changes in financial estimates or other statements by securities
analysts; and
- changes in general economic conditions.
Because of this volatility, we may fail to meet the expectations of our
shareholders or of securities analysts, and our stock price could decline as a
result.
14
PROVISIONS OF WISCONSIN LAW AND OUR ARTICLES OF INCORPORATION AND
BYLAWS CONTAIN PROVISIONS THAT COULD MAKE THE TAKEOVER OF US MORE DIFFICULT.
Certain provisions of Wisconsin law and our articles of incorporation
and bylaws could have the effect of delaying or preventing a third party from
acquiring us, even if a change in control would be beneficial to our
shareholders. These provisions of our articles of incorporation and bylaws
include:
- providing for a classified board of directors with staggered,
three-year terms;
- permitting removal of directors only for cause;
- providing that vacancies on the board of directors will be filled
by the remaining directors then in office; and
- requiring advance notice for shareholder proposals and director
nominees.
In addition, the Wisconsin control share acquisition statute and
Wisconsin's "fair price" and "business combination" provisions limit the ability
of an acquiring person to engage in certain transactions or to exercise the full
voting power of acquired shares under certain circumstances. These provisions
and other provisions of Wisconsin law could make it more difficult for a third
party to acquire us, even if doing so would benefit our shareholders. As a
result, offers to acquire us, which represent a premium over the available
market price of our common stock, may be withdrawn or otherwise fail to be
realized. The provisions described above could cause our stock price to decline.
NOTICE REGARDING CONSENT OF ARTHUR ANDERSEN LLP
Arthur Andersen LLP was formerly our independent auditor.
Representatives of Arthur Andersen LLP are not available to consent to the
incorporation by reference of their report contained in this Annual Report into
our registration statements on Form S-3, Form S-4 and Form S-8, and we have
dispensed with the requirement to file their consent in reliance upon Rule 473a
of the Securities Act of 1933. Because Arthur Andersen LLP has not consented to
the incorporation by reference of their report into these registration
statements, purchasers of stock under these registration statements will not be
able to recover against Arthur Andersen LLP under Section 11 of the Securities
Act of 1933 for any untrue statements of a material fact contained in the
financial statements audited by Arthur Andersen LLP that are incorporated by
reference into these registration statements or any omissions of material fact
required to be stated therein.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is set forth in the financial
statements and the notes thereto (pages 44 to 71) contained in our Annual Report
to Shareholders for the fiscal year ended December 31, 2002, which information
is hereby incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
As previously disclosed, on April 10, 2002, we dismissed Arthur
Andersen LLP as our independent public accountants and appointed
PricewaterhouseCoopers LLP as our new independent accountants. The decision to
dismiss Arthur Andersen and to retain PricewaterhouseCoopers was recommended by
our Audit Committee and approved by our Board of Directors.
Arthur Andersen's reports on our consolidated financial statements for
each of the years ended December 31, 2001 and 2000 did not contain any adverse
opinion or disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles.
15
During the years ended December 31, 2001 and 2000, and the subsequent
interim period through April 10, 2002, there were no disagreements between us
and Arthur Andersen on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to Arthur Andersen's satisfaction, would have
caused them to make reference to the subject matter of the disagreement in
connection with their report.
None of the reportable events described in Item 304(a)(1)(v) of
Regulation S-K occurred during the years ended December 31, 2001 and 2000 or
during the subsequent interim period through April 10, 2002.
We provided Arthur Andersen with a copy of the foregoing disclosures. A
copy of Arthur Andersen's letter dated April 16, 2002, stating their agreement
with such statements is attached as Exhibit 16.1 of our Current Report on Form
8-K filed with the Securities and Exchange Commission on April 16, 2002.
During the years ended December 31, 2001 and 2000, and the subsequent
interim period through April 10, 2002, we did not consult with
PricewaterhouseCoopers regarding any of the matters or events set forth in Item
304(a)(2)(i) and (ii) of Regulation S-K.
16
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Executive Officers. Reference is made to "Executive Officers
of Manpower" in Part I after Item 4.
(b) Directors. The information required by this Item is set forth
in our Proxy Statement for the Annual Meeting of Shareholders
to be held on April 29, 2003 at pages 3 to 4 under the caption
"Election of Directors," which information is hereby
incorporated herein by reference.
(c) The board of directors has determined that Edward J. Zore,
chairman of the audit committee, is an "audit committee
financial expert." Mr. Zore is "independent" as that term is
used in Item 7(d)(3)(iv) of Schedule 14A under the Securities
Exchange Act of 1934.
(d) Section 16 Compliance. The information required by this Item
is set forth in our Proxy Statement for the Annual Meeting of
Shareholders to be held on April 29, 2003 at pages 27 to 28
under the caption "Section 16(a) Beneficial Ownership
Reporting Compliance," which information is hereby
incorporated herein by reference.
(e) We have adopted a Code of Business Conduct and Ethics that
applies to our directors, officers and employees, including
our principal executive officer, principal financial officer,
principal accounting officer and controller. We have filed the
Code of Business Conduct and Ethics as an exhibit to this
Annual Report on Form 10-K and we posted the Code on our
Internet website at www.manpower.com. We intend to satisfy the
disclosure requirement under Item 10 of Form 8-K by posting
such information on our Internet website.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is set forth in our Proxy
Statement for the Annual Meeting of Shareholders to be held on April 29, 2003,
at pages 5 to 6 under the caption "Remuneration of Directors"; at pages 8 to 12
under the caption "Executive Compensation"; and at page 16 under the caption
"Executive Compensation Committee Interlocks and Insider Participation," which
information is hereby incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this Item is set forth in our Proxy
Statement for the Annual Meeting of Shareholders to be held on April 29, 2003,
at page 2 under the caption "Security Ownership of Certain Beneficial Owners";
at page 7 under the caption "Security Ownership of Management"; and at pages 17
to 18 under the caption "Equity Compensation Plan Information," which
information is hereby incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is set forth in our Proxy
Statement for the Annual Meeting of Shareholders to be held on April 29, 2003,
at pages 5 to 6 under the caption "Remuneration of Directors" and at page 16
under the caption "Executive Compensation Committee Interlocks and Insider
Participation," which information is hereby incorporated herein by reference.
17
ITEM 14. CONTROLS AND PROCEDURES
We maintain a set of disclosure controls and procedures that are
designed to ensure that information required to be disclosed by us in the
reports filed by us under the Securities Exchange Act of 1934, as amended
("Exchange Act") is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms. Within the 90 days prior to the
date of this report, we carried out an evaluation, under the supervision and
with the participation of our management, including our Chairman and Chief
Executive Officer and our Executive Vice President and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Rule 13a-14 of the Exchange Act. Based on that
evaluation, our Chairman and Chief Executive Officer and our Executive Vice
President and Chief Financial Officer concluded that our disclosure controls and
procedures are effective.
There have been no significant changes in our internal controls or
other factors that could significantly affect those controls subsequent to the
conclusion of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
18
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) Financial Statements. Page Number(s)
in Annual Report to
Shareholders
------------
Consolidated Financial Statements (data incorporated by reference
from the attached Annual Report to Shareholders):
Report of Independent Accountants............................... 44
Report of Independent Public Accountants........................ 45
Consolidated Statements of Operations for the years ended
December 31, 2002, 2001 and 2000................................ 46
Consolidated Balance Sheets as of December 31, 2002 and 2001.... 47
Consolidated Statements of Cash Flows for the years ended
December 31, 2002, 2001 and 2000................................ 48
Consolidated Statements of Shareholders' Equity for the Years
ended December 31, 2002, 2001 and 2000.......................... 49
Notes to Consolidated Financial Statements...................... 50 - 70
(a)(2) Financial Statement Schedules.
Report of Independent Accountants on Financial Statement Schedule
Consent of Independent Accountants
Report of Independent Public Accountants on Financial Statement Schedule
Consent of Independent Public Accountants (omitted pursuant to
Rule 437a under the Securities Act of 1933, as amended)
SCHEDULE II - Valuation and Qualifying Accounts
(a)(3) Exhibits.
See (c) below.
Pursuant to Regulation S-K, Item 601(b)(4)(iii), Manpower hereby
agrees to furnish to the Commission, upon request, a copy of
each instrument and agreement with respect to long-term debt of
Manpower and its consolidated subsidiaries which does not exceed
10 percent of the total assets of Manpower and its subsidiaries
on a consolidated basis.
(b) Reports on Form 8-K.
We filed one report on Form 8-K, dated December 3, 2002 with
respect to Item 5 - Other Events.
19
(c) Exhibits.
3.1 Articles of Incorporation of Manpower Inc. incorporated by reference to Annex C
of the Prospectus, which is contained in Amendment No. 1 to Form S-4
(Registration No. 33-38684).
3.2 Amendment of Amended and Restated Articles of Incorporation of Manpower Inc.,
incorporated by reference to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2001.
3.3 Amended and Restated By-laws of Manpower Inc., incorporated by reference to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.
4.1 Indenture between Manpower Inc. and Citibank, N.A., dated as of August 17, 2001,
incorporated by reference to the Company's Registration Statement on Form S-3
(Registration No. 333-71040) filed on October 5, 2001.
10.1 Five-Year Credit Agreement dated as of December 3, 2001 among Manpower Inc., the
initial lenders named therein, Citibank N.A. and Salomon Smith Barney Inc.,
incorporated by reference to Amendment No. 1 to the Company's Registration
Statement on Form S-3 ((Registration No. 333-71040) filed on December 4, 2001.
10.2 364-Day Credit Agreement, dated as of November 29, 2001, among Manpower Inc., the
initial lenders named therein, Citibank, N.A. and Salomon Smith Barney Inc.,
incorporated by reference to Amendment No. 1 to the Company's Registration
Statement on Form S-3 (Registration No. 333-71040) filed on December 4, 2001.
10.2.1 Amended and Restated 364-day Credit Agreement, dated as of October 7, 2002, among
Manpower Inc., the initial lenders named therein, Citibank, N.A. and Salomon
Smith Barney Inc., incorporated by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 2002.
10.3 Amended and Restated Manpower 1991 Executive Stock Option and Restricted Stock
Plan, incorporated by reference to Form 10-Q of Manpower Inc. dated September 30,
1996. **
10.4 Manpower Savings Related Share Option Scheme, incorporated by reference to
Amendment No. 1 to the Company's Registration Statement on Form S-4 (Registration
No. 33-38684). **
10.8 Amended and Restated Manpower 1990 Employee Stock Purchase Plan, incorporated by
reference to the Company's Registration Statement on Form S-8 (Registration No.
333-31021). **
10.9 Manpower Retirement Plan, as amended and restated effective as of March 1, 1989,
incorporated by reference to Form 10-K of Manpower PLC, SEC File No. 0-9890, filed
for the fiscal year ended October 31, 1989. **
10.10(a) 1994 Executive Stock Option and Restricted Stock Plan of Manpower Inc. (Amended
and Restated October 29, 2002). **
20
10.10(b) Procedures Governing the Grant of Operations to Non-Employee Directors under
1994 Executive Stock Option and Restricted Stock Plan of Manpower Inc. dated
May 1, 2001, incorporated by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2001.
10.13 Manpower Inc. 2002 Corporate Senior Management Incentive Program, incorporated by
reference to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001. **
10.14 Amendment to Manpower Inc. 2002 Corporate Senior Management Incentive Program
dated as of October 29, 2002. **
10.15 Amended and Restated Manpower 1991 Directors Stock Option Plan, incorporated
by reference to the Company's Registration Statement on Form S-8 (Registration
No. 333-31021). **
10.16 Amended and Restated Manpower Deferred Stock Plan, incorporated by reference
to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1996. **
10.17(a) Employment Agreement between Terry A. Hueneke and Manpower Inc. dated February
18, 1997, incorporated by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996. **
10.17(b) Employment Agreement between Terry A. Hueneke and Manpower Inc. dated February
23, 1998, incorporated by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1998. **
10.17(c) Separation Agreement between Terry Hueneke and Manpower Inc. dated as of March
27, 2002, incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 2002. **
10.18(a) Employment Agreement between Jeffrey A. Joerres and Manpower Inc. dated as of
February 19, 2002, incorporated by reference to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2001. **
10.18(b) Severance Agreement between Jeffrey A. Joerres and Manpower Inc. dated as of
February 19, 2002, incorporated by reference to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2001. **
10.18(c) Amendment to Severance Agreement between Jeffrey A. Joerres and Manpower Inc.
dated as of October 29, 2002. **
10.19(a) Employment Agreement between Michael J. Van Handel and Manpower Inc. dated as of
February 19, 2002, incorporated by reference to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2001. **
10.19(b) Severance Agreement between Michael J. Van Handel and Manpower Inc. dated as of
February 19, 2002, incorporated by reference to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2001. **
10.19(c) Amendment to Severance Agreement between Michael J. Van Handel and Manpower Inc.
dated as of October 29, 2002. **
21
10.20 Employment Agreement between Barbara J. Beck and Manpower Inc. dated as of
December 18, 2001, incorporated by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002. **
10.21 Severance Agreement between Barbara J. Beck and Manpower Inc. dated as of August
15, 2002. **
10.22 Description of Bonus Arrangement for Yoav Michaely, incorporated by reference
to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2002. **
10.23 Description of Bonus Arrangement for Jean-Pierre Lemonnier,
incorporated by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002. **
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
13 2002 Annual Report to Shareholders. Pursuant to Item 601(b)(13)(ii) of
Regulation S-K, the portions of the Annual Report incorporated by reference in
this Form 10-K are filed as an exhibit hereto.
14 Manpower Inc. Code of Business Conduct and Ethics.
16 Letter of Arthur Andersen LLP regarding change in certifying accountant,
incorporated by reference to the Company's Current Report on Form 8-K dated April
16, 2002.
21 Subsidiaries of Manpower Inc.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Arthur Andersen LLP (omitted pursuant to Rule 437a
under the Securities Act of 1933, as amended).
24 Powers of Attorney.
99.1 Statement of Jeffrey A. Joerres, Chairman and Chief Executive Officer,
pursuant to 18 U.S.C. ss. 1350.
99.2 Statement of Michael J. Van Handel, Executive Vice President and Chief
Financial Officer, pursuant to 18 U.S.C. ss. 1350.
** Management contract or compensatory plan or arrangement.
22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MANPOWER INC.
By: /a/ Jeffrey A. Joerres
------------------------------------------------
Jeffrey A. Joerres
Chairman, President and Chief Executive Officer
Date: February 27, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934,
the following persons on behalf of the registrant and in the capacities and on
the dates indicated have signed this report below.
NAME TITLE DATE
---- ----- ----
/s/ Jeffrey A. Joerres Chairman, President, Chief Executive February 27, 2003
- --------------------------- Officer and a Director
Jeffrey A. Joerres (Principal Executive Officer)
/s/ Michael J. Van Handel Executive Vice President, Chief Financial Officer, February 27, 2003
- --------------------------- and Secretary (Principal Financial Officer
Michael J. Van Handel and Principal Accounting Officer)
Directors: J. Thomas Bouchard, Willie D. Davis, Terry A. Hueneke, Rozanne L. Ridgway, Dennis Stevenson, John
R. Walter and Edward J. Zore
By: /s/ Michael J. Van Handel February 27, 2003
--------------------------
Michael J. Van Handel
Attorney-In-Fact*
*Pursuant to authority granted by powers of attorney, copies of which are filed herewith.
23
CERTIFICATION
I, Jeffrey A. Joerres, Chairman and Chief Executive Officer of Manpower Inc.,
certify that:
(1) I have reviewed this annual report on Form 10-K of Manpower Inc.;
(2) Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
(4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons
performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
(6) The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Dated: February 27, 2003
/s/ Jeffrey A. Joerres
- -----------------------------------
Jeffrey A. Joerres
Chairman, Chief Executive Officer
24
CERTIFICATION
I, Michael J. Van Handel, Executive Vice President and Chief Financial Officer
of Manpower Inc., certify that:
(1) I have reviewed this annual report on Form 10-K of Manpower Inc.;
(2) Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
(4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons
performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
(6) The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Dated: February 27, 2003
/s/ Michael J. Van Handel
- ------------------------------
Michael J. Van Handel
Executive Vice President,
Chief Financial Officer
25
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Shareholders of Manpower Inc.:
Our audit of the consolidated financial statements referred to in our
report dated January 28, 2003, appearing in the 2002 Annual Report to
Shareholders of Manpower Inc. (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the financial statement schedule for the year ended
December 31, 2002 listed in Item 15(a)(2) of this Form 10-K. In our opinion, the
financial statement schedule for the year ended December 31, 2002 presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. The financial
statement schedules of Manpower Inc. for the years ended December 31, 2001 and
2000 were audited by other independent accountants who have ceased operations.
Those independent accountants expressed an unqualified opinion on those
financial statement schedules in their report dated January 28, 2002.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
January 28, 2003
------------------------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (File Nos. 33-40441, 33-55264, 33-84736, 333-1040,
333-31021, 333-82459 and 333-66656), Form S-3 (File Nos. 33-89660, 333-6545 and
333-71040) and Form S-4 (File Nos. 333-650, 33-95896 and 333-87554) of Manpower
Inc. of our report dated January 28, 2003 relating to the financial statements,
which appears in the Annual Report to Shareholders, which is incorporated in
this Annual Report on Form 10-K. We also consent to the incorporation by
reference of our report dated January 28, 2003 relating to the financial
statement schedule, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
February 24, 2003
26
This is a copy of the Report of Independent Public Accountants on
Financial Statement Schedule issued by Arthur Andersen LLP in connection with
Manpower's Annual Report on Form 10-K for the fiscal year ended December 31,
2001. This report has not been reissued by Arthur Andersen LLP in connection
with this Annual Report on Form 10-K. Please refer to the section in Part II of
this Annual Report entitled "Notice Regarding Consent of Arthur Andersen LLP"
for further information.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Shareholders of Manpower Inc.:
We have audited in accordance with auditing standards generally
accepted in the United States, the financial statements included in Manpower
Inc.'s annual report to shareholders incorporated by reference in this Form
10-K, and have issued our report thereon dated January 28, 2002. Our audit was
made for the purpose of forming an opinion on those statements taken as a whole.
The schedule listed in the index at item 14(a)(2)* is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
January 28, 2002
* Please note that this schedule is at item 15(a)(2) for this Annual Report on
Form 10-K.
------------------------------------
The consent of Arthur Andersen LLP has been omitted pursuant to Rule
437a under the Securities Act of 1933, as amended.
27
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For the years ended December 31, 2002, 2001 and 2000, in millions:
Allowance for Doubtful Accounts:
Balance at Provisions Balance
Beginning Charged to Write-Offs Translation Reclassifications at End of
of Year Earnings Adjustments and Other Year
-------------------------------------------------------------------------------------------
Year ending
December 31, 2002 $ 61.8 18.2 (18.4) 7.2 1.5 $ 70.3
Year ending
December 31, 2001 $ 55.3 23.8 (18.2) (2.6) 3.5 $ 61.8
Year ending
December 31, 2000 $ 47.1 21.7 (12.2) (1.9) .6 $ 55.3
28