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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
ACT TELECONFERENCING, 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)(4) 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:
ACT TELECONFERENCING, INC.
1658 Cole Boulevard, Suite 130
Golden, Colorado 80401
303-233-3500 or 800-228-2554
PROXY STATEMENT AND NOTICE OF ANNUAL MEETING
First Sent to Shareholders on May 16, 1997
GENERAL INFORMATION
TIME AND PLACE OF MEETING
This Proxy Statement and Notice of Meeting is furnished in connection
with the solicitation of proxies by the Board of Directors of ACT
Teleconferencing, Inc. (the "Company"), to be used at the annual meeting of
shareholders (the "Annual Meeting"), to be held at 3:30 PM Mountain Time on
Wednesday, June 18, 1997, at the Denver West Marriot Hotel, 1717 Denver West
Parkway, Golden, Colorado 80401, for the purposes set forth below. The principal
executive offices of ACT Teleconferencing, Inc. are located at 1658 Cole
Boulevard, Suite 130, Golden, Colorado 80401.
ABOUT THIS PROXY
This proxy is solicited by the Company. The cost of this solicitation
and of conducting the meeting will be borne by the Company. The person giving
this proxy has the power to revoke it by attending the meeting and voting his or
her shares at that time.
PROPOSALS FOR 1998 ANNUAL MEETING OF SHAREHOLDERS
The Company expects to hold its 1998 annual meeting of shareholders on
or about June 26, 1998. All proposals of shareholders intended to be presented
at the 1998 annual meeting, for inclusion in the Company's proxy statement
relating to that meeting, must be received by the Company no later than February
26, 1998.
ACTION TO BE TAKEN UNDER PROXY
SHARES WILL BE VOTED AS INSTRUCTED IN THE ACCOMPANYING PROXY ON EACH
MATTER SUBMITTED TO THE VOTE OF SHAREHOLDERS. IF ANY DULY-EXECUTED PROXY IS
RETURNED WITHOUT VOTING INSTRUCTIONS, THE PERSONS NAMED AS PROXIES THEREON
INTEND TO VOTE ALL SHARES REPRESENTED BY SUCH PROXY AS FOLLOWS:
1. ELECTION OF DIRECTORS
The Articles of Incorporation, as amended, set the maximum number of
directors at nine with the exact number within limitation of nine to be
determined from time to time by the Board. Each class is elected for a term
expiring at the annual meeting of shareholders in the third year after the
election. The Board has established the size of the Board at six members (i.e.,
three classes of two members each). Currently there are five members and one
vacancy.
Gerald D. Van Eeckhout and Ronald J. Bach were elected as Class I
directors in 1995 to serve a 3 year term expiring 1998. James F. Seifert was
elected as a Class II director for a 2 year terming expiring 1997. In 1996,
Carolyn R. Van Eeckhout and Donald L. Sturtevant were elected as Class III
directors to serve a 3 year period expiring 1999.
James F. Seifert has been nominated for election as a Class II director
to serve a 3 year term expiring in the year 2000. There is no nominee for the
vacancy in the other Class II directorship. Management has no reason to believe
that any nominee will not serve if elected, discretionary authority is however
reserved to vote for a substitute, should any nominee be unable or unwilling to
serve.
The Board of Directors recommends a vote FOR James F. Seifert to serve
as a Class II director.
2. APPROVAL OF STOCK OPTION PLAN OF 1996
In 1991, the Company adopted its Stock Option Plan of 1991 (the "1991
Plan"), which authorized the grant of options on 400,000 shares of the Company's
common stock. All options in the 1991 Plan have been granted. In order to
continue to provide the incentives to officers, key employees, and consultants
provided by stock options, the Board recommended the adoption of the Stock
Option Plan of 1996 (the "1996 Plan") subject to approval by the shareholders at
the annual meeting and made grants of options to purchase 150,000 shares
conditional on such approval. See Executive Compensation--Stock Options. The
1996 Plan, if so approved, will authorize the grant of 400,000 options.
Summary of the Provisions of the Stock Option Plan of 1996
In August 1996, the Board of Directors, subject to obtaining
stockholder approval, approved the 1996 Plan. The following discussion describes
the features of the 1996 Plan.
Purpose
The purpose of the 1996 Plan is to enhance stockholder investment by
attracting, retaining, and motivating directors, officers, key employees, and
consultants of ACT Teleconferencing, Inc. (the "Company"), and to encourage
stock ownership by such persons by providing them with a means to acquire a
proprietary interest in the Company.
Administration
The 1996 Plan is administered by a committee (the "Committee") of two
or more directors who are "disinterested persons" within the meaning of Rule
16b-3 under the Exchange Act. The Personnel and Compensation Committee of the
Board of Directors currently serves as the Committee that administers the 1996
Plan, all of whose members are "disinterested directors" for purposes of
Exchange Act Rule 16b-3 and "outside directors" for purposes of Section 162(m)
of the Internal Revenue Code of 1986, as amended, (the "Code"). Subject to the
provisions of the 1996 Plan, the Committee has the exclusive power to make
awards under the 1996 Plan, to determine when and to whom awards will be
granted, and the form, amount and other terms and conditions of each award. The
Committee has the authority to interpret the 1996 Plan and any award or
agreement made under the 1996 Plan, to establish, amend, waive and rescind any
rules and regulations relating to the administration of the 1996 Plan, to
determine the terms and provisions of any agreements entered into under the 1996
Plan (not inconsistent with the 1996 Plan), and to make all other determinations
necessary or advisable for the administration of the 1996 Plan. The Committee
may delegate all or part of its responsibilities under the 1996 Plan to persons
who are not "disinterested persons" within the meaning of Exchange Act Rule
16b-3 for purposes of determining and administering awards solely to employees
who are not then subject to the reporting requirements of Section 16 of the
Exchange Act.
Notwithstanding the foregoing, the granting, terms, conditions and
eligibility requirements of awards granted to outside directors (as defined in
the 1996 Plan) are governed solely by the provisions of the 1996 Plan pertaining
thereto, and the Committee has no discretion with respect to the granting of
such awards or to alter or amend any terms, conditions or eligibility
requirements of such awards to outside directors.
Number of Shares and Eligibility
All employees of the Company and its affiliates are eligible to receive
awards under the 1996 Plan at the discretion of the Committee. Outside directors
will receive grants of non-statutory options as set forth under "Types of
Awards--Outside Director Options" below. Awards other than incentive stock
options also may be awarded by the Committee to individuals who are not
employees or outside directors but who provide services to the Company or its
affiliates in the capacity of an independent contractor. The Company currently
has approximately 100 employees eligible to receive awards under the 1996 Plan.
The 1996 Plan provides that all awards are to be evidenced by written
agreements containing the terms and conditions of the awards. Such agreements
are subject to amendment, including unilateral amendments by the Company (with
the approval of the Committee) unless such amendments are deemed by the
Committee to be materially adverse to the recipient and are not required as a
matter of law. Any shares of ACT Common Stock subject to an award under the 1996
Plan which are not used because the terms and conditions of the award are not
met may again be used for an award under the 1996 Plan. However, shares of ACT
Common Stock with respect to which a stock appreciation right has been exercised
(in cash and/or in stock) may not again be awarded under the 1996 Plan.
Types of Awards
The types of awards that may be granted under the 1996 Plan include
incentive and non-statutory stock options, stock appreciation rights, restricted
stock, performance units and other stock-based awards (awards of, or based on,
stock other than options, stock appreciation rights, restricted stock or
performance units). Subject to certain restrictions applicable to outside
director options and incentive stock options, awards will be exercisable by the
recipients at such times as are determined by the Committee.
In addition to the general characteristics of all of the awards
described in this Proxy Statement, the basic characteristics of awards that may
be granted under the 1996 Plan are as follows:
INCENTIVE AND NON-STATUTORY STOCK OPTIONS. Options may be granted to
recipients at such exercise prices as the Committee may determine. Stock options
may be granted and exercised at such times as the Committee may determine,
except that (1) no incentive stock option may be granted at less than fair
market value, (2) no incentive stock options may be granted more than ten years
after the effective date of the 1996 Plan, (3) an incentive stock option shall
not be exercisable more than ten years after the date of grant, (4) the
aggregate fair market value of the shares of Company common stock with respect
to which incentive stock options may first become exercisable in any calendar
year for any employee may not exceed $100,000 under the 1996 Plan or any other
plan of the Company, and (5) no non-statutory stock option may be granted at
less than 85 percent of fair market value. Additional restrictions apply to an
incentive stock option granted to an individual who beneficially owns more than
ten percent of the combined voting power of all classes of stock of the Company.
The purchase price payable upon exercise of options may be payable in
cash, or through a reduction of the number of shares of Common stock of the
Company delivered to the participant upon exercise of the option or by
delivering stock already owned by the participant (where the fair market value
of the shares of Common stock of the Company withheld or delivered on the date
of exercise is equal to the option price of the stock being purchased), or in a
combination of cash and such stock, unless otherwise provided in the applicable
award agreement. To the extent permitted by law, the participants may
simultaneously exercise options and sell the stock purchased upon such exercise
pursuant to brokerage or similar relationships and use the sale proceeds to pay
the purchase price.
STOCK APPRECIATION RIGHTS. The Committee may, under such terms and
conditions as it deems appropriate, and in its sole discretion, authorize the
surrender by an employee of the Company, of all or part of an unexercised option
and authorize a payment in consideration thereof of an amount equal to the
difference obtained by subtracting the exercise price of the Shares then subject
to exercise under such option from the fair market value of the stock
represented by such Shares on the date of surrender, provided that the Committee
determines that such settlement is consistent with the purpose of the Plan and
provided, further, that no such right shall be exercisable during the six (6)
month period following the grant thereof.
Payment may be made in Shares valued at their fair market value on the
date of surrender of such option or in cash, or partly in Shares and partly in
cash. Acceptance of such surrender and the manner of payment shall be in the
discretion of the Committee.
Transferability
During the lifetime of a participant to whom an award is granted, only
such participant (or such participant's legal representative) may exercise an
option or stock appreciation right or receive payment with respect to
performance units or any other award. No award may be sold, assigned,
transferred, exchanged or otherwise encumbered (other than pursuant to a
qualified domestic relations order as defined in the Code or Title I of ERISA or
the rules thereunder), and any attempt to do so will not be effective, except by
will or the laws of descent and distribution.
Acceleration of Vesting
In the event of the disability or death of an optionee, any option or
portion thereof held by such individual or his or her legal representative that
was not previously exercisable becomes immediately exercisable in full if the
disabled or deceased individual was continuously employed by the Company or a
parent or subsidiary thereof between the date such option was granted and the
date of such disability or death.
Duration, Adjustments, Modifications, Termination
The 1996 Plan will remain in effect until all stock subject to it is
distributed or all awards have expired or lapsed, whichever occurs later, or the
1996 Plan is terminated as described below.
In the event of a fundamental change, recapitalization,
reclassification, stock dividend, stock split, stock combination or other
relevant change, the Committee has the discretion to adjust the number and type
of shares of Common stock of the Company available for awards or the number and
type of shares of Common stock of the Company and amount of cash subject to
outstanding awards, the option exercise price of outstanding options, and
outstanding awards of performance units and payments with regard thereto.
Adjustments in performance targets and payments on performance units are also
permitted upon the occurrence of such events as may be specified in the related
agreements, which may include a change in control.
The 1996 Plan also gives the Board the right to terminate, suspend or
modify the 1996 Plan, except that amendments to the 1996 Plan are subject to
stockholder approval if needed to comply with Exchange Act Rule 16b-3 or
applicable provisions of the Code.
Under the 1996 Plan, the Committee may cancel outstanding options and
stock appreciation rights generally in exchange for cash payments or substitute
options or rights to the recipients upon the occurrence of a fundamental change.
Summary of Federal Income Tax Consequences
The Company has been advised by its counsel that awards made under the
1996 Plan generally will result in the following tax events for United States
citizens under current United States federal income tax laws.
INCENTIVE STOCK OPTIONS. A recipient will realize no taxable income,
and the Company will not be entitled to any related deduction, at the time an
incentive stock option is granted under the 1996 Plan. If certain statutory
employment and holding period conditions are satisfied before the recipient
disposes of shares of Common stock of the Company acquired pursuant to the
exercise of such an option, then no taxable income will result upon the exercise
of such option and the Company will not be entitled to any deduction in
connection with such exercise. Upon disposition of the shares of Common stock of
the Company after expiration of the statutory holding periods, any gain or loss
realized by a recipient will be a capital gain or loss. The Company will not be
entitled to a deduction with respect to a disposition of the shares of Common
stock of the Company by a recipient after the expiration of the statutory
holding periods.
Except in the event of death, if shares of Common stock of the Company
acquired by a recipient upon the exercise of an incentive stock option are
disposed of by such recipient before the expiration of the statutory holding
periods (a "disqualifying disposition"), such recipient will be considered to
have realized as compensation, taxable as ordinary income in the year of
disposition, an amount, not exceeding the gain realized on such disposition,
equal to the difference between the exercise price and the fair market value of
the shares of Common stock of the Company on the date of exercise of the option.
The Company will be entitled to a deduction at the same time and in the same
amount as the recipient is deemed to have realized ordinary income. Any gain
realized on the disposition in excess of the amount treated as compensation or
any loss realized on the disposition will constitute capital gain or loss,
respectively. If the recipient pays the option price with shares of Common stock
of the Company that were originally acquired pursuant to the exercise of an
incentive stock option and the statutory holding periods for such shares of
Common stock of the Company have not been met, the recipient will be treated as
having made a disqualifying disposition of such shares of Common stock of the
Company, and the tax consequences of such disqualifying disposition will be as
described above.
The foregoing discussion applies only for regular tax purposes. For
alternative minimum tax purposes, an incentive stock option will be treated as
if it were a non-statutory stock option, the tax consequences of which are
discussed below.
NON-STATUTORY STOCK OPTIONS. A recipient will realize no taxable
income, and the Company will not be entitled to any related deduction, at the
time a non-statutory stock option is granted under the 1996 Plan. At the time of
exercise of a non-statutory stock option, the recipient will realize ordinary
income, and the Company will be entitled to a deduction, equal to the excess of
the fair market value of the stock on the date of exercise over the option
price. Upon disposition of the shares of Common stock of the Company, any
additional gain or loss realized by the recipient will be taxed as a capital
gain or loss.
STOCK APPRECIATION RIGHTS. Generally (1) the recipient will not realize
income upon the grant of a stock appreciation right, (2) the recipient will
realize ordinary income, and the Company will be entitled to a corresponding
deduction, in the year that cash, shares of Common stock of the Company or a
combination of cash and shares of Common stock of the Company are delivered to
the recipient upon exercise of a stock appreciation right and (3) the amount of
such ordinary income and deduction will be the amount of cash received plus the
fair market value of the shares of Common stock of the Company received on the
date of issuance. The federal income tax consequences of a disposition of
unrestricted shares of Common stock of the Company received by the recipient
upon exercise of a stock appreciation right are the same as described below with
respect to a disposition of unrestricted shares of Common stock of the Company.
WITHHOLDING. The 1996 Plan permits the Company to withhold from awards
an amount sufficient to cover any required withholding taxes. In lieu of cash, a
participant may elect to cover withholding obligations through a reduction in
the number of shares of Common stock of the Company to be delivered to such
participant or by delivery of shares of Common stock of the Company already
owned by the participant. Unless otherwise permitted by the Committee, the use
of stock to satisfy withholding obligations is subject to certain restrictions
if the participant is subject to the reporting requirements of Section 16 of the
Exchange Act.
Board of Directors' Recommendation
By unanimous consent as of August 16, 1996, subject to stockholder
approval, the Board of Directors adopted the 1996 Plan subject to approval by
the stockholders at the 1997 Annual Meeting.
The Board of Directors is submitting the entire 1996 Plan for approval
by the stockholders. Such submission is necessary for the Company to comply with
the requirements of Section 162(m) of the Internal Revenue Code of 1986, as
amended ("Section 162(m)"). Generally, Section 162(m) prohibits a publicly
traded corporation from deducting compensation in excess of $1 million per
taxable year paid to any person who, on the last day of the taxable year, is the
chief executive officer or one of the four most highly compensated executive
officers other than the chief executive officer. Under Section 162(m),
compensation that qualifies as "performance-based compensation" is not counted
for purposes of the $1 million limit. In addition to other requirements, Section
162(m) requires that a compensation plan be submitted to the stockholders of a
company for approval to be considered as "performance-based compensation."
Currently, the Company does not pay compensation to any applicable person such
that the compensation would be affected by the requirements of Section 162(m).
The Board of Directors, however, believes it to be in the best interests of the
long-term growth and performance of the Company to maintain flexibility with
respect to compensation, and, therefore, to comply with Section 162(m).
The Board of Directors recommends a vote FOR approval of the 1996 Plan
discussed in this Proxy Statement.
MATTERS NOT REQUIRED TO BE SUBMITTED
The Board may consider other appropriate matters that come to the
attention of the Board between the time of preparation of this proxy statement
and the date of the Annual Meeting. The Board does not anticipate that any such
matters will arise.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Board of Directors has fixed the close of business on April 30,
1997 as the record date for the determination of shareholders entitled to notice
of and entitled to vote at the Annual Meeting. As of that date there were
2,939,930 shares of common stock issued and outstanding (the "Shares"). Each
Share is entitled to one vote at the Annual Meeting.
The following table sets forth, as of April 30, 1997, information with
respect to the beneficial ownership of the Common Stock of the Company by (i)
each person who, to the knowledge of the Company, owned more than five percent
of such stock, (ii) each director or nominee for director, (iii) each executive
officer, and (iv) all directors and executive officers as a group. Unless
otherwise noted, shares are subject to the sole voting and investment power of
the indicated person.
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS OF NATURE OF
BENEFICIAL OWNER BENEFICIAL PERCENT OF
------------------- OWNERSHIP(1) OUTSTANDING SHARES
------------ ------------------
<S> <C> <C>
Gerald D. and Carolyn R. Van Eeckhout(2)(3)(4)(12)... 616,583 20.97%
Charles T. Stout(2)(5)............................... 38,055 1.29%
James F. and Nancy Seifert(6)........................ 215,200 7.31%
Ronald J. Bach(2)(7)(12)............................. 66,500 2.24%
Susan Y. Ambrose(2)(8)............................... 27,500 0.93%
John W. Hill(2)(9)................................... 101,250 3.39%
Edward G. Monty(10).................................. 154,200 5.25%
Donald L. Sturtevant(11)............................. 4,000 0.14%
Gene Warren(2) -- 0.00%
David Holden(2) -- 0.00%
Gavin J. Thomson(2) -- 0.00%
All directors and executive officers as a
group(4)(5)(6)(7)(8)(9)(12).......................... 1,069,088 34.96%
</TABLE>
- ------------
(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission, and includes general voting power
and/or investment power with respect to securities. Shares of Common
Stock subject to option or warrants that are currently exercisable or
exercisable within 60 days from April 30, 1997, are deemed outstanding
for purposes of computing the percentage of the person holding such
options or warrants, but are not deemed outstanding for purposes of
computing the percentage of any other person.
(2) Unless otherwise noted the address of each director and executive
officer of the Company is 1658 Cole Boulevard, Suite 162, Golden,
Colorado 80401.
(3) Gerald D. Van Eeckhout and Carolyn R. Van Eeckhout are husband and
wife.
(4) Includes 51,000 shares held directly by Gerald D. Van Eeckhout and
565,583 shares held directly by Carolyn R. Van Eeckhout.
(5) Includes 7,500 shares issuable upon exercise of currently exercisable
options.
(6) Includes 125,000 shares held of record by the Nancy L. Seifert
Management Trust and 75,000 shares held of record by the James L.
Seifert Management Trust, for which trusts Mr. Seifert and Mrs. Seifert
are the co-trustees. Also includes 10,950 shares owned directly by Mr.
Seifert and 3,000 shares issuable upon exercise of currently
exercisable options held by Mr. Seifert. Mr. and Mrs. Seifert are
husband and wife. Their address is 300 Law Building, Cedar Rapids, Iowa
52401.
(7) Includes 33,000 shares issuable upon exercise of currently exercisable
stock options.
(8) Includes 27,500 shares issuable upon exercise of currently exercisable
stock options.
(9) Includes 45,000 shares issuable upon exercise of currently exercisable
stock options.
(10) Mr. Monty's address is 3405 134th St. West, Burnsville, Minnesota
55337.
(11) Includes 2,000 shares issuable upon exercise of currently exercisable
warrants. Mr. Sturtevant's address is 3693 E. Oak Creek Dr., Vadnais
Heights, Minnesota 55127.
(12) Excludes 44,300 shares owned by RLD Enterprises, Inc. ("RLD") which
serve as collateral on a loan to RLD from an investment group headed by
Mr. Bach. Mr. Van Eeckhout and Mr. Bach each own less than 10 percent
of the outstanding common stock of RLD and Mr. Van Eeckhout is one of
RLD's four directors. Messrs. Bach and Van Eeckhout disclaim any
control over or beneficial interest in said 44,300 shares.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
NAME AGE POSITION
- ---- --- --------
Gerald D. Van Eeckhout 56 Chairman of the Board of Directors, Chief
Executive Officer
Carolyn R. Van Eeckhout 58 Director; Vice President, ACT Teleconferencing
Services, Inc.
James F. Seifert 68 Director
Ronald J. Bach 63 Director
Donald L. Sturtevant 59 Director
Gavin J. Thomson 39 Vice President, ACT Teleconferencing, Inc.,
Chief Financial Officer, Treasurer, Secretary
Charles T. Stout 49 Assistant Secretary, Assistant Treasurer
Susan Y. Ambrose 39 Vice President, ACT Teleconferencing
Services, Inc.
Gene Warren 44 Managing Director, ACT Teleconferencing
Services, Inc.
John W. Hill 70 Managing Director, ACT VideoConferencing, Inc.
David Holden 35 Managing Director, ACT Teleconferencing Limited
GERALD D. VAN EECKHOUT, a founder of the Company, has been Chairman of
its Board of Directors and Chief Executive Officer since the Company's formation
in 1989. From 1982 to 1989, Mr. Van Eeckhout was President, Chief Executive
Officer, and a Director of ConferTech International, Inc., a teleconferencing
services and manufacturing company. He received a Bachelor of Science degree
from the University of North Dakota in 1962, and completed the Stanford
Executive Program in 1976. He is a director and Chairman of the Board of Rocky
Mountain Internet, a Nasdaq-listed company. He has also been a national director
of the American Electronic Association and President of the University of North
Dakota Foundation.
CAROLYN R. VAN EECKHOUT, a founder of the Company, serves as Vice
President of ACT Teleconferencing Services, Inc. (a wholly owned subsidiary),
and as a Director of the Company. She has been employed by the Company since its
inception. From 1985 to 1989, she was a self-employed consultant to various
health professionals and the Denver Public School District. She received her
Bachelor's degree in Education from Pennsylvania State University.
JAMES F. SEIFERT, a Director of the Company, has been Chairman and CEO
of James F. Seifert & Sons L.L.C. since 1993. Mr. Seifert was previously
Chairman and CEO of Grafton Group, Inc., doing business as Seifert's, a women's
apparel chain that operated up to 234 stores. James F. Seifert & Sons L.L.C. has
acquired approximately 40 of those stores. Mr. Seifert received his Bachelor of
Science degree in Commerce from the University of North Dakota in 1950. He is a
former President of the University of North Dakota Foundation.
RONALD J. BACH, a Director of the Company, is a certified public
accountant who was employed continuously by the firm of Deloitte and Touche from
1955 until his retirement in 1991 at which time he was partner in charge of its
Bloomington, Minnesota office. He holds a degree in accounting from the
University of Minnesota, and serves as a director of a number of privately held
companies in which he has an ownership interest.
DONALD L. STURTEVANT was elected as a Director of the Company during
1996. Since 1991 he has served as President and CEO of Medivators, Inc., a
medical products corporation located in Eagan, Minnesota. Previously, he held
the positions of CEO and Chairman of the Board of BallistiVet, Inc., from 1988
through 1990. From 1985 through 1987 Mr. Sturtevant was vice president of Alpha
Business Group, Inc., a medical venture management group which he co-founded.
From 1972 to 1985 Mr. Sturtevant held various positions at Medtronic, Inc.,
including Vice President and General Manager of the Instrument Division. Mr.
Sturtevant received a Bachelor of Science degree in Business Administration from
the University of Minnesota in 1966 and is a 1975 graduate of Northwestern
University's International Management Program in Bergenstock, Switzerland.
GAVIN J. THOMSON, Vice President, ACT Teleconferencing, Inc., Chief
Financial Officer, Secretary, and Treasurer joined the Company in February 1997.
Previously, Mr. Thomson served as Managing Director of TEK Corporation, a
consumer electronics company based in Johannesburg, South Africa. Prior to
holding that position he was the Chief Financial Officer of TEK Corporation for
a period of four years. He is a Chartered Accountant (South Africa) and received
his bachelor's and post-graduate degrees in accounting from Natal University,
South Africa; earned his master's degree in Business Administration from the
University of Denver; and completed the Stanford Business School Advanced
Management Course in 1991.
CHARLES T. STOUT held the position of the Company's Treasurer from 1991
until 1997 at which time he was appointed Assistant Secretary and Assistant
Treasurer. From 1985 to 1990, Mr. Stout was Vice President of Finance for
ConferTech International, Inc., an audio teleconferencing service and
manufacturing company. From 1991 to 1992, Mr. Stout held an accounting projects
management position with Capital Associates International, Inc., and from 1992
to 1995, Mr. Stout was engaged as an accountant by contractors of temporary
accounting services to Resolution Trust Corporation. Prior to 1996, Treasurer
was a part-time position; since 1996, Mr. Stout has served as Treasurer on a
full-time basis. He holds a bachelor's degree and a master's degree in
accounting and management science from the University of Colorado.
SUSAN Y. AMBROSE, Vice President of ACT Teleconferencing Services,
Inc., joined the Company in August 1992 and is currently responsible for
managing the strategic business development of the company. Ms. Ambrose was
primarily responsible for establishing and managing the Company's operations in
the Netherlands. From 1989 to 1992, she served as General Manager of Conference
Pros International, a Houston, Texas, based audio teleconferencing service.
GENE WARREN, Managing Director ACT Teleconferencing Services, Inc.
joined the Company in August 1996. Mr. Warren came to the Company with over 20
years of executive experience in telecommunications. He has served as Senior
Vice President in charge of Business Development, Operations and Technology at
ITC Multimedia Conferencing; Director of Technical Services for ConferTech
International; and Senior Director of Technical Support for MCI. Mr. Warren
received a Bachelor of Science degree in Physics and Mathematics from Atlanta
University in 1975. He also holds a Master's degree in Business Administration
from Regis College.
JOHN W. HILL has been with the Company on a full-time basis since April
1995. From 1990 to the present, he has also served as President of ACT Research,
Inc., a part-time position. He has provided consulting services to the Company
and its subsidiaries personally and through Janus Technology Group since 1985.
From 1989 to 1993 he managed US West's data laboratory in Minneapolis, Minnesota
and implemented US West's video teleconferencing applications. He received a
Bachelor of Science degree in Electrical Engineering and Telecommunications from
the University of Edinburgh, Scotland.
DAVID L. HOLDEN has been the Managing Director of ACT Teleconferencing,
Ltd., since 1992. Immediately prior to joining the Company he was employed for
seven years with British Telecom as manager of its audio teleconferencing
service business in London. Mr. Holden received a Bachelor of Science degree in
Business Administration from the University of Wales.
Gerald D. Van Eeckhout and Carolyn R. Van Eeckhout are husband and
wife.
Management of the Company is under the direction of the Board of
Directors. Directors are elected in classes of two members each for three-year
terms for a total of six directors. The Board of Directors is presently composed
of five individuals and has one vacancy. The Board of Directors held 9 meetings
during 1996.
The Company's Board of Directors has a standing Audit Committee and a
standing Personnel and Compensation Committee, which also serves as a nominating
committee. The Audit Committee is responsible for the selection and evaluation
of performance of the Company's outside accountants. The Personnel and
Compensation Committee has the following responsibilities: (1) review executive
performance and compensation; (2) manage stock option grants; and (3) nominate
board members.
The Audit Committee is composed of Ronald Bach as chair, with James
Seifert and Donald Sturtevant as members. The Personnel and Compensation
Committee is composed of James Seifert as chair, with Ronald Bach and Donald
Sturtevant as members. Each of these committees held one meeting during 1996.
The Personnel and Compensation Committee will consider nominees to the
Board of Directors recommended by the Company's shareholders (the
"Shareholders"). A shareholder desiring to submit such a recommendation should
send it in a letter addressed to James Seifert at the Company's address.
Meetings are held periodically, but no less frequently than quarterly,
and are usually conducted by audio teleconference.
The Company's executive officers are elected by, and serve at the
pleasure of the Company's Board of Directors.
Save for Mr. Warren, who is subject to a non-competition agreement
which expires on July 18, 1997, none of the officers or directors are subject to
any non-competition agreements, nondisclosure agreements, or other restrictions
on their employment with the Company as the result of their prior employment or
other relationship with prior employers, including the Company's competitors in
the services segment or the equipment segment of the teleconferencing industry.
CERTAIN TRANSACTIONS
ISSUANCE OF SHARES
During the past two years, the Company has issued certain securities to
officers and/or directors of the Company and its subsidiaries. The following
table indicates, for each such person, the number of shares acquired, the period
during which the shares were acquired, and the consideration paid for such
shares.
Dates Number of Price
Acquired Shares Per Share
-------- ------ ---------
James December 1995 10,950 $2.00(1)
(1)Exercise price of warrants purchased in 1993.
OPTIONS AND WARRANTS
Certain officers, directors, and subsidiary officers and shareholders
have been granted options and warrants to purchase shares of Common Stock. See
Executive Compensation -- Stock Options.
GUARANTEES
Certain financing leases of the Company are personally guaranteed by
Gerald D. Van Eeckhout and Carolyn R. Van Eeckhout.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
compensation paid by the Company for services rendered for the fiscal years
ended December 31, 1994, December 31, 1995, and December 31, 1996, to Gerald D.
Van Eeckhout, Chairman of the Board and Chief Executive Officer. No other
executive officer was paid cash compensation in excess of $100,000 during any of
these three years.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
FISCAL ------------------- COMPENSATION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
--------------------------- ---- ------ ----- ------- -------------
<S> <C> <C> <C> <C> <C>
Gerald D. Van Eeckhout, Chairman 1996 $77,800 $33,997 150,000(2) $13,971
of the Board and CEO 1995 $74,827 none none $13,971
1994 $73,028 none none $13,971
</TABLE>
- -------------
(1) Including an annual disability insurance policy premium of $1,971 per year
and a split-dollar life insurance policy premium of $12,000 per year.
(2) Granted on November 1, 1996 at an exercise price of $3.025 per share.
Includes options to purchase 50,000 shares of common stock granted under the
1991 Plan and options to purchase 100,000 shares of common stock granted under
the 1996 Plan. Options granted under the 1996 Plan are subject to Shareholder
approval of the 1996 Plan.
DIRECTORS' FEES
The Company has adopted a compensation plan for directors which will
provide for payment of directors' fees in the form of stock options or stock
grants. In 1994 and 1995, the Company made grants of options totaling 5,000
shares each to its two non-employee directors at $2.00 per share, vesting over
four years from date of grant, expiring ten years from date of grant.
KEY EMPLOYEE INSURANCE
The Company maintains a key-employee life insurance policy on the life
of Mr. Van Eeckhout, in the amount of $500,000, which is payable to the Company.
The intended purpose of this policy is to assist the Company in replacing Mr.
Van Eeckhout and in making other adjustments in operations in the event of his
death. The Company's United Kingdom subsidiary holds a life insurance policy on
the life of Mr. Holden in the amount of (pound)840,000, the proceeds of which
are payable to the subsidiary for the purpose of liquidating Mr. Holden's
estate's ownership of the subsidiary's shares in the event of his death. The
Company has the option to repurchase Mr. Holden's shares upon his death or
disability.
EMPLOYMENT AGREEMENTS
Although officers receive salaries agreed upon by the officer and the
Board and are eligible for performance incentives determined from time to time
by the Board, the Company has no formal employment agreements with any of its
officers. Its United Kingdom subsidiary has a service agreement with its
Managing Director, Mr. Holden, which may be terminated by the employer or
employee on six months' notice. Pursuant to said agreement, Mr. Holden receives
a base salary, currently (pound)46,000 per year, and a performance-related bonus
as determined by the subsidiary's board from time to time. Mr. Holden received a
bonus of (pound)11,612 in 1996.
STOCK OPTIONS
During 1996 and 1997 the following stock options were granted to Directors and
Officers:
Number Price
------- -----
Gerald D. Van Eeckhout 150,000 3.025
Gene Warren 50,000 2.75
Gavin J. Thomson 50,000 3.00
During 1996, the total increase in stock options granted (net
forfeiture) amounted to 259,400. Thereby increasing the total number of stock
options granted and outstanding at the end of the year to 454,300. The 50,000
options granted to Mr. Thomson, and 100,000 of the 150,000 options granted to
Mr. Van Eeckhout were granted under the 1996 Plan conditional upon approval of
the 1996 Plan by the shareholders at the 1997 annual meeting to which this Proxy
Statement pertains. The balance of 50,000 options granted to Mr. Van Eeckhout
and the 50,000 options granted to Mr. Warren were granted pursuant to the 1991
Plan thereby exhausting all the options authorized under the 1991 Plan.
VOTING PROCEDURES
With regard to the nominated directors, a majority vote of Shareholders
is required to elect these individuals as directors. Cumulative voting is not
allowed.
Votes will be tallied manually at the meeting. Formal abstentions will
count for purposes of forming a quorum of the Shareholders, but will not count
toward a majority vote.
Your vote is very important to the Company. If you will not be able to
attend the Annual Meeting, please take a moment to fill out the enclosed Proxy
and mail it to the Company in the enclosed envelope.
ACT TELECONFERENCING, INC.
STOCK OPTION PLAN OF 1996
1. PURPOSE. The purpose of this Stock Option Plan of 1996 (the "Plan")
is to enhance stockholder investment by attracting, retaining, and motivating
directors, officers, key employees, and consultants of ACT Teleconferencing,
Inc. (the "Company"), and to encourage stock ownership by such persons by
providing them with a means to acquire a proprietary interest in the Company.
2. ADMINISTRATION.
(a) GENERAL. This Plan shall be administered by a Personnel
and Compensation Committee made up of two or more directors of the
Company (the "Committee") appointed by the Company's Board of Directors
(the "Board"). The Committee shall have the power, subject to the
limitations contained in this Plan, to fix any terms and conditions for
the grant or exercise of any option under this Plan. Unless the entire
Board shall constitute the Committee, no director shall serve as a
member of the Committee unless such director shall be a "non-employee
director" as that term is defined in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act") or any successor
statute or regulation comprehending the same subject matter. A majority
of the members of the Committee shall constitute a quorum for any
meeting of the Committee, and the acts of a majority of the members
present at any meeting at which a quorum is present or the acts
unanimously approved in writing by all members of the Committee shall
be the acts of the Committee. Subject to the provisions of this Plan,
the Committee may from time to time adopt such rules for the
administration of this Plan as it deems appropriate. The decision of
the Committee on any matter affecting this Plan or the rights and
obligations arising under this Plan or any option granted hereunder,
shall be final, conclusive and binding upon all persons, including
without limitation the Company, shareholders and optionees.
(b) INDEMNIFICATION. To the full extent permitted by law, (i)
no member of the Committee shall be liable for any action or
determination taken or made in good faith with respect to this Plan or
any option granted hereunder and (ii) the members of the Committee and
each person to whom the Committee delegates authority under this Plan
shall be entitled to indemnification by the Company against and from
any loss incurred by such member or person by reason of any such
actions and determinations.
3. SHARES. The shares that may be made subject to options granted under
this Plan shall be authorized and unissued shares of Common Stock of the
Company, no par value ("Shares," and each individually a "Share"), and they
shall not exceed 400,000 Shares in the aggregate, subject to adjustment as
provided in paragraph 13, below, except that, if any option lapses or terminates
for any reason before such option has been completely exercised, the Shares
covered by the unexercised portion of such option may again be made subject to
options granted under this Plan.
4. ELIGIBLE PARTICIPANTS. For purposes of this Plan, any person,
including an officer or director of the Company, who is employed by the Company
or a parent or subsidiary thereof is referred to herein as an "Employee," and
any person or entity, including an officer or director of the Company, who
provides services (other than as an Employee) to the Company or a parent or
subsidiary thereof is referred to herein as a "Non-Employee Service Provider."
Options may be granted under this Plan to any Employee. Nonstatutory stock
options (as defined in subparagraph 5(a) below) also may be granted to any
Non-Employee Service Provider. The Employees and Non-Employee Service Providers
to whom options may be granted pursuant to this paragraph 4 are referred to
herein as "Eligible Participants."
5. TERMS AND CONDITIONS OF OPTIONS.
(a) GENERAL. Subject to the terms and conditions of this Plan,
the Committee may, from time to time during the term of this Plan,
grant to such Eligible Participants as the Committee may determine
options to purchase such number of Shares of the Company on such terms
and conditions as the Committee may determine. In determining the
Eligible Participants to whom options shall be granted and the number
of Shares to be covered by each option, the Committee may take into
account the nature of the services rendered by the respective Eligible
Participants, their present and potential contributions to the success
of the Company, and such other factors as the Committee in its sole
discretion may deem relevant. Unless the Committee specifically directs
otherwise, the date and time of approval by the Committee of the
granting of an option shall be considered the date and the time of the
grant of such option. The Committee in its sole discretion may
designate whether an option granted to an Employee is to be considered
an "incentive stock option" (as that term is defined in Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), or any
amendment thereto) or a nonstatutory stock option (an option granted
under this Plan that is not intended to be an "incentive stock
option"). The Committee may grant both incentive stock options and
nonstatutory stock options to the same Employee. However, if an
incentive stock option and a nonstatutory stock option are awarded
simultaneously, such options shall be deemed to have been awarded in
separate grants and shall be clearly identified, and in no event shall
the exercise of one such option affect the right to exercise the other.
To the extent that the aggregate Fair Market Value (as defined in
paragraph 7 below) of Shares with respect to which incentive stock
options (determined without regard to this sentence) are exercisable
for the first time by any Employee during any calendar year (under all
plans of the Company and its parent and subsidiary corporations)
exceeds $100,000, such options shall be treated as nonstatutory stock
options. Notwithstanding the foregoing, no incentive stock option may
be granted under this Plan unless this Plan is approved by the
shareholders of the Company within twelve months after the effective
date of this Plan.
(b) PURCHASE PRICE. The purchase price of each Share subject
to an option granted pursuant to this paragraph 5 shall be fixed by the
Committee, subject, however, to the remainder of this subparagraph
5(b). For nonstatutory stock options, such purchase price shall be no
less than 85% of the Fair Market Value of a Share on the date of grant.
For incentive stock options, such purchase price shall be no less than
100% of the Fair Market Value of a Share on the date of grant, provided
that if such incentive stock option is granted to an Employee who owns,
or is deemed under Section 424(d) of the Code to own, at the time such
option is granted, stock of the Company (or of any parent or subsidiary
of the Company) possessing more than 10% of the total combined voting
power of all classes of stock therein (a "10% Shareholder"), such
purchase price shall be no less than 110% of the Fair Market Value of a
Share on the date of grant.
(c) VESTING. Unless an option is terminated as provided
hereunder, an optionee may exercise his option for up to, but not in
excess of, the amount of shares that have vested according to the
applicable option agreement based on the optionee's number of years of
continuous service with the Company or a parent or subsidiary from the
date on which the option is granted. In the case of an optionee who is
an Employee, continuous service shall mean continuous employment; in
the case of an optionee who is a Non-Employee Service Provider,
continuous service shall mean the continuous provision of services. In
applying said limitations, the amount of shares, if any, previously
purchased by the optionee under the option shall be counted in
determining the amount of shares the optionee can purchase at any time.
The Committee shall be free to specify other terms and conditions in
its discretion.
(d) TERMINATION. Each option granted pursuant to this
paragraph 5 shall expire, and all rights to purchase Shares thereunder
shall terminate, on the earliest of:
(i) ten years after the date such option is granted
(or in the case of an incentive stock option granted to a 10%
Shareholder, five years after the date such option is granted)
or on such date prior thereto as may be fixed by the Committee
on or before the date such option is granted;
(ii) the expiration of the period after the
termination of the optionee's employment within which the
option is exercisable as specified in paragraph 10(b) or
10(c), whichever is applicable (provided that the Committee
may, in any option agreement provided for in paragraph 6 or by
Committee action with respect to any outstanding option,
extend the periods specified in paragraph 10(b) and 10(c)); or
(iii) the date, if any, fixed for termination or
cancellation pursuant to paragraphs 11 or 12 below.
6. OPTION AGREEMENTS. All options granted under this Plan shall be
evidenced by a written agreement in such form or forms as the Committee may from
time to time determine, which agreement shall, among other things, (i) designate
whether the options being granted thereunder are nonstatutory stock options or
incentive stock options, and (ii) designate the times that the options granted
thereunder shall vest.
7. FAIR MARKET VALUE. For purposes of this Plan, the "Fair Market
Value" of a Share at a specified date shall, unless otherwise expressly provided
in this Plan, mean the closing sale price of a Share on the date immediately
preceding such date or, if no sale of Shares shall have occurred on that date,
on the next preceding day on which a sale of Shares occurred, on the Nasdaq
National Market or any similar system then in use or, if Shares are not included
in the Nasdaq National Market or any similar system then in use, the mean
between the closing "bid" and the closing "asked" quotation of a Share on the
date immediately preceding the date as of which such Fair Market Value is being
determined, or, if no closing bid or asked quotation is made on that date, on
the next preceding day on which a quotation is made, on the Nasdaq SmallCap
Market or any similar system then in use, provided that if the Shares in
question are not quoted on any such system, Fair Market Value shall be what the
Committee determines in good faith to be 100% of the fair market value of a
Share as of the date in question. Notwithstanding anything stated in this
paragraph 7, if the applicable securities exchange or system has closed for the
day by the time the determination is being made, all references in this
paragraph to the date immediately preceding the date in question shall be deemed
to be references to the date in question.
8. MANNER OF EXERCISE. A person entitled to exercise an option granted
under this Plan may, subject to its terms and conditions and the terms and
conditions of this Plan, exercise it in whole at any time, or in part from time
to time, by delivery to the Company at its principal executive office, to the
attention of its Secretary, of written notice of exercise, specifying the number
of Shares with respect to which the option is being exercised. The purchase
price of the Shares with respect to which an option is being exercised shall be
payable in full at the time of exercise, provided that, to the extent permitted
by law, the holder of an option may simultaneously exercise an option and sell
all or a portion of the Shares thereby acquired pursuant to a brokerage or
similar relationship and use the proceeds from such sale to pay the purchase
price of such Shares. The purchase price of each Share on the exercise of any
option shall be paid in full in cash (including check, bank draft or money
order) or, at the discretion of the person exercising the option, by delivery to
the Company of unencumbered Shares, by a reduction in the number of Shares
delivered upon exercise of the option, or by a combination of cash and such
Shares (in each case such Shares having an aggregate Fair Market Value on the
date of exercise equal to the amount of the purchase price being paid through
such delivery or reduction of Shares); provided, however, that no person shall
be permitted to pay any portion of the purchase price with Shares if, in the
opinion of the Committee, payment in such manner could have adverse financial
accounting consequences for the Company. The granting of an option to a person
shall give such person no rights as a shareholder except as to Shares issued to
such person.
9. TAX WITHHOLDING. Delivery of Shares upon exercise of any
nonstatutory stock option granted under this Plan shall be subject to any
required withholding taxes. A person exercising such an option may, as a
condition precedent to receiving the Shares, be required to pay the Company a
cash amount equal to the amount of any required withholdings. In lieu of all or
any part of such a cash payment, the Committee may, but shall not be required
to, provide in any option agreement provided for in paragraph 6 (or provide by
Committee action with respect to any outstanding option) that a person
exercising an option may cover all or any part of the required withholdings, and
any additional withholdings up to the amount needed to cover the individual's
full FICA and federal, state and local income tax liability with respect to
income arising from the exercise of the option, through the delivery to the
Company of unencumbered Shares, through a reduction in the number of Shares
delivered to the person exercising the option or through a subsequent return to
the Company of Shares delivered to the person exercising the option (in each
case, such Shares having an aggregate Fair Market Value on the date of exercise
equal to the amount of the withholding taxes being paid through such delivery,
reduction or subsequent return of Shares).
10. TRANSFERABILITY AND TERMINATION OF EMPLOYMENT.
(a) TRANSFERABILITY. During the lifetime of an optionee, only
such optionee or his or her guardian or legal representative may
exercise options granted under this Plan. No option granted under this
Plan shall be assignable or transferable by the optionee otherwise than
by will or the laws of descent and distribution.
(b) TERMINATION OF EMPLOYMENT DURING LIFETIME. During the
lifetime of an optionee, an option may be exercised only while the
optionee is employed by the Company or by a parent or subsidiary
thereof, and only if such optionee has been continuously so employed
since the date the option was granted, except that:
(i) an option shall continue to be exercisable for
three months after termination of the optionee's employment
but only to the extent that the option was exercisable
immediately prior to such optionee's termination of
employment; and
(ii) in the case of an optionee who is disabled (as
hereinafter defined) while employed, such optionee or his or
her legal representative may exercise the option within one
year after termination of such optionee's employment.
(c) TERMINATION UPON DEATH. With respect to an optionee whose
employment terminates by reason of death, any option held by such
optionee at the time of death may be exercised by such optionee's legal
representatives, heirs or legatees, but only within one year after the
death of such optionee.
(d) VESTING UPON DISABILITY OR DEATH. In the event of the
disability (as hereinafter defined) or death of an optionee, any option
or portion thereof held by such individual or his or her legal
representative that was not previously exercisable shall become
immediately exercisable in full if the disabled or deceased individual
shall have been continuously employed by the Company or a parent or
subsidiary thereof between the date such option was granted and the
date of such disability or death. "Disability" of an optionee shall
have the meaning given to such term in Section 22(e)(3) of the Code.
"Disabled," with respect to any optionee, shall mean that such optionee
has incurred a disability.
(e) TRANSFERS AND LEAVES OF ABSENCE. Neither the transfer of
employment of a person to whom an option is granted between any
combination of the Company and a parent or subsidiary thereof, nor a
leave of absence granted to such person and approved by the Committee,
shall be deemed a termination of employment for purposes of this Plan.
The terms "parent" and "subsidiary" as used in this Plan shall have the
meanings ascribed to "parent corporation" and "subsidiary corporation"
respectively in Sections 424(e) and (f) of the Code.
(f) RIGHT TO TERMINATE EMPLOYMENT. Nothing contained in this
Plan, or in any option granted pursuant to this Plan, shall confer upon
any optionee holding an option any right to continued employment by the
Company or any parent or subsidiary of the Company or limit in any way
the right of the Company or any such parent or subsidiary to terminate
such optionee's employment at any time.
(g) EXPIRATION DATE. In no event shall any option be
exercisable at any time after the time it shall have expired in
accordance with paragraph 5(d) of this Plan. When an option is no
longer exercisable, it shall be deemed to have lapsed or terminated and
will no longer be outstanding.
11. ACQUISITION. In the event that an Acquisition occurs with respect
to the Company, the Company shall have the right, but not the obligation, to
cancel options outstanding as of the effective date of Acquisition, whether or
not such options are then exercisable, in return for payment to the optionees of
an amount equal to a reasonable estimate of an amount (hereinafter the "Spread")
equal to the difference between the net amount per share payable in the
Acquisition, or as a result of the Acquisition, less the exercise price of the
option. In estimating the Spread, appropriate adjustments to give effect to the
existence of the options shall be made, such as deeming the options to have been
exercised, with the Company receiving the exercise price payable thereunder, and
treating the shares receivable upon exercise of the options as being outstanding
in determining the net amount per share. For purposes of this section, an
"Acquisition" shall mean any transaction in which substantially all of the
Company's assets are acquired or in which a controlling amount of the Company's
outstanding shares are acquired, in each case by a single person or entity or an
affiliated group of persons and/or entities. For purposes of this section a
controlling amount shall mean more than fifty percent (50%) of the issued and
outstanding shares of Stock of the Company. The Company shall have such a right
regardless of how the Acquisition is effectuated, whether by direct purchase,
through a merger or similar corporate transaction, or otherwise. In cases where
the acquisition consists of the acquisition of assets of the Company, the net
amount per share shall be calculated on the basis of the net amount receivable
with respect to shares upon a distribution and liquidation by the Company after
giving effect to expenses and charges, including, but not limited to, taxes
payable by the Company before the liquidation can be completed.
Where the Company does not exercise its right under this paragraph 11,
the provisions of paragraph 12 shall govern, to the extent applicable.
12. DISSOLUTION, LIQUIDATION, MERGER.
(a) MERGER OR CONSOLIDATION. Subject to any required action by
the stockholders, if the Company shall be the surviving corporation in
any merger or consolidation, any option granted hereunder shall pertain
to and apply to the securities to which a holder of the number of
Shares subject to the option would have been entitled in such merger or
consolidation.
(b) OTHER TRANSACTIONS. A dissolution or a liquidation of the
Company or a merger and consolidation in which the Company is not the
surviving corporation shall cause every option outstanding hereunder to
terminate as of the effective date of such dissolution, liquidation,
merger, or consolidation. However, the optionee either (i) shall be
offered a firm commitment whereby the resulting or surviving
corporation in a merger or consolidation will tender to the optionee an
option (the "Substitute Option") to purchase its shares on terms and
conditions both as to number of shares and otherwise, which will
substantially preserve to the optionee the rights and benefits of the
option outstanding hereunder granted by the Company, or (ii) shall have
the right immediately prior to such dissolution, liquidation, merger or
consolidation to exercise any unexercised options whether or not then
vested, subject to the provisions of this Plan. The Committee shall
have absolute and uncontrolled discretion to determine whether the
optionee has been offered a firm commitment and whether the tendered
Substitute Option will substantially preserve to the optionee the
rights and benefits of the option outstanding hereunder. In any event,
any Substitute Option for an incentive stock option shall comply with
the requirements of Section 424(a) of the Code. All provisions of this
Plan applicable to options shall also apply to Substitute Options.
13. ADJUSTMENTS. In the event of any reorganization, merger,
consolidation, recapitalization, liquidation, reclassification, stock dividend,
stock split, combination of shares, rights offering, or extraordinary dividend
or divestiture (including a spin-off), or any other change in the corporate
structure or Shares of the Company, the Committee (or if the Company does not
survive any such transaction, a comparable committee of the Board of Directors
of the surviving corporation) may, without the consent of any optionee, make
such adjustment as it determines in its discretion to be appropriate as to the
number and kind of securities subject to and reserved under this Plan and, in
order to prevent dilution or enlargement of rights of participants in this Plan,
the number and kind of securities issuable upon exercise of outstanding options
and the exercise price thereof.
14. STOCK APPRECIATION RIGHTS. The Committee may, under such terms and
conditions as it deems appropriate, and in its sole discretion, authorize the
surrender by an optionee who is not a director of the Company, unless such
person is also an Employee of the Company, of all or part of an unexercised
option and authorize a payment in consideration thereof of an amount equal to
the difference obtained by subtracting the exercise price of the Shares then
subject to exercise under such option from the fair market value of the stock
represented by such Shares on the date of surrender, provided that the Committee
determines that such settlement is consistent with the purpose of the Plan and
provided, further, that no such right shall be exercisable during the six (6)
month period following the grant thereof. Such payment may be made in Shares
valued at their fair market value on the date of surrender of such option or in
cash, or partly in Shares and partly in cash. Acceptance of such surrender and
the manner of payment shall be in the discretion of the Committee.
15. COMPLIANCE WITH LEGAL REQUIREMENTS.
(a) GENERAL. No certificate for Shares distributable under
this Plan shall be issued and delivered unless the issuance of such
certificate complies with all applicable legal requirements including,
without limitation, compliance with the provisions of applicable state
securities laws, the Securities Act of 1933, as amended, and the
Exchange Act.
(b) RULE 16b-3. With respect to Section 16 Individuals,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To
the extent any provision of this Plan or action by the Committee fails
to so comply, it shall be deemed null and void, to the extent permitted
by law and deemed advisable by the Committee.
16. GOVERNING LAW. To the extent that federal laws do not otherwise
control, this Plan and all determinations made and actions taken under this Plan
shall be governed by the laws of the State of Colorado and construed
accordingly.
17. AMENDMENT AND DISCONTINUANCE OF PLAN. The Board may at any time
amend, suspend or discontinue this Plan; provided, however, that no amendment to
this Plan shall, without the consent of the holder of the option, alter or
impair any option previously granted under this Plan. To the extent considered
necessary to comply with Exchange Act Rule 16b-3 or applicable provisions of the
Code, any such amendments to this Plan may be made subject to approval by the
shareholders of the Company.
18. TERM.
(a) EFFECTIVE DATE. This Plan shall be effective as of August
16, 1996.
(b) TERMINATION. This Plan shall remain in effect until (i)
all Shares subject to it are distributed or (ii) this Plan is
terminated under paragraph 17 above. No award of an incentive stock
option shall be made under this Plan more than ten years after the
effective date of this Plan (or such other limit as may be required by
the Code) if such limitation is necessary to qualify the option as an
incentive stock option.
19. NO OBLIGATION TO EXERCISE. The granting of an option shall impose
no obligation upon the holder thereof to exercise such option.
PROXY
ACT Teleconferencing, Inc.
Annual Shareholders' Meeting
June 18, 1997
This Proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints Ronald J. Bach and Gavin J. Thomson as Proxies,
each with power to appoint her or his substitute, and hereby authorizes them, or
any of them, to represent and to vote, as designated below, all the shares of
common stock, no par value, of ACT Teleconferencing, Inc., held of record by the
undersigned as of April 30, 1997, at the Annual Meeting of shareholders to be
held on June 18, 1997 or any adjournment thereof.
A. Election of James F. Seifert as a Class II Director
[ ] For [ ] Withhold Authority
B. Adoption of the ACT Teleconferencing Stock Option Plan of 1996
[ ] For [ ] Against [ ] Abstain
C. In their discretion, the Proxies are authorized to vote upon such other
business as may come before the meeting.
[ ] For [ ] Against [ ] Abstain
This Proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholders. If no direction is made, this Proxy will be voted
FOR each proposal.
Please sign exactly as your name appears on your stock certificate. If shares
are held by joint tenants, both should sign. When signing as attorney-in-fact,
executor, administrator, trustee, or guardian, please give full title as such.
If signing on behalf of a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
----------------------
Number of Shares Owned
Date Signed: ______________, 1997
________________________________________
Print Name(s) of Shareholder(s)
________________________________________
Signature (all joint tenants must sign)
________________________________________
Signature of Joint Tenant (if applicable)
________________________________________
Title (if applicable)
