<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange act of
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WEST TELESERVICES CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] $125 per Exchange Act Rules 0-11(c)(i)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3)Filing party: N/A
(4) Date filed: N/A
<PAGE>
[LOGO OF WEST TELESERVICES CORPORATION]
WEST TELESERVICES CORPORATION
11808 Miracle Hills Drive
OMAHA, NEBRASKA 68154
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 10, 2000
To the Stockholders of WEST
TELESERVICES CORPORATION.
You are cordially invited to attend the annual meeting of stockholders (the
"Annual Meeting") of West TeleServices Corporation, a Delaware corporation
(the "Company"), which will be held at the Marriott Hotel, 10220 Regency
Circle, Omaha, Nebraska on May 10, 2000 at 9:00 a.m., Central Daylight Time,
for the following purposes:
1. To elect two directors to serve for three-year terms until the 2003
annual meeting of stockholders;
2. To ratify the appointment by the Board of Directors of Deloitte &
Touche LLP as independent auditors for the Company for the fiscal year
ending December 31, 2000; and
3. To consider and transact such other business as may properly be
brought before the Annual Meeting or any adjournment or postponement
thereof.
The Board of Directors has fixed the close of business on April 3, 2000 as
the record date for the determination of stockholders entitled to receive
notice of, and to vote at, the Annual Meeting and any adjournment or
postponement thereof.
By Order of the Board of Directors,
Mary E. West Vice Chair and
Secretary
Dated: April 5, 2000
Whether or not you expect to be present at the Annual Meeting, please date and
sign the enclosed proxy and return it promptly in the enclosed envelope. In
the event you attend the Annual Meeting and vote in person, the proxy will not
be used. These proxy materials are furnished in connection with the
solicitation by the Board of Directors of the Company of proxies to be used at
the Annual Meeting and at any adjournment or postponement thereof.
<PAGE>
WEST TELESERVICES CORPORATION
11808 Miracle Hills Drive
Omaha, Nebraska 68154
----------------
PROXY STATEMENT
----------------
You are cordially invited to attend the Annual Meeting of Stockholders on
May 10, 2000, to be held at the Marriott Hotel, 10220 Regency Circle, Omaha,
Nebraska at 9:00 a.m. Central Daylight Time, and at any adjournment or
postponement thereof. The Company's Annual Report to Stockholders, this Proxy
Statement and accompanying proxy are first being mailed to stockholders on
approximately April 10, 2000.
Proxy Information
Your vote is important. Because many stockholders cannot personally attend
the Annual Meeting, it is necessary that a large number be represented by
proxy. Stockholders may sign, date and mail their proxies in the postage-paid
envelope provided. Proxies may be revoked at any time before they are
exercised by written notice to the Secretary, by timely notice of a properly
executed later dated proxy or by voting in person at the Annual Meeting.
All shares of Common Stock, par value $.01 per share, of the Company
("Common Shares") entitled to vote and represented by properly executed
proxies received prior to the Annual Meeting and not revoked will be voted at
the Annual Meeting in accordance with the instructions indicated on those
proxies. If no instructions are indicated on a properly executed proxy, the
Common Shares represented by that proxy will be voted at the discretion of the
person or persons holding such proxy.
If any other matters are properly presented at the Annual Meeting for
consideration, including, among others things, consideration of a motion to
adjourn the Annual Meeting to another time or place, the persons named in the
enclosed form of proxy and acting thereunder will have discretion to vote on
those matters to the same extent as the person signing the proxy would be
entitled to vote. The Company does not currently anticipate that any other
matters will be raised at the Annual Meeting.
Stockholders Entitled To Vote
Holders of record of the Common Shares at the close of business on April 3,
2000 (the "Record Date") are entitled to notice of and to vote at the Annual
Meeting. On March 1, 2000, there were 63,821,365 Common Shares outstanding.
Each Common Share is entitled to one vote on each matter brought before the
Annual Meeting. At March 1, 2000, there were also 10,000,000 shares of
authorized preferred stock, none of which have been issued.
<PAGE>
Security Ownership of Certain Beneficial Owners, Executive Officers and
Directors
The following table sets forth information concerning the beneficial
ownership of the Common Shares as of March 1, 2000, for (a) each person known
to the Company to be a beneficial owner of more than five percent of the
Common Shares; (b) each director and each of the nominees for director; (c)
each executive officer designated in the section of this Proxy Statement
captioned "Executive Compensation"; and (d) all directors and executive
officers as a group. Except as otherwise noted, each person named below had
sole voting and investment power with respect to such securities.
<TABLE>
<CAPTION>
Amount
Beneficially Percent of
Name and Address(1) Owned(2) Common Shares
- ------------------- ------------ -------------
<S> <C> <C>
Gary L. West(3)..................................... 45,451,263 70.3%
Mary E. West(3)..................................... 45,451,263 70.3%
Troy L. Eaden(4)(5)................................. 8,516,250 13.2%
Thomas B. Barker.................................... 185,000 *
William E. Fisher................................... 18,000 *
Greg T. Sloma(6).................................... 19,800 *
Michael A. Micek.................................... 136,000 *
John W. Erwin....................................... 370,100 *
Nancee R. Berger.................................... 141,250 *
Michael M. Sturgeon................................. -- --
All directors and executive officers as a group (13
persons)........................................... 54,837,663 84.8%
</TABLE>
- --------
* Less than 1%
(1) The address of each executive officer and director of the Company is c/o
West TeleServices Corporation, 11808 Miracle Hills Drive, Omaha, Nebraska
68154.
(2) Under the rules of the Securities and Exchange Commission (the "SEC"),
shares are deemed to be "beneficially owned" by a person if such person
directly or indirectly has or shares (i) the power to vote or dispose of
such shares whether or not such person has any pecuniary interest in such
shares, or (ii) the right to acquire the power to vote or dispose of such
shares within 60 days, including any right to acquire through the exercise
of any option, warrant or right.
(3) Common Shares held by the Wests are held in joint tenancy with right of
survivorship. Voting power of these Common Shares is shared between them.
(4) Includes 1,516,250 Common Shares held by the Eaden Family Limited
Partnership, of which Mr. Eaden is a general partner.
(5) Mr. Troy L. Eaden resigned from the Board on April 3, 2000.
(6) Includes 900 Common Shares held by Mr. Sloma's daughter and voted by Mr.
Sloma's wife as guardian.
ELECTION OF DIRECTORS
The Board of Directors presently consists of six directors divided into
three classes, each class serving for a period of three years. Two directors
will be elected at the Annual Meeting to serve for a term expiring at the
Company's annual meeting of stockholders to be held in the year 2003.
The persons named in the enclosed proxy intend to vote such proxy for the
election of each of the two nominees named below, unless the stockholder
indicates on the proxy card that the vote should be withheld from any or all
of such nominees. Each nominee elected as a director will continue in office
until his or her successor has been duly elected and qualified, or until his
or her earlier death, resignation or retirement. Should any one or more of
these nominees become unable to serve for any reason or, for good cause, will
not serve, which is not anticipated, the Board of Directors may, unless the
Board of Directors by resolution provides for a lesser number of directors,
designate substitute nominees, in which event the persons named in the
enclosed proxy will vote for the election of such substitute nominee or
nominees.
2
<PAGE>
The Board of Directors has proposed the following nominees for election as
directors at the Annual Meeting.
Nominees for Terms Expiring at the Annual Meeting of Stockholders to be held
in the Year 2003:
Thomas B. Barker
William E. Fisher
The Board of Directors Recommends a vote FOR the election of the above named
nominees for election as Directors.
Directors Whose Terms Will Expire in 2003
Thomas B. Barker joined the Company in 1991 as Executive Vice President of
West Interactive Corporation. Mr. Barker was promoted to President and Chief
Operating Officer of the Company in March 1995. Mr. Barker was promoted to
President and Chief Executive Officer of the Company in September of 1998.
Prior to joining the Company, he served as President and Chief Operating
Officer of Cue Network Corp., a provider of nationwide paging and satellite
data distribution services. Mr. Barker is 45 years of age.
William E. Fisher was appointed to the Board of Directors in 1997. Since
1993, Mr. Fisher has been director, Chairman of the Board, President and Chief
Executive Officer of Transaction Systems Architects, Inc. ("TSA"), an Omaha
based company which develops, markets and supports a broad line of software
products and services primarily focused on facilitating electronic payments.
Effective November 10, 1999 Mr. Fisher resigned from his positions as
President and Chief Executive Officer, but remains Chairman of the Board.
Since 1991, Mr. Fisher has also served as Chief Executive Officer of Applied
Communications, Inc., a subsidiary of TSA. Mr. Fisher is a director of
Trizetto Group, Inc. and Hypercom Corporation. Mr. Fisher is 53 years of age.
Directors Whose Terms Will Expire in 2001
Mary E. West co-founded WATS Marketing of America ("WATS") in 1978 and
remained with that Company until December 1985. In January 1986, she founded
the Company. Mrs. West has served as Vice Chair of the Company since 1987.
Mrs. West and Mr. West are wife and husband. Mrs. West is 54 years of age.
Directors Whose Terms Will Expire in 2002
Gary L. West co-founded WATS in 1978 and remained with that company until
1985. Mr. West joined the Company in July 1987 after the expiration of a
noncompetition agreement with WATS. Mr. West has served as Chairman of the
Board since joining the Company. Mr. West and Mary E. West are husband and
wife. Mr. West is 54 years of age.
Greg T. Sloma was appointed to the Board of Directors in 1997. Since 1996,
Mr. Sloma has been the President and Chief Operating Officer of Data
Transmission Network ("DTN"), an Omaha based provider of electronic
information and communication services. Mr. Sloma served as an Executive Vice
President and Chief Financial Officer of DTN prior to his promotion to his
current position. Prior to joining DTN in 1993, Mr. Sloma was a tax partner
with the accounting firm Deloitte & Touche. Mr. Sloma is 48 years of age.
3
<PAGE>
BOARD OF DIRECTORS AND COMPENSATION
As described in the Restated Bylaws of the Company, the Board has authority
to fix the number of directors and the Board has fixed the number of its
members at six. The Board of Directors currently consists of the following
five directors: Gary L. West, Mary E. West, Thomas B. Barker, William E.
Fisher and Greg T. Sloma.
Committees of the Board of Directors
The Board of Directors has established a Compensation Committee, currently
comprised of Gary L. West, William E. Fisher and Greg T. Sloma (the
"Compensation Committee"), which provides recommendations concerning salaries
and incentive compensation for employees of, and consultants to, the Company.
The Board of Directors has also established an Audit Committee, comprised of
William E. Fisher and Greg T. Sloma (the "Audit Committee"), which reviews the
results and scope of the annual audit of the Company's financial statements
conducted by the Company's independent accountants, the scope of other
services provided by the Company's independent accountants, proposed changes
in the Company's financial and accounting standards and principles, and the
Company's policies and procedures with respect to its internal accounting,
auditing and financial controls. The Audit Committee also makes
recommendations to the Board of Directors on the engagement of the independent
accountants as well as other matters which may come before the Audit Committee
or at the direction of the Board of Directors. The Board of Directors does not
have a Nominating Committee.
Attendance at Meetings of the Board of Directors and of Committees
The Board of Directors met four times during the fiscal year ended December
31, 1999. Each of the directors who served during such period attended at
least 75% of the aggregate number of meetings of the Board of Directors and
any committee of which they were members during such period. The Compensation
Committee and the Audit Committee each met once during the fiscal year ended
December 31, 1999.
Directors' Annual Compensation
During the fiscal year ended December 31, 1999, non-employee members of the
Board of Directors received $24,000 in directors' fees. The Company is
obligated to reimburse the members of the Board of Directors for all
reasonable expenses incurred in connection with their attendance at directors'
meetings. No director made any claim for reimbursement in fiscal 1999. Members
of the Board of Directors who are not employees of the Company receive $3,000
per meeting plus reasonable expenses incurred in connection with their
attendance at directors' meetings. Pursuant to the 1996 Stock Incentive Plan
(the "1996 Plan"), these directors are granted options to acquire 2,000 Common
Shares as of the date of their first election to the Board of Directors (the
"Initial Grant"). Each director also is granted options to purchase 1,000
additional Common Shares as of each of the Company's annual stockholders
meetings provided that such director remains a member of the Board of
Directors at such time (the "Annual Grant"). The options become vested and
exercisable one year from the date such options are granted. Effective
February 1, 1997, the Board of Directors adopted an amendment to the 1996 Plan
that increased the Initial Grant from 2,000 Common Shares to 14,000 Common
Shares and increased the Annual Grant from 1,000 Common Shares to 4,000 Common
Shares. The vesting schedule for such options was changed to a three year
period (for the Initial Grants and Annual Grants, respectively, options for
6,000 and 1,000 Common Shares vest on the first anniversary of the date of
grant and options for 4,000 and 1,500 Common Shares vest on the second and
third anniversary of the date of grant).
4
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides certain summary information concerning
compensation of the Company's Chief Executive Officer and the four other most
highly compensated executive officers of the Company (collectively, the "Named
Executive Officers") for each of the last three fiscal years. There were no
stock appreciation rights outstanding during the fiscal year ended December
31, 1999.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation
Compensation Awards
--------------- ------------
Securities
Underlying All Other
Name and Principal Fiscal Salary Bonus Options Compensation
Position Year ($) ($) (#) ($)(1)
------------------ ------ ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Troy L. Eaden................ 1999 289,705 -- -- 5,000
Co-Chairman of the Board and
Director(3) 1998 285,787 -- -- 5,000
1997 262,095 -- -- 4,750
Thomas B. Barker............. 1999 415,000 68,375 5,000
President, Chief Executive
Officer and Director(4) 1998 415,000 263,048 800,000(5) 5,000
1997 306,419 59,758 650,000(2) 4,750
Nancee R. Berger............. 1999 250,000 150,000 5,000
Chief Operating Officer 1998 220,077 50,313 575,000(5) 5,000
West TeleServices
Corporation(6) 1997 140,000 80,765 300,000(2) 4,750
John W. Erwin................ 1999 200,000 362,900 5,000
President--Direct
TeleServices 1998 181,779 247,638 550,000(5) 5,000
1997 160,599 248,234 460,000(2) 4,716
Michael A. Micek............. 1999 200,000 213,655 4,307
Chief Financial Officer,
Executive 1998 168,334 338,601 560,000(5) 5,000
Vice President--Finance and
Treasurer 1997 140,151 131,417 300,000(2) 4,750
Michael M. Sturgeon.......... 1999 190,000 197,958 5,000
Executive Vice President--
Sales and Marketing 1998 203,612 212,082 360,000(5) 5,000
1997 200,960 44,601 152,000(2) 4,750
</TABLE>
- --------
(1) These amounts, if any, reflect matching contributions made by the Company
on behalf of each Named Executive Officer pursuant to the Company's
Employee 401(k) Retirement Plan.
(2) These awards represent a grant of additional options as well as repricing
of options previously granted in November 1996.
(3) Mr. Eaden served as Chief Executive Officer from March 1995 to September
1998 and as Co-Chairman of the Board from September 1998 to April 3, 2000.
Mr. Eaden resigned from the Board on April 3, 2000.
(4) Mr. Barker served as President and Chief Operating Officer from March 1995
to September 1998. Mr. Barker has served as President and Chief Executive
Officer since September 1998.
(5) These awards represent a grant of additional options as well as repricing
of options previously granted in June 1997 and January 1998.
(6) Ms. Berger served as President of Interactive Teleservices from October
1996 to September 1998. Ms. Berger has served as Chief Operating Officer
since September 1998.
Option Grants in the Last Fiscal Year
No options were granted to the Named Executive Officers during the year
ended December 31, 1999.
5
<PAGE>
The following table sets forth the number of shares covered by options held
by the Named Executive Officers, and the value of the options as of December
31, 1999. None of the options were exercisable in 1999.
Aggregated Option Exercises In Last Fiscal Year and Fiscal Year End Option
Value(1)
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at in-the Money Options
Fiscal Year-End at Fiscal Year-End
(#) ($)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Thomas B. Barker........... N/A 800,000 N/A 11,800,000
Nancee R. Berger........... N/A 575,000 N/A 8,481,250
John W. Erwin.............. N/A 550,000 N/A 8,112,500
Michael A. Micek........... N/A 560,000 N/A 8,260,000
Michael M. Sturgeon........ N/A 360,000 N/A 5,310,000
</TABLE>
- --------
(1) Based on a closing price of $24.4375 per Common Share on December 31,
1999, all options were in the money at fiscal year end.
Employment Agreements
Pursuant to an employment agreement dated as of June 30, 1991 and as amended
October 1, 1998, Mr. Eaden's salary and bonus are determined annually by the
Board of Directors. Mr. Eaden's employment shall terminate upon certain events
including Mr. Eaden's death or disability, the sale of all or substantially
all of the assets of the Company, termination of employment by the Company for
cause or without cause, or Mr. Eaden's resignation. Upon termination of
employment for any reason, the Company shall pay Mr. Eaden all salary through
the date of termination, together with any bonuses declared by the Board of
Directors with respect to Mr. Eaden's services prior to the effective date of
termination. Mr. Eaden also agrees, for a period of two years following the
termination of his employment, not to engage in any business competing for the
customers or accounts of the Company and not to induce or attempt to induce
any person employed by the Company at the time of Mr. Eaden's termination to
leave his employment or agency with the Company. Mr. Eaden resigned as an
employee of the Company on April 3, 2000.
Thomas B. Barker, Nancee R. Berger, John W. Erwin, Michael A. Micek and
Michael M. Sturgeon serve the Company pursuant to employment agreements dated
as of January 1, 1996, as amended September 1, 1998 for Mr. Barker, January 1,
1996, as amended September 1, 1998 for Ms. Berger, July 1, 1996, as amended
September 1, 1998 for Mr. Erwin, January 1, 1996, as amended September 1, 1998
for Mr. Micek and March 17, 1997, as amended February 22, 1999 for Mr.
Sturgeon (the dates of the initial agreements are collectively referred to as
the "Effective Date"). Each agreement had an initial term of two years. Each
agreement will be automatically renewed, subject to prior termination, for
successive one-year periods on the second anniversary of the respective
Effective Date and each anniversary thereafter unless either party gives
notice of non-renewal. These agreements provide, respectively, for the
employment of Mr. Barker as President and Chief Executive Officer of the
Company, for Ms. Berger as Chief Operating Officer of the Company, for Mr.
Erwin as President--Outbound Services of the Company, for Mr. Micek as Chief
Financial Officer and Executive Vice President--Finance and for Mr. Sturgeon
as Executive Vice President--Sales and Marketing. Under the respective
agreements, Mr. Barker's base salary is $415,000 per year, Ms. Berger's base
salary is $250,000 per year, Mr. Erwin's base salary is $200,000 per year, Mr.
Micek's base salary is $200,000 per year and Mr. Sturgeon's base salary
$190,000 per year. The agreements also provide for an annual bonus determined
at the discretion of the Board of Directors. In the event of death,
termination for cause or without cause or resignation, the Company will pay
any salary earned through the date of termination, any bonus earned at the end
of the month immediately preceding the date of termination and all vested
benefits, if any, as of the date of termination. In the event of a termination
without cause or resignation, the employment agreements provide for the
executive to remain as a consultant to the Company for at least twenty-four
months following termination of employment.
6
<PAGE>
Board Compensation Committee Report on Executive Compensation
The Company's executive compensation program is administered by the
Compensation Committee. The Compensation Committee is currently composed of
two non-employee directors and two employee directors. The Compensation
Committee approves compensation objectives and policies as well as
compensation plans and specific compensation levels for all executive
officers. The Company formed the Compensation Committee in order to administer
the executive compensation program commencing with the fiscal year ended
December 31, 1997.
The Compensation Committee seeks to provide a total compensation package
that will motivate and retain key employees. The Compensation Committee also
seeks to provide incentives to achieve short and long-term business objectives
that will enhance the value of the Common Shares. When determining
compensation amounts, the Compensation Committee considers (1) the base salary
levels of executives with similar responsibilities in companies in a similar
line of business, (2) the executive's experience in his or her position at the
Company and in the line of business as well as his or her performance over a
sustained period of time, and (3) the historical and projected financial
performance of the Company and the particular division associated with the
executive. An analysis of the financial performance includes a review of such
measures as revenues, operating margin, net income, return on stockholders'
equity, return on revenues, and total market value. The Compensation Committee
makes a subjective determination based upon a collective consideration of all
such factors. Compensation for the named executive officers for the fiscal
year ended December 31, 1999, was comprised of three components: (1) base
salary, (2) cash bonuses and (3) long-term incentive compensation.
The Compensation Committee has based bonuses for executive officers on the
attainment of financial targets set forth in formulas described in each of
their employment agreements. The formulas are individually tailored to
motivate the particular executive in accordance with his or her position, his
or her prior performance, and the potential impact he or she could have on the
growth of sales and profit for the Company and the division with which he or
she is associated. For the fiscal year ended December 31, 1999, the results of
the Company and of the applicable individual divisions met the minimum
objectives as set forth in each of the executive's employment agreements, and
accordingly, each received a cash bonus.
Long-term incentive compensation opportunities are provided through grants
of stock options, stock appreciation rights, restricted stock awards, phantom
stock unit awards, performance share unit awards and other stock bonus awards
under the 1996 Plan. All grants are made at exercise prices which are at least
equal to the fair market value of the Common Shares on the date of grant in
order that executives can gain only when stockholders gain. In making grants
under the plan for fiscal 1999, the Board of Directors considered an
employee's position with the Company and relevant responsibilities, service,
individual and Company performance and the anticipated length of future
service. In addition to the 1996 Plan, the Company also sponsors the Company's
1997 Employees Stock Purchase Plan (the "Stock Purchase Plan") which provides
employees the opportunity to purchase Common Shares through annual offerings
to be made during the five year period commencing July 1, 1997.
Grants of options to acquire Common Shares are utilized by the Company as an
employment incentive to recruit and retain persons necessary for the
development and financial success of the Company. The grant of options is
provided for under the 1996 Plan which has 9,499,500 Common Shares for the
grant of incentive awards. On July 30, 1999, 507,000 options were granted to
employees at $10.813 per Common Share. On May 12, 1999, 8,000 options were
granted to the two outside directors at $8.00 per Common Share. No options
were granted to the Named Executive Officers during the year ended December
31, 1999. At December 31, 1999, 7,011,400 options were outstanding to
employees and directors of the Company.
The Compensation Committee believes that the role of Chief Executive Officer
is particularly important in reaching corporate objectives and accordingly
review the Chief Executive Officer's compensation package annually based on
his performance as Chief Executive Officer and the overall performance of the
Company.
7
<PAGE>
The Committee determined that Mr. Barker should receive compensation in the
form of a base salary, cash bonus and long term incentives. In establishing
Mr. Barker's compensation, the Committee has compared his compensation with
the compensation of the chief executive officers of the industry in relation
to the relative performance of the Company with respect to the industry. For
setting Mr. Barker's fiscal 1999 compensation, the Committee also considered
the Company's performance during the fiscal year. The Committee recognized Mr.
Barker's leadership skills in assembling and developing a strong management
team and his role in guiding the Company through its significant growth since
1995 in his role as President. The Committee also considered Mr. Barker's
strong industry background as well as his unique ability to manage significant
growth in a profitable manner for the benefit of the stockholders. For the
fiscal year ended December 31, 1999 for serving as both President and Chief
Operating Officer prior to September 1998 and as Chief Executive Officer and
President after that time, Mr. Barker received a base salary of $415,000 and a
cash bonus of $68,375.
The Committee believes that Mr. Barker's actual compensation for the fiscal
year was appropriate in light of the above considerations.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code")
generally disallows a tax deduction to public companies for annual
compensation over $1 million paid to each of the corporation's Chief Executive
Officer and four other most highly compensated executive officers, except to
the extent such compensation qualifies as "performance-based." Based on
information currently available, the Compensation Committee believes that all
compensation arrangements that could potentially result in the compensation of
any Named Executive Officer exceeding $1 million will qualify as performance-
based and that all compensation paid to the Company's Named Executive Officers
will be fully deductible. Provided that other Company objectives are met, the
Company intends to structure future incentive compensation arrangements for
its Named Executive Officers in a manner that will allow such compensation to
be fully deductible for Federal income tax purposes.
December 15, 1999 The Compensation Committee
Troy L. Eaden
William E. Fisher
Greg T. Sloma
Gary L. West
Compensation Committee Interlocks And Insider Participation
The Compensation Committee is presently composed of William E. Fisher, Greg
T. Sloma and Gary L. West. Mr. Troy L. Eaden resigned on April 3, 2000. During
the fiscal year ended December 31, 1999, the Compensation Committee met once,
and during such time made all executive officer compensation decisions.
8
<PAGE>
Performance Graph
The following performance graph compares the Company's cumulative total
stockholder return for the period since its initial public offering with the
cumulative total return of the S&P 500 Index and a composite group of companies
(the "Composite Index") in each case assuming an investment of $100 on November
26, 1996 and the accumulation and reinvestment of dividends through December
31, 1999. The Composite Index consists of companies that provide outsourced
teleservices and is comprised of the following companies: AEGIS Communications
Group, Inc., APAC Teleservices, Inc., Convergys Corporation, ICT Group Inc.,
Precision Response Corp, RMH Teleservices Inc., Sitel Corporation, Sykes
Enterprises, Inc., Telespectrum Worldwide Inc. and Teletech Holdings, Inc. The
total stockholder return for each company in the Composite Index has been
weighted according to its market capitalization.
[GRAPH OF COMPARISON OF TOTAL CUMULATIVE TOTAL RETURN FUND APPEARS HERE]
PLOT POINTS FOR GRAPH ARE AS FOLLOWS:
11/26/96 12/31/96 12/31/97 12/31/98 12/31/99
West TeleServices Corporation 100 126 66 54 135
Composite Index 100 83 39 31 53
S&P 500 100 98 131 168 204
*ASSUMES $100 INVESTED ON NOVEMBER 26, 1996.
TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS.
TOTAL RETURN BASED ON MARKET CAPITALIZATION.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, officers and stockholders holding more than ten percent of the
Common Shares to file reports of holdings and transactions in the Common Shares
with the SEC. Officers, directors and greater than ten percent stockholders are
required by the SEC to furnish the Company with copies of all Section 16(a)
forms they file. To the Company's knowledge, based solely on a review of the
copies of
9
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such reports furnished to the Company or written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were
complied with during, or in respect of, the fiscal year ended December 31,
1999.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
The Company leases a building located at 9910 Maple Street, Omaha, Nebraska,
which houses one of its call center operations. The building has 42,000 square
feet of leasable space and is situated on a parcel of land of approximately
4.4 acres. This building is owned by 99-Maple Partnership, a partnership owned
and controlled by Gary L. West, the Company's Chairman of the Board, and Mary
E. West, the Company's Vice Chair of the Board and Secretary. This lease
commenced on April 1, 1988, and was renewed on September 1, 1994, for a term
of ten years. For the period commencing September 1, 1998 and ending August
31, 1999, the rent is $66,965 per month, which rent increases each year
thereafter at a rate of approximately six percent. For the period commencing
September 1, 2003, and ending August 31, 2004, the rent will be $89,635 per
month. In addition to payment of rent, the Company is obligated to pay all
taxes, insurance and maintenance pertaining to the building.
The Company, Gary L. West, Mary E. West, Troy L. Eaden and each of the
former stockholders of the West Affiliates entered into a Registration Rights
Agreement (the "Registration Rights Agreement") as of November 25, 1996,
which, among other things, provides that upon the request of the Wests or Mr.
Eaden, the Company will register under the Securities Act of 1933, as amended,
any of the Common Shares currently held by or acquired in the future by the
foregoing (a "Demand Registration"). The Wests, collectively, and Mr. Eaden,
individually, each will have the right to request four Demand Registrations.
Each of the foregoing and each of the seven other former stockholders of the
West Affiliates will have the right, which may be exercised at any time and
from time to time in the future, to include the Common Shares held by him or
her in certain other registrations. On March 14, 2000, Mr. Eaden requested
that some of his shares be registered.
West Telemarketing Insurance Agency, Inc. ("West Insurance") is a Texas
corporation which is wholly-owned by John W. Erwin, the Company's President of
West Telemarketing Corporation Outbound. West Insurance is a licensed
insurance agency formed in June 1996 under the laws of Texas to service a
client of West Telemarketing Corporation Outbound in the insurance industry.
These arrangements are set forth in a Personnel Company Subscriber Service
Agreement, dated as of November 12, 1996. West Telemarketing Corporation
Outbound pays hourly fees to West Insurance for its agents' services, which
fees have averaged approximately $188,000, per month in the fiscal year ended
December 31, 1999. Neither West Insurance nor Mr. Erwin has made any profit in
connection with this arrangement and neither is expected to do so in the
future. Mr. Erwin entered into a Stock Redemption Agreement, dated April 9,
1996, with Gary L. West, Mary E. West and Troy L. Eaden restricting the
transfer of his West Insurance stock and providing for the option by the Wests
and Mr. Eaden to acquire his West Insurance stock in the event of his death,
disability or termination of employment with West Insurance or at any other
time they desire. This Stock Redemption Agreement was assigned to the Company
by the Wests and Mr. Eaden, effective upon the closing of the Company's
initial public offering pursuant to an Assignment and Assumption Agreement,
dated as of November 12, 1996.
The Company has an option to acquire, develop and commercialize an
innovative new technology that is the subject of a pending patent application.
The Company intends to seek board approval and it may choose not to exercise
this option. The acquisition is conditioned on the patent being issued. The
patent is currently expected to be issued in the second quarter of 2000. If a
venture is formed, the Company will have an initial equity interest in excess
of 80% in the venture. In order to provide incentive to management to develop
and pursue the commercialization process, the Company intends to grant Mr.
Thomas B. Barker, Ms. Nancee R. Berger and Mr. Michael A. Micek approximately
a 4.0%, 1.25% and 1.00% equity interest in the venture, respectively, which is
subject to a five-year vesting period and is non-transferrable prior to such
vesting. The Company's venture partner has the option, during the first 18
months of the venture, to surrender its 5% equity interest in the venture in
exchange for $12 million in cash plus an option to acquire 325,000 shares of
the Company's common stock, exercisable at the market price on the date of the
execution of the proposed agreement.
10
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RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP ("Deloitte &
Touche") to be the Company's auditors for the fiscal year ending December 31,
2000 and recommends to stockholders that they vote for ratification of that
appointment. Deloitte & Touche served in this capacity for the fiscal year
ended December 31, 1999. Its representative will be present at the Annual
Meeting, will have an opportunity to make a statement and will be available to
respond to appropriate questions. The appointment of auditors is approved
annually by the Board of Directors and subsequently submitted to the
stockholders for ratification. The decision of the Board of Directors is based
on the recommendation of the Audit Committee, which reviews and approves in
advance the audit scope, the types of nonaudit services, and the estimated
fees for the coming year. The Audit Committee also reviews and approves
proposed nonaudit services to ensure that they will not impair the
independence of the auditors.
The Board of Directors recommends a vote FOR this proposal.
11
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OTHER MATTERS
Required Vote
The presence, in person or by proxy, of the holders of a majority of the
votes entitled to be cast by the stockholders entitled to vote generally at
the Annual Meeting is necessary to constitute a quorum. Abstentions and
"broker non-votes" are counted as present and entitled to vote for purposes of
determining a quorum. A "broker non-vote" occurs when a nominee holding Common
Shares for a beneficial owner does not vote on a particular proposal because
the nominee does not have discretionary voting power with respect to that item
and has not received voting instructions from the beneficial owner.
A plurality of the votes duly cast is required for the election of directors
(i.e., the nominees receiving the greatest number of votes will be elected).
The affirmative vote by the holders of the majority of the Common Shares
present in person or represented by proxy and entitled to vote on the matter
is required to approve any other matter to be acted upon at the Annual
Meeting. For purposes of determining whether a matter has received the
required number of votes for approval, abstentions will be included in the
vote totals with the result that an abstention has the same effect as a
negative vote. A "broker non-vote" will not be included in the vote totals
and, therefore, will have no effect on the vote.
Stockholder Proposals
Stockholders who intend to present proposals at the 2001 annual meeting of
stockholders, and who wish to have such proposals included in the Company's
Proxy Statement for the 2001 annual meeting of stockholders, must ensure that
such proposals are received by the Secretary of the Company at 11808 Miracle
Hills Drive, Omaha, Nebraska 68154, not later than December 3, 2000. In the
event that the 2001 annual meeting of stockholders is called for a date that
is not within thirty (30) days before or after May 12, 2001, in order to be
timely, notice by the stockholder must be received not later than the close of
business on the tenth day following the day on which such notice of the date
of the annual meeting was mailed or such public disclosure of the date of the
annual meeting was made, whichever first occurs. Such proposals must meet the
requirements set forth in the rules and regulations of the SEC in order to be
eligible for inclusion in the Company's Proxy Statement for the 2001 annual
meeting of stockholders. Any stockholder interested in making a proposal is
referred to Article II Section 11 of the Company's Restated Bylaws.
Solicitation of Proxies and Other Matters
At the date this Proxy Statement went to press, management does not know of
any other matters to be brought before the Annual Meeting other than those
referred to above. If any matter should be presented at the Annual Meeting
upon which a vote properly may be taken, the Common Shares represented by the
proxy will be voted at the discretion of the person or persons holding such
proxy. The entire cost of soliciting management proxies will be borne by the
Company. In addition to the use of the mails, proxies may be solicited
personally by directors, officers or regular employees of the Company, who
will not be compensated for their services. Management of the Company intends
to request banks, brokerage houses, custodians, nominees and fiduciaries to
forward soliciting material to the beneficial owners of the Common Shares held
of record by such persons and entities.
The Company will provide to any stockholder a copy of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999 free of charge
upon written request to its Secretary at 11808 Miracle Hills Drive, Omaha,
Nebraska 68154.
Thomas B. Barker
President and Chief Executive
Officer
Dated: April 5, 2000
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WEST TELESERVICES CORPORATION
11808 Miracle Hills Drive
Omaha, Nebraska 68154
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Mary E. West, Vice Chair and Secretary,
attorney and agent, with power of substitution, for and in the name and place of
the undersigned, to vote as proxy the number of shares of Common Stock that the
undersigned would be entitled to vote if they were personally present at the
2000 Annual Meeting of the Stockholders of West TeleServices Corporation to be
held at the Marriott Hotel, 10220 Regency Circle, Omaha, Nebraska on Wednesday,
May 10,2000 at 9:00 a.m., Central Daylight Time, or at any adjournment or
postponement thereof, as designated on the reverse side hereof.
(change of address)
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[UP ARROW] FOLD AND DETACH HERE [UP ARROW]
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Please mark your X votes as in this example.
This proxy when executed will be voted in the manner directed herein. If
no direction is made, this proxy will be voted FOR the nominees in proposal 1
and FOR proposals 2.
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR the nominees in proposal 1 and FOR
proposals 2.
- -------------------------------------------------------------------------------
FOR ALL NOMINEES WITHOLD AUTHORITY TO VOTE
1. Election of Directors Thomas B. Barker
(See reverse) William E. Fisher
For, except vote witheld from the following nominee(s):
Change of Address
On Reverse Side
- -------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of appointment of Deloitte & Touche LLP
as auditors
3. In accordance with their discretion, upon all other
matters that may properly come before said Annual
Meeting and any adjournment thereof.
- -------------------------------------------------------------------------------
The signer hereby revokes all proxies heretofore
given by the signer to vote at said meeting or any
adjournments or postponements thereof.
Please sign exactly as name appears hereon, Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please
give full title as such.
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SIGNATURES(S) DATE
[UP ARROW] FOLD AND DETACH HERE [UP ARROW]
