<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
SITEL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
PRELIMINARY COPY -- FOR INFORMATION OF THE SECURITIES AND EXCHANGE COMMISSION
ONLY
[LOGO]
SITEL CORPORATION
13215 BIRCH STREET
OMAHA, NEBRASKA 68164
May [ ], 1997
Dear Stockholder:
It is our pleasure to invite you to your Company's Annual Meeting of
Stockholders in Omaha on June 6, 1997. In the following pages you will find
information about the meeting and a Proxy Statement.
If you cannot be with us in person, please be sure to vote your shares by
proxy. To vote by proxy, please mark, sign and date the enclosed proxy card and
return it in the enclosed return envelope. Your prompt return of the proxy card
will help your Company avoid additional solicitation costs. In person or by
proxy, your vote is important.
Sincerely yours,
[SIGNATURE]
James F. Lynch
CHAIRMAN OF THE BOARD
<PAGE>
SITEL CORPORATION
13215 BIRCH STREET
OMAHA, NEBRASKA 68164
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FRIDAY, JUNE 6, 1997
------------------------
To the Stockholders of
SITEL Corporation
The annual meeting of stockholders of SITEL Corporation will be held on
Friday, June 6, 1997, at 2:00 p.m. Central Standard Time, at the Omaha Marriott,
10220 Regency Circle, Omaha, Nebraska, for the following purposes:
1. To approve an amendment to the Amended and Restated Bylaws.
2. To elect two directors for a three-year term and one director for a
one-year term.
3. To approve the Amended and Restated SITEL Corporation 1995 Non-Employee
Directors Stock Option Plan.
4. To approve an amendment to the Amended and Restated SITEL Corporation
1995 Employee Stock Option Plan.
5. To ratify the selection of KPMG Peat Marwick LLP as the Company's
independent auditors.
6. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors of the Company has fixed the close of business on
April 8, 1997, as the record date for determining the stockholders of the
Company entitled to notice of and to vote at the meeting.
Barry S. Major
CORPORATE SECRETARY
May [ ], 1997
PLEASE MARK, SIGN, AND DATE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN
THE ENVELOPE ENCLOSED FOR YOUR USE. THE PROXY WILL NOT BE USED IF YOU ATTEND
THE MEETING IN PERSON AND SO REQUEST.
<PAGE>
PRELIMINARY COPY -- FOR INFORMATION OF THE SECURITIES AND EXCHANGE COMMISSION
ONLY
[LOGO]
SITEL CORPORATION
13215 BIRCH STREET
OMAHA, NEBRASKA 68164
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 6, 1997
This Proxy Statement is being furnished by SITEL Corporation, a Minnesota
corporation ("SITEL" or the "Company") to holders of shares of its Common Stock,
par value $.001 per share ("Common Stock"), in connection with the solicitation
of proxies by the Board of Directors of the Company for use at the Annual
Meeting of Stockholders of the Company to be held on June 6, 1997 at the Omaha
Marriott, 10220 Regency Circle, Omaha, Nebraska, commencing at 2:00 p.m.,
Central Standard Time, and at any adjournments or postponements thereof (the
"meeting"). Holders of record of the $.001 par Common Stock of the Company
("Common Stock") at the close of business on April 8, 1997 will be entitled to
vote at the meeting.
PROXIES
Proxies are being solicited by the Board of Directors of the Company. The
Company will bear all costs of the solicitation. Stockholders' proxies are
received and counted by or under the direction of the Company's Secretary.
If the accompanying Proxy is properly signed and returned to the Company and
not revoked, the shares covered thereby will be voted in accordance with the
instructions contained therein (except where, as described below, an irrevocable
proxy is already on file with the Secretary of the Corporation for the same
shares). Unless contrary instructions are given, the persons designated as
proxies in the accompanying Proxy will vote for approval of the Resolutions set
forth in this Proxy Statement at the meeting. The accompanying Proxy may be
revoked by the person giving it at any time prior to its being voted; such
revocation may be accomplished by a letter, or by a duly executed Proxy bearing
a later date, filed with the Secretary of the Company prior to the meeting. If a
stockholder who has given a Proxy is present at the meeting and wishes to vote
in person, such stockholder may withdraw the Proxy at that time. Any irrevocable
proxy on file with the Secretary of the Company which has been given by a
stockholder whose stock is subject to a Voting Agreement in favor of James F.
Lynch shall control as to voting on matters covered by such irrevocable proxy
and be used in place of any Proxy in the accompanying form which is returned for
the same shares.
This Proxy Statement and the accompanying Proxy are first being sent to the
holders of Common Stock on or about May [ ], 1997.
VOTING AT THE MEETING
At the close of business on April 8, 1997, the Company had outstanding
60,888,798 shares of Common Stock. Each such share of Common Stock is entitled
to one vote upon each matter to be voted upon at the meeting.
1
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A majority of the votes entitled to be cast on matters to be considered at
the meeting constitutes a quorum. If a share is represented for any purpose at
the meeting, it is deemed to be present for all other matters. Abstentions and
shares held of record by a broker or its nominee ("broker shares") that are
voted on any matter are included in determining the number of votes present.
Broker shares that are not voted on any matter at the meeting will not be
included in determining whether a quorum is present.
The three nominees receiving the highest vote totals will be elected as
directors of SITEL at the meeting. Accordingly, abstentions, failures to vote
and broker non-votes will not affect the outcome of the election of directors.
The proposal to amend the bylaws will be decided by the affirmative vote of two-
thirds (2/3) of the shares present in person or by proxy at the meeting and
entitled to vote. All other matters to be voted on will be decided by the
affirmative vote of a majority of the shares present in person or by proxy at
the meeting and entitled to vote. As a result, abstentions, failures to vote and
broker non-votes will have no effect on the vote in respect of the amendment of
the bylaws and such other matters, except to the extent that they affect the
quorum required for the meeting and the shares present at the meeting.
COMMON STOCK OWNED BY
CERTAIN BENEFICIAL OWNERS AND BY EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information as of April 8, 1997 with
respect to the beneficial ownership of the Company's Common Stock (i) by each
person or group who, to the knowledge of the Company, was the beneficial owner
(as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of
more than 5% of the Common Stock, (ii) by each of the Company's executive
officers and directors, and (iii) by all executive officers and directors of the
Company as a group. Unless otherwise noted, each person or group identified has
sole voting and investment power with respect to the shares shown.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP CLASS
- ------------------------------------------------------------------- ---------------------- ------------
<S> <C> <C>
James F. Lynch (2)(5)(6)........................................... 14,714,291 24.2%
Henk P. Kruithof................................................... 10,309,956 16.9%
Pilgrim Baxter & Associates, Ltd. (3).............................. 5,680,900 9.3%
Matthew H. Gates (4)(5)............................................ 3,333,398 5.4%
Edward R. Taylor (4)(5)............................................ 1,573,196 2.6%
Michael P. May (4)(5).............................................. 698,756 1.1%
Nancy C. Noack (4)................................................. 391,043 *
Barry S. Major (5)................................................. 120,600 *
George J. Kubat (5)(7)............................................. 37,000 *
Kelvin C. Berens (5)............................................... 20,100 *
Bill L. Fairfield (5).............................................. 4,000 *
Phillip A. Clough.................................................. 3,000 *
All executive officers and directors as a group
(10 persons) (4)(5).............................................. 25,720,559 41.8%
</TABLE>
- ------------------------
* Less than 1%
(1) The address of Matthew H. Gates, a former executive officer, is 15 Colleton
River Drive, c/o Colleton River Plantation, Bluffton, South Carolina 29910.
The address of Pilgrim Baxter & Associates, Ltd., an institutional holder,
is 1255 Drummers Lane, Suite 300, Wayne, Pennsylvania 19087.
(2) Includes 6,686,621 shares owned by other stockholders over which Mr. Lynch
exercises voting control pursuant to a Voting Agreement. The Voting
Agreement grants Mr. Lynch the right to vote all shares of Common Stock held
by the stockholders signatory thereto in the manner directed by Mr. Lynch
(except as to certain shares held by an institutional investor, representing
less than 1% of the
2
<PAGE>
outstanding shares, which may be voted by Mr. Lynch only with respect to the
election of directors). Mr. Lynch acquires voting control over additional
shares which are issued pursuant to the Company's stock option plans until
such shares are sold by the holders thereof into the public market.
(3) Based on data available in 13F filings for the calendar quarter ended
December 31, 1996.
(4) Except for shares which have been acquired by these persons in the public
market (representing in the aggregate less than 1% of the outstanding
shares), voting control over these shares is held by Mr. Lynch pursuant to a
Voting Agreement.
(5) Includes the following shares which may be acquired under stock options
which are exercisable currently or within 60 days: Mr. Lynch -- 7,670; Mr.
Gates -- 552,000; Mr. Taylor -- 193,196; Mr. May -- 318,416; Mr. Major --
120,000; Mr. Kubat -- 4,000; Mr. Berens -- 4,000; and Mr. Fairfield --
4,000. Upon exercise, voting control over such shares will be held by Mr.
Lynch pursuant to a Voting Agreement.
(6) Includes 97,000 shares owned by a limited liability company for members of
Mr. Lynch's immediate family.
(7) Includes 3,000 shares owned by a partnership for members of Mr. Kubat's
immediate family. Mr. Kubat shares investment power but disclaims beneficial
ownership.
ITEM 1: APPROVE AN AMENDMENT TO
THE AMENDED AND RESTATED BYLAWS
The Board of Directors has adopted an amendment to the Amended and Restated
Bylaws of SITEL Corporation, subject to stockholder approval.
The amendment to the Amended and Restated Bylaws amends Section 2. NUMBER,
ELECTION, AND TERM OF OFFICE, of Article III. BOARD OF DIRECTORS to increase the
size of the Board from five members to seven members. Under the amendment, one
additional directorship resulting from the increase in the size of the Board is
added to Class II and the other directorship is added to Class III. The purpose
of the amendment is to enable the Company to invite additional persons to join
the Board and thereby gain the benefit of their expertise and business
experience and have additional non-employee independent directors who are
eligible to serve on the Compensation and Audit Committees. The directorship
added to Class III is to be filled at this meeting, with the initial term of the
director elected to such position expiring at the 1998 annual stockholders
meeting and such directorship thereafter being elected or appointed for three
year terms. The directorship added to Class II is to be filled by the Board at a
later date, with the initial term of the director appointed to such position
expiring at the 2000 annual stockholders meeting, and such directorship
thereafter being elected or appointed for three year terms. The Board presently
expects to fill such new Class II directorship by appointing a non-employee
independent director.
The Board of Directors intends to submit the following Resolution to the
Stockholders of the Company at the meeting:
RESOLVED, that the stockholders of the Company hereby approve the
amendment to the Amended and Restated Bylaws of SITEL Corporation which
is set forth in Appendix A to the Proxy Statement for the 1997 Annual
Meeting.
The Board recommends a vote FOR the resolution approving the amendment to
the Amended and Restated Bylaws of SITEL Corporation. Proxies received by the
Board of Directors of the Company will be voted for such Resolution unless
stockholders specify a contrary choice in their proxies. Approval of such
Resolution will require the affirmative vote of the holders of at least
two-thirds (2/3) of the outstanding shares of Common Stock present in person or
by proxy at the meeting and entitled to vote.
3
<PAGE>
ITEM 2: BOARD OF DIRECTORS AND ELECTION
The Company's Board of Directors is presently composed of five members,
divided into three classes. The classes serve initially for terms of one year
(two members), two years (two members) and three years (one member),
respectively, and thereafter for three-year terms.
The terms of the following directors (Class II) expire at the annual meeting
on June 6, 1997: Kelvin C. Berens and George J. Kubat. The Board of Directors'
nominees to positions on the Board expiring at the annual stockholders meeting
in 2000 are: Kelvin C. Berens and George J. Kubat. The Board of Directors'
nominee to the newly created Class III directorship with an initial term
expiring at the annual stockholders meeting in 1998 is Michael P. May. The newly
created Class II directorship will be filled by the Board of Directors at a
later date. The Board of Directors presently intends to appoint a non-employee
independent director to such Class II directorship.
The following paragraphs set forth the principal occupation of each director
and nominee for the last five years, other positions each has held, the date
each was first elected a director of the Company, the date each director's term
expires, and the age of each director and nominee. Nominees for election at the
1997 annual stockholders meeting are listed first.
KELVIN C. BERENS -- Nominee -- Omaha, Nebraska.
Mr. Berens has been a director of the Company since July 1995 and previously
served as a director from shortly after the Company's inception until April
1995. Since 1985, Mr. Berens has been the Managing Partner of Berens & Tate,
P.C., a labor and employment law firm based in Omaha. Berens & Tate, P.C.
provides legal services to the Company in the areas of labor and employment
law. He is 45 years of age.
GEORGE J. KUBAT -- Nominee -- Omaha, Nebraska.
Mr. Kubat has been a director since July 1995. Since 1992, Mr. Kubat has
been the Chief Executive Officer and President of Phillips Manufacturing
Co., a metal fabricating company based in Omaha. From 1969 to 1992, he
served in various positions with the Omaha office of Coopers & Lybrand, most
recently as Tax Partner-in-Charge. Mr. Kubat is also a director of America
First Companies L.L.C. and related publicly-traded partnerships and American
Business Information, Inc. He is 51 years of age.
MICHAEL P. MAY -- Nominee -- Omaha, Nebraska.
Mr. May has served as Chief Executive Officer of SITEL since January 1997.
Mr. May previously served as President of SITEL since June 1996 and as an
Executive Vice President since October 1992, when SITEL acquired May
Telemarketing, Inc., which Mr. May founded in 1985. Prior to founding May
Telemarketing, he was a director, executive officer and treasurer between
1976 and 1982 of Applied Communications, Inc., a publicly-traded software
products company, now known as Transaction Systems Architects, Inc. He is 47
years of age.
The following directors serve for terms that expire after 1997:
BILL L. FAIRFIELD -- Omaha, Nebraska.
Mr. Fairfield has been a director since July 1995. Since 1985, Mr. Fairfield
has been the Chief Executive Officer, President and a director of Inacom
Corp., a marketer and distributor of information technology products and
services. Mr. Fairfield is also a director of The Buckle, Inc. His current
term expires at the 1999 annual stockholders meeting. He is 50 years of age.
4
<PAGE>
HENK P. KRUITHOF -- Brussels, Belgium.
Mr. Kruithof has served as Executive Vice Chairman and a director since
October 1996. Mr. Kruithof is also the Chairman and Chief Executive Officer
of SITEL Europe plc (formerly Mitre plc, which was acquired by SITEL in
September 1996). Mr. Kruithof co-founded Mitre plc in 1992 and its
predecessor Merit Direct Limited in 1985, and has served as their Chairman
since inception. Prior to founding Mitre plc and Merit Direct Limited, Mr.
Kruithof started a number of businesses in various industry sectors and has
extensive experience in managing international businesses. Mr. Kruithof has
previously served on the boards of several European publicly held companies,
including Worcester Group Plc and Robert Bosch Investment plc. His current
term expires at the 1999 annual stockholders meeting. He is 61 years of age.
JAMES F. LYNCH -- Omaha, Nebraska.
Mr. Lynch founded SITEL in 1985 and has served as Chairman and a director
since its inception. From SITEL's inception to January 1997, Mr. Lynch
served as Chief Executive Officer. Prior to founding SITEL, he served as
President of HQ800, Inc., a subsidiary of United Technologies that provided
telemarketing services to third parties. SITEL was formed when Mr. Lynch
negotiated the purchase of the assets of HQ800 from United Technologies.
From 1980 to 1984, Mr. Lynch served as Director of Sales and Marketing for
WATTS Marketing of America, a former subsidiary of First Data Resources, a
credit card processing firm. WATTS is now part of MATRIXX Marketing Inc., a
provider of telemarketing services. His current term expires at the 1998
annual stockholders meeting. He is 47 years of age.
As part of the acquisition of Mitre plc, SITEL agreed to nominate Mr.
Kruithof to the Board and to use all reasonable efforts to solicit proxies for
the election of Mr. Kruithof to the Board until such time as Mr. Kruithof,
directly or indirectly, beneficially owns, in the aggregate, less than five
million of the outstanding shares of Common Stock, subject to adjustment for any
stock splits or other reclassifications.
Proxies received by the Board of Directors will be voted "FOR" the election
of the above nominees unless stockholders direct that their vote be withheld
from one or more of such nominees. In case any nominee shall become unavailable
for election to the Board of Directors for any reason not presently known or
contemplated, the proxy holders will have discretionary authority to vote the
proxies for a substitute. Proxies cannot be voted for a greater number of
persons than the number of nominees named above.
DIRECTORS' MEETINGS AND COMPENSATION
BOARD AND COMMITTEE MEETINGS
The Board of Directors meets on a regularly scheduled basis. During fiscal
1996, the Board met on nine occasions. Each director except Bill L. Fairfield
attended at least 75% of the total number of meetings of the Board on which he
served. Each director attended at least 75% of the meetings of the Committees on
which he served. The Board and Compensation Committee also acted by unanimous
written consent between regularly scheduled and special meetings.
The Board of Directors has an Audit Committee and a Compensation Committee,
all members of which are independent directors. The Audit Committee recommends
the annual engagement of the Company's auditors, with whom the Audit Committee
reviews the scope of audit and non-audit assignments, related fees, the
accounting principles used by the Company in financial reporting, internal
financial auditing procedures and the adequacy of the Company's internal control
procedures. Members of the Audit Committee, which met three times during fiscal
year 1996, are George J. Kubat (Chairman), Kelvin C. Berens, and Bill L.
Fairfield.
The Compensation Committee determines officers' salaries and bonuses and
administers the Company's stock option plans, except for the directors' stock
option plan which is administered by the Stock Option Plan Committee of the
Board, whose sole member consists of James F. Lynch, the only current
5
<PAGE>
non-outside director. Members of the Compensation Committee, which met four
times during fiscal 1996 and acted by unanimous written consent at other times,
are Bill L. Fairfield (Chairman) and George J. Kubat.
The Company does not have a standing Nominating Committee.
DIRECTOR COMPENSATION
For their service on the Board during 1996, non-employee directors were paid
$1,000 per quarterly meeting and $500 per special meeting of the Board of
Directors or committee thereof attended. The quarterly meeting compensation was
increased to $3,000 for 1997. Directors also are reimbursed for expenses
incurred in connection with attendance at Board of Directors and committee
meetings.
Upon first election to the Board of Directors, each non-employee director
receives options to purchase 4,000 shares of Common Stock (as adjusted for stock
splits to date), exercisable at the market price of the Common Stock as of the
date of grant. These options are granted under the SITEL Corporation 1995
Non-Employee Directors Stock Option Plan, vest commencing one year after grant
and expire 10 years after issuance (the "Directors' Options"). Additional
Directors' Options for 4,000 shares are granted to each non-employee director on
each annual anniversary of that director's initial election to the Board of
Directors.
As described under Item 3 in this Proxy Statement, the Company has, subject
to stockholder approval, adopted the Amended and Restated SITEL Corporation 1995
Non-Employee Directors Stock Option Plan ("Restated Plan"). Under the Restated
Plan, each non-employee director will receive options to purchase 18,000 shares
of Common Stock, exercisable at the market price of the Common Stock as of the
date of grant, upon election or re-election to the Board of Directors for a
three-year term. Such options will vest in three equal annual installments, such
installments becoming exercisable on the first, second and third annual
anniversaries, respectively, of the date the option is granted, and expire 10
years after issuance. Incumbent non-employee directors who are not nominees for
re-election at this meeting will be issued options for a prorated portion of
18,000 shares based upon the number of years remaining in his existing term.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION; CERTAIN
TRANSACTIONS
The Compensation Committee is composed of Bill L. Fairfield (Chairman) and
George J. Kubat, both of whom are non-employee directors.
SITEL has purchased products and services from Inacom Corp., a company with
which Bill L. Fairfield is associated in various capacities, but such purchases
during fiscal 1996 were not sufficiently significant to be reportable.
Management believes that these transactions and relationships during fiscal 1996
were on terms that were reasonable and competitive. Additional transactions and
relationships of this kind can be expected to take place in the ordinary course
of business in the future as the Company's needs require.
Kelvin C. Berens is the Managing Partner and owner of more than 10% of the
voting stock in the Berens & Tate, P.C. law firm. The Company engaged the Berens
& Tate, P.C. firm to provide legal services in the areas of labor and employment
law during fiscal 1996, as in previous years, and expects to continue to engage
the firm for such services. The amounts which the Company paid such firm for
such services in fiscal 1996 were not sufficiently significant to be reportable.
As of December 31, 1996, the Company had advanced $65,526.12 to James F.
Lynch to enable Mr. Lynch to pay expenses incurred by him on behalf of the
Company. This advance accrues interest at a rate equal to 9.0% per annum. Upon
Mr. Lynch's subsequent itemization of expenses, the amount of this advance will
be settled. The advance is otherwise due and payable on May 31, 1997. Such
advances can be expected to take place in the ordinary course of business in the
future in order to enable Mr. Lynch to pay expenses incurred by him on behalf of
the Company.
6
<PAGE>
EXECUTIVE COMPENSATION
ANNUAL COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth the compensation
earned by the Company's Chief Executive Officer, the other four executive
officers of the Company at December 31, 1996, and an executive officer who
retired prior to December 31, 1996 but had aggregate salary and bonus of more
than $100,000 (collectively, the "Named Executive Officers"), for services
rendered in all capacities to the Company during the fiscal years ended December
31, 1996, 1995 and 1994.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
ANNUAL COMPENSATION STOCK OPTIONS
---------------------- OTHER ANNUAL (NUMBER OF ALL OTHER
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY BONUS (1) COMPENSATION SHARES) (2) COMPENSATION (3)
- -------------------------------- ----------- ---------- ---------- ----------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
James F. Lynch, 1996 $ 220,385 $ 555,000 -- 38,350 $ 130,542
Chairman and Chief Executive 1995 195,000 467,856 -- -- 134,277
Officer 1994 195,000 450,000 -- -- 86,012
Henk P. Kruithof, 1996 54,354 -- -- -- --
Executive Vice Chairman 1995 -- -- -- -- --
1994 -- -- -- -- --
Michael P. May, 1996 173,077 400,000 -- 175,000 20,620
President 1995 124,616 50,250 -- 796,040 492,815
1994 95,000 55,000 -- -- 4,463
Edward R. Taylor, 1996 139,230 105,000 -- 110,000 30,678
Exec. Vice President 1995 130,000 89,180 -- 482,990 20,756
1994 130,000 168,000 -- -- 16,027
Barry S. Major, 1996 129,616 50,000 -- 110,000 6,733
Exec. Vice President 1995 19,320 -- -- 600,000 --
1994 -- -- -- -- --
Nancy C. Noack, 1996 85,000 35,000 -- -- 4,995
Senior Vice President 1995 85,000 20,250 -- 20,620 2,638
1994 78,250 26,000 -- -- 511
</TABLE>
- ------------------------
(1) Represents bonus payments made to each Named Executive Officer on account of
the Company's performance during such fiscal year. The Company recently
changed its fiscal year end to December 31 but has continued the original
term of the current bonus program for the period June 1, 1996 through May
31, 1997. Accordingly, the fiscal 1996 bonus amounts above do not include
any bonus amounts attributable to the period June 1, 1996 through December
31, 1996 which are to be determined and paid after May 31, 1997.
(2) The fiscal 1996 stock options, other than those granted to James F. Lynch,
were granted in December 1996 for the purchase of shares of Common Stock of
the Company at an exercise price of $15.50 per share pursuant to the Amended
and Restated SITEL Corporation 1995 Employee Stock Option Plan (the
"Employee Stock Option Plan"). These do not include options granted to
Messrs. May, Taylor and Major which were cancelled prior to issuance, as
discussed below under "Repricings of Options and Stock Appreciation Rights".
The fiscal 1996 options to James F. Lynch were granted in June 1996 in
accordance with Mr. Lynch's employment agreement for the purchase of shares
of Common Stock of the Company at exercise prices of $14.71 and $13.38 per
share pursuant to the Employee Stock Option Plan. The fiscal 1995 stock
options, other than those granted to Barry S.
7
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Major, were granted in February 1995 for the purchase of shares of Common
Stock of the Company at an exercise price of $.0025 per share, in
replacement of stock appreciation rights previously granted under the
Company's Employee Equity Benefit Plan and previously granted stock options.
The fiscal 1995 stock options to Barry S. Major were granted in October 1995
for the purchase of shares of Common Stock of the Company at an exercise
price of $5.92 pursuant to the Employee Stock Option Plan and become
exercisable in five equal annual installments (subject to accelerated
exercisability in the event his employment is terminated by the Company
other than for cause or is terminated by Mr. Major because of certain
adverse changes in salary or responsibilities, and upon certain events
involving dissolution, merger, consolidation, sale or lease of substantially
all of the Company's assets, or a change in control of the Company).
(3) Represents amounts matched by the Company under its Executive Wealth
Accumulation Plan, which begin to vest after five years of service with the
Company pursuant to a vesting schedule (subject to accelerated vesting in
the event of a change of control of the Company) in fiscal 1995 and interest
on such matched amounts in fiscal 1996; $64,385, $64,745 and $65,112 for Mr.
Lynch, and $10,186, $10,260 and $10,334 for Mr. Taylor, for fiscal years
1996, 1995 and 1994, respectively, pursuant to split-dollar life insurance
interest-free loans; and forgiveness in the amount of $479,188 related to a
note of Mr. May.
Mr. Kruithof became Executive Vice Chairman and a director of the Company in
October 1996, following the pooling of interests combination of the Company and
Mitre plc effective September 3, 1996. Compensation paid by the Company to Mr.
Kruithof for services rendered to Mitre plc prior to such date is not included
in the above table.
Following the recommendation of Mr. Lynch, the Board appointed Michael P.
May as Chief Executive Officer effective January 27, 1997, a position which Mr.
Lynch had held until such date. Mr. May's duties as President were assumed by
Phillip A. Clough. Mr. Lynch remains Chairman of the Board of Directors.
Mr. Taylor and Mrs. Noack retired from the Company in March 1997 and October
1996, respectively.
OPTION GRANTS AND HOLDINGS
1996 OPTION GRANTS. The following table summarizes the options which were
granted during the fiscal year ended December 31, 1996 to the Named Executive
Officers. No stock appreciation rights were granted during fiscal 1996.
OPTION GRANTS IN FISCAL 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
------------------------------------------ AT ASSUMED ANNUAL RATES OF
% OF TOTAL STOCK PRICE APPRECIATION GRANT DATE
OPTIONS GRANTED FOR OPTION TERM (1) PRESENT
OPTIONS TO IN EMPLOYEES EXERCISE EXPIRATION -------------------------- VALUE (2)
NAME GRANTED IN FISCAL YEAR PRICE DATE 5% ($) 10% ($) 0% ($)
- ----------------------------- --------- --------------- ----------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
James F. Lynch (3)........... 37,380 * $ 14.71 05-31-2001 $ 151,763 $ 335,672 $ 0.00
970 * $ 13.38 08-29-2001 $ 3,793 $ 8,439 $ 0.00
Henk P. Kruithof............. none -- -- -- -- -- --
Michael P. May (4)(5)........ 175,000 3.10% $ 15.50 11-11-2006 $ 1,680,000 $ 4,243,750 $ 0.00
Edward R. Taylor (4)(5)...... 110,000 1.95% $ 15.50 11-11-2006 $ 1,056,000 $ 2,667,500 $ 0.00
Barry S. Major (4)(5)........ 110,000 1.95% $ 15.50 11-11-2006 $ 1,056,000 $ 2,667,500 $ 0.00
Nancy C. Noack............... none -- -- -- -- -- --
</TABLE>
- ------------------------
* Less than 1%
8
<PAGE>
(1) Potential realizable value is based on the assumption that the common stock
price appreciates at the annual rate shown (compounded annually) from the
date of grant until the end of the option term. The average of the high and
low sales prices (adjusted for stock splits) for SITEL's Common Stock
applicable to the date of grant (June 1, 1996) of the non-qualified option
of 970 shares to Mr. Lynch was $13.38 per share as quoted on the Nasdaq
Stock Market; the incentive stock option of 37,380 shares was issued to Mr.
Lynch at an exercise price of $14.71 per share, which was 110% of such fair
market value on such date. The average of the high and low sales prices for
SITEL's Common Stock at the date of grant (December 26, 1996) to Messrs.
May, Taylor and Major was $15.50 per share as quoted on the Nasdaq Stock
Market. For the option granted to Mr. Lynch at an exercise price of $14.71,
SITEL's stock price at the end of the 5 year term based on a 5% appreciation
rate would be $18.77 and based on a 10% appreciation rate would be $23.69.
For the option granted to Mr. Lynch at an exercise price of $13.38, SITEL's
stock price at the end of the 5 year and 90 day term based on a 5%
appreciation rate would be $17.29 and based on a 10% appreciation rate would
be $22.08. For the options granted to Messrs. May, Taylor and Major, SITEL's
stock price at the end of the 9 year and 320 day term based on a 5%
appreciation rate would be $25.10 and based on a 10% appreciation rate would
be $39.75. These numbers are calculated based on the requirements
promulgated by the Securities and Exchange Commission. The actual value, if
any, a Named Executive Officer may realize will depend on the excess of the
stock price over the exercise price on the date the option is exercised (if
the executive were to sell the shares on the date of exercise), so there is
no assurance that the value realized will be at or near the potential
realizable value as calculated in this table.
(2) This "Grant Date Present Value" column represents the total value of each of
the Named Executive Officers' options on the date of grant using the value
per share as quoted on the Nasdaq Stock Market less the exercise price.
(3) These options were granted pursuant to the Employee Stock Option Plan. The
options are for the purchase of Common Stock of the Company and are
exercisable as to 7,670 shares on each of April 15, 1997, 1998, 1999, 2000
and 2001 and expire on May 31, 2001 with respect to the incentive stock
options and on August 29, 2001 with respect to the non-qualified options,
and are subject to earlier exercise or earlier termination and the other
terms and provisions in the option agreements and the Employee Stock Option
Plan.
(4) The options were granted pursuant to the Employee Stock Option Plan. These
options are for the purchase of Common Stock of the Company and are
exercisable as to all shares on May 12, 2006, and expire on November 11,
2006. These options are subject to earlier exercise at the rate of 20% per
year if certain goals are met by SITEL on or before December 31, 2001. These
options are subject to earlier termination and other terms and provisions in
the option agreement and the Employee Stock Option Plan.
(5) Does not include options which were granted but cancelled prior to issuance,
as discussed below under "Repricings of Options and Stock Appreciation
Rights".
9
<PAGE>
1996 OPTION EXERCISES AND HOLDINGS. The following table summarizes
information on aggregate option exercises in the fiscal year ended December 31,
1996 and information with respect to the value of unexercised options to
purchase the Company's Common Stock for the Named Executive Officers. No stock
appreciation rights were exercised during 1996 or were outstanding at December
31, 1996.
AGGREGATED OPTION EXERCISES IN FISCAL 1996
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
NUMBER OF SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE OPTIONS AT 12-31-96 (1) 12-31-96 (2)
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------------------------ ------------------- ------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
James F. Lynch...................... -- -- --/38,350 $ /849
Henk P. Kruithof.................... -- -- --/-- --/--
Michael P. May...................... -- -- 159,208/811,832 2,268,316/9,073,264
Edward R. Taylor.................... -- -- 96,598/496,392 1,376,280/5,505,120
Barry S. Major...................... -- -- 120,000/590,000 999,375/3,997,500
Nancy C. Noack...................... -- -- 4,124/16,496 58,757/235,027
</TABLE>
- ------------------------
(1) All of the options relate to shares of Common Stock. The options held by Mr.
Lynch were granted under the Employee Stock Option Plan. With respect to Mr.
May's options, options for 796,040 shares were granted under the SITEL
Corporation Stock Option Plan (for Replacement of EEBs) and options for
175,000 shares were granted under the Employee Stock Option Plan. With
respect to Mr. Taylor's options, options for 482,980 shares were granted
under the SITEL Corporation Stock Option Plan for Replacement of Existing
Options and options for 110,000 shares were granted under the Employee Stock
Option Plan. Mr. Major's options were granted under the Employee Stock
Option Plan. Ms. Noack's options were granted under the SITEL Corporation
Stock Option Plan (for Replacement of EEBs).
(2) These values have been calculated by subtracting the per share option
exercise price from the fair market value of the underlying Common Stock.
Such fair market value is deemed to be the closing price of the Common Stock
on the New York Stock Exchange as of December 31, 1996, which was $14.25.
REPRICINGS OF OPTIONS AND STOCK APPRECIATION RIGHTS. The following table
summarizes the adjustments or amendments to the exercise price of stock options
or stock appreciation rights previously awarded to any of the Named Executive
Officers, whether through amendment, cancellation or replacement grants, or any
other means.
TEN-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL OPTION
SECURITIES MARKET PRICE OF EXERCISE PRICE TERM REMAINING
UNDERLYING OPTIONS/ STOCK AT TIME AT TIME OF NEW AT DATE OF
SARS REPRICED OR OF REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME DATE AMENDED AMENDMENT AMENDMENT PRICE AMENDMENT
- ---------------------- --------- ------------------- --------------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Michael P. May........ 12/26/96 175,000 $ 15.50 $ 17.75 $ 15.50 11/11/06
Barry S. Major........ 12/26/96 110,000 $ 15.50 $ 17.75 $ 15.50 11/11/06
Edward R. Taylor...... 12/26/96 110,000 $ 15.50 $ 17.75 $ 15.50 11/11/06
</TABLE>
On November 12, 1996, the Compensation Committee approved a stock option
program under the Employee Stock Option Plan which contemplated kickoff grants
on the same date and with the same exercise price to exempt employees worldwide
(the "Award Program"). At the time, the Employee Stock Option Plan provided for
the fair market value of the Common Stock to be determined as of the trading
10
<PAGE>
day immediately preceding the grant date. The kickoff grants to exempt employees
worldwide pursuant to the Award Program approved on November 12, 1996 thus
originally were to be based upon the November 11, 1996 stock price of the Common
Stock. Before these options were actually issued to employees, the Company
determined that United Kingdom law would not permit use of the preceding day's
stock price as the fair market value of grants on November 12, 1996 to United
Kingdom employees and that the Company would either have to set a different
exercise price for its United Kingdom employees or such United Kingdom employees
would be taxed on any increase in the stock price between the two dates. In
order that its employees worldwide could receive options which would have the
same exercise price without adverse tax consequences, on December 26, 1996 the
Company amended the Employee Stock Option Plan to provide for the fair market
value of the Common Stock to be determined as of the grant date rather than the
preceding trading day. Also on December 26, 1996, the Compensation Committee
cancelled the November 12, 1996 option grants and granted new options. The
executive officers named in the above table are the only Named Executive
Officers who were granted options under the Award Program during 1996.
EMPLOYMENT AGREEMENTS
JAMES F. LYNCH. In May 1995, the Company entered into an employment
agreement with Mr. Lynch providing for payment of a base salary equal to an
amount established by the Compensation Committee from time to time, but in no
event less than $250,000 in the first year (with annual adjustments for
increases in the consumer price index). The agreement is for a rolling
three-year term through no later than May 2003. Mr. Lynch is entitled to a bonus
calculated pursuant to criteria agreed upon each year by Mr. Lynch and the
Compensation Committee. The Company has agreed to grant Mr. Lynch annual stock
options covering a minimum of 5% of the aggregate number of shares for which
options were granted during the year to other employees and non-employee
directors. These options fully vest if Mr. Lynch's employment is terminated
other than for cause or his voluntary resignation. Mr. Lynch may terminate the
employment agreement by providing 30 days' written notice of his resignation. If
Mr. Lynch voluntarily terminates his employment with the Company by resigning,
or if his employment is terminated by reason of his death or disability, he or
his estate is entitled to a severance payment equal to 18 months of his base
salary and 1.5 times his average bonus over the preceding three years. If he is
terminated constructively, involuntarily or without cause, he will be entitled
to a severance payment equal to his base salary and his average bonus over the
three preceding years multiplied by the number of years then remaining in the
term of the agreement (rounding fractional years up). If Mr. Lynch's employment
is terminated for cause, he will receive a cash payment equal to his base
salary, bonuses and other compensation and benefits up to the date of
termination. In the event that Mr. Lynch's employment is terminated prior to the
expiration of the agreement for any reason other than his voluntary resignation
or expiration of the employment agreement, he will be entitled to certain
registration rights with respect to his shares of Common Stock. Unless Mr.
Lynch's employment is terminated by the Company without cause, he has agreed not
to compete against the Company for 18 months after termination of his
employment.
MICHAEL P. MAY. Mr. May has an employment agreement terminable at will
providing for payment of a base salary of $95,000 plus an annual bonus of up to
30% of such amount determined in the discretion of the Board of Directors. In
addition, upon execution of the agreement, Mr. May received stock appreciation
rights in 312,500 shares of the Company's Common Stock (which were replaced by
199,010 stock options under the Company's Stock Option Plan (for replacement of
EEBs) in February 1995). The Company also agreed to forgive a loan owed to the
Company by Mr. May in the original principal amount of $407,819 upon certain
events, including the completion of an initial public offering. The loan was
forgiven in February 1995. The Company also agreed to hold Mr. May harmless from
certain personal guarantees which existed at the time of the Company's purchase
of May Telemarketing, Inc. in 1992. Unless Mr. May's employment is terminated
without cause, he has agreed not to compete against the Company for two years
after termination of his employment. In April 1997, Mr. May's base salary was
increased to $250,000.
11
<PAGE>
BENEFIT PLANS
The following summary description of the Company's existing benefit plans
does not incorporate any changes proposed to the Directors Stock Option Plan and
the Employee Stock Option Plan in Items 3 and 4 of this Proxy Statement.
STOCK OPTION PLAN FOR REPLACEMENT OF EXISTING OPTIONS. In February 1995,
the Company's Board of Directors and stockholders adopted the SITEL Corporation
Stock Option Plan for Replacement of Existing Options (the "Replacement Plan").
Pursuant to the Replacement Plan, the Company granted non-qualified options
("Replacement Options") to purchase up to 4,541,780 shares of the Company's
Common Stock to those employees of the Company who, as of the effective date of
the Plan, owned options to purchase stock of the Company (the "Terminated
Options") in replacement of such Terminated Options. No further options will be
granted under the Replacement Plan. The Replacement Plan is administered by the
Compensation Committee.
Replacement Options granted pursuant to the Replacement Plan have an
exercise price of $.0025 per share and expire five years and 90 days from the
date of grant but remain in effect despite termination of employment of an
optionee (including upon death). Replacement Options are exercisable in five
equal installments beginning on January 1, 1996, with succeeding installments
becoming exercisable on January 10, 1997, 1998, 1999 and 2000. The Replacement
Options are subject to accelerated exercisability in connection with certain
events involving dissolution, merger, consolidation, sale or lease of
substantially all of the Company's assets, or a change in control of the Company
if the acquiring or surviving entity does not assume or replace the Replacement
Options with substantially equivalent options.
Under the Replacement Plan, each holder of options is required as a
condition of option exercise to enter into a ten-year voting agreement (the
"Voting Agreement") with James F. Lynch, the Company's Chief Executive Officer,
pursuant to which each will agree to vote all shares of Common Stock held by
such individual in the manner directed by Mr. Lynch. The ten year term of the
Voting Agreement does not commence for option holders until the exercise of
their respective options. The Voting Agreement is binding on each of the
stockholders' and option holders' successors in interest. Mr. Lynch is required
to release shares covered by the Voting Agreement if a stockholder intends to
sell shares in the public market, completes the sale within 90 days of the
release and, in the case of employees of the Company, the stockholder is not
then competing against the Company. Shares sold into the public market will
thereafter not be subject to the Voting Agreement. The Replacement Plan also
provides that, prior to publicly or privately selling any shares underlying
options, optionees must provide the Company with written notice of the sale and
the right to elect to purchase such shares within ten days at the market price
or the privately negotiated sales price, as the case may be. This right of first
refusal expires as to shares sold into the public market.
STOCK OPTION PLAN FOR REPLACEMENT OF EEBS. In February 1995, the Company's
Board of Directors and stockholders adopted the SITEL Corporation Stock Option
Plan (the "EEB Replacement Plan"). Pursuant to the EEB Replacement Plan, the
Company granted non-qualified options ("EEB Options") to purchase up to
7,381,720 shares of the Company's Common Stock to employees of the Company who,
as of the effective date of the Plan, owned stock appreciation rights under the
Company's Employee Equity Benefit Plan (the "EEB Plan") which was terminated
concurrently with the adoption of the EEB Replacement Plan. No further options
will be granted under the EEB Replacement Plan. The EEB Replacement Plan also is
administered by the Compensation Committee.
EEB Options granted pursuant to the EEB Replacement Plan have an exercise
price of $.0025 per share and expire five years and 90 days from the date of
grant but remain in effect despite termination of employment of an optionee
(including upon death). EEB Options are exercisable in five equal installments
beginning on January 1, 1996, with succeeding installments becoming exercisable
on January 10, 1997, 1998, 1999 and 2000. The EEB Options are subject to
accelerated exercisability in connection with certain events involving
dissolution, merger, consolidation, sale or lease of substantially all of the
Company's
12
<PAGE>
assets, or a change in control of the Company if the acquiring or surviving
entity does not assume or replace the EEB Options with substantially equivalent
options.
The EEB Plan also provides that optionees must enter into a Voting Agreement
and comply with a right of first refusal similar to those described above under
the Replacement Plan.
EMPLOYEE STOCK OPTION PLAN. In September 1996 the Company's Board of
Directors adopted, and in October 1996 the Company's stockholders approved, the
Amended and Restated SITEL Corporation 1995 Employee Stock Option Plan (the
"Employee Stock Option Plan"). The Employee Stock Option Plan provides for the
granting of various types of incentive awards ("Awards") for the issuance of up
to an aggregate of 9,800,000 shares (as adjusted for stock splits) of Common
Stock to employees and independent consultants of the Company and its
subsidiaries. The Awards permitted under the Employee Stock Plan include: (a)
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended ("Incentive Options") and/or options that do
not qualify as Incentive Options ("Non-Qualified Options") (collectively,
"Options"), (b) stock appreciation rights with respect to shares of Common Stock
of the Company ("SARs"), (c) nonvested or restricted shares of Common Stock of
the Company ("Restricted Stock"), (d) performance share awards which are
designated as a specified number of shares of Common Stock of the Company and
earned based on performance ("Performance Shares"), and (e) performance unit
awards which are designated as having a certain value per unit and earned based
on performance ("Performance Units"). The Employee Stock Option Plan is
administered by the Compensation Committee.
Incentive Options may not be granted at exercise prices less than the fair
market value of the Common Stock on the date of grant (or, for an option granted
to a person holding more than 10% of the Company's voting stock, at less than
110% of fair market value). Non-Qualified Options may not be granted at an
exercise price below the par value of the shares of Common Stock. SARs are
granted at exercise prices as determined by the Compensation Committee. The
Company may settle the SAR in the form of cash (either in a lump sum payment or
in installments), whole shares of Common Stock or a combination thereof, as the
participant's award agreement prescribes. Restricted Stock may be vested or may
be nonvested until specific conditions specified in the participant's award
agreement are met. Restricted Stock may be issued to a participant with or
without payment by the participant of any consideration, unless required to pay
a minimum price such as par value. Performance Shares and Performance Units may
be granted without payment by the participant of any consideration and vest upon
achievement of the applicable objectives within the applicable performance
period. Following the end of the applicable performance period, the Company may
settle vested Performance Shares and Performance Units in the form of cash
(either in a lump sum payment or in installments), whole shares of Common Stock
or a combination thereof, as the participant's award agreement prescribes.
A participant whose employment ceases for cause forfeits all unexercised
vested Awards and all nonvested Awards. A participant whose employment ceases
because of total and permanent disability or for any reason other than death or
for cause forfeits any non-vested Awards and has three months after termination
within which to exercise his or her vested Awards. Awards may not be transferred
other than by will or the laws of descent and distribution and the vested
portion of Awards may be exercised during the lifetime of an optionee. The
vested portion of Awards which have been granted to participants who terminate
employment due to death may be exercised for a period of one year thereafter,
except that any Performance Share, Performance Unit, or share of Restricted
Stock which is not vested and did not become vested as a consequence of the
participant's death is forfeited. The term of each award, which is fixed at the
date of grant, may not exceed ten years from the date the award is granted,
except that an Incentive Option granted to a person holding more than 10% of the
Company's voting stock may be exercisable only for five years. Each share of
Restricted Stock which is not vested within 10 years from the date the
Restricted Stock was granted is forfeited. Options may be made exercisable in
whole or in installments. The Employee Stock Option Plan also provides that
optionees must enter into a Voting
13
<PAGE>
Agreement and comply with a right of first refusal similar to those described
above under the Replacement Plan.
DIRECTORS STOCK OPTION PLAN. In April 1995, the Board of Directors adopted
the SITEL Corporation 1995 Non-Employee Directors Stock Option Plan (the
"Directors Stock Option Plan"), which provides for automatic, formula grants of
Non-Qualified Options to each non-employee director of the Company. The Company
is authorized to issue 120,000 shares (as adjusted for stock splits to date)
under this plan. Each non-employee director is granted Non-Qualified Options to
purchase 4,000 shares (as adjusted for stock splits to date) of Common Stock
upon first being elected to the Board of Directors and on each anniversary
thereof. The exercise price for all Non-Qualified Options will equal the fair
market value of the Common Stock on the date of grant and options will become
exercisable commencing one year after grant and remain exercisable for a period
of nine years thereafter. The Non-Employee Directors Plan is administered by the
Board members who are not eligible to participate in this plan. The Non-Employee
Directors Plan also provides that optionees must enter into a Voting Agreement
and comply with a right of first refusal similar to those described above under
the Replacement Plan.
EXECUTIVE WEALTH ACCUMULATION PLAN. In May 1994, the Company adopted the
SITEL Corporation Executive Wealth Accumulation Plan (the "Wealth Accumulation
Plan"). The Wealth Accumulation Plan is administered by the Compensation
Committee and permits executive employees selected by the Compensation Committee
to elect voluntary salary reductions of up to 25% of base salary and 100% of
incentive compensation. The Company may voluntarily match a portion of the
compensation deferred by participants. Amounts deferred by participants are
fully vested immediately and amounts contributed by the Company are subject to a
vesting schedule beginning after five years of service with the Company until
the earlier of 15 years of service with the Company or death, disability or
retirement after age 65 (subject to accelerated vesting in the event of a change
of control of the Company). Participants' accounts earn interest at a rate equal
to the average of the composite yield on Moody's Seasoned Corporate Bond Yield
Index as published by Moody's Investor's Services. Participants may also receive
early distribution of their entire vested account in one lump sum payment after
having participated in the plan for five years. The Company's obligations under
the Wealth Accumulation Plan are unfunded and unsecured.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
SITEL's executive compensation program is administered by the Compensation
Committee (the "Committee") of the Board of Directors. The Committee is composed
of two non-employee directors. The Committee has the responsibility for general
oversight of the Company's compensation program and benefit plans. The Committee
regularly reviews the executive compensation policies and practices of the
Company and establishes the salaries of executive officers. The Committee
administers the stock option plans in which executive officers participate.
COMPENSATION POLICIES
The Company's compensation policies are designed to attract and retain
highly able and motivated individuals at all levels of the Company. In addition,
the compensation policies are designed to be cost effective and to treat all
employees fairly. The Company's overall approach to compensation emphasizes the
following: competitive salaries, significant bonuses tied to Company, business
unit and individual performance, and an opportunity to build exceptional
long-term value through equity participation.
In establishing total compensation amounts, the Committee considers a
variety of measures of historical and projected Company performance. This review
includes such measures as revenues, operating margin, net income, earnings per
share, return on shareholders' equity, return on assets, performance against
budget, and total market value. This information forms the basis for the
Committee's assessment of the Company's overall performance and prospects, which
underpins the Committee's establishment of total compensation ranges. The
Committee makes a subjective determination based upon a collective consideration
of all such factors.
14
<PAGE>
FACTORS AND CRITERIA OF EXECUTIVE COMPENSATION
ANNUAL COMPENSATION
Annual compensation for 1996 consisted of three components: base salary,
cash bonuses, and equity participation. Individual base salary increases are
determined primarily by individual performance. Assessment of an individual's
performance includes consideration of a person's impact on the Company's
financial performance as well as their judgment, creativity, effectiveness in
developing subordinates, and contributions to the improvement in the quality of
the Company's services and operations.
Annual cash bonuses are paid to executives pursuant to executive bonus
programs at the corporate and business unit levels. These programs have operated
from June 1 through May 31, but are changing to correspond with the Company's
change to a calendar year. As a transition into calendar year plans, including
bonus programs, the Company intends to continue in place its previous fiscal
1997 plans for the North American Operating Region and the executives and
members of the senior corporate staff for the twelve months ending May 31, 1997.
The Company's other operating regions already had calendar year bonus plans in
place. A June 1997 review is scheduled to compare actual performance against the
previous fiscal 1997 plans for the North American Operating Region and the
Company overall, with a possible mid-year payment of bonuses to the North
American Operating Region and corporate management as a transition into the
calendar 1997 plan. Any bonuses paid under the previous fiscal 1997 plan are to
be applied against the bonuses determined under the calendar 1997 plan discussed
below. Because the cash bonus compensation for executives for the last seven
months of 1996 will not be determined or paid until after May 31, 1997, the cash
bonus component of 1996 annual compensation shown in the Executive Compensation
table in the Proxy Statement relates solely to the former fiscal year ended May
31, 1996.
Under the fiscal 1997 plans, the executives and members of the senior
corporate staff participate in a bonus pool which, subject to downward
adjustment if operating margin and net income objectives are not met, represents
approximately 1% of the Company's revenues. The North American Operating Region
business unit executives participate in a similar bonus pool which, again
subject to downward adjustment if operating margin and net income objectives are
not met, represents approximately 1% of the business unit's revenues. Actual
awards from the bonus pools depend upon achievement of Company, business unit
and individual goals. Generally approximately 80% of the actual corporate level
bonus pool has been allocated among the senior management and the other 20% has
been allocated among the other executives and staff at the corporate level.
Generally up to approximately 25% of each business unit's actual bonus pool has
been allocated to the business unit head and the balance has been allocated to
the other executives and staff in the business unit.
Under the calendar year bonus plans into which the Company will transition
during 1997, senior management will have cash bonus opportunities based upon a
percentage of the executive's base salary. No bonus is payable unless the
Company achieves at least 40% growth in both revenues and earnings per share
over the prior year. The full bonus is payable if the Company achieves at least
50% growth in both revenues and earnings per share over the prior year. The
bonus program for each business unit consists of a bonus plan constructed to
actual performance against their business plan and tied to the prior year's
performance. The Committee has discretion to adjust upward or downward bonus
amounts computed according to any of the bonus plans or programs.
LONG-TERM INCENTIVES
Stock options are a form of long-term incentive used for executive officers
and other management level employees. This incentive emphasizes the long-term
focus necessary for the Company's continued success. The Company has also
emphasized the importance of substantial equity ownership by individuals in
leadership roles to ensure proper focus on shareholder value. Stock options have
traditionally been granted broadly and deeply within the organization. In
December 1996, the Company began a new program under which one-time "kickoff"
options are awarded to all full-time exempt employees worldwide, including new
employees joining the Company after the kickoff. The options become exercisable
on May 12, 2006 and expire on November 11, 2006 but are subject to earlier
exercise at the rate of 20% per
15
<PAGE>
year if certain performance goals are met by the Company on or before December
31, 2001. Approximately 4.6 million kickoff options were granted during 1996 to
more than 1,700 employees worldwide under this award program. Top-performing
employees in Levels 1 through 6, which excludes senior management and business
unit leaders and generally consists of directors, managers, supervisors and
other full-time salaried employees with responsibility for executing defined
goals in support of the Company's business plan, are eligible to be awarded
additional options on similar terms based upon their individual performance
during the year.
CHIEF EXECUTIVE OFFICER COMPENSATION
The compensation of James F. Lynch, Chairman of the Board and Chief
Executive Officer during 1996, is determined in substantial part by his
employment agreement. Mr. Lynch's employment agreement provides for a $250,000
base salary, a bonus calculated pursuant to criteria agreed upon each year by
Mr. Lynch and the Compensation Committee, and options equal to at least 5% of
the options granted during the year to other employees.
In establishing the agreed bonus criteria applicable to the twelve month
period ending May 31, 1997, the Committee reviewed with Mr. Lynch the financial
and business performance of the Company for the year ending May 31, 1996. The
review included a number of factors, including revenues, operating margins,
earnings, return on equity, growth in revenues and earnings, and total
shareholder return. In arriving at the agreed criteria, the Committee made a
subjective determination based upon a consideration of all such factors
collectively, rather than assigning relative rates or rankings for such factors.
The cash bonus component of annual compensation shown for Mr. Lynch in the
Executive Compensation table for 1996 relates to the June 1, 1995 through May
31, 1996 period, which was reported on by the Committee in the 1996 proxy
statement. Mr. Lynch's actual cash bonus compensation for the last seven months
of 1996 is not scheduled to be determined or paid until after May 31, 1997 and
is to be based upon an evaluation of Mr. Lynch's and the Company's performance
from June 1, 1996 through May 31, 1997.
In accordance with his employment agreement, Mr. Lynch was awarded a total
of 38,350 options in June 1996 at fair market value (non-qualified options) or
110% of fair market value (incentive stock options) at date of grant. Mr. Lynch
elected not to participate in the Company's award of kickoff options in December
1996.
COMMITTEE ACTIONS
The Committee's actions were not modified or rejected in any material way by
the Board of Directors.
SUBMITTED BY THE
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
OF SITEL CORPORATION
Bill L. Fairfield
George J. Kubat
16
<PAGE>
PERFORMANCE GRAPH
The following line graph compares the yearly percentage change in the
cumulative stockholder return on the Company's Common Stock for the period since
the Initial Public Offering of its Common Stock on June 8, 1995 with the
cumulative total return of a Competitor Index (computed by the Company) and with
the Standard & Poors 500 Index through the year ended December 31, 1996. The
comparison assumes $100 was invested on June 8, 1995 in the Company's Common
Stock and in each of the foregoing indices and assumes reinvestment of
dividends, if any.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SITEL COMPETITORS INDEX S&P 500
<S> <C> <C> <C>
6/8/95 $100.00 $100.00
6/30/95 $117.17 $102.13
7/31/95 $136.04 $105.37
8/31/95 $140.89 $105.34
9/30/95 $160.55 $109.56
10/31/95 $149.15 $100.00 $109.02
11/30/95 $168.74 $125.25 $113.49
12/31/95 $200.66 $132.18 $115.47
1/31/96 $217.89 $181.19 $119.24
2/29/96 $250.66 $179.70 $120.07
3/31/96 $296.53 $282.18 $121.02
4/30/96 $362.06 $264.11 $122.64
5/31/96 $344.04 $291.11 $125.44
6/30/96 $550.46 $276.16 $125.73
7/31/96 $445.61 $254.25 $119.98
8/31/96 $460.35 $292.85 $122.23
9/30/96 $583.22 $351.71 $128.85
10/31/96 $517.69 $320.41 $132.22
11/30/96 $517.69 $295.27 $141.92
12/31/96 $373.53 $252.34 $138.87
</TABLE>
Since the Company's initial public offering in June 1995, over a dozen
telemarketing firms have gone public. The five largest, in terms of market
capitalization, were used to compute a "Competitors' Index", using month-end
stock prices and their respective market capitalization values to appropriately
weight their stock prices. Monthly data points were used to add meaning to the
period's results.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES AND EXCHANGE ACT
The Company's officers and directors, and persons who own more than 10% of
the Company's Common Stock, are required to file reports of ownership and
changes in ownership of the Company's Common Stock with the Securities and
Exchange Commission. Copies of such reports must also be furnished to the
Company. Based solely upon a review of the copies of reports furnished to the
Company and written representations that no other reports were required, the
Company believes that during fiscal 1996 its officers and directors and greater
than 10% beneficial owners complied with such filing requirements, except that
Michael P. May, Barry S. Major, Edward R. Taylor, Alan J. Rausch, Donald J.
Vrana, Henk P. Kruithof, George J. Kubat, and the George J. Kubat Trust each
filed one report, relating to certain transactions during 1996, after the due
date thereof.
ITEM 3: APPROVE THE AMENDED AND RESTATED
SITEL CORPORATION 1995 NON-EMPLOYEE DIRECTORS OPTION PLAN
In 1995, the Company's Board of Directors adopted, and the Company's
stockholders approved, the SITEL Corporation 1995 Non-Employee Directors Stock
Option Plan ("Prior Plan"). As of January 31, 1997, a total of 28,000 options
was outstanding under the Prior Plan.
Subject to stockholder approval, the Board of Directors of SITEL has adopted
the Amended and Restated SITEL Corporation Non-Employee Directors Stock Option
Plan ("Restated Plan"), which amends and restates the Prior Plan. The material
changes from the Prior Plan are to (a) provide for
17
<PAGE>
issuance of up to a total of 300,000 shares of Common Stock, an increase of
180,000 shares from the Prior Plan, (b) provide that non-qualified options to
purchase 18,000 shares of Common Stock shall be granted on each date a
non-employee director is elected or re-elected to the Board of Directors for a
three-year term which options shall become exercisable in three equal annual
installments beginning one year after the date of grant and (c) provide for
accelerated exercisability of the options if the Company dissolves, liquidates,
merges or consolidates with another corporation and is not the surviving
corporation, or substantially all of the assets or more than 80% of the
outstanding Common Stock is sold. Under the Prior Plan, non-employee directors
were granted options to purchase 4,000 shares (as adjusted for stock splits to
date) of Common Stock on an annual basis which options became exercisable on the
first year anniversary of the option grant date and such exercisability was not
accelerated upon the events described above. Approval of the Restated Plan
requires the affirmative vote of a majority of the outstanding shares of Common
Stock present in person or by proxy at the meeting and entitled to vote.
The following summary of the material terms of the Restated Plan, a copy of
which is attached hereto as Appendix B, does not purport to be complete and is
subject to and qualified in its entirety by the full terms of the Restated Plan.
All members of the Board who are not employees of the Company or any
Subsidiary as of the date of any option grant pursuant to the Restated Plan are
eligible to participate in the Restated Plan. The Restated Plan provides for
automatic, formula grants of non-qualified options to purchase 18,000 shares of
the Company's Common Stock to each non-employee director upon first being
elected to the Board for a three-year term and on each succeeding date that such
person is re-elected to the Board. The exercise price for all such options will
equal the fair market value of the Common Stock on the date of grant. The
options granted to a director in respect of a three-year term become exercisable
in three equal annual installments beginning one year after the date of grant
and will remain exercisable (subject to earlier termination upon certain
corporate events) until ten years after the date of the grant. The Non-Employee
Directors Plan is administered by the Board members who are not eligible to
participate in this plan. The Non-Employee Directors Plan also provides that
optionees must enter into a Voting Agreement and comply with a right of first
refusal similar to those described above under the Replacement Plan.The
aggregate number of shares of Common Stock which may be issued under the
Restated Plan is 300,000 shares. The aggregate market value of the Common Stock
underlying the options permitted by the Restated Plan is $4,425,000, based upon
the $14.75 closing price of the Common Stock as of April 8, 1997.
As contemplated by the Restated Plan, the Class II non-employee directors
elected at the 1997 annual meeting of stockholders (Kelvin C. Berens and George
J. Kubat) will receive options to purchase 18,000 shares of the Company's Common
Stock, and the Class I non-employee director elected at the 1996 annual meeting
of stockholders (Bill L. Fairfield) will receive options to purchase 12,000
shares of Common Stock, which reflects proration of the 18,000 shares for the
two years remaining under his current term. Kelvin C. Berens, George J. Kubat,
and Bill L. Fairfield each received options to purchase 8,000 shares of Common
Stock (as adjusted for stock splits to date) under the Prior Plan, and all
current directors who are not executive officers as a group received options to
purchase 24,000 shares of Common Stock (as adjusted for stock splits to date)
under the Prior Plan.
The following table shows, based on the expected composition of the Board
immediately following the meeting, the number of shares covered by stock options
which will be granted in 1997 under the Restated Plan, provided it is approved
by stockholders.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE NUMBER OF SHARES
- --------------------------------------------------------------- -------------------- -----------------
<S> <C> <C>
All current directors who are not executive officers as a group
(3 persons).................................................. Not determinable 48,000
</TABLE>
Non-qualified options may not be granted at exercise prices less than the
fair market value of the Common Stock on the date of grant. Options granted to a
director in respect of a three-year term will
18
<PAGE>
become exercisable in three equal annual installments of the total shares of
Common Stock covered by the option, beginning with the first year anniversary of
the date the option is granted. No option may be exercised after the expiration
of ten years from the date it is granted.
The Restated Plan is not qualified under Section 401 of the Internal Revenue
Code of 1986, as amended (the "Code"). The tax treatment of non-qualified
options is governed by Section 83 of the Code. Generally, holders of
non-qualified options are subject to tax, at ordinary income rates, at the time
of exercise of the non-qualified option and the Company receives a corresponding
income tax deduction, and future appreciation after the date is subject to
capital gains treatment.
Options may be granted pursuant to the Restated Plan through May 31, 2005.
All options which are outstanding on such date remain in effect until they are
exercised or expire by their terms. The Restated Plan expires for all purposes
on May 31, 2015. The Board is authorized to suspend, discontinue, revise, amend
or extend the Restated Plan for an additional term at any time, subject to
stockholder approval if then required by the Code or other applicable laws or
regulations. The Restated Plan is administered by the Committee, which is
comprised of the Board member(s) who are not eligible to participate in the
Restated Plan.
If a participant's service as a director of the Company terminates for any
reason, then the participant's options which were exercisable on the date of the
participant's termination of service as a director shall remain in full force
and effect and the participant may exercise such outstanding options in
accordance with their original terms. All options which had been granted to the
participant as of the date of the participant's termination of service as a
director but were not yet exercisable shall automatically terminate as of such
director's termination date. Options may not be transferred or assigned other
than by will or the laws of descent and distribution and the vested portion of
options may be exercised during the lifetime of a participant only by such
participant or the participant's legal representative. The exercisable portion
of options which have been granted to participants who terminate service as a
director due to death may be exercised by such deceased participant's executor,
administrator, other duly appointed representative, or the devisee of such
deceased participant's options in accordance with the terms and provisions of
the Restated Plan and the applicable option agreement. The term of each option
is fixed at the date of grant and may not exceed ten years from the date the
option is granted.
Options are exercisable in whole or in installments. Unless otherwise
provided in the particular award agreement, if the Company dissolves,
liquidates, merges or consolidates with another corporation and is not the
surviving corporation, or substantially all of the assets or more than 80% of
the outstanding Common Stock of the Company is sold, then each option shall
expire as of the effective date of such transaction, provided that the Committee
shall give at least fifteen (15) days prior written notice of such event to any
participant who shall then have the right to exercise his or her outstanding
options in whole or in part prior to the effective date of such transaction,
subject to earlier expiration pursuant to the Restated Plan.
Participants must comply with a right of first refusal in favor of the
Company with respect to the sale of any shares of Common Stock acquired upon the
exercise of options granted under the Restated Plan. All shares of Common Stock
issued pursuant to the Restated Plan will be subject to a Voting Agreement in
favor of James F. Lynch and to a right of first refusal in favor of the Company
with respect to the sale of any shares acquired upon exercise of options granted
under the Restated Plan.
The Board of Directors of the Company intends to submit the following
Resolution to the stockholders of the Company at the meeting:
RESOLVED, that the stockholders of the Company hereby approve the
Amended and Restated SITEL Corporation 1995 Non-Employee Directors Stock
Option Plan which is set forth in Appendix B to the Proxy Statement for
the 1997 Annual Meeting.
19
<PAGE>
THE BOARD RECOMMENDS A VOTE FOR THE RESOLUTION APPROVING THE AMENDED AND
RESTATED SITEL CORPORATION 1995 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN.
Proxies received by the Board of Directors of the Company will be voted for such
Resolution unless stockholders specify a contrary choice in their proxies.
Approval of such Resolution will require the affirmative vote of the holders of
at least a majority of the outstanding shares of Common Stock present in person
or by proxy at the meeting and entitled to vote.
ITEM 4: APPROVE AN AMENDMENT TO THE AMENDED AND RESTATED
SITEL CORPORATION 1995 EMPLOYEE STOCK OPTION PLAN
In 1996, the Company's Board of Directors adopted, and the Company's
stockholders approved, the Amended and Restated SITEL Corporation 1995 Employee
Stock Option Plan ("Restated Plan"). As of January 31, 1997, a total of
6,626,116 options was outstanding under the Restated Plan.
Subject to stockholder approval, the Company's Board of Directors has
adopted an amendment to the Amended and Restated SITEL Corporation 1995 Employee
Stock Option Plan ("Amendment"), a copy of which is attached hereto as Exhibit
C. The Amendment provides that the aggregate number of shares of Common Stock
which may be utilized and/or issued to a participant under the Restated Plan
shall not exceed one million (1,000,000) shares. The Amendment also documents
the adjustment which the Compensation Committee previously made, in accordance
with Section 12 of the Restated Plan, to the total number of shares which may be
issued under the Restated Plan from 4,900,000 shares to 9,800,000 shares because
of a stock split effective October 21, 1996. Approval of the Amendment requires
the affirmative vote of a majority of the outstanding shares of Common Stock
present in person or by proxy at the meeting and entitled to vote.
The following summary of the material terms of the Restated Plan, as
amended, does not purport to be complete and is subject to and qualified in its
entirety by the full terms of the Restated Plan, as amended.
All employees and independent consultants of the Company and its
subsidiaries (including an employee or independent consultant who is an officer
or director) are eligible to participate in the Restated Plan. The Plan
Administrator, which is a committee consisting of at least two non-employee
directors, administers the Restated Plan, selects the employees and independent
consultants who will participate in the Restated Plan, and grants awards to
participants.
The following table shows the total Awards which have been granted or issued
to each Named Executive Officer, to the current executive officers as a group,
and to all employees other than current executive officers (as adjusted for
stock splits) as of January 31, 1997 for the issuance or acquisition of shares
of the Company's Common Stock under the Restated Plan. Because future Awards to
these persons and groups are discretionary and cannot be determined at this
time, the table does not reflect any such Awards.
PLAN BENEFITS
<TABLE>
<CAPTION>
EXERCISE PRICE PER
NAME AND POSITION SHARE NUMBER OF SHARES (1)
- --------------------------------------------------------- ----------------------- --------------------
<S> <C> <C>
James F. Lynch $14.71 37,380
Chief Executive Officer.................................. 13.38 970
Henk P. Kruithof
Executive Vice Chairman.................................. -- --
Michael P. May
President................................................ 15.50 175,000
Edward R. Taylor
Executive Vice President................................. 15.50 110,000
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
EXERCISE PRICE PER
NAME AND POSITION SHARE NUMBER OF SHARES (1)
- --------------------------------------------------------- ----------------------- --------------------
<S> <C> <C>
Barry S. Major 5.92 600,000
Executive Vice President................................. 15.50 110,000
All current executive officers as a group................ Fair market value on 1,323,350
date of grant
All employees, other than current executive officers, as
a group.................................................. Fair market value on 5,359,274
date of grant
</TABLE>
- ------------------------
(1) Does not include options which were granted but cancelled prior to issuance,
as discussed above under "Repricings of Options and Stock Appreciation
Rights".
The Restated Plan permits the grant of various types of incentive awards
("Awards") including (a) incentive stock options within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended ("Incentive Options")
and/or options that do not qualify as Incentive Options ("Non-Qualified
Options") (collectively, "Options"), (b) stock appreciation rights with respect
to shares of Common Stock of the Company ("SARs"), (c) nonvested or restricted
shares of Common Stock of the Company ("Restricted Stock"), (d) performance
share awards which are designated as a specified number of shares of Common
Stock of the Company and earned based on performance ("Performance Shares"), and
(e) performance unit awards which are designated as having a certain value per
unit and earned based on performance ("Performance Units"). The aggregate number
of shares of Common Stock which may be utilized and/or issued with respect to
Awards is 9,800,000 shares. The aggregate number of shares of Common Stock which
may be utilized and/or issued with respect to Awards per participant is
1,000,000 shares. The aggregate market value of the Common Stock underlying the
Awards permitted by the Restated Plan is $144,550,000, based upon the $14.75
closing price of the Common Stock as of April 8, 1997.
Incentive Options may not be granted at exercise prices less than the fair
market value of the Common Stock on the date of grant (or, for an option granted
to a person holding more than 10% of the Company's voting stock, at less than
110% of fair market value). Non-Qualified Options may not be granted at exercise
prices below the par value of the shares of Common Stock. The Restated Plan is
not qualified under Section 401 of the Internal Revenue Code of 1986, as amended
(the "Code"). The tax consequences of the issuance and exercise of Options
granted under the Restated Plan depend upon whether they are Incentive Options
or Non-Qualified Options. The tax treatment of Incentive Options is governed by
Sections 421 and 422 of the Code while the tax treatment of Non-Qualified
Options is governed by Section 83 of the Code. Generally, holders of Incentive
Options are subject to tax, at capital gains rates at the time they dispose of
the stock acquired upon exercise of the Incentive Option, subject to certain
required minimum holding periods. If the stock has not been held for the
requisite minimum holding period, the income realized with be taxed at ordinary
income rates at the time of the disqualifying disposition and the Corporation
receives a corresponding income tax deduction. Generally, holders of
Non-Qualified Options are subject to tax, at ordinary income rates, at the time
of exercise of the Option and the Company receives a corresponding income tax
deduction and future appreciation after the exercise date is subject to capital
gains treatment.
SARs allow a participant to receive all or any portion of the future
appreciation in the fair market value of one share of Common Stock on the date
of exercise over the exercise price of such SAR. SARs are granted at exercise
prices as determined by the Plan Administrator. The Company may settle the SAR
in the form of cash (either in a lump sum payment or in installments), whole
shares of Common Stock or a combination thereof, as the participant's award
agreement prescribes.
21
<PAGE>
Restricted Stock may be vested or may be nonvested until specific conditions
specified in the participant's award agreement are met. Restricted Stock may be
issued to a participant with or without payment by the participant of any
consideration, unless required to pay a minimum price such as par value.
Performance Shares (designated as a specified number of shares of Common
Stock) and Performance Units (designated as a specified dollar value) may be
granted without payment by the participant of any consideration and vest upon
achievement of the applicable objectives within the applicable performance
period. Following the end of the applicable performance period, the Company may
settle vested Performance Shares and Performance Units in the form of cash
(either in a lump sum payment or in installments), whole shares of Common Stock
or a combination thereof, as the participant's award agreement prescribes.
Awards may be granted pursuant to the Restated Plan through September 20,
2005. All Awards which are outstanding on such date remain in effect until they
are exercised or expire by their terms. The Restated Plan expires for all
purposes on September 20, 2015. The Board is authorized to extend the Plan for
an additional term at any time; however, no Incentive Stock Options may be
granted under the Restated Plan during an extended term unless, if stockholder
approval is then required by the Code or applicable regulations, the extension
is approved by the stockholders of the Company within one year of such
extension. The Plan Administrator may amend or terminate the Restated Plan at
any time, subject to stockholder approval if then required by the Code or
applicable regulations with respect to amendments that would (i) increase the
aggregate number of shares of Common Stock issuable as Incentive Stock Options
under the Restated Plan, or (ii) change the designation of the class of persons
eligible to receive Incentive Stock Options.
A participant who leaves the Company for reasons other than death, total and
permanent disability, or termination for cause forfeits any non-vested
Performance Shares and/or Performance Units, forfeits any non-vested shares of
Restricted Stock, and has three months after termination within which to
exercise his or her vested awards other than awards of Performance Shares,
Performance Units or Restricted Stock. Awards may not be transferred other than
by will or the laws of descent and distribution and the vested portion of Awards
may be exercised during the lifetime of an optionee only by the optionee. The
vested portion of Awards which have been granted to employees who terminate
employment due to death may be exercised for a period of one year thereafter,
except that any Performance Share, Performance Unit, or share of Restricted
Stock which is not vested and did not become vested as a consequence of the
participant's death is forfeited. The term of each award, which is fixed at the
date of grant, may not exceed ten years from the date the award is granted,
except that an Incentive Option granted to a person holding more than 10% of the
Company's voting stock may be exercisable only for five years and except that
the term of Performance Shares or Performance Units may not exceed ten years
from the date the Performance Share and/or Performance Unit was granted. Each
share of Restricted Stock which is not vested within 10 years from the date the
Restricted Stock was granted is forfeited. In the event of a participant's
death, Performance Shares and/or Performance Units may not be transferred other
than by will or the laws of descent and distribution and any Performance Shares
and/or Performance Units which are not vested and did not become vested as a
consequence of the participant's death are forfeited.
Awards may be made exercisable in whole or in installments. Unless otherwise
provided in the particular option agreement, upon the (a) dissolution or
liquidation of the Corporation, (b) merger or consolidation of the Corporation
with another corporation or other entity pursuant to which the Corporation is
not the surviving entity, (c) sale or lease of all or substantially all the
business assets of the Corporation, or (d) the sale of more than 80% of the
outstanding Common Stock of the Corporation in a single transaction or series of
related transactions involving the same acquiring entity or person, unless (A)
the surviving or acquiring entity or an entity affiliated with the dissolving or
liquidating Corporation assumes the outstanding Awards (which assumption may
take the form of replacement of the outstanding Awards with substantially
equivalent Awards from the surviving or acquiring or affiliated entity, and with
the determination as to whether the outstanding Awards have been assumed and
whether the assumption
22
<PAGE>
involved "substantially equivalent" Awards being determined by the Plan
Administrator within its complete discretion) then (B) each Award shall expire
as of the effective date of such transaction, provided that the Plan
Administrator shall give at least fifteen (15) days prior written notice of such
event to any participant who shall then have the right to exercise his or her
Vested Awards (in the manner provided in the Award Agreement) prior to the
effective date of such transaction, subject to earlier expiration pursuant to
the Plan and any vested Awards remaining unexercised as of the effective date of
any such event and all nonvested Awards shall terminate upon the effective date
of any such event.
Participants must comply with a right of first refusal in favor of the
Company with respect to the sale of any shares of Common Stock acquired upon
exercise of Awards granted under the Restated Plan. All shares of Common Stock
issued pursuant to the Restated Plan will be subject to a Voting Agreement in
favor of James F. Lynch and to a right of first refusal in favor of the Company
with respect to the sale of any shares acquired upon exercise of options or
other Awards granted under the Restated Plan.
The Board of Directors of the Company intends to submit the following
Resolution to the stockholders of the Company at the meeting:
RESOLVED, that the stockholders of the Company hereby approve the
amendment to the Amended and Restated SITEL Corporation 1995 Employee
Stock Option Plan which is set forth in Appendix C to the Proxy
Statement for the 1997 Annual Meeting.
THE BOARD RECOMMENDS A VOTE FOR THE RESOLUTION APPROVING THE AMENDMENT TO
THE AMENDED AND RESTATED SITEL CORPORATION 1995 EMPLOYEE STOCK OPTION PLAN.
Proxies received by the Board of Directors of the Company will be voted for such
Resolution unless stockholders specify a contrary choice in their proxies.
Approval of such Resolution will require the affirmative vote of the holders of
at least a majority of the outstanding shares of Common Stock present in person
or by proxy at the meeting and entitled to vote.
ITEM 5: RATIFY APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, acting upon recommendation of the Audit Committee,
has appointed the firm of KPMG Peat Marwick LLP to examine the financial
statements of the Company and its subsidiaries for the fiscal year ending
December 31, 1997. Following its appointment on January 31, 1997, KPMG audited
the Company's consolidated financial statements for the years ended December 31,
1994, 1995 and 1996. The stockholders are asked to approve the Board's
appointment of KPMG Peat Marwick LLP for the fiscal year ending December 31,
1997.
A representative of KPMG Peat Marwick LLP will be present at the meeting.
The representative will be given an opportunity to make a statement if he or she
desires to do so and will be available to respond to appropriate questions.
On January 30, 1997, the Board of Directors determined to change the
Company's fiscal year to December 31 in order to correspond with the fiscal year
used by SITEL Europe plc (formerly known as Mitre plc) ("Mitre") and National
Action Financial Services, Inc. ("NAFS"), two companies recently acquired by the
Company in business combinations accounted for as pooling of interests.
Effective January 31, 1997, upon the recommendation of its Audit Committee, the
Board of Directors of the Company rescinded its previous selection of Coopers &
Lybrand LLP ("Coopers & Lybrand") as its principal independent accountants to
audit its financial statements for the fiscal year ending May 31, 1997, and
selected KPMG Peat Marwick LLP ("KPMG") to serve in such capacity for the fiscal
year ending December 31, 1996. KPMG has served for several years as the
principal independent accountants to audit the financial statements for Mitre.
For the fiscal years ending May 31, 1995 and May 31, 1996, Coopers & Lybrand
audited the Company's financial statements. The reports of Coopers & Lybrand on
the Company's financial statements for these fiscal years did not contain an
adverse opinion or a disclaimer of opinion and was not qualified or
23
<PAGE>
modified as to uncertainty, audit scope, or accounting principles. During the
fiscal years ending May 31, 1995 and May 31, 1996 and through the January 31,
1997, date of dismissal, there were no disagreements between the Company and
Coopers & Lybrand on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, as described in Regulation
S-K Item 304(a)(1)(iv), and no reportable event, as described in Regulation S-K
Item 304(a)(1)(v).
During the fiscal years ending May 31, 1995 and May 31, 1996 and through the
January 31, 1997 date of engagement, the Company did not consult KPMG regarding
the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company's financial statements, as described in Regulation S-K Item
304(a)(2)(i), or any matter that was either the subject of a disagreement, as
described in Regulation S-K Item 304(a)(1)(iv), or a reportable event, as
described in Regulation S-K Item 304(a)(1)(v), except that the Company did
consult KPMG on the matter described in the following paragraph.
In the course of the Company's preparation of restated financial statements
which would give effect to the pooling of interests combinations with Mitre and
NAFS, there were various communications between the Company, Coopers & Lybrand,
and KPMG as Mitre's auditors. During those communications, the Company inquired
of both Coopers & Lybrand and KPMG concerning the manner in which a change by
SITEL in its fiscal year end to correspond with Mitre's following a pooling of
interests should be reflected in filings with the Securities and Exchange
Commission. Coopers & Lybrand initially expressed the view that it would not be
possible to retroactively restate the Company's financial statements based on
Mitre's fiscal year end. KPMG expressed the view that the Securities and
Exchange Commission would not object to reflecting a change to Mitre's fiscal
year end in the form of retroactively restated pooled financial statements for
prior years based on Mitre's fiscal year end. After further reviewing the
matter, Coopers & Lybrand advised the Company that they concurred with the view
expressed by KPMG. The Company did not receive written views from either firm.
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSAL RATIFYING THE APPOINTMENT OF
KPMG PEAT MARWICK LLP.
1998 STOCKHOLDER PROPOSALS
The date by which shareholder proposals must be received by the Company for
inclusion in the proxy materials relating to the 1998 Annual Meeting of
Stockholders is February 6, 1998.
OTHER MATTERS
Neither the Board of Directors nor management intends to bring any matter
for action at the meeting other than those matters described above. If other
matters or proposals should be presented and should properly come before the
meeting for action, the persons named in the accompanying proxy will vote upon
such matter or proposal in accordance with their best judgment.
24
<PAGE>
APPENDIX A
AMENDMENT NO. 1
TO THE
AMENDED AND RESTATED SITEL CORPORATION BYLAWS
As adopted by the Board of Directors on March 20, 1997
Article III ("Board of Directors"), Section 2, captioned "Number, Election,
and Term of Office" of the Amended and Restated SITEL Corporation Bylaws is
amended to state in its entirety as follows:
"The number of directors which shall constitute the Board of Directors
shall be seven (7). The directors shall be divided into three classes,
with the first class ("Class I") having two (2) directors, the second
class ("Class II") having three (3) directors and the third class
("Class III") having two (2) directors. The initial term of office of
the original Class I directors shall expire at the 1996 annual meeting
of shareholders, the initial term of office of the original Class II
directors shall expire at the 1997 annual meeting of shareholders, and
the initial term of office of the original Class III director shall
expire at the 1998 annual meeting of shareholders. Directors elected to
succeed those directors whose terms have thereupon expired shall be
elected to a term to expire at the third (3rd) succeeding annual meeting
of shareholders after their election, and upon the election and
qualification of their successors. At the 1997 annual meeting of
shareholders, notwithstanding the provisions of Article III, Section 4
of these Bylaws, the director elected by the shareholders to fill the
vacancy created by the increase in the number of Class III directors
shall be elected to a term to expire at the 1998 annual meeting of
shareholders, and upon the election and qualification of his or her
successor. If the number of directors is changed, any increase or
decrease shall be apportioned among the classes so as to maintain or
attain, if possible, the number of directors in each class as nearly
equal as possible, but in no case will a decrease in the number of
directors shorten the term of any incumbent director."
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APPENDIX B
AMENDED AND RESTATED
SITEL CORPORATION 1995 NON-EMPLOYEE DIRECTORS
STOCK OPTION PLAN
PURPOSE AND SCOPE
The Company, having established this Plan to attract, retain, and compensate
highly qualified individuals who are not employees of SITEL Corporation for
service as members of the Board of Directors of the Company and to provide an
incentive for such individuals to expand and improve the profits and prosperity
of the Company and to remain associated with the Company, hereby amends certain
provisions of the Plan and restates the Plan in its entirety.
DEFINITIONS
1. DEFINITIONS. Unless otherwise required by the context:
1.1 "BOARD" shall mean the Board of Directors of SITEL Corporation.
1.2 "COMMITTEE" shall mean the members of the Board who are not
Participants.
1.3 "COMPANY" shall mean SITEL Corporation, a Minnesota corporation, its
successors and assigns.
1.4 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
1.5 "FAIR MARKET VALUE" of a share of Stock on any day shall be the average
of the high and low prices on any stock exchange where such Stock is traded, as
reported for such day in THE WALL STREET JOURNAL or, if no such prices are
reported for such day, the average of the high bid and low asked prices of Stock
as reported for such day. If no price quotation is available for the applicable
day, then the Fair Market Value of a share of Stock on such day shall be
determined in the manner set forth in the preceding sentence using quotations
for the next preceding day for which there were quotations, provided that such
quotations are for a day not more than ten (10) business days preceding the
applicable day. Notwithstanding the foregoing, if the Committee deems it
necessary or appropriate or if the Stock is not traded on any stock exchange,
the Fair Market Value of a share of Stock on any day shall be determined in good
faith by the Committee using such method as the Committee deems appropriate.
1.6 "FAMILY MEMBER" shall mean a person who is the spouse of a Participant,
a parent of a Participant, a parent of the spouse of a Participant, a lineal
descendant of a Participant, or the spouse of a lineal descendant of a
Participant.
1.7 "OPTION" shall mean an option to purchase shares of Stock granted
pursuant to this Plan.
1.8 "OPTION AGREEMENT" shall mean the written agreement entered into with a
Participant setting forth the terms of the Option granted to the Participant.
1.9 "OPTION EXERCISE PRICE" shall mean the purchase price for Stock under
an Option, as determined in Section 5.2 of the Plan.
1.10 "PARTICIPANT" shall mean all active members of the Board who are not
as of the date of any Option grant made pursuant to this Plan an employee of the
Company or any Subsidiary.
1.11 "PLAN" shall mean this SITEL Corporation 1995 Non-Employee Directors
Stock Option Plan, as amended.
1.12 "STOCK" shall mean the common stock of the Company, with a par value
of $.001 per share.
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1.13 "SUBSIDIARY" shall mean any corporation of which a majority of the
outstanding voting stock or voting power is beneficially owned, directly or
indirectly, by the Company.
1.14 "TRANSFER" as a verb shall mean to directly or indirectly issue, sell,
transfer, assign, pledge, mortgage, create a security interest in, or in any
other way encumber or dispose of Stock. "Transfer" as a noun shall mean any
issuance, sale, transfer, assignment, pledge, mortgage, creation of a security
interest in, or any other encumbrance or disposition of Stock.
STOCK TO BE OPTIONED
2.1 MAXIMUM NUMBER OF SHARES UNDER PLAN. Subject to the provisions of
Section 9.1 of the Plan, the maximum number of shares of Stock that may be
optioned or sold under the Plan is Three Hundred Thousand (300,000) shares. Such
shares may be treasury shares or authorized but unissued shares of Stock.
2.2 REGISTERED OR RESTRICTED SHARES. Regardless of whether the shares
issued under the Plan have been registered under the Securities Act of 1933, as
amended (the "Act") or have been registered or qualified under the securities
laws of any state or foreign country, the Company may impose restrictions upon
the sale, pledge, or other transfer of such shares (including the placement of
appropriate legends on stock certificates) if, in the judgment of the Company
and its counsel, such restrictions are necessary or desirable to achieve
compliance with the provisions of the Act, the securities laws of any state, or
any other law. If the shares issued under the Plan are not registered under the
Act and the Company determines that the registration requirements of the Act
apply but an exemption is available which requires an investment representation
or other representation, the Participant shall be required, as a condition to
acquiring such shares, to represent that such shares are being acquired for
investment, and not with a view to the sale or distribution thereof, except in
compliance with the Act, and to make such other representations as are deemed
necessary or appropriate by the Company and its counsel. Stock certificates
evidencing shares acquired pursuant to an unregistered transaction to which the
Act applies shall bear restrictive legends as are required or deemed advisable
under the Plan or the provisions of any applicable law. Any determination by the
Company and its counsel in connection with any of the matters set forth in this
Section 2.2 shall be conclusive and binding on all persons. The Committee shall
in all events direct that any stock certificates evidencing shares of Stock
issued pursuant to this Plan shall bear a legend referencing the right of first
refusal provided in Section 2.3 of the Plan.
2.3 RIGHT OF FIRST REFUSAL. Except for a Transfer permitted in accordance
with the provisions of Section 2.4 of this Plan, any Participant who desires to
Transfer any Stock purchased by him or her under this Plan (the "Offered
Shares") shall first give written notice of his or her intention to make such
Transfer (the "Notice") to the Company specifying the terms of the proposed
Transfer and the name of the proposed transferee and offering to Transfer the
Offered Shares to the Company on the terms set forth in the Notice and in
accordance with this Plan. If the Participant proposes to Transfer the Offered
Shares pursuant to a sale on the open market, the price for the Offered Shares
shall be deemed to be the closing price for such Offered Shares on the date such
Notice is received by the Company or, if the Notice is not received on a day
when the market is open for trading, at the closing price on the next trading
day. If the Stock is traded over the counter, the closing price shall mean the
lower of the closing bid and ask prices. After the Company has received a Notice
pursuant to this paragraph, it shall have ten (10) days to accept the
Participant's offer to sell all of the Offered Shares by delivering a written
acceptance to the Participant. If the offer, as to the Offered Shares, is not
accepted by the Company within the time permitted, the Participant shall be free
for a period of ninety (90) days to Transfer to the originally proposed
transferee all (but not less than all) of the Offered Shares in accordance with
the terms of the original offer but not on any other terms; provided that if
such Transfer is to be a sale on the open market, the Participant may sell the
Offered Shares on the open market at any time during such ninety (90) days at
the available market price; after the expiration of such 90-day period, the
preceding provisions of this paragraph shall again apply if the original
proposed transaction is not completed. If the Company accepts the offer as to
the
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Offered Shares, then the Company shall have thirty (30) days after such
acceptance to complete the purchase in the manner set forth in the Notice and in
accordance with the Plan. Any Offered Shares sold by a Participant shall be
subject to all of the terms of this Agreement and, before such sale is
consummated, the purchaser of such Offered Shares shall execute and deliver to
the Company an instrument satisfactory to the Company by which such purchaser
accepts the terms of this Agreement and agrees to be bound thereby, effective
upon such purchaser's receipt of the Offered Shares; provided, however, that
this provision shall not apply to Offered Shares sold by a Participant on the
open market.
2.4 PERMITTED TRANSFERS. The following Transfers of shares of Stock
purchased under this Plan shall not constitute a violation of the provisions of
Section 2.3:
(a) Upon or after the death of a Participant, a Transfer from such
Participant's name to the name of either the personal representative of
such Participant's estate or the nominee of such personal representative;
provided, that before such Transfer shall be effected, the transferee
shall have executed and delivered to the Company an instrument
satisfactory to the Company by which the transferee accepts the terms of
the Plan and agrees to be bound thereby, effective upon the transferee's
receipt of the transferred shares of Stock.
(b) Upon the death of a Participant, a Transfer from such Participant's
estate to a Family Member, to a custodianship under the Uniform Transfers
to Minors Act for a Family Member, or to a trust for the exclusive
benefit of one or more Family Members; provided, that before such
Transfer shall be effected, the transferee shall have executed and
delivered to the Company an instrument satisfactory to the Company by
which the transferee accepts the terms of the Plan and agrees to be bound
thereby, effective upon the transferee's receipt of the transferred
shares of Stock.
(c) A Transfer from a custodianship or trust which is a permitted transferee
under Section 2.4(b) above to a beneficiary of such custodianship or
trust who is a Family Member; provided, that before such Transfer shall
be effected, the transferee shall have executed and delivered to the
Company an instrument satisfactory to the Company by which the transferee
accepts the terms of the Plan and agrees to be bound thereby, effective
upon the transferee's receipt of the transferred shares of Stock.
(d) A Transfer during the Participant's life to a Family Member, to a
custodianship under the Uniform Transfers to Minors Act for a Family
Member, or to a trust for the exclusive benefit of one or more Family
Members; provided, that the Participant shall receive no compensation for
such Transfer and that before such Transfer shall be effected, the
transferee shall have executed and delivered to the Company an instrument
satisfactory to the Company by which the transferee accepts the terms of
the Plan and agrees to be bound thereby, effective upon the transferee's
receipt of the transferred shares of Stock.
2.5 LAST OPTION GRANT DATE. The last date upon which the Committee may
grant Options pursuant to the Plan is May 31, 2005.
ADMINISTRATION
3.1 COMMITTEE. The Plan shall be administered by the Committee.
3.2 AUTHORITY OF COMMITTEE. The Committee shall have the authority (i) to
exercise all of the powers granted to it under the Plan, (ii) to construe,
interpret, and implement the Plan and any Option Agreements issued pursuant to
the Plan, (iii) to prescribe, amend, and rescind rules and regulations relating
to the Plan, including rules governing its own operations, (iv) to make all
determinations necessary or advisable for the proper administration of the Plan,
and (v) to correct any defect, supply any omission, and reconcile any
inconsistency in the Plan; provided, however, that the Committee shall have no
discretion with respect to the eligibility or selection of Participants to
receive Options under the Plan, the number of shares of Stock subject to Options
or the Plan, the timing of the grant of Options pursuant to
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the Plan, or the purchase price thereunder. The determination of the Committee
pursuant to powers vested in it hereunder on all matters relating to the Plan or
any Option Agreement shall be final, binding, and conclusive.
3.3 ACTION OF COMMITTEE. The action of the majority of the members of the
Committee shall be the action of the Committee. Any action may be taken by a
written instrument signed by a majority of the Committee members, and any action
so taken shall be as fully effective as if it had been taken by a vote at a
meeting of the Committee. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Option granted thereunder.
ELIGIBILITY
4.1 ELIGIBILITY. All active members of the Board who are not employees of
the Company or any Subsidiary as of the date of any Option grant pursuant to
this Plan shall be eligible to participate in the Plan.
OPTION GRANT DATES AND EXERCISE PRICE
5.1 OPTION GRANT DATES. Options to purchase shares of Stock shall be
granted to eligible Participants as follows:
(a) Options to purchase 18,000 shares of Stock (as the same may be
adjusted pursuant to Section 9.1) shall be automatically granted to each
eligible Participant on the date that such person is first elected or
appointed to a three-year term as a member of the Board and on each
succeeding date that such person is re-elected to the Board for a three-year
term. If an eligible Participant is first elected or appointed, or
re-elected or re-appointed, to a term of less than three years, options to
purchase a prorated number of shares of Stock equal to 6,000 shares (as the
same may be adjusted pursuant to Section 9.1) per full year within such term
shall be automatically granted to such Participant on the date that such
person is elected or appointed, or re-elected or re-appointed, to the Board
for such less than three-year term. For purposes of the foregoing sentence,
(i) the term "full year" means the time period beginning with an annual
stockholders meeting and ending immediately prior to the next scheduled
annual stockholders meeting and (ii) the initial period of such less than
three-year term which begins on the date of the election or appointment and
ends with the next scheduled annual stockholders meeting (which for this
purpose shall be considered to be scheduled for a date one year after the
most recently held annual stockholders meeting) shall constitute a "full
year" for purposes of calculating the prorated number of shares to be
covered by the Option and determining when such Option becomes exercisable
under Section 6.5(a)(ii) below if it exceeds six months.
(b) Upon approval of this Plan by the Company's stockholders, Options to
purchase 12,000 shares (reflecting a proration of the 18,000 shares
applicable to a three-year term) shall be automatically granted to each
eligible Participant who is not a nominee for re-election at the 1997 annual
stockholders meeting and whose directorship term is scheduled to expire at
the 1999 annual meeting of stockholders of the Company.
5.2 OPTION EXERCISE PRICE. The Option Exercise Price per share payable by
the Participant to the Company upon exercise of an Option granted hereunder
shall be the Fair Market Value of a share of Stock on the date the Option is
granted.
TERMS AND CONDITIONS OF OPTIONS
6.1 WRITTEN AGREEMENTS. Options granted pursuant to the Plan shall be
evidenced by Option Agreements which shall provide that such Option is subject
to all of the terms and provisions of the Plan and shall contain such other
provisions as the Committee in its sole discretion may deem necessary or
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desirable, including without limitation that all shares of Stock issued upon
exercise of the Option shall be subject to a Voting Agreement in the form
attached to the Option Agreement.
6.2 TIME AND METHOD OF PAYMENT. The Option Exercise Price shall be paid in
full in cash at the time an Option is exercised under the Plan. Failure to pay
the Option Exercise Price in full at the time an Option is exercised shall cause
such exercise of any Option to be invalid and of no effect. Promptly after the
exercise of an Option and the payment of the full Option Exercise Price, the
Participant shall be entitled to the issuance of a stock certificate evidencing
his or her ownership of such shares of Stock. A Participant shall have none of
the rights of a shareholder until shares of Stock are issued to him or her, and
no adjustment will be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
6.3 NUMBER OF SHARES. Each Option Agreement shall state the total number
of shares of Stock covered by such Option.
6.4 LIMITATIONS ON EXERCISE OF OPTIONS. No Option may be exercised after
the expiration of ten (10) years from the date it is granted. No Option may be
exercised for a fractional share of Stock.
6.5 EXERCISE OF OPTIONS. Each Option shall be exercisable as follows:
(a) (i) Each Option granted under Section 5.1 to an eligible Participant
upon election or appointment, or re-election or re-appointment, to a
three-year term as a member of the Board of Directors shall become
exercisable in three (3) equal annual installments, with the first
installment becoming exercisable on the date of the first annual meeting of
the stockholders of the Company following the date on which the Option was
granted and the second and third installments becoming exercisable on the
dates of the second and third annual meetings of the stockholders of the
Company, respectively, following the date on which the Option was granted.
(ii) Each Option granted under Section 5.1 to an eligible Participant upon
election or appointment, or re-election or re-appointment, to a less than
three-year term as a member of the Board shall become exercisable in that
number of equal annual installments equal to the number of full years
(determined in accordance with Section 5.1 for all purposes of this Section
6.5) in such less than three-year term, with the first installment becoming
exercisable on the date of the first annual meeting of the stockholders of
the Company which is one full year after the date on which the Option was
granted and any subsequent installment(s) (as applicable) becoming
exercisable on the dates of the second and third (as applicable) annual
meetings of the stockholders of the Company which are two and three full
years, respectively, following the date on which the Option was granted.
(b) Once an Option installment becomes exercisable, it shall remain
exercisable until expiration, cancellation, or termination of the Option.
(c) An Option may be exercised from time to time as to all or any part
of the shares as to which such Option is then exercisable.
(d) An Option shall be exercised by the delivery of a written notice of
exercise to the Company, on such form and in such manner as the Committee in
its sole discretion shall prescribe, duly signed by the Participant or by
such other person as then may have the right to exercise the Option.
(e) Any written notice of the exercise of an Option shall be accompanied
by payment of the Option Exercise Price for the shares of Stock being
purchased. Such payment shall be made either (i) by certified or cashier's
check (or the equivalent thereof acceptable to the Company) for the full
Option Exercise Price, or (ii) at the discretion of the Committee and to the
extent permitted by law, in such other manner, consistent with the terms of
the Plan, as the Committee from time to time may prescribe.
(f) Any written notice of the exercise of an Option shall also be
accompanied by a Voting Agreement, in such form as the Committee from time
to time may prescribe, duly signed by the
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Participant or by such other person as then may have the right to exercise
the Option and who has exercised the Option.
(g) Promptly after receiving a duly signed written notice of exercise of
an Option accompanied by payment of the full Option Exercise Price and the
signed Voting Agreement, the Company shall, subject to the provisions of
Section 12.1, deliver to the Participant, or to such other person as then
may have the right to exercise the Option and who has exercised the Option,
a certificate or certificates for the shares of Stock as to which the Option
has been exercised. If the method of payment employed upon the exercise of
an Option so requires, and if applicable law permits, a Participant may
direct the Company to deliver the certificate or certificates to the
Participant's stockbroker.
(h) No Participant (or other person having the right to exercise an
Option) shall have any of the rights of a stockholder of the Company with
respect to the shares subject to an Option granted under the Plan until the
issuance of a stock certificate to such person for such shares. Except as
otherwise provided in Section 9.1, no adjustment shall be made for
dividends, distributions, or other rights (whether ordinary or extraordinary
and whether in cash, securities, or other property) for which the record
date is prior to the date on which such stock certificate is issued.
TERMINATION OF SERVICE AS DIRECTOR
7.1 EXERCISE OF OPTION AFTER TERMINATION OF SERVICE. If the Participant's
service as a director of the Company terminates for any reason, then the
Participant's Options which were exercisable on the date of the Participant's
termination of service as a director (the "Termination Date") shall remain in
full force and effect and the Participant may exercise such outstanding Options
in accordance with their original terms but in no event after the expiration
date of the Option. All Options which had been granted to the Participant as of
the Termination Date but which were not yet exercisable shall automatically
terminate as of the Termination Date. The Committee in its discretion may
determine whether any leave of absence constitutes a termination of service on
the Board for purposes of the Plan and the impact, if any, of such leave of
absence on Options theretofore granted under the Plan. Such determination of the
Committee shall be final, binding, and conclusive. Any exercise of an Option
following a Participant's death shall be made only by the deceased Participant's
executor or administrator or other duly appointed representative reasonably
acceptable to the Committee, unless the deceased Participant's will specifically
devises such Option, in which case such exercise shall be made only by the
beneficiary of such specific devise. If a deceased Participant's personal
representative or the beneficiary of a specific devise under such deceased
Participant's will is entitled to exercise any Option pursuant to the preceding
sentence, then such representative or beneficiary shall be bound by all of the
terms and provisions of the Plan and the applicable Option Agreement which would
have applied to the deceased Participant.
NONASSIGNABILITY
8.1 NONASSIGNABILITY. Options shall not be assignable or transferable
other than by Will or by the law of descent and distribution, and during a
Participant's lifetime shall be exercisable only by such Participant or the
Participant's legal representative.
EFFECT OF CHANGE IN STOCK SUBJECT TO THE PLAN
9.1 CHANGE IN STOCK. If there is any change in the outstanding shares of
Stock by reason of a stock dividend or distribution, stock split-up,
recapitalization, or combination or exchange of shares, or by reason of any
merger, consolidation, spinoff, or other corporate reorganization in which the
Company is the surviving corporation, then the number of shares of Stock
available for issuance under the Plan both in the aggregate and with respect to
each outstanding Option, and the Option Exercise Price per share under
outstanding Options, shall be equitably adjusted by the Committee, whose
determination shall be final,
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binding, and conclusive. In the event of (i) a dissolution or liquidation of the
Company, (ii) the merger or consolidation of the Company with another
corporation or other entity pursuant to which the Company is not the surviving
entity, (iii) the sale or lease of all or substantially all the business assets
of the Corporation, or (iv) the sale of more than eighty percent (80%) of the
outstanding common stock of the Company in a single transaction or series of
related transactions involving the same acquiring entity or person, each
outstanding Option shall expire as of the effective date of such transaction,
provided that the Committee shall give at least fifteen (15) days prior written
notice of such event to any Participants having outstanding Options who shall
then have the right to exercise his or her entire outstanding Options, in whole
or in part, prior to the effective date of such transaction, subject to earlier
expiration of such Options pursuant to the applicable Option Agreement.
AMENDMENT AND TERMINATION
10.1 AMENDMENT AND TERMINATION. The Board from time to time may suspend,
discontinue, revise, or amend the Plan in any respect whatsoever, except that
(i) no such amendment shall materially impair any rights or materially increase
any obligations under any Option previously granted under the Plan without the
consent of the Participant holding such Option (or, upon the Participant's
death, the person having the right to exercise the Option); and (ii) to the
extent required by Rule 16b-3 under Section 16 of the Securities Exchange Act of
1934, in effect from time to time, Plan or Option Agreement provisions relating
to amount, price and timing of Options shall not be amended more than once every
six months, except that the foregoing shall not preclude any amendment to
comport with changes in the Code, the Employee Retirement Income Security Act of
1974, or the rules thereunder in effect from time to time. For purposes of this
Section 10.1, an action of the Board or the Committee that in any way alters or
affects the tax treatment of any Option shall not by itself be considered to
materially impair any rights of the Participant. The Committee may cancel any
Option under the Plan and issue a new Option in substitution therefor. The
Committee also may amend any outstanding Option Agreement to (i) accelerate the
time or times at which an Option may be exercised, (ii) waive or amend any
restrictions or conditions set forth in the Option Agreement, or (iii) make such
other changes therein as the Committee in its sole discretion may deem
appropriate. However, any such cancellation or amendment that materially impairs
the rights or materially increases the obligations of a Participant under an
outstanding Option shall be made only with the consent of the Participant (or,
upon the Participant's death, the person having the right to exercise the
Option).
REPRESENTATION
11.1 REPRESENTATION. As a condition to the exercise of any portion of an
Option, the Company may require the person exercising such Option to represent
and warrant at the time of such exercise that any shares of Stock acquired at
exercise are being acquired only for investment and without any present
intention to sell or distribute such shares, if, in the opinion of counsel for
the Company, such a representation is required under the Securities Act of 1933,
as amended, or any other applicable law, regulation, or rule of any governmental
agency; provided, however, that this provision shall not apply if the shares of
Stock to be issued pursuant to the exercise of an Option are registered as
provided in Section 2.2.
RESERVATION OF SHARES OF STOCK
12.1 AVAILABLE STOCK. If the Committee at any time shall determine that
any Consent (as defined in this Section 12.1) is necessary or desirable as a
condition of, or in connection with, the granting of any Option, the issuance of
shares upon the exercise of an Option, or the taking of any other action under
the Plan (each such action being hereinafter referred to as a "Plan Action"),
then such Plan Action shall not be taken, in whole or in part, unless and until
such Consent shall have been effected or obtained to the full satisfaction of
the Committee. The term "Consent" as used herein with respect to any Plan Action
means (i) any and all listings, registrations, or qualifications in respect
thereof upon any securities exchange or
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under any federal, state, or local law, rule, or regulation, (ii) any and all
written agreements and representations by the Participant with respect to the
disposition of shares, or with respect to any other matter, which the Committee
shall deem necessary or desirable to comply with the terms of any such listing,
registration, or qualification or to obtain an exemption from the requirement
that any such listing, qualification, or registration be made, and (iii) any and
all consents, clearances, and approvals in respect of the Plan Action by any
governmental or other regulatory bodies. The Company, during the term of this
Plan, will at all times reserve and keep available, and will seek or obtain from
any regulatory body having jurisdiction any requisite authority necessary to
issue and to sell, the number of shares of Stock that shall be sufficient to
satisfy the requirements of this Plan. The inability of the Company to obtain
from any regulatory body having jurisdiction the authority deemed necessary by
counsel for the Company for the lawful issuance and sale of its Stock hereunder
shall relieve the Company of any liability in respect of the failure to issue or
sell Stock as to which the requisite authority has not been obtained.
MISCELLANEOUS
13.1 RIGHT OF REMOVAL RESERVED. Nothing in the Plan or in any Option
Agreement shall affect any right which the shareholders of the Company may have
under the Articles of Incorporation or Bylaws of the Company or under applicable
law to remove such Participant from the Board.
13.2 OTHER PAYMENTS OR AWARDS. Nothing contained in the Plan shall be
deemed in any way to limit or restrict the Company or its Subsidiaries from
making any award or payment to any person under any other plan, arrangement, or
understanding, whether now existing or hereafter in effect.
13.3 SECTION HEADINGS. The section headings contained in the Plan are for
the purpose of convenient reference only and are not intended to define or limit
the contents of the various sections of the Plan.
13.4 WITHHOLDING TAXES. Whenever shares of Stock are to be delivered upon
the exercise of an Option granted under the Plan, the Company will require as a
condition of the delivery that the Participant remit to the Company an amount
sufficient in the opinion of the Company to satisfy all federal, state, or other
governmental tax withholding requirements related thereto. With the approval of
the Committee, which it shall have sole discretion to grant, the Participant may
satisfy the foregoing condition by electing to have the Company withhold from
delivery shares of Stock having a value equal to the amount of tax to be
withheld. Such shares shall be valued at their fair market value as of the date
on which the amount of tax to be withheld is determined. Fractional share
amounts shall be settled in cash. Such a withholding election may be made with
respect to all or any portion of the shares to be delivered upon the exercise of
an Option. To the extent required for such a withholding of shares to qualify
for the exemption available under Rule 16b-3, such an election by a Participant
whose transactions in Stock are subject to Section 16(b) of the 1934 Act shall
be (i) subject to the approval of the Committee in its sole discretion, (ii)
irrevocable, (iii) made no sooner than six months after the grant of the Option
with respect to which the election is made, and (iv) subject to and in
compliance with any other applicable provisions of Rule 16b-3.
13.5 EFFECTIVE DATE. The Plan shall become effective as of the effective
date of the first registration statement filed by the Company regarding the
public offering of its Stock. All Options granted under the Plan prior to its
termination shall remain in effect until such Options have been terminated or
expire in accordance with the terms and provisions of the Plan and the
applicable Option Agreements.
13.6 GOVERNING LAW. All rights and obligations under the Plan shall be
construed and interpreted in accordance with the internal substantive laws of
the State of Nebraska, without giving effect to principles of conflict of laws.
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APPENDIX C
AMENDMENT NO. 2
TO THE
AMENDED AND RESTATED SITEL CORPORATION 1995 EMPLOYEE STOCK OPTION PLAN
(a/k/a the Employee Stock Option Plan)
As adopted by the Board of Directors as of December 26, 1996
1. Section 6(a) of the Amended and Restated SITEL Corporation 1995 Employee
Stock Option Plan captioned "Shares Subject to This Plan" is amended to state in
its entirety as follows:
"(a) SHARES SUBJECT TO THIS PLAN.
Awards which are granted or issued under this Plan shall be with
respect to the authorized but unissued or reacquired Shares of the
Corporation's Common Stock. The aggregate number of Shares which may be
issued as Restricted Stock, issued upon the exercise of Options and/or
which may be utilized with respect to Stock Appreciation Rights,
Performance Shares and Performance Units settled in cash or in Shares
under this Plan shall not exceed nine million eight hundred thousand
(9,800,000) Shares, subject to adjustment under Section 12. The aggregate
number of Shares which may be issued to a Participant as Restricted
Stock, issued to a Participant upon the exercise of Options, and/or which
may be utilized for a Participant with respect to Stock Appreciation
Rights, Performance Shares and Performance Units settled in cash or in
Shares under this Plan, shall not exceed one million (1,000,000) Shares,
subject to adjustment under Section 12."
2. Section 6(b) of the Amended and Restated SITEL Corporation 1995 Employee
Stock Option Plan captioned "Adjustment of Shares" is amended to state in its
entirety as follows:
"(b) ADJUSTMENT OF SHARES.
In the event an adjustment is made pursuant to Section 12, then (i)
the number of Shares reserved for issuance under the Plan, (ii) the limit
on the aggregate number of Shares which may be issued or utilized with
respect to Awards under this Plan to a Participant, (iii) the Exercise
Price of and number of Shares subject to outstanding Options, (iv) the
Exercise Price of and number of Shares with respect to which there are
outstanding Stock Appreciation Rights, and (v) any other factor
pertaining to outstanding Awards may be duly and proportionately adjusted
(as determined by the Plan Administrator in its complete discretion),
subject to any required action by the Board or the stockholders of the
Corporation and compliance with applicable securities laws; provided,
however, that fractions of a Share shall not be issued but shall either
be paid in cash at Fair Market Value or shall be rounded up to the
nearest Share, as determined by the Plan Administrator in its complete
discretion; and provided, further, that the Exercise Price of any Option
may not be decreased to below the par value, if any, of the Shares."
C-1
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SITEL CORPORATION
PROXY
PLEASE VOTE AND SIGN BELOW
THIS PROXY IS SOLICITED BY YOUR BOARD OF DIRECTORS
FOR THE JUNE 6, 1997 ANNUAL STOCKHOLDERS MEETING
The undersigned hereby appoints James F. Lynch and Michael P. May, and each
of them, proxies, with full power of substitution in each of them, for and on
behalf of the undersigned to vote as directed and permitted herein, at the
annual meeting of stockholders of the Company to be held at the Omaha
Marriott, 10220 Regency Circle, Omaha, Nebraska, on June 6, 1997 at 2:00 p.m.
and at any postponements or adjournments thereof, upon the matters set forth
in the Proxy Statement and, in their judgment and discretion, upon such other
business as may properly come before the meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFIC INDICATION BELOW. IN
THE ABSENCE OF SUCH INDICATION, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2, 3, 4
and 5. SO, IF YOU ARE FOR ITEMS 1, 2, 3, 4 and 5, YOU NEED ONLY SIGN AND DATE
THIS PROXY BELOW AND RETURN IT IN THE ENVELOPE PROVIDED.
(THIS PROXY IS CONTINUED ON THE REVERSE SIDE)
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/x/ Please mark your votes as in this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2, 3, 4 and 5.
<TABLE>
<CAPTION>
VOTE FOR ALL WITHHOLD VOTE Nominees: Kelvin C. Berens, George J. Kubat,
NOMINEES FOR ALL NOMINEES and Michael P. May
<S> <C> <C> <C>
Item 1 Elect / / / /
directors
WITHHOLD VOTE FOR THE FOLLOWING NOMINEE(S):
______________________________________________
</TABLE>
For Against Abstain
Item 2 Approve the amendment to the / / / / / /
SITEL Corporation Amended and
Restated Bylaws
Item 3 Approve the amendment and / / / / / /
restatement of the SITEL Corporation
1995 Non-Employee Directors Stock
Option Plan
Item 4 Approve the amendment to the / / / / / /
Amended and Restated SITEL
Corporation 1995 Employee Stock
Option Plan
Item 5 Ratify appointment of independent / / / / / /
accountants for fiscal 1997
Signature__________________________________________
Signature__________________________________________ DATED: _____________, 1997
Please sign exactly as your name(s) appear on this proxy card. Joint owners
should each sign individually. Corporate or partnership proxies should be
signed in full corporate or partnership name by an authorized officer.
Fiduciaries should give full titles.
