<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:
[_] CONFIDENTIAL, FOR USE OF THE
[_] Preliminary Proxy Statement COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WEST TELESERVICES CORPORATION
------------------------------------------
(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:
N/A
- - -------------------------------------------------------------------------------
(2)Aggregate number of securities to which transaction applies:
N/A
- - -------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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- - -------------------------------------------------------------------------------
(4)Proposed maximum aggregate value of transaction:
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- - -------------------------------------------------------------------------------
(5)Total fee paid:
[_]Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1)Amount previously paid:
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- - -------------------------------------------------------------------------------
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(4)Date filed:
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<PAGE>
[LOGO APPEARS HERE]
WEST TELESERVICES CORPORATION
9910 MAPLE STREET
OMAHA, NEBRASKA 68134
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 14, 1997
To the Stockholders of
WEST TELESERVICES CORPORATION.
You are cordially invited to attend the annual meeting of stockholders (the
"Annual Meeting") of West TeleServices Corporation, a Delaware corporation
(the "Company"), which will be held at the Marriott Hotel, 10220 Regency
Circle, Omaha, Nebraska on May 14, 1997 at 9:00 a.m., Central Daylight Time,
for the following purposes:
1. To elect two directors to serve for three-year terms until the 2000
annual meeting of stockholders;
2. To ratify the appointment by the Board of Directors of Deloitte &
Touche LLP as independent auditors for the Company for the fiscal year
ending December 31, 1997;
3. To ratify and approve the Company's 1997 Employees Stock Purchase
Plan; and
4. To consider and transact such other business as may properly be
brought before the Annual Meeting or any adjournment or postponement
thereof
The Board of Directors has fixed the close of business on April 14, 1997 as
the record date for the determination of stockholders entitled to receive
notice of, and to vote at, the Annual Meeting and any adjournment or
postponement thereof.
By Order of the Board of Directors,
Mary E. West
Vice Chair and Secretary
Dated: April 17, 1997
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IN
THE EVENT YOU ATTEND THE ANNUAL MEETING AND VOTE IN PERSON, THE PROXY WILL NOT
BE USED. THESE PROXY MATERIALS ARE FURNISHED IN CONNECTION WITH THE
SOLICITATION BY THE BOARD OF DIRECTORS OF THE COMPANY OF PROXIES TO BE USED AT
THE ANNUAL MEETING AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
<PAGE>
WEST TELESERVICES CORPORATION
9910 MAPLE STREET
OMAHA, NEBRASKA 68134
----------------
PROXY STATEMENT
----------------
You are cordially invited to attend the Annual Meeting of Stockholders on
May 14, 1997, to be held at the Marriott Hotel, 10220 Regency Circle, Omaha,
Nebraska at 9:00 a.m. Central Daylight Time, and at any adjournment or
postponement thereof. The Company's Annual Report to Stockholders, this Proxy
Statement and accompanying proxy are first being mailed to stockholders on
approximately April 17, 1997.
PROXY INFORMATION
Your vote is important. Because many stockholders cannot personally attend
the Annual Meeting, it is necessary that a large number be represented by
proxy. Stockholders may sign, date and mail their proxies in the postage-paid
envelope provided. Proxies may be revoked at any time before they are
exercised by written notice to the Secretary, by timely notice of a properly
executed later dated proxy or by voting in person at the Annual Meeting.
All shares of Common Stock, par value $.01 per share, of the Company
("Common Shares") entitled to vote and represented by properly executed
proxies received prior to the Annual Meeting and not revoked will be voted at
the Annual Meeting in accordance with the instructions indicated on those
proxies. If no instructions are indicated on a properly executed proxy, the
Common Shares represented by that proxy will be voted at the discretion of the
person or persons holding such proxy.
If any other matters are properly presented at the Annual Meeting for
consideration, including, among others things, consideration of a motion to
adjourn the Annual Meeting to another time or place, the persons named in the
enclosed form of proxy and acting thereunder will have discretion to vote on
those matters to the same extent as the person signing the proxy would be
entitled to vote. The Company does not currently anticipate that any other
matters will be raised at the Annual Meeting.
STOCKHOLDERS ENTITLED TO VOTE
Holders of record of the Common Shares at the close of business on April 14,
1997 (the "Record Date") are entitled to notice of and to vote at the Annual
Meeting. On March 17, 1997, there were 63,330,000 Common Shares outstanding.
Each Common Share is entitled to one vote on each matter brought before the
Annual Meeting. At March 17, 1997, there were also 10,000,000 shares of
authorized preferred stock, none of which have been issued.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, EXECUTIVE OFFICERS AND
DIRECTORS
The following table sets forth information concerning the beneficial
ownership of the Common Shares as of March 17, 1997, for (a) each person known
to the Company to be a beneficial owner of more than five percent of the
Common Shares; (b) each director and each of the nominees for director; (c)
each executive officer designated in the section of this Proxy Statement
captioned "Executive Compensation"; and (d) all directors and executive
officers as a group. Except as otherwise noted, each person named below had
sole voting and investment power with respect to such securities.
<TABLE>
<CAPTION>
AMOUNT
BENEFICIALLY PERCENT OF
NAME AND ADDRESS(1) OWNED(2) COMMON SHARES
------------------- ------------ -------------
<S> <C> <C>
Gary L. West(3)...................................... 45,451,263 71.8%
Mary E. West(3)...................................... 45,451,263 71.8%
Troy L. Eaden(4)..................................... 8,516,250 13.4%
Thomas B. Barker..................................... 16,500 *
William E. Fisher.................................... 500 *
Greg T. Sloma........................................ 0 *
Nancee R. Berger..................................... 12,500 *
Michael M. Sturgeon.................................. 1,175 *
Lee O. Waters........................................ 1,000 *
All directors and executive officers as a
group (14 persons)(1)............................... 55,016,308 86.9%
</TABLE>
- - --------
* Less than 1%
(1) The address of each executive officer and director of the Company is c/o
West TeleServices Corporation, 9910 Maple Street, Omaha, Nebraska 68134.
(2) Under the rules of the Securities and Exchange Commission (the "SEC"),
shares are deemed to be "beneficially owned" by a person if such person
directly or indirectly has or shares (i) the power to vote or dispose of
such shares whether or not such person has any pecuniary interest in such
shares, or (ii) the right to acquire the power to vote or dispose of such
shares within 60 days, including any right to acquire through the exercise
of any option, warrant or right.
(3) Common Shares held by the Wests are held in joint tenancy with right of
survivorship. Voting power of these shares is shared between them.
(4) Includes 1,516,250 Common Shares held by the Eaden Family Limited
Partnership, of which Mr. Eaden is a general partner.
ELECTION OF DIRECTORS
The Board of Directors presently consists of six directors divided into
three classes, each class serving for a period of three years. Two Directors
will be elected at the Annual Meeting to serve for a term expiring at the
Company's annual meeting of stockholders to be held in the year 2000.
The persons named in the enclosed proxy intend to vote such proxy for the
election of each of the two nominees named below, unless the stockholder
indicates on the proxy card that the vote should be withheld from any or all
of such nominees. Each nominee elected as a Director will continue in office
until his or her successor has been duly elected and qualified, or until his
or her earlier death, resignation or retirement. Should any one or more of
these nominees become unable to serve for any reason or, for good cause, will
not serve, which is not anticipated, the Board of Directors may, unless the
Board by resolution provides for a lesser number of directors, designate
substitute nominees, in which event the persons named in the enclosed proxy
will vote for the election of such substitute nominee or nominees.
2
<PAGE>
The Board of Directors has proposed the following nominees for election as
Directors at the Annual Meeting.
NOMINEES FOR TERMS EXPIRING AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
IN THE YEAR 2000:
THOMAS B. BARKER
WILLIAM E. FISHER
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE ABOVE NAMED
NOMINEES FOR ELECTION AS DIRECTORS.
NOMINEES FOR TERMS EXPIRING IN 2000
THOMAS B. BARKER joined the Company in 1991 as Executive Vice President of
Interactive. Mr. Barker was promoted to President and Chief Operating Officer
of the Company in March 1995. Prior to joining the Company, he served as
President and Chief Operating Officer of Cue Network Corp., a provider of
nationwide paging and satellite data distribution services. Mr. Barker is 42
years of age.
WILLIAM E. FISHER was appointed to the Board of Directors in 1997. Since
1993, Mr. Fisher has been director, Chairman of the Board, President and Chief
Executive Officer of Transaction Systems Architects, Inc. ("TSA"), an Omaha
based company which develops, markets and supports a broad line of software
products and services primarily focused on facilitating electronic payments.
Since 1991, Mr. Fisher has also served as Chief Executive Officer of Applied
Communications, Inc., a subsidiary of TSA. Mr. Fisher is a director of BA
Merchant Services, Inc. Mr. Fisher is 50 years of age.
DIRECTORS WHOSE TERMS WILL EXPIRE IN 1998
MARY E. WEST co-founded WATS and remained until December 1985. In January
1986, she and Mr. Eaden founded the Company. Mrs. West has served as Vice
Chair of the Company since 1987. Mrs. West and Mr. West are wife and husband.
Mrs. West is 51 years of age.
TROY L. EADEN co-founded the Company with Mrs. West in January 1986. He has
served as the principal executive of the Company since 1989 and has formally
held the title of Chief Executive Officer since March 1995. Mr. Eaden was
employed by WATS from May 1980 to December 1985. Mr. Eaden is 34 years of age.
DIRECTORS WHOSE TERMS WILL EXPIRE IN 1999
GARY L. WEST co-founded WATS Marketing of America ("WATS") in 1978 and
remained with that company until 1985. Mr. West joined the Company in July
1987 after the expiration of a noncompetition agreement with WATS. Mr. West
has served as Chairman of the Board since joining the Company. Mr. West and
Mary E. West are husband and wife. Mr. West is 51 years of age.
GREG T. SLOMA was appointed to the Board of Directors in 1997. Since 1996,
Mr. Sloma has been the President and Chief Operating Officer of Data
Transmission Network ("DTN"), an Omaha based provider of electronic
information and communication services. Mr. Sloma served as an Executive Vice
President and Chief Financial Officer of DTN prior to his promotion to his
current position. Prior to joining DTN in 1993, Mr. Sloma was a tax partner
with the accounting firm Deloitte & Touche. Mr. Sloma is 45 years of age.
3
<PAGE>
BOARD OF DIRECTORS AND COMPENSATION
Beginning immediately prior to the initial public offering of the Company in
November 1996, the Board of Directors consisted of four directors: Gary L.
West, Mary E. West, Troy L. Eaden and Thomas B. Barker. As described in the
Restated Bylaws of the Company, the Board has authority to fix the number of
Directors and to elect Directors resulting from any increase in the number of
Directors. In February 1997, the Board increased the number of its members to
six and elected William E. Fisher and Greg T. Sloma to fill the two vacancies
on the Board.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established a Compensation Committee, comprised
of Gary L. West, Troy L. Eaden, William E. Fisher and Greg T. Sloma (the
"Compensation Committee"), which provides recommendations concerning salaries
and incentive compensation for employees of, and consultants to, the Company.
The Board of Directors has also established an Audit Committee, comprised of
Troy L. Eaden, William E. Fisher and Greg T. Sloma, which reviews the results
and scope of the annual audit of the Company's financial statements conducted
by the Company's independent accountants, the scope of other services provided
by the Company's independent accountants, proposed changes in the Company's
financial and accounting standards and principles, and the Company's policies
and procedures with respect to its internal accounting, auditing and financial
controls. The Audit Committee also makes recommendations to the Board of
Directors on the engagement of the independent accountants as well as other
matters which may come before the Audit Committee or at the direction of the
Board of Directors. The Board of Directors does not have a Nominating
Committee.
ATTENDANCE AT MEETINGS OF THE BOARD OF DIRECTORS AND OF COMMITTEES
The Board of Directors met four times during the fiscal year ended December
31, 1996. Each of the directors who served during such period attended at
least 75% of the aggregate number of meetings of the Board of Directors and
any committee of which they were members during such period. Neither the
Compensation Committee nor the Audit Committee met during the fiscal year
ended December 31, 1996.
DIRECTORS' ANNUAL COMPENSATION
During the fiscal year ended December 31, 1996, members of the Board of
Directors received no directors' fees. The Company is obligated to reimburse
the members of the Board of Directors for all reasonable expenses incurred in
connection with their attendance at directors' meetings. No director made any
claim for reimbursement in fiscal 1996. Members of the Board of Directors who
are not employees of the Company will receive $2,000 per meeting plus
reasonable expenses incurred in connection with their attendance at directors'
meetings. Pursuant to the 1996 Stock Incentive Plan, these directors will be
granted options to acquire 2,000 Common Shares as of the date of their first
election to the Board of Directors (the "Initial Grant"). Each director also
will be granted options to purchase 1,000 additional Common Shares as of each
of the Company's annual stockholders meetings provided that such director
remains a member of the Board of Directors at such time (the "Annual Grant").
The options will become vested and exercisable one year from the date such
options are granted. Effective February 1, 1997, the Board adopted an
amendment to the 1996 Stock Incentive Plan that increased the Initial Grant
from 2,000 Common Shares to 14,000 Common Shares and increased the Annual
Grant from 1,000 Common Shares to 4,000 Common Shares. The vesting schedule
for such options was changed to a three year period (for the Initial Grants
and Annual Grants, respectively, options for 6,000 and 1,000 Common Shares
vest on the first anniversary of the date of grant and options for 4,000 and
1,500 Common Shares vest on the second and third anniversary of the date of
grant).
4
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides certain summary information concerning
compensation of the Company's chief executive officer and the four other most
highly compensated executive officers of the Company (collectively, the "Named
Executive Officers") for each of the last three fiscal years. There were no
stock appreciation rights outstanding during the fiscal year ended December
31, 1996.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
--------------- ------------
SECURITIES
UNDERLYING ALL OTHER
FISCAL SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)(1)
--------------------------- ------ ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Troy L. Eaden................. 1996 259,644 0 0 1,680
Chief Executive Officer...... 1995 234,493 0 0 2,850
and Director................. 1994 181,262 0 0 2,205
Thomas B. Barker.............. 1996 220,457 527,134 437,000 1,680
President, Chief Operating 1995 293,284 223,845 0 2,850
Officer and Director......... 1994 148,850 500,749 0 2,138
Nancee R. Berger.............. 1996 124,212 380,836 212,800 3,070
President--.................. 1995 116,418 0 0 2,313
Interactive Teleservices..... 1994 97,059 12,000 0 2,443
Michael M. Sturgeon........... 1996 350,000 23,479 91,200 3,470
Executive Vice President--... 1995 350,000 193,845 0 2,850
Sales and Marketing.......... 1994 75,000 122,880 0 2,171
Lee O. Waters ................ 1996 186,868 111,708 152,000 1,680
Executive Vice President--... 1995 97,543 158,088 0 0
Operator Services Division... 1994 63,575 0 0 0
</TABLE>
- - --------
(1) These amounts, if any, reflect matching contributions made by the Company
on behalf of each Named Executive Officer pursuant to the Company's
Employee 401(k) Retirement Plan.
5
<PAGE>
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth options granted to the Named Executive
Officers. The Company did not issue stock appreciation rights in fiscal 1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE(1)
-------------------------------------------------------- -------------
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL
OPTIONS OPTIONS GRANTED EXERCISE OR GRANT DATE
GRANTED(2) TO EMPLOYEES BASE PRICE EXPIRATION PRESENT VALUE
NAME (#) IN FISCAL YEAR ($/SH) DATE ($)
---- ---------- --------------- ----------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
Troy L. Eaden........... 0 0 N/A N/A N/A
Thomas B. Barker........ 437,000 12.14 $18.00 November 27, 2006 3,738,887
Nancee R. Berger........ 212,800 5.91 $18.00 November 27, 2006 1,820,675
Michael M. Sturgeon..... 91,200 2.53 $18.00 November 27, 2006 780,289
Lee O. Waters........... 152,000 4.22 $18.00 November 27, 2006 1,300,482
</TABLE>
- - --------
(1) The fair value of the stock options was estimated at the date of grant
using the Black-Scholes pricing model. The calculation was based on a
risk-free interest rate of 6.5%, no dividend yield, expected volatility of
40%, and an expected life of 5.5 years.
(2) The options will vest and become exercisable at a rate of 5% on and after
the first anniversary of the date of grant, an additional 5% on the second
and third anniversary of the date of grant, an additional 10% on each of
the fourth, fifth, sixth, seventh and eighth anniversary of the date of
grant, 15% on the ninth anniversary of the date of grant and the final 20%
on the tenth anniversary of the date of grant. However, upon a change of
control, all options will become fully vested.
The following table sets forth the number of shares covered by options held
by Messrs. Barker, Sturgeon, and Waters and Ms. Berger, the members of the
Named Executive Officers who held options in 1996, and the value of the
options as of December 31, 1996. None of the options were exercisable in 1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUE(1)
--------------------------------------------------------------------------
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
FISCAL YEAR-END AT FISCAL YEAR-END
(#) ($)
----------------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- ----------------- ----------- -------------
<S> <C> <C> <C> <C>
Thomas B. Barker........ N/A 437,000 N/A 2,075,750
Michael M. Sturgeon..... N/A 91,200 N/A 433,200
Nancee R. Berger........ N/A 212,800 N/A 1,010,800
Lee O. Waters........... N/A 152,000 N/A 722,000
</TABLE>
- - --------
(1) Based on a closing price of $22.75 per Common Share on December 31, 1996,
all of the options were in the money at fiscal year end.
EMPLOYMENT AGREEMENTS
Pursuant to an employment agreement dated as of June 30, 1991, Mr. Eaden's
salary and bonus are determined annually by the Board of Directors. Mr.
Eaden's employment shall terminate upon certain events including Mr. Eaden's
death or disability, the sale of all or substantially all of the assets of the
Company, termination of employment by the Company for cause or without cause,
or Mr. Eaden's resignation. Upon termination of employment for any reason, the
Company shall pay Mr. Eaden all salary through the date of termination,
together with any bonuses declared by the Board of Directors with respect to
Mr. Eaden's services prior to the effective date of termination. Mr. Eaden
also agrees, for a period of two years following the termination of his
employment, not to engage in any business competing for the customers or
accounts of the Company and not to induce or attempt to induce any person
employed by the Company at the time of Mr. Eaden's termination to leave his
employment or agency with the Company.
6
<PAGE>
Thomas B. Barker, Nancee R. Berger, Michael M. Sturgeon and Lee O. Waters
serve the Company pursuant to employment agreements dated as of January 1,
1996 for Mr. Barker, January 1, 1996 for Ms. Berger, March 17, 1997 for Mr.
Sturgeon and June 25, 1996 for Mr. Waters (collectively referred to as the
"Effective Date"). The initial term of each of these agreements is two years.
Each agreement will be automatically renewed, subject to prior termination,
for successive one-year periods on the second anniversary of the respective
Effective Date and each anniversary thereafter unless either party gives
notice of non-renewal. These agreements provide, respectively, for the
employment of Mr. Barker as President and Chief Operating Officer of the
Company, for Ms. Berger as the President--Interactive Teleservices of the
Company, for Mr. Sturgeon as Executive Vice President--Sales and Marketing and
for Mr. Waters as Executive Vice President--Operator Services Division. Under
the respective agreements, Mr. Barker's base salary is $200,000 per year, Ms.
Berger's base salary is $140,000 per year, Mr. Sturgeon's base salary is
$200,000 per year, and Mr. Water's base salary is $150,000 per year. The
agreements also provide for an annual bonus determined at the discretion of
the Board of Directors. In the event of death, termination for cause or
without cause or resignation, the Company will pay any salary earned through
the date of termination, any bonus earned at the end of the month immediately
preceding the date of termination and all vested benefits, if any, as of the
date of termination. In the event of a termination without cause or
resignation, the employment agreements provide for the executive to remain as
a consultant to the Company for at least twenty-four months following
termination of employment. If the employee is terminated for cause, the
Company, in its sole discretion, may elect to retain such executive as a
consultant. During the consulting period, the executive will only be paid his
annual base salary.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee (the "Compensation Committee") of the Board of
Directors. The Compensation Committee is currently composed of two non-
employee directors and two employee directors. The Compensation Committee
approves compensation objectives and policies as well as compensation plans
and specific compensation levels for all executive officers. Prior to the
initial public offering of the Company, compensation of the Company's
executive officers was determined by Mr. Eaden. Thereafter, the Company formed
the Compensation Committee in order to administer the executive compensation
program for the fiscal year ending December 31, 1997. Notwithstanding the
formation of the Compensation Committee, the entire Board of Directors
approves grants of options and material modifications to the 1996 Stock
Incentive Plan.
The Compensation Committee seeks to provide a total compensation package
that will motivate and retain key employees. The Compensation Committee also
seeks to provide incentives to achieve short- and long-term business
objectives that will enhance the value of the Common Shares. When determining
compensation amounts, the Compensation Committee considers (1) the base salary
levels of executives with similar responsibilities in companies in a similar
line of business, (2) the executive's experience in his or her position at the
Company and in the line of business as well as his or her performance over a
sustained period of time, and (3) the historical and projected financial
performance of the Company and the particular division associated with the
executive. An analysis of the financial performance includes a review of such
measures as revenues, operating margin, net income, return on stockholders'
equity, return on revenues, and total market value. The Compensation Committee
makes a subjective determination based upon a collective consideration of all
such factors.
Compensation for the Named Executive Officers for the fiscal year ended
December 31, 1996 was comprised of three components; base salary, cash bonuses
and long-term incentive compensation. The base salary of the Chief Executive
Officer was determined by the Board of Directors. The base salary of the other
Named Executive Officers was determined through contracts which are discussed
under the caption "Employment Agreements."
The Compensation Committee has based bonuses for executive officers on the
attainment of financial targets set forth in formulas described in each of
their employment agreements. The formulas are individually tailored to
motivate the particular executive in accordance with his or her position, his
or her prior performance and the
7
<PAGE>
potential impact he or she could have on the growth of sales and profit for
the Company and the division with which he or she is associated. For the
fiscal year ended December 31, 1996, the results of the Company and of the
applicable individual divisions met the minimum objectives set forth in each
of the executive's employment agreements, and accordingly each received a cash
bonus.
Long-term incentive compensation opportunities are provided through grants
of stock options, stock appreciation rights, restricted stock awards, phantom
stock unit awards, performance share unit awards and other stock bonus awards
under the 1996 Stock Incentive Plan. All grants are made at exercise prices
which are at least equal to the fair market value of the Common Shares on the
date of grant in order that executives can gain only when stockholders gain.
In making grants under the plan for fiscal 1996, the Board of Directors
considered an employee's position with the Company and relevant
responsibilities, service, individual and Company performance and the
anticipated length of future service. Stock options were granted to Messrs.
Barker, Sturgeon and Waters and Ms. Berger for the fiscal year ended December
31, 1996.
The Compensation Committee believes that the role of the Chief Executive
Officer is particularly important in reaching corporate objectives and
accordingly reviews Mr. Eaden's compensation package annually. For the fiscal
year ended December 31, 1996, Mr. Eaden received a base salary of $259,644.
Mr. Eaden did not receive a cash bonus during 1996 and did not participate in
the 1996 Stock Incentive Plan.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code")
generally disallows a tax deduction to public companies for annual
compensation over $1 million paid to each of the corporation's Chief Executive
Officer and four other most highly compensated executive officers, except to
the extent such compensation qualifies as "performance-based." Based on
information currently available, the Compensation Committee believes that all
compensation arrangements that could potentially result in the compensation of
any named executive officer exceeding $1 million will qualify as performance-
based and that all compensation paid to the Company's named executive officers
will be fully deductible. Provided that other Company objectives are met, the
Company intends to structure future incentive compensation arrangements for
its named executive officers in a manner that will allow such compensation to
be fully deductible for Federal income tax purposes.
The Compensation Committee:
Troy L. Eaden
William E. Fisher
Greg T. Sloma
Gary L. West
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is presently composed of Troy L. Eaden, Gary L.
West, William E. Fisher and Greg T. Sloma. During the fiscal year ended
December 31, 1996, the Company did not have a compensation committee of the
Board of Directors, and during such time Troy L. Eaden made all executive
officer compensation decisions.
8
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the Company's cumulative total
stockholder return for the period since its initial public offering with the
cumulative total return of the S&P 500 Index and a composite group of
companies (the "Composite Index"), in each case assuming an investment of $100
on November 26, 1996 and the accumulation and reinvestment of dividends
through December 31, 1996. The Composite Index consists of companies that
provide outsourced teleservices and is comprised of the following companies:
APAC Teleservices, Inc., ATC Communications Group Inc., ICT Group Inc.,
Precision Response Corp, RMH Teleservices Inc., Sitel Corporation,
Telespectrum Worldwide Inc. and Teletech Holdings, Inc. The total stockholder
return for each company in the Composite Index has been weighted according to
its market capitalization.
THIS PAGE CONTAINS A LINE GRAPH IN WHICH THE Y AXIS REPRESENTS DOLLARS AND THE
X AXIS REPRESENTS DATES BEGINNING WITH NOVEMBER 26, 1996. THE VALUES ARE LISTED
ON THE FOLLOWING TABLE:
COMPARISON OF CUMULATIVE TOTAL RETURN*
WEST TELESERVICES CORP. COMPOSITE INDEX S & P 500
11/26/96 100 100 100
12/31/96 126 84 98
* ASSUMES $100 INVESTED ON NOVEMBER 26, 1996.
TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS.
TOTAL RETURN BASED ON MARKET CAPITALIZATION
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, officers and stockholders holding more than ten percent of the
Common Shares to file reports of holdings and transactions in the Common
Shares with the SEC. Officers, directors and greater than ten percent
stockholders are required by the SEC to furnish the Company with copies of all
Section 16(a) forms they file. To the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company or written
representations that no other reports were required, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten
percent beneficial owners were complied with during, or in respect of, the
fiscal year ended December 31, 1996, except that each of Gary L. West, Mary E.
West, Troy L. Eaden, Thomas B. Barker, Michael A. Micek, Nancee R. Berger,
John W. Erwin, Lee O. Waters, Mark V. Lavin, Joseph L. Bradley and Diane K.
Ferris did not file a Form 3 on a timely basis and John W. Erwin did not file
a Form 4 on a timely basis for one acquisition of Common Shares.
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CERTAIN TRANSACTIONS AND RELATIONSHIPS
On November 25, 1996, each of the stockholders of West Telemarketing
Corporation, West Interactive Corporation and West Telemarketing Corporation
Outbound (the "West Affiliates") exchanged the capital stock of such company
owned by such stockholder for Common Shares pursuant to a reorganization such
that each of the foregoing companies became wholly owned subsidiaries of the
Company. Before the Company's initial public offering, each of the West
Affiliates had made periodic distributions to its existing stockholders in
amounts approximately equal to the stockholders' corresponding tax liabilities
associated with each company's earnings plus amounts representing a portion of
retained earnings. The West Affiliates made aggregate distributions of
approximately $81.443 million for the year ended December 31, 1996. The
Company paid $44.879 million of such distributions with notes payable to the
stockholders. The Company repaid these stockholder notes after the
consummation of the initial public offering in November 1996.
The Company leases a building located at 9910 Maple Street, Omaha, Nebraska,
which houses its corporate headquarters. The building has 42,000 square feet
of leasable space and is situated on a parcel of land of approximately 4.4
acres. This building is owned by 99-Maple Partnership, a partnership owned and
controlled by Gary L. West, the Company's Chairman of the Board, and Mary E.
West, the Company's Vice Chair of the Board and Secretary. This lease
commenced on April 1, 1988, and was renewed on September 1, 1994, for a term
of ten years. For the period commencing September 1, 1996, and ending August
31, 1997, the rent is $59,600 per month, which rent increases each year
thereafter at a rate of approximately six percent. For the period commencing
September 1, 2003, and ending August 31, 2004, the rent will be $89,635 per
month. In addition to payment of rent, the Company is obligated to pay all
taxes, insurance and maintenance pertaining to the building.
The Company, Gary L. West, Mary E. West, Troy L. Eaden and each of the
former stockholders of the West Affiliates entered into a Registration Rights
Agreement (the "Registration Rights Agreement") as of November 25, 1996,
which, among other things, provides that upon the request of the Wests or Mr.
Eaden, the Company will register under the Securities Act of 1933, as amended,
any of the Common Shares currently held by or acquired in the future by the
foregoing (a "Demand Registration"). The Wests, collectively, and Mr. Eaden,
individually, each will have the right to request four Demand Registrations.
Each of the foregoing and each of the seven other former stockholders of the
West Affiliates will have the right, which may be exercised at any time and
from time to time in the future, to include the Common Shares held by him or
her in certain other registrations.
West Telemarketing Insurance Agency, Inc. ("West Insurance") is a Texas
corporation which is wholly-owned by John W. Erwin, the Company's President of
Direct Teleservices. West Insurance is a licensed insurance agency formed in
June 1996 under the laws of Texas to service a client of West Telemarketing
Corporation Outbound in the insurance industry. These arrangements are set
forth in a Personnel Company Subscriber Service Agreement, dated as of
November 12, 1996. West Telemarketing Corporation Outbound pays hourly fees to
West Insurance for its agents' services, which fees have averaged since July
1, 1996 approximately $162,420 per month. Neither West Insurance nor Mr. Erwin
has made any profit in connection with this arrangement and neither is
expected to do so in the future. Mr. Erwin entered into a Stock Redemption
Agreement, dated April 9, 1996, with Gary L. West, Mary E. West and Troy L.
Eaden restricting the transfer of his West Insurance stock and providing for
the option by the Wests and Mr. Eaden to acquire his West Insurance stock in
the event of his death, disability or termination of employment with West
Insurance or at any other time they desire. This Stock Redemption Agreement
was assigned to the Company by the Wests and Mr. Eaden, effective upon the
closing of the Company's initial public offering pursuant to an Assignment and
Assumption Agreement, dated as of November 12, 1996.
West Telemarketing Corporation sold its 12.5% undivided interest in an
aircraft to Troy L. Eaden, a director and the Company's Chief Executive
Officer, pursuant to a Bill of Sale and Assignment dated October 30, 1996, for
$642,208. This price was determined by Michael A. Micek, Chief Financial
Officer of the Company, and represents the value of the asset as it was
carried on the financial statements of the Company. West Telemarketing
Corporation purchased the interest for $755,000 from Executive Jet Sales, Inc.
pursuant to a Purchase Agreement, dated March 14, 1996.
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RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Deloitte & Touche llp ("Deloitte &
Touche") to be the Company's auditors for the fiscal year ending December 31,
1997 and recommends to stockholders that they vote for ratification of that
appointment. Deloitte & Touche served in this capacity for the fiscal year
ended December 31, 1996. Its representative will be present at the Annual
Meeting, will have an opportunity to make a statement and will be available to
respond to appropriate questions. The appointment of auditors is approved
annually by the Board and subsequently submitted to the stockholders for
ratification. The decision of the Board is based on the recommendation of the
Audit Committee, which reviews and approves in advance the audit scope, the
types of nonaudit services, and the estimated fees for the coming year. The
committee also reviews and approves proposed nonaudit services to ensure that
they will not impair the independence of the accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
ADOPTION OF THE 1997 EMPLOYEES STOCK PURCHASE PLAN
The Board of Directors believes that it would be in the best interests of
the Company to give employees a greater stake in the Company through increased
stock holdings and accordingly recommends adoption of the 1997 Employees Stock
Purchase Plan (the "Purchase Plan"). The following summary describes the
Purchase Plan. This summary is qualified in its entirety by reference to the
specific provisions of the Purchase Plan, the full text of which was filed
with the SEC along with this Proxy Statement.
GENERAL
If approved by the Company's stockholders, the Purchase Plan will become
effective July 1, 1997. 2,000,000 of authorized Common Shares have been
reserved for issuance under the Purchase Plan. The Purchase Plan will have a
duration of five years, subject to earlier termination by the Board of
Directors.
ADMINISTRATION
The Purchase Plan will be administered by the Compensation Committee or a
committee composed of senior management. The Purchase Plan may be amended by
the Board of Directors but may not be amended, without prior stockholder
approval, to the extent required by Section 423 of the Code. The proceeds of
the sale of stock and of administrative fees received under the Purchase Plan
will constitute general funds of the Company and may be used by it for any
purpose. The Purchase Plan provides for proportionate adjustments to reflect
stock splits, stock dividends or other changes in the capital stock.
PURCHASE OF COMMON SHARES
The Purchase Plan permits employees to purchase Common Shares through
payroll deductions during five consecutive annual offerings, beginning July 1,
1997. Eligible employees on each offering date may purchase full or fractional
shares through payroll deductions of up to 10% of compensation, but in no
event can more than $25,000 worth of Common Shares be purchased in a calendar
year. The price an employee pays is 100% of the fair market value of the
Common Shares on the date of grant. Common Shares for the Purchase Plan may be
either shares purchased in the open market, or authorized and unissued shares.
Eligibility will be extended to all regular and certain other employees of the
Company and of its subsidiaries, as defined in the Purchase Plan.
WITHDRAWAL
A participant may withdraw from participation in the Purchase Plan by
written notice to the Company at any time prior to the last business day of an
offering period, in which event the Company will promptly refund without
interest the entire balance of their deductions not previously used to
purchase Common Shares under the Purchase Plan. After such withdrawal, a
participant's option for the offering period is automatically terminated and
no further payroll deductions may be made during the course of such offering
period. If a participant
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withdraws from the Plan during an offering period, he or she may not resume
participation until the next offering period. A participant may resume
participation for any subsequent offering period by delivering to the Company
a new subscription agreement at least ten business days prior to the date of
enrollment for such offering period. Termination of employment cancels the
participant's right to continue in the Purchase Plan.
LIMITATION
No person shall be granted options which permit his right to purchase Common
Shares under the Purchase Plan and any other similar stock purchase plans of
the Company or any of its subsidiary corporations to accrue at a rate which
exceeds $25,000 of the fair market value of such stock (determined at date of
grant) for each calendar year in which such options are at any time
outstanding.
MARKET VALUE
The market value of the Common Shares as of April 11, 1997 was $14.25 per
share.
FEDERAL TAX CONSEQUENCES
The following is a brief discussion of the Federal income tax consequences
of transactions under the Purchase Plan based on the Code. The Purhcase Plan
is not qualified under Section 401(a) of the Code. This discussion does not
address all aspects of Federal income taxation and does not describe state or
local tax consequences.
Under Section 423(a) of the Code, the transfer of a Common Share to a
participant pursuant to the Plan is entitled to the benefits of Section 421(a)
of the Code. Under that Section, a participant will not be required to
recognize income at the time the option is granted (the "Enrollment Date") or
at the time the option is exercised (the "Exercise Date").
In order for a participant to receive the favorable tax treatment provided
in Section 421(a) of the Code, Section 423(a) requires that the participant
make no disposition of the shares acquired during an offering period within
two years from the Enrollment Date nor within one year from the Exercise Date
of the offering period.
If a Participant disposes of Common Shares acquired pursuant to the Purchase
Plan before the expiration of the holding period requirements set forth above
(a "disqualifying disposition"), the participant will realize, at the time of
the disposition, "ordinary income" to the extent the fair market value of the
Common Shares on the Exercise Date exceeds the amount paid for the shares. The
difference between the fair market value of the Common Shares on the Exercise
Date and the amount realized on disposition is treated as long-term or short-
term capital gain or loss, depending on the participant's holding period in
the Common Shares. The amount treated as "ordinary income" may be subject to
the income tax withholding requirements of the Code and FICA withholding
requirements. At the time of such disqualifying disposition, the Company will
be entitled to deduct an amount in the determination of its taxable income
equal to the amount taken into "ordinary income" by the Participant.
The Company will not be entitled to any deduction in the determination of
its taxable income with respect to the Purchase Plan, except in connection
with a disqualifying disposition as discussed below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
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OTHER MATTERS
REQUIRED VOTE
The presence, in person or by proxy, of the holders of a majority of the
votes entitled to be cast by the stockholders entitled to vote generally at
the Annual Meeting is necessary to constitute a quorum. Abstentions and
"broker non-votes" are counted as present and entitled to vote for purposes of
determining a quorum. A "broker non-vote" occurs when a nominee holding Common
Shares for a beneficial owner does not vote on a particular proposal because
the nominee does not have discretionary voting power with respect to that item
and has not received voting instructions from the beneficial owner.
A plurality of the votes duly cast is required for the election of directors
(i.e., the nominees receiving the greatest number of votes will be elected).
The affirmative vote by the holders of the majority of the Common Shares
present in person or represented by proxy and entitled to vote on the matter
is required to approve any other matter to be acted upon at the Annual
Meeting. For purposes of determining whether a matter has received the
required number of votes for approval, abstentions will be included in the
vote totals with the result that an abstention has the same effect as a
negative vote. A "broker non-vote" will not be included in the vote totals
and, therefore, will have no effect on the vote.
STOCKHOLDER PROPOSALS
Stockholders who intend to present proposals at the 1998 annual meeting of
stockholders, and who wish to have such proposals included in the Company's
Proxy Statement for the 1998 annual meeting of stockholders, must ensure that
such proposals are received by the Secretary of the Company at 9910 Maple
Street, Omaha, Nebraska 68134, not later than December 14, 1997. In the event
that the 1998 annual meeting of stockholders is called for a date that is not
within thirty (30) days before or after May 14, 1998, in order to be timely,
notice by the stockholder must be received not later than the close of
business on the tenth day following the day on which such notice of the date
of the annual meeting was mailed or such public disclosure of the date of the
annual meeting was made, whichever first occurs. Such proposals must meet the
requirements set forth in the rules and regulations of the SEC in order to be
eligible for inclusion in the Company's Proxy Statement for the 1998 annual
meeting of stockholders. Any stockholder interested in making a proposal is
referred to Article II Section 11 of the Company's Restated Bylaws.
SOLICITATION OF PROXIES AND OTHER MATTERS
At the date this Proxy Statement went to press, management does not know of
any other matters to be brought before the Annual Meeting other than those
referred to above. If any matter should be presented at the Annual Meeting
upon which a vote properly may be taken, the Common Shares represented by the
proxy will be voted at the discretion of the person or persons holding such
proxy. The entire cost of soliciting management proxies will be borne by the
Company. In addition to the use of the mails, proxies may be solicited
personally by directors, officers or regular employees of the Company, who
will not be compensated for their services. Management of the Company intends
to request banks, brokerage houses, custodians, nominees and fiduciaries to
forward soliciting material to the beneficial owners of the Common Shares held
of record by such persons and entities.
The Company will provide to any stockholder a copy of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996 or the
Purchase Plan, free of charge upon written request to its Secretary at 9910
Maple Street, Omaha, Nebraska 68134.
Troy L. Eaden
Chief Executive Officer
Dated: April 17, 1997
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APPENDIX A
1997 EMPLOYEES STOCK PURCHASE PLAN
ARTICLE I. PURPOSE OF PLAN
The purpose of this Plan is to provide employees a continued opportunity to
purchase shares of the Common Stock, par value $.01 per share of West
TeleServices Corporation (the "Common Shares"), through annual offerings to be
made during the five-year period commencing July 1, 1997.
ARTICLE II. ADMINISTRATION
The Plan shall be administered by the Compensation Committee or such other
Committee that may be appointed by the Board of Directors from members of
senior management. The Committee shall have authority to make rules and
regulations for the administration of the Plan; its interpretations and
decisions with regard thereto shall be final and conclusive. Unless prohibited
by law, the Committe may, at its discretion, decrease (but not increase) the
limitations set forth at Sections 6.01(a), 6.02 and 8.02 hereof.
ARTICLE III. ELIGIBILITY
Except as provided below, all employees of the Corporation or its
subsidiaries who are eligible to participate in the West Telemarketing
Corporation Employee 401-K Retirement Plan and Trust Agreement, as from time
to time amended, shall be eligible to participate in the Plan but without
giving effect to the restriction on persons under the age of 21 contained
therein; provided, however, that each of such employees must have completed at
least twenty (20) hours of service per week for a one-year period. No employee
may be granted an option if such employee, immediately after the option is
granted, owns 5% or more of the total combined voting power or value of the
stock of the Corporation or any subsidiary. For purposes of the preceding
sentence, the rules of Section 424(d) of the Internal Revenue Code of 1986, as
amended (the "Code") shall apply in determining the stock ownership of an
employee, and stock that the employee may purchase under outstanding options
shall be treated as stock owned by the employee.
ARTICLE IV. OFFERINGS
The Plan shall be implemented by consecutive offering periods until
terminated in accordance with Article XXIV of the Plan. Each offering period
shall be 12 months in duration, during which (or during such portion thereof
as an employee may elect to participate) the amounts received as compensation
by an employee shall constitute the measure of such of the employee's
participation in the offering as is based on compensation; provided, however,
the first offering period shall commence on the first trading day after July
1, 1997 and ending on or prior to June 30, 1998.
ARTICLE V. PARTICIPATION.
An employee eligible on the effective date of any offering may participate
in such offering at any time by completing and forwarding a payroll deduction
authorization to the employee's appropriate payroll location. The form will
authorize a regular payroll deduction from the employee's compensation, and
must specify the date on which such deduction is to commence, which may not be
retroactive.
ARTICLE VI. DEDUCTIONS.
SECTION 6.01. PAYROLL DEDUCTION ACCOUNTS
(a) The Corporation shall maintain payroll deduction accounts for all
participating employees. With respect to any offering made under this Plan, an
employee may authorize a payroll deduction of a whole percentage (up
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to a maximum of 10%) of the compensation the employee receives on each payday
during the offering period (or during such portion thereof in which the
employee may elect to participate).
(b) All payroll deductions made for a participant shall be credited to his
account under the Plan and will be withheld in whole percentages only. A
participant may not make any additional payments into such account.
(c) At the time the option is exercised, in whole or in part, or at the time
some or all of the Common Shares issued under the Plan is disposed of, the
participant must make adequate provisions for the Corporation's federal,
state, or other tax withholding obligations, if any, which arise upon the
exercise of the option or the disposition of the Common Shares. At any time,
the Corporation may, but will not be obligated to, withhold from the
participant's compensation the amount necessary for the Corporation to meet
applicable withholding obligations, including any withholding required to make
available to the Corporation any tax deductions or benefits attributable to
sale or early disposition of Common Shares by the employee.
SECTION 6.02 LIMITATION
No employee may be granted an option that permits his or her rights to
purchase stock under this Plan, and any other stock purchase plan of the
Corporation and its subsidiaries, to accrue at a rate that exceeds $25,000 of
the fair market value of such stock (determined at the date such option is
granted) for each calendar year in which the option is outstanding at any
time.
ARTICLE VII. DEDUCTION CHANGES.
An employee may increase or decrease the employee's payroll deduction by
filing a new payroll deduction authorization at any time during an offering
period. The change may not become effective sooner than the next pay period
after receipt of the authorization.
ARTICLE VIII. PURCHASE OF SHARES.
SECTION 8.01 GRANT OF OPTION
Each employee participating in any offering under this Plan shall be granted
an option, upon the effective date of such offering, for as many full and
fractional Common Shares as the participating employee may elect to purchase
with up to 10% of the compensation received during the specified offering
period (or during such portion thereof as the employee may elect to
participate), to be paid by payroll deductions during such period.
SECTION 8.02 LIMITATION ON NUMBER OF SHARES
Notwithstanding the foregoing, in no event shall the number of shares
purchased by an employee during an offering period exceed 1,000 shares.
SECTION 8.03 PURCHASE PRICE
The purchase price for each share purchased shall mean an amount equal to
100% of the Fair Market Value of a share of Common Shares on the date of
grant. As of the last day of the last pay period during any offering, the
account of each participating employee shall be totaled, and, unless the
participating employee has withdrawn as provided in Article XIII hereof, the
employee shall be deemed to have exercised an option to purchase one or more
full or fractional shares at the then-applicable price; the employee's account
shall be charged for the amount of the purchase; and ownership of such share
or shares shall be appropriately evidenced on the books of the Corporation. If
at the end of the offering the fair market value of the Common Shares subject
to the option is less than 100% of the fair market value at the date of grant,
then such option shall not be deemed exercised and the payroll deductions made
with respect to such option shall be applied to the next offering unless the
employee
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elects to have the payroll deductions withdrawn from the Plan and returned to
the employee pursuant to Article XIII. Additional shares covered by the
employee's option shall be purchased in the same manner, as of the last day of
each subsequent pay period during the offering period. A participating
employee may not purchase a share under any offering period beyond 12 months
from the effective date thereof. Any balance remaining in an employee's
payroll deduction account at the end of an offering period will be carried
forward to the next offering period.
ARTICLE IX. EMPLOYEE ACCOUNTS AND CERTIFICATES.
Upon purchase of one or more full or fractional shares by a Plan participant
pursuant to Article VIII hereof, the Corporation shall establish a book entry
account in the name of the employee to reflect the share(s) purchased at that
time. Certificates shall be issued only on request for full shares and also
when necessary to comply with transaction requirements outside the United
States. To request certificates, employees may call the Company's Investment
Relations officer. In the event a participant terminates his or her account,
any fractional share held in the account will be paid to the participant in
cash.
ARTICLE X. REGISTRATION OF SHARES.
Shares may be registered only in the name of the employee, or, if the
employee so indicates on the employee's payroll deduction authorization form,
the employee may designate a beneficiary pursuant to Article XVI.
ARTICLE XI. DEFINITIONS
SECTION 11.01. BOARD
The term "Board" means the Board of Directors of the Corporation.
SECTION 11.02 CODE
The term "Code" means the Internal Revenue Code of 1986, as amended.
SECTION 11.03 COMMITTEE
The term "Committee" shall have the meaning set forth at Article II hereof.
SECTION 11.04 COMMON SHARES
The term "Common Shares" means the common stock of the Corporation.
SECTION 11.05 CORPORATION
The term "Corporation" means West TeleServices Corporation, a Delaware
corporation.
SECTION 11.06 EXCHANGE ACT
The term "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
SECTION 11.07 FAIR MARKET VALUE
The term "Fair Market Value" means, as of any date, the value of Common
Shares determined as follows:
(a) If the Common Shares is listed on any established stock exchange or a
national market system, including without limitation the National Market
System of the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ"), its Fair Market Value shall be the average of
the high and low sale price for the Common Shares (or the average of the
closing bid and asked prices, if no sales
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were reported), as quoted on such exchange (or the exchange with the
greatest volume of trading in Common Shares) or system on the date of such
determination, as reported in The Wall Street Journal or such other source
as the Committee deems reliable; or
(b) If the Common Shares is quoted on NASDAQ (but not on the National
Market System thereof) or is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall be
the average of the closing bid and asked prices for the Common Shares on
the date of such determination, as reported in The Wall Street Journal or
such other source as the Committee deems reliable; or
(c) In the absence of an established market for the Common Shares, the
Fair Market Value thereof shall be determined in good faith by the
Committee.
SECTION 11.08 PLAN
The term "Plan" means this Employees Stock Purchase Plan.
SECTION 11.09 RESERVES
The term "Reserves" means the number of Common Shares covered by each option
under the Plan which have not yet been exercised and the number of Common
Shares which have been authorized for issuance under the Plan but not yet
placed under option.
SECTION 11.10 RULE 16B-3
The term "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or
any successor provision.
SECTION 11.11 SUBSIDIARY
The term "subsidiary" means a subsidiary of the Corporation within the
meaning of Section 424(f) of the Code and the regulations promulgated
thereunder.
SECTION 11.12 TRADING DAY
The term "Trading Day" means a day on which the Common Shares (i) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (ii) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of such security.
ARTICLE XII. RIGHTS AS A STOCKHOLDER.
None of the rights or privileges of a stockholder of the Corporation shall
exist with respect to shares purchased under this Plan unless and until such
shares shall have been appropriately evidenced on the books of the
Corporation.
ARTICLE XIII. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
A participant may withdraw all but not less than all the payroll deductions
credited to his or her account and not yet used to exercise his or her option
under the Plan at any time prior to the last business day of an offering
period by giving written notice to the Corporation. All of the participant's
payroll deductions credited to his account will be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option
for the offering period will be automatically terminated, and no further
payroll deductions for the purchase of shares will be made during the offering
period. If a participant withdraws from the Plan during an offering period, he
may not resume participation until the next offering period. He may resume
participation for any other offering period by delivering to the Corporation a
new subscription agreement at least ten (10) days prior to such offering
period.
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Upon a participant's ceasing to be an employee, for any reason, he or she
will be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participant's account during the offering period
but not yet used to exercise the option will be returned to such participant
or, in the case of his or her death, to the person or persons entitled thereto
under Article XVI hereof, and such participant's option will be automatically
terminated.
A participant's withdrawal from an offering period will not have any effect
upon his eligibility to participate in any similar plan which may hereafter be
adopted by the Corporation.
ARTICLE XIV. INTEREST.
No interest or other increment shall accrue or be payable with respect to
any of the payroll deductions of a participant in the Plan.
ARTICLE XV. STOCK.
The Common Shares to be sold to participants under the Plan may, at the
election of the Corporation, be either treasury shares or authorized but
previously unissued Common Shares. The maximum number of Common Shares which
shall be made available for sale under the Plan shall be 2,000,000 shares,
subject to adjustment upon changes in capitalization of the Corporation as
provided in Article XXI hereof. If on a given exercise date the number of
shares with respect to which options are to be exercised exceeds the number of
shares then available under the Plan, the Corporation shall make a pro rata
allocation of the shares remaining available for purchase in as uniform a
manner as shall be practicable and as it shall determine to be equitable.
ARTICLE XVI. DESIGNATION OF BENEFICIARY.
A participant may file a written designation of a beneficiary who is to
receive any shares and cash, if any, from the participant's account under the
Plan in the event of such participant's death subsequent to the date on which
the option is exercised but prior to delivery to such participant of such
shares or cash. In addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to exercise of the
option.
Such designation of beneficiary may be changed by the participant at any
time by written notice. In the event of the death of a participant and in the
absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Corporation shall deliver such
shares or cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been appointed (to
the knowledge of the Corporation), the Corporation, in its discretion, may
deliver such shares or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known
to the Corporation, then to such other person as the Corporation may
designate.
ARTICLE XVII. USE OF FUNDS.
All payroll deductions received or held by the Corporation under the Plan
may be used by the Corporation for any corporate purpose, and the Corporation
shall not be obligated to segregate such payroll deductions.
ARTICLE XVIII. REPORTS.
Individual accounts will be maintained for each participant in the Plan.
Statements of account will be given to participating employees within such
time as the Committee may reasonably determine, which statements will set
forth the amounts of payroll deductions, the purchase price, the number of
shares purchased and the remaining cash balance, if any.
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ARTICLE XIX. RIGHTS NOT TRANSFERABLE.
Rights under this Plan are not transferable by a participating employee
other than by will or the laws of descent and distribution, and are
exercisable during the employee's lifetime only by the employee.
ARTICLE XX. APPLICATION OF FUNDS AND ADMINISTRATIVE FEES.
All funds received or held by the Corporation under this Plan may be used
for any corporate purpose. The Committee may impose reasonable administrative
fees on participating employees to defray the administrative costs of the
Plan, which shall in no event exceed the actual administrative costs of the
Plan. Initially, the fee shall be $10 per participating employee per offering
period.
ARTICLE XXI. ADJUSTMENTS IN CASE OF CHANGES AFFECTING COMMON SHARES.
SECTION 21.01 CHANGES IN CAPITALIZATION
Subject to any required action by the stockholders of the Corporation, the
Reserves as well as the price per share of Common Shares covered by each
option under the Plan which has not yet been exercised shall be
proportionately adjusted for any increase or decrease in the number of issued
Common Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Shares, or any other
increase or decrease in the number of Common Shares effected without receipt
of consideration by the Corporation; provided, however, that conversion of any
convertible securities of the Corporation shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the
Corporation of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of Common Shares
subject to an option.
SECTION 21.02 DISSOLUTION OR LIQUIDATION.
In the event of the proposed dissolution or liquidation of the Corporation,
the offering period will terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Board.
SECTION 21.03. MERGER OR ASSET SALE.
In the event of a proposed sale of all or substantially all of the assets of
the Corporation, or the merger of the Corporation with or into another
corporation ("Transaction"), each option under the Plan shall be assumed or an
equivalent option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Board
determines, in the exercise of its sole discretion, that in lieu of such
assumption or substitution to terminate all outstanding options in exchange
for a cash payment equal to the excess of the Fair Market Value of the shares
subject to options (determined at the date to the Transaction) over the
purchase price thereof. For purposes of this paragraph, an option granted
under the Plan shall be deemed to be assumed if, following the sale of assets
or merger, the option confers the right to purchase, for each share of option
stock subject to the option immediately prior to the sale of assets or merger,
the consideration (whether stock, cash or other securities or property)
received in the sale of assets or merger by holders of Common Shares for each
share of Common Shares held on the effective date of the Transaction (and if
such holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Common Shares);
provided, however, that if such consideration received in the sale of assets
or merger was not solely common stock of the successor corporation or its
parent (as defined in Section 424(e) of the Code), the Board may, with the
consent of the successor corporation and the participant, provide for the
consideration to be received upon exercise of the option to be solely common
stock of the successor corporation or its parent equal in fair market value to
the per share consideration received by holders of Common Shares in the sale
of assets or merger.
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The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per share
of Common Shares covered by each outstanding option, in the event the
Corporation effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Shares, and in the event of the Corporation being consolidated with or merged
into any other corporation.
ARTICLE XXII. DISPOSITION RESTRICTION.
Subject to approval of the Internal Revenue Service, the Committee will
amend the Plan, effective after giving at least one month's written notice to
participating employees, to provide for a holding period of up to one year
following the purchase of each share under the Plan, with the disposition of
such share during the offering period in which it was acquired resulting in
suspension of the participant from further Plan participation for a period not
extending beyond the end of the first offering period that begins after the
date of the disposition; provided that the issuance of a stock certificate may
be treated as a disposition for this purpose; and provided further that a
participant shall not be so suspended if the disposition is required by legal
process.
ARTICLE XXIII. AMENDMENT OF THE PLAN.
The Board of Directors may at any time, or from time to time, amend this
Plan in any respect, except that, to the extent necessary to comply with
Section 423 of the Code, the Corporation shall obtain the approval of a
majority of the shares of stock of the Corporation then issued and outstanding
and entitled to vote.
ARTICLE XXIV. TERMINATION OF THE PLAN.
This Plan and all rights of employees under any offering hereunder shall
terminate:
(a) on the day that participating employees become entitled to purchase a
number of shares equal to or greater than the number of shares remaining
available for purchase. If the number of shares so purchasable is greater
than the shares remaining available, the available shares shall be
allocated by the Committee among such participating employees in such
manner as it deems fair, or
(b) at any time, at the discretion of the Board of Directors.
No offering hereunder shall be made which shall extend beyond June 30, 2002.
ARTICLE XXV. GOVERNMENTAL REGULATIONS.
The Corporation's obligation to sell and deliver Common Shares under this
Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance, or sale of such stock.
ARTICLE XXVI. RULE 16B-3 LIMITATIONS.
The terms and conditions of options granted hereunder to, and the purchase
of shares by, persons subject to Section 16 of the Exchange Act shall comply
with the applicable provisions of Rule 16b-3 thereunder. This Plan shall be
deemed to contain, and such options shall contain, and the shares issued upon
exercise thereof shall be subject to, such additional conditions and
restrictions as may be required by Rule 16b-3 to qualify for the maximum
exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
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ARTICLE XXVII. NOTICES.
All notices or other communications by a participant to the Corporation
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Corporation at the location, or by
the person, designated by the Corporation for the receipt thereof.
ARTICLE XXVIII. CONDITIONS UPON ISSUANCE OF SHARES.
Shares shall not be issued with respect to an option unless the exercise of
such option and the issuance and delivery of such shares pursuant thereto
shall comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder and the
requirements of any stock exchange upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the Corporation
with respect to such compliance.
As a condition to the exercise of an option, the Corporation may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without
any present intention to sell or distribute such shares if, in the opinion of
counsel for the Corporation, such a representation is required by any of the
aforementioned applicable provisions of law.
ARTICLE XXIX. PLAN SHARES PURCHASES.
Purchases of outstanding shares may be made pursuant to and on behalf of
this Plan, upon such terms as the Corporation may approve, for delivery under
this Plan.
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WEST TELESERVICES CORPORATION
9910 Maple Street
Omaha, Nebraska 68134
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Gary L. West, Mary E. West and Troy L.
Eaden, and each of them, with power of substitution, attorneys and proxies for
and in the name and place of the undersigned, to vote the number of shares of
Common Stock that the undersigned is entitled to vote at the 1997 Annual Meeting
of the Stockholders of West TeleServices Corporation to be held at the Marriott
Hotel, 10220 Regency Circle, Omaha, Nebraska on Wednesday, May 14, 1997 at 9:00
a.m., Central Daylight Time, or at any adjournment or postponement thereof, as
designated on the reverse side hereof.
(change of address)
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Please mark your
X votes as in this
example.
This proxy when executed will be voted in the manner directed herein. If no
direction is made, this proxy will be voted FOR the nominees in proposal 1
and FOR proposals 2 and 3.
- - --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR the nominees in
proposal 1 and FOR proposals 2 and 3.
- - --------------------------------------------------------------------------------
FOR ALL NOMINEES WITHHOLD AUTHORITY TO VOTE
1. Election of Thomas B. Barker
Directors William E. Fisher
(See reverse)
For, except vote withheld from the following nominee(s):
Change of Address
on Reverse Side
- - ---------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of appointment of
Deloitte & Touche L.L.P. as auditors
3. Adoption of the 1997 Employee
Stock Purchase Plan
4. In accordance with their discretion,
upon all other matters that may properly
come before said Annual Meeting and
any adjournment thereof.
- - --------------------------------------------------------------------------------
The signer hereby revokes all proxies heretofore given by the signer to
vote at said meeting or any adjournments or postponements thereof.
Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
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SIGNATURE(S) DATE
[UP ARROW] FOLD AND DETACH HERE [UP ARROW]
