<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 Under Rule 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 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MAY 24, 2000
-------------------------------
TO THE SHAREHOLDERS OF
ICT GROUP, INC.:
Notice is hereby given that the 2000 Annual Meeting of Shareholders
(the "Annual Meeting") of ICT GROUP, INC. (the "Company" or "ICT") will be held
at the Hyatt Regency Princeton, 102 Carnegie Center, Princeton, New Jersey 08540
on May 24, 2000, at 10:00 a.m., local time, for the following purposes:
1. To elect two directors;
2. To approve a proposal to amend the Company's 1996 Equity
Compensation Plan to increase the number of shares reserved for
issuance thereunder from 1,120,000 to 1,620,000;
3. To approve a proposal to amend the Company's 1996 Non-Employee
Directors Plan to increase the number of shares reserved for
issuance thereunder from 30,000 to 50,000;
4. To ratify the selection of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending
December 31, 2000; and
5. 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 3,
2000 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 3, 2000 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 M. Dadamo
Secretary
Langhorne, Pennsylvania
April 19, 2000
================================================================================
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.
================================================================================
1
<PAGE>
ICT GROUP, INC.
800 Town Center Drive
Langhorne, Pennsylvania 19047
-------------------------------
PROXY STATEMENT
FOR
2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MAY 24, 2000
-------------------------------
General Information on the Meeting
This proxy statement and the accompanying form of proxy are being
mailed on or about April 19, 2000 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 2000 Annual Meeting of Shareholders (the "Annual Meeting") to be held at the
Hyatt Regency Princeton, 102 Carnegie Center, Princeton, New Jersey 08540 on May
24, 2000, 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 common stock of the Company, par value $0.01 per
share ("Common Stock") of record at the close of business on April 3, 2000 are
entitled to notice of, and to vote at, the Annual Meeting. As of April 3, 2000,
there were 11,820,025 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 nominees listed herein
under "Election of Directors," FOR the proposals to amend the Company's 1996
Equity Compensation Plan and the Company's 1996 Non-Employee Directors Plan and
FOR ratification of the selection of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ended December 31, 2000. If
2
<PAGE>
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.
3
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
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, two directors are to be elected for the
current class. The term of office for the directors elected at the Annual
Meeting will expire at the 2003 annual meeting of shareholders.
John J. Brennan and John A. Stoops, current members of the board of
directors, have been nominated by the board of directors for election as
directors at the Annual Meeting.
The nominees have 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 nominees. The board
of directors believes the nominees will be able to serve as directors. 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 nominees.
-----------------------------------------------------------
Nominees for Election
-----------------------------------------------------------
<TABLE>
<CAPTION>
Year First Became Director, Principal Occupations During
Name of Director Age Past Five Years and Certain Directorships
- ---------------- --- --------------------------------------------------------
<S> <C> <C>
John J. Brennan 56 Mr. Brennan has served as Chairman, President and Chief Executive
Officer of the Company and as a director since April 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.
John A. Stoops 46 Mr. Stoops has been Vice President of Scholastics, Inc. since September
1999. From January 1995 to September 1999, Mr. Stoops was Vice
President and General Manager of Books and Information Services for
American Express Publishing Corporation, a joint venture between
American Express and Time Publishing. 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>
4
<PAGE>
-----------------------------------------------------------
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> <C>
Bernard Somers 50 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>
-----------------------------------------------------------
Director Continuing in Office with Term Expiring in 2002
-----------------------------------------------------------
<TABLE>
<CAPTION>
Year First Became Director, Principal Occupations During
Name of Director Age Past Five Years and Certain Directorships
- ---------------- --- --------------------------------------------------------
<S> <C> <C>
Donald P. Brennan
59 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>
General Information Concerning the Board of Directors and its Committees
The board of directors of the Company met on five occasions during
1999. 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 75% 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 twice during 1999. 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 twice during 1999. The Compensation Committee is currently
composed of two non-employee directors, Donald P. Brennan and Bernard Somers.
5
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
John J. Brennan 56 Chairman, President, Chief Executive Officer
Vincent A. Paccapaniccia 42 Senior Vice President, Finance and Administration,
Chief Financial Officer, and Assistant Secretary
Timothy F. Kowalski 39 Senior Vice President, Systems and Technology,
Chief Information and e-Commerce Officer
Vincent M. Dadamo 52 Senior Vice President, General Counsel and
Secretary
John D. Campbell 44 President, ICT Group Sales
John L. Magee 46 President, ICT TeleServices Division
Dean J. Kilpatrick 55 President, ICT Marketing Services Division
John P. McCabe 47 President, ICT Management Services and
International 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 Assistant
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 Chief e-Commerce
Officer since December 1999 and 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, 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.
Vincent M. Dadamo has served as the Company's Senior Vice President,
General Counsel and Secretary since June 1999. From July 1980 until January
1999, Mr. Dadamo was employed by DecisionOne Corporation (and its predecessors)
a computer services company as General Counsel or Associate General Counsel.
6
<PAGE>
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 1996. 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.
John P. McCabe has served as President, ICT Management Services and
International Services Division since March 2000. He served as President, ICT
International Services Division, from September 1998 to March 2000. Prior to
joining the Company in April 1997, Mr. McCabe was senior vice president of
National Westminster Bancorp, where he managed its operations, strategic
planning and credit card business.
John J. Brennan and Donald P. Brennan are brothers.
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 therefore 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.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 31, 2000
(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>
John J. Brennan (3)(4) ......................................... 7,541,625 58.1%
Donald P. Brennan (3) .......................................... 6,346,500 53.7%
Eileen Brennan Oakley (5)....................................... 2,062,500 17.5%
Bernard Somers (6).............................................. 10,000 0.1%
John A. Stoops (6).............................................. 4,000 *
John D. Campbell (7)............................................ 163,700 1.4%
John L. Magee (8)............................................... 275,175 2.3%
John P. McCabe (9).............................................. 30,025 0.3%
Maurice J. Kerins (10).......................................... 126,450 1.1%
All executive officers and directors as a group (12 persons).... 7,563,425 58.2%
</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, 2000.
(2) The percentage for each individual or group is based on the aggregate
number of shares outstanding as of March 31, 2000 (11,820,025) 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, 2000.
(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) 124,500 issued and outstanding shares of Common Stock and
1,035,625 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)
35,000 issued and outstanding shares of Common Stock and 127,700 shares
of Common Stock issuable pursuant to exercisable stock options issued
in Mr. Brennan's name.
(5) These shares are held subject to fourteen trusts for which Ms. Oakley
serves as trustee. The address of this shareholder is 800 Town Center
Drive, Langhorne, PA 19047.
(6) Includes 4,000 shares of Common Stock issuable pursuant to exercisable
stock options.
8
<PAGE>
(7) Includes 67,000 issued and outstanding shares of Common Stock and
96,700 shares of Common Stock issuable pursuant to stock options
exercisable as of March 31, 2000, or within 60 days thereafter. Voting
control over these shares is held by John J. Brennan pursuant to the
terms of the Voting Agreements.
(8) Consists of 275,175 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) Consists of 30,025 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.
(10) Consists of 126,450 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
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary Compensation Table. The following table sets forth for the
years ended December 31, 1999, 1998, and 1997 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, 1999.
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.......................... 1999 $414,299 $ 0 58,800 (3) $73,621
Chairman, President and Chief Executive 1998 $394,940 $ 29,314 (2) 116,400 $72,567
Officer 1997 $330,730 $ 15,942 -- $46,008
John L. Magee............................ 1999 $199,846 $ 92,790 12,800 (3) $ 4,918
President, ICT TeleServices Division 1998 $193,192 $ 45,021 17,200 $ 5,191
1997 $163,077 $ 56,161 -- $ 6,123
John D. Campbell......................... 1999 $179,846 $111,780 16,700 (3) $ 5,037
President, ICT Group Sales 1998 $172,654 $ 72,516 19,400 $ 4,926
1997 $149,462 $ 94,898 -- $ 6,267
John P. McCabe........................... 1999 $165,846 $105,163 12,500 (3) $ 5,037
President, ICT Management Services and 1998 $156,554 $ 63,256 4,600 $ 2,880
International Services Divisions 1997 $ 57,692 $ 18,000 21,000 $ 321
Maurice J. Kerins(4)..................... 1999 $159,846 $ 70,446 9,800 (3) $ 4,360
President, ICT Management Services Division 1998 $152,423 $ 56,146 17,000 $ 4,496
1997 $134,462 $ 80,332 -- $ 5,158
</TABLE>
- -------------------
(1) Includes: (A) for 1999 (i) Company contributions of $4,000, $4,000,
$4,000, $4,000 and $4,000 to the Company's 401(k) tax-qualified
employee savings and retirement plan on behalf of Mr. Brennan, Mr.
Magee, Mr. Campbell, Mr. McCabe and Mr. Kerins, respectively, (ii)
premiums paid by the Company in the amount of $1,032, $360, $240, $360,
and $360 for group term life insurance on behalf of Mr. Brennan, Mr.
Magee, Mr. Campbell, Mr. McCabe and Mr. Kerins, respectively; (iii)
premiums paid by the Company in the amount of $56,321, $558 and $797
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 $12,268 for an automobile leased on behalf of Mr.
Brennan; (B) 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; (C) 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
$1,109 for life insurance on behalf of Mr. Brennan, Mr. Magee and Mr.
Campbell, respectively.
(2) This bonus represents a portion of Mr. Brennan's 1997 base salary that
he was eligible to receive in 1997, but of which he elected to defer
payment and receive as a bonus during 1998.
(3) These options were granted in 1999 as bonus compensation for the
individual's performance during 1998.
(4) Mr. Kerins resigned as the President, ICT Management Services Division
in February 2000.
10
<PAGE>
Option Grants in Last Fiscal Year. The following table sets forth
certain information concerning grants of stock options made during 1999 to the
persons named in the Summary Compensation Table.
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realization Value
Number of % of Total at Assumed Annual Rates of
Securities Options Stock Price Appreciation for
Underlying Granted to Exercise Option Term (5 years) (1)
Options Employees In Price Expiration -------------------------
Name Granted Fiscal Year ($/share) Date 5% 10%
---- ------- ----------- --------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
John J. Brennan............ 58,800 20% $3.40 02/23/09 $55,234 $122,053
John L. Magee ............. 12,800 4% $3.40 02/23/09 $12,024 $ 26,569
John D. Campbell........... 16,700 6% $3.40 02/23/09 $15,687 $ 34,665
John P. McCabe............. 12,500 4% $3.40 02/23/09 $11,742 $ 25,947
Maurice J. Kerins.......... 9,800 3% $3.40 02/23/09 $ 9,206 $ 20,342
</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.
Year End Values. The following table summarizes option exercises during
1999 and the value of vested and unvested options for the persons named in the
Summary Compensation Table at December 31, 1999. Year-end values are based upon
a price of $12.25 per share, which was the closing market price of a share of
the Company's Common Stock on December 31, 1999.
Aggregated Option Exercises in Last Year and
Year-End Option Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options at
Options at December 31, 1999 December 31, 1999 (1)
Shares Acquired ----------------------------- ----------------------------
Name on Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John J. Brennan...... -- -- 72,900 102,300 $ 559,320 $819,510
John L. Magee........ 19,000 $160,556 272,800 18,200 $3,277,407 $148,385
John D. Campbell..... 81,000 $219,154 81,375 22,225 $ 910,298 $182,384
John P. McCabe....... -- -- 18,025 24,275 $ 87,144 $165,451
Maurice J. Kerins.... 40,000 $347,354 119,750 15,850 $1,400,158 $127,735
</TABLE>
- -----------
(1) Values calculated using the closing market price of $12.25 per share of
the Company's Common Stock on December 31, 1999 and the per share
exercise price of the individual's options.
11
<PAGE>
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.
In October, 1999 the Company adopted a Non-Qualified Deferred
Compensation Plan for certain employees, with deferrals to commence in April
2000. This plan will allow these employees to defer a portion of their
compensation on a pre-tax basis. Currently, there is no employer match on any
amounts deferred. Employees are fully vested in their deferred amounts, but
withdrawals are not permitted until the plan is terminated, the employee attains
age 65, or the employee terminates, becomes disabled, or dies. Other withdrawals
are permitted for unforeseeable emergencies only.
Employment Agreements
In May 1996, the Company entered into an employment agreement with John
J. Brennan as President and Chief Executive Officer. The agreement was for a
three-year term which ended 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. Mr. Brennan's employment agreement was renewed
on May 1, 1999 for an additional three-year term. The agreement initially
provided 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.
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. In
February 2000, Mr. Kerins resigned his position as President, ICT Management
Services Division and the Company has no further payment obligations under his
employment agreement. During March 2000 Mr. Kerins acted as a consultant to the
Company. Mr. Magee's current base salary is $210,000. His 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. The agreement was renewed on January 1, 2000 for
an additional one-year term. In addition to base salary, the agreement allows
for bonuses to be paid by the Company. The Company may terminate the employment
agreement at any time, with or without cause. The employment agreement contains
severance provisions which, if triggered, entitle Mr. Magee to monthly severance
payments in an amount equal to his 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 Mr. Magee 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 Mr. Magee terminates his employment upon 90 days' prior written
notice, in certain circumstances, the Company would be required to continue to
provide him 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, 2000 for an additional one-year term. Mr.
Campbell, whose current base salary is $190,000, is eligible for bonuses from
the Company.
12
<PAGE>
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 $165,000, 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.
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.
13
<PAGE>
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 1999
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 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.
Compensation of Chief Executive Officer
The CEO's annual base salary was increased to $421,375 effective May 1,
1999 from $401,310 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.
The CEO was granted 58,800 options in 1999. These options were granted
as bonus compensation for the CEO's performance during 1998.
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, 1999,
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
Bernard Somers
14
<PAGE>
COMPARATIVE STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return on the
Company's Common Stock at its initial public offering price 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 Aegis Communications
Group, Inc., APAC Teleservices, Inc., RMH Teleservices, Inc., Telespectrum
Worldwide, Inc., West Teleservices Corp., Precision Response Corp., Sitel Corp.
and Teletech Holdings, Inc. In 1998, ATC Communications Group, Inc. merged with
IQI, Inc. and changed its corporate name to Aegis Communications Group, 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
(GRAPH OMITTED)
Measurement Date ICT Group, Inc. Nasdaq Stock Market Peer Group
- ---------------- --------------- ------------------- ----------
6/14/96 $100 $100 $100
12/31/96 $ 27 $103 $113
12/31/97 $ 28 $126 $ 44
12/31/98 $ 16 $178 $ 28
12/31/99 $ 77 $313 $ 77
15
<PAGE>
PROPOSAL NO. 2
AMENDMENT OF 1996 EQUITY COMPENSATION PLAN
At the Annual Meeting, the shareholders will vote on a proposal to
amend the Company's 1996 Equity Compensation Plan (the "Plan") to increase the
number of shares of Common Stock reserved for issuance under the Plan from
1,120,000 to 1,620,000. The board of directors approved the amendment at its
meeting held in April 2000, subject to shareholder approval.
The board believes the Plan helps the Company to attract, retain and
motivate employees and other key personnel and to encourage them to devote their
best efforts to the business and financial success of the Company. The board
believes that providing key employees and consultants with the opportunity to
acquire an equity interest in the Company over time serves to align their
interests closely with other shareholders. The Plan has not been amended
previously. As of December 31, 1999, the Company had granted, net of
cancellations, options to purchase 670,375 shares under the Plan. The board of
directors believes it is in the best interest of the Company to increase the
number of shares authorized for issuance under the Plan because the increase
will allow the Company to continue to grant stock-based compensation at levels
it deems appropriate. The Company has received a report from Arthur Andersen
LLP, an independent worldwide compensation consultant, advising the Company that
the proposed increase in the number of shares reserved for issuance under the
Plan is reasonable and within generally accepted limits when compared to other
companies within the Company's peer group.
The board of directors recommends that the shareholders vote FOR the
proposal to amend the Plan to increase the number of shares of Common Stock
reserved for issuance under the Plan from 1,120,000 to 1,620,000.
Vote Required for Approval
Approval of the proposed amendment to the Plan requires the affirmative
vote of the holders of a majority of the votes cast by the holders of the Common
Stock entitled to vote thereon.
Description of the Plan
General. Subject to adjustment in certain circumstances as discussed
below, the Plan currently authorizes up to 1,120,000 shares of Common Stock of
the Company for issuance pursuant to the terms of the Plan. If and to the extent
Grants under the Plan expire or are terminated for any reason without being
exercised, or the shares of Common Stock subject to a Grant are forfeited, the
shares of Common Stock subject to such Grants again will be available for Grants
under the Plan.
Administration of the Plan. The Plan is administered and interpreted by
a Committee (the "Committee") of the Board consisting of two or more persons
appointed by the Board from among its members, each of whom must be a
"disinterested person" as defined in Rule 16b-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and an "outside director" as
defined by section 162(m) of the Internal Revenue Code (the "Code").
Grants. Grants to employees (including officers and directors) and
consultants of the Company ("Grantees") under the Plan may consist of (i)
options intended to qualify as incentive stock options ("ISOs") within the
meaning of section 422 of the Code, (ii) options which are not intended to
qualify as ISO's ("NQSOs") (iii) restricted stock, (iv) stock appreciation
rights ("SARs") or (v) other awards that are valued in whole or in part by
reference to, or are otherwise based on, the Company's Common Stock.
Eligibility for Participation. Grants may be made to any full-time
employee (including officers and directors) and consultants of the Company. As
of December 31, 1999, 460 employees were eligible for Grants under the Plan.
During any calendar year, no Grantee may receive Grants for more than 570,000
shares of Common Stock. As of December 31, 1999, 89 Grants had been made under
the Plan.
Options. The option price of any ISO granted under the Plan will not be
less than the fair market value of the underlying shares of Common Stock on the
date of grant; provided, however, that if an ISO is granted to a Grantee who
then owns, directly or indirectly, shares possessing more than ten percent of
the total combined voting power of all classes of stock of the Company, then the
option price will be at least 110% of the fair market value of the underlying
shares of Common Stock on the date of grant. The option price of an NQSO is
determined by the Committee in its sole discretion and may be greater than,
equal to or less than the fair market value of the underlying shares of Common
Stock on the date of grant.
16
<PAGE>
The Committee may determine the term of each option; provided, however,
that the exercise period may not exceed ten years from the date of grant or five
years from the date of grant of an ISO if the Grantee on the date of grant owns,
directly or indirectly, shares possessing more than ten percent of the total
combined voting power of all classes of stock of the Company. A Grantee may pay
the option price (i) in cash, (ii) with the approval of the Committee, by
delivering shares of Common Stock owned by the Grantee (including Common Stock
acquired in connection with the exercise of a stock option, subject to such
restrictions as the Committee deems appropriate) and having a fair market value
on the date of exercise equal to the option price or (iii) by a combination of
the foregoing.
If a Grantee ceases to serve as an employee, director or consultant of
the Company or its subsidiaries for any reason other than disability, death or
termination for cause, the Grantee's stock options will terminate 90 days
following the date on which he or she ceases to serve. If the Grantee's service
ceases due to the Grantee's death or disability, the Grantee's stock options
will terminate one year following the date on which he or she ceases to serve
due to such death or disability. If the Grantee's service ceases due to
termination by the Company for cause, the Grantee's stock options will terminate
immediately. However, in each case described above, the Committee may specify a
different termination date with respect to a Grantee, but in no event later than
the date of expiration of the option term.
Restricted Stock. The Committee may make Grants of restricted stock.
Shares may be issued for cash or other consideration, as the Committee
determines. The number of shares of Common Stock granted to each Grantee shall
be determined by the Committee. Grants of restricted stock will be made subject
to such restrictions and conditions as the Committee may determine in its sole
discretion, including restrictions on transferability (the "Restriction
Period"). During the Restriction Period, if any, a Grantee will have the right
to vote the shares subject to the Grant and the right to receive any regular
cash dividends paid thereon, unless the Committee determines otherwise. If a
Grantee's employment or service for the Company terminates, or in the event of
the occurrence of certain other events determined by the Committee, the Grant
will terminate with respect to all shares as to which the restrictions have not
lapsed and those shares must be returned to the Company.
Stock Appreciation Rights. The Committee may grant SARs alone or in
tandem with any stock option. The base amount of an SAR will be the greater of
(i) the exercise price of the related stock option, if any, or (ii) the fair
market value of a share of Common Stock on the date of grant of the SAR, unless
the Committee determines otherwise. Upon exercise of an SAR, a Grantee will
receive the amount by which the fair market value of the Common Stock on the
date of exercise exceeds the base amount of the SAR. A Grantee may elect to have
such appreciation paid in cash or in shares of Common Stock of the Company,
subject to Committee approval.
Stock-Based Awards. The Committee may, subject to limitations under
applicable law, grant to any Grantee other than a non-employee director, awards
of Common Stock or cash equal to the value of shares of Common Stock as a bonus,
subject to such conditions and restrictions, if any, as the Committee may
determine in its sole discretion.
Conditions of Grants. Unless the Committee determines otherwise, all
Grants under the Plan will be contingent upon the Grantee entering a voting
agreement with respect to any shares issued pursuant to such Grant, in the form
and manner prescribed by the Committee. No shares of Common Stock will be issued
in connection with any Grant under the Plan unless the Grantee participates in
such voting trust or the Committee determines otherwise.
Amendment and Termination of the Plan. The Board may amend or terminate
the Plan at any time; provided, however, that, the Board must obtain shareholder
approval of any amendments to the Plan that (i) increase the aggregate number of
shares of Common Stock for which Grants may be made thereunder, (ii) decrease
the minimum exercise price specified by the Plan in respect of ISOs, (iii)
change the class of employees eligible to receive ISOs under the Plan, (iv)
increase the individual limit of shares of Common Stock for which Grants of
options may be made to any single individual under the Plan or (v) make any
amendment that requires shareholder approval pursuant to Rule 16b-3 of the
Exchange Act or 162(m) of the Code. The Plan will terminate in May 2006, unless
terminated earlier by the Board or extended by the Board with approval of the
shareholders.
17
<PAGE>
Adjustment Provisions. If there is any change in the number or kind of
shares of Common Stock outstanding by reason of a stock dividend,
recapitalization, stock split or combination or exchange of such shares, or
merger, reorganization or consolidation in which the Company is the surviving
corporation, or reclassification or other change in the par value of the Common
Stock or by reason of any other extraordinary or unusual event affecting the
outstanding Common Stock as a class, the Committee may make adjustment to
reflect any increase or decrease in the number or kind of issued shares of
Common Stock.
Change of Control of the Company. Upon a change of control of the
Company (i) the Company will provide each Grantee with outstanding Grants
written notice of such change of control, (ii) all outstanding stock options and
SARs will automatically accelerate and become fully exercisable and (iii) the
restrictions and conditions on all outstanding restricted stock and stock-based
awards will immediately lapse. In addition, upon a change of control where the
Company is not the surviving corporation, all outstanding stock options and SARs
must be assumed or replaced with comparable options or rights by the surviving
corporation; provided, however, that the Committee may (i) require that Grantees
surrender their outstanding stock options and SARs in exchange for a payment by
the Company, in cash or Common Stock as determined by the Committee, in an
amount equal to the amount by which the then fair market value of the shares of
Common Stock subject to the Grantee's outstanding stock options or SARs exceeds
the option purchase price of the stock options or base amount of the SARs, as
the case may be, and (ii) terminate any or all outstanding stock options and
SARs at such time as the Committee deems appropriate.
18
<PAGE>
PROPOSAL NO. 3
AMENDMENT OF 1996 NON-EMPLOYEE DIRECTORS PLAN
At the Annual Meeting, the shareholders will vote on a proposal to
amend the Company's 1996 Non-Employee Directors Plan (the "Directors Plan") to
increase the number of shares of Common Stock reserved for issuance under the
Directors Plan from 30,000 to 50,000. The board of directors approved the
amendment at its meeting held in April 2000, subject to shareholder approval.
The board believes the Directors Plan helps the Company to attract,
retain and motivate non-employee directors to participate in the management of
the Company through representation on the board. The board believes that
providing non-employee directors with the opportunity to acquire an equity
interest in the Company will align their interests closely with other
shareholders. The Directors Plan has not been amended previously. As of December
31, 1999, the Company had granted, net of cancellations, options to purchase
8,000 shares under the Directors Plan. The board of directors believes it is in
the best interest of the Company to increase the number of shares authorized for
issuance under the Directors Plan because the increase will allow the Company to
continue to grant stock-based compensation at levels it deems appropriate. The
Company has received a report from Arthur Andersen LLP, an independent worldwide
compensation consultant, advising the Company that the proposed increase in the
number of shares reserved for issuance under the Directors Plan is reasonable
and within generally accepted limits when compared to other companies within the
Company's peer group.
The board of directors recommends that the shareholders vote FOR the
proposal to amend the Directors Plan to increase the number of shares of Common
Stock reserved for issuance under the Director Plan from 30,000 to 50,000.
Vote Required for Approval
Approval of the proposed amendment to the Directors Plan requires the
affirmative vote of the holders of a majority of the votes cast by the holders
of the Common Stock entitled to vote thereon.
Description of the Directors Plan
The Directors Plan was adopted by the Board in May 1996. The Directors
Plan currently provides for formula grants of NQSOs to members of the Board of
Directors who are not employees of the Company ("Non-Employee Directors").
General. Subject to adjustment in certain circumstances as discussed
below, the Directors Plan authorizes up to 30,000 shares of common stock of the
Company for issuance pursuant to the terms of the Plan. If and to the extent
Grants under the Directors Plan expire or are terminated for any reason without
being exercised, or the shares of Common Stock subject to a Grant are forfeited,
the shares of Common Stock subject to such Grants again will be available for
future Grants under the Directors Plan.
Eligibility for Participation. Each Non-Employee Director who owns less
than 10% of the outstanding stock of the Company is eligible to receive NQSOs
under the Directors Plan.
Formula Grants. Pursuant to the Directors Plan, each Non-Employee
Director who first becomes a member of the Board will receive an NQSO to
purchase 1,000 shares of Common Stock on the date he or she becomes a member of
the Board. Such NQSOs will be 100% vested and immediately exercisable on the
date of grant. Thereafter, on each date that the Company holds its annual
meeting of shareholders, each Non-Employee Director in office immediately after
the annual election of directors (other than Non-Employee Directors first
elected at such meeting) will receive an NQSO to purchase 1,000 shares of Common
Stock. The exercise price of all options granted pursuant to the Directors Plan
must be equal to the fair market value of a share of Common Stock on the date of
grant and the term of each such option will be ten years. Options granted
annually to Non-Employee Directors pursuant to the Directors Plan shall become
exercisable with respect to 100% of the shares on the first anniversary of the
date of grant.
19
<PAGE>
If a Non-Employee Director ceases to serve as a Non-Employee Director
of the Company or its subsidiaries for any reason other than becoming an
employee of the Company, disability, death or termination for cause, the
Non-Employee Director's NQSOs will terminate 90 days following the date on which
he or she ceases to serve. If a Non-Employee Director's service ceases due to
death or disability, the Non-Employee Director's NQSOs will terminate one year
following the date on which he or she ceases to serve due to such death or
disability. If a Non-Employee Director's service ceases due to termination by
the Company for cause, the Non-Employee Director's NQSOs will terminate
immediately.
Amendment and Termination of the Directors Plan. The Board may amend or
terminate the Directors Plan at any time provided, however, that the formula
provisions of the Directors Plan may not be amended more than once every six
months, other than to comport with changes in the Code, the Employee Retirement
Income Security Act, or the rules thereunder. The Directors Plan will terminate
in May 2006, unless terminated earlier by the Board or extended by the Board
with approval of the shareholders.
Adjustment Provisions. If there is any change in the number or kind of
shares of Common Stock outstanding by reason of a stock dividend,
recapitalization, stock split or combination or exchange of such shares, or
merger, reorganization or consolidation in which the Company is the surviving
corporation, or reclassification or other change in the par value of the Common
Stock or by reason of any other extraordinary or unusual event affecting the
outstanding Common Stock as a class, the Committee may make adjustment to
reflect any increase or decrease in the number or kind of issued shares of
Common Stock.
Change of Control of the Company. Upon a change of control of the
Company (i) the Company will provide each Non-Employee Director with outstanding
NQSOs written notice of such change of control and (ii) all outstanding NQSOs
will automatically accelerate and become fully exercisable.
20
<PAGE>
PROPOSAL NO. 4
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The board of directors has appointed the firm of Arthur Andersen LLP as
the Company's independent public accountants for the year ending December 31,
2000. 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 of directors 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, 2000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires the Company's
executive officers and directors and persons who own more than ten percent of
the Company's Common Stock to file reports of ownership and changes in ownership
of the Company's Common Stock and any other equity securities of the Company
with the Securities and Exchange Commission. Based on its records, the Company
believes that reports for its executive officers, directors and greater than ten
percent shareholders were filed during 1999, except that the grants of a stock
option to two executive officers of the Company inadvertently were not reported.
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 2001 ANNUAL MEETING
Shareholders may submit proposals on matters appropriate for
shareholder 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 2001 annual meeting, such proposals must be received by the
Company no later than December 26, 2000. Proposals should be directed to the
attention of the Secretary of the Company.
21
<PAGE>
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 the 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 M. Dadamo
Secretary
April 19, 2000
22
<PAGE>
ICT Group, Inc.
ANNUAL MEETING OF SHAREHOLDERS - MAY 24, 2000 THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
The undersigned hereby appoints JOHN J. BRENNAN and VINCENT M. DADAMO,
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 Hyatt Regency Princeton, 102
Carnegie Center, Princeton, New Jersey 08540 on May 24, 2000, 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 mark your votes as in this example.
WITHHOLD
AUTHORITY
to vote for the [X}
nominees listed
at right
FOR the
nominees listed at right (except as marked to the contrary below)
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Nominees: John J. Brennan
John A. Stoops
1. Election of Directors
(Class I)
(Instructions: To withhold authority to vote for an individual nominee, write
that nominee's name on the line below.)
2. Proposal to amend the Company's 1996 Equity Compensation Plan to increase the
number of shares reserved for issuance from 1,120,000 to 1,620,000.
3. Proposal to amend the Company's 1996 Non-Employee Directors Plan to increase
the number of shares reserved for issuance from 30,000 to 50,000.
4. Proposal to ratify the Appointment of Arthur Andersen LLP as Independent
Public Accountants of the Company for the Fiscal Year Ending December 31, 2000.
5. 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 nominees, "FOR" the proposal to increase
the number of shares reserved for issuance under the Company's 1996 Equity
Compensation Plan and 1996 Non-Employee Directors Plan 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: , 2000
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 give full title.
