<PAGE>
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 (S) 240.14a-11(c) or (S) 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:
<PAGE>
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 20, 1998
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 Wednesday, May 20, 1998, at 1:30
p.m., Pacific Daylight Time, Mandarin Oriental Hotel, 222 Sansome Street, San
Francisco, CA, 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 1998;
3. To approve an increase in the number of shares reserved for issuance under
the Company's 1983 Non-Statutory Stock Option Plan by 1,000,000 shares; and
4. To transact any other business which may properly come before the meeting.
Only the shareholders of record at the close of business on March 13, 1998
are entitled to receive notice of 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 20, 1998.
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 30, 1998
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.
<PAGE>
ALPNET, INC.
4460 South Highland Drive, Suite #100
Salt Lake City, Utah 84124-3543
March 30, 1998
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 Mandarin
Oriental Hotel, 222 Sansome Street, San Francisco, CA, on Wednesday, May 20,
1998, at 1:30 p.m., Pacific 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 6, 1998.
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 13,
1998 (the "Record Date"), shares which are entitled to vote at the meeting
include: (i) 23,344,815 shares of Common Stock; and (ii) 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 786,051 common shares. 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. The shareholder of series D Preferred Stock will
be entitled to nine votes for each series D preferred share owned. 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 for such other business as may properly come before
the
1
<PAGE>
meeting.
PRINCIPAL SHAREHOLDERS
----------------------
The following table sets forth, as of March 13, 1998, 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 13, 1998 (1) (2) Outstanding (1) (2)
----------------------------------------------------------------------
<S> <C> <C>
H. F. Boeckmann, II 5,106,724/(3)/ 21.9%
15505 Roscoe Boulevard
North Hills, CA 91343
Michael F. Eichner 1,325,000/(4)/ 5.5%
69A Parkhall Road
West Dulwich
London SE21 8EX
United Kingdom
Gruber & McBaine Capital 1,220,000 5.2%
Management, LLC
50 Osgood Place
San Francisco, CA 94133
All executive officers 2,339,971/(5)/ 9.7%
and directors as a group
(5 persons)
--------------
</TABLE>
(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 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 13, 1998.
(3) Includes 44,750 shares of Common Stock owned by Mr. Boeckmann's immediate
family, as to which he disclaims beneficial ownership.
(4) Includes 786,051 shares of Common Stock issuable upon the exercise of the
right to convert series D Preferred Stock
2
<PAGE>
which right is exercisable within 60 days of March 13, 1998.
(5) Includes: (i) 1,553,920 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 13, 1998.
ELECTION OF DIRECTORS
---------------------
(Proposal No. 1)
----------------
At the meeting, seven 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 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
Director of the Company.
INFORMATION ABOUT DIRECTORS AND NOMINEES FOR DIRECTOR
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.
3
<PAGE>
<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 13, 1998/(1)//(2)/ Outstanding/(1)//(2)/
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nominees for Director
Michael F. Eichner 52 1988 1,325,000/(3)/ 5.5%
69A Parkhall Road
West Dulwich
London SE21 8EX
United Kingdom
Chairman and Director
Jaap van der Meer 43 1996 1,003,246 4.3%
Havengebouw
De Ruyterkade 7
1013 AA Amsterdam
The Netherlands
President, Director
John W. Wittwer 52 1993 0 0
4460 South Highland Drive
Suite #100
Salt Lake City, UT 84124
Executive Vice President,
Director
James R. Morgan 51 1997 0 0
1273 North Nola Drive (Former director
Centerville, UT 84014 1990 - 1995)
Donald N. Reeves 61 1997 1,725 *
3361 N. Calle Tortosa
Tucson, AZ 85750
Jacqueline M. Simkin 55 New Nominee 2,000 *
Apt. Ph-01, 9 Island Avenue
Miami Beach, FL 33139
Herwig M. Langohr 54 New Nominee 0 0
23 Rue Marechal Foche
F-77780 Bourron Marlotte
France
</TABLE>
_____________________
* Less than 1%
4
<PAGE>
(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 13, 1998.
(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 13, 1998.
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 TTI 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 1984 when Interlingua merged with TTI
Group and he assumed the position of Executive Chairman. Mr. Eichner is also
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.
JAAP VAN DER MEER. Mr. Van der Meer has served as a director since May 1996 and
as President of ALPNET since August 1997. Mr. Van der Meer joined the Company
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 before joining
ALPNET. Mr. Van der Meer received a degree in linguistics and literature at the
University of Amsterdam.
JOHN W. WITTWER. Mr. Wittwer is one of the founders of the Company and has
served as a director of the Company since May 1993. He is currently serving as
Executive Vice President and U.S. Country Manager and is chairman of the ALPNET
Management Board. He has been employed by the Company since 1982 serving in
various positions including Vice President of Finance and Administration,
Director of Administration, Chief Executive Officer, Treasurer and Chief
Financial and Accounting Officer and he is a Certified Public Accountant.
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. He was re-elected to the
Board in May 1997. From March 1987 to September 1995, Mr. Morgan was an officer
of NFT Ventures, Inc., a private investment company which was 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
5
<PAGE>
from Brigham Young University and a J.D. degree from the University of Utah.
DONALD N. REEVES. Mr. Reeves, who was appointed as a director in August 1997,
retired in 1996 as Senior Vice President of Technology Implementation with R.R.
Donnelley & Sons Company. During his 38-year career with R.R. Donnelley, he was
president of several divisions including Telecommunications, Electronic
Graphics, and Financial Printing. During this time, Mr. Reeves also structured
acquisitions of key translation and localization companies.
JACQUELINE M. SIMKIN. Ms. Simkin has been Chairwoman and Chief Executive
Officer of Simkin Management, Inc. since 1996 and Co-Chairwoman and Co-Chief
Executive Officer of the Denver Brick Company from 1994 to February 1998. Since
February 1998, she has been Co-Chairwoman of The Denver Brick Company. She has
also been an advisor to the Board of Directors of Thompson's Pet Pasta Products,
Inc. from 1994 to the present. For more than the past five years she has been a
private investor in both public and privately held companies.
HERWIG M. LANGOHR. Mr. Langohr is Professor of Finance and Banking at INSEAD
(Fountainbleu, France), which he joined in 1976, specializing in corporate
finance and financial services. He also taught at The Wharton School (1982-83),
The Darden School (1991-92) and the Universitat Konstanz in Germany (1992). Mr.
Langohr was Associate Dean, MBA and member of the Executive Committee at INSEAD
from 1992-95. He joined the Board of Directors of INSEAD Research and
Development in 1996 and the Board of Kredietbank n.v. (Brussels) in 1997. He
has been a Visiting Scholar at the Board of Governors of the Federal Reserve
System (1982-83) and advisor to the Services of the Prime Minister of the
Belgian Government (1978-79). He is a regular consultant in corporate finance
and business strategy. Mr. Langohr, who is a Belgian citizen and French
resident, holds MBA and DBA degrees from Indiana University (1978) and a Doctor
of Law degree from the K.U. Leuven (Belgium 1967).
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 each quarter, and special
meetings are scheduled when required. There were four regular meetings and one
special meeting of the Board of Directors during 1997. All directors attended
all of the regular meetings and the special meeting.
The Company has a standing Audit Committee of the Board of Directors which
is currently comprised of Messrs. Eichner and Morgan. The principal functions
of the Audit 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. During 1997, the Audit Committee held one meeting.
The Company also has a standing Compensation Committee, currently comprised
of Messrs. Eichner, Morgan and Reeves. The functions of the Compensation
Committee include reviewing and making recommendations concerning the
compensation of executive officers, the granting of stock options
6
<PAGE>
to employees, and the compensation policies of the Company. The Compensation
Committee held one meeting in 1997.
COMPENSATION OF DIRECTORS
During 1997, the chairman was paid $7,500 each quarter and non-employee
members of the Board of Directors were paid a quarterly fee of $2,000. In
total, $39,000 of directors' fees were paid in 1997. In addition, in 1997 each
of the non-employee directors (Messrs. Eichner, Morgan, and Reeves) were granted
options to purchase 30,000 shares of Common Stock under the terms of the 1996
Executive Stock Option Plan (see "Compensation Pursuant to Plans" elsewhere in
this Proxy Statement). These options have an exercise price of $1.41 per share
with vesting dates of June 1, 1999 and 2000. Directors who are also employees
of the Company did not receive any compensation related specifically to their
service on the Board.
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 operations, as follows:
RAYMOND J. KING, 41. 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 15 years and is
currently responsible for the ALPNET U.K. - South operation as well as the
operations in Ireland and Spain. Mr. King speaks English and German.
GERALDINE LIM, 44. Director of ALPNET Asia. Ms. Lim was born in Singapore
and attended both Chinese and English schools in 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, Korea, China, Japan, and Thailand. Ms. Lim is fluent
in Chinese and English.
DAVID J. MARSHALL, 36. International Finance Director and Country Manager
of ALPNET U.K. - Regions. 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,
France, Belgium and the Netherlands, and also has responsibility for accounting
and finance matters internationally. Mr. Marshall is fluent in English, French
and German.
DR. FRANCOIS MASSION, 43. 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.
7
<PAGE>
PAULA B. SHANNON, 38. International Director IT Services. Ms. Shannon
graduated as a faculty scholar from McGill University, Montreal, Canada with a
B.A. in Russian and German and a minor in Linguistics. Prior to joining ALPNET
in 1996, she served in a series of key positions with Berlitz International in
both the U.S. and in Canada. Ms. Shannon is fluent in English, French and Dutch
and functional in German, Spanish and Russian.
ROBERT H. STANLEY, 50. 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 the U.S. in various capacities, he is currently responsible for new business
development and overseeing major U.K. client accounts. Mr. Stanley is fluent in
English, French, Italian and Spanish, and also speaks some German and
Portuguese.
D. KERRY STUBBS, 43. 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, 43. 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 the Canadian operation since
1987 and the Company's global information and communications technologies since
1997. 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 AND RELATED INFORMATION
The following Summary Compensation Table sets forth the cash compensation
and certain other components of the compensation of persons serving in the
position of President of the Company during 1997, and the other most highly
compensated executive officers (named executives) of the Company, whose total
annual salary and bonus exceeded $100,000 in 1997.
8
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Long-Term Compensation
Annual Compensation Awards Payouts
Other
Annual Restricted Securities All other
Compen- Stock Underlying LTIP Compen-
Name and Salary Bonus/(1)/ sation/(2)/ Award(s) Options Payouts sation/(3)/
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas F. Seal 1997 105,420 0 8,300 0 0 0 102,891
President and Chief Executive Officer 1996 134,000 7,000 14,275 0 0 0 31,278
(through August 1997) 1995 124,000 17,000 10,800 0 750,000 0 25,943
Jaap van der Meer 1997 100,669 0 0 0 0 0 0
President (August-December 1997) 1996 115,800 6,000 1,000 0 0 0 0
Vice President Sales and Marketing
(through August 1997)
John W. Wittwer 1997 137,100 0 300 0 100,000 0 0
Executive Vice President 1996 125,500 4,700 2,200 0 0 0 0
1995 120,500 7,000 1,800 0 250,000 0 0
</TABLE>
- ------------------
(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 and the Company's contributions to
retirement plans for the respective years, and, for Mr. Seal, $8,000,
$12,000 and $9,000 cost of living payments due to increased foreign living
expenses in 1997, 1996 and 1995, respectively.
(3) Represents payments made to or for the benefit of the named executive for
(i) foreign housing and utilities ($18,318 in 1997, $25,687 in 1996, and
$19,647 in 1995), (ii) certain other specific foreign-location items
($4,302 in 1997, $5,591 in 1996, and $6,296 in 1995), and (iii) for 1997,
$80,271 of costs paid or accrued related to Mr. Seal's resignation as
President in August 1997. The Company's Board of Directors has also agreed
to reimburse Mr. Seal for foreign income tax costs, if any, which are
incurred in excess of what would have been paid by him absent the foreign
assignment. No such amounts have been paid for any of the years presented.
(4) Certain of the amounts presented above were paid in foreign currencies and
were converted into U.S. dollars at the foreign currency exchange rates
prevailing during the respective periods.
OPTION GRANTS IN 1997
The following table sets forth certain information concerning options to
purchase Common Stock granted during 1997 to the executives named in the Summary
Compensation Table.
9
<PAGE>
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Number % of Total
of Securities Options
Underlying Granted
Options to Employees Exercise Expiration Grant Date
Name Granted (#)/(1)/ in 1997 Price ($/Sh)/(2)/ Date Value($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Thomas F. Seal 0 N/A N/A N/A N/A
Jaap van der Meer 0 N/A N/A N/A N/A
John W. Wittwer 100,000 8.5% 1.13 September 1, 2000 62,625
</TABLE>
- -----------------------
(1) All options granted and reported in this table have been granted under
the terms of the 1996 Executive Stock Option Plan as described in the
section "Compensation Pursuant to Plans" elsewhere in this Proxy
Statement.
(2) Exercise price was equal to the fair market value on the date of grant,
determined by calculating the average of high and low prices of Common
Stock as reported by the Nasdaq Stock Market.
AGGREGATED OPTION EXERCISES IN 1997
AND DECEMBER 31, 1997 OPTION VALUES
The following table sets forth certain information concerning the exercise
in 1997 of options to purchase Common Stock by the Executives named in the
Summary Compensation Table and the unexercised options to purchase Common Stock
held by such individuals at December 31, 1997.
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Shares Unexercised In-the-Money
Acquired Value Options at Options at
on Exercise Realized/(1)/ 12/31/97 (#) 12/31/97($)/(2)/
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thomas F. Seal 0 0 0 / 250,000 0 / 390,750
Jaap van der Meer 0 0 0 / 400,000 0 / 587,700
John W. Wittwer 0 0 0 / 350,000 0 / 413,217
</TABLE>
- -----------
(1) The value realized equals the aggregate amount of the excess of the fair
market value on the date of exercise (the closing price of Common Stock as
reported by the Nasdaq Stock Market for the exercise date) over the relevant
exercise price.
(2) Options are "in-the-money" if the fair market value of the underlying
securities exceeds the exercise price of the option. The value is
calculated based on the aggregate amount of the excess of the closing price
of Common Stock as reported by the Nasdaq Stock Market for December 31, 1997
($2.06) over the relevant exercise prices.
10
<PAGE>
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 $.34
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 were exercisable beginning June 1998 through June 2000. In
1997, Mr. Van der Meer relinquished options for the purchase of 350,000 shares
of Common Stock. 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 COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors reviews and makes
recommendations to the Board of Directors concerning the overall compensation
for the Company's officers and other key executives, including the named
executives. The Committee also oversees the granting of stock options to all
executives and employees of the Company.
The Company seeks to compensate executives at competitive levels, considering
the overall size and growth rate of the Company, the complexity of the Company's
operations (especially as it relates to its international operations), the
Company's general financial performance (with a primary focus on levels of
profitability), and each executive's individual contribution to meeting the
Company's goals and objectives. The Company does not set specific, identified
financial benchmarks to use in determining base salaries or other compensation
of its executives. The Company's compensation is designed to attract and
maintain highly qualified executives.
The primary components of executive compensation are base salary, related fringe
benefits such as insurance plan participation (on substantially the same terms
as available to all other employees), and stock option grants. The Company
discontinued its granting of incentive cash bonuses in 1997 and thus bonuses
were not part of the compensation for any executive in 1997.
Base Salary. Each executive receives a base salary, denominated in the local
currency of the country in which the executive resides. The base salaries for
1997 were approved by the Board of Directors in a meeting in November 1996. Mr.
Van der Meer, the Company's president, did not receive an increase in base
salary, or any other compensation adjustments, at the time of his appointment as
President in August 1997. Base salary adjustments for the Company's executive
officers for the year 1997 consisted of increases in the range of 5.2% to 9.2%
as compared to 1996. These increases were determined based on the subjective
collective judgements of the Compensation Committee members, using the factors
discussed above as guidelines.
11
<PAGE>
Stock Option Grants. A significant component of each executive's total
compensation consists of the receipt of stock options. One purpose of the
granting of stock options is to reward individual performance that increases
long-term shareholder value. Certain of the Company's executives, including all
of the named executives, were granted options in 1995, which options are
currently covered by the Company's 1996 Executive Stock Option Plan and have
vesting dates ranging from June 1998 through June 2000. Grants of options and
the relinquishment of options during the year 1997 by the named executives are
discussed in the section titled "Compensation Pursuant to Plans" in this Proxy
Statement. During 1997, no option grants were made to Mr. Van der Meer.
From January 1997 to May 1997, the Compensation Committee consisted of Michael
F. Eichner and Thomas F. Seal. From May 1997 to November 1997, the committee
consisted of Michael F. Eichner and James R. Morgan. From November 1997 to
December 1997, the committee consisted of Michael F. Eichner, James R. Morgan
and Donald N. Reeves. All final decisions of the Compensation Committee were
approved unanimously by the committee and subsequently ratified by the Board of
Directors.
Compensation Committee
Michael F. Eichner
James R. Morgan
Donald N. Reeves
12
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following graph presents a comparison of the cumulative total
shareholder return on the Company's Common Stock with the cumulative total
return on the Nasdaq Stock Market (U.S.) Index and the Quantum MicroCap
Benchmark. This graph assumes that $100 was invested on December 31, 1992 in
the Company's Common Stock, the Nasdaq Stock Market (U.S.) Index, and the
Quantum MicroCap Benchmark.
The Quantum MicroCap Benchmark was chosen because there is no published
industry index for the industry in which the Company operates nor are there any
public companies in the Company's industry from which to make a selection of
peer issuers. The Quantum MicroCap Benchmark is an index of approximately 4,000
companies with an average market capitalization of approximately $80,000,000.
COMPARISON OF STOCK PRICES FOR
ALPNET, INC., THE NASDAQ STOCK MARKET (U.S.),
AND QUANTUM MICROCAP BENCHMARK
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPH
Quantum
MicroCap
ALPNET, Inc. NASDAQ Benchmark
------------ ------ ---------
1992 100 100 100
1993 240 115 121
1994 90 112 114
1995 580 159 153
1996 510 195 179
1997 660 240 223
There can be no assurance about the Company's stock performance in future
periods. The Company does not make nor does it endorse any predictions as to
the future stock price performance.
The immediately preceding sections entitled "Compensation Committee Report
on Executive Compensation" and "Stock Price Performance Graph" do not constitute
soliciting material for purposes of Rule 14a-9 of the Securities and Exchange
Commission, may not be deemed to have been filed with the Commission for
purposes of Section 18 of the Securities Exchange Act of 1934, and are not to be
incorporated by reference into any other filing made with the Commission by the
Company.
13
<PAGE>
COMPENSATION PURSUANT TO PLANS
Incentive Stock Option Plan
- ---------------------------
As of December 31, 1997, 136,577 shares were reserved for issuance under
the 1981 Incentive Stock Option Plan (the "1981 Plan"). As of December 31,
1997, 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 1981 Plan has been dormant for several years and was
terminated in February 1998.
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 2008.
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 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, 1997
was 1,063,423. In February 1998, the Board of Directors approved a reallocation
of 88,900 additional shares originally reserved under the 1981 Plan as
additional shares reserved for issuance under the 1983 Plan, increasing the
total number of shares reserved for issuance under the 1983 Plan to 1,152,323.
At December 31, 1997, 196,931 shares of Common Stock had been issued upon
exercise of options granted under the 1983 Plan, and options to purchase an
aggregate of 832,300 shares of the Company's Common Stock (net of exercises and
cancellations) were outstanding under the 1983 Plan. Based on 1,152,323 shares
currently reserved for issuance and 1,029,231 shares issued or issuable upon
exercise of options granted under the 1983 Plan, options for an additional
123,092 shares could be granted in the future, under terms of the Plan.
14
<PAGE>
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.
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). Exercise
prices ranged from $.50 per share to $1.10 per share. 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 (the "1996 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 1996 Plan provides for no additional grants of options unless some of
the previously granted options are forfeited or terminated. During 1997, Mr.
Seal relinquished options to purchase 500,000 shares of Common Stock and Mr. Van
der Meer relinquished options to purchase 350,000 shares of Common Stock. Along
with grants to other executives and directors, Mr. Wittwer was granted an option
to acquire an additional 100,000 shares of Common Stock at an exercise price of
$1.13 per share, with vesting dates of June 1, 1999 and 2000. As of December
31, 1997, outstanding options under the 1996 Plan have the following terms and
conditions: 983,333 optioned shares vest on June 1, 1998 and are exercisable at
$.50 per share; 853,333 optioned shares vest on June 1, 1999 and are exercisable
at $.75 to $1.44 per share; and 878,334 optioned shares vest on June 1, 2000 and
are exercisable at $1.10 to $1.44 per share.
All unexercised options expire on September 1, 2000 or when the employee
(or director) 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, covered U.S. employees may elect a salary reduction and have amounts
equal to the reduction of salary contributed to the Plan for their benefit,
which contribution is excluded from the employees' taxable income. The Company
has discretionary authority to make additional contributions to the Plan for the
benefit of employees. The total of the Company's deductible annual contribution
may not exceed 20% of the employee's annual compensation, reduced by such
employee's elective deferral of compensation, which may not exceed $10,000 per
annum. Company contributions to the Plan were $10,450, $4,700 and $3,900 in
1997, 1996 and 1995, respectively, of which a total of $600 was for the benefit
of Messrs. Seal and Wittwer.
15
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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
$.34 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.
Reference is made to the section, "Compensation Pursuant to Plans" under
the heading "1996 Executive Stock Option Plan" for information related to
options granted to certain officers and directors.
As of December 31, 1997, the Company has a $44,700 unsecured promissory
note receivable, bearing interest at prime plus 3%, from John W. Wittwer. The
note balance was $56,600 at December 31, 1996.
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, 1998. 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.
16
<PAGE>
PROPOSAL TO INCREASE SHARES RESERVED FOR ISSUANCE
-------------------------------------------------
UNDER STOCK OPTION PLAN
-----------------------
(Proposal No. 3)
----------------
The Board of Directors has approved and proposes an increase of 1,000,000
shares of the Company's Common Stock to be set aside for and be issuable under
the Company's 1983 Stock Option Plan.
Currently, only 123,092 shares are available for option grants under the
1983 plan. The approval of this proposal would increase the number of shares
reserved for issuance under this plan to 1,123,092. The primary purpose of this
proposal is to afford an incentive to employees of the Company and to enable the
Company to retain employees, thereby promoting the interests of the Company and
all its shareholders.
The Board of Directors recommends a vote "FOR" the increase in the number
of shares set aside for issuance under the Company's 1983 Stock Option Plan.
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 1999 Annual
Meeting of Shareholders must be received by the Company by December 1, 1998 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, 1997 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 13, 1998,
but it is not deemed a part of the proxy soliciting materials.
17
<PAGE>
FINANCIAL STATEMENTS
--------------------
Financial statements for the Company and its subsidiaries are included in
the Annual Report on Form 10-K for the Year 1997, which is being furnished to
all shareholders along with this Proxy Statement.
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 30, 1998
18
<PAGE>
PROXY FOR 1998 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 James R. Morgan 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 20, 1998, 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, 2 AND 3.
1. ELECTION OF DIRECTORS
---------------------
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) listed 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, John W. Wittwer, Jaap van der Meer,
James R. Morgan, Donald N. Reeves, Jacqueline M. Simkin,
Herwig M. Langohr
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT
-----------------------------------------------------------------------
AUDITORS OF THE COMPANY.
-----------------------
[_] FOR [_] AGAINST [_] ABSTAIN
3. PROPOSAL TO INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE UNDER THE
-------------------------------------------------------------------------
COMPANY'S STOCK OPTION PLAN BY 1,000,000 SHARES
-----------------------------------------------
[_] 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, 2 AND 3 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
DATED this ___ day of _________ 1998. -----------------------------------
PLEASE VOTE, SIGN, DATE, AND RETURN Stockholder Signature (Joint
THIS PROXY USING THE ENCLOSED Signature if Applicable)
ENVELOPE.
