<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ X ]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of
the Commission Only
(as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ASPECT TELECOMMUNICATIONS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
ASPECT TELECOMMUNICATIONS CORPORATION
- --------------------------------------------------------------------------------
(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 transactions 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> 2
[LOGO OF ASPECT TELECOMMUNICATIONS APPEARS HERE]
March 21, 1997
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders, to
be held on April 29, 1997. Enclosed are the Secretary's official notice of
this meeting, a proxy statement, and a form of proxy. Please note that the
meeting will be held at 3:30 p.m., at the Four Seasons Hotel, 57 East 57th
Street, New York, New York.
Details of the business to be conducted at the meeting are given in the
attached Notice of Annual Meeting of Shareholders and Proxy Statement.
It is important that your shares be represented at the meeting, so please
complete and return the enclosed proxy as soon as possible.
Sincerely,
/s/ James R. Carreker
------------------------------------
James R. Carreker
Chairman and Chief Executive Officer
<PAGE> 3
ASPECT TELECOMMUNICATIONS CORPORATION
_________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 29, 1997
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Aspect
Telecommunications Corporation (the "Company"), a California corporation,
will be held on April 29, 1997 at 3:30 p.m., at the Four Seasons Hotel, 57 East
57th Street, New York, New York, for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors of the Company for the fiscal year ending December 31,
1997.
3. To transact such other business as may properly come before the
meeting and any adjournment(s) thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on March 3, 1997 are
entitled to notice of and to vote at the meeting and any adjournment(s)
thereof.
To assure your representation at the meeting, you are urged to mark, sign,
date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any shareholder attending
the meeting may vote in person even if such shareholder returned a proxy.
/s/ Craig Johnson
---------------------------
Craig W. Johnson, Secretary
San Jose, California
March 21, 1997
<PAGE> 4
ASPECT TELECOMMUNICATIONS CORPORATION
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
Aspect Telecommunications Corporation (the "Company") for use at the Annual
Meeting of Shareholders to be held April 29, 1997 at 3:30 p.m., or at any
adjournment(s) thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting will
be held at the Four Seasons Hotel, 57 East 57th Street, New York, New York
10022. The telephone number at that location is (212) 758-5700.
These proxy solicitation materials were mailed on or about March 21, 1997
to all shareholders entitled to vote at the meeting. The cost of soliciting
these proxies will be borne by the Company. The Company has retained the
services of Corporate Investor Communications, Inc. ("CIC") to solicit proxies
and distribute materials to brokerage houses, banks, custodians and other
institutional owners. The Company will pay CIC a fee of approximately $3,000
for these services, plus expenses. In addition, the Company will reimburse
brokerage firms and other persons representing beneficial owners of shares for
their expenses in forwarding solicitation materials to such beneficial owners.
The Company may conduct further solicitation personally, telephonically or by
facsimile through its officers, directors and regular employees, none of whom
will receive additional compensation for assisting with the solicitation.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company, at its
principal executive office at 1730 Fox Drive, San Jose, CA 95131 (Attention:
Eric J. Keller, Chief Financial Officer), a written notice of revocation or a
duly executed proxy bearing a later date or by attending the meeting and voting
in person.
VOTING AND SOLICITATION
Every shareholder voting for the election of directors may cumulate such
shareholder's votes and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of shares held by
such shareholder or distribute the shareholder's votes on the same principle
among as many candidates as the shareholder thinks fit, provided that votes
cannot be cast for more than five candidates. However, no shareholder shall be
entitled to cumulate votes unless the candidate's name has been placed in
nomination prior to the voting and the shareholder, or any other shareholder,
has given notice at the meeting prior to the voting of the intention to
cumulate the shareholder's votes. On all other matters, each share has one
vote.
Only shareholders of record at the close of business on March 3, 1997, are
entitled to notice of and to vote at the meeting. At the record date,
48,943,475 shares of the Company's Common Stock, with a par value of $.01 per
share, were issued and outstanding.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections with the assistance of the Company's transfer agent.
The Inspector of Elections will also determine whether or not a quorum is
present. Except with respect to the election of directors where cumulative
voting is invoked and except in certain other circumstances, the affirmative
vote of a majority of shares represented and voting at a duly held meeting at
which a quorum is present is required under California law for approval of
proposals presented to shareholders. In general, California law also provides
that a quorum consists of a majority of these shares entitled to vote,
represented either in person or by proxy. The Inspector of Elections will
treat abstentions as shares that are present and entitled to vote for purposes
of determining the presence of a quorum, but as not voting for purposes of
determining the approval of any matter submitted to the shareholders for a
vote. Any proxy which is returned using the form of proxy enclosed and which
is not marked as to the particular item will be voted for the election of
directors, for the ratification of the appointment of the designated
independent auditors and as the proxy holders deem advisable on other matters
that may come before the meeting, as the case may be with respect to the item
not marked. If a broker indicates on the enclosed proxy or its substitute that
it does not have discretionary authority as to certain shares to vote on a
particular matter ("broker non-votes"), those shares will not be considered as
voting with respect to that matter. While there is no definitive specific
1
<PAGE> 5
statutory or case law authority in California concerning the proper treatment
of abstentions and broker non-votes, the Company believes that the tabulation
procedures to be followed by the Inspector of Elections are consistent with the
general statutory requirements in California concerning voting of shares and
determination of a quorum.
ALL REFERENCES HEREIN WITH REGARD TO SHARES, PER SHARE AMOUNTS AND SHARE PRICES
HAVE BEEN ADJUSTED TO REFLECT THE TWO-FOR-ONE STOCK SPLITS THAT TOOK PLACE IN
JANUARY 1997 AND SEPTEMBER 1995.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
NOMINEES
A board of five directors will be elected at the meeting. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for the
five nominees named below. In the event that any nominee of the Company is
unable or declines to serve as a director at the time of the Annual Meeting of
Shareholders, the proxies will be voted for any nominee who shall be designated
by the present Board of Directors to fill the vacancy. In the event that
additional persons are nominated for election as directors, the proxy holders
intend to vote all proxies received by them in such a manner in accordance with
cumulative voting as will assure the election of as many of the nominees listed
below as possible, and, in such event, the specific nominees to be voted for
will be determined by the proxy holders. It is not expected that any nominee
listed below will be unable or will decline to serve as a director. The term
of office of each person elected as a director will continue until the next
Annual Meeting of Shareholders or until his or her successor has been elected
and qualified.
The names of the nominees, their ages as of February 28, 1997, and certain
other information about them are set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
- --------------- --- -------------------- --------
<S> <C> <C> <C>
James R. Carreker . . . . . 50 Chairman and Chief Executive Officer of the Company 1985
Debra J. Engel . . . . . . 44 Senior Vice President of Corporate Services of 1996
3Com Corporation
Norman A. Fogelsong . . . . 45 General Partner of Institutional Venture Partners 1985
James L. Patterson . . . . 59 Chairman of the Board of Directors of Clarify Inc. 1987
John W. Peth . . . . . . . 48 Executive Vice President of TAB Products Company 1992
</TABLE>
Except as set forth below, each of the nominees has been engaged in his or
her principal occupation set forth above during the past five years. There are
no family relationships among the directors or executive officers of the
Company.
Mr. Carreker, a founder of the Company, has served as Chief Executive
Officer and as a director of the Company since its inception in August 1985.
He has served as Chairman of the Company's Board of Directors since October
1995 and was President of the Company between August 1985 and October 1995.
Since January 1997, Mr. Carreker has also served as a director of Herman
Miller, Inc., a company that manufactures and sells office systems products and
services.
Ms. Engel has been a director of the Company since May 1996. Ms. Engel
currently holds the position of Senior Vice President of Corporate Services of
3Com Corporation, a data networking products and services company. Ms. Engel
has served as a Vice President at 3Com since November 1983. Prior to that, she
was with Hewlett-Packard Company for seven years, most recently as Corporate
Staffing Manager at Hewlett-Packard's Corporate Headquarters.
Mr. Fogelsong has been a director of the Company since September 1985.
Since March 1989, Mr. Fogelsong has served as a general partner of
Institutional Venture Partners IV, V, VI and VII, all venture capital
investment partnerships. Between June 1981 and February 1989, Mr. Fogelsong
served as a general partner of Mayfield III, IV, V and VI, all venture capital
investment partnerships. Mr. Fogelsong is also a director of several privately
owned technology companies.
2
<PAGE> 6
Mr. Patterson has been a director of the Company since August 1987. Since
1991, Mr. Patterson has served as the Chairman of the Board of Directors of
Clarify Inc., a developer of customer support software. From April 1990 to
October 1990, Mr. Patterson served as the President and Chief Executive Officer
of Insite Peripherals, Inc., a development phase company developing
high-capacity floppy disk drives. Since June 1987, Mr. Patterson has also been
a management consultant to various companies. From February 1980 to June 1987,
Mr. Patterson was co-founder and served as President and Chief Executive
Officer of Quantum Corporation, a disk drive manufacturer. Mr. Patterson also
serves as a director of several privately owned technology companies.
Mr. Peth has been a director of the Company since May 1992. From July 1996
through January 1997, Mr. Peth was Acting President and Chief Executive Officer
of TAB Products Company (TAB), an office filing and furniture systems
manufacturer and distributor. From August 1993 through June 1996, Mr. Peth was
Executive Vice President and Chief Operating Officer of TAB and President of
TAB U.S. He also served as a director of TAB from April 1991 through January
1997. From December 1989 to April 1991, Mr. Peth served as the Office Managing
Partner, San Jose Region, for Deloitte & Touche LLP, a public accounting firm.
From August 1984 to December 1989, Mr. Peth served as the partner in charge of
the San Jose office of Deloitte, Haskins & Sells (a predecessor public
accounting firm that merged with a second public accounting firm to form
Deloitte & Touche LLP). Mr. Peth also serves as a director of Business
Resource Group, a provider of office workspace products and services.
BOARD MEETINGS AND COMMITTEES
The Board of Directors held a total of nine meetings during the year ended
December 31, 1996. The Board of Directors has an Audit Committee and a
Compensation Committee. It does not have a nominating committee or a committee
performing the functions of a nominating committee.
The Audit Committee of the Board of Directors currently consists of
directors Fogelsong and Peth and held six meetings during the last fiscal year.
The Audit Committee recommends engagement of the Company's independent auditors
and is primarily responsible for approving the services performed by the
Company's independent auditors and for reviewing and evaluating the Company's
accounting principles and its system of internal accounting controls.
The Compensation Committee of the Board of Directors currently consists of
directors Engel and Patterson and held one meeting during the last fiscal year.
The Compensation Committee determines policy on executive compensation and
makes recommendations to the Board of Directors concerning the Company's stock
and option plans.
No incumbent director attended fewer than 75% of the aggregate number of
meetings of the Board of Directors and meetings of the committees of the Board
of Directors on which he or she serves.
Directors are reimbursed for out-of-pocket travel expenses associated with
their attendance at Board meetings. Each non-employee director receives a
quarterly stipend of $2,500 for his or her service on the Board of Directors,
in addition to a nominal amount for each committee meeting attended. Directors
Fogelsong, Patterson and Peth were each granted options to purchase 6,000
shares and director Engel was granted an option to purchase 24,000 shares of
Common Stock of the Company during 1996 under the 1989 Director's Stock Option
Plan.
The 1989 Director's Stock Option Plan provides for the grant of
nonstatutory options to non-employee directors of the Company. The 1989
Director's Stock Option Plan is designed to work automatically (initial grants
of options to purchase 24,000 shares are made to each director, and thereafter
on August 31 of each year, after the first anniversary of service, options to
purchase 6,000 shares are issued to each director; grants are made at fair
market value) and do not require administration; however, to the extent
administration is necessary, it is provided by the Board of Directors. Initial
grants vest 25% on the first, second, third and fourth anniversaries of the
date of grant and each subsequent option vests in full on the fourth
anniversary of the date of grant. All options expire five years after the
grant date.
REQUIRED VOTE
The five nominees receiving the highest number of affirmative votes of the
shares entitled to be voted shall be elected as directors of the Company.
Votes against any nominee and votes withheld have no legal effect under
California law.
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR ALL OF THE NOMINEES LISTED ABOVE.
3
<PAGE> 7
PROPOSAL NO. 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP, independent
auditors, to audit the financial statements of the Company for the year ending
December 31, 1997 and recommends that the shareholders vote for ratification of
such appointment. In the event the shareholders do not ratify such
appointment, the Board of Directors will reconsider its selection. Deloitte &
Touche LLP (or their predecessor Deloitte, Haskins & Sells, an accounting firm
that merged with a second public accounting firm to form Deloitte & Touche LLP)
has audited the Company's financial statements since 1986. One or more
representatives of Deloitte & Touche LLP are expected to be present at the
meeting with the opportunity to make a statement if they desire to do so and
are expected to be available to respond to appropriate questions.
The ratification of the appointment of Deloitte & Touche LLP requires the
affirmative vote of a majority of the shares represented and voting at the
meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP.
OTHER INFORMATION
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth information known to the Company with
respect to the beneficial ownership of the Company's Common Stock as of
February 28, 1997 as to (i) each person who is known by the Company to
beneficially own five percent or more of the Company's Common Stock, (ii) each
of the Company's directors, (iii) each of the executive officers named in the
Summary Compensation Table below ("Named Executive Officers") and (iv) all
directors and executive officers as a group.
<TABLE>
<CAPTION>
5% SHAREHOLDERS, DIRECTORS, NAMED
EXECUTIVE OFFICERS, AND DIRECTORS SHARES BENEFICIALLY
AND EXECUTIVE OFFICERS AS A GROUP OWNED (1)
--------------------------------- ---------
NUMBER PERCENT
------ -------
<S> <C> <C>
Entities affiliated with FMR Corp. (2) . . . . . . . . . . . . . . . . . . 5,467,000 11.2%
82 Devonshire Street
Boston, MA 02109
Pilgrim Baxter & Associates, Ltd. (3) . . . . . . . . . . . . . . . . . . . 3,601,400 7.4%
1255 Drummers Lane, Suite 300
Wayne, PA 19087
James R. Carreker (4) . . . . . . . . . . . . . . . . . . . . . . . . . . 1,460,369 3.0%
Debra J. Engel (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 *
Norman A. Fogelsong (6) . . . . . . . . . . . . . . . . . . . . . . . . . 457,252 *
James L. Patterson (7) . . . . . . . . . . . . . . . . . . . . . . . . . . 36,000 *
John W. Peth (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,000 *
Dennis L. Haar (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,948 *
Eric J. Keller (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,598 *
R. Dixon Speas, Jr. (11) . . . . . . . . . . . . . . . . . . . . . . . . . 139,103 *
Larry S. Miller (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,732 *
All directors and executive officers as a group (15 persons) (13) . . . . 2,966,505 5.9%
- -----------
</TABLE>
*Less than 1%
(1) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock.
4
<PAGE> 8
(2) Includes 4,352,000 shares of Common Stock owned by investment funds (the
"Funds") managed by Fidelity Management & Research Company, a wholly-owned
subsidiary of FMR Corp. and an investment adviser registered under the
Investment Advisers Act of 1940. Edward C. Johnson 3d (Chairman of FMR
Corp.), FMR Corp. and the Funds each has sole power to dispose of
4,341,000 shares owned by the Funds. Fidelity International Limited
("FIL"), FMR Corp. and Fidelity American Special Situations Trust
("FASST") (an English subsidiary of FIL) each has power to vote and to
dispose of 11,000 shares held by FASST. Also includes 1,058,200 shares of
Common Stock owned by Fidelity Management Trust Company. Edward C.
Johnson 3d and FMR Corp. each have sole power to dispose of these shares
and sole power to vote 671,300 shares. The power to vote 386,900 shares
has been retained by institutional accounts for whom Fidelity Management
Trust Company acts as an investment manager. Also includes 56,800 shares
over which Mr. Johnson has sole voting and dispositive power. This
information was determined as of January 31, 1997 from Schedule 13G/A
dated February 7, 1997, as filed by FMR Corp. with the Securities and
Exchange Commission.
(3) Pilgrim Baxter & Associates Ltd., has shared voting power and sole
dipositive power with respect to such shares. This information was
determined as of February 28, 1997 from written notification dated March 3,
1997 from Pilgrim Baxter & Associates, Ltd.
(4) Includes 1,055,140 shares held by the Carreker Family Trust and 400 shares
owned directly. Also includes 31,000 shares held by the Arbutus
Educational Trust, a charitable remainder trust of which Mr. Carreker is
the sole trustee, and 373,829 shares issuable pursuant to options that are
exercisable by Mr. Carreker within 60 days of February 28, 1997.
(5) Represents 10,000 shares issuable pursuant to options that are exercisable
by Ms. Engel within 60 days of February 28, 1997.
(6) Includes 451,252 shares held by the Fogelsong Family Trust. Also includes
6,000 shares issuable pursuant to options that are exercisable by Mr.
Fogelsong within 60 days of February 28, 1997.
(7) Includes 30,000 shares held by the Patterson Family Trust. Also includes
6,000 shares issuable pursuant to options that are exercisable by Mr.
Patterson within 60 days of February 28, 1997.
(8) Represents 24,000 shares issuable pursuant to options that are exercisable
by Mr. Peth within 60 days of February 28, 1997.
(9) Includes 189,148 shares issuable pursuant to options that are exercisable
by Mr. Haar within 60 days of February 28, 1997.
(10) Includes 31,248 shares issuable pursuant to options that are exercisable
by Mr. Keller within 60 days of February 28, 1997.
(11) Includes 114,163 shares issuable pursuant to options that are exercisable
by Mr. Speas within 60 days of February 28, 1997.
(12) Includes 25,466 shares issuable pursuant to options that are exercisable
by Mr. Miller within 60 days of February 28, 1997.
(13) Includes 1,105,769 shares issuable pursuant to options that are
exercisable by all directors and executive officers within 60 days of
February 28, 1997.
5
<PAGE> 9
EXECUTIVE COMPENSATION
The table immediately following presents the compensation of the Chief
Executive Officer (the "CEO") and the four other most highly compensated
executive officers for the last fiscal year (the group of five individuals
collectively referred to hereinafter as the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
----------------------
Annual Compensation Awards
------------------- ------
Securities
Underlying All Other
Name and Principal Position Year Salary Bonus Options (1) Compensation (2)
- --------------------------- ---- ------ ----- ----------- ----------------
<S> <C> <C> <C> <C> <C>
James R. Carreker . . . . . . . . . 1996 $254,021 $203,123 60,000 $4,590
Chairman and 1995 $234,480 $183,625 120,000 $4,590
Chief Executive Officer 1994 $210,000 $189,247 160,000 $2,538
Dennis L. Haar . . . . . . . . . . 1996 $221,397 $145,001 80,000 $5,178
President and 1995 $188,777 $145,741 100,000 $4,590
Chief Operating Officer 1994 $155,769 $122,447 60,000 $2,610
Eric J. Keller (3) . . . . . . . . 1996 $215,132 $ 96,011 100,000 $5,397
Vice President, Finance and 1995 - - - -
Chief Financial Officer 1994 - - - -
R. Dixon Speas, Jr. . . . . . . . 1996 $162,551 $119,831 13,000 $4,590
Vice President, International 1995 $156,001 $ 92,644 40,000 $5,594
1994 $139,992 $ 92,928 40,000 $2,610
Larry S. Miller (4) . . . . . . . 1996 $128,392 $114,211 12,000 $4,590
Vice President, North America 1995 $110,331 $ 31,264 80,000 $2,417
1994 - - - -
- -----------
</TABLE>
(1) No stock appreciation rights were granted in 1996, 1995 or 1994.
(2) Amounts shown for 1996 include term life insurance premiums of $90 ($678
for Mr. Haar and $897 for Mr. Keller) paid by the Company and matching
contributions of $4,500 to 401(k) savings accounts. Amounts shown for
1995 include term life insurance premiums of $90 ($1,094 for Mr. Speas and
$83 for Mr. Miller) paid by the Company and matching contributions of
$4,500 to 401(k) savings accounts ($2,334 for Mr. Miller). Amounts shown
for 1994 include term life insurance premiums of $360 paid by the Company
and matching contributions of $2,250 ($2,178 for Mr. Carreker) to 401(k)
savings accounts.
(3) Mr. Keller joined the Company on January 15, 1996. Had he been employed
for all of the year ended December 31, 1996, his annual salary would have
been approximately $225,000.
(4) Mr. Miller joined the Company on January 16, 1995. Had he been employed
for all of the year ended December 31, 1995, his annual salary would have
been approximately $115,000.
6
<PAGE> 10
The Company's 1989 Stock Option Plan provides for the grant of options to
the CEO and other employees of the Company. The grants made during 1996 were
"incentive stock options" to the extent allowable under Section 422 of the
Internal Revenue Code and were granted at a price equal to the fair market
value of the Company's Common Stock on the date of grant. Such options
typically expire ten years from the date of grant. The following table
presents stock option grants made during 1996 to the Named Executive Officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN 1996
INDIVIDUAL GRANTS
------------------------------------------------------------
POTENTIAL
% OF TOTAL REALIZABLE VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES
SECURITIES GRANTED TO OF STOCK APPRECIATION
UNDERLYING EMPLOYEES EXERCISE OR FOR OPTION TERM (4)
OPTIONS IN FISCAL BASE PRICE EXPIRATION -------------------
NAME GRANTED (1)(2) YEAR (3) PER SHARE DATE 5% 10%
- ---- -------------- -------- --------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
James R. Carreker . . 60,000 2.3% $24.75 6/27/06 $ 933,909 $2,366,708
Dennis L. Haar . . . 80,000 3.1% $24.75 6/27/06 $1,245,211 $3,155,610
Eric J. Keller . . . 100,000 3.9% $16.31 1/15/06 $1,025,884 $2,599,792
R. Dixon Speas, Jr. . 13,000 0.5% $24.75 6/27/06 $ 202,347 $ 512,787
Larry S. Miller . . . 12,000 0.5% $24.75 6/27/06 $ 186,782 $ 473,342
- -----------
</TABLE>
(1) Options to purchase the Company's Common Stock granted pursuant to the
Company's 1989 Stock Option Plan. Of the above grants, the following were
nonstatutory stock option grants: 59,700 for Mr. Carreker, 77,044 for Mr.
Haar, 87,202 for Mr. Keller, 10,602 for Mr. Speas and 7,350 for Mr.
Miller. No stock appreciation rights were granted during 1996.
(2) Options become exercisable at the rate of 25% on the first anniversary of
the grant date, and 2.0833% each month thereafter.
(3) The Company granted options representing 2,512,000 shares to employees in
1996. There were no SARs granted to employees in 1996.
(4) The 5% and the 10% assumed rates of appreciation are mandated by the rules
of the Securities and Exchange Commission and do not represent the
Company's estimate or projection of the future Common Stock price.
The following table presents information on stock options exercised during
1996 and the value of all stock options held on December 31, 1996 for the Named
Executive Officers.
AGGREGATED OPTION EXERCISES IN 1996 AND
DECEMBER 31, 1996 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS (1) OPTIONS (1)(2)
SHARES AT DECEMBER 31, 1996 AT DECEMBER 31, 1996
ACQUIRED VALUE -------------------- --------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James R. Carreker . . - - 344,996 255,004 $9,269,224 $4,798,268
Dennis L. Haar . . . 17,000 $304,188 191,164 207,936 $4,903,689 $3,370,998
Eric J. Keller . . . - - - 100,000 - $1,543,750
R. Dixon Speas, Jr. . 22,000 $440,965 122,662 88,338 $3,176,682 $1,842,351
Larry S. Miller . . . 8,330 $130,977 19,265 64,405 $ 384,791 $1,173,962
- -----------
</TABLE>
(1) No stock appreciation rights were exercised or outstanding during 1996.
(2) Based on the closing sale price of the Company's Common Stock as reported
on the Nasdaq Stock Market on December 31, 1996 of $31.75 per share.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings,
7
<PAGE> 11
including this Proxy Statement, in whole or in part, the following report and
the Performance Graph below shall not be incorporated by reference into any
such filings.
COMPENSATION COMMITTEE REPORT
The Company's executive compensation policies are determined by the
Compensation Committee of the Board of Directors (the "Committee"). The
Committee is composed of two non-employee directors. The Committee meets at
least once a year to establish the compensation program for the next fiscal
year and to evaluate how effectively the program is meeting its objectives.
Additionally, the Committee may hold special meetings to approve the
compensation program of a newly hired executive or of an executive whose scope
of responsibility has significantly changed.
The objective of the Company's executive compensation program is to align
executive compensation with the Company's business objectives and performance,
and to enable the Company to attract, retain and reward qualified executives
who contribute to the long-term business success of the Company. The Company's
executive compensation program is based on the same four basic principles that
guide compensation decisions for all employees of the Company:
- Compensate for demonstrated and sustained performance
- Compensate competitively
- Strive for equity and fairness in the administration of compensation
- Ensure that each employee understands how his or her compensation is
determined
The Company believes in compensating its executives for demonstrated and
sustained levels of performance in their individual jobs. The achievement of
higher levels of performance and contribution are rewarded by higher levels of
compensation. In order to ensure that it compensates its executives
competitively, the Company regularly compares its compensation practices to
those of other companies of comparable size within similar industries. Through
the use of independent compensation surveys and analyses, employee compensation
training, and periodic pay reviews, the Company strives to ensure that
compensation is administered equitably and fairly and that a balance is
maintained between how executives are paid relative to other employees and
relative to executives with similar responsibilities in comparable companies.
In December each year, the Committee meets with the CEO and the Vice
President, People Programs and Services regarding potential executive
compensation for the next five years and proposals for executive compensation
for the next operating year. Compensation plans are based on compensation
surveys and assessments as to the demonstrated and sustained performance of the
individual executives. The Committee then independently reviews the individual
performance for the CEO and the Company, and develops the annual compensation
plan for the CEO based on competitive compensation data and the Committee's
evaluation of the CEO's demonstrated and sustained performance and its
expectation as to his future contributions in leading the Company. The
Committee presents for adoption its findings on the compensation of each
executive at a subsequent meeting of the full Board of Directors.
During 1996, the Company's executive compensation program included these
key components:
(1) Base Salary
The Company establishes the base salaries of its executives based on
competitive market rates derived through comparisons with companies of similar
size engaged in similar industries.
(2) Cash-Based Incentives
All executives of the Company participate in a cash incentive program under
which payment is contingent upon the achievement of specific Company-wide goals
in the areas of customer satisfaction, operating profit, revenue performance,
and cash management. The CEO and five vice presidents are eligible for
participation in a second cash incentive program that focuses on the
achievement of specific individual performance goals that are measured
objectively, such as bookings, profit contribution, new product introductions,
and quality standards, as well as performance goals that are measured
subjectively, such as leadership effectiveness. Aspect's cash incentives are
structured so that the total of base salary and cash incentives, when taken
together, will compensate executives at market levels when Company-wide and
individual goals are achieved. The cash incentive elements are sensitive to
performance achievement versus plan, and payment of these cash bonuses is
designed to range from no bonus payment when performance is well below
established targets, to bonus amounts somewhat above market levels when
performance is well above established targets.
8
<PAGE> 12
(3) Equity-Based Incentives
Stock options are an important component of the total compensation of
executives and are designed to align the interests of each executive with those
of the shareholders. Each year, the Committee considers the grant to
executives of stock option awards under the Company's 1989 Stock Option Plan.
The Committee believes that stock options provide added incentive for
executives to influence the strategic direction of the Company and to create
and grow value for customers, shareholders and employees. The option grants
utilize four-year vesting periods to encourage executives to continue
contributing to the Company. The number of stock option shares that are
granted to individual executives is, in part, based on independent survey data
reflecting competitive stock option practices.
CEO Compensation
The CEO's base salary for 1996 was based on competitive market rates and
the Committee's review of his past performance. Effective January 1997, the
Committee increased the CEO's base salary to keep pace with salaries being paid
to the CEOs of comparably sized companies engaged in similar industries. When
considering the CEO's cash-based incentives, it was the Committee's
determination that under the leadership of the CEO, the Company progressed
above plan in 1996. By virtually every measure including bookings, revenues,
operating income, net income, return on assets and attainment of specific
strategic goals, the Company achieved at or above plan. The Committee was
satisfied that the Company had progressed in directions both financially and
strategically that were consistent with the Company's goal of creating and
growing value for customers, employees, shareholders, business partners, and
the communities in which the Company's employees live and work.
The 1993 Omnibus Budget Reconciliation Act ("OBRA") established a
$1,000,000 ceiling for deductions taken for tax years beginning on or before
January 1, 1994, where deductions are for compensation paid to any of the five
most highly compensated executive officers identified in the Company's proxy
statement (although performance-related compensation as defined by OBRA in
excess of $1,000,000 will remain deductible). Because none of the compensation
figures for the five most highly compensated executive officers identified in
the Company's proxy statement approached the limitation, there has been no
requirement on the part of the Committee to use any of the available exemptions
from the deduction limit. However, the Committee remains aware of the
existence of these limitations, and the available exemptions, and will address
the issue of deductibility when and if compensation levels warrant it in the
future.
COMPENSATION COMMITTEE
Debra J. Engel
James L. Patterson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, the Compensation Committee was comprised of directors Engel
and Patterson. Neither of these persons has ever been an officer or employee
of the Company or any of its subsidiaries, nor were there any compensation
committee interlocks or other relationships during 1996 requiring disclosure
under Item 402(j) of Regulation S-K of the Securities and Exchange Commission.
9
<PAGE> 13
COMPANY STOCK PRICE PERFORMANCE
The following graph compares cumulative total shareholder returns for the
Company during the preceding five years to the S&P 500 Stock Index and the S&P
High Technology Composite Index.
COMPARISON OF CUMULATIVE TOTAL RETURN* SINCE DECEMBER 1991
Aspect Telecommunications Corporation, S&P High Technology Composite Index and
the S&P 500 Index
[CHART]
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Aspect Telecommunications Corporation 100 152 439 348 696 1,319
S&P High Technology Composite Index 100 110 135 154 222 319
S&P 500 Index 100 104 112 110 148 178
</TABLE>
* Assumes that the value of the investment in Aspect Telecommunications
Corporation Common Stock and each index was $100 on December 31, 1991, and that
all dividends were reinvested.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. Officers, directors and greater than ten percent shareholders
are required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely upon review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1996 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with.
10
<PAGE> 14
1996 EMPLOYEE STOCK OPTION PLAN INFORMATION
In October 1996, the Board of Directors adopted the 1996 Employee Stock
Option Plan and authorized 2,000,000 shares, solely for the grant of
nonqualified stock options to employees and consultants who are not executive
officers or directors of the Company. Under the terms of the 1996 Employee
Stock Option Plan, options must be granted at a price equal to 100% of fair
market value of the Company's stock on the date of grant. Options are
typically granted with a four-year vesting schedule and typically expire 30
days after the optionee's termination date or ten years after grant date,
whichever is sooner. The maximum number of shares that may be granted to any
individual during a year is 250,000 shares.
The Company continues to maintain the 1989 Stock Option Plan, which permits
option grants to all employees, including executive officers. Beginning
January 1997, the Company anticipates that option grants under the 1989 Option
Plan will be made primarily to executive officers. As of January 1, 1997,
approximately 2,377,000 shares were available for grant under the 1989 Stock
Option Plan.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals by shareholders of the Company that are intended to be presented
by such shareholders at the Company's 1998 Annual Meeting of Shareholders must
be received by the Company no later than November 21, 1997 in order that they
may be included in the proxy statement and form of proxy relating to that
meeting.
OTHER MATTERS
The Company knows of no other matters to be submitted to shareholders at
the meeting. If any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed form of Proxy to vote the shares
they represent as the Board of Directors may recommend.
THE BOARD OF DIRECTORS
Dated: March 21, 1997
11
<PAGE> 15
DETACH HERE
PROXY [LOGO OF ASPECT TELECOMMUNICATIONS APPEARS HERE]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ASPECT TELECOMMUNICATIONS CORPORATION
1997 ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of Aspect Telecommunications Corporation, a
California corporation, hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement, each dated March 21, 1997, and
hereby appoints James R. Carreker, Eric J. Keller and Craig W. Johnson, or any
of them, proxies and attorneys-in-fact, with full power to each of
substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the 1997 Annual Meeting of Shareholders of Aspect
Telecommunications Corporation to be held on April 29, 1997 at 3:30 p.m., at
the Four Seasons Hotel, 57 East 57th Street, New York, New York, and at any
adjournments(s) thereof, and to vote all shares of Common Stock that the
undersigned would be entitled to vote if then and there personally present, on
the matters set forth on the reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF ALL LISTED DIRECTORS, FOR THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT
AUDITORS, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
----------------
SEE REVERSE SIDE
----------------
<PAGE> 16
DETACH HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
1. ELECTION OF DIRECTORS (Page 2).
Nominees: James R. Carreker; Debra J. Enger; Norman A. Fogelsong;
James L. Patterson; John W. Peth.
FOR* WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[ ] [ ]
FOR ALL EXCEPT THE FOLLOWING NOMINEES:
--------------------------------------
2. APPOINTMENT OF DELOITTE & FOR AGAINST ABSTAIN
TOUCHE LLP AS THE INDEPENDENT [ ] [ ] [ ]
AUDITORS (Page 4).
and, in their discretion, upon such other matter or matters which may
properly come before the meeting and any adjournment(s) thereof.
MARK HERE
FOR ADDRESS [ ]
CHANGE AND
NOTE AT LEFT
* FOR all nominees listed or, in the discretion of such proxies, for such
other persons as may be nominated if any of such nominees does not or
cannot stand for election (except as indicated).
(This Proxy should be marked, dated, signed by the shareholder(s) exactly
as his or her name appears hereon, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If
shares are held by joint tenants or as community property, both should
sign.)
Signature: _____________ Date: ________ Signature: _____________ Date: ________
