<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
ICT GROUP, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
ICT GROUP, INC.
800 Town Center Drive
Langhorne, Pennsylvania 19047
-------------------------------
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MAY 18, 1999
-------------------------------
TO THE SHAREHOLDERS OF
ICT GROUP, INC.:
Notice is hereby given that the 1999 Annual Meeting of Shareholders
(the "Annual Meeting") of ICT GROUP, INC. (the "Company" or "ICT") will be held
at The Nassau Inn, 10 Palmer Square, Princeton, New Jersey 08542 on May 18,
1999, at 10:00 a.m., local time, for the following purposes:
1. To elect one director;
2. To ratify the selection of Arthur Andersen LLP as the
Company's independent public accountants for the fiscal year
ending December 31, 1999; and
3. To transact such other business as may properly come before
the Annual Meeting or any adjournments thereof.
Only shareholders of record as of the close of business on April 9,
1999 will be entitled to notice of the Annual Meeting and to vote at the Annual
Meeting and any adjournments thereof. A list of shareholders of the Company as
of the close of business on April 9, 1999 will be available for inspection
during normal business hours for ten days prior to the Annual Meeting at the
Company's executive offices at 800 Town Center Drive, Langhorne, Pennsylvania
19047.
By order of the board of directors,
Vincent A. Paccapaniccia
Secretary
Langhorne, Pennsylvania
April 19, 1999
================================================================================
EACH SHAREHOLDER IS URGED TO COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY
CARD IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. IF A SHAREHOLDER DECIDES TO ATTEND THE MEETING, HE OR SHE MAY,
IF SO DESIRED, REVOKE THE PROXY AND VOTE THE SHARES IN PERSON.
================================================================================
<PAGE>
ICT GROUP, INC.
800 Town Center Drive
Langhorne, Pennsylvania 19047
-------------------------------
PROXY STATEMENT
FOR
1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MAY 18, 1999
-------------------------------
General Information on the Meeting
This proxy statement and the accompanying form of proxy are being
mailed on or about April 19, 1999 to the shareholders of ICT GROUP, INC. (the
"Company" or "ICT"). These materials are being furnished in connection with the
solicitation by the board of directors of the Company of proxies to be voted at
the 1999 Annual Meeting of Shareholders (the "Annual Meeting") to be held at The
Nassau Inn, 10 Palmer Square, Princeton, New Jersey 08542 on May 18, 1999, at
10:00 a.m., local time, and at any adjournments thereof.
The entire cost of soliciting proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by telephone by
officers and directors and a small number of regular employees of the Company
who will not be specially compensated for such services. The Company also will
request banks and brokers to solicit proxies from their customers, where
appropriate, and will reimburse such persons for reasonable expenses incurred in
that regard.
Voting at the Meeting
Only shareholders of record at the close of business on April 9, 1999
are entitled to notice of, and to vote at, the Annual Meeting. As of April 9,
1999, there were 11,642,925 shares of Common Stock outstanding. Each shareholder
entitled to vote shall have the right to one vote for each share of Common Stock
outstanding in such shareholder's name.
The Company presently has no other class of stock outstanding and
entitled to be voted at the Annual Meeting. The presence in person or by proxy
of shareholders entitled to cast a majority of all votes entitled to be cast at
the Annual Meeting will constitute a quorum.
Shares cannot be voted at the Annual Meeting unless the holder of
record is present in person or by proxy. The enclosed form of proxy is a means
by which a shareholder may authorize the voting of his or her shares at the
Annual Meeting. Directors are to be elected at the Annual Meeting by a plurality
of the votes cast by holders of Common Stock present in person or represented by
proxy at the Annual Meeting and entitled to vote. In the case of shares that are
present at the Annual Meeting for quorum purposes, not voting those shares for a
particular nominee for director (including by withholding authority on the
proxy) will not operate to prevent the election of that nominee if he otherwise
receives affirmative votes; an abstention on any other item will operate to
prevent approval of the item to the same extent as a vote against approval of
such item and a broker "non-vote" on any item (which results when a broker
holding shares for a beneficial owner has not received timely voting
instructions on certain matters from such beneficial owner and those matters are
matters with respect to which the broker has no discretion to vote) will have no
effect on the outcome of the vote on such item. The shares of Common Stock
represented by each properly executed proxy will be voted at the Annual Meeting
in accordance with each shareholder's directions. Shareholders are urged to
specify their choices by marking the appropriate boxes on the enclosed proxy
card. If no choice has been specified and the enclosed proxy card is properly
executed and returned, the shares will be voted FOR the nominee listed herein
under "Election of Director," and FOR ratification of the selection of Arthur
Andersen LLP as the Company's independent public accountants for the fiscal year
ended December 31, 1999. If any other matters are properly presented to the
Annual Meeting for action, the proxy holders will vote the proxies (which confer
discretionary authority to vote on such matters) in accordance with their best
judgment.
Execution of the accompanying proxy will not affect a shareholder's
right to attend the Annual Meeting and vote in person. Any shareholder giving a
proxy has the right to revoke it by giving written or oral notice of revocation
to the Secretary of the Company, or by delivering a subsequently executed proxy,
at any time before the proxy is voted.
Your proxy vote is important. Accordingly, you are asked to complete,
sign and return the accompanying proxy card whether or not you plan to attend
the Annual Meeting. If you plan to attend the Annual Meeting to vote in person
and your shares are registered with the Company's transfer agent in the name of
a broker or bank, you must secure a proxy from your broker or bank assigning
voting rights to you for your shares of Common Stock.
2
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTOR
The board of directors of the Company currently consists of four
members and is divided into three classes, two classes each consisting of one
director and one class consisting of two directors. One class is elected each
year to hold office for a three year term and until the election and
qualification of the director's successor or until the director's death, removal
or resignation. At the Annual Meeting, one director is to be elected for the
current class. The term of office for the director elected at the Annual Meeting
will expire at the 2002 annual meeting of shareholders.
Donald P. Brennan, a current member of the board of directors, has been
nominated by the board of directors for election as a director at the Annual
Meeting.
The nominee has consented to be named and to serve if elected. Unless
otherwise instructed by the shareholders, the persons named in the proxies will
vote the shares represented thereby for the election of such nominee. The board
of directors believes the nominee will be able to serve as a director; if this
should not be the case, however, the proxies may be voted for one or more
substitute nominees to be designated by the board of directors or the board may
decide to reduce the number of directors. The board of directors recommends a
vote FOR the nominee.
-----------------------------------------------------------
Nominee for Election
-----------------------------------------------------------
<TABLE>
<CAPTION>
Year First Became Director, Principal Occupations During
Name of Director Age Past Five Years and Certain Directorships
- ---------------- ----- ---------------------------------------------------------
<S> <C>
Donald P. Brennan 58 Donald P. Brennan has served as a Vice Chairman and director of
the Company since April 1987. Mr. Brennan has been a private
investor since December 1998. He had been an Advisory Director of
Morgan Stanley & Co. Incorporated since February 1996. Prior to
that time, Mr. Brennan was a Managing Director and Head of the
Merchant Banking Division of Morgan Stanley & Co. Incorporated
from 1986 until his retirement in December 1998, and also has
served as Chairman of Morgan Stanley Capital Partners III, Inc.,
Chairman of Morgan Stanley Leveraged Equity Fund II, Inc.,
Chairman of Morgan Stanley Venture Partners and a director of
Morgan Stanley & Co. Incorporated.
</TABLE>
-----------------------------------------------------------
Directors Continuing in Office with Term Expiring in 2000
-----------------------------------------------------------
<TABLE>
<CAPTION>
Year First Became Director, Principal Occupations During
Name of Director Age Past Five Years and Certain Directorships
- ---------------- ----- ---------------------------------------------------------
<S> <C>
John J. Brennan 55 Mr. Brennan has served as Chairman, President and Chief Executive Officer of the
Company and as a director since 1987, when he managed the buyout of ICT's
predecessor company, International Computerized Telemarketing, Inc., from
Decision Industries Corporation ("DIC"). Mr Brennan was employed by DIC from May
1983 to March 1987 and over that period served as Vice President of Product
Marketing, Vice President of Corporate Planning and Business Development and
President of its subsidiary, International Computerized Telemarketing.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Year First Became Director, Principal Occupations During
Name of Director Age Past Five Years and Certain Directorships
- ---------------- ----- ---------------------------------------------------------
<S> <C>
John A. Stoops 45 Mr. Stoops has been Vice President and General Manager of Books and Information
Services for American Express Publishing Corporation, a joint venture between
American Express and Time Publishing, since January 1995. From November 1990 to
September 1994, Mr. Stoops was President of Atlas Editions, U.S.A. He has been a
director of the Company since 1996.
</TABLE>
-----------------------------------------------------------
Director Continuing in Office with Term Expiring in 2001
-----------------------------------------------------------
<TABLE>
<CAPTION>
Year First Became Director, Principal Occupations During
Name of Director Age Past Five Years and Certain Directorships
- ---------------- ----- ---------------------------------------------------------
<S> <C>
Bernard Somers 49 Mr. Somers has been a partner of Somers & Associates, Chartered Accountants,
located in Dublin, Ireland, since 1988. Mr. Somers has been a director of the
Company since 1996. He currently serves as a director of Eurotel Marketing
Limited, a subsidiary of the Company, and Commerzbank Europe (Ireland) Ltd.
</TABLE>
General Information Concerning the Board of Directors and its Committees
The board of directors of the Company met on five occasions during
1998. The Pennsylvania Business Corporation Law provides that the board of
directors, by resolution adopted by a majority of the entire board, may
designate one or more committees, each of which shall consist of one or more
directors. The board of directors annually elects from its members an Audit
Committee and Compensation Committee. Each director attended at least 50% of the
aggregate of the meetings of the board of directors held during the period for
which he was a director, and the meetings of the committee or committees on
which he served during such period.
Audit Committee. The Audit Committee is responsible for providing
general oversight with respect to the accounting principles employed in ICT's
financial reporting. The Audit Committee meets at least annually with the
Company's principal financial and accounting officers and independent public
accountants to review the scope of auditing procedures, the Company's policies
relating to internal auditing and accounting procedures and controls, and to
discuss results of the annual audit of the Company's financial statements. The
Audit Committee met once during 1998. The Audit Committee is currently composed
of three non-employee directors, Donald P. Brennan, Bernard Somers and John A.
Stoops.
Compensation Committee. The Compensation Committee has general
supervisory power over, and the power to grant options under, the Company's
stock option plans. In addition, the Compensation Committee recommends to the
board the compensation of the Company's Chairman, President and Chief Executive
Officer, reviews and takes action on the recommendations of the Chairman,
President and Chief Executive Officer as to the compensation of the Company's
other officers and key personnel, approves the grants of any bonuses to
officers, and reviews other compensation matters generally. The Compensation
Committee met once during 1998. The Compensation Committee is currently composed
of two non-employee directors, Donald P. Brennan and Bernard Somers.
4
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C>
John J. Brennan 55 Chairman, President, Chief Executive Officer
Vincent A. Paccapaniccia 41 Senior Vice President, Finance and Administration,
Chief Financial Officer, and Secretary
Timothy F. Kowalski 38 Senior Vice President, Systems and Technology,
Chief Information Officer
John D. Campbell 43 President, ICT Group Sales
John L. Magee 45 President, ICT TeleServices Division
Dean J. Kilpatrick 54 President, ICT Marketing Services Division
Maurice J. Kerins 45 President, ICT Management Services Division
</TABLE>
- ------------------
John J. Brennan's employment background is described above under
"Directors Continuing In Office."
Vincent A. Paccapaniccia has served as the Company's Senior Vice
President, Finance and Administration, Chief Financial Officer and Secretary
since August 1998. From July 1998 through August 1998, he served as Senior Vice
President of Finance. From January 1996 through July 1998, Mr. Paccapaniccia
served as Vice President of Finance. Between August 1991 and October 1995, Mr.
Paccapaniccia served as Chief Financial Officer and then as Executive Vice
President of Operations for Villeroy and Boch Ltd. He has also held several
financial management positions for Lenox Inc. between October 1984 and August
1991, including Vice President and Controller and Director of Operations
Planning.
Timothy F. Kowalski has served as the Company's Senior Vice President,
Systems and Technology and Chief Information Officer since August 1997. From May
1993 until July 1997, Mr. Kowalski was employed by Independence Blue Cross, a
healthcare company, where he served as Senior Director of Information and
Technology Development. From December 1984 until May 1993, Mr. Kowalski was
employed by Computer Sciences Corporation, a systems integration company, where
he served as Technical Director.
John D. Campbell has served as President of ICT Group Sales since
January 1998. He served as President of ICT Domestic Sales between January 1997
and January 1998 and as Senior Vice President, Sales and Marketing between
January 1990 and January 1998. Mr. Campbell served as the President of ICT
Direct between January 1994 and January 1997.
John L. Magee has served as the President of ICT TeleServices Division
since January 1996 and was the Executive Vice President, Operations between
January 1994 and January 1997. From November 1987 to January 1994, he served as
Senior Vice President, Operations of the Company.
Dean J. Kilpatrick has served as President of ICT Marketing Services
Division since September 1996 and was the President of ICT Research Services
from May 1994 to September 1996. From January 1992 to April 1994, Mr. Kilpatrick
was the sole proprietor of Kilpatrick and Associates, a direct marketing
consulting firm. Between February 1988 and January 1992, Mr. Kilpatrick was Vice
President, Marketing for StarTV, Inc., a start-up television network business.
From 1986 to 1988, Mr. Kilpatrick was Executive Vice President of MRI, Inc., a
market research company.
Maurice J. Kerins has served as President of ICT Management Services
Division since January 1998. He served as the Company's Senior Vice President,
Systems and Technology from April 1994 to December 1997 and as the Company's
Vice President, Systems and Technology from November 1988 to April 1994.
John J. Brennan and Donald P. Brennan are brothers.
5
<PAGE>
Certain Relationships and Related Transactions Involving Executive Officers and
Directors
Voting Trust Agreement. John J. Brennan, Donald P. Brennan and the
Company have entered into a Voting Trust Agreement that terminates December 3,
2080 (the "Voting Trust Agreement"), with John J. Brennan and Donald P. Brennan
as voting trustees. All acts of the voting trustees under the Voting Trust
Agreement must be by unanimous consent, although the agreement provides that the
voting trustees all be present for purposes of constituting a quorum at any
meeting of the shareholders, regardless of whether the shares subject to the
Voting Trust Agreement are to be voted at the meeting. Upon the death,
incompetence or resignation of John J. Brennan as a voting trustee, Donald P.
Brennan shall have the right to (i) be the sole voting trustee if he becomes
actively involved in the Company, which shall include, up to December 31, 1999,
becoming Chairman and appointing a President and Chief Executive Officer, and
thereafter holding the position of President and Chief Executive Officer, or
(ii) appoint a successor trustee if he does not become, or ceases to be,
actively involved in the Company. Upon the death, incompetence or resignation of
Donald P. Brennan as a voting trustee, John J. Brennan shall have the right to
be the sole voting trustee.
Shareholders' Agreement. John J. Brennan, Donald P. Brennan and the
Company have entered into a Shareholders' Agreement that covers the shares
included under the Voting Trust Agreement and any other shares that they may own
(the "Shareholders' Agreement"). The Shareholders' Agreement prohibits the
transfer of shares owned by John J. Brennan and Donald P. Brennan, without the
consent of the other, except (i) pursuant to a public offering, (ii) to certain
family members and trusts therefor who agree to be bound by the Shareholders'
Agreement, (iii) to the other party, or the Company, pursuant to rights of first
refusal or (iv) to a third party if the first refusal rights have not been
exercised.
Voting Agreement. Each of the Company's employee optionholders has
entered into a ten-year voting agreement (the "Voting Agreements") with the
Company and John J. Brennan, the Chairman, President and Chief Executive
Officer, pursuant to which each has agreed to vote all shares of Common Stock
received by such individuals upon the exercise of options in the manner directed
by Mr. Brennan. The Voting Agreements are binding on each of the optionholders'
successors in interest. Mr. Brennan is required to release shares covered by the
Voting Agreements if a shareholder intends to sell shares in the public market
and completes the sale within 90 days of the release. Shares sold in the public
market will thereafter not be subject to the Voting Agreements.
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 31, 1999
(except as otherwise noted) regarding the ownership of Common Stock (i) by each
person known by the Company to be the beneficial owner of more than five percent
of the outstanding Common Stock, (ii) by each director of the Company, (iii) by
each executive officer of the Company named in the Summary Compensation Table
included elsewhere in this proxy statement and (iv) by all current executive
officers and directors of the Company as a group.
<TABLE>
<CAPTION>
Number of Shares Percentage
Names Beneficially Owned (1) of Class (2)
- ----- ---------------------- ------------
<S> <C> <C> <C>
John J. Brennan (3)(4) ......................................... 7,595,475 59.4%
Donald P. Brennan (3) .......................................... 6,346,500 54.5%
Eileen Brennan Oakley (5)....................................... 2,062,500 17.7%
Bernard Somers (7).............................................. 8,000 *
John A. Stoops (7).............................................. 2,000 *
John L. Magee (8)............................................... 317,800 2.7%
John D. Campbell (6)............................................ 162,375 1.4%
Maurice J. Kerins (9)........................................... 162,250 1.4%
Dean J. Kilpatrick (6).......................................... 32,225 *
All executive officers and directors as a group (10 persons).... 7,605,475 59.4%
</TABLE>
- ----------------
* Less than one percent
(1) Nature of ownership consists of sole voting and investment power unless
otherwise indicated. The number of shares indicated includes shares
issuable upon the exercise of outstanding stock options held by each
individual or group to the extent such options are exercisable within
60 days of March 31, 1999.
(2) The percentage for each individual or group is based on the aggregate
number of shares outstanding as of March 31, 1999 (11,642,925) and all
shares issuable upon the exercise of outstanding stock options held by
such individual or group to the extent such options are exercisable
within 60 days of March 31, 1999.
(3) Includes 6,346,500 shares of Common Stock over which John J. Brennan
and Donald P. Brennan share voting and dispositive power pursuant to a
Voting Trust Agreement dated February 2, 1996, with John J. Brennan and
Donald P. Brennan as voting trustees, and a Shareholders' Agreement
dated February 2, 1996. The address of these shareholders is 800 Town
Center Drive, Langhorne, PA 19047.
(4) Includes (i) 69,100 issued and outstanding shares of Common Stock and
1,076,975 shares of Common Stock issuable pursuant to exercisable stock
options over which John J. Brennan exercises voting control pursuant to
certain Voting Agreements entered into by and among current and former
employees of the Company, John J. Brennan and the Company. and (ii)
30,000 issued and outstanding shares of Common Stock and 72,900 shares
of Common Stock issuable pursuant to exercisable stock options issued
in Mr. Brennan's name.
(5) These shares are held subject to seven trusts for which Ms. Oakley
serves as trustee. The address of this shareholder is 800 Town Center
Drive, Langhorne, PA 19047.
(6) Consists of shares of Common Stock issuable pursuant to stock options
exercisable as of March 31, 1999, or within 60 days thereafter. Voting
control over these shares is held by John J. Brennan pursuant to the
terms of the Voting Agreements. The address of these shareholders is
800 Town Center Drive, Langhorne, PA 19047.
7
<PAGE>
(7) Includes 2,000 shares of Common Stock issuable pursuant to exercisable
stock options. The address of these shareholders is 800 Town Center
Drive, Langhorne, PA 19047.
(8) Includes 26,000 issued and outstanding shares of Common Stock and
291,800 shares of Common Stock issuable pursuant to exercisable stock
options over which John J. Brennan exercises voting control pursuant to
certain Voting Agreements entered into by and among current and former
employees of the Company, John J. Brennan and the Company.
(9) Includes 2,500 issued and outstanding shares of Common Stock and
159,750 shares of Common Stock issuable pursuant to exercisable stock
options over which John J. Brennan exercises voting control pursuant to
certain Voting Agreements entered into by and among current and former
employees of the Company, John J. Brennan and the Company.
8
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary Compensation Table. The following table sets forth for the
years ended December 31, 1998, 1997 and 1996 certain compensation paid by the
Company to its Chief Executive Officer and the four other most highly
compensated executive officers of the Company whose cash compensation exceeded
$100,000 for the year ended December 31, 1998.
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
Annual Long Term
Compensation Compensation
------------ ------------
Securities
Underlying All Other
Name and Principal Position Year Salary Bonus Options/ SARs Compensation (1)
- --------------------------- ---- ------ ----- ------------- ----------------
<S> <C> <C> <C> <C> <C>
John J. Brennan.......................... 1998 $394,940 $ 29,314(2) 116,400(3) $72,567
Chairman, President and Chief Executive 1997 $330,730 $ 15,942 -- $46,008
Officer 1996 $350,449 $ 87,929 -- $79,068
John L. Magee............................ 1998 $193,192 $ 45,021 17,200(3) $ 5,191
President, ICT TeleServices Division 1997 $163,077 $ 56,161 -- $ 6,123
1996 $149,616 $ 46,103 -- $ 5,606
John D. Campbell......................... 1998 $172,654 $ 72,516 19,400(3) $ 4,926
President, ICT Group Sales 1997 $149,462 $ 94,898 -- $ 6,267
1996 $129,788 $109,202 -- $ 5,666
Maurice J. Kerins........................ 1998 $152,423 $ 56,146 17,000(3) $ 4,496
President, ICT Management Services Division 1997 $134,462 $ 80,332 -- $ 5,158
1996 $114,904 $ 40,571 -- $ 4,060
Dean J. Kilpatrick....................... 1998 $152,577 $ 48,164 14,100(3) $ 4,952
President, ICT Marketing Services Division 1997 $139,462 $ 36,768 -- $ 5,337
1996 $124,867 $ 51,301 4,500 $ 5,844
</TABLE>
- -------------------
(1) Includes: (A) for 1998 (i) Company contributions of $3,800, $3,800,
$3,800, $3,800 and $3,800 to the Company's 401(k) tax-qualified
employee savings and retirement plan on behalf of Mr. Brennan, Mr.
Magee, Mr. Campbell, Mr. Kerins and Mr. Kilpatrick, respectively, (ii)
premiums paid by the Company in the amount of $1,800, $696, $408, $696,
and $1,152 for group term life insurance on behalf of Mr. Brennan, Mr.
Magee, Mr. Campbell, Mr. Kerins and Mr. Kilpatrick, respectively; (iii)
premiums paid by the Company in the amount of $54,725, $695 and $718
for life insurance on behalf of Mr. Brennan, Mr. Magee and Mr.
Campbell, respectively; and (iv) lease payments paid by the Company in
the amount of $12,242 for an automobile leased on behalf of Mr.
Brennan; (B) for 1997 (i) Company contributions of $4,750, $4,750,
$4,750, $4,750 and $4,185 to the Company's 401(k) tax-qualified
employee savings and retirement plan on behalf of Mr. Brennan, Mr.
Magee, Mr. Campbell, Mr. Kerins and Mr. Kilpatrick, respectively, (ii)
premiums paid by the Company in the amount of $1,152, $408, $408, $408,
and $1,152 for group term life insurance on behalf of Mr. Brennan, Mr.
Magee, Mr. Campbell, Mr. Kerins and Mr. Kilpatrick, respectively; and
(iii) premiums paid by the Company in the amount of $40,106, $965 and
$1,109 for life insurance on behalf of Mr. Brennan, Mr. Magee and Mr.
Campbell, respectively; and (C) for 1996 (i) Company contributions of
$4,750, $4,750, $4,750, $3,693 and $4,750 to the Company's 401(k)
tax-qualified employee savings and retirement plan on behalf of Mr.
Brennan, Mr. Magee, Mr. Campbell, Mr. Kerins and Mr. Kilpatrick,
respectively, (ii) premiums paid by the Company in the amount of
$1,152, $408, $408, $367, and $1,094 for group term life insurance on
behalf of Mr. Brennan, Mr. Magee, Mr. Campbell, Mr. Kerins and Mr.
Kilpatrick, respectively; and (iii) premiums paid by the Company in the
amount of $73,166, $448 and $508 for life insurance on behalf of Mr.
Brennan, Mr. Magee and Mr. Campbell, respectively.
(2) This bonus represents a portion of Mr. Brennan's 1997 base salary that
he was eligible to receive in 1997, but of which he elected to defer
payment and receive as a bonus during 1998.
(3) These options were granted in 1998 as bonus compensation for the
individuals's performance during 1997.
9
<PAGE>
Option Grants in Last Fiscal Year. The following table sets forth
certain information concerning grants of stock options made during 1998 to the
persons named in the Summary Compensation Table.
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realization
Value at Assumed Annual
Number of % of Total Rates of Stock Price
Securities Options Appreciation for Option
Underlying Granted to Exercise Term (5 years) (1)
Options Employees In Price Expiration -----------------------
Name Granted Fiscal Year ($/share) Date 5% 10%
---- ------- ----------- --------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
John J. Brennan............ 116,400 51% $4.87 02/28/08 $157,140 $345,708
John L. Magee ............. 17,200 8% $4.87 02/28/08 $23,220 $51,084
John D. Campbell........... 19,400 9% $4.87 02/28/08 $26,190 $57,618
Maurice J. Kerins.......... 17,000 8% $4.87 02/28/08 $22,950 $50,490
Dean J. Kilpatrick......... 14,100 6% $4.87 02/28/08 $19,350 $41,877
</TABLE>
- ----------------
(1) The dollar amounts under these columns are the result of calculations at 5%
and 10% rates set by the Securities and Exchange Commission and, therefore,
are not intended to forecast possible future appreciation of the price of
the Common Stock. The Company did not use an alternative formula for a grant
date valuation. The Company is not aware of any formula that will determine
with reasonable accuracy a present value based on future unknown or volatile
factors.
10
<PAGE>
Year End Values. The following table summarizes option exercises during
1998 and the value of vested and unvested options for the persons named in the
Summary Compensation Table at December 31, 1998. Year-end values are based upon
a price of $2.5625 per share, which was the closing market price of a share of
the Company's Common Stock on December 31, 1998.
Aggregated Option Exercises in Last Year and
Year-End Option Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised Options In-the-Money Options at
at December 31, 1998 December 31, 1998 (1)
-------------------- ---------------------
Shares Acquired
Name on Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C>
John J. Brennan...... -- -- 29,100 87,300 $ 0 $0
John L. Magee........ 26,000 $125,606 284,300 12,900 $705,180 $0
John D. Campbell..... -- -- 153,350 14,550 $351,916 $0
Maurice J. Kerins.... 8,700 $30,169 153,050 12,750 $352,815 $0
Dean J. Kilpatrick... -- -- 25,350 12,375 $ 32,188 $0
</TABLE>
- ---------------
(1) Values calculated using the closing market price of a share of the
Company's Common Stock on December 31, 1998 and the per share exercise
price of the individual's options.
The Company does not currently grant any long-term incentives, other
than stock options, to its executives or other employees. Similarly, the Company
does not sponsor any defined benefit or actuarial plans at this time.
Employment Agreements
In May 1996, the Company entered into an employment agreement with John
J. Brennan as President and Chief Executive Officer. The agreement is for a
three-year term ending April 30, 1999 and renews automatically for successive
three-year periods unless either party gives written notice of termination at
least 180 days prior to the expiration date, unless earlier terminated as
provided therein. The agreement provides for a base salary of $364,000, which
shall be increased by a minimum of 5% each year but may not be decreased below
the then current level. The Board, in its sole discretion, may award incentive
bonuses in the form of cash and/or stock to Mr. Brennan, who will be eligible
each year for a minimum bonus in an amount equal to his then current salary. If
Mr. Brennan is terminated by the Company for other than willful misconduct, or
terminates his employment for "good reason," then the Company shall maintain its
obligations under the agreement through the later of (i) the expiration of the
then current term of the agreement (or the expiration of the next renewal term
if there are less than 180 days remaining in the current term and no notice of
termination was given prior thereto), or (ii) 24 months from the date of
termination. Mr. Brennan may terminate his agreement for "good reason" upon 30
days' written notice if there has been a reduction in his salary or benefits, a
substantial change in his duties or a change of control, defined as the decrease
below 50% of the combined voting power of the Common Stock by John J. Brennan
and Donald P. Brennan and their children and grandchildren.
11
<PAGE>
In April 1987, the Company entered into employment agreements with John
L. Magee and Maurice J. Kerins that provided for base salaries of $70,000 and
$55,000 per year, respectively. Each employment agreement provides that the
employee's salary is to be reviewed annually by the Board of Directors. Messrs.
Magee's and Kerins' current base salaries are $193,192 and $152,423,
respectively. Each employment agreement had an initial term of three years, but
renews automatically each year for an additional one-year term unless either
party to the agreement terminates prior to the end of the renewal term. Each of
the agreements were renewed on January 1, 1999 for additional one-year terms. In
addition to base salary, each agreement allows for bonuses to be paid by the
Company. The Company may terminate the employment agreements described
immediately above at any time, with or without cause. Each of the employment
agreements contains severance provisions which, if triggered, entitle the
employees to monthly severance payments in an amount equal to the affected
employee's then-current monthly salary for a period of 12 months. The severance
payments are triggered by the occurrence of any of the following events:
termination of employment by the Company without cause, cessation of business
operations in a business in which the employee is employed, a merger,
consolidation or acquisition of the Company, the filing by the Company of a
voluntary petition in bankruptcy or the filing of an involuntary petition in
bankruptcy against the Company which is not dismissed within 60 days. In
addition, if the employee terminates his employment upon 90 days' prior written
notice, in certain circumstances, the Company would be required to continue to
provide the employee with his regular payments of base salary for a period of 90
days.
In October 1987, John D. Campbell entered into an employment agreement
with the Company that provided for a base salary of $43,200 per year. Mr.
Campbell's employment agreement had an initial term of one year, but renews
automatically each year for an additional one-year term unless either party
terminates prior to the end of the renewal term. Mr. Campbell's employment
agreement was renewed on January 1, 1999 for an additional one-year term. Mr.
Campbell, whose current base salary is $172,654, is eligible for bonuses from
the Company.
In 1994, the Company entered into an employment agreement with Dean J.
Kilpatrick that provided for a base salary of $110,000 per year. Mr.
Kilpatrick's employment agreement had an initial term of one year and renews
automatically for consecutive one-year periods unless terminated within 90 days
prior to the expiration of the then-current term. In addition to his base
salary, which is currently $152,577, Mr. Kilpatrick is eligible for bonuses from
the Company.
The employment agreements discussed above contain non-tampering,
non-disclosure, non-solicitation and confidentiality provisions. Although the
employment contracts restrict the employee from interfering with the Company's
current, former or potential customers, there is no provision restricting a
terminated employee's ability to work for a competitor of the Company.
Compensation of Directors
The independent directors are paid directors' fees of $2,000 for each
quarterly Board meeting attended and $500 for each special Board meeting
attended and each committee meeting attended. In addition, directors are
reimbursed for expenses incurred in connection with attendance at Board and
committee meetings.
Under the Company's 1996 Non-Employee Directors Plan, each independent
director owning less than 10% of the outstanding capital stock of the Company
receives, upon initial election to the Board, an option to purchase 1,000 shares
of Common Stock. The options are fully vested and immediately exercisable, have
an exercise price equal to the fair market value of the Common Stock on the date
of grant and expire ten years after the date of grant. In addition, each
independent director owning less than 10% of the outstanding capital stock of
the Company is granted an option to purchase 1,000 shares of Common Stock on the
date of each annual meeting; these options will vest in full one year after
grant, will have an exercise price equal to the fair market value of the Common
Stock on the date of grant and expire ten years after issuance.
12
<PAGE>
The following Compensation Committee Report and the Comparative Stock
Performance Graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933, as amended, or under the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such Acts.
COMPENSATION COMMITTEE REPORT
On July 30, 1996, following the Company's initial public offering, the
board of directors created the Compensation Committee to have the responsibility
for implementing and administering the Company's compensation policies and
programs for its executive officers. Prior to July 1996, the responsibilities of
the Committee were performed by the Board as a whole.
The Compensation Committee is responsible for setting the base salaries
and the total compensation levels of the Chief Executive Officer (the "CEO") and
the other executive officers of the Company. In addition, the Compensation
Committee is responsible for (i) setting the performance criteria for annual
bonus awards and determining the achievement levels and payout for the executive
officers and (ii) determining which executives, including the CEO, will be
granted stock options and the size of such grants.
Compensation Philosophy
The Company's compensation policies for executive officers are designed
to (a) provide competitive compensation packages that will attract and retain
superior executive talent, (b) link a significant portion of compensation to
financial results, so as to reward successful performance, and (c) provide
long-term equity compensation, to further align the interests of executive
officers with those of stockholders and further reward successful performance.
The principal components of the Company's executive officer compensation program
are base salary, annual bonus awards, and grants of stock options.
Annual Compensation
Annual cash compensation is comprised of a base salary and a bonus
award and is based upon a review of compensation packages of executives in
comparable positions with other publicly held teleservices firms. The Committee
believes that the compensation levels of the executive officers in fiscal 1998
were within the median compensation levels for comparable positions.
Bonus awards are made pursuant to a criteria established toward the
beginning of each fiscal year. The amount of bonus paid to an executive officer
is largely based upon the Company's achievement of specified levels of operating
income determined by the Compensation Committee; provided, however, that in the
case of sales personnel their bonuses are based upon specified sales targets and
the margins achieved with such sales. Payment of awards are made in cash and in
stock options as determined by the Compensation Committee.
Long-Term Compensation
The Compensation Committee has had the discretion to grant stock
options to the executive officers. The number of options in each grant is not
based on any specific criteria. However, the Compensation Committee considered
primarily the executive's position, skills and achievements, and the level and
timing of previously granted stock options.
13
<PAGE>
Compensation of Chief Executive Officer
The CEO's annual base salary was increased to $401,310 effective May 1,
1998 from $382,000 pursuant to his employment agreement which was executed in
May 1996. Based upon the analysis by the Compensation Committee, the
Compensation Committee is of the opinion that the CEO's base salary is
comparable to the median of competitive base salaries for executives from
companies of similar annual revenues, operating earnings and growth potential.
In 1997, the CEO was eligible to receive a base salary of $360,044 as
compensation for his services during 1997. The CEO elected to defer receipt of a
$29,314 portion of this compensation. During 1998, the CEO was paid a bonus
equal to the amount of the 1997 deferred compensation ($29,314).
The CEO was granted 116,400 options in 1998. These options were granted
as bonus compensation for the CEO's performance during 1997.
Deductibility of Certain Compensation
Section 162(m) of the Internal Revenue Code generally denies a federal
income tax deduction for certain compensation exceeding $1,000,000 paid to the
CEO or any of the four other highest paid executive officers, excluding (among
other things) certain performance-based compensation. Through December 31, 1998,
this provision has not affected the Company's tax deductions, but the
Compensation Committee will continue to monitor the potential impact of section
162(m) on the Company's ability to deduct executive compensation.
THE COMPENSATION COMMITTEE
Donald P. Brennan
Bernard Somers
14
<PAGE>
COMPARATIVE STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return on the
Company's Common Stock with the cumulative total return of (i) the Nasdaq Stock
Market (U.S.) Index (the "Nasdaq Index") and (ii) a "peer group" index, assuming
an investment of $100 on June 14, 1996 in each of the Common Stock of the
Company, the stocks comprising the Nasdaq Index and the stocks comprising the
"peer group," and further assuming reinvestment of dividends. The "peer group"
consists of ATC Communications Group, Inc., APAC Teleservices, Inc., RMH
Teleservices, Inc., Telespectrum Worldwide, Inc., West Teleservices Corp.,
Precision Response Corp., Sitel Corp. and Teletech Holdings, Inc. The graph
commences as of June 14, 1996, the date the Common Stock became publicly-traded.
COMPARISON OF CUMULATIVE RETURN
ICT, Nasdaq Index and Peer Group Index
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Measurement Date ICT Group, Inc. Nasdaq Stock Market Peer Group
---------------- --------------- ------------------- ----------
<S> <C> <C> <C> <C> <C>
6/14/96 $100 $100 $100
12/31/96 $ 30 $105 $140
12/31/97 $ 28 $129 $ 62
12/31/98 $ 12 $178 $ 30
</TABLE>
15
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of Arthur Andersen LLP as
independent public accountants for the year ending December 31, 1999. Arthur
Andersen LLP has audited the Company's financial statements since the Company's
inception. The appointment of independent public accountants is approved
annually by the Board of Directors, which is based in part on the
recommendations of the Audit Committee. In making its recommendations, the Audit
Committee reviews both the audit scope and estimated audit fees for the coming
year. This appointment will be submitted to the shareholders for ratification at
the Annual Meeting.
Although not required by law or by the By-laws of the Company, the
Board of Directors has determined that it would be desirable to request
ratification of this appointment by the shareholders. If ratification is not
received, the Board will reconsider the appointment. A representative of Arthur
Andersen LLP is expected to be available at the Annual Meeting to respond to
appropriate questions and to make a statement if he so desires.
The affirmative vote of a majority of the votes cast at the Annual
Meeting by the holders of the outstanding shares of Common Stock is required for
the ratification of this selection.
The Board of Directors recommends that the shareholders vote FOR
ratification of the selection of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending December 31, 1999.
OTHER MATTERS
The board of directors is not aware of any matters not set forth herein
that may come before the meeting. If, however, further business properly comes
before the meeting, the persons named in the proxies will vote the shares
represented thereby in accordance with their judgment.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Shareholders may submit proposals on matters appropriate for
stockholder action at annual meetings in accordance with regulations adopted by
the SEC. To be considered for inclusion in the proxy statement and form of proxy
relating to the 2000 annual meeting, such proposals must be received by the
Company no later than December 26, 1999. Proposals should be directed to the
attention of the Secretary of the Company.
ANNUAL REPORT ON FORM 10-K
The Company will furnish without charge to each person whose proxy is
being solicited, upon the written request of such person, a copy of the
Company's annual report on Form 10-K for the year ended December 31, 1999,
including he financial statements, but excluding exhibits. Requests for copies
of such report should be directed to the Company, Attention: Vincent
Paccapaniccia.
By order of the board of directors,
Vincent A. Paccapaniccia
Secretary
April 19, 1999
16
<PAGE>
ICT GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS - MAY 18, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints JOHN J. BRENNAN and VINCENT PACCAPANICCIA,
or either of them, acting alone in the absence of the other, the proxies of the
undersigned, with full powers of substitution (the "Proxies"), to attend and act
as proxy or proxies of the undersigned at the Annual Meeting of Shareholders of
ICT Group, Inc, (the "Company") to be held at The Nassau Inn, Princeton, New
Jersey on May 18, 1999, at 10:00 a.m. or any adjournment thereof, and to vote as
specified herein the number of shares which the undersigned, if personally
present, would be entitled to vote.
(Continued and to be signed on the reverse side.)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
ICT GROUP, INC.
May 18, 1999
Please Detach and Mail in the Envelope Provided
A /X/ Please mark your
votes as in this
example.
WITHHOLD
1. Election of AUTHORITY
Director FOR the nominee to vote for
(Class III) listed at right the nominee Nominee: Donald P. Brennan
/ / / /
(Instructions: To withhold authority to vote for the
nominee, check the box entitled "Withhold Authority.")
2. Proposal to ratify the Appointment of Arthur Andersen LLP as Independent
Public Accountants of the Company for the Fiscal Year Ending December 31,
1999.
FOR AGAINST ABSTAIN
/ / / / / /
3. Other Business. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the Annual Meeting and any
and all adjournments thereof.
This Proxy, when properly executed, will be voted as directed by the
shareholder. if no such directions are indicated, the Proxies will have
authority to vote "FOR" the director nominee and "FOR" the ratification of
Arthur Andersen LLP as the Independent Public Accountants of the Company.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Date: , 1999
- ----------------------- ---------------------- -------------------
SIGNATURE SIGNATURE
Note: Please sign exactly as name or names appear on this Proxy. If stock is
held jointly, each holder must sign. If signing as attorney, trustee,
executor, administrator, custodian or corporate officer, please five full
title.
