<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ____________
Commission File Number 000-21771
WEST TELESERVICES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 47-0777362
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation of organization)
11808 Miracle Hills Drive, Omaha, Nebraska 68154
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (402) 571-7700
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]
At November 6, 1998, 63,330,000 shares of Common Stock, par value $.01 per
share, of the registrant ("Common Stock") were outstanding.
<PAGE>
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I. FINANCIAL INFORMATION.......................................................... 3
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 1998 and December 31, 1997.... 3
Consolidated Statements of Operations -
Three and Nine Months Ended September 30, 1998 and 1997................. 4
Consolidated Statements of Cash Flows - Nine Months Ended
September 30, 1998 and 1997............................................... 5
Notes to Consolidated Financial Statements................................ 6
Item 2. Management's Discussion and Analysis of Financial Condition
And Results of Operations................................................. 7
Item 3. Quantitative and Qualitative Disclosure about Market Risk................. 10
PART II. OTHER INFORMATION............................................................ 11
Item 1. Legal Proceedings......................................................... 11
Item 5. Other Information......................................................... 11
Item 6. Exhibits and Reports on Form 8-K.......................................... 11
SIGNATURES............................................................................. 13
</TABLE>
2
<PAGE>
WEST TELESERVICES CORPORATION
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
----------------- ----------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 7,605 $ 39,820
Accounts receivable, net of allowance for doubtful accounts
of $1,707 and $447 107,238 64,325
Notes receivable 6,256 7,486
Accounts receivable - financing 10,575 4,971
Other 10,868 5,017
----------------- ----------------
Total current assets 142,542 121,619
PROPERTY AND EQUIPMENT:
Land and improvements 4,888 4,888
Buildings 24,325 23,059
Telephone and computer equipment 116,751 97,021
Office furniture and equipment 23,534 18,730
Leasehold improvements 28,834 24,119
Construction in process 12,857 1,182
----------------- ----------------
211,189 168,999
Accumulated depreciation and amortization (75,454) (57,289)
----------------- ----------------
135,735 111,710
GOODWILL, net of accumulated amortization of $3,116 and $1,853 47,417 48,680
OTHER ASSETS 3,569 141
----------------- ----------------
$ 329,263 $ 282,150
================= ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable - financing $ 6,000 $ -
Notes payable - bank 8,000 -
Accounts payable 23,131 18,948
Customer deposits and holdbacks 12,911 22,475
Accrued wages and benefits 8,588 8,809
Accrued phone expense 12,343 7,228
Other current liabilities 4,659 3,103
Current maturities of long-term obligations 4,063 5,736
Income tax payable 1,037 -
----------------- ----------------
Total current liabilities 80,732 66,299
LONG TERM OBLIGATIONS, less current maturities 13,258 15,950
DEFERRED INCOME TAXES 4,115 3,684
OTHER LONG-TERM LIABILITIES 158 -
COMMITMENTS AND CONTINGENCIES (Note 2) - -
STOCKHOLDERS' EQUITY
Preferred stock $0.01 par value, 10,000 shares authorized,
no shares issued and outstanding - -
Common stock $0.01 par value, 200,000 shares authorized,
63,330 shares issued and outstanding 633 633
Additional paid-in capital 157,647 157,647
Retained earnings 72,720 37,937
----------------- ----------------
Total stockholders' equity 231,000 196,217
----------------- ----------------
$ 329,263 $ 282,150
================= ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
WEST TELESERVICES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ---------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUE $ 123,294 $ 100,493 $ 357,373 $ 294,519
COST OF SERVICES 65,237 56,067 192,221 162,568
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 40,044 30,125 109,584 85,654
------------ ------------ ------------ ------------
NET OPERATING INCOME 18,013 14,301 55,568 46,297
OTHER INCOME (EXPENSE):
Interest income 163 241 504 942
Interest income - financing, net of interest expense of $200, $52,
$593 and $230 493 458 1,414 1,228
Interest expense (126) (179) (366) (588)
Other expense, net (105) (271) (543) (585)
------------ ------------ ------------ ------------
Net other income 425 249 1,009 997
------------ ------------ ------------ ------------
NET INCOME BEFORE INCOME TAX EXPENSE 18,438 14,550 56,577 47,294
INCOME TAX EXPENSE:
Current income tax expense 7,286 5,487 21,855 18,083
Deferred income tax expense (benefit) (203) 117 (61) 274
------------ ------------ ------------ ------------
Total income tax expense 7,083 5,604 21,794 18,357
------------ ------------ ------------ ------------
NET INCOME $ 11,355 $ 8,946 $ 34,783 $ 28,937
============ ============ ============ ============
EARNINGS PER COMMON SHARE:
Basic $ 0.18 $ 0.14 $ 0.55 $ 0.46
============ ============ ============ ============
Diluted $ 0.18 $ 0.14 $ 0.55 $ 0.46
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic common shares 63,330 63,330 63,330 63,330
Dilutive impact of potential common shares from stock options - - - 22
------------ ------------ ------------ ------------
Diluted common shares 63,330 63,330 63,330 63,352
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
WEST TELESERVICES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 34,783 $ 28,937
Adjustments to reconcile net income to net cash flows
from operating activities:
Depreciation and amortization 19,775 14,589
Loss on sale of equipment 41 166
Deferred income tax expense (benefit) (61) 274
Changes in operating assets and liabilities:
Accounts receivable (45,637) (14,628)
Other assets and vendor receivables (6,149) (816)
Accounts payable 4,183 (9,779)
Other liabilities and accrued expenses 6,608 2,391
Income tax payable 1,812 (2,414)
------------ ------------
Net cash flows from operating activities 15,355 18,720
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (43,859) (33,480)
Proceeds from disposal of property and equipment 1,281 352
Issuance of notes receivable (5,161) (1,838)
Proceeds from payments of notes receivable 5,702 1,056
------------ ------------
Net cash flows from investing activities (42,037) (33,910)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt - 2,499
Payments of long-term obligations (4,365) (16,443)
Net change in line of credit agreement 8,000 -
Net change in accounts receivable financing
and notes payable financing 396 1,487
Payments for stock registration costs - (72)
Net change in customer deposits and holdbacks (9,564) (816)
------------ ------------
Net cash flows from financing activities (5,533) (13,345)
------------ ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS (32,215) (28,535)
CASH AND CASH EQUIVALENTS, Beginning of period 39,820 55,065
------------ ------------
CASH AND CASH EQUIVALENTS, End of period $ 7,605 $ 26,530
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 960 $ 920
============ ============
Cash paid during the period for income taxes $ 20,045 $ 20,178
============ ============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:
Reduction of accounts receivable through
issuance of notes receivable $ 2,724 $ 1,114
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
WEST TELESERVCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF CONSOLIDATION AND PRESENTATION
West TeleServices Corporation and its direct and indirect subsidiaries (West
Telemarketing Corporation, West Interactive Corporation, West Telemarketing
Corporation Outbound, Interactive Billing Services, Inc. and West Interactive
Canada, Inc.) (collectively, the "Company") provide a full range of customized
telecommunications-based services to business clients on an outsourced basis.
The Company is a leading provider in each of inbound operator services,
automated voice response services and outbound direct teleservices through its
call centers throughout the United States. The Company's inbound operator
services consist of live operator call-processing applications such as order
capture, customer service and product support. The Company's automated voice
response services consist of computerized call-processing applications such as
automated product information requests, computerized surveys and polling and
secure automated credit card activation. The Company's outbound direct
teleservices consist of live operator direct marketing applications such as
product sales and customer acquisition and retention campaigns. All significant
intercompany balances and transactions have been eliminated.
The accompanying unaudited consolidated financial statements reflect all
normal and recurring adjustments which are, in the opinion of management,
necessary for a fair presentation of the financial position, operating results,
and cash flows for the interim periods. The consolidated financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto, together with management's discussion and analysis of financial
condition and results of operations, contained in the Company's Form 10-K for
the year ended December 31, 1997.
Certain amounts in prior fiscal periods have been reclassified for
comparative purposes.
2. COMMITMENTS AND CONTINGENCIES
From time to time, the Company is subject to lawsuits and claims which arise
out of its operations in the normal course of its business. The Company and
certain of its subsidiaries are defendants in various litigation matters in the
ordinary course of business, some of which involve claims for damages that are
substantial in amount. The Company believes, except for the items discussed in
its Annual Report on Form 10-K for the year ended December 31, 1997, and its
quarterly reports on Form 10-Q for the first and second quarters of 1998, for
which the Company is currently unable to predict the outcome, the disposition of
claims currently pending will not have a material adverse effect on the
Company's financial position or results of operations.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the Consolidated
Financial Statements and the Notes thereto. Certain statements under this
caption constitute forward-looking statements, which involve risks and
uncertainties. The Company's actual results in the future could differ
significantly from the results discussed or implied in such forward-looking
statements. Factors that could cause or contribute to such differences include,
but are not limited to, the effect on financial performance of increased
competition in the teleservices industry, potential future competition,
competitive pricing for services, potential future competing technologies and
trends, dependence on technology and phone service, dependence on the Company's
labor force, reliance on major clients, the success of new product innovations,
legal proceedings and government regulation.
RESULTS OF OPERATIONS
COMPARISON OF THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
REVENUE: For the three months ended September 30, 1998, revenues increased
$22.8 million, or 22.7%, to $123.3 million up from $100.5 million for the three
months ended September 30, 1997. For the nine months ended September 30, 1998,
revenues increased $62.9 million, or 21.3%, to $357.4 million up from $294.5
million for the nine months ended September 30, 1997. For the three months
ending September 30, 1998, inbound operator teleservices accounted for $47.1
million of revenue, interactive teleservices accounted for $29.0 million, and
outbound direct teleservices accounted for $47.2 million. For the nine months
ended September 30, 1998, revenue from inbound operator teleservices increased
approximately $43.0 million to $136.5 million. Revenue from interactive
teleservices decreased approximately $12.3 million to $93.1 million. Revenue
from outbound direct teleservices increased approximately $32.2 million to
$127.8 million. During 1997 and 1998, interactive teleservices transferred calls
to a live agent at inbound operator teleservices to complete a service that
began on interactive teleservices voice response units. Inbound operator
teleservices billed interactive teleservices for the live operator portion of
the call and interactive teleservices billed the entire service provided by both
divisions. Consequently, a portion of interactive teleservices revenue reported
on the Company's reports on Form 10-Q in 1997 represented services delivered by
inbound operator teleservices. Since management feels that it is more
appropriate to include the revenue in the division that provided the services
rather than where the revenue is invoiced to the client, the Company
reclassified revenue for 1997 as described in its Form 10-K for the year ended
December 31, 1997. All of the revenue information contained herein reflects such
reclassification. The increases in inbound operator teleservices and outbound
direct teleservices are primarily the result of servicing the growing needs of
the Company's clients. The decrease in interactive teleservices is a result of
the reduction in 900 pay per call volume due to a shift in the emphasis by the
Company's clients to 800 interactive programs in the nine months ended September
30, 1998 compared to the comparable period of 1997.
COST OF SERVICES: Cost of services represents direct labor, telephone
expense and other costs directly related to teleservices activities. Costs of
services increased $9.1 million, or 16.4%, in the third quarter of 1998 to $65.2
million, up from $56.1 million for the comparable period of 1997. Cost of
services increased $29.6 million, or 18.2%, to $192.2 million for the nine
months ended September 30, 1998 up from $162.6 million for the comparable period
of 1997. As a percentage of revenue, cost of services decreased to 52.9% for
the third quarter of 1998 and 53.8% for the nine months ended September 30, 1998
compared to 55.8% and 55.2%, respectively, for the comparable periods in 1997.
The decreases in cost of services as a percentage of revenue can be attributed
to the Company's ability to continue to hire cost effective quality labor as it
enters new markets through the addition of call centers and the change in the
service mix from interactive teleservices to direct and operator teleservices
divisions. Direct and operator teleservices traditionally have lower direct
costs as a percentage of revenue.
7
<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE ("SG&A") EXPENSES: SG&A expenses
increased by $9.9 million, or 32.9%, to $40.0 million for the third quarter of
1998 up from $30.1 million for the comparable period of 1997. For the nine
months ended September 30, 1998, SG&A expenses increased by $23.9 million, or
27.9%, to $109.6 million, up from $85.7 million for the comparable period of
1997. As a percentage of revenue, SG&A expenses increased to 32.5% for the
third quarter of 1998 and 30.7% for the nine months ended September 30, 1998
compared to approximately 30.0% and 29.1%, respectively, for the comparable
periods of 1997. The increase can be attributed to increased depreciation
expense and other costs associated with call center expansion and the change in
the service mix from interactive teleservices to direct and operator
teleservices divisions. Direct and operator teleservices traditionally have
higher SG&A expenses as a percentage of revenue.
NET OPERATING INCOME: Net operating income increased by $3.7 million, or
26.0%, to $18.0 million in the third quarter of 1998 up from $14.3 million in
the third quarter of 1997. For the nine months ended September 30, 1998, net
operating income increased by $9.3 million, or 20.0%, to $55.6 million up from
$46.3 million for the comparable period of 1997. As a percentage of revenue,
net operating income increased to approximately 14.6% for the third quarter of
1998 and decreased to 15.6% for the nine months ended September 30, 1998,
compared to 14.2% and 15.7%, respectively, for the corresponding periods of 1997
due to the factors discussed above for Revenue, Cost of Services and SG&A
expenses.
NET OTHER INCOME (EXPENSE): Net other income (expense) includes interest
income from short-term investments, interest income from an accounts receivable
financing program (net of the related interest expense to fund the program) and
interest expense from short-term and long-term borrowings under credit
facilities, a mortgage note and capital leases. Other income (expense) for the
third quarter of 1998 totaled $425,000 compared to $249,000 for the third
quarter of 1997. Other income (expense) for the nine months ended September 30,
1998, totaled $1,009,000 compared to $997,000 for the comparable period of 1997.
The increases in net other income are primarily due to incentives from local and
state governments related to call center expansion partially offset by reduced
interest income as a result of lower cash balances during the three and nine
months ended September 30, 1998 compared to the comparable periods of 1997.
NET INCOME: Net income increased by $2.4 million, or 26.9%, for the third
quarter of 1998, to $11.4 million from net income of $9.0 million for the third
quarter of 1997. Net income increased by $5.9 million, or 20.2%, for the nine
months ended September 30, 1998, to $34.8 million up from net income of $28.9
million for the comparable period of 1997. Net income includes a provision for
income tax expense at an effective rate of approximately 38.4% and 38.5% for the
three and nine months ended September 30, 1998, respectively, and approximately
38.5% and 38.8% for the comparable periods of 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary source of liquidity has been cash flow from
operations, supplemented by borrowings under its revolving bank lines of credit.
The Company has a $20.0 million unsecured revolving credit facility.
Advances under the revolving credit facility bear interest at the prime rate
less 1.0%. The revolving credit facility expires on June 29, 1999. There was
$8.0 million outstanding under this facility at September 30, 1998. The
Company's credit facility contains certain financial covenants and restrictions,
which were met at September 30, 1998.
The Company also has a $15.0 million revolving bank line used to fund an
accounts receivable financing program offered to certain customers in the pay
per call industry. Borrowings under the facility are limited to a borrowing base
of pledged accounts receivable from certain of the Company's qualified customers
which were assigned by the Company to the bank. There was $6.0 million
outstanding under this facility at September 30, 1998. The credit facility
expires on June 29, 1999.
8
<PAGE>
Net cash flow from operating activities decreased $3.3 million, or 18.0%, to
$15.4 million for the nine months ended September 30, 1998, compared to a net
cash flow from operating activities of $18.7 million for the nine months ended
September 30, 1997. The decrease was due principally to increases in accounts
receivable and other assets resulting from growth in revenue, partially offset
by higher net income and higher depreciation and amortization.
Net cash flow used in investing activities was $42.0 million for the nine
months ended September 30, 1998 compared to $33.9 million for the comparable
period of 1997. The increase was primarily due to investments in call center
expansion to support the growth of the Company's businesses.
Net cash flow used in financing activities was $5.5 million for the nine
months ended September 30, 1998 compared to $13.3 million for the comparable
period of 1997. In the nine months ended September 30, 1998 and 1997, net cash
flow used in financing activities was primarily a result of refunds in customer
holdbacks and deposits and payments of debt and capital lease obligations. The
decrease in net cash flow used in financing activities is primarily due to
additional payments on debt and capital lease obligations in January 1997 with
the remaining proceeds from the initial public offering of Common Stock in
November of 1996, partially offset by increased refunds of customer holdbacks
and deposits.
CAPITAL EXPENDITURES
The Company's operations will continue to require significant capital
expenditures for capacity expansion and upgrades. Capital expenditures were
$43.9 million for the nine months ended September 30, 1998. Capital expenditures
for the nine months ended September 30, 1998 consisted primarily of equipment
purchases. The Company projects its capital expenditures for the remainder of
1998 to be approximately $5.0 million to $10.0 million, primarily for capacity
expansion and upgrades at existing facilities and the addition of four new call
centers.
The Company believes cash flow from operations, together with existing cash
and cash equivalents, financing through capital or operating leases, and
available borrowings under its credit facilities will be adequate to meet its
capital requirements for the foreseeable future. The Company may pledge
additional property or assets of the Company or any of its subsidiaries, which
are not already pledged as collateral securing existing credit facilities. The
Company or any of its affiliates may be required to guarantee any existing or
additional credit facilities.
9
<PAGE>
IMPACT OF THE YEAR 2000 ISSUE
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the Company's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
Based on a recent assessment, the Company determined that it will be required
to modify or replace portions of its information technology and non-information
technology systems so that its systems will properly utilize dates beyond
December 31, 1999. The Company presently believes that modifications to
existing software and conversions to new hardware and software can mitigate the
impact of the Year 2000 Issue. However, if such modifications and conversions
are not completed on a timely basis, the Year 2000 Issue could subject the
Company to potential liability claims from certain of its customers and have a
material adverse impact on the operations of the Company. Contingency plans are
currently being developed and put into place to control the possibility of
single point failure.
The Company is in the process of communicating with all of its significant
suppliers and large customers to determine the extent to which the Company is
vulnerable to those third parties' failure to remediate their own Year 2000
Issue, and the Company's current assessments are based on presently available
information. However, there can be no guarantee that the systems of other
companies on which the Company's systems rely will be timely converted, or that
a failure to convert by another company, or a conversion that is incompatible
with the Company's systems, would not have material adverse effect on the
Company.
The Company will utilize both internal and external resources to reprogram,
or replace, and test the software for Year 2000 modifications. The Company
plans to complete the Year 2000 project in the next 12 months, if not sooner.
The total cost of the Year 2000 project is estimated at $5.6 million for the
Company's critical systems and is being funded through operating cash flows. Of
the total projected cost, approximately $3.7 million is attributable to the
purchase of new software and hardware, which will be capitalized. The remaining
$1.9 million, will be expensed as incurred and is not expected to have a
material effect on the results of operations.
The costs of the project and the date on which the Company plans to complete
the Year 2000 modifications and conversions are based on management's best
estimates which were derived utilizing numerous assumptions of future events
including the continued availability of certain resources, third party
modification plans and other factors. However, there can be no guarantee that
these estimates will be achieved and actual results could differ materially from
those plans. Specific factors that might cause such material differences
include, but are not limited to, the availability and cost of personnel trained
in this area, the ability to locate and correct all relevant computer codes,
failure of third parties on which the Company relies and similar uncertainties.
INFLATION
The Company does not believe that inflation has had a material effect on its
results of operations. However, there can be no assurance that the Company's
business will not be affected by inflation in the future.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Company is subject to lawsuits and claims which arise
out of its operations in the normal course of its business. The Company and
certain of its subsidiaries are defendants in various litigation matters in the
ordinary course of business, some of which involve claims for damages that are
substantial in amount. The Company believes, except for the items discussed in
its Annual Report on Form 10-K for the year ended December 31, 1997, and its
quarterly reports on Form 10-Q for the first and second quarters of 1998, for
which the Company is currently unable to predict the outcome, the disposition of
claims currently pending will not have a material adverse effect on the
Company's financial position or results of operations.
ITEM 5. OTHER INFORMATION
On July 16, 1998, the majority owners, Gary and Mary West (the "Wests"),
along with the Company's Co-Chairman, Troy Eaden ("Eaden") proposed to acquire
all the Common Stock not owned by the Wests or Eaden for a cash purchase price
of $13.50 per share. The Wests collectively beneficially own approximately
71.8% of the Company's outstanding Common Stock and Eaden beneficially owns
approximately 13.4% of the Company's outstanding Common Stock.
On August 18, 1998, the Wests and Eaden withdrew their proposal to acquire
all of the outstanding shares of Common Stock of the Company not currently owned
by the Wests and Eaden, after being informed by the Special Committee appointed
by the Company's Board of Directors that the Special Committee would not be able
to recommend the Wests' and Eaden's final proposal of $15.50 per share. Based on
the Special Committee's decision, the Wests and Eaden withdrew their proposal
and terminated all discussions with the Company relating to their proposal.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
Number Description
- --------------------------------------------------------------------------------
10.01 Employment Agreement between the Company and Thomas B. Barker dated
Janaury 1, 1996, as amended September 1, 1998
- --------------------------------------------------------------------------------
10.02 Employment Agreement between the Company and Michael A. Micek dated
Janaury 1, 1996, as amended September 1, 1998
- --------------------------------------------------------------------------------
10.03 Employment Agreement between the Company and John W. Erwin dated
January 1, 1996, as amended September 1, 1998
- --------------------------------------------------------------------------------
10.04 Employment Agreement between the Company and Mark V. Lavin dated
July 1, 1996, as amended September 1, 1998
- --------------------------------------------------------------------------------
10.05 Employment Agreement between the Company and Nancee Berger dated
January 1, 1996, as amended September 1, 1998
- --------------------------------------------------------------------------------
10.06 Employment Agreement between the Company and Steven M. Stangl dated
January 1, 1996, as amended September 1, 1998
- --------------------------------------------------------------------------------
27.01 Financial Data Schedule
11
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(b) Reports on Form 8-K
During the quarter ended September 30, 1998, the Company filed the
following:
(i) A report on Form 8-K, dated September 14, 1998, was filed on September
16, 1998 reporting the withdrawal of a proposal to acquire shares of
Common Stock by the Wests and Eaden (Item 5). No financial statements were
filed with this report.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 12, 1998
WEST TELESERVICES CORPORATION
By: /s/ Thomas B. Barker
----------------------------
Thomas B. Barker
Chief Executive Officer
By: /s/ Michael A. Micek
----------------------------
Michael A. Micek
Chief Financial Officer,
Executive Vice President-Finance and Treasurer
13
<PAGE>
INDEX TO EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NUMBER
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
10.01 Employment Agreement between the Company and Thomas B. Barker dated
Janaury 1, 1996, as amended September 1, 1998
- ------------------------------------------------------------------------------------------------------
10.02 Employment Agreement between the Company and Michael A. Micek dated
Janaury 1, 1996, as amended September 1, 1998
- ------------------------------------------------------------------------------------------------------
10.03 Employment Agreement between the Company and John W. Erwin dated
January 1, 1996, as amended September 1, 1998
- ------------------------------------------------------------------------------------------------------
10.04 Employment Agreement between the Company and Mark V. Lavin dated
July 1, 1996, as amended September 1, 1998
- ------------------------------------------------------------------------------------------------------
10.05 Employment Agreement between the Company and Nancee Berger dated
January 1, 1996, as amended September 1, 1998
- ------------------------------------------------------------------------------------------------------
10.06 Employment Agreement between the Company and Steven M. Stangl dated
January 1, 1996, as amended September 1, 1998
- ------------------------------------------------------------------------------------------------------
27.01 Financial Data Schedule
</TABLE>
<PAGE>
EXHIBIT 10.01
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into effective the 1st day of January, 1996,between
West Telemarketing Corporation a Delaware corporation ("Employer") and
TOM BARKER ("Employee").
RECITALS
A. WHEREAS, Employer and Employee have agreed to certain terms and
conditions of employment between the parties; and
B. WHEREAS, the parties desire to enter into this Agreement to
memorialize the terms and conditions of the employment relationship and any
prior and existing employment agreement(s) between the parties.
NOW THEREFORE, the parties agree as follows;
1. Employment. Employer agrees to employ Employee in his capacity as
----------
PRESIDENT AND COO of Employer. Employer may also direct Employee to perform such
duties for West Telemarketing Corporation Outbound and West Interactive
Corporation and other entities which now are, or in the future may be,
affiliated with Employer (the "Affiliates"), subject to the limitation that
Employees total time commitment shall be consistent with that normally expected
of similarly situated executive level employees. Employee shall serve Employer
and the Affiliates faithfully, diligently and to the best of his ability.
Employee agrees during the term of this Agreement to devote his best efforts,
attention, energy and skill to the performance of his employment and/or
consulting duties and to furthering the interest of Employer and the Affiliates.
2. Term of Employment. Employee's employment under this Agreement shall
------------------
commence effective the 1st day of January, 1996, and shall continue for a period
of two years unless terminated or renewed under the provisions of Paragraph 6
below.
a) Unless terminated pursuant to paragraph 6(a), the term of employment
shall be extended by one year at the end of each successive year so
that at the beginning of each successive year the term of this
Agreement will be two years.
3. Compensation. Employer shall pay Employee as set forth in Exhibit A
-------------
attached hereto and incorporated herein as is fully set forth in this paragraph.
Employee may receive additional discretionary bonuses as determined by the Board
of Directors of Employer in its sole discretion provided nothing contained
herein shall be construed as a commitment by the corporation to declare or pay
any such bonuses.
<PAGE>
4. Benefits. In addition to the compensation provided for in Paragraph 3
---------
above, Employer will provide Employee with employment benefits commensurate to
those received by other executive level employees of Employer during the term of
this Agreement.
5. Other Activities. Employee shall devote substantially all of his
----------------
working time and efforts during the Company's normal business hours to the
business and affairs of the Company and to the duties and responsibilities
assigned to him pursuant to this Agreement. Employee may devote a reasonable
amount of his time to civic, community or charitable activities. Employee in
all events shall be free to invest his assets in such manner as will not require
any substantial services by Employee in the conduct of the businesses or affairs
of the entities or in the management of the assets in which such investments are
made.
6. Term and Termination. The termination of this Agreement shall be
--------------------
governed by the following:
a) The term of this Agreement shall be for the period set out in
paragraph 2 unless earlier terminated in one of the following ways:
(1) Death. This Agreement shall immediately terminate upon the death
-----
of Employee.
(2) For Cause. The Employer, upon written notice to Employee, may
---------
terminate the employment of Employee at any time for "cause."
For purposes of this paragraph, "cause" shall be deemed to exist
if, and only if, the CEO and COO of Employer, in good faith,
determine that Employee has engaged, during the performance of
his duties hereunder, in significant objective acts or omissions
constituting dishonesty, willful misconduct or gross negligence
relating to the business of Employer.
(3) Without Cause. The Employer, upon written notice to Employee,
-------------
may terminate the employment of Employee at any time without
cause.
(4) Resignation. Employee, upon written notice to Employer, may
-----------
resign from the employment of Employer at any time.
2
<PAGE>
(b) Accrued Compensation on Termination. In the event of termination of
-----------------------------------
the Agreement, Employee shall be entitled to receive:
(1) salary earned prior to and including the date of termination;
(2) any bonus earned as of the end of the month immediately preceding
the date of termination; and
(3) all benefits, if any, which have vested as of the date of
termination.
7. Consulting.
----------
(a) In the event of termination of employment pursuant to paragraph
6(a) (3) or 6(a)(4) above, Employer and Employee agree that
Employee shall, for a minimum period of twenty-four (24) months
from the date of termination serve as a consultant to Employer.
(b) In the event of termination pursuant to paragraph 6(a)(2),
Employer and Employee agree that Employer may, at its sole
option, elect to retain the services of Employee as a consultant
for a period of twenty-four (24) months from the date of
termination and that Employee will serve as a consultant to
Employer if Employer so elects.
c) During any period of consulting, Employee shall be acting as an
independent contractor. As part of the consulting services,
Employee agrees to provide certain services to Employer,
including, but not limited to, the following:
(1) oral and written information with reference to continuing
programs and new programs which were developed or under
development under the supervision of Employee;
(2) meeting with officers and managers of Employer to discuss
and review programs and to make recommendations;
(3) analysis, opinion and information regarding the
effectiveness and public acceptance of their programs.
d) During the consulting period, Employee shall continue to receive,
as compensation for his consulting, the annualized salary set
forth in Exhibit A. No bonus of any kind will be paid during
any period of consulting.
e) Employee hereby agrees that during any period of consulting, he
will devote his full attention, energy and skill to the
performance of
3
<PAGE>
his duties and to furthering the interest of Employer and the
affiliates, which shall include, and Employee acknowledges, a
fiduciary duty and obligation to Employer. Employee acknowledges
that this prohibition includes, but is not necessarily limited
to, a preclusion from any other employment or consulting by
Employee during the consulting period except pursuant to
paragraph 7(f) hereafter.
f) During the term of this Agreement, including any period of
consulting, Employee shall not, singly, jointly, or as a member,
employer or agent of any partnership, or as an officer, agent,
employee, director, stockholder or investor of any other
corporation or entity, or in any other capacity, engage in any
business endeavors of any kind or nature whatsoever, other than
those of Employer or its Affiliates without the express written
consent of Employer, provided, however, that Employee may own
stock in a publicly traded corporation. Employee agrees that
Employer may in its sole discretion give or withhold its consent
and understands that Employer's consent will not be unreasonably
withheld if the following conditions are met:
(1) Employee's intended employment will not interfere in
Employer's opinion with Employee's duties and obligations as
a consultant, including the fiduciary duty assumed
hereunder; and
(2) Employee's intended employment or activity would not, in the
opinion of Employer, place Employee in a situation where
confidential information of Employer or its Affiliates known
to Employee may benefit Employee's new employer; and
(3) Employee's new employment will not, in Employer's opinion,
result, directly or indirectly, in competition with Employer
or its Affiliates, then or in the future.
g) Notwithstanding any provisions in this Agreement to the contrary,
the provisions of paragraph 7 shall survive the termination of
this Agreement.
h) Employer shall reimburse Employee for all reasonable expenses
incurred by Employee in furtherance of his consulting duties
pursuant to this Agreement provided the expenses are pre-approved
by Employer.
4
<PAGE>
i) Benefits During Consulting Period. Employee and his dependents
--------------------------------
shall be entitled to continue their participation in all benefit
plans in effect on the date of Employee's termination from
employment during the period of consulting, under the same terms
and conditions and at the same net cost to Employee as when
employed by Employer unless Employee accepts new employment
during the consulting term in accordance with paragraph 7 above,
in which event all benefits will cease, at Employer's option,
when the new employment is accepted by Employee.
8. Confidential Information. In the course of Employee's employment,
------------------------
Employee will be provided with certain information, technical data and know-how
regarding the business of Employer and its Affiliates and their products, all of
is confidential (hereinafter referred to as "Confidential Information").
agrees to receive, hold and treat all confidential information received
Employer and its Affiliates as confidential and secret and agrees to
the secrecy of said Confidential Information. Employee agrees that the
Information will be disclosed only to those persons who are
to have such knowledge in connection with their work for Employer and
such Confidential Information will not be disclosed to others without the
written consent of the Employer. The provisions hereof shall not be
to: (a) information which at the time of disclosure to Employee is a
of public knowledge; or (b) information which, after disclosure to
becomes public knowledge other than through a breach of this
Unless the Confidential Information shall be of the type herein
set forth, Employee shall not use such Confidential Information for his
benefit or for a third party's or parties' benefit at any time. Upon
of employment, Employee will return all books, records and other
provided to or acquired by Employee during the course of employment
relate in any way to Employer or its business. The obligations imposed
Employee by this paragraph shall survive the expiration or termination of
Agreement.
9. Covenant Not to Compete. Notwithstanding any other provision of this
-----------------------
Agreement to the contrary, Employee covenants and agrees that for the period of
one (1) year following termination of his employment with Employer for any
reason he will not:
a) directly or indirectly, for himself, or as agent of, or on behalf of,
or in connection with, any person, firm, association or corporation,
engage in any business competing directly for the customers,
prospective customers or accounts of the Employer or any of its
Affiliates with whom Employee had contact or about whom Employee
learned during the course of his employment with Employer and during
the one (1) year immediately preceding the end of his employment.
b) induce or attempt to induce any person employed by Employer or any of
its Affiliates, in any capacity, at the time of the termination of
Employee's
5
<PAGE>
service with Employer, to leave his employment, agency directorship or
office with Employer or the Affiliate.
c) induce or attempt to induce any customer of Employer or any of its
Affiliates to terminate or change in any way its business relationship
with Employer or the Affiliate.
Employee agrees the knowledge and information gained by him in the
performance of his duties would be valuable to those who are now, or might
become, competitors of the Employer or its Affiliates and that the business of
Employer and its Affiliates by its nature, covers at least the entire United
States of America and Canada. In the event these covenants not to compete are
held, in any respect, to be an unreasonable restriction upon the Employee, the
Court so holding may reduce the territory, or time, to which it pertains or
otherwise reasonably modify the covenant to the extent necessary to render this
covenant enforceable by said Court for the reasonable protection of Employer and
its Affiliates. The obligations imposed upon Employee by this paragraph are
severable from, and shall survive the expiration or termination of, this
Agreement.
10. Developments.
------------
a) Employee will make full and prompt disclosure to Employer of all
inventions, improvements, discoveries, methods, developments, software
and works of authorship, whether patentable or not, which are created,
made, conceived, reduced to practice by Employee or under his
direction or jointly with others during his employment by Employer,
whether or not during normal working hours or on the premises of
Employer which relate to the business of Employer as conducted from
time to time (all of which are collectively referred to in this
Agreement as "Developments").
b) Employee agrees to assign, and does hereby assign, to Employer (or any
person or entity designated by Employer) all of his right, title and
interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications.
c) Employee agrees to cooperate fully with Employer, both during and
after his employment with Employer, with respect to the procurement,
maintenance and enforcement of copyrights and patents (both in the
United States and foreign countries) relating to Developments.
Employee shall sign all papers, including, without limitation,
copyright applications, patent applications, declarations, oaths,
formal assignments, assignment or priority rights, and powers of
attorney, which Employer may deem necessary or desirable in order to
protect its rights and interest in any Developments.
6
<PAGE>
11. Injunction and Other Relief. Both parties hereto recognize that the
---------------------------
services to be rendered under this Agreement by Employee are special, unique and
of extraordinary character, and that in the event of the breach of Employee of
the terms and conditions of this Agreement to be performed by him, or in the
event Employee performs services for any person, firm or corporation engaged in
the competing line of business with Employer as provided in Paragraph 9, or if
Employee shall breach the provisions of this Agreement with respect to
Confidential Information or consulting services, then Employer shall be
entitled, if it so elects, in addition to all other remedies available to it
under this Agreement or at law or in equity to affirmative injunctive relief.
12. Severability. In the event that any of the provisions of this
------------
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such invalidity or unenforceability shall not affect the remainder
of this Agreement and same shall be construed as if such invalid or
unenforceable provisions had never been a part hereof. In the event any court
would invalidate or fail to enforce any provision of Paragraph 7 and or
Paragraph 9 of this Agreement, Employee shall return any sums paid to Employee
by Employer pursuant to the consulting provision in paragraph 7 hereof.
13. Governing Law. This Agreement shall be governed by the laws of the
-------------
State of Nebraska.
14. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties respecting the employment of Employee by Employer and
supersedes all prior understandings, arrangements and agreements, whether oral
or written, including without limitation, any existing employment agreement, and
may not be amended except by a writing signed by the parties hereto.
15. Notice. Notices to Employer under this Agreement shall be in writing
------
and sent by registered mail, return receipt requested, at the following address:
Chief Executive Officer - West Telemarketing Corporation
9910 Maple Street
Omaha, Nebraska 68134
16. Miscellaneous. Employee acknowledges that:
-------------
a) He has consulted with or had an opportunity to consult with an
attorney of Employee's choosing regarding this Agreement.
b) He will receive substantial and adequate consideration for his
obligations under this Agreement.
7
<PAGE>
c) He believes the obligations, terms and conditions hereof are
reasonable and necessary for the protectable interests of Employer and
are enforceable.
d) This Agreement contains restrictions on his post-employment
activities.
IN WITNESS WHEREOF, Employer has, by its appropriate officers, executed
this Agreement and Employee has executed this Agreement as of the day and year
first above written.
WEST TELEMARKETING CORPORATION,
Employer
By: /s/ Troy L. Eaden
--------------------------------
Its: Chief Executive Officer
/s/ Thomas Barker
-------------------------------
Thomas Barker, Employee
-------------------------------
8
<PAGE>
To: Tom Barker
From: Troy Eaden
Date: September 1, 1998
Subject: Revised Compensation Plan Exhibit A
- -------------------------------------------------------------------------------
Your Compensation Plan through December 31, 1999 while you are employed as
President and Chief Executive Officer of West TeleServices Corporation is
outlined below:
1. Your annual base salary will be $415,000 while you are employed as President
and Chief Executive Officer of WTSC. Should you elect to voluntarily terminate
your employment, you will be compensated for your services through the date of
your actual termination, per your Employment Agreement.
2. Effective January 1, 1999, you will be eligible to receive a performance
bonus based on year-to-date growth of profits over the same period of the prior
year. This bonus will be calculated by multiplying the year-to-date growth in
profits for each quarter by the corresponding profit growth participation factor
from the table below, minus bonus paid year-to-date for the respective calendar
year.
Profit Growth Profit Growth Participation Factor
------------- ----------------------------------
12% 0
12.1% - 14.99% .0125
15% - 16.99% .015
17% - 19.99% .0175
20% - 21.99% .02
22% + .025
Please note a negative year-to-date profit calculation at the end of any given
quarter will result in "loss carry forward" to be applied to the next quarterly
year-to-date calculation. All bonuses will be paid within thirty days of the
end of each quarter.
3. For the purposes for this Exhibit A, profit shall be defined as pre-tax
profit growth of the Company on a consolidated basis.
4. At the discretion of management, you may receive an additional bonus based
on the Companies' and your individual performance.
5. Your Compensation Plan for the year 2000 will be presented no later than
December 1, 1999.
/s/ TB
<PAGE>
EXHIBIT 10.02
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into effective the 1st day of January, 1996,
between West Telemarketing Corporation a Delaware corporation ("Employer") and
MICHAEL A. MICEK ("Employee").
RECITALS
A. WHEREAS, Employer and Employee have agreed to certain terms and
conditions of employment between the parties; and
B. WHEREAS, the parties desire to enter into this Agreement to
memorialize the terms and conditions of the employment relationship and any
prior and existing employment agreement(s) between the parties.
NOW THEREFORE, the parties agree as follows;
1. Employment. Employer agrees to employ Employee in his capacity as
----------
CHIEF FINANCIAL OFFICER of Employer. Employer may also direct Employee to
perform such duties for West Interactive Corporation and West Telemarketing
Corporation Outbound and other entities which now are, or in the future may
be, affiliated with Employer (the "Affiliates"), subject to the limitation that
Employees total time commitment shall be consistent with that normally expected
of similarly situated executive level employees. Employee shall serve Employer
and the Affiliates faithfully, diligently and to the best of his ability.
Employee agrees during the term of this Agreement to devote his best efforts,
attention, energy and skill to the performance of his employment and/or
consulting duties and to furthering the interest of Employer and the Affiliates.
2. Term of Employment. Employee's employment under this Agreement
------------------
shall commence effective the 1st day of January, 1996, and shall continue for a
period of two years unless terminated or renewed under the provisions of
Paragraph 6 below.
(a) Unless terminated pursuant to paragraph 6(a), the term of employment
shall be extended by one year at the end of each successive year so
that at the beginning of each successive year the term of this
Agreement will be two years.
3. Compensation. Employer shall pay Employee as set forth in Exhibit A
------------
attached hereto and incorporated herein as is fully set forth in this paragraph.
Employee may receive additional discretionary bonuses as determined by the Board
of Directors of Employer in its sole discretion provided nothing contained
herein shall be construed as a commitment by the corporation to declare or pay
any such bonuses.
<PAGE>
4. Benefits. In addition to the compensation provided for in Paragraph 3
--------
above, Employer will provide Employee with employment benefits commensurate to
those received by other executive level employees of Employer during the term of
this Agreement.
5. Other Activities. Employee shall devote substantially all of his
----------------
working time and efforts during the Company's normal business hours to the
business and affairs of the Company and to the duties and responsibilities
assigned to him pursuant to this Agreement. Employee may devote a reasonable
amount of his time to civic, community or charitable activities. Employee in
all events shall be free to invest his assets in such manner as will not require
any substantial services by Employee in the conduct of the businesses or affairs
of the entities or in the management of the assets in which such investments are
made.
6. Term and Termination. The termination of this Agreement shall be
--------------------
governed by the following:
(a) The term of this Agreement shall be for the period set out in
paragraph 2 unless earlier terminated in one of the following ways:
(1) Death. This Agreement shall immediately terminate upon the death
-----
of Employee.
(2) For Cause. The Employer, upon written notice to Employee, may
---------
terminate the employment of Employee at any time for "cause."
For purposes of this paragraph, "cause" shall be deemed to exist
if, and only if, the CEO and COO of Employer, in good faith,
determine that Employee has engaged, during the performance of
his duties hereunder, in significant objective acts or omissions
constituting dishonesty, willful misconduct or gross negligence
relating to the business of Employer.
(3) Without Cause. The Employer, upon written notice to Employee,
-------------
may terminate the employment of Employee at any time without
cause.
(4) Resignation. Employee, upon written notice to Employer, may
-----------
resign from the employment of Employer at any time.
2
<PAGE>
(b) Accrued Compensation on Termination. In the event of termination of the
-----------------------------------
Agreement, Employee shall be entitled to receive:
(1) salary earned prior to and including the date of termination;
(2) any bonus earned as of the end of the month immediately preceding
the date of termination; and
(3) all benefits, if any, which have vested as of the date of
termination.
7. Consulting.
----------
(a) In the event of termination of employment pursuant to paragraph
6(a) (3) or 6(a)(4) above, Employer and Employee agree that
Employee shall, for a minimum period of twenty-four (24) months
from the date of termination serve as a consultant to Employer.
(b) In the event of termination pursuant to paragraph 6(a)(2),
Employer and Employee agree that Employer may, at its sole
option, elect to retain the services of Employee as a consultant
for a period of twenty-four (24) months from the date of
termination and that Employee will serve as a consultant to
Employer if Employer so elects.
c) During any period of consulting, Employee shall be acting as an
independent contractor. As part of the consulting services,
Employee agrees to provide certain services to Employer,
including, but not limited to, the following:
(1) oral and written information with reference to continuing
programs and new programs which were developed or under
development under the supervision of Employee;
(2) meeting with officers and managers of Employer to discuss
and review programs and to make recommendations;
(3) analysis, opinion and information regarding the
effectiveness and public acceptance of their programs.
d) During the consulting period, Employee shall continue to receive,
as compensation for his consulting, the annualized salary set
forth in Exhibit A. No bonus of any kind will be paid during
any period of consulting.
e) Employee hereby agrees that during any period of consulting, he
will devote his full attention, energy and skill to the performance
3
<PAGE>
of his duties and to furthering the interest of Employer and the
affiliates, which shall include, and Employee acknowledges, a
fiduciary duty and obligation to Employer. Employee acknowledges
that this prohibition includes, but is not necessarily limited
to, a preclusion from any other employment or consulting by
Employee during the consulting period except pursuant to
paragraph 7(f) hereafter.
f) During the term of this Agreement, including any period of
consulting, Employee shall not, singly, jointly, or as a member,
employer or agent of any partnership, or as an officer, agent,
employee, director, stockholder or investor of any other
corporation or entity, or in any other capacity, engage in any
business endeavors of any kind or nature whatsoever, other than
those of Employer or its Affiliates without the express written
consent of Employer, provided, however, that Employee may own
stock in a publicly traded corporation. Employee agrees that
Employer may in its sole discretion give or withhold its consent
and understands that Employer's consent will not be unreasonably
withheld if the following conditions are met:
(1) Employee's intended employment will not interfere in
Employer's opinion with Employee's duties and obligations as
a consultant, including the fiduciary duty assumed
hereunder; and
(2) Employee's intended employment or activity would not, in the
opinion of Employer, place Employee in a situation where
confidential information of Employer or its Affiliates known
to Employee may benefit Employee's new employer; and
(3) Employee's new employment will not, in Employer's opinion,
result, directly or indirectly, in competition with Employer
or its Affiliates, then or in the future.
g) Notwithstanding any provisions in this Agreement to the contrary,
the provisions of paragraph 7 shall survive the termination of
this Agreement.
h) Employer shall reimburse Employee for all reasonable expenses
incurred by Employee in furtherance of his consulting duties
pursuant to this Agreement provided the expenses are pre-approved
by Employer.
4
<PAGE>
i) Benefits During Consulting Period. Employee and his dependents
---------------------------------
shall be entitled to continue their participation in all benefit
plans in effect on the date of Employee's termination from
employment during the period of consulting, under the same terms
and conditions and at the same net cost to Employee as when
employed by Employer unless Employee accepts new employment
during the consulting term in accordance with paragraph 7 above,
in which event all benefits will cease, at Employer's option,
when the new employment is accepted by Employee.
8. Confidential Information. In the course of Employee's employment,
------------------------
Employee will be provided with certain information, technical data and know-how
regarding the business of Employer and its Affiliates and their products, all of
which is confidential (hereinafter referred to as "Confidential Information").
Employee agrees to receive, hold and treat all confidential information received
from Employer and its Affiliates as confidential and secret and agrees to
protect the secrecy of said Confidential Information. Employee agrees that the
Confidential Information will be disclosed only to those persons who are
required to have such knowledge in connection with their work for Employer and
that such Confidential Information will not be disclosed to others without the
prior written consent of the Employer. The provisions hereof shall not be
applicable to: (a) information which at the time of disclosure to Employee is a
matter of public knowledge; or (b) information which, after disclosure to
Employee, becomes public knowledge other than through a breach of this
Agreement. Unless the Confidential Information shall be of the type herein
before set forth, Employee shall not use such Confidential Information for his
own benefit or for a third party's or parties' benefit at any time. Upon
termination of employment, Employee will return all books, records and other
materials provided to or acquired by Employee during the course of employment
which relate in any way to Employer or its business. The obligations imposed
upon Employee by this paragraph shall survive the expiration or termination of
this Agreement.
9. Covenant Not to Compete. Notwithstanding any other provision of this
-----------------------
Agreement to the contrary, Employee covenants and agrees that for the period of
one (1) year following termination of his employment with Employer for any
reason he will not:
a) directly or indirectly, for himself, or as agent of, or on behalf of,
or in connection with, any person, firm, association or corporation,
engage in any business competing directly for the customers,
prospective customers or accounts of the Employer or any of its
Affiliates with whom Employee had contact or about whom Employee
learned during the course of his employment with Employer and during
the one (1) year immediately preceding the end of his employment.
b) induce or attempt to induce any person employed by Employer or any of
its Affiliates, in any capacity, at the time of the termination of
Employee's
5
<PAGE>
service with Employer, to leave his employment, agency directorship or
office with Employer or the Affiliate.
c) induce or attempt to induce any customer of Employer or any of its
Affiliates to terminate or change in any way its business relationship
with Employer or the Affiliate.
Employee agrees the knowledge and information gained by him in the
performance of his duties would be valuable to those who are now, or might
become, competitors of the Employer or its Affiliates and that the business of
Employer and its Affiliates by its nature, covers at least the entire United
States of America and Canada. In the event these covenants not to compete are
held, in any respect, to be an unreasonable restriction upon the Employee, the
Court so holding may reduce the territory, or time, to which it pertains or
otherwise reasonably modify the covenant to the extent necessary to render this
covenant enforceable by said Court for the reasonable protection of Employer and
its Affiliates. The obligations imposed upon Employee by this paragraph are
severable from, and shall survive the expiration or termination of, this
Agreement.
10. Developments.
------------
a) Employee will make full and prompt disclosure to Employer of all
inventions, improvements, discoveries, methods, developments, software
and works of authorship, whether patentable or not, which are created,
made, conceived, reduced to practice by Employee or under his
direction or jointly with others during his employment by Employer,
whether or not during normal working hours or on the premises of
Employer which relate to the business of Employer as conducted from
time to time (all of which are collectively referred to in this
Agreement as "Developments").
b) Employee agrees to assign, and does hereby assign, to Employer (or any
person or entity designated by Employer) all of his right, title and
interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications.
c) Employee agrees to cooperate fully with Employer, both during and
after his employment with Employer, with respect to the procurement,
maintenance and enforcement of copyrights and patents (both in the
United States and foreign countries) relating to Developments.
Employee shall sign all papers, including, without limitation,
copyright applications, patent applications, declarations, oaths,
formal assignments, assignment or priority rights, and powers of
attorney, which Employer may deem necessary or desirable in order to
protect its rights and interest in any Developments.
6
<PAGE>
11. Injunction and Other Relief. Both parties hereto recognize that the
---------------------------
services to be rendered under this Agreement by Employee are special, unique and
of extraordinary character, and that in the event of the breach of Employee of
the terms and conditions of this Agreement to be performed by him, or in the
event Employee performs services for any person, firm or corporation engaged in
the competing line of business with Employer as provided in Paragraph 9, or if
Employee shall breach the provisions of this Agreement with respect to
Confidential Information or consulting services, then Employer shall be
entitled, if it so elects, in addition to all other remedies available to it
under this Agreement or at law or in equity to affirmative injunctive relief.
12. Severability. In the event that any of the provisions of this
------------
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such invalidity or unenforceability shall not affect the remainder
of this Agreement and same shall be construed as if such invalid or
unenforceable provisions had never been a part hereof. In the event any court
would invalidate or fail to enforce any provision of Paragraph 7 and or
Paragraph 9 of this Agreement, Employee shall return any sums paid to Employee
by Employer pursuant to the consulting provision in paragraph 7 hereof.
13. Governing Law. This Agreement shall be governed by the laws of the
-------------
State of Nebraska.
14. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties respecting the employment of Employee by Employer and
supersedes all prior understandings, arrangements and agreements, whether oral
or written, including without limitation, any existing employment agreement, and
may not be amended except by a writing signed by the parties hereto.
15. Notice. Notices to Employer under this Agreement shall be in writing
------
and sent by registered mail, return receipt requested, at the following address:
President - West Telemarketing Corporation
9910 Maple Street
Omaha, Nebraska 68134
16. Miscellaneous. Employee acknowledges that:
-------------
a) He has consulted with or had an opportunity to consult with an
attorney of Employee's choosing regarding this Agreement.
b) He will receive substantial and adequate consideration for his
obligations under this Agreement.
7
<PAGE>
c) He believes the obligations, terms and conditions hereof are
reasonable and necessary for the protectable interests of Employer and
are enforceable.
d) This Agreement contains restrictions on his post-employment
activities.
IN WITNESS WHEREOF, Employer has, by its appropriate officers, executed
this Agreement and Employee has executed this Agreement as of the day and year
first above written.
WEST TELEMARKETING CORPORATION,
Employer
By: /s/ Troy L. Eaden
------------------------------
Its: Chief Executive Officer
/s/ Michael A. Micek
-------------------------------
Michael A. Micek, Employee
8
<PAGE>
To: MIKE MICEK
From: TOM BARKER
Date: SEPTEMBER 1, 1998
Subject: 1998 COMPENSATION PLAN EXHIBIT A (REVISION)
- -------------------------------------------------------------------------------
Mike, below is a revision of your Compensation Plan for 1998. Your Compensation
Plan will be reviewed by December 15th of each year for the following year. If
changes are made for an upcoming year, a new Exhibit a will be created.
1. Annual Salary You will be paid an annual salary of $200,000.
2. Effective January 1, 1998, you will be eligible to receive a quarterly
performance bonus based on year-to-date growth of profits over the same period
of the prior year.
This quarterly bonus will be calculated by multiplying the year-to-date growth
in profits each quarter by the corresponding "Profit Growth Participation"
factor from the table below, minus bonus paid year-to-date for the respective
calendar year.
Profit Growth Profit Growth Participation
------------- ---------------------------
0 - 19.99% 1.0%
0 - 29.99% 1.25%
30 - Above 1.40%
As an example, if profits for the first quarter of calendar year 1998 increases
by 20% compared to the same period of the previous year representing a
$2,000,000 increase in profits, you would earn a bonus of $25,000 ($2,000,000 x
1.25%).
Please note a negative year-to-date profit calculation at the end of any given
quarter will result in a "loss carry forward" to be applied to the next
quarterly year-to-date calculation. All quarterly bonuses will be paid within
30 days after the end of each quarter.
3. For purposes of this Exhibit A, profits shall be defined as pre-tax
profit growth of the Company.
4. At the discretion of management, you may receive an additional bonus
based on the Companies' and your individual performance.
5. Your Compensation Plan for the year 2000 will be presented no later than
December 1, 1999.
/s/ MM
<PAGE>
EXHIBIT 10.03
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into effective the 1st day of January, 1996,
between West Telemarketing Corporation a Delaware corporation ("Employer") and
JOHN ERWIN ("Employee").
RECITALS
A. WHEREAS, Employer and Employee have agreed to certain terms and
conditions of employment between the parties; and
B. WHEREAS, the parties desire to enter into this Agreement to
memorialize the terms and conditions of the employment relationship and any
prior and existing employment agreement(s) between the parties.
NOW THEREFORE, the parties agree as follows;
1. Employment. Employer agrees to employ Employee in his capacity as
----------
PRESIDENT OUTBOUND SERVICES of Employer. Employer may also direct Employee to
perform such duties for West Telemarketing Corporation and West
Interactive Corporation and other entities which now are, or in the future may
be, affiliated with Employer (the "Affiliates"), subject to the limitation that
Employees total time commitment shall be consistent with that normally expected
of similarly situated executive level employees. Employee shall serve Employer
and the Affiliates faithfully, diligently and to the best of his ability.
Employee agrees during the term of this Agreement to devote his best efforts,
attention, energy and skill to the performance of his employment and/or
consulting duties and to furthering the interest of Employer and the Affiliates.
2. Term of Employment. Employee's employment under this Agreement
------------------
shall commence effective the 1st day of January, 1996, and shall continue for a
period of two years unless terminated or renewed under the provisions of
Paragraph 6 below.
(a) Unless terminated pursuant to paragraph 6(a), the term of employment
shall be extended by one year at the end of each successive year so
that at the beginning of each successive year the term of this
Agreement will be two years.
3. Compensation. Employer shall pay Employee as set forth in Exhibit A
-------------
attached hereto and incorporated herein as is fully set forth in this paragraph.
Employee may receive additional discretionary bonuses as determined by the Board
of Directors of Employer in its sole discretion provided nothing contained
herein shall be construed as a commitment by the corporation to declare or pay
any such bonuses.
<PAGE>
4. Benefits. In addition to the compensation provided for in Paragraph 3
--------
above, Employer will provide Employee with employment benefits commensurate to
those received by other executive level employees of Employer during the term of
this Agreement.
5. Other Activities. Employee shall devote substantially all of his
----------------
working time and efforts during the Company's normal business hours to the
business and affairs of the Company and to the duties and responsibilities
assigned to him pursuant to this Agreement. Employee may devote a reasonable
amount of his time to civic, community or charitable activities. Employee in
all events shall be free to invest his assets in such manner as will not require
any substantial services by Employee in the conduct of the businesses or affairs
of the entities or in the management of the assets in which such investments are
made.
6. Term and Termination. The termination of this Agreement shall be
--------------------
governed by the following:
(a) The term of this Agreement shall be for the period set out in
paragraph 2 unless earlier terminated in one of the following ways:
(1) Death. This Agreement shall immediately terminate upon the death
-----
of Employee.
(2) For Cause. The Employer, upon written notice to Employee, may
---------
terminate the employment of Employee at any time for "cause."
For purposes of this paragraph, "cause" shall be deemed to exist
if, and only if, the CEO and COO of Employer, in good faith,
determine that Employee has engaged, during the performance of
his duties hereunder, in significant objective acts or omissions
constituting dishonesty, willful misconduct or gross negligence
relating to the business of Employer.
(3) Without Cause. The Employer, upon written notice to Employee,
-------------
may terminate the employment of Employee at any time without
cause.
(4) Resignation. Employee, upon written notice to Employer, may
-----------
resign from the employment of Employer at any time.
2
<PAGE>
(b) Accrued Compensation on Termination. In the event of termination of the
-----------------------------------
Agreement, Employee shall be entitled to receive:
(1) salary earned prior to and including the date of termination;
(2) any bonus earned as of the end of the month immediately preceding
the date of termination; and
(3) all benefits, if any, which have vested as of the date of
termination.
7. Consulting.
----------
(a) In the event of termination of employment pursuant to paragraph
6(a) (3) or 6(a)(4) above, Employer and Employee agree that
Employee shall, for a minimum period of twenty-four (24) months
from the date of termination serve as a consultant to Employer.
(b) In the event of termination pursuant to paragraph 6(a)(2),
Employer and Employee agree that Employer may, at its sole
option, elect to retain the services of Employee as a consultant
for a period of twenty-four (24) months from the date of
termination and that Employee will serve as a consultant to
Employer if Employer so elects.
c) During any period of consulting, Employee shall be acting as an
independent contractor. As part of the consulting services,
Employee agrees to provide certain services to Employer,
including, but not limited to, the following:
(1) oral and written information with reference to continuing
programs and new programs which were developed or under
development under the supervision of Employee;
(2) meeting with officers and managers of Employer to discuss
and review programs and to make recommendations;
(3) analysis, opinion and information regarding the
effectiveness and public acceptance of their programs.
d) During the consulting period, Employee shall continue to receive,
as compensation for his consulting, the annualized salary set
forth in Exhibit A. No bonus of any kind will be paid during
any period of consulting.
e) Employee hereby agrees that during any period of consulting, he
will devote his full attention, energy and skill to the
performance
3
<PAGE>
of his duties and to furthering the interest of Employer and the
affiliates, which shall include, and Employee acknowledges, a
fiduciary duty and obligation to Employer. Employee acknowledges
that this prohibition includes, but is not necessarily limited
to, a preclusion from any other employment or consulting by
Employee during the consulting period except pursuant to
paragraph 7(f) hereafter.
f) During the term of this Agreement, including any period of
consulting, Employee shall not, singly, jointly, or as a member,
employer or agent of any partnership, or as an officer, agent,
employee, director, stockholder or investor of any other
corporation or entity, or in any other capacity, engage in any
business endeavors of any kind or nature whatsoever, other than
those of Employer or its Affiliates without the express written
consent of Employer, provided, however, that Employee may own
stock in a publicly traded corporation. Employee agrees that
Employer may in its sole discretion give or withhold its consent
and understands that Employer's consent will not be unreasonably
withheld if the following conditions are met:
(1) Employee's intended employment will not interfere in
Employer's opinion with Employee's duties and obligations as
a consultant, including the fiduciary duty assumed
hereunder; and
(2) Employee's intended employment or activity would not, in the
opinion of Employer, place Employee in a situation where
confidential information of Employer or its Affiliates known
to Employee may benefit Employee's new employer; and
(3) Employee's new employment will not, in Employer's opinion,
result, directly or indirectly, in competition with Employer
or its Affiliates, then or in the future.
g) Notwithstanding any provisions in this Agreement to the contrary,
the provisions of paragraph 7 shall survive the termination of
this Agreement.
h) Employer shall reimburse Employee for all reasonable expenses
incurred by Employee in furtherance of his consulting duties
pursuant to this Agreement provided the expenses are pre-approved
by Employer.
4
<PAGE>
i) Benefits During Consulting Period. Employee and his dependents
---------------------------------
shall be entitled to continue their participation in all benefit
plans in effect on the date of Employee's termination from
employment during the period of consulting, under the same terms
and conditions and at the same net cost to Employee as when
employed by Employer unless Employee accepts new employment
during the consulting term in accordance with paragraph 7 above,
in which event all benefits will cease, at Employer's option,
when the new employment is accepted by Employee.
8. Confidential Information. In the course of Employee's employment,
------------------------
Employee will be provided with certain information, technical data and know-how
regarding the business of Employer and its Affiliates and their products, all of
which is confidential (hereinafter referred to as "Confidential Information").
Employee agrees to receive, hold and treat all confidential information received
from Employer and its Affiliates as confidential and secret and agrees to
protect the secrecy of said Confidential Information. Employee agrees that the
Confidential Information will be disclosed only to those persons who are
required to have such knowledge in connection with their work for Employer and
that such Confidential Information will not be disclosed to others without the
prior written consent of the Employer. The provisions hereof shall not be
applicable to: (a) information which at the time of disclosure to Employee is a
matter of public knowledge; or (b) information which, after disclosure to
Employee, becomes public knowledge other than through a breach of this
Agreement. Unless the Confidential Information shall be of the type herein
before set forth, Employee shall not use such Confidential Information for his
own benefit or for a third party's or parties' benefit at any time. Upon
termination of employment, Employee will return all books, records and other
materials provided to or acquired by Employee during the course of employment
which relate in any way to Employer or its business. The obligations imposed
upon Employee by this paragraph shall survive the expiration or termination of
this Agreement.
9. Covenant Not to Compete. Notwithstanding any other provision of this
-----------------------
Agreement to the contrary, Employee covenants and agrees that for the period of
one (1) year following termination of his employment with Employer for any
reason he will not:
a) directly or indirectly, for himself, or as agent of, or on behalf of,
or in connection with, any person, firm, association or corporation,
engage in any business competing directly for the customers,
prospective customers or accounts of the Employer or any of its
Affiliates with whom Employee had contact or about whom Employee
learned during the course of his employment with Employer and during
the one (1) year immediately preceding the end of his employment.
b) induce or attempt to induce any person employed by Employer or any of
its Affiliates, in any capacity, at the time of the termination of
Employee's
5
<PAGE>
service with Employer, to leave his employment, agency directorship or
office with Employer or the Affiliate.
c) induce or attempt to induce any customer of Employer or any of its
Affiliates to terminate or change in any way its business relationship
with Employer or the Affiliate.
Employee agrees the knowledge and information gained by him in the
performance of his duties would be valuable to those who are now, or might
become, competitors of the Employer or its Affiliates and that the business of
Employer and its Affiliates by its nature, covers at least the entire United
States of America and Canada. In the event these covenants not to compete are
held, in any respect, to be an unreasonable restriction upon the Employee, the
Court so holding may reduce the territory, or time, to which it pertains or
otherwise reasonably modify the covenant to the extent necessary to render this
covenant enforceable by said Court for the reasonable protection of Employer and
its Affiliates. The obligations imposed upon Employee by this paragraph are
severable from, and shall survive the expiration or termination of, this
Agreement.
10. Developments.
------------
a) Employee will make full and prompt disclosure to Employer of all
inventions, improvements, discoveries, methods, developments, software
and works of authorship, whether patentable or not, which are created,
made, conceived, reduced to practice by Employee or under his
direction or jointly with others during his employment by Employer,
whether or not during normal working hours or on the premises of
Employer which relate to the business of Employer as conducted from
time to time (all of which are collectively referred to in this
Agreement as "Developments").
b) Employee agrees to assign, and does hereby assign, to Employer (or any
person or entity designated by Employer) all of his right, title and
interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications.
c) Employee agrees to cooperate fully with Employer, both during and
after his employment with Employer, with respect to the procurement,
maintenance and enforcement of copyrights and patents (both in the
United States and foreign countries) relating to Developments.
Employee shall sign all papers, including, without limitation,
copyright applications, patent applications, declarations, oaths,
formal assignments, assignment or priority rights, and powers of
attorney, which Employer may deem necessary or desirable in order to
protect its rights and interest in any Developments.
6
<PAGE>
11. Injunction and Other Relief. Both parties hereto recognize that the
---------------------------
services to be rendered under this Agreement by Employee are special, unique and
of extraordinary character, and that in the event of the breach of Employee of
the terms and conditions of this Agreement to be performed by him, or in the
event Employee performs services for any person, firm or corporation engaged in
the competing line of business with Employer as provided in Paragraph 9, or if
Employee shall breach the provisions of this Agreement with respect to
Confidential Information or consulting services, then Employer shall be
entitled, if it so elects, in addition to all other remedies available to it
under this Agreement or at law or in equity to affirmative injunctive relief.
12. Severability. In the event that any of the provisions of this
------------
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such invalidity or unenforceability shall not affect the remainder
of this Agreement and same shall be construed as if such invalid or
unenforceable provisions had never been a part hereof. In the event any court
would invalidate or fail to enforce any provision of Paragraph 7 and or
Paragraph 9 of this Agreement, Employee shall return any sums paid to Employee
by Employer pursuant to the consulting provision in paragraph 7 hereof.
13. Governing Law. This Agreement shall be governed by the laws of the
-------------
State of Nebraska.
14. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties respecting the employment of Employee by Employer and
supersedes all prior understandings, arrangements and agreements, whether oral
or written, including without limitation, any existing employment agreement, and
may not be amended except by a writing signed by the parties hereto.
15. Notice. Notices to Employer under this Agreement shall be in writing
------
and sent by registered mail, return receipt requested, at the following address:
COO - West Telemarketing Corporation Outbound
9910 Maple Street
Omaha, Nebraska 68134
16. Miscellaneous. Employee acknowledges that:
-------------
a) He has consulted with or had an opportunity to consult with an
attorney of Employee's choosing regarding this Agreement.
b) He will receive substantial and adequate consideration for his
obligations under this Agreement.
7
<PAGE>
c) He believes the obligations, terms and conditions hereof are
reasonable and necessary for the protectable interests of Employer and
are enforceable.
d) This Agreement contains restrictions on his post-employment
activities.
IN WITNESS WHEREOF, Employer has, by its appropriate officers, executed
this Agreement and Employee has executed this Agreement as of the day and year
first above written.
WEST TELEMARKETING CORPORATION,
Employer
By: /s/ Thomas B. Barker
------------------------------
Its: President / Chief Operating Officer
/s/ John W. Erwin
-------------------------------
John W. Erwin, Employee
8
<PAGE>
TO: John Erwin
FROM: Tom Barker
DATE: September 1, 1998
SUBJECT: 1998 COMPENSATION PLAN - EXHIBIT A
- -------------------------------------------------------------------------------
The compensation plan for 1998 and 1999 while you are employed as President of
the Outbound Services Division for West TeleServices Corporation is being
revised as indicated below:
1. Effective August 1, 1998, your base salary will be increased from $165,000.00
to $200,000.00. Should you elect to voluntarily terminate your employment,
you will be compensated for your services through the date of your actual
termination per your employment agreement. This will be reviewed on an
annual basis and revised, if necessary, in accordance with the consumer price
index.
2. The rate factors used to calculate your pre-tax profit bonus are being
revised according to the schedule below. You are eligible to receive a
quarterly performance bonus based on each quarter's pre-tax profit growth
when compared to the same quarter the previous year. A negative differential
will result in a loss carry-forward to be applied to future bonus
calculations. The bonus will be calculated by multiplying the year-to-date
pre-tax profit differential times the rate factor from the table below minus
bonuses paid year-to-date for the respective calendar year.
RATE FACTOR WTO PRE-TAX PROFIT
----------- ------------------
5% 0% - 8%
6% 8.1% - 9%
7% 9.1% - 10.99%
8% 11% - 11.99%
8.5% 12% or above
/s/ JE
<PAGE>
EXHIBIT 10.04
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into effective the 1st day of July, 1996,
between West Telemarketing Corporation a Delaware corporation ("Employer") and
MARK LAVIN ("Employee").
RECITALS
A. WHEREAS, Employer and Employee have agreed to certain terms and
conditions of employment between the parties; and
B. WHEREAS, the parties desire to enter into this Agreement to
memorialize the terms and conditions of the employment relationship and any
prior and existing employment agreement(s) between the parties.
NOW THEREFORE, the parties agree as follows;
1. Employment. Employer agrees to employ Employee in his capacity as
----------
EXECUTIVE VICE PRESIDENT, DIRECT RESPONSE SERVICES of Employer. Employer may
also direct Employee to perform such duties for West Telemarketing Corporation
Outbound and West Interactive Corporation and other entities which now are, or
in the future may be, affiliated with Employer (the "Affiliates"), subject to
the limitation that Employees total time commitment shall be consistent with
that normally expected of similarly situated executive level employees. Employee
shall serve Employer and the Affiliates faithfully, diligently and to the best
of his ability. Employee agrees during the term of this Agreement to devote his
best efforts, attention, energy and skill to the performance of his employment
and/or consulting duties and to furthering the interest of Employer and the
Affiliates.
2. Term of Employment. Employee's employment under this Agreement
------------------
shall commence effective the 1st day of July, 1996, and shall continue for a
period of two years unless terminated or renewed under the provisions of
Paragraph 6 below.
(a) Unless terminated pursuant to paragraph 6(a), the term of employment
shall be extended by one year at the end of each successive year so
that at the beginning of each successive year the term of this
Agreement will be two years.
3. Compensation. Employer shall pay Employee as set forth in Exhibit A
------------
attached hereto and incorporated herein as is fully set forth in this paragraph.
Employee may receive additional discretionary bonuses as determined by the Board
of Directors of
<PAGE>
Employer in its sole discretion provided nothing contained herein shall be
construed as a commitment by the corporation to declare or pay any such bonuses.
4. Benefits. In addition to the compensation provided for in Paragraph 3
--------
above, Employer will provide Employee with employment benefits commensurate to
those received by other executive level employees of Employer during the term of
this Agreement.
5. Other Activities. Employee shall devote substantially all of his
----------------
working time and efforts during the Company's normal business hours to the
business and affairs of the Company and to the duties and responsibilities
assigned to him pursuant to this Agreement. Employee may devote a reasonable
amount of his time to civic, community or charitable activities. Employee in
all events shall be free to invest his assets in such manner as will not require
any substantial services by Employee in the conduct of the businesses or affairs
of the entities or in the management of the assets in which such investments are
made.
6. Term and Termination. The termination of this Agreement shall be
--------------------
governed by the following:
(a) The term of this Agreement shall be for the period set out in
paragraph 2 unless earlier terminated in one of the following ways:
(1) Death. This Agreement shall immediately terminate upon the death
-----
of Employee.
(2) For Cause. The Employer, upon written notice to Employee, may
---------
terminate the employment of Employee at any time for "cause."
For purposes of this paragraph, "cause" shall be deemed to exist
if, and only if, the CEO and COO of Employer, in good faith,
determine that Employee has engaged, during the performance of
his duties hereunder, in significant objective acts or omissions
constituting dishonesty, willful misconduct or gross negligence
relating to the business of Employer.
(3) Without Cause. The Employer, upon written notice to Employee,
-------------
may terminate the employment of Employee at any time without
cause.
(4) Resignation. Employee, upon written notice to Employer, may
-----------
resign from the employment of Employer at any time.
2
<PAGE>
(b) Accrued Compensation on Termination. In the event of termination of the
-----------------------------------
Agreement, Employee shall be entitled to receive:
(1) salary earned prior to and including the date of termination;
(2) any bonus earned as of the end of the month immediately preceding
the date of termination; and
(3) all benefits, if any, which have vested as of the date of
termination.
7. Consulting.
----------
(a) In the event of termination of employment pursuant to paragraph
6(a) (3) or 6(a)(4) above, Employer and Employee agree that
Employee shall, for a minimum period of twenty-four (24) months
from the date of termination serve as a consultant to Employer.
(b) In the event of termination pursuant to paragraph 6(a)(2),
Employer and Employee agree that Employer may, at its sole
option, elect to retain the services of Employee as a consultant
for a period of twenty-four (24) months from the date of
termination and that Employee will serve as a consultant to
Employer if Employer so elects.
c) During any period of consulting, Employee shall be acting as an
independent contractor. As part of the consulting services,
Employee agrees to provide certain services to Employer,
including, but not limited to, the following:
(1) oral and written information with reference to continuing
programs and new programs which were developed or under
development under the supervision of Employee;
(2) meeting with officers and managers of Employer to discuss
and review programs and to make recommendations;
(3) analysis, opinion and information regarding the
effectiveness and public acceptance of their programs.
d) During the consulting period, Employee shall continue to receive,
as compensation for his consulting, the annualized salary set
forth in Exhibit A. No bonus of any kind will be paid during
any period of consulting.
e) Employee hereby agrees that during any period of consulting, he
will devote his full attention, energy and skill to the
performance
3
<PAGE>
of his duties and to furthering the interest of Employer and the
affiliates, which shall include, and Employee acknowledges, a
fiduciary duty and obligation to Employer. Employee acknowledges
that this prohibition includes, but is not necessarily limited
to, a preclusion from any other employment or consulting by
Employee during the consulting period except pursuant to
paragraph 7(f) hereafter.
f) During the term of this Agreement, including any period of
consulting, Employee shall not, singly, jointly, or as a member,
employer or agent of any partnership, or as an officer, agent,
employee, director, stockholder or investor of any other
corporation or entity, or in any other capacity, engage in any
business endeavors of any kind or nature whatsoever, other than
those of Employer or its Affiliates without the express written
consent of Employer, provided, however, that Employee may own
stock in a publicly traded corporation. Employee agrees that
Employer may in its sole discretion give or withhold its consent
and understands that Employer's consent will not be unreasonably
withheld if the following conditions are met:
(1) Employee's intended employment will not interfere in
Employer's opinion with Employee's duties and obligations as
a consultant, including the fiduciary duty assumed
hereunder; and
(2) Employee's intended employment or activity would not, in the
opinion of Employer, place Employee in a situation where
confidential information of Employer or its Affiliates known
to Employee may benefit Employee's new employer; and
(3) Employee's new employment will not, in Employer's opinion,
result, directly or indirectly, in competition with Employer
or its Affiliates, then or in the future.
g) Notwithstanding any provisions in this Agreement to the contrary,
the provisions of paragraph 7 shall survive the termination of
this Agreement.
h) Employer shall reimburse Employee for all reasonable expenses
incurred by Employee in furtherance of his consulting duties
pursuant to this Agreement provided the expenses are pre-approved
by Employer.
4
<PAGE>
i) Benefits During Consulting Period. Employee and his dependents
---------------------------------
shall be entitled to continue their participation in all benefit
plans in effect on the date of Employee's termination from
employment during the period of consulting, under the same terms
and conditions and at the same net cost to Employee as when
employed by Employer unless Employee accepts new employment
during the consulting term in accordance with paragraph 7 above,
in which event all benefits will cease, at Employer's option,
when the new employment is accepted by Employee.
8. Confidential Information. In the course of Employee's employment,
------------------------
Employee will be provided with certain information, technical data and know-how
regarding the business of Employer and its Affiliates and their products, all of
which is confidential (hereinafter referred to as "Confidential Information").
Employee agrees to receive, hold and treat all confidential information received
from Employer and its Affiliates as confidential and secret and agrees to
protect the secrecy of said Confidential Information. Employee agrees that the
Confidential Information will be disclosed only to those persons who are
required to have such knowledge in connection with their work for Employer and
that such Confidential Information will not be disclosed to others without the
prior written consent of the Employer. The provisions hereof shall not be
applicable to: (a) information which at the time of disclosure to Employee is a
matter of public knowledge; or (b) information which, after disclosure to
Employee, becomes public knowledge other than through a breach of this
Agreement. Unless the Confidential Information shall be of the type herein
before set forth, Employee shall not use such Confidential Information for his
own benefit or for a third party's or parties' benefit at any time. Upon
termination of employment, Employee will return all books, records and other
materials provided to or acquired by Employee during the course of employment
which relate in any way to Employer or its business. The obligations imposed
upon Employee by this paragraph shall survive the expiration or termination of
this Agreement.
9. Covenant Not to Compete. Notwithstanding any other provision of this
-----------------------
Agreement to the contrary, Employee covenants and agrees that for the period of
one (1) year following termination of his employment with Employer for any
reason he will not:
a) directly or indirectly, for himself, or as agent of, or on behalf of,
or in connection with, any person, firm, association or corporation,
engage in any business competing directly for the customers,
prospective customers or accounts of the Employer or any of its
Affiliates with whom Employee had contact or about whom Employee
learned during the course of his employment with Employer and during
the one (1) year immediately preceding the end of his employment.
b) induce or attempt to induce any person employed by Employer or any of
its Affiliates, in any capacity, at the time of the termination of
Employee's
5
<PAGE>
service with Employer, to leave his employment, agency directorship or
office with Employer or the Affiliate.
c) induce or attempt to induce any customer of Employer or any of its
Affiliates to terminate or change in any way its business relationship
with Employer or the Affiliate.
Employee agrees the knowledge and information gained by him in the
performance of his duties would be valuable to those who are now, or might
become, competitors of the Employer or its Affiliates and that the business of
Employer and its Affiliates by its nature, covers at least the entire United
States of America and Canada. In the event these covenants not to compete are
held, in any respect, to be an unreasonable restriction upon the Employee, the
Court so holding may reduce the territory, or time, to which it pertains or
otherwise reasonably modify the covenant to the extent necessary to render this
covenant enforceable by said Court for the reasonable protection of Employer and
its Affiliates. The obligations imposed upon Employee by this paragraph are
severable from, and shall survive the expiration or termination of, this
Agreement.
10. Developments.
------------
a) Employee will make full and prompt disclosure to Employer of all
inventions, improvements, discoveries, methods, developments, software
and works of authorship, whether patentable or not, which are created,
made, conceived, reduced to practice by Employee or under his
direction or jointly with others during his employment by Employer,
whether or not during normal working hours or on the premises of
Employer which relate to the business of Employer as conducted from
time to time (all of which are collectively referred to in this
Agreement as "Developments").
b) Employee agrees to assign, and does hereby assign, to Employer (or any
person or entity designated by Employer) all of his right, title and
interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications.
c) Employee agrees to cooperate fully with Employer, both during and
after his employment with Employer, with respect to the procurement,
maintenance and enforcement of copyrights and patents (both in the
United States and foreign countries) relating to Developments.
Employee shall sign all papers, including, without limitation,
copyright applications, patent applications, declarations, oaths,
formal assignments, assignment or priority rights, and powers of
attorney, which Employer may deem necessary or desirable in order to
protect its rights and interest in any Developments.
6
<PAGE>
11. Injunction and Other Relief. Both parties hereto recognize that the
---------------------------
services to be rendered under this Agreement by Employee are special, unique and
of extraordinary character, and that in the event of the breach of Employee of
the terms and conditions of this Agreement to be performed by him, or in the
event Employee performs services for any person, firm or corporation engaged in
the competing line of business with Employer as provided in Paragraph 9, or if
Employee shall breach the provisions of this Agreement with respect to
Confidential Information or consulting services, then Employer shall be
entitled, if it so elects, in addition to all other remedies available to it
under this Agreement or at law or in equity to affirmative injunctive relief.
12. Severability. In the event that any of the provisions of this
------------
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such invalidity or unenforceability shall not affect the remainder
of this Agreement and same shall be construed as if such invalid or
unenforceable provisions had never been a part hereof. In the event any court
would invalidate or fail to enforce any provision of Paragraph 7 and or
Paragraph 9 of this Agreement, Employee shall return any sums paid to Employee
by Employer pursuant to the consulting provision in paragraph 7 hereof.
13. Governing Law. This Agreement shall be governed by the laws of the
-------------
State of Nebraska.
14. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties respecting the employment of Employee by Employer and
supersedes all prior understandings, arrangements and agreements, whether oral
or written, including without limitation, any existing employment agreement, and
may not be amended except by a writing signed by the parties hereto.
15. Notice. Notices to Employer under this Agreement shall be in writing
------
and sent by registered mail, return receipt requested, at the following address:
President - West Telemarketing Corporation
9910 Maple Street
Omaha, Nebraska 68134
16. Miscellaneous. Employee acknowledges that:
-------------
a) He has consulted with or had an opportunity to consult with an
attorney of Employee's choosing regarding this Agreement.
b) He will receive substantial and adequate consideration for his
obligations under this Agreement.
7
<PAGE>
c) He believes the obligations, terms and conditions hereof are
reasonable and necessary for the protectable interests of Employer and
are enforceable.
d) This Agreement contains restrictions on his post-employment
activities.
IN WITNESS WHEREOF, Employer has, by its appropriate officers, executed
this Agreement and Employee has executed this Agreement as of the day and year
first above written.
WEST TELEMARKETING CORPORATION,
Employer
By: /s/ Thomas B. Barker
------------------------------
Its: President / Chief Operating Officer
/s/ Mark V. Lavin
-------------------------------
Mark V. Lavin, Employee
8
<PAGE>
To: Mark Lavin
From: Tom Barker
Date: September 1, 1998
Subject: 1998 Compensation Plan - Exhibit A
- -------------------------------------------------------------------------------
Your Compensation Plan for the remainder of 1998 while you are employed as
President Operator Services Division for West TeleServices Corporation is
outlined below.
1. Your base salary will be adjusted to the annual rate of $190,500. Should
you elect to voluntarily terminate your employment, you will be compensated for
your services through the date of your actual termination per your employment
agreement.
2. All revenue and profits from the DR Division and the COS Division will be
aggregated and compared to 1997. You will be eligible to receive a quarterly
performance bonus based on Pre Tax Profit growth when compared to the same
period of the prior year. This quarterly bonus will be calculated by
multiplying the year-to-date Pre Tax Profit growth times the year-to-date
incentive factors indicated below minus bonuses paid year-to-date for the
respective calendar year. A negative profit calculation at the end of any given
quarter will result in a loss carry-forward to be applied to the next quarterly
bonus calculation. All bonuses will be paid within 30 days after the end of
each quarter.
Pre Tax Profit Growth Profit Factor
--------------------- -------------
0 - $11.5 million .013
$11.5 million + .015
3. All Pre Tax Profit in excess of $11.5 million will be applied against the
rate factor of .015. You will also be eligible to receive a one time bonus of
$75,000 if your YTD SG&A as a % of sales is at 29.8 or less at year end. This
amount will be paid not later than 30 days after your year end financial
statements are prepared, but in no event will you be paid later than February
28, 1999.
4. Your Compensation Plan for 1999 will be presented no later than December 1,
1998.
/s/ ML
<PAGE>
EXHIBIT 10.05
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into effective the 1st day of January, 1996,
between West Interactive Corporation a Delaware corporation ("Employer") and
NANCEE BERGER ("Employee").
RECITALS
A. WHEREAS, Employer and Employee have agreed to certain terms and
conditions of employment between the parties; and
B. WHEREAS, the parties desire to enter into this Agreement to
memorialize the terms and conditions of the employment relationship and any
prior and existing employment agreement(s) between the parties.
NOW THEREFORE, the parties agree as follows;
1. Employment. Employer agrees to employ Employee in her capacity as
----------
EXECUTIVE VICE PRESIDENT of Employer. Employer may also direct Employee to
perform such duties for West Telemarketing Corporation, and West Telemarketing
Corporation Outbound and other entities which now are, or in the future may be,
affiliated with Employer (the "Affiliates"), subject to the limitation that
Employees total time commitment shall be consistent with that normally expected
of similarly situated executive level employees. Employee shall serve Employer
and the Affiliates faithfully, diligently and to the best of her ability.
Employee agrees during the term of this Agreement to devote her best efforts,
attention, energy and skill to the performance of her employment and/or
consulting duties and to furthering the interest of Employer and the Affiliates.
2. Term of Employment. Employee's employment under this Agreement
------------------
shall commence effective the 1st day of January, 1996, and shall continue for a
period of two years unless terminated or renewed under the provisions of
Paragraph 6 below.
(a) Unless terminated pursuant to paragraph 6(a), the term of employment
shall be extended by one year at the end of each successive year so
that at the beginning of each successive year the term of this
Agreement will be two years.
3. Compensation. Employer shall pay Employee as set forth in Exhibit A
------------
attached hereto and incorporated herein as is fully set forth in this paragraph.
Employee may receive additional discretionary bonuses as determined by the Board
of Directors of Employer in its sole discretion provided nothing contained
herein shall be construed as a commitment by the corporation to declare or pay
any such bonuses.
<PAGE>
4. Benefits. In addition to the compensation provided for in Paragraph 3
--------
above, Employer will provide Employee with employment benefits commensurate to
those received by other executive level employees of Employer during the term of
this Agreement.
5. Other Activities. Employee shall devote substantially all of her
----------------
working time and efforts during the Company's normal business hours to the
business and affairs of the Company and to the duties and responsibilities
assigned to him pursuant to this Agreement. Employee may devote a reasonable
amount of her time to civic, community or charitable activities. Employee in
all events shall be free to invest her assets in such manner as will not require
any substantial services by Employee in the conduct of the businesses or affairs
of the entities or in the management of the assets in which such investments are
made.
6. Term and Termination. The termination of this Agreement shall be
--------------------
governed by the following:
(a) The term of this Agreement shall be for the period set out in
paragraph 2 unless earlier terminated in one of the following ways:
(1) Death. This Agreement shall immediately terminate upon the death
-----
of Employee.
(2) For Cause. The Employer, upon written notice to Employee, may
---------
terminate the employment of Employee at any time for "cause."
For purposes of this paragraph, "cause" shall be deemed to exist
if, and only if, the CEO and COO of Employer, in good faith,
determine that Employee has engaged, during the performance of
her duties hereunder, in significant objective acts or omissions
constituting dishonesty, willful misconduct or gross negligence
relating to the business of Employer.
(3) Without Cause. The Employer, upon written notice to Employee,
-------------
may terminate the employment of Employee at any time without
cause.
(4) Resignation. Employee, upon written notice to Employer, may
-----------
resign from the employment of Employer at any time.
2
<PAGE>
(b) Accrued Compensation on Termination. In the event of termination of the
-----------------------------------
Agreement, Employee shall be entitled to receive:
(1) salary earned prior to and including the date of termination;
(2) any bonus earned as of the end of the month immediately preceding
the date of termination; and
(3) all benefits, if any, which have vested as of the date of
termination.
7. Consulting.
----------
(a) In the event of termination of employment pursuant to paragraph
6(a) (3) or 6(a)(4) above, Employer and Employee agree that
Employee shall, for a minimum period of twenty-four (24) months
from the date of termination serve as a consultant to Employer.
(b) In the event of termination pursuant to paragraph 6(a)(2),
Employer and Employee agree that Employer may, at its sole
option, elect to retain the services of Employee as a consultant
for a period of twenty-four (24) months from the date of
termination and that Employee will serve as a consultant to
Employer if Employer so elects.
c) During any period of consulting, Employee shall be acting as an
independent contractor. As part of the consulting services,
Employee agrees to provide certain services to Employer,
including, but not limited to, the following:
(1) oral and written information with reference to continuing
programs and new programs which were developed or under
development under the supervision of Employee;
(2) meeting with officers and managers of Employer to discuss
and review programs and to make recommendations;
(3) analysis, opinion and information regarding the
effectiveness and public acceptance of their programs.
d) During the consulting period, Employee shall continue to receive,
as compensation for her consulting, the annualized salary set
forth in Exhibit A. No bonus of any kind will be paid during
any period of consulting.
e) Employee hereby agrees that during any period of consulting, he
will devote her full attention, energy and skill to the
performance
3
<PAGE>
of her duties and to furthering the interest of Employer and the
affiliates, which shall include, and Employee acknowledges, a
fiduciary duty and obligation to Employer. Employee acknowledges
that this prohibition includes, but is not necessarily limited
to, a preclusion from any other employment or consulting by
Employee during the consulting period except pursuant to
paragraph 7(f) hereafter.
f) During the term of this Agreement, including any period of
consulting, Employee shall not, singly, jointly, or as a member,
employer or agent of any partnership, or as an officer, agent,
employee, director, stockholder or investor of any other
corporation or entity, or in any other capacity, engage in any
business endeavors of any kind or nature whatsoever, other than
those of Employer or its Affiliates without the express written
consent of Employer, provided, however, that Employee may own
stock in a publicly traded corporation. Employee agrees that
Employer may in its sole discretion give or withhold its consent
and understands that Employer's consent will not be unreasonably
withheld if the following conditions are met:
(1) Employee's intended employment will not interfere in
Employer's opinion with Employee's duties and obligations as
a consultant, including the fiduciary duty assumed
hereunder; and
(2) Employee's intended employment or activity would not, in the
opinion of Employer, place Employee in a situation where
confidential information of Employer or its Affiliates known
to Employee may benefit Employee's new employer; and
(3) Employee's new employment will not, in Employer's opinion,
result, directly or indirectly, in competition with Employer
or its Affiliates, then or in the future.
g) Notwithstanding any provisions in this Agreement to the contrary,
the provisions of paragraph 7 shall survive the termination of
this Agreement.
h) Employer shall reimburse Employee for all reasonable expenses
incurred by Employee in furtherance of her consulting duties
pursuant to this Agreement provided the expenses are pre-approved
by Employer.
4
<PAGE>
i) Benefits During Consulting Period. Employee and her dependents
---------------------------------
shall be entitled to continue their participation in all benefit
plans in effect on the date of Employee's termination from
employment during the period of consulting, under the same terms
and conditions and at the same net cost to Employee as when
employed by Employer unless Employee accepts new employment
during the consulting term in accordance with paragraph 7 above,
in which event all benefits will cease, at Employer's option,
when the new employment is accepted by Employee.
8. Confidential Information. In the course of Employee's employment,
------------------------
Employee will be provided with certain information, technical data and know-how
regarding the business of Employer and its Affiliates and their products, all of
which is confidential (hereinafter referred to as "Confidential Information").
Employee agrees to receive, hold and treat all confidential information received
from Employer and its Affiliates as confidential and secret and agrees to
protect the secrecy of said Confidential Information. Employee agrees that the
Confidential Information will be disclosed only to those persons who are
required to have such knowledge in connection with their work for Employer and
that such Confidential Information will not be disclosed to others without the
prior written consent of the Employer. The provisions hereof shall not be
applicable to: (a) information which at the time of disclosure to Employee is a
matter of public knowledge; or (b) information which, after disclosure to
Employee, becomes public knowledge other than through a breach of this
Agreement. Unless the Confidential Information shall be of the type herein
before set forth, Employee shall not use such Confidential Information for her
own benefit or for a third party's or parties' benefit at any time. Upon
termination of employment, Employee will return all books, records and other
materials provided to or acquired by Employee during the course of employment
which relate in any way to Employer or its business. The obligations imposed
upon Employee by this paragraph shall survive the expiration or termination of
this Agreement.
9. Covenant Not to Compete. Notwithstanding any other provision of this
-----------------------
Agreement to the contrary, Employee covenants and agrees that for the period of
one (1) year following termination of her employment with Employer for any
reason he will not:
a) directly or indirectly, for himself, or as agent of, or on behalf of,
or in connection with, any person, firm, association or corporation,
engage in any business competing directly for the customers,
prospective customers or accounts of the Employer or any of its
Affiliates with whom Employee had contact or about whom Employee
learned during the course of her employment with Employer and during
the one (1) year immediately preceding the end of her employment.
b) induce or attempt to induce any person employed by Employer or any of
its Affiliates, in any capacity, at the time of the termination of
Employee's
5
<PAGE>
service with Employer, to leave her employment, agency directorship or
office with Employer or the Affiliate.
c) induce or attempt to induce any customer of Employer or any of its
Affiliates to terminate or change in any way its business relationship
with Employer or the Affiliate.
Employee agrees the knowledge and information gained by him in the
performance of her duties would be valuable to those who are now, or might
become, competitors of the Employer or its Affiliates and that the business of
Employer and its Affiliates by its nature, covers at least the entire United
States of America and Canada. In the event these covenants not to compete are
held, in any respect, to be an unreasonable restriction upon the Employee, the
Court so holding may reduce the territory, or time, to which it pertains or
otherwise reasonably modify the covenant to the extent necessary to render this
covenant enforceable by said Court for the reasonable protection of Employer and
its Affiliates. The obligations imposed upon Employee by this paragraph are
severable from, and shall survive the expiration or termination of, this
Agreement.
10. Developments.
------------
a) Employee will make full and prompt disclosure to Employer of all
inventions, improvements, discoveries, methods, developments, software
and works of authorship, whether patentable or not, which are created,
made, conceived, reduced to practice by Employee or under her
direction or jointly with others during her employment by Employer,
whether or not during normal working hours or on the premises of
Employer which relate to the business of Employer as conducted from
time to time (all of which are collectively referred to in this
Agreement as "Developments").
b) Employee agrees to assign, and does hereby assign, to Employer (or any
person or entity designated by Employer) all of her right, title and
interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications.
c) Employee agrees to cooperate fully with Employer, both during and
after her employment with Employer, with respect to the procurement,
maintenance and enforcement of copyrights and patents (both in the
United States and foreign countries) relating to Developments.
Employee shall sign all papers, including, without limitation,
copyright applications, patent applications, declarations, oaths,
formal assignments, assignment or priority rights, and powers of
attorney, which Employer may deem necessary or desirable in order to
protect its rights and interest in any Developments.
6
<PAGE>
11. Injunction and Other Relief. Both parties hereto recognize that the
---------------------------
services to be rendered under this Agreement by Employee are special, unique and
of extraordinary character, and that in the event of the breach of Employee of
the terms and conditions of this Agreement to be performed by him, or in the
event Employee performs services for any person, firm or corporation engaged in
the competing line of business with Employer as provided in Paragraph 9, or if
Employee shall breach the provisions of this Agreement with respect to
Confidential Information or consulting services, then Employer shall be
entitled, if it so elects, in addition to all other remedies available to it
under this Agreement or at law or in equity to affirmative injunctive relief.
12. Severability. In the event that any of the provisions of this
------------
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such invalidity or unenforceability shall not affect the remainder
of this Agreement and same shall be construed as if such invalid or
unenforceable provisions had never been a part hereof. In the event any court
would invalidate or fail to enforce any provision of Paragraph 7 and or
Paragraph 9 of this Agreement, Employee shall return any sums paid to Employee
by Employer pursuant to the consulting provision in paragraph 7 hereof.
13. Governing Law. This Agreement shall be governed by the laws of the
-------------
State of Nebraska.
14. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties respecting the employment of Employee by Employer and
supersedes all prior understandings, arrangements and agreements, whether oral
or written, including without limitation, any existing employment agreement, and
may not be amended except by a writing signed by the parties hereto.
15. Notice. Notices to Employer under this Agreement shall be in writing
------
and sent by registered mail, return receipt requested, at the following address:
President - West Interactive Corporation
9910 Maple Street
Omaha, Nebraska 68134
16. Miscellaneous. Employee acknowledges that:
-------------
a) She has consulted with or had an opportunity to consult with an
attorney of Employee's choosing regarding this Agreement.
b) She will receive substantial and adequate consideration for her
obligations under this Agreement.
7
<PAGE>
c) She believes the obligations, terms and conditions hereof are
reasonable and necessary for the protectable interests of Employer and
are enforceable.
d) This Agreement contains restrictions on her post-employment
activities.
IN WITNESS WHEREOF, Employer has, by its appropriate officers, executed
this Agreement and Employee has executed this Agreement as of the day and year
first above written.
WEST TELEMARKETING CORPORATION,
Employer
By: /s/ Thomas B. Barker
------------------------------
Its: President
/s/ Nancee R. Berger
-------------------------------
Nancee R. Berger, Employee
8
<PAGE>
To: Nancee Berger
From: Tom Barker
Date: September 1, 1998
Subject: WTSC - C.O.O. Compensation Plan
- -------------------------------------------------------------------------------
Your Compensation Plan through December 31, 1999 while you are employed as Chief
Operating Officer of West TeleServices Corporation is outlined below.
1. Your annual base salary will be $250,000.00 while you are employed as Chief
Operating Officer of West TeleServices Corporation. Should you elect to
voluntarily terminate your employment, you will be compensated for your services
through the date of your actual termination, per your Employment Agreement.
2. You will be paid at the annual rate of $350,000.00 through December 31,
1999. This represents your base salary plus an annualized incentive of
$100,000.00 as you learn the operations of the other two West divisions. You
will also be eligible for a quarterly bonus of $50,000.00 for third and fourth
quarter of 1999 if WTSC meets or exceeds the consensus street estimate for those
quarters. This bonus will be paid after consolidated financial statements are
prepared for the quarter, but in any event will be paid no later than thirty
days after the end of the quarter.
3. At the discretion of Management, you may receive an additional bonus based
on the Companies and your individual performance.
4. Your Compensation Plan for the year 2000 will be presented no later than
December 1, 1999.
/s/ N Berger 9/17/98
<PAGE>
EXHIBIT 10.06
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into effective the 1st day of January, 1996,
between West Interactive Corporation a Delaware corporation ("Employer") and
STEVE STANGL ("Employee").
RECITALS
A. WHEREAS, Employer and Employee have agreed to certain terms and
conditions of employment between the parties; and
B. WHEREAS, the parties desire to enter into this Agreement to
memorialize the terms and conditions of the employment relationship and any
prior and existing employment agreement(s) between the parties.
NOW THEREFORE, the parties agree as follows;
1. Employment. Employer agrees to employ Employee in his capacity as
----------
VICE PRESIDENT OF ACCOUNTING of Employer. Employer may also direct Employee to
perform such duties for West Telemarketing Corporation and West Telemarketing
Corporation Outbound and other entities which now are, or in the future may be,
affiliated with Employer (the "Affiliates"), subject to the limitation that
Employees total time commitment shall be consistent with that normally expected
of similarly situated executive level employees. Employee shall serve Employer
and the Affiliates faithfully, diligently and to the best of his ability.
Employee agrees during the term of this Agreement to devote his best efforts,
attention, energy and skill to the performance of his employment and/or
consulting duties and to furthering the interest of Employer and the Affiliates.
2. Term of Employment. Employee's employment under this Agreement
------------------
shall commence effective the 1st day of January, 1996, and shall continue for a
period of two years unless terminated or renewed under the provisions of
Paragraph 6 below.
(a) Unless terminated pursuant to paragraph 6(a), the term of employment
shall be extended by one year at the end of each successive year so
that at the beginning of each successive year the term of this
Agreement will be two years.
3. Compensation. Employer shall pay Employee as set forth in Exhibit A
------------
attached hereto and incorporated herein as is fully set forth in this paragraph.
Employee may receive additional discretionary bonuses as determined by the Board
of Directors of Employer in its sole discretion provided nothing contained
herein shall be construed as a commitment by the corporation to declare or pay
any such bonuses.
<PAGE>
4. Benefits. In addition to the compensation provided for in Paragraph 3
--------
above, Employer will provide Employee with employment benefits commensurate to
those received by other executive level employees of Employer during the term of
this Agreement.
5. Other Activities. Employee shall devote substantially all of his
----------------
working time and efforts during the Company's normal business hours to the
business and affairs of the Company and to the duties and responsibilities
assigned to him pursuant to this Agreement. Employee may devote a reasonable
amount of his time to civic, community or charitable activities. Employee in
all events shall be free to invest his assets in such manner as will not require
any substantial services by Employee in the conduct of the businesses or affairs
of the entities or in the management of the assets in which such investments are
made.
6. Term and Termination. The termination of this Agreement shall be
--------------------
governed by the following:
(a) The term of this Agreement shall be for the period set out in
paragraph 2 unless earlier terminated in one of the following ways:
(1) Death. This Agreement shall immediately terminate upon the death
-----
of Employee.
(2) For Cause. The Employer, upon written notice to Employee, may
---------
terminate the employment of Employee at any time for "cause."
For purposes of this paragraph, "cause" shall be deemed to exist
if, and only if, the CEO and COO of Employer, in good faith,
determine that Employee has engaged, during the performance of
his duties hereunder, in significant objective acts or omissions
constituting dishonesty, willful misconduct or gross negligence
relating to the business of Employer.
(3) Without Cause. The Employer, upon written notice to Employee,
-------------
may terminate the employment of Employee at any time without
cause.
(4) Resignation. Employee, upon written notice to Employer, may
-----------
resign from the employment of Employer at any time.
2
<PAGE>
(b) Accrued Compensation on Termination. In the event of termination of the
-----------------------------------
Agreement, Employee shall be entitled to receive:
(1) salary earned prior to and including the date of termination;
(2) any bonus earned as of the end of the month immediately preceding
the date of termination; and
(3) all benefits, if any, which have vested as of the date of
termination.
7. Consulting.
----------
(a) In the event of termination of employment pursuant to paragraph
6(a) (3) or 6(a)(4) above, Employer and Employee agree that
Employee shall, for a minimum period of twenty-four (24) months
from the date of termination serve as a consultant to Employer.
(b) In the event of termination pursuant to paragraph 6(a)(2),
Employer and Employee agree that Employer may, at its sole
option, elect to retain the services of Employee as a consultant
for a period of twenty-four (24) months from the date of
termination and that Employee will serve as a consultant to
Employer if Employer so elects.
c) During any period of consulting, Employee shall be acting as an
independent contractor. As part of the consulting services,
Employee agrees to provide certain services to Employer,
including, but not limited to, the following:
(1) oral and written information with reference to continuing
programs and new programs which were developed or under
development under the supervision of Employee;
(2) meeting with officers and managers of Employer to discuss
and review programs and to make recommendations;
(3) analysis, opinion and information regarding the
effectiveness and public acceptance of their programs.
d) During the consulting period, Employee shall continue to receive,
as compensation for his consulting, the annualized salary set
forth in Exhibit A. No bonus of any kind will be paid during
any period of consulting.
e) Employee hereby agrees that during any period of consulting, he
will devote his full attention, energy and skill to the
performance
3
<PAGE>
of his duties and to furthering the interest of Employer and the
affiliates, which shall include, and Employee acknowledges, a
fiduciary duty and obligation to Employer. Employee acknowledges
that this prohibition includes, but is not necessarily limited
to, a preclusion from any other employment or consulting by
Employee during the consulting period except pursuant to
paragraph 7(f) hereafter.
f) During the term of this Agreement, including any period of
consulting, Employee shall not, singly, jointly, or as a member,
employer or agent of any partnership, or as an officer, agent,
employee, director, stockholder or investor of any other
corporation or entity, or in any other capacity, engage in any
business endeavors of any kind or nature whatsoever, other than
those of Employer or its Affiliates without the express written
consent of Employer, provided, however, that Employee may own
stock in a publicly traded corporation. Employee agrees that
Employer may in its sole discretion give or withhold its consent
and understands that Employer's consent will not be unreasonably
withheld if the following conditions are met:
(1) Employee's intended employment will not interfere in
Employer's opinion with Employee's duties and obligations as
a consultant, including the fiduciary duty assumed
hereunder; and
(2) Employee's intended employment or activity would not, in the
opinion of Employer, place Employee in a situation where
confidential information of Employer or its Affiliates known
to Employee may benefit Employee's new employer; and
(3) Employee's new employment will not, in Employer's opinion,
result, directly or indirectly, in competition with Employer
or its Affiliates, then or in the future.
g) Notwithstanding any provisions in this Agreement to the contrary,
the provisions of paragraph 7 shall survive the termination of
this Agreement.
h) Employer shall reimburse Employee for all reasonable expenses
incurred by Employee in furtherance of his consulting duties
pursuant to this Agreement provided the expenses are pre-approved
by Employer.
4
<PAGE>
i) Benefits During Consulting Period. Employee and his dependents
----------------------------------
shall be entitled to continue their participation in all benefit
plans in effect on the date of Employee's termination from
employment during the period of consulting, under the same terms
and conditions and at the same net cost to Employee as when
employed by Employer unless Employee accepts new employment
during the consulting term in accordance with paragraph 7 above,
in which event all benefits will cease, at Employer's option,
when the new employment is accepted by Employee.
8. Confidential Information. In the course of Employee's employment,
-------------------------
Employee will be provided with certain information, technical data and know-how
regarding the business of Employer and its Affiliates and their products, all of
which is confidential (hereinafter referred to as "Confidential Information").
Employee agrees to receive, hold and treat all confidential information received
from Employer and its Affiliates as confidential and secret and agrees to
protect the secrecy of said Confidential Information. Employee agrees that the
Confidential Information will be disclosed only to those persons who are
required to have such knowledge in connection with their work for Employer and
that such Confidential Information will not be disclosed to others without the
prior written consent of the Employer. The provisions hereof shall not be
applicable to: (a) information which at the time of disclosure to Employee is a
matter of public knowledge; or (b) information which, after disclosure to
Employee, becomes public knowledge other than through a breach of this
Agreement. Unless the Confidential Information shall be of the type herein
before set forth, Employee shall not use such Confidential Information for his
own benefit or for a third party's or parties' benefit at any time. Upon
termination of employment, Employee will return all books, records and other
materials provided to or acquired by Employee during the course of employment
which relate in any way to Employer or its business. The obligations imposed
upon Employee by this paragraph shall survive the expiration or termination of
this Agreement.
9. Covenant Not to Compete. Notwithstanding any other provision of this
-----------------------
Agreement to the contrary, Employee covenants and agrees that for the period of
one (1) year following termination of his employment with Employer for any
reason he will not:
a) directly or indirectly, for himself, or as agent of, or on behalf of,
or in connection with, any person, firm, association or corporation,
engage in any business competing directly for the customers,
prospective customers or accounts of the Employer or any of its
Affiliates with whom Employee had contact or about whom Employee
learned during the course of his employment with Employer and during
the one (1) year immediately preceding the end of his employment.
b) induce or attempt to induce any person employed by Employer or any of
its Affiliates, in any capacity, at the time of the termination of
Employee's
5
<PAGE>
service with Employer, to leave his employment, agency directorship or
office with Employer or the Affiliate.
c) induce or attempt to induce any customer of Employer or any of its
Affiliates to terminate or change in any way its business relationship
with Employer or the Affiliate.
Employee agrees the knowledge and information gained by him in the
performance of his duties would be valuable to those who are now, or might
become, competitors of the Employer or its Affiliates and that the business of
Employer and its Affiliates by its nature, covers at least the entire United
States of America and Canada. In the event these covenants not to compete are
held, in any respect, to be an unreasonable restriction upon the Employee, the
Court so holding may reduce the territory, or time, to which it pertains or
otherwise reasonably modify the covenant to the extent necessary to render this
covenant enforceable by said Court for the reasonable protection of Employer and
its Affiliates. The obligations imposed upon Employee by this paragraph are
severable from, and shall survive the expiration or termination of, this
Agreement.
10. Developments.
------------
a) Employee will make full and prompt disclosure to Employer of all
inventions, improvements, discoveries, methods, developments, software
and works of authorship, whether patentable or not, which are created,
made, conceived, reduced to practice by Employee or under his
direction or jointly with others during his employment by Employer,
whether or not during normal working hours or on the premises of
Employer which relate to the business of Employer as conducted from
time to time (all of which are collectively referred to in this
Agreement as "Developments").
b) Employee agrees to assign, and does hereby assign, to Employer (or any
person or entity designated by Employer) all of his right, title and
interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications.
c) Employee agrees to cooperate fully with Employer, both during and
after his employment with Employer, with respect to the procurement,
maintenance and enforcement of copyrights and patents (both in the
United States and foreign countries) relating to Developments.
Employee shall sign all papers, including, without limitation,
copyright applications, patent applications, declarations, oaths,
formal assignments, assignment or priority rights, and powers of
attorney, which Employer may deem necessary or desirable in order to
protect its rights and interest in any Developments.
6
<PAGE>
11. Injunction and Other Relief. Both parties hereto recognize that the
---------------------------
services to be rendered under this Agreement by Employee are special, unique and
of extraordinary character, and that in the event of the breach of Employee of
the terms and conditions of this Agreement to be performed by him, or in the
event Employee performs services for any person, firm or corporation engaged in
the competing line of business with Employer as provided in Paragraph 9, or if
Employee shall breach the provisions of this Agreement with respect to
Confidential Information or consulting services, then Employer shall be
entitled, if it so elects, in addition to all other remedies available to it
under this Agreement or at law or in equity to affirmative injunctive relief.
12. Severability. In the event that any of the provisions of this
------------
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such invalidity or unenforceability shall not affect the remainder
of this Agreement and same shall be construed as if such invalid or
unenforceable provisions had never been a part hereof. In the event any court
would invalidate or fail to enforce any provision of Paragraph 7 and or
Paragraph 9 of this Agreement, Employee shall return any sums paid to Employee
by Employer pursuant to the consulting provision in paragraph 7 hereof.
13. Governing Law. This Agreement shall be governed by the laws of the
-------------
State of Nebraska.
14. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties respecting the employment of Employee by Employer and
supersedes all prior understandings, arrangements and agreements, whether oral
or written, including without limitation, any existing employment agreement, and
may not be amended except by a writing signed by the parties hereto.
15. Notice. Notices to Employer under this Agreement shall be in writing
------
and sent by registered mail, return receipt requested, at the following address:
President - West Interactive Corporation
9910 Maple Street
Omaha, Nebraska 68134
16. Miscellaneous. Employee acknowledges that:
-------------
a) He has consulted with or had an opportunity to consult with an
attorney of Employee's choosing regarding this Agreement.
b) He will receive substantial and adequate consideration for his
obligations under this Agreement.
7
<PAGE>
c) He believes the obligations, terms and conditions hereof are
reasonable and necessary for the protectable interests of Employer and
are enforceable.
d) This Agreement contains restrictions on his post-employment
activities.
IN WITNESS WHEREOF, Employer has, by its appropriate officers, executed
this Agreement and Employee has executed this Agreement as of the day and year
first above written.
WEST TELEMARKETING CORPORATION,
Employer
By: /s/ Thomas B. Barker
------------------------------
Its: President
/s/ Steven M.Stangl
-------------------------------
Steven M. Stangl, Employee
<PAGE>
To: Steve Stangl
From: Nancee Berger
Date: September 1, 1998
Subject: Executive Vice President West Interactive Compensation Plan
- -------------------------------------------------------------------------------
Steve, below is an outline of a Compensation Plan through December 31, 1999 for
the Executive Vice President of West Interactive. The Compensation Plan will be
reviewed on an annual basis.
1. Your base salary will be $140,000 while employed as Executive Vice President
of West Interactive. Should you elect to voluntarily terminate your
employment, you will be compensated for your services through the date of
your actual termination, per your Employment Agreement. In addition to your
base salary, you will receive a monthly minimum guaranteed bonus of $3,500.00
through June 30,1999.
2. Beginning with the third quarter of 1999, you will be eligible to receive a
quarterly performance bonus of .01 based on each quarter's pre-tax profit.
3. Your Compensation Plan for the year 2000 will be presented no later than
December 1, 1999.
/s/ SS
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE THIRD
QUARTER 1998 FORM 10-Q OF WEST TELESERVICES CORPORATION, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE FINANCIAL STATEMENTS CONTAINED THEREIN.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-1-1998
<PERIOD-END> SEP-30-1998
<CASH> 7,605
<SECURITIES> 0
<RECEIVABLES> 108,945
<ALLOWANCES> 1,707
<INVENTORY> 0
<CURRENT-ASSETS> 142,542
<PP&E> 211,189
<DEPRECIATION> 75,454
<TOTAL-ASSETS> 329,263
<CURRENT-LIABILITIES> 80,732
<BONDS> 0
0
0
<COMMON> 633
<OTHER-SE> 230,367
<TOTAL-LIABILITY-AND-EQUITY> 329,263
<SALES> 123,294
<TOTAL-REVENUES> 123,294
<CGS> 65,237
<TOTAL-COSTS> 105,281
<OTHER-EXPENSES> 105
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 326
<INCOME-PRETAX> 18,438
<INCOME-TAX> 7,083
<INCOME-CONTINUING> 11,355
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,355
<EPS-PRIMARY> 0.18
<EPS-DILUTED> 0.18
</TABLE>
