Kforce : 2024 Annual Report Proxy Statement

Published: 2025-03-14 16:34:07 ET KFRC

2025Proxy Statement

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

You are cordially invited to attend the 2025 Annual Meeting of Kforce Inc. Shareholders (the Annual Meeting).

Wednesday, April 23, 2025

8:00 a.m. Eastern Time

DATE

TIME

1150 Assembly Drive, Suite 500,

February 21, 2025

Tampa, Florida 33607

LOCATION

RECORD DATE

Proposals and Voting Recommendations

Proposal

Description

Board Recommendation

Page Reference

Elect three Class I directors nominated by the

Board of Directors of Kforce Inc. to serve until

FOR

2028

Ratify the appointment of Deloitte & Touche LLP

as Kforce's independent registered public

FOR

accountants for 2025

FOR52

FOR53

The proxy statement, proxy card and Kforce's 2024 Annual Report to Shareholders are being mailed on or about March 14, 2025. Regardless of whether or not you plan to attend the annual meeting, we encourage you to vote your shares online, by phone, or by signing, dating and mailing the enclosed proxy card.

If you need further assistance, please contact Kforce Investor Relations at (813) 552-5000. Thank you for your continuing support.

By the Order of the Board of Directors,

David M. Kelly

Corporate Secretary

Tampa, Florida

March 14, 2025

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on April 23, 2025.

This proxy statement and our 2024 Annual Report to Shareholders are available at

https://investor.kforce.com/financials/annual-reports/default.aspx.

LETTER TO OUR SHAREHOLDERS

At Kforce, we empower our clients, candidates, consultants and employees to reimagine how business gets done with innovative and scalable solutions. We are innovators, thought leaders and high performers who work with our clients, candidates, consultants, employees and communities to move Together Toward Tomorrow®.

We have been operating in an uncertain macro environment since March 2022 when the Federal Reserve began rapidly raising interest rates to address persistent inflationary pressures. Since then, the U.S. economy has continued to defy broad- based recession expectations due to a strong labor market and consumer spending. The prolonged period of uncertainty has resulted in our clients continuing to exercise a degree of restraint in the level of their technology investments.

Operating trends in our Technology business stabilized early in 2024, and remained stable throughout the year. We are extremely proud of how our teams have operated in this relatively subdued environment as evidenced by our industry- leading performance in our Technology business yet again in 2024.

Our teams have continued to persevere and make the necessary adjustments within our business to maintain high levels of performance and significantly advance our strategic priorities, which we believe will provide a great foundation moving forward to return higher levels of profitability as revenues inflect. In 2024, we made the strategic decision to establish a development center in Pune, India. Pune is one of the leading technology cities in India, and we are optimistic about leveraging this capability to further enhance our service offerings to our clients. Our teams also made tremendous progress on the implementation of Workday as our future state enterprise cloud application for human capital management and finance, along with the further integration of our consulting solutions offering within the Firm as One Kforce. Each of these strategic priorities are transformational in nature and are expected to meaningfully contribute to us generating greater operating margins when we return to $1.7 billion in annual revenue and achieving our longer-term goal of generating at least 10% operating margins at $2.1 billion in annual revenue. As we look ahead to the remainder of 2025, our priorities remain consistent.

We believe that a meaningful by-product of the restraint that our clients have been exercising in anticipation of a recession, which hasn't materialized, is an increasingly strong backlog of strategically imperative technology investments. Conversations with our clients post-election and the preponderance of economic views suggest to us that the operating environment as we move through 2025 may improve as clients generally gain increased confidence in the U.S. economy. We believe we are ideally positioned to capture this demand, should it improve, and continue capturing additional market share as we have been doing for many years.

Our 2024 Sustainability Report was published in February 2025 and outlines the considerable progress we made in our overall ESG efforts. Sound corporate governance remains a cornerstone of our strategy and we took steps to further strengthen our practices by instituting a responsible use policy related to artificial intelligence. We continued to prioritize the well-being of our employees and communities in which we operate and initiated a number of new programs in 2024. Additionally, we calculated our value chain emissions for 2024 and are proud of the roughly 60% decline as compared to our 2019 baseline due to a continued focus on reducing our real estate footprint to align with our Office Occasional® work environment. Our environmental efforts are grounded in emission reduction and renewable energy as we strive to minimize our impact on the planet. The path to sustainability is a continuous one. We will continue to listen, learn and adapt as we navigate the complexities of the ESG landscape.

We want to reiterate how proud we are of the performance and resiliency of our collective Kforce team. Together, we fought through a challenging operating environment, made some difficult decisions and met every challenge that arose. We are blessed to have a high performing team that is tenured, dedicated and passionate. We could not be more excited about the future of Kforce.

David L. Dunkel, Chairman

Elaine D. Rosen, Lead Independent Director

Joseph J. Liberatore, President and Chief

Executive Officer, Director

2 Kforce 2025 Proxy Statement

BOARD AND CORPORATE GOVERNANCE

EXECUTIVE

COMPENSATION

OTHER MATTERS

TABLE OF CONTENTS

Role of the Board of Directors

Leadership Structure

Committee Structure

Directors' Time Commitments

Board's Role in Risk Oversight

Our Board of Directors

Biographical Information for Our Director Nominees

Proposal 1 Election of Directors

Biographical Information for Our Continuing Directors

Composition and Diversity

Environmental, Social and Governance (ESG) Oversight and Activities

Related Party Transactions, Compensation Committee Interlocks and

Insider Participation

Director Compensation

Ratification of Appointment of Independent Registered Public

Proposal 2

Accountants

Executive Officers

Compensation Discussion and Analysis

Executive Summary

Our Compensation Principles, Components and Practices

Named Executive Officer Compensation

Executive Compensation Tables

CEO Pay Ratio

Pay versus Performance

Proposal 3 Advisory Vote on Executive Compensation

Proposal 4 Approval of Kforce Inc. 2025 Stock Incentive Plan

Securities Authorized for Issuance Under Equity Compensation Plans

Stock Ownership Information

General Information

Shareholder Communications, Proposals and Other Matters

Appendix A. Kforce Inc. 2025 Stock Incentive Plan

3 Kforce 2025 Proxy Statement

BOARD AND CORPORATE GOVERNANCE

ROLE OF THE BOARD OF DIRECTORS

The primary functions of our Board of Directors (the Board) are to:

We believe that sound corporate governance is fundamental to the overall success of Kforce. Our key governance documents,

including our Corporate Governance Guidelines, are available at http://investor.kforce.com/governance/governance- documents.

In conjunction with management reports and dialogue with executive leadership, the Board reviews various operational, strategic, financial, capital markets and legal compliance areas, business and sector trends, as well as the Firm's progress against established objectives and risks. At each quarterly Board meeting, our Board receives:

an executive summary that includes, among other items,

management's analysis on the current state of the staffing

any pertinent risks related to our business

and solutions industries and corporate development

activities

the Firm's financial and operational performance, including

insights on human capital trends, productivity metrics and,

progress against our expectations and plans

as part of our ESG program, highlights of our Diversity,

Equity and Inclusion (DE&I) efforts

an update on the Firm's accomplishments and near-term

a report on the Firm's Enterprise Risk Management (ERM)

objectives associated with our strategic priorities

program

updates on relevant matters from each of the committees

an update on significant claims and litigation and an ethics

of the Board

hotline summary

management's assessment of the current state of the

updates as needed on key legal and regulatory changes and

capital markets and macro-economic environment

potential impacts on our business

reports on other matters that may arise from time to time, which require reporting to the Board, including a quarterly update from the Audit Committee on any significant cybersecurity related items

On a monthly basis, our Board receives:

A description of certain significant

A financial update from management,

Any other necessary items requiring the

events and risk factors, if any, that have

including operating trends against

attention of the Board

occurred in each period

expectations

4 Kforce 2025 Proxy Statement

On an annual basis, executive management and our Board discuss the Firm's near-term and longer-term strategic objectives, management's progress towards its objectives and any necessary changes to our strategies based on our position and the evolving external landscape. Over the last several years, management has engaged in dedicated sessions with the Board related to the Firm's cybersecurity program, ESG program and shareholder engagement matters. In addition, the full Board participates in annual education sessions on matters deemed pertinent by the Nomination Committee and full Board. The Board education topics have varied in recent years to include Generative AI (GenAI), the state of shareholder activism activities in the market, regulatory updates, ESG programs, cybersecurity, as well as other topics, and are usually facilitated by independent subject matter experts.

LEADERSHIP STRUCTURE

Our Board continues to be led by its Chairman, David L. Dunkel, who served as our CEO for more than 40 years and retired from the CEO position in 2021. Mr. Dunkel has continued to serve Kforce solely as its non-executive Board Chairman. This role is coupled with, and balanced by, a lead independent director as well as independent Audit, Compensation, Nomination and Corporate Governance Committees and a majority of independent directors. The Lead Independent Director, among other things, acts as a liaison between the independent directors and the Chairman, presides over Board meetings in the absence of the Chairman, and assists the Chairman with oversight of CEO performance and succession planning. The Board believes that this structure provides the most effective, efficient and appropriate framework for board oversight and governance. Mr. Dunkel possesses a deep and unique understanding of the Firm's business and operations. The Board continues to believe that his in-depth knowledge and experience places him in the best position to both guide and implement the Board's direction as Chairman, while the Lead Independent Director facilitates the Board's processes and controls and further strengthens the cohesiveness and effectiveness of the Board as a whole.

Our commitment to Board independence is further supported by the independent directors, a lead independent director and independent directors who chair each of the Audit, Compensation, Nomination and Corporate Governance Committees. As a result, the oversight of the critical issues within the purview of the Board's Committees is entrusted to the independent directors and serves to further uphold effective governance standards. All continuing and nominee directors are independent under the listing standards of the NYSE, with the exception of Mr. Dunkel and Mr. Liberatore. There are no family relationships between any of the continuing directors, nominee directors or executive officers.

The Board and executive management remain open to, and regularly seek, shareholder feedback with regard to governance topics, such as the Board leadership structure, and consider the feedback provided as part of its assessment process. Aspects of our shareholder engagement efforts are summarized in the "Consideration of Shareholder Feedback" section of this Proxy Statement.

5 Kforce 2025 Proxy Statement

COMMITTEE STRUCTURE

Our Board has established four standing committees consisting of an Audit Committee, Compensation Committee, Nomination Committee and Corporate Governance Committee. These Committees facilitate a more in-depth assessment of certain important areas than can be addressed during each quarterly Board meeting. The Board has determined that the chair and each of the members of its Audit, Compensation, Nomination and Corporate Governance Committees are independent under the listing standards of the NYSE and SEC Rules for the applicable Committee. The Committee members and independent directors meet regularly in executive session without management. Each Committee has the authority to retain or obtain the advice of legal counsel, accountants and other advisors. Each of our Committees has a written charter, all of which are available at http://investor.kforce.com/governance/governance-documents. Additional information regarding the composition and responsibilities of each Committee is described below.

Members:

Elaine D. Rosen

(Chair)

Derrick D. Brooks

Catherine H.

Cloudman

Corporate Governance Committee

Roles and Responsibilities of the Committee:

The functions of the Corporate Governance Committee are to: encourage and enhance communication among independent directors; provide a forum for independent directors to meet separately from management; provide leadership and oversight related to ethical standards and governance practices (including ESG); and provide a channel for communication with the CEO. The Corporate Governance Committee also coordinates a formal annual evaluation of the performance of the Board, each of its committees and the CEO.

Ann E. Dunwoody

Mark F. Furlong

Randall A. Mehl

N. John Simmons

Number of

Meetings:

Each member of the Board who is independent (as determined under the NYSE Rules) serves on the Corporate Governance Committee. This committee is designed to fulfill the requirements of §303A.03 of the NYSE Listed Company Manual (i.e., through the meetings of this committee, our independent directors meet regularly in executive session without any of our management present). The Firm's Lead Independent Director serves as the Chair of the Corporate Governance Committee and presides over each meeting of the committee.

Audit Committee

Members:

Mark F. Furlong

(Chair)

Catherine H.

Cloudman

N. John Simmons

Number of

Meetings:

Roles and Responsibilities of the Committee:

The Audit Committee oversees the accounting and financial reporting processes of the Firm and the Firm's ERM program. The Board also delegated responsibility for the Firm's cybersecurity program and data privacy practices to the Audit Committee. In discharging this oversight role, the Audit Committee is empowered to investigate any matter brought to its attention, with full access to all books, records, facilities and personnel of Kforce, and the power to retain outside counsel or other experts. The Audit Committee also has the responsibility for selecting, evaluating, compensating and monitoring the independence and performance of the Firm's independent auditors in conducting its audits and reviews, reviewing and approving related party transactions, and overseeing the Firm's internal audit function and ERM program, including cybersecurity, data privacy, risks related to the use of AI and ESG disclosures. At each quarterly meeting, or more frequently as needed, the members of the Audit Committee meet in executive session and meet regularly in separate executive sessions with the Firm's Vice President of Internal Audit, General Counsel and independent registered public accountants, Deloitte & Touche LLP.

The Board has determined that Mr. Furlong, Ms. Cloudman and Mr. Simmons are considered audit committee financial experts, as defined by SEC Rules.

6 Kforce 2025 Proxy Statement

Members:

Randall A. Mehl

(Chair)

Mark F. Furlong

Elaine D. Rosen

Number of

Meetings:

Compensation Committee

Roles and Responsibilities of the Committee:

The Compensation Committee is responsible for the development of the compensation principles that guide the design of the Firm's named executive officer compensation program, which includes: reviewing and approving the named executive officer compensation plans; approving any new or amended employment agreements for the Firm's named executive officers; issuing grants or awards to the Firm's named executive officers under its long-term incentive program; and preparing an annual report on the Firm's named executive compensation policies and practices as required by SEC Rules. In the discharge of its duties, the Compensation Committee also has the authority to select and utilize an independent compensation consultant to assist in the evaluation of director and named executive officer compensation.

Members:

Ann E. Dunwoody

(Chair)

Derrick D. Brooks Randall A. Mehl

Number of

Meetings:

Nomination Committee

Roles and Responsibilities of the Committee:

The Nomination Committee is responsible for: identifying and recommending candidates; assessing the size and composition of the Board; ensuring appropriate Board diversity; establishing procedures for the nomination process; and overseeing board education and training. The Nomination Committee has the authority to retain a search firm to be used to identify director candidates and to approve the search firm's fees and other retention terms.

The Nomination Committee has not established minimum qualifications for director nominees because it is the view of this committee that the establishment of rigid minimum qualifications might preclude the consideration of otherwise desirable and qualified candidates for election to the Board. However, the Nomination Committee is committed to selecting directors who bring diversity, experience and integrity to the Board, as further described in the section titled "Composition and Diversity" in this Proxy Statement. The Nomination Committee will consider director candidates recommended by shareholders. Refer to the section titled "Shareholder Communications, Proposals and Other Matters" in this Proxy Statement for more information on shareholder nominations.

During 2024, the Board held five meetings, and the four committees of the Board held a total of 18 meetings. Each director attended 100% of the Board meetings, and all of the directors attended 100% of the committee meetings on which he or she served, except one director who attended 75% of the Nomination Committee meetings. Our Corporate Governance Guidelines invite, but do not require, our directors to attend our annual meeting of shareholders. Two directors attended the annual meeting of shareholders held on April 24, 2024.

DIRECTORS' TIME COMMITMENTS

Kforce's Corporate Governance Guidelines limit non-employee directors of Kforce to serve on no more than four public-

company boards (including Kforce), and the Audit Committee's charter generally prohibits a member of the Audit Committee

from serving on more than three audit committees of public-company boards (including Kforce). In the context of reviewing our directors' continued ability to dedicate sufficient time to our Board, Kforce assesses each director's compliance with these

policies. Each of our directors is currently compliant with these policies.

7 Kforce 2025 Proxy Statement

BOARD'S ROLE IN RISK OVERSIGHT

Identifying, assessing and managing potential impacts of risks to our business, including any cybersecurity, AI or ESG-related risks, is critical to our long-term success and, thus, generating long-term shareholder value. The Board, as a whole and at the committee level, has an active role in overseeing the management of the Firm's risks. The Board's primary mechanism for assessing overall risk to the Firm as well as management's actions to address and mitigate those risks is through a comprehensive, integrated ERM program.

Enterprise Risk Management

Our ERM program is committed to regularly assessing risks and testing plans to prepare for the possibility of the occurrence of a range of events, including severe weather, threats to our systems and data security, financial fraud or loss, and other matters. All potential and actual risks are ranked and prioritized into one of the following four categories:

Traditional monetary risks covering cash and treasury management activities, risks inherent in achieving our profitability objectives, meeting regulatory reporting requirements, and susceptibility to fraudulent activities.

Risks associated with the capture, development and

retention of our clients with a specific focus on contractual compliance and any concentration risks; and retention risks associated with our associates who support our clients, candidates and consultants.

Risks associated with general execution of the business, including key core processes and strategies for areas such as payroll and business continuity; cybersecurity and data privacy risks; and risks of evolving, disruptive or enabling technologies (ex. AI).

Compliance risks associated with areas including, but not limited to, worker classification and associated claims, hiring practices, foreign worker compliance and other employment related risks. These risks may be derived from local, state and/or federal regulations.

Our Vice President of Internal Audit, in collaboration with our General Counsel, facilitates our ERM process. Each of the four categories above contains specific risks that could impact Kforce. Each category is highlighted during a particular quarter, allowing for an in-depth analysis of all risks at least annually. During this in-depth analysis, the team engages the appropriate stakeholders, including key members of senior management, to measure the business impact and residual risk likelihood, considering external factors and current mitigation efforts and ultimately determine whether further action plans are needed. Our internal audit team, which reports directly to the Audit Committee, uses the ERM program to develop a risk-based audit plan, which is approved by the Audit Committee annually. In addition, the program is evaluated annually, with the assistance of independent third-parties, to benchmark and implement enhancements as needed.

To assist the Audit Committee with its role of compliance and risk oversight, the Vice President of Internal Audit provides the Committee with a quarterly report covering the applicable quarter's ERM category. This engagement also allows the Audit Committee to provide guidance on current and future action plans. The Board also receives a summary of the ERM report each quarter.

Cybersecurity and Other

The Board is actively engaged in the oversight of cybersecurity and data privacy, and additional related risks such as artificial intelligence. The Audit Committee assists the Board in meeting its responsibility to oversee cybersecurity and data privacy strategies and practices. On a quarterly basis, the Audit Committee receives updates on (a) our progress meeting objectives established in our cybersecurity maturity roadmap, (b) relevant reported cybersecurity events in the overall market and evolving risks, (c) results of work performed by our information security organization (ex. penetration tests, cybersecurity

program maturity assessments) and (d) detailed reports of cybersecurity trends within the Firm. We engage subject matter experts in conducting independent assessments of our cybersecurity program maturity, penetration tests, and other tests and assessments.

8 Kforce 2025 Proxy Statement

Senior management, including our Chief Information Officer (CIO) and Chief Information Security Officer (CISO), brief the Board on an annual basis, or more frequently, as needed, on our cybersecurity and information security posture and as needed for cybersecurity incidents deemed to have at least a moderate business impact (even if the incidents do not rise to the level of being material). Annually, the Board and management participate in a comprehensive strategy discussion on cybersecurity.

To further enhance the Board and Audit Committee's role in overseeing cybersecurity risks, the Board formed a special working group that is comprised of Ms. Cloudman and Mr. Simmons to have more frequent and detailed dialogue with executive management on all areas pertaining to cybersecurity and data privacy practices. This working group provides updates on a quarterly basis, or more frequently if necessary, to the Audit Committee. As a result of the steps taken by the Firm with respect to our cybersecurity program, we have not experienced a material breach to date.

Management also provides the Audit Committee with an annual overview of the various lines of insurance that we maintain, including our cybersecurity insurance policy. The Audit Committee provides the Board with quarterly reports on the Firm's risks and ERM program findings, including cybersecurity risk and data privacy practices. For more information, see Item 1C. Cybersecurity, in our Form 10-K for the fiscal year ended December 31, 2024.

In addition, the Board is responsible for the oversight of our ESG policies and strategy. The Board delegates certain aspects to Board committees who inherently play an active role and are jointly responsible for ESG compliance and oversight.

The individual Committees also consider risk within their areas of responsibility as summarized below. The Committee chairs provide reports of their activities to the Board at each quarterly Board meeting, including any significant risks within their areas of responsibility and management's response to those risks.

Audit

Oversees risk assessment activities, ERM program (including cybersecurity, data privacy, AI and ESG disclosures) and annual

internal audit plan

Monitors and receives reports on the Firm's cybersecurity risks and incidents and ensures data privacy practices are appropriately followed and in compliance with rules and regulations

Monitors risk relating to the Firm's financial statements, systems, reporting process and compliance

Reviews and approves

related party transactions and relationships involving directors and executive officers

Compensation

Oversees executive

compensation plan design in light of evolving trends and best practices

Responsible for the

preparation of required

disclosures regarding

executive compensation

practices

Responsible for reviewing executive compensation and benefits policies and practices

Determines whether

executive compensation and benefits policies and practices are reasonably likely to have a material adverse effect on the Firm

Nomination

Oversees Board

refreshment activities

including director

succession risk

Establishes procedures for

the Board's nomination

process

Recommends candidates for election to the Board

Oversees education and training (e.g., AI, ESG), recommends representation of appropriate board diversity and establishes an appropriate mix of directors to evaluate ESG-related issues

Corporate Governance

Leadership and oversight of

ethical standards and governance practices

Provides a forum for the

Board's independent

directors to meet

separately from the Firm's

management

Reviews and recommends to the Board any changes to the Corporate Governance Guidelines

Conducts and oversees the evaluation of the CEO and Board's performance and sufficiency of their respective responsibilities

9 Kforce 2025 Proxy Statement

Disclaimer

Kforce Inc. published this content on March 14, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 14, 2025 at 20:33:44.401.