<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (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 Section 240.14a-11(c) or Section 240.14a-12
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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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Notes:
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ACT TELECONFERENCING, INC.
1658 COLE BOULEVARD, SUITE 130
GOLDEN, COLORADO 80401
303-235-9000 OR 800-228-2554
PROXY STATEMENT AND NOTICE OF ANNUAL MEETING
First Sent to Shareholders on April 15, 1998
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 5:00 PM Greenwich Mean Time on Wednesday, May
13, 1998, at the Barn Hotel located at West End Road, Ruislip, Middlesex HA46JB,
United Kingdom, international telephone: 44-1895-636-057 and facsimile: 44-1895-
638-379, for the purposes set forth below. The principal executive offices of
ACT Teleconferencing, Inc. are located at 1658 Cole Boulevard, Suite 130,
Golden, Colorado, USA 80401.
ABOUT THIS PROXY
The Board of Directors solicits this proxy. 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 1999 ANNUAL MEETING OF SHAREHOLDERS
The Company expects to hold its 1999 annual meeting of shareholders on or
about April 15, 1999. The Company must receive all proposals of shareholders
intended to be presented at the 1999 annual meeting, for inclusion in the
Company's proxy statement relating to that meeting, no later than January 31,
1999.
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:
PROPOSAL 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. In 1996, Carolyn R. Van
Eeckhout and Donald L. Sturtevant were elected as Class III directors to serve a
3 year period expiring 1999. In 1997, James F. Seifert was elected as a Class II
director for a 3 year term expiring 2000.
Gerald D. Van Eeckhout and Ronald J. Bach have been nominated for
election as Class I directors to serve a 3-year term expiring in the year 2001.
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 Gerald D. Van Eeckhout
and Ronald J. Bach to serve as Class I directors.
1
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PROPOSAL 2. AMENDMENT TO STOCK OPTION PLAN OF 1996
The purpose of the amendment is to continue to enhance stockholder
investment by attracting, retaining, and motivating all employees of the Company
in addition to directors, officers and consultants of the Company, and to
encourage stock ownership by such persons by providing them with a means to
acquire a proprietary interest in the Company.
In 1991 and 1996, the Company adopted Stock Option Plans for 1991
and 1996 (the "Plans"), each of which authorized the grant of options on 400,000
shares of the Company's common stock. All 800,000 options in the Plans have been
granted. In order to continue to provide incentives to officers, employees, and
consultants provided by stock options, the Board has recommended two amendments
to the 1996 Plan: (a) to increase the grant of options by an additional 400,000
shares and (b) to delete the reference to "key employees" to be replaced by "all
employees with over twelve (12) months of unbroken service within the ACT group
of companies internationally." All other terms of the Plan will remain the same.
Subject to approval by the shareholders at the annual meeting, the Board
previously made grants of options for an officer to purchase 11,500 shares
conditional on such approval. See Executive Compensation--Stock Options.
The Board of Directors recommends a vote FOR approval of the
amendment to the 1996 Plan as discussed in this Proxy Statement.
PROPOSAL 3. EMPLOYEE STOCK PURCHASE PLAN
In order to further promote interest in the Company and to
encourage stock ownership by employees, the Board has recommended the adoption
of an Employee Stock Purchase Plan. The main provisions of the Plan are
summarized below and the full plan is attached as Appendix B.
Purpose of Plan. The purpose of the Employee Stock Purchase Plan
---------------
(the "Plan") is to provide employees with an opportunity to acquire a
proprietary interest in the Company through the purchase of its common stock
and, thus, to develop a stronger incentive to work for the continued success of
the Company. The Plan is intended to be an "employee stock purchase plan" within
the meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended,
and shall be interpreted and administered in a manner consistent with such
intent.
Scope of the Plan. Shares of common stock may be sold by the
-----------------
Company to eligible employees commencing July 1, 1998, as hereinafter provided,
but not more than 100,000 shares of Common Stock shall be sold to eligible
employees pursuant to this Plan. All sales of common stock pursuant to this Plan
shall be subject to the same terms, conditions, rights and privileges. The
shares of common stock delivered by the Company pursuant to this Plan may have
the status of any combination of authorized but unissued shares, newly issued
shares, or treasury shares.
Amount of Common Stock Each Eligible Employee May Purchase. The
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purchase price of each share of common stock sold pursuant to this Plan will be
the lesser of 85% of the fair market value of such share on the first day of the
purchase period or 85% of the fair market value of such share on the last day of
the purchase period.
Date of Plan. This Plan shall be effective May 14, 1998, for the
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offering commencing July 1, 1998, and ending December 31, 1998 and continuing on
a semi-annual basis thereafter. All rights of participants in any offering
hereunder shall terminate on the earlier of (i) the day that participants become
entitled to purchase a number of shares of common stock equal to or greater than
the number of shares remaining available for purchase or (ii) at any time, at
the discretion of the Board of Directors, after 30 days' notice has been given
to all participants. Upon termination of this Plan, shares of common stock shall
be issued to participants in accordance with Section 10, and cash, if any,
remaining in the participants' record keeping accounts shall be refunded to
them, as if the Plan were terminated at the end of a purchase period.
Registration Statement. The Company will file a registration
----------------------
statement on Form S-8 with respect to the shares issued through the plan.
The Board recommends a vote FOR adoption of the Employee Stock
Purchase Plan as described in this Proxy Statement.
PROPOSAL 4. APPROVAL OF SELECTION OF AUDITORS
Upon recommendation of its Audit Committee, the Board has selected
Ernst & Young LLP, certified public accountants, as independent auditors for the
fiscal year ending December 31, 1998. That firm has acted as independent
auditors to the Company for two (2) years and the Board considers it highly
qualified. The Board of Directors wishes to submit the selection of Ernst &
Young LLP for shareholders' approval at the Meeting. If the shareholders do not
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give approval, the Board will reconsider its selection.
A representative from Ernst & Young LLP is expected to be available at
the annual shareholders meeting and will have an opportunity to make a statement
if the representative so desires. The representative is expected to be available
to respond to appropriate questions.
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 6,
1998 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
3,689,942 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 6, 1998, 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
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP(1) OUTSTANDING SHARES
-------------------- ------------------ -------------------
<S> <C> <C>
Gerald D. and Carolyn R. Van Eeckhout/(2)(3)(4)(9)/.... 645,083 17.3%
James F. and Nancy Seifert/(6)/........................ 219,700 5.9%
Ronald J. Bach/(2)(7)(9)/.............................. 72,250 1.9%
Donald L. Sturtevant/(8)/.............................. 20,166 0.6%
Gene Warren/(2)/....................................... 12,500 0.3%
David Holden/(2)/...................................... 11,250 0.3%
Gavin J. Thomson/(2)/.................................. 12,500 0.3%
Charles T. Stout/(2)(5)/............................... 44,305 1.2%
Anchor Investments, Inc./(10)/......................... 505,621 13.7%
Dimitrios and Angelos Vellis/(11)/..................... 221,400 6.0%
All directors and executive officers as a group........ 1,037,754 27.0%
</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 options or warrants that are currently exercisable or
exercisable within 60 days from April 6, 1998, 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 130, 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 556,583
shares held directly by Carolyn R. Van Eeckhout, 37,500 shares currently
exercisable by Mr. Van Eeckhout, but excludes 6,000 shares held non-
beneficially by a partnership in which Mrs. Van Eeckhout is a managing
partner.
/(5)/Includes 13,750 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 8,750 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 38,750 shares issuable upon exercise of currently exercisable
stock options for Mr. Bach.
/(8)/Includes 2,000 shares issuable upon exercise of currently exercisable
warrants and 14,166 of currently exercisable options. Mr. Sturtevant's
address is 3693 E. Oak Creek Dr., Vadnais Heights, Minnesota 55127.
/(9)/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.
/(10)/Address is Trias 22, Melissia, Athens, 15127, Greece.
/(11)/Address is Evias 3, Marousi, Athens, 15125, Greece.
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DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
NAME AGE* POSITION
- ---- ---- ---------------------------------------------------------------------------
Gerald D. Van Eeckhout 57 Chairman of the Board of Directors, Chief Executive Officer
James F. Seifert 69 Director
Ronald J. Bach 64 Director
Donald L. Sturtevant 60 Director
Carolyn R. Van Eeckhout 60 Director; Vice President, ACT Teleconferencing Services, Inc.
Gavin J. Thomson 40 Vice President, ACT Teleconferencing, Inc., Chief Financial and Planning
Officer, Treasurer, Secretary
Gene Warren 46 Managing Director, ACT Teleconferencing Services, Inc.
David Holden 37 Managing Director, ACT Teleconferencing Limited
Charles T. Stout 52 Vice President Finance for US Operations, Assistant Secretary and Treasurer
</TABLE>
* Age is as of April 15, 1998
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. Prior to 1982, he served seven years as
Chief Financial and Administrative Officer of Medtronic, Inc., five years as
Chief Financial and Planning Officer at Pillsbury International and eight years
as a CPA with Touche Ross & Co., based in Minneapolis, Minnesota. He received a
Bachelor of Science degree from the University of North Dakota in 1962, is a
certified public accountant and completed the Stanford Executive Program in
1976. He has also been a national director of the American Electronic
Association and President of the University of North Dakota Foundation. Mr. Van
Eeckhout is a director of RLD Enterprises, Inc., a publicly traded company.
James F. Seifert, a Director of the Company, has been Chairman and CEO
----------------
of James F. Seifert & Sons LLC 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 LLC has acquired
approximately 50 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. He is the Chief Operating Officer and a director of St. Croix Medical,
Inc., a medical implantable hearing systems company. He was President and Chief
Executive Officer of MediVators, Inc. from 1991 through 1996. 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.
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.
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 and technical experience in telecommunications. He has served
as Senior Vice President in charge of Business Development, Operations and
Technology at Global Access; Director of Technical Services for ConferTech
International; and Senior Director of Technical Support for MCI. Mr. Warren
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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.
David L. Holden has been the Managing Director of ACT
---------------
Teleconferencing, Limited since 1992. Immediately prior to joining the Company
he was employed for seven years with British Telecom as general 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.
Gavin J. Thomson, Vice President, ACT Teleconferencing, Inc., Chief
----------------
Financial and Planning Officer, Secretary, and Treasurer joined the Company in
February 1997. Previously, Mr. Thomson served as Managing Director of TEK
Electronics, a consumer electronics company based in Johannesburg, South Africa.
Prior to holding that position he was the Chief Financial Officer of TEK
Electronics for a period of four years, then one of the largest consumer
appliance companies in South Africa. 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 College.
Charles T. Stout held the position of the Company's Treasurer from
----------------
1991 until 1997, at which time he was appointed Vice President of Finance for US
Operations, 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 management position with Capital Associates International,
Inc., and from 1992 to 1995, the Resolution Trust Corporation engaged Mr. Stout
as an accountant. He holds a bachelor's degree and a master's degree in
accounting and management science from the University of Colorado.
Gerald D. Van Eeckhout and Carolyn R. Van Eeckhout are husband and
wife.
BOARD OF DIRECTOR MEETINGS
Management of the Company is under the direction of the Board of
Directors. Meetings are held periodically, but no less frequently than
quarterly, and are usually conducted by audio teleconference. 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 six meetings during 1997. No
director attended less than 75% of the board of director meetings or less than
75% of committee meetings on which the director served.
BOARD OF DIRECTOR COMMITTEES
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 two meetings during 1997.
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.
The Company's executive officers are elected by, and serve at the
pleasure of the Company's Board of Directors. 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.
5
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CERTAIN TRANSACTIONS
ISSUANCE OF SHARES
The Company has issued no securities to officers and/or directors of
the Company and its subsidiaries during the past two years.
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.
LOAN FROM SHAREHOLDER
During February 1998, the Company entered into a loan agreement with
Gerald D. Van Eeckhout and Carolyn R. Van Eeckhout in an amount of $200,000
payable at 1% below the prime rate and due on demand.
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, 1995, December 31, 1996, and December 31, 1997, to Gerald D.
Van Eeckhout, and for 1997 only to Gene Warren and David Holden. No other
executive officer besides the above were paid cash compensation in excess of
$100,000 during any of these three years. All amounts in US$.
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
------ ---------
FISCAL COMPENSATION COMPENSATION TOTAL CASH
------ ------------ ------------ ----------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS STOCK OPTIONS COMPENSATION
--------------------------- ------ -------- ------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Gerald D. Van Eeckhout, Chairman 1997 $120,000 $54,816 $188,787/(1)/
of the Board and CEO 1996 $77,800 $33,997 150,000/(2)/ $125,768/(1)/
1995 $74,827 none none $88,798/(1)/
Gene Warren, Managing Director 1997 $96,081 $39,835 100,000/(3)/ $135,916
(US Operations)
David Holden, Managing Director 1997 $80,000 $51,320 60,000/(4)/ $131,320
(UK Operations)
</TABLE>
/(1)/ Includes 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.
/(3)/ 50,000 options granted on November 1, 1996 at an exercise price of $3.025
per share; 25,000 options to purchase common stock granted on June 18, 1997 at
$5.00 per share; and 25,000 options to purchase common stock granted on December
30, 1997 at $6.00 per share.
/(4)/ Includes 45,000 options to purchase common stock granted on July 1, 1996
at an exercise price of $3.00 per share and 15,000 options to purchase common
stock granted on December 30, 1997 at $6.00 per share. Of the aforementioned
15,000 options, 11,500 are subject to approval by shareholders of the amendment
to 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 1995 and 1996, 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 life insurance policies on
the life of Mr. Holden in the amount of (Pounds)1,090,000, the proceeds of which
are payable to the subsidiary for the purpose of liquidating Mr. Holden's
estate's ownership of 40% of the subsidiary's shares in the event of his death
as well as other adjustments to operations. The Company has the option to
repurchase Mr. Holden's shares upon his death or disability.
6
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EMPLOYMENT AGREEMENTS
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 presently has no formal employment agreements with its
officers other than with five officers of three subsidiaries.
The Company's 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 (Pounds)50,000 (US $80,000) per year, and a
performance-related bonus as determined by the subsidiary's board from time to
time.
The Company's Multimedia Teleconferencing and Solutions Limited (MaTS)
subsidiary has service agreements with three executive directors namely Finlay
Malcom Anthony John McKeracher, Martin James Offwood and Sarah Jane Stacey which
may each be terminated by the employer or employee on twelve months' notice.
Base salaries for the above three directors are (Pounds)70,000 (US$ 112,000),
(Pounds)49,000 (US$ 78,400), and (Pounds)36,500 (US$ 58,400), respectively.
Performance related bonuses are determined by the subsidiary's Board from time
to time. Mr. McKeracher's compensation is not shown under the Executive
Compensation amounts in excess of $100,000 as the MaTS subsidiary was acquired
only with effect from December 29, 1997.
The Company's Australian subsidiary, ACT Teleconferencing (Pty.)
Limited has a service agreement with its Managing Director, Peter Eeles, which
may be terminated by the employer or employee on six months' notice. Base salary
for Mr. Eeles is AU$75,000 (US$ 52,500). A performance related bonus may be
determined by this subsidiary's Board from time to time.
STOCK OPTIONS
During 1996 and 1997 the following stock options were granted to
Directors and Officers as well as Officers of subsidiary companies:
<TABLE>
<CAPTION>
Weighted
Position Number Average Price
---------- ------ -------------
<S> <C> <C> <C>
Gerald D. Van Eeckhout Chairman & CEO 150,000 $3.025
Ronald J. Bach Director 10,000 $4.00
James F. Seifert Director 10,000 $4.00
Donald L. Sturtevant Director 25,000 $3.40
Gene Warren Managing Director, US Operations 100,000 $4.13
Gavin J. Thomson Chief Financial and Planning Officer 100,000 $4.25
Thierry Bignet Managing Director, European Operations 50,000 $6.00
Dominic Dodd Global Business Development Director 50,000 $6.00
David Holden Managing Director, UK Operations 60,000 $3.75
Peter Meijer Managing Director, Netherlands 10,000 $6.00
</TABLE>
During 1997, the total increase in stock options granted (net of
forfeiture and exercise) amounted to 276,100, thereby increasing the total
number of stock options granted and outstanding at the end of the year to
730,400. Of the 15,000 options granted to Mr. Holden, 11,500 were granted under
the 1996 Plan as amended conditional upon approval of the amendment to that plan
by shareholders.
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.
7
<PAGE>
APPENDIX A
ACT TELECONFERENCING, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE AND SCOPE OF PLAN. The purpose of this ACT Teleconferencing Employee
Stock Purchase Plan (the "Plan") is to provide the employees of ACT
Teleconferencing, Inc. (the "Company") and its subsidiaries with an opportunity
to acquire a proprietary interest in the Company through the purchase of its
common stock and, thus, to develop a stronger incentive to work for the
continued success of the Company. The Plan is intended to be an "employee stock
purchase plan" within the meaning of Section 423(b) of the Internal Revenue Code
of 1986, as amended, and shall be interpreted and administered in a manner
consistent with such intent.
2. DEFINITIONS. The terms defined in this section are used (and capitalized)
elsewhere in this Plan:
(a) "Affiliate" means each domestic or foreign corporation that is a
---------
"parent corporation" or "subsidiary corporation" of the Company, as defined
in Sections 424(e) and 424(f) of the Code or any successor provision and
whose participation in the Plan the Board of Directors has expressly
approved.
(b) "Board of Directors" means the Board of Directors of the Company.
------------------
(c) "Code" means the Internal Revenue Code of 1986, as amended from time
----
to time.
(d) "Committee" means three or more Disinterested Persons designated by
---------
the Board of Directors to administer the Plan under Section 13.
(e) "Common Stock" means the no par value common stock of the Company.
------------
(f) "Company" means ACT Teleconferencing, Inc.
-------
(g) "Compensation" means the gross cash compensation (including wage,
------------
salary, commission, bonus, and overtime earnings) paid by the Company
or any Affiliate to a Participant in accordance with the terms of
employment.
(h) "Disinterested Persons" means a member of the Board of Directors who
---------------------
is considered a disinterested person within the meaning of Exchange
Act Rule 16b-3 or any successor definition.
(i) "Eligible Employee" means any employee of the Company or an Affiliate
-----------------
whose customary employment is at least 20 hours per week; provided,
however, that "Eligible Employee" shall not include any person who
would be deemed, for purposes of Section 423(b)(3) of the Code, to own
stock possessing 5% or more of the total combined voting power or
value of all classes of stock of the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time.
(k) "Fair Market Value" of a share of Common Stock as of any date means,
-----------------
if the Company's Common Stock is listed on a national securities
exchange or traded in the national market system, the mean between the
high and low sale prices for such Common Stock on such exchange or
market on said date, or, if no sale has been made on such exchange or
market on said date, on the last preceding day on which any sale shall
have been made. If such determination of Fair Market Value is not
consistent with the then current regulations of the Secretary of the
Treasury applicable to plans intended to qualify as an "employee stock
purchase plan" within the meaning of Section 423(b) of the Code,
however, Fair Market Value shall be determined in accordance with such
regulations. The determination of Fair Market Value shall be subject
to adjustment as provided in Section 14.
(l) "Participant" means an Eligible Employee who has elected to
-----------
participate in the Plan in the manner set forth in Section 4.
(m) "Plan" means this ACT Teleconferencing, Inc. Employee Stock Purchase
----
Plan, as amended from time to time.
(n) "Purchase Period" means the Company's semi-annual periods of January 1
---------------
through June 30 and July 1 through December 31, commencing July 1,
1998.
(o) "Record keeping Account" means the account maintained in the books and
----------------------
records of the Company recording the amount withheld from each
Participant through payroll deductions made under the Plan.
3. SCOPE OF THE PLAN. Shares of Common Stock may be sold by the Company to
Eligible Employees commencing July 1, 1998, as hereinafter provided, but not
more than 100,000 shares of Common Stock (subject to adjustment as provided in
Section 14) shall be sold to Eligible Employees pursuant to this Plan. All sales
of Common Stock pursuant to this Plan shall be subject to the same terms,
conditions, rights and privileges. The shares of Common Stock delivered by the
Company pursuant to this Plan may be acquired shares having the status of any
combination of authorized but unissued shares, newly issued shares, or treasury
shares.
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<PAGE>
4. ELIGIBILITY AND PARTICIPATION. To be eligible to participate in the Plan
for a given Purchase Period, an employee must be an Eligible Employee on the
first day of such Purchase Period. An Eligible Employee may elect to participate
in the Plan by filing an enrollment form with the Company before the first day
of such Purchase Period that authorizes regular payroll deductions from
Compensation beginning with the first payday in such Purchase Period and
continuing until the Eligible Employee withdraws from the Plan, modifies his or
her authorization, or ceases to be an Eligible Employee, as hereinafter
provided.
5. AMOUNT OF COMMON STOCK EACH ELIGIBLE EMPLOYEE MAY PURCHASE.
5.1. Subject to the provisions of this Plan, each Eligible Employee shall
be offered the right to purchase on the last day of the Purchase
Period the maximum number of shares of Common Stock (not including
fractional shares) that can be purchased at the price specified in
Section 5.2 with the entire credit balance in the Participant's Record
keeping Account; provided, however, that (i) no more than 1,000 shares
of Common Stock may be purchased under the Plan by any Participant for
a given Purchase Period and (ii) no more than $25,000 in Fair Market
Value (determined at the beginning of each Purchase Period) of shares
of Common Stock may be purchased under the Plan and all other employee
stock purchase plans, if any, of the Company and the Affiliates by any
Participant for each calendar year. If the purchases by all
Participants would otherwise cause the aggregate number of shares of
Common Stock to be sold under the Plan to exceed the number specified
in Section 3, however, each Participant shall be allocated a ratable
portion of the maximum number of shares of Common Stock which may be
sold.
5.2. The purchase price of each share of Common Stock sold pursuant to
this Plan will be the lesser of (a) or (b) below:
(a) 85% of the Fair Market Value of such share on the first day of
the Purchase Period.
(b) 85% of the Fair Market Value of such share on the last day of the
Purchase Period.
6. METHOD OF PARTICIPATION.
6.1. The Company shall give notice to each Eligible Employee of the
opportunity to purchase shares of Common Stock pursuant to this Plan
and the terms and conditions for such offering. Such notice is subject
to revision by the Company at any time prior to the date of purchase
of such shares. The Company contemplates that for tax purposes the
first day of a Purchase Period will be the date of the offering of
such shares.
6.2. Each Eligible Employee who desires to participate in the Plan for a
Purchase Period shall signify his or her election to do so by signing
an election form developed by the Committee. An Eligible Employee may
elect to have any whole percent of Compensation withheld, but not
exceeding ten percent (10%) per pay period. An election to participate
in the Plan and to authorize payroll deductions as described herein
must be made before the first day of the Purchase Period to which it
relates and shall remain in effect unless and until such Participant
withdraws from the Plan, modifies his or her authorization, or ceases
to be an Eligible Employee, as hereinafter provided.
6.3. Any Eligible Employee who does not make a timely election as provided
in Section 6.2 shall be deemed to have elected not to participate in
the Plan. Such election shall be irrevocable for such Purchase Period.
7. RECORD KEEPING ACCOUNT.
7.1. The Company shall maintain a Record keeping Account for each
Participant. Payroll deductions pursuant to Section 6 will be credited
to such Record keeping Accounts on each payday.
7.2. No interest will be credited to a Participant's Record keeping
Account.
7.3. The Record keeping Account is established solely for accounting
purposes, and all amounts credited to the Record keeping Account will
remain part of the general assets of the Company.
7.4. A Participant may not make any separate cash payment into the Record
keeping Account.
8. RIGHT TO ADJUST PARTICIPATION OR TO WITHDRAW.
8.1. A Participant may, at any time during a Purchase Period, direct the
Company to make no further deductions from his or her Compensation or
to increase or decrease the percentage amount of such deductions from
future Compensation, subject to the limitation in Section 6.2. Upon
any such action, future payroll deductions with respect to such
Participant shall cease or shall be increased or decreased in
accordance with the Participant's direction.
8.2. Any Participant who stops payroll deductions may not thereafter
resume payroll deductions during such Purchase Period.
A-2
<PAGE>
8.3. At any time before the end of a Purchase Period, any Participant may
withdraw from the Plan. In such event, all future payroll deductions
shall cease and the entire credit balance in the Participant's Record
keeping Account will be paid to the Participant, without interest, in
cash within 15 days. A Participant who withdraws from the Plan will
not be eligible to reenter the Plan until the next succeeding Purchase
Period.
8.4. Notification of a Participant's election to increase, decrease, or
terminate deductions, or to withdraw from the Plan, shall be made by
filing an appropriate form with the Company.
9. TERMINATION OF EMPLOYMENT. If the employment of a Participant is terminated
for any reason, including death, disability, or retirement, the entire balance
in the Participant's Recordkeeping Account will be applied to the purchase of
shares as provided in Section 10.1 as of the last day of the Purchase Period in
which the Participant's employment terminated; except that if such Participant
so requests prior to the last day of such Purchase Period, the Company shall
refund in cash within 15 days all amounts credited to his or her Record keeping
Account.
10. PURCHASE OF SHARES.
10.1. As of the last day of the Purchase Period, the entire credit balance
in each Participant's Record keeping Account will be used to purchase
shares (not including fractional shares) of Common Stock (subject to
the limitations of Section 5) unless the Participant has filed an
appropriate form with the Company in advance of that date (which
either elects to purchase a specified number of shares which is less
than the number described above or elects to receive the entire credit
balance in cash). Any amount in a Participant's Record keeping Account
that is not used to purchase shares pursuant to this Section 10.1 will
be refunded to the Participant, except that any balance in such Record
keeping Account resulting from the inability to purchase fractional
shares shall be carried over to the immediately following Purchase
Period unless the Participant elects to have such balance paid in
cash.
10.2. Certificates for the number of whole shares of Common Stock
purchased by each Participant shall be issued and delivered to him or
her promptly after the end of each Purchase Period.
11. RIGHTS AS A STOCKHOLDER. A Participant shall not be entitled to any of the
rights or privileges of a stockholder of the Company with respect to such
shares, including the right to receive any dividends which may be declared by
the Company, until (i) he or she actually has paid the purchase price for such
shares and (ii) certificates for such shares have been issued to him or her,
both as provided in Section 10.
12. RIGHTS NOT TRANSFERABLE. A Participant's rights under this Plan are
exercisable only by the Participant during his or her lifetime, and may not be
sold, pledged, assigned or transferred in any manner other than by will or the
laws of descent and distribution. Any attempt to sell, pledge, assign or
transfer the same shall be null and void and without effect. The amounts
credited to a Record keeping Account may not be assigned, transferred, pledged
or hypothecated in any way, and any attempted assignment, transfer, pledge,
hypothecation or other disposition of such amounts will be null and void and
without effect.
13. ADMINISTRATION OF THE PLAN. This Plan shall be administered by the
Committee, which is authorized to make such uniform rules as may be necessary to
carry out its provisions. The Committee shall determine any questions arising in
the administration, interpretation and application of this Plan, and all such
determinations shall be conclusive and binding on all parties.
14. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event of any change in the
Common Stock of the Company by reason of stock dividends, split-ups, corporate
separations, recapitalizations, mergers, consolidations, combinations, exchanges
of shares and the like, the aggregate number and class of shares available under
this Plan and the number, class and purchase price of shares available but not
yet purchased under this Plan, may be adjusted appropriately by the Committee.
15. REGISTRATION OF CERTIFICATES. Stock certificates will be registered in the
name of the Participant, or jointly in the name of the Participant and another
person, as the Participant may direct on an appropriate form filed with the
Company.
16. AMENDMENT OF PLAN. The Board of Directors may at any time amend this Plan in
any respect which shall not adversely affect the rights of Participants pursuant
to shares previously acquired under the Plan, except that, without stockholder
approval on the same basis as required by Section 20.1, no amendment shall be
made (i) to increase the number of shares to be reserved under this Plan, (ii)
to decrease the minimum purchase price, (iii) to withdraw the administration of
this Plan from the Committee, or (iv) to change the definition of employees
eligible to participate in the Plan.
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<PAGE>
17. EFFECTIVE DATE OF PLAN. This Plan shall be effective May 14, 1998, for the
offering commencing July 1, 1998, and ending December 31, 1998 and continuing on
a semi-annual basis thereafter. All rights of Participants in any offering
hereunder shall terminate at the earlier of (i) the day that Participants become
entitled to purchase a number of shares of Common Stock equal to or greater than
the number of shares remaining available for purchase or (ii) at any time, at
the discretion of the Board of Directors, after 30 days' notice has been given
to all Participants. Upon termination of this Plan, shares of Common Stock shall
be issued to Participants in accordance with Section 10, and cash, if any,
remaining in the Participants' Record keeping Accounts shall be refunded to
them, as if the Plan were terminated at the end of a Purchase Period.
18. GOVERNMENTAL REGULATIONS AND LISTING. All rights granted or to be granted to
Eligible Employees under this Plan are expressly subject to all applicable laws
and regulations and to the approval of all governmental authorities required in
connection with the authorization, issuance, sale or transfer of the shares of
Common Stock reserved for this Plan, including, without limitation, there being
a current registration statement of the Company under the Securities Act of
1933, as amended, covering the shares of Common Stock purchasable on the last
day of the Purchase Period applicable to such shares, and if such a registration
statement shall not then be effective, the term of such Purchase Period shall be
extended until the first business day after the effective date of such a
registration statement, or post-effective amendment thereto. If applicable, all
such rights hereunder are also similarly subject to effectiveness of an
appropriate listing application to a national securities exchange or a national
market system, covering the shares of Common Stock under the Plan upon official
notice of issuance.
19. MISCELLANEOUS
19.1. This Plan shall not be deemed to constitute a contract of employment
between the Company and any Participant, nor shall it interfere with
the right of the Company to terminate any Participant and treat him or
her without regard to the effect which such treatment might have upon
him or her under this Plan.
19.2. Wherever appropriate as used herein, the masculine gender may be
read as the feminine gender, the feminine gender may be read as the
masculine gender, the singular may be read as the plural and the
plural may be read as the singular.
19.3. This Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Colorado.
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<PAGE>
APPENDIX B
PROXY
-----
ACT TELECONFERENCING, INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 13, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned shareholder of ACT Teleconferencing, Inc. (the "Company")
hereby acknowledges receipt of the Proxy Statement and Notice of Annual Meeting,
each dated April 15, 1998, and hereby appoints Ronald J. Bach and Gavin J.
Thomson as proxies and attorney-in-fact, each with the full power of
substitution, on behalf and in the name of the undersigned, to vote all the
shares of common stock, no par value, of ACT Teleconferencing, Inc., held of
record by the undersigned as of April 6, 1998, at the Annual Meeting of
Shareholders to be held on May 13, 1998, at 5:00 p.m. Greenwich Mean Time at the
Barn Hotel, West End Road, Ruislip, Middlesex HA46JB, United Kingdom, and at any
postponement or adjournment thereof.
Any shareholder completing this Proxy that fails to mark one of the boxes
for the proposal will be deemed to have given the proxy holders complete
discretion in voting his, her or its shares on such proposal at the Annual
Meeting. If no mark is made, this Proxy will be voted FOR each proposal. If a
box is marked, your shares shall be voted in accordance with your instructions.
The Board of Directors recommends a vote FOR each of the Directors listed
below and a vote FOR the other proposals.
A. Election of Gerald D. Van Eckhout as a Class I Director to serve until
the 2001 Annual Meeting of Shareholders or until his successor is
elected and qualified.
[_]For [_]Withhold Authority
B. Election of Ronald J. Bach as a Class I Director to serve until the
2001 Annual Meeting of Shareholders or until his successor is elected
and qualified.
[_]For [_]Withhold Authority
C. Adoption of the Amendment to ACT Teleconferencing, Inc. Stock Option
Plan of 1996.
[_]For [_]Against [_]Abstain
D. Adoption of the ACT Teleconferencing, Inc. Employee Stock Purchase
Plan of 1998.
[_]For [_]Against [_]Abstain
E. Ratification of the appointment of Ernst & Young LLP as the
independent accountants for the Company for the year ending December
31, 1998.
[_]For [_]Against [_]Abstain
F. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting and any
postponement or adjournment thereof.
[_]For [_]Against [_]Abstain
(Over)
<PAGE>
Please sign exactly as your name appears on your stock certificate. If shares
are held by joint tenants, both should sign personally. When signing as
attorney-in-fact, executor, administrator, trustee, guardian, or another
fiduciary capacity, please give full title as such. If signing on behalf of a
corporation, please sign in full corporate name by president or other authorized
person. If a partnership, please sign in partnership name by authorized person.
Date Signed: _______________, 1998
_____________________
Number of Shares Owned
_________________________________________
Print Name(s) of Shareholder(s)
_________________________________________
Signature (all Joint Tenants must sign)
_________________________________________
Signature of Joint Tenant (if applicable)
_________________________________________
Title (if applicable)
