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 section 240.14a-11(c) or section 240.14a-12
ALPNET, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ALPNET, INC.
4460 SOUTH HIGHLAND DRIVE, SUITE #100
SALT LAKE CITY, UTAH 84124-3543
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 22, 1997
To the Shareholders of ALPNET, Inc.:
Notice is hereby given that the Annual Meeting of the Shareholders of
ALPNET, Inc. (the "Company"), will be held on Thursday, May 22, 1997, at 1:00
p.m., Mountain Daylight Time, Little America Hotel, 500 South Main Street, Salt
Lake City, Utah, for the following purposes:
1. To elect directors for the terms specified in the enclosed Proxy Statement;
2. To ratify the appointment of Ernst & Young LLP as the Company's independent
auditors for the year 1997; and
3. To transact any other business which may properly come before the meeting.
Only the shareholders of record at the close of business on March 14, 1997
are entitled to receive notice and to vote at the meeting and any adjournments
thereof. A list of shareholders as of such date will be available for
examination by any shareholder for any appropriate purpose relating to the
meeting, at the offices of the Company, for ten days prior to May 22, 1997.
The solicitation of proxies in the enclosed form is made on behalf of the
Board of Directors of the Company.
By Order of the Board of Directors
D. Kerry Stubbs
Secretary
Salt Lake City, Utah
March 31, 1997
IT IS IMPORTANT THAT ALL SHAREHOLDERS BE REPRESENTED AT THE MEETING.
Shareholders who are unable to attend in person SHOULD IMMEDIATELY MARK, SIGN,
DATE AND RETURN the accompanying form of proxy in the enclosed self-addressed
envelope. If you attend the meeting, you may, if you wish, revoke your proxy
and vote in person. The proxy may be revoked at any time prior to its exercise
in the manner described in the Proxy Statement.
ALPNET, INC.
4460 SOUTH HIGHLAND DRIVE, SUITE #100
SALT LAKE CITY, UTAH 84124-3543
MARCH 31, 1997
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of ALPNET, Inc. (the "COMPANY"), of proxies to be voted
at the Annual Meeting of Shareholders of the Company to be held at the Little
America Hotel, 500 South Main Street, Salt Lake City, Utah, on Thursday, May 22,
1997, at 1:00 p.m., Mountain Daylight Time, and at any and all adjournments
thereof. This proxy statement and the accompanying form of proxy will be first
sent or given to shareholders on or about April 7, 1997.
Your vote is important. Accordingly, you are urged to sign and return the
enclosed proxy whether or not you plan to attend the meeting. If you do attend,
you may vote by ballot at the meeting, thereby canceling any proxy previously
given.
ANY SHAREHOLDER WHO EXECUTES A PROXY MAY REVOKE IT ANY TIME BEFORE IT IS
VOTED BY NOTIFYING THE SECRETARY OF THE COMPANY, IN WRITING, OF THE REVOCATION,
OR BY DULY EXECUTING ANOTHER PROXY BEARING A LATER DATE, OR BY ATTENDING THE
MEETING AND EXPRESSING A DESIRE TO VOTE HIS OR HER SHARES IN PERSON.
The cost of this solicitation will be borne by the Company. The Company
will use its own employees to assist in the solicitation of proxies. Although
there is no formal agreement to do so, the Company may also reimburse banks,
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding proxy materials to their principals.
VOTING SECURITIES
The Company's authorized capital stock consists of 40 million shares of no
par value Common Stock and 2 million shares of Preferred Stock. As of March 14,
1997 (the "RECORD DATE"), shares which are entitled to vote at the meeting
include: (i) 18,536,196 shares of Common Stock; and (ii) 527,691 shares of
series C Preferred Stock and 87,339 shares of series D Preferred Stock which
have voting rights as if the preferred shares had been converted to common
shares at the ratio of nine common shares for each preferred share, for a total
equivalent number of 4,749,219 common shares and 786,051 common shares, for
series C and D, respectively. Only those shareholders of record at the close of
business on the Record Date will be entitled to vote. Each shareholder of
Common Stock will be entitled to one vote for each common share owned by him or
her. Each shareholder of series C or series D Preferred Stock will be entitled
to nine votes for each series C or series D preferred share owned by him or her.
The affirmative vote of a majority of shares represented at the meeting will be
the act of the shareholders. Unless contrary instructions are given, all shares
represented by the persons named in the enclosed form of proxy will be voted
"FOR" each of the proposals and otherwise in the discretion of any of the
persons acting as proxies.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of March 14, 1997, the beneficial
ownership of the Company's Common Stock and Common Stock equivalents by (i) each
person known to the Company to be the beneficial owner of more than five percent
of the outstanding shares of Common Stock, and (ii) all directors and executive
officers as a group. Detailed information regarding voting securities
beneficially owned by directors and director nominees is disclosed under
Election of Directors, below. The information shown below was furnished to the
Company by the respective persons listed.
<TABLE>
<CAPTION>
Shares of
Common Stock
and Equivalents Percent of
Beneficially Common Stock
Name and Address Owned as of and Equivalents
of Beneficial Owner March 14, 1997 (1) (2) Outstanding (1) (2)
<S> <C> <C>
H. F. Boeckmann, II 5,631,389(3) 24.2%
15505 Roscoe Boulevard
Sepulveda, CA 91343
Gruber & McBaine Capital Management 1,130,000 6.1%
50 Osgood Place
San Francisco, CA 94133
Michael F. Eichner 1,135,837(4) 5.9%
69A Parkhall Road
West Dulwich
London SE21 8EX
United Kingdom
Ogilvy & Mather (Canada) Ltd 1,068,076 5.8%
33 Yonge Street
Toronto, Ontario
Canada M5E 1X6
NFT Ventures, Inc. 1,012,681 5.5%
899 West Center Street
Orem, UT 84057
Jaap van der Meer 1,003,246 5.4%
Havengebouw
De Ruyterkade 7
1013 AA Amsterdam
The Netherlands
All executive officers and 2,173,754(5) 11.3%
directors as a group
(5 persons)
<FN>
(1) The persons named in this table have sole voting power with respect to all shares of Common Stock and Common Stock
equivalents beneficially owned by them, subject to joint tenancy and community property laws, where applicable, and the
information contained in the notes to this table.
The number of shares and the percentages indicated in the table have been computed assuming that each shareholder has
exercised all available options to acquire Common Stock and has converted all Preferred Stock to Common Stock and that no
other shareholder has made the same exercise or conversion, thus indicating the maximum number and percentage of share
ownership possible.
The Preferred Stock has voting rights as if the Preferred Stock has been converted to Common Stock, at the ratio of nine
common shares for each preferred share of series C or D Preferred Stock. Holders of the Preferred Stock have these
voting rights even if the Preferred Stock is never converted to Common Stock.
(2) These amounts do not include shares reserved for issuance pursuant to exercise of stock options granted under the
Company's Stock Option Plans which are not exercisable within 60 days of March 14, 1997.
(3) Includes: (i) 44,750 shares of Common Stock owned by Mr. Boeckmann's immediate family, as to which he disclaims
beneficial ownership; and (ii) 4,749,219 shares of Common Stock issuable upon the exercise of the right to convert series
C Preferred Stock which right is exercisable within 60 days of March 14, 1997.
(4) Includes 786,051 shares of Common Stock issuable upon the exercise of the right to convert series D Preferred Stock which
right is exercisable within 60 days of March 14, 1997.
(5) Includes: (i) 1,387,703 shares of Common Stock issued and outstanding; and (ii) 786,051 shares of Common Stock issuable
upon the exercise of the right to convert series D Preferred Stock which right is exercisable within 60 days of March 14,
1997.
</FN>
</TABLE>
ELECTION OF DIRECTORS
(Proposal No. 1)
At the meeting, five directors are to be elected to hold office for one
year or until their successors shall be elected and qualified or until they
resign. Unless authority is withheld, it is the intention of the persons named
in the enclosed form of proxy to vote "FOR" the election of the persons
identified as nominees for director in the table below. If the candidacy of any
one or more of such nominees should, for any reason, be withdrawn, the proxies
will be voted "FOR" such other person or persons, if any, as may be nominated by
the Board of Directors. The Board of Directors has no reason to believe that
any nominee named herein will be unable or unwilling to serve. The election of
each director requires the affirmative vote of not less than a majority of the
issued and outstanding Common Stock and Preferred Stock represented and entitled
to vote at the meeting. Each share of Common Stock will be entitled to one vote
for each director and each share of series C or series D Preferred Stock will be
entitled to nine votes for each director.
No arrangement or understanding exists between any director or executive
officer and any other person pursuant to which any director or executive officer
was nominated or is to be elected as a director or officer.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES FOR
DIRECTORS OF THE COMPANY.
INFORMATION ABOUT DIRECTORS
The following table sets forth the name and age of each nominee, the
position and office with the Company held by each nominee, the year each first
became a director, and the beneficial ownership of stock in the Company of each.
The information below the table sets forth the principal occupation, employment
and business experience of each nominee for the past five years.
<TABLE>
<CAPTION>
Shares of
Common Stock
and Equivalents Percent of
First Beneficially Owned Common Stock
Name, Address Became As of and Equivalents
and Position Age a Director March 14, 1997(1) (2) Outstanding(1) (2)
Nominees for Director
<S> <C> <C> <C> <C>
Michael F. Eichner 51 1988 1,135,837(3) 5.9%
69A Parkhall Road
West Dulwich
London SE21 8EX
United Kingdom
Director and Chairman
Thomas F. Seal 43 1989 30,671 *
4460 South Highland Drive
Suite #100
Salt Lake City, UT 84124
President and Chief
Executive Officer,
Director
John W. Wittwer 51 1993 0 *
4460 South Highland Drive
Suite #100
Salt Lake City, UT 84124
Executive Vice President,
Director
Jaap van der Meer 42 1996 1,003,246 5.4%
Havengebouw
De Ruyterkade 7
1013 AA Amsterdam
The Netherlands
Vice President Sales and
Marketing, Director
James R. Morgan 50 New nominee 0 *
1273 Nola Drive (Former director
Centerville, UT 84014 1990 - 1995)
<FN>
* Less than 1%
(1) The persons named in this table have sole voting power with respect to all shares of
Common Stock and Common Stock equivalents beneficially owned by them, subject to joint
tenancy and community property laws, where applicable, and the information contained in
the notes to this table.
The number of shares and the percentages indicated in the table have been computed assuming
that each director or nominee has exercised all available options to acquire Common Stock
and has converted all Preferred Stock to Common Stock and that no other shareholder has
made the same exercise or conversion, thus indicating the maximum number and percentage of
share ownership possible.
(2) These amounts do not include shares reserved for issuance pursuant to exercise of stock
options granted under the Company's Stock Option Plans which are not exercisable within 60
days of March 14, 1997.
(3) Includes 786,051 shares of Common Stock issuable upon the exercise of the right to convert
series D Preferred Stock which right is exercisable within 60 days of March 14, 1997.
</FN>
</TABLE>
MICHAEL F. EICHNER. Mr. Eichner has served as a director of the Company since
May 1988 and is currently the Chairman of the Board of Directors. He was
serving as Executive Chairman of Interlingua Group Ltd. of London England (then
the largest translation Company in Europe) from 1985 until March 1988 when
Interlingua was acquired by ALPNET, Inc. He joined Interlingua in 1978 and
served as its Managing Director until 1985 when he assumed the position of
Executive Chairman. Mr. Eichner is Chairman of Eurosis Group P.L.C. of London,
England, a company involved in providing leased equipment and personnel to the
international conference and meetings industry.
THOMAS F. SEAL. Mr. Seal joined the Company in January 1987 as its Vice
President of Research and Development. In June 1988, Mr. Seal assumed
responsibility for the Company's Canadian operations, and he resided in Canada
from October 1988 to March 1989 where he directed the restructuring of Canadian
operations. In April 1989, Mr. Seal returned to the U.S., and was named
President and Chief Executive Officer in May 1989. Mr. Seal was elected to the
Board of Directors in June 1989. Mr. Seal presently resides in London where he
oversees the worldwide operations of the Company. Mr. Seal received his B.S.
degree in Computer Science from Brigham Young University in 1975, and since that
time has held a variety of technical and management positions in companies
related to the computer industry.
JOHN W. WITTWER. Mr. Wittwer is one of the founders of the Company. He has
been employed by the Company since 1982 serving in various positions including
Vice President of Finance and Administration, Director of Administration,
Executive Vice President, Chief Executive Officer, Treasurer and Chief Financial
and Accounting Officer. Mr. Wittwer is a Certified Public Accountant, is
currently serving as Executive Vice President and U.S. Country Manager, and has
served as a director of the Company since May 1993.
JAAP VAN DER MEER. Mr. Van der Meer joined ALPNET in September 1995 assuming
responsibilities for strategic development and worldwide sales and marketing.
Before Mr. Van der Meer joined ALPNET, he was the CEO of the INK Network, a
leading international translation/localization company. Mr. Van der Meer
founded INK in 1980 and he and his partners sold the company to R.R. Donnelley &
Sons Company in 1993. At the end of 1994, Mr. Van der Meer left Donnelley to
pursue his interests in combining telecommunications with language services and
worked on various consultancy projects in this area before joining ALPNET. Mr.
Van der Meer is of Dutch nationality and studied linguistics and literature at
the University of Amsterdam. He has served as a director of the Company since
May 1996.
JAMES R. MORGAN. Mr. Morgan is an attorney currently serving as an officer and
director of a closely held private venture capital firm. Mr. Morgan previously
served as a director of the Company from May 1990 to December 1995 and as
Chairman of the Board from May 1993 to December 1995. From March 1987 to
September 1995, Mr. Morgan was an officer of NFT Ventures, Inc., a private
investment company, which is a principal shareholder of the Company. Prior to
his affiliation with NFT Ventures, Inc. and its related companies, Mr. Morgan
was a founder and director of a real estate syndication firm from 1983 to 1987.
From December of 1979 through June 1983, he was employed by CFS Financial
Corporation serving in the General Counsel's office. From 1974 through 1979, he
maintained a private law practice. Mr. Morgan holds a B.S. degree from Brigham
Young University and a J.D. degree from the University of Utah.
COMMITTEES OF THE BOARD OF DIRECTORS
AND MEETING ATTENDANCE
The Board of Directors has the responsibility of establishing broad
corporate policies and overseeing the overall performance of the Company.
Regular meetings of the Board of Directors are held once each quarter, and
special meetings are scheduled when required. There were four regular meetings
and three special meetings of the Board of Directors during 1996. All directors
attended all of the regular meetings and all of the special meetings.
The Company has a standing Audit and Budget Committee of the Board of
Directors which is currently comprised of Messrs. Eichner and Seal. The
principal audit-related functions of the Audit and Budget Committee are to
consider and recommend the selection of independent public accountants to audit
the Company's financial statements; to review the Company's internal accounting
policies and controls; to review with the independent public accountants the
scope and content of their audit and their recommendations and comments with
respect to internal controls and accounting systems; and to reinforce the
independence of the independent public accountants. The principal budget-
related function of the Committee is to review and recommend for approval the
annual budget of the Company. During 1996, the Audit and Budget Committee held
one meeting.
The Company also has a standing Compensation Committee, currently comprised
of Messrs. Eichner and Seal. The functions of the Compensation Committee
include reviewing and making recommendations concerning the compensation of
executive officers, the granting of stock options to employees, and the
compensation policies of the Company. The Compensation Committee held one
meeting in 1996.
COMPENSATION OF DIRECTORS
During 1996, members of the Board of Directors were paid a quarterly fee of
$200 for services as a director. In addition, each director was paid $200 for
attendance at each meeting of the Board of Directors and $75 for attendance at
each meeting of any committees thereof. In total, $7,750 of directors' fees
were paid in 1996.
In addition to the above remuneration, Mr. Eichner was paid a total of
$24,996 for independent consulting services provided to the Company during 1996.
CERTAIN SIGNIFICANT EMPLOYEES
In addition to the directors who also serve as officers, the Company has
certain significant employees who are engaged in management positions in its
international translation operations and other areas, as follows:
RAYMOND J. KING, 40. Country Manager of ALPNET U.K. - South. Mr. King
obtained his Bachelor of Arts degree in German in 1979, with additional studies
in French and English. He has been with the U.K. operation for 14 years and
presently manages ALPNET U.K.'s international project management team as well as
its in-house electronic publishing group. Mr. King speaks English and German.
GERALDINE LIM, 43. Director of ALPNET Asia. Ms. Lim was born in Singapore
and attended both Chinese and English schools developing her language skills.
Her professional career started in the travel industry in the Far East. In the
Singapore Foreign Service, she headed the Consular and Administrative
Departments of the Singapore Commission in Hong Kong. Thereafter, she was a
freelance journalist. She is currently responsible for ALPNET's Asian
operations in Singapore, Hong Kong, Korea, China and Japan. Ms. Lim is fluent
in Chinese and English.
DAVID J. MARSHALL, 35. Country Manager of ALPNET U.K. - Regions and
International Finance Director. Mr. Marshall graduated with a degree in French
and German from the University of Durham in 1984. He qualified as a Chartered
Accountant with Arthur Andersen & Co. before joining ALPNET in 1988. Mr.
Marshall has operational responsibility over several of the U.K. offices and
also coordinates accounting and finance matters in the U.K. Mr. Marshall is
fluent in English, French and German.
DR. FRANCOIS MASSION, 42. Country Manager of ALPNET Germany. Dr. Massion
graduated as a translator from the University of Mayence. He obtained his
Doctorate at Erlangen University. He worked in Germany for 11 years for a large
Munich bank, for Erlangen University, and for a large manufacturing company
before joining ALPNET in 1989. Dr. Massion is fluent in French, German and
English.
ROBERT H. STANLEY, 49. Commercial Director of ALPNET U.K. Mr. Stanley is
an honors graduate of London and Rome Universities in modern languages and
phoenetics, and joined the Company in 1970 following a brief career in
journalism. Having been involved in several ALPNET offices in the U.K., Europe
and U.S. in various capacities, he is currently responsible for new business
development and overseeing major U.K. and U.S. client accounts. Mr. Stanley is
fluent in French, Italian and Spanish, and also speaks some German and
Portuguese.
D. KERRY STUBBS, 42. Chief Financial Officer, Treasurer, and Secretary.
Mr. Stubbs joined the Company in November 1993 as Vice President Finance. He
has been Chief Financial Officer and Treasurer since June 1994 and Secretary
since February 1995. His responsibilities include coordinating the
international accounting, finance and taxation functions of the Company. A
Certified Public Accountant, he practiced with Ernst & Young for 13 years prior
to joining the Company.
DANIEL D. VINCENT, 42. Country Manager of ALPNET Canada. Mr. Vincent is a
Certified Management Accountant (Canada) and holds an M.B.A. degree from
Concordia University and a Bachelor of Business Administration with Honors from
Bishops University. Mr. Vincent has been managing ALPNET Canada since 1988.
Previously, Mr. Vincent spent three years as Vice President of Finance and
Administration at Comp-U-Card Canada, a large telemarketing service, and six
years as Corporate Controller/Treasurer for a subsidiary of RCA. Mr. Vincent is
fluent in French and English.
EXECUTIVE COMPENSATION
The information set forth below regarding Executive Compensation has been
prepared in compliance with SEC Regulation S-B. Regulation S-B simplifies
ongoing disclosure and filing requirements for qualifying small businesses in an
effort to reduce the compliance burdens placed on them by the Federal securities
laws. Accordingly, the Company is exempt from some of the expanded executive
compensation reporting requirements.
The following Summary Compensation Table sets forth the cash compensation
and certain other components of the compensation of Thomas F. Seal, the
President and Chief Executive Officer of the Company, and the other most highly
compensated executive officers (named executives) of the Company, whose total
annual salary and bonus exceeded $100,000 in 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Other Awards Payouts
Annual Restricted Securities All other
Compen- Stock Underlying LTIP Compen-
Name and Salary Bonus(1) sation(2) Award(s) Options Payouts sation(3)
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas F. Seal 1996 134,000 7,000 14,275 0 0 0 31,278
President and Chief Executive 1995 124,000 17,000 10,800 0 750,000 0 25,943
Officer 1994 120,000 0 1,600 0 0 0 0
John W. Wittwer 1996 125,500 4,700 2,200 0 0 0 0
Executive Vice President 1995 120,500 7,000 1,800 0 250,000 0 0
1994 118,000 0 1,600 0 0 0 0
Jaap van der Meer 1996 115,800 6,000 1,000 0 0 0 0
Vice President Sales and Marketing
<FN>
(1) The amounts shown represent what was earned in the respective years. Certain of these amounts were paid in subsequent
years.
(2) Represents directors' fees earned for the respective years, and, for Mr. Seal, $12,000 and $9,000 cost of living
payments due to increased foreign living expenses in 1996 and 1995, respectively.
(3) Represents payments made to or for the benefit of the named executive for foreign housing and utilities ($25,687 in 1996
and $19,647 in 1995) and certain other specific foreign-location items ($5,591 in 1996 and $6,296 in 1995). The Company's
Board of Directors has also agreed to reimburse Mr. Seal for foreign income tax costs, if any, which are incurred
in excess of what would have been paid by him absent the foreign assignment. No such amounts have been paid for any of the
years presented.
</FN>
</TABLE>
AGGREGATED OPTION EXERCISES IN 1996
AND DECEMBER 31, 1996 OPTION VALUES
The following table sets forth certain information concerning the
exercise in 1996 of options to purchase Common Stock by the Executives named in
the Summary Compensation Table and the unexercised options to purchase Common
Stock held by such individuals at December 31, 1996.
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Shares Unexercised In-the-Money
Acquired Value Options at Options at
on Exercise Realized(1) 12/31/96 (#) 12/31/96 ($)(2)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C>
Thomas F. Seal 0 0 0 / 750,000 0 / 560,000
John W. Wittwer 0 0 0 / 250,000 0 / 186,667
Jaap van der Meer 500,000 921,875 0 / 750,000 0 / 560,000
<FN>
(1) The value realized equals the aggregate amount of the excess of the fair market value on the date of exercise (the average of
high and low prices of Common Stock as reported by the Nasdaq Stock Market for the exercise date) over the relevant exercise
price.
(2) The value is calculated based on the aggregate amount of the excess of the average of the high and low prices of Common Stock
as reported by the Nasdaq Stock Market for December 31, 1996 ($1.53) over the relevant exercise price(s). Options are "in-
the-money" if the fair market value of the underlying securities exceeds the exercise price of the option.
</FN>
</TABLE>
EMPLOYMENT CONTRACT
The Company and Mr. Van der Meer entered into an employment contract
when Mr. Van der Meer joined the Company in September 1995. The contract had an
initial term of one year, but remains in effect for successive one-year periods
unless otherwise terminated by either party.
The contract provides for compensation in the form of a monthly salary,
set by the Company's Board of Directors annually, and the grant of certain stock
options, which grants were made in 1995. The 1995 stock option grants were for
(i) the purchase of 500,000 shares of Common Stock at an exercise price of
$.34375 per share, which option was exercised in May 1996; and (ii) the purchase
of 750,000 shares of Common Stock at exercise prices ranging from $.50 to $1.10
per share, which options are exercisable beginning June 1998 through June 2000.
Upon termination for any reason other than cause, Mr. Van der Meer is entitled
to receive termination compensation equal to six months of salary.
COMPENSATION PURSUANT TO PLANS
INCENTIVE STOCK OPTION PLAN
As of December 31, 1996, 136,577 shares were reserved for issuance under
the 1981 Incentive Stock Option Plan (the "1981 PLAN"). As of December 31,
1996, an aggregate of 47,677 shares of Common Stock had been issued upon
exercise of options granted under the 1981 Plan, and no options were
outstanding. The Company is no longer granting new options under the 1981 Plan,
primarily because of changes in the U.S. individual income tax laws. No options
were granted during 1996.
1983 NON-STATUTORY STOCK OPTION PLAN
The Company originally reserved 800,000 shares of Common Stock for issuance
under its 1983 Non-Statutory Stock Option Plan, as amended (the "1983 PLAN").
The 1983 Plan is administered by the Board of Directors (with recommendations
from the Compensation Committee), which selects the optionees and determines:
(i) the number of shares subject to each option; (ii) when the option becomes
exercisable; (iii) the exercise price; and (iv) the duration of the option,
which cannot exceed ten years from the date of the grant. The options granted
pursuant to the Company's 1983 Plan are reserved for issuance to key employees,
executive officers, directors and independent contractors of the Company and its
subsidiaries. Generally, the options expire if employment is terminated and are
non-transferable except by Will or the laws of descent and distribution as to
accrued or vested portions. In 1988, the initial term of the 1983 Plan expired.
The Board of Directors has extended the term of the 1983 Plan to 1998.
The Board of Directors may also grant stock appreciation rights ("SAR'S")
in connection with specific options granted under the 1983 Plan. Each SAR
entitles the holder to either cash (in an amount equal to the excess of the fair
market value of a share of the Company's Common Stock over the option price of
the related option) or Common Stock (with the number of shares issued being
determined by dividing the SAR's cash value by the fair market value of a share
on the SAR exercise date). SAR's may be granted at the same time options under
the 1983 Plan are granted and to holders of previously granted options. No
SAR's have been granted under the 1983 Plan.
In August 1989, the shareholders of the Company approved a reallocation of
263,423 of the shares originally reserved under the Company's 1981 Incentive
Stock Option Plan as additional shares reserved for issuance under the 1983
Plan. Accordingly, the number of shares reserved for issuance under the 1983
Plan at December 31, 1996 was 1,063,423.
At December 31, 1996, 188,031 shares of Common Stock had been issued upon
exercise of options granted under the 1983 Plan, and options to purchase an
aggregate of 377,000 shares of the Company's Common Stock (net of exercises and
cancellations) were outstanding under the 1983 Plan. Based on 1,063,423 shares
reserved for issuance at December 31, 1996 and 565,031 shares issued or issuable
upon exercise of options granted under the 1983 Plan, options for an additional
498,392 shares could be granted in the future, under terms of the Plan.
However, in conjunction with the grant of stock options to certain executives of
the Company in August 1995, which are not part of the 1983 Plan or the 1981 Plan
(see below), the Board of Directors limited the number of shares that could be
issued under the terms of the two existing Plans of the Company, from that date
forward, to 500,000. This limitation effectively reduces the number of shares
which can be issued for stock options granted under the 1983 Plan from 498,392
shares to 53,700 shares at December 31, 1996.
1996 EXECUTIVE STOCK OPTION PLAN
In August 1995, the Board of Directors approved the grant of stock
options to nine members of management, including a new vice president of the
Company. In total, options to purchase 2,950,000 shares of restricted Common
Stock were granted. In 1996, the Company's shareholders approved an executive
stock option plan to encompass these stock options and permit registration of
the stock set aside for issuance with the Securities and Exchange Commission,
which registration was completed during 1996. The plan provides for no
additional grants of options unless some of the previously granted options are
forfeited or terminated. As of December 31, 1996, the options have the
following terms and conditions: 983,333 optioned shares vest on June 1, 1998 and
are exercisable at $.50 per share; 983,333 optioned shares vest on June 1, 1999
and are exercisable at $.75 per share; and 983,334 optioned shares vest on June
1, 2000 and are exercisable at $1.10 per share. Options to purchase 750,000
shares of Common Stock were granted to both Thomas F. Seal and Jaap van der Meer
(with vesting dates of June 1, 1998, 1999 and 2000) and options to purchase
250,000 shares of Common Stock were granted to John W. Wittwer (with vesting
dates of June 1, 1998, 1999 and 2000).
All unexercised options expire on September 1, 2000 or when the employee
terminates employment with the Company, if sooner. All existing options (for
the purchase of approximately 450,000 shares of unrestricted Common Stock)
previously granted to members of management participating in the new grants,
were voluntarily forfeited. Thomas F. Seal forfeited options to purchase 93,489
shares of Common Stock and John W. Wittwer forfeited options to purchase 102,000
shares of Common Stock.
PROFIT SHARING 401(K) PLAN
In January 1986, the Company adopted a contributory profit sharing plan
("PLAN") which is designed to meet the requirements for qualification under
Section 401(k) of the Internal Revenue Code. The adoption of the Plan was
approved by the Board of Directors in November 1985. Under the provisions of
the Plan, a covered employee may elect a salary reduction and have an amount
equal to the reduction of salary contributed to the Plan for his or her benefit,
which contribution is excluded from the covered employee's taxable income. The
Company has the discretion to make additional contributions to the Plan for the
benefit of the employees, except that no discretionary contributions may be made
for any officer or director of the Company. The total of the Company's
deductible annual contribution may not exceed 15% of the employee's annual
compensation, reduced by such employee's elective deferral of compensation,
which may not exceed $9,500 per annum. Company contributions to the Plan were
$4,700, $3,900 and $1,700 in 1996, 1995 and 1994, respectively, none of which
were for the benefit of any officer or director.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1994, the Company entered into a "financial monitoring agreement" with
H.F. Boeckmann, II which requires the Company, among other things, to obtain
prior approval for major financing transactions, significant asset purchases or
sale of a major portion of the Company's assets.
In August 1995, the Company converted a $243,000 note payable to Michael F.
Eichner ($242,000, net of related costs) to 87,339 shares of series D
Convertible Preferred Stock. The Preferred Stock is convertible at the option
of the shareholder into common shares at a rate of nine common shares for each
preferred share, has voting rights as if the preferred shares were already
converted, and features a 10% non-cumulative dividend subject to the discretion
of the Board of Directors. In 1995, the Company paid interest of approximately
$14,300 to Mr. Eichner.
In 1995, the Company issued 581,818 shares of restricted Common Stock to
Jaap van der Meer for net proceeds of approximately $194,000. In conjunction
with this transaction, the Company granted Mr. Van der Meer an option to acquire
another 500,000 shares of restricted Common Stock at the same exercise price of
$.34375 per share, which option was exercised in 1996. The price per share for
both of these transactions was based upon the average of high and low prices of
Common Stock as reported by The Nasdaq Stock Market on the day the Board of
Directors approved the transactions.
In 1995, the Board of Directors granted options for the purchase of
2,950,000 shares of Common Stock to nine members of management, all as described
in the section, "Compensation Pursuant to Plans" under the heading "1996
Executive Stock Option Plan."
As of December 31, 1996, the Company has a $56,600 unsecured promissory
note receivable, bearing interest at prime plus 3%, from John W. Wittwer. The
note balance was $67,200 at December 31, 1995.
LITIGATION INVOLVING EXECUTIVE OFFICERS AND DIRECTORS
During the past five years, no executive officer or director of the Company
has been, nor is presently, involved in any litigation material to such
executive officer's or director's ability to serve as such or as to his
integrity.
RATIFICATION OF SELECTION OF AUDITORS
(Proposal No. 2)
Subject to ratification by the shareholders, the Board of Directors, upon
the recommendation of the Audit Committee, has selected the accounting firm of
Ernst & Young LLP to serve as auditors of the financial records of the Company
and its subsidiaries for the fiscal year ending December 31, 1997. The
accounting firm of Ernst & Young LLP, and its predecessors, has been the
independent auditor of the Company since 1983.
One or more representatives of Ernst & Young LLP are expected to be present
at the annual meeting and will have an opportunity to make a statement and
respond to appropriate questions.
THE SELECTION OF ERNST & YOUNG LLP WILL BE SUBMITTED FOR RATIFICATION BY
THE SHAREHOLDERS AT THE ANNUAL MEETING. THE BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" RATIFICATION OF THE SELECTION.
VOTE NECESSARY FOR APPROVAL
A majority of the outstanding shares of Common Stock and Common Stock
equivalents of the Company represented at the annual meeting shall constitute a
quorum of the shareholders. Each matter to be voted upon at the annual meeting
for which this proxy statement is provided will be approved and adopted if at
least a majority of all outstanding shares of Common Stock and Common Stock
equivalents of the Company voted at the meeting are cast in favor of such
approval and adoption.
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at the 1998 Annual
Meeting of Shareholders must be received by the Company by December 1, 1997 to
be considered by the Company for inclusion in the Company's proxy statement and
form of proxy relating to that meeting.
OTHER MATTERS
Neither the Company nor any of the persons named as proxies know of matters
other than those stated above to be presented and voted on at the annual
meeting. However, if any other matters should properly come before the meeting,
it is the intention of the persons named in the proxy to vote the proxy in
accordance with their judgment on such matters.
ANNUAL REPORT
The Annual Report to Shareholders of the Company for the fiscal year ended
December 31, 1996 includes the Company's Annual Report on Form 10-K and has been
mailed with this proxy statement to shareholders of record as of March 14, 1997,
but it is not deemed a part of the proxy soliciting materials.
FINANCIAL STATEMENTS
Financial statements for the Company and its subsidiaries are included in
the Annual Report to Shareholders for the Year 1996.
UPON WRITTEN REQUEST BY ANY SHAREHOLDER TO D. KERRY STUBBS, VICE PRESIDENT
FINANCE, ALPNET, INC., 4460 SOUTH HIGHLAND DRIVE, SUITE 100, SALT LAKE CITY,
UTAH 84124-3543, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE PROVIDED WITHOUT CHARGE.
EXHIBITS TO THE FORM 10-K WILL BE FURNISHED ONLY UPON SPECIFIC REQUEST AND UPON
PAYMENT OF A FEE REPRESENTING THE EXPENSES OF FURNISHING ANY SUCH EXHIBITS.
By Order of the Board of Directors
D. Kerry Stubbs
Secretary
Salt Lake City, Utah
March 31, 1997
PROXY FOR 1997 ANNUAL MEETING
OF SHAREHOLDERS OF
ALPNET, INC.
4460 SOUTH HIGHLAND DRIVE, SUITE #100
SALT LAKE CITY, UTAH 84124-3543
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas F. Seal and John W. Wittwer, and each of
them, as proxies of the undersigned, with full power of substitution and
revocation to each of them, for and in the name of the undersigned to vote all
shares of Common Stock of ALPNET, Inc. (the "COMPANY"), which the undersigned
would be entitled to vote if personally present at the Company's Annual Meeting
of Shareholders to be held on May 22, 1997, and at any adjournment or
adjournments thereof, with all the powers the undersigned would possess if
personally present, with authority to vote (i) as specified by the undersigned
below, and (ii) in the discretion of any proxy upon such other business as may
properly come before the meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" 1 AND 2.
1. ELECTION OF DIRECTORS
[ ]FOR all nominees listed below [ ]WITHHOLD AUTHORITY
(except as marked to the contrary To vote for all nominees listed
below) below
[INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.]
Michael F. Eichner, Thomas F. Seal, John W. Wittwer, Jaap van der Meer, and
James R. Morgan
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT
AUDITORS OF THE COMPANY.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2 AND OTHERWISE IN THE DISCRETION OF ANY OF THE
PROXIES.
Please sign exactly as your name appears
on the label to the left. When shares
are held by joint tenants, both should
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such.
If a corporation, please sign full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
Stockholder Signature
Stockholder Signature (Joint Signature if
Applicable)
DATED this day of 1997.
PLEASE VOTE, SIGN, DATE, AND RETURN THIS PROXY USING THE ENCLOSED ENVELOPE.
