<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 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:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-----------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
-----------------------------------------------------------------------
<PAGE>
[LOGO]
SITEL CORPORATION
111 SOUTH CALVERT STREET, SUITE 1900
BALTIMORE, MARYLAND 21202
March 30, 1999
Dear Stockholder:
It is our pleasure to invite you to your Company's Annual Meeting of
Stockholders in Baltimore on May 6, 1999. 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
111 SOUTH CALVERT STREET, SUITE 1900
BALTIMORE, MARYLAND 21202
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, MAY 6, 1999
------------------------
To the Stockholders of
SITEL Corporation
The annual meeting of stockholders of SITEL Corporation will be held on
Thursday, May 6, 1999, at 9:30 a.m. Eastern Daylight Savings Time, at the
Renaissance Harborplace Hotel, 202 E. Pratt Street, Baltimore, Maryland, for the
following purposes:
1. To elect two directors for a three-year term.
2. To approve the SITEL Corporation 1999 Stock Incentive Plan.
3. To ratify the selection of KPMG Peat Marwick LLP as the Company's
independent auditors.
4. 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
March 10, 1999, as the record date for determining the stockholders of the
Company entitled to notice of and to vote at the meeting.
W. Gar Richlin
CORPORATE SECRETARY
March 30, 1999
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>
[LOGO]
SITEL CORPORATION
111 SOUTH CALVERT STREET, SUITE 1900
BALTIMORE, MARYLAND 21202
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 6, 1999
This Proxy Statement is 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"). The Board of Directors of the
Company is soliciting proxies for use at the Annual Meeting of Stockholders of
the Company to be held on May 6, 1999 at the Renaissance Harborplace Hotel, 202
E. Pratt Street, Baltimore, Maryland, commencing at 9:30 a.m., Eastern Daylight
Savings Time, and at any adjournments or postponements of the meeting (the
"meeting"). Holders of record of the Common Stock at the close of business on
March 10, 1999 are entitled to vote at the meeting.
PROXIES
The Company will bear all costs of this solicitation. Stockholders' proxies
will be 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 by the Proxy 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 Company 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, the 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 will 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 March 30, 1999.
VOTING AT THE MEETING
At the close of business on March 10, 1999, the Company had outstanding
65,149,352 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.
A majority of the votes entitled to be cast on matters to be considered at
the meeting constitutes a quorum. Shares represented by proxies that are marked
"abstain" as to a matter will be counted as shares present for purposes of
determining the presence of a quorum. Proxies relating to "street name" shares
1
<PAGE>
that are voted by brokers on some matters will be counted as shares present for
purposes of determining the presence of a quorum, but will not be considered as
shares entitled to vote at the meeting on those matters as to which authority to
vote is withheld by the broker ("broker non-votes").
The two nominees receiving the highest vote totals will be elected as
directors at the meeting. Thus, abstentions and broker non-votes will not affect
the outcome of the election of directors. 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. On any such matter, an
abstention will have the same effect as a negative vote. A broker non-vote will
not be counted as an affirmative vote or a negative vote because shares held by
brokers will not be considered entitled to vote on matters as to which the
brokers withhold authority.
COMMON STOCK OWNED BY
CERTAIN BENEFICIAL OWNERS AND BY EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information as of March 10, 1999 with
respect to the beneficial ownership of the 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>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNER (1) OWNERSHIP OF CLASS
- ------------------------------------------------------------------- ---------------------- -----------
<S> <C> <C>
James F. Lynch (2)(3)(4)........................................... 12,915,828 19.82%
Henk P. Kruithof................................................... 7,848,356 12.05%
State of Wisconsin Investment Board (6)............................ 4,587,000 7.04%
Dimensional Fund Advisors, Inc. (6)................................ 3,911,800 6.00%
Matthew H. Gates (4)(5)............................................ 3,589,398 5.43%
Barry S. Major (4)................................................. 370,600 *
Timothy P. Keyser (4).............................................. 305,864 *
Michael P. May (5)................................................. 293,476 *
Antoon Vanparys (4)................................................ 278,357 *
Phillip A. Clough (4).............................................. 90,000 *
George J. Kubat (4)(7)............................................. 61,500 *
W. Gar Richlin..................................................... 55,000 *
Kelvin C. Berens (4)(8)............................................ 42,600 *
Bill L. Fairfield (4).............................................. 20,000 *
All executive officers and directors as a group
(9 persons)...................................................... 21,617,505 32.98%
</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 the State of Wisconsin Investment Board, an institutional
holder, is P.O. Box 7842, Madison, Wisconsin 53707. The address of
Dimensional Fund Advisors, Inc., an institutional holder, is 1299 Ocean
Avenue, 11(th) Floor, Santa Monica, California 90401.
(2) Includes 5,986,878 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 to the Voting Agreement in the manner directed
2
<PAGE>
by Mr. Lynch. 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) Includes 280,750 shares held by two 501(c)(3) organizations established by
Mr. Lynch. Mr. Lynch has shared voting and/or investment power with respect
to these 280,750 shares but disclaims beneficial ownership thereof.
(4) Includes the following shares which may be acquired under stock options
which are exercisable currently or within 60 days: Mr. Gates -- 927,000; Mr.
Major -- 360,000; Mr. Keyser -- 305,864; Mr. Clough -- 40,000; Mr.
Kubat -- 20,000; Mr. Berens -- 20,000; and Mr. Fairfield -- 20,000. Upon
exercise, voting control over these shares will be held by Mr. Lynch
pursuant to a Voting Agreement. Since the market price of the Common Stock
on March 10, 1999 was below $9.00 per share, this table does not include
shares which may be acquired under options that would be exercisable within
60 days only if the average closing price of the Common Stock reached $9.00
per share for a specified period during such 60 days.
(5) 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.
(6) Based on a Schedule 13G filing for the year ended December 31, 1998.
(7) Includes 15,000 shares owned by a partnership for members of Mr. Kubat's
immediate family. Mr. Kubat shares investment power but disclaims beneficial
ownership. Also includes 2,000 shares held by Mr. Kubat's spouse. Mr. Kubat
disclaims beneficial ownership of these shares.
(8) Includes 100 shares owned by Mr. Berens' spouse. Mr. Berens disclaims
beneficial ownership of these shares.
BOARD OF DIRECTORS AND ELECTION
The Company's Board of Directors consists of up to seven members, divided
into three classes whose terms expire in consecutive years. All three classes of
directors serve for three-year terms. The Board of Directors currently is
comprised of six directors. The seventh directorship (Class II) is expected to
be filled by the Board at a later date by appointing a non-employee independent
director.
The terms of the following directors (Class I) expire at this meeting: Bill
L. Fairfield and Henk P. Kruithof. The Board of Directors' nominees to positions
on the Board expiring at the annual stockholders meeting in 2002 are: Bill L.
Fairfield and Henk P. Kruithof.
The following paragraphs set forth the principal occupation of each director
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. Directors who are nominees for election at the 1999
annual stockholders meeting are listed first.
BILL L. FAIRFIELD -- Nominee -- 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. He is 52
years of age.
3
<PAGE>
HENK P. KRUITHOF -- Nominee -- Brussels, Belgium.
Mr. Kruithof has served as Executive Vice Chairman and a director since
October 1996. Mr. Kruithof is also the Chairman of SITEL Europe plc
(formerly Mitre plc, which was merged with 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. He is 62
years of age.
The following directors serve for terms that expire after 1999:
KELVIN C. BERENS -- 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. His current term expires at the 2000 annual stockholders meeting. He is
47 years of age.
GEORGE J. KUBAT -- 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. Mr. Kubat is also a
director of infoUSA Inc. His current term expires at the 2000 annual
stockholders meeting. He is 53 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. His current term expires at the 2001
annual stockholders meeting. He is 49 years of age.
PHILLIP A. CLOUGH -- Baltimore, Maryland.
Mr. Clough has served as Chief Executive Officer since May 1998 and as
President since January 1997. Prior to joining SITEL, he was an investment
banker with Alex. Brown & Sons Incorporated, most recently as a Principal.
His current term expires at the 2001 annual stockholders meeting. He is 37
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
future 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 1998,
the Board met on eleven occasions. Each director except Henk P. Kruithof
attended at least 75% of the total number of meetings of the Board, and at least
75% of the meetings of the Committees on which he served. The Board and
4
<PAGE>
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 four times during 1998,
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 Amended and
Restated SITEL Corporation 1995 Non-Employee Directors Stock Option Plan (the
"Directors Plan"). The Directors Plan is administered by the Stock Option Plan
Committee of the Board, whose members consist of Henk P. Kruithof, James F.
Lynch and Phillip A. Clough, employee directors who are not eligible to
participate in that plan. Members of the Compensation Committee, which met seven
times during 1998 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 1998, non-employee directors were paid
$3,000 per quarterly meeting and $500 per special meeting of the Board of
Directors or committee attended. Directors also are reimbursed for expenses
incurred in connection with attendance at Board of Directors and committee
meetings.
Upon election or re-election to a three-year term on the Board of Directors,
each non-employee director receives options to purchase 18,000 shares of Common
Stock, exercisable at the fair market value of the Common Stock as of the date
of grant. The number of options is prorated upon appointment or election to a
term less than three years. These options are granted under the Amended and
Restated SITEL Corporation 1995 Non-Employee Directors Stock Option Plan (the
"Directors Plan"), vest and become exercisable in three equal annual
installments commencing one year after grant, and expire 10 years after
issuance.
The Directors Plan was amended in January 1999 to permit discretionary
grants of additional options to the non-employee directors. Following the plan
amendment, in recognition of the continued commitment and dedication of its
non-employee directors and the Company's desire to retain highly qualified
non-employee directors, each of the three current non-employee directors was
granted options to purchase 67,000 shares of Common Stock, exercisable at the
fair market value of the Common Stock as of the date of grant. These options
become exercisable in five equal annual installments commencing one year after
grant, and expire 10 years after issuance, subject to earlier expiration if the
director leaves the Board during his term or declines to stand for re-election.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION; CERTAIN
TRANSACTIONS
The Compensation Committee is composed of Bill L. Fairfield (Chairman) and
George J. Kubat, both non-employee directors.
SITEL has purchased products and services from Inacom Corp., a company with
which Bill L. Fairfield is associated in various capacities. Management believes
that these transactions and relationships during 1998 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.
5
<PAGE>
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 Berens &
Tate to provide legal services in the areas of labor and employment law during
1998 and expects to continue to engage the firm for such services.
James F. Lynch is indebted to the Company for certain advances for personal
expenses, of which the maximum amount outstanding during 1998 and the total
balance as of December 31, 1998 was $283,609, including accrued interest. The
advances accrue interest at 9% per annum.
ANNUAL COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth information
regarding annual and long-term compensation for the chief executive officer, the
other four most highly compensated executive officers of the Company in office
as of December 31, 1998, and two former executive officers who separated from
the Company during 1998 (collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION AWARDS
-------------------------------
ANNUAL COMPENSATION STOCK OPTIONS
---------------------- OTHER ANNUAL (NUMBER OF ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) COMPENSATION (2) SHARES) (3) COMPENSATION (4)
- ----------------------------- --------- ---------- ---------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
James F. Lynch 1998 $ 259,616 $ -- $ -- 38,350(5) $ 109,668
Chairman 1997 250,000 -- -- -- 136,147
1996 220,385 555,000 -- 38,350 130,542
Henk P. Kruithof (6) 1998 151,373 -- 17,466 -- --
Executive Vice Chairman 1997 163,600 -- -- -- --
1996 54,354 -- -- -- --
Phillip A. Clough (6) 1998 309,039 -- -- 600,000(5) --
Chief Executive Officer 1997 221,154 -- -- 400,000 --
W. Gar Richlin (6) 1998 168,269 -- -- 600,000(5) --
Chief Operating Officer
Chief Financial Officer
Antoon Vanparys (6) 1998 253,607 50,943 -- 100,000(5) --
Executive Vice President 1997 195,423 33,091 -- -- --
1996 60,520 12,608 -- 35,000 --
Michael P. May (7) 1998 120,962 -- 17,590 -- 559,291
Former Chief Executive 1997 235,577 -- -- -- 16,352
Officer 1996 173,077 400,000 -- 175,000 20,620
Barry S. Major (8) 1998 153,630 47,829 -- -- 106,890
Former Executive 1997 163,462 -- -- -- 11,042
Vice President-- 1996 129,616 50,000 -- 110,000 6,733
North America
</TABLE>
- ------------------------
(1) Represents bonus payments made to each Named Executive Officer on account of
the Company's performance during such year.
(2) The aggregate amount of perquisites and other personal benefits is included
in "Other Annual Compensation" if it exceeds the lesser of $50,000 or 10% of
the annual salary and bonus. The amount listed for Mr. Kruithof represents a
car allowance. The amount listed for Mr. May represents personal use of a
company-provided car ($13,750) and club dues.
(3) All of the options granted in 1996-1998 were for shares of Common Stock
pursuant to the Amended and Restated SITEL Corporation 1995 Employee Stock
Option Plan (the "Employee Plan").
6
<PAGE>
(4) Represents interest accrued in 1998, 1997 and 1996, respectively, on amounts
accumulated by Messrs. Lynch, May and Major under the Company's Executive
Wealth Accumulation Plan as follows: for Mr. Lynch $38,759, $65,239, and
$66,157; for Mr. May $4,291, $16,352, and $20,620; and for Mr. Major $3,285,
$11,042, and $6,733; split-dollar life insurance interest-free loans in
1998, 1997 and 1996, respectively, for Mr. Lynch of $70,909, $70,908, and
$64,385; and, for Messrs. May and Major, the items described in footnotes 7
and 8 below.
(5) Certain of these options represent previously granted options that were
repriced in October 1998, as follows: Mr. Lynch -- 38,350; Mr.
Clough -- 400,000; Mr. Richlin -- 300,000; and Mr. Vanparys -- 35,000. The
previously granted options were granted in years prior to 1998 for each of
these executives other than Mr. Richlin, whose previously granted options
were granted in March 1998. See "TEN-YEAR OPTION REPRICINGS" table.
(6) No compensation is reported for periods prior to the dates these executives
joined the Company, which for Messrs. Kruithof and Vanparys was September
1996 upon the Company's acquisition of Mitre plc, for Mr. Clough was January
1997, and for Mr. Richlin was March 1998. Messrs. Kruithof and Vanparys each
provide services to the Company through a separate consultancy firm which he
controls.
(7) Mr. May resigned as Chief Executive Officer in May 1998. Mr. May's
separation agreement provided for salary continuation for one year; paying
relocation costs, including moving expenses, purchasing (at Mr. May's basis)
and reselling Mr. May's Baltimore residence, and reimbursement of taxes
incurred by Mr. May on such residence sale; and continuation of certain
benefits (health insurance, company-provided car, and club dues) through
December 31, 1998. In addition to the items specified in footnote 4, "All
Other Compensation" consists of amounts paid or accrued pursuant to Mr.
May's separation agreement, which consisted principally of salary
continuation in the amount of $300,000 and relocation costs in the amount of
$253,889.
(8) Mr. Major resigned as Executive Vice President -- North America in October
1998. Mr. Major's separation agreement provided for salary continuation for
six months; assignment of the lease to the company car used by Mr. Major;
transfer of a laptop computer used by Mr. Major; outplacement services for
six months; and continuation of certain benefits (health insurance,
individual long-term disability and group life insurance) through April 30,
1999. Mr. Major retained the 600,000 options granted to him in October 1995
pursuant to the original terms of his option agreements. In addition to the
items specified in footnote 4, "All Other Compensation" consists of amounts
paid or accrued pursuant to Mr. Major's separation agreement, which
consisted principally of salary continuation in the amount of $98,000.
7
<PAGE>
OPTION GRANTS AND HOLDINGS
1998 OPTION GRANTS. The following table summarizes the options which were
granted during the year ended December 31, 1998 to the Named Executive Officers.
No stock appreciation rights were granted during 1998.
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
------------------------------------------ AT ASSUMED ANNUAL RATES OF
% OF TOTAL STOCK PRICE APPRECIATION
OPTIONS OPTIONS GRANTED EXERCISE FOR OPTION TERM (3)
GRANTED TO EMPLOYEES IN PRICE EXPIRATION --------------------------
NAME (#)(1)(2) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ---------------------------- ----------- --------------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
James F. Lynch.............. 37,380 .52% $ 3.50 6-1-2001 $ (37,885) $ (25,756)
970 .01% 3.50 6-1-2006 317 996
Henk P. Kruithof............ None -- -- -- -- --
Phillip A. Clough........... 290,000 4.03% 3.50 1-7-2007 (66,492) 376,115
110,000 1.53% 3.50 11-11-2006 (28,243) 134,412
200,000 2.78% 9.75 2-17-2008 1,226,345 3,107,798
W. Gar Richlin.............. 300,000 4.17% 3.50 3-19-2008 (9,544) 563,942
300,000 4.17% 12.03125 3-19-2008 2,101,937 5,484,935
Antoon Vanparys............. 35,000 .49% 3.50 11-11-2006 (8,986) 42,767
65,000 .90% 2.40625 11-11-2006 76,118 178,896
Michael P. May.............. None -- -- -- -- --
Barry S. Major.............. None -- -- -- -- --
</TABLE>
- ------------------------
(1) The options which have an exercise price of $3.50 represent repriced options
granted in October 1998 under the Employee Plan. These repriced options
become exercisable after a $9.00 average closing stock price is reached for
thirty consecutive trading days. At that time, these options are exercisable
at the rate of 20% per year for each annual anniversary since a specified
date (June 1, 1996 for Mr. Lynch; January 7, 1997 for Mr. Clough as to his
290,000 options; March 19, 1998 for Mr. Richlin; and October 16, 1998 for
Mr. Vanparys and for Mr. Clough as to his 110,000 options). Continuing 20%
installments, if any, become exercisable on subsequent anniversary dates. If
the $9.00 stock price is not reached earlier, these options become
exercisable in all events on a specified date (May 1, 2001 for Mr. Lynch as
to 37,380 shares, but subject to certain resale restrictions through May 12,
2006; December 1, 2005 for Mr. Lynch as to 970 shares; and May 12, 2006 for
Messrs. Clough, Richlin, Vanparys). In addition, all of the options with an
exercise price of $3.50, except Mr. Lynch's and except Mr. Clough's 290,000
options, become vested (non-forfeitable) on May 12, 2006, and are subject to
accelerated vesting if certain goals are met by the Company before May 12,
2006. The options held by Messrs. Clough and Richlin which expire on January
7, 2007 and March 19, 2008, respectively, are further subject to accelerated
vesting and exercise in the event of termination of employment by the
Company other than for cause or by the executive because of certain adverse
changes in the terms of his employment, or in the event of a dissolution,
merger, consolidation, sale or lease of all or substantially all of the
Company's business assets, or a change in control of the Company.
(2) Mr. Clough's options for 200,000 shares with an exercise price of $9.75 were
not repriced. These options were granted in February 1998 at the fair market
value on the grant date and become
8
<PAGE>
exercisable in five equal annual installments after the grant date, subject
to accelerated vesting and exercise if certain performance goals are met by
the Company before May 12, 2006, and further subject to accelerated vesting
and exercise in the event of termination of employment by the Company other
than for cause or by Mr. Clough because of certain adverse changes in the
terms of his employment, or in the event of a dissolution, merger,
consolidation, sale or lease of all or substantially all of the Company's
business assets, or a change in control of the Company. Mr. Richlin's
options for 300,000 shares with an exercise price of $12.03125 were repriced
as described in footnote 1 above and these original options were terminated.
These original options were granted in March 1998 at the fair market value
on the grant date, were exercisable in five equal annual installments after
the grant date, were subject to accelerated vesting if certain goals were
met by the Company before May 12, 2006, and were further subject to
accelerated vesting and exercise in the event of termination of employment
by the Company other than for cause or by Mr. Richlin because of certain
adverse changes in the terms of his employment, or in the event of a
dissolution, merger, consolidation, sale or lease of all or substantially
all of the Company's business assets, or a change in control of the Company.
Mr. Vanparys' options for 65,000 shares were granted in December 1998 at the
fair market value on the grant date, become exercisable at the rate of 20%
per year for each annual anniversary since the grant date, become vested on
May 12, 2006, and are subject to accelerated vesting if certain goals are
met by the Company before May 12, 2006. All of the foregoing options were
granted under the Employee Plan.
(3) Potential realizable value is based on the assumption that the Common Stock
price (using the closing price of the Common Stock on the New York Stock
Exchange as of the date of grant) appreciates at the annual rate shown
(compounded annually) from the date of grant until the end of the option
term. These numbers are calculated based on the requirements promulgated by
the Securities and Exchange Commission. The actual value, if any, that a
Named Executive Officer may realize will depend on the excess of the stock
price over the exercise price on the date that 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, if any, realized will be at or near the
potential realizable value as calculated in this table. The closing price of
the Common Stock on the New York Stock Exchange as of February 17, 1998 was
$9.75, as of October 16, 1998 was $2.1875, and as of December 31, 1998 was
$2.4375.
9
<PAGE>
1998 OPTION EXERCISES AND HOLDINGS. The following table summarizes
information for the Named Executive Officers regarding aggregate option
exercises in the year ended December 31, 1998 and the value of unexercised
options to purchase the Company's Common Stock. No stock appreciation rights
were exercised during 1998 or were outstanding at December 31, 1998.
AGGREGATED OPTION EXERCISES IN 1998 AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED VALUE OPTIONS AT 12-31-98 (1) 12-31-98 (2)
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------------------- --------------- ------------ ----------------------- -----------------------
<S> <C> <C> <C> <C>
James F. Lynch................... -- $ -- 0/38,350 $ 0/0
Henk P. Kruithof................. -- -- 0/0 0/0
Phillip A. Clough................ -- -- 40,000/560,000 0/0
W. Gar Richlin................... -- -- 0/300,000 0/0
Antoon Vanparys.................. -- -- 0/100,000 0/0
Michael P. May................... 159,208 1,073,990 0/318,416 0/775,343
Barry S. Major................... -- -- 360,000/240,000 0/0
</TABLE>
- ------------------------
(1) All of the options relate to shares of Common Stock. Except for options for
318,416 shares granted to Mr. May under the SITEL Corporation Stock Option
Plan (for Replacement of EEBs), all of the options were granted under the
Employee Plan. For Messrs. Lynch, Clough, Richlin, and Vanparys, the number
and value of "Unexercisable" stock options includes the number and the
year-end value of options which have price thresholds for exercisability
which are above the exercise price. These executives may begin exercising
these options and potentially realize a portion of the listed value relating
to these options once those price thresholds are attained.
(2) These values have been calculated by subtracting the per share option
exercise price from the fair market value of the underlying Common Stock.
For purposes of this table, 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, 1998, which was $2.4375.
REPRICING OF OPTIONS
COMPENSATION COMMITTEE REPORT ON REPRICING
In October 1998, in light of the Company's circumstances at that time and
the competitive environment for the Company's employees, the Compensation
Committee (the "Committee") determined that certain changes were necessary to
the Company's option programs and to outstanding employee options in order for
those programs and options to continue to provide effective equity incentives to
the Company's employees. Equity incentives are a significant component of the
total compensation package of the Company's employees, particularly senior
managers, and play a substantial role in the Company's ability to retain and
recruit the talented and experienced employees essential to the Company's
long-term success.
The substantial decline in the market price of the Common Stock between
October 1997 and October 1998 had created a significant gap between the exercise
price at which many of the Company's stock options had been issued and the
current market price of the Common Stock. The Committee had repriced certain
options, excluding those held by senior managers, in October 1997 to an exercise
price of
10
<PAGE>
$12.50 per share. With the further substantial decline in the market price of
the Common Stock since that date, there was now a significant gap between the
$12.50 exercise price and the then current market price. The gap was even more
pronounced for senior managers whose options had never been repriced. As a
result, these options no longer provided effective equity incentives to the
Company's employees. The Committee considered the trading prices for the Common
Stock during the 60-90 day period preceding October 16, 1998 and determined that
employee options outstanding under the Employee Plan (a total of 5,590,225
options) should be repriced to a $3.50 exercise price. The Committee determined
that the options held by the Company's top 54 senior managers would not become
exercisable at the $3.50 price until the earlier of the date that a $9.00
average closing stock price is reached for thirty consecutive trading days or
May 12, 2006. The Committee extended the term of certain options held by these
senior managers (options originally issued under the Employee Plan for a less
than ten-year term) so that the ultimate exercise date could be set as close as
possible to May 12, 2006.
Many of the stock options granted by the Company since December 1996 were
issued under the Company's performance-vesting stock option award program. Under
this program, the vesting and exercise schedule for options was tied to the
achievement of one of two performance goals, one performance goal being based on
certain annual revenues and operating margin targets and the other being based
on a share price target. Unless one of these performance goals was achieved, the
options would not vest or become exercisable until the year 2006. The Committee
determined that under the circumstances that existed in October 1998, the
vesting and exercise points for the options seemed so distant to employees as to
cause them to conclude that their options had no value. As a result, the option
program was not furthering the objectives of the Employee Plan to motivate
existing employees and help recruit new employees. The Committee determined that
it was necessary to amend the exercise schedule to a more traditional 20% per
year schedule commencing with the amendment date.
The changes to the exercise price of employee options outstanding under the
Employee Plan and to the exercise schedule of the award program options were
implemented effective October 16, 1998.
SUBMITTED BY THE
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
OF SITEL CORPORATION
Bill L. Fairfield
George J. Kubat
11
<PAGE>
The following table sets forth the number of options repriced for the Named
Executive Officers in 1998.
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
ORIGINAL
NUMBER OF OPTION TERM
SECURITIES MARKET PRICE OF EXERCISE PRICE REMAINING AT
UNDERLYING STOCK AT TIME AT TIME OF NEW DATE OF
REPRICED OPTIONS OF REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME (1)(2) DATE OR AMENDED (#) AMENDMENT ($) AMENDMENT ($) PRICE ($) AMENDMENT
- -------------------------------- --------- ---------------- --------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
James F. Lynch 10/16/98 37,380 $ 2.125 $ 14.7125 $ 3.50 2.62 years
Chairman 10/16/98 970 2.125 13.375 3.50 2.87 years
Henk P. Kruithof -- -- -- -- -- --
Executive Vice Chairman
Phillip A. Clough 10/16/98 290,000 2.125 16.875 3.50 8.23 years
Chief Executive Officer 110,000 2.125 16.875 3.50 8.07 years
W. Gar Richlin 10/16/98 300,000 2.125 12.03125 3.50 9.42 years
Chief Operating Officer
Chief Financial Officer
Antoon Vanparys 10/16/98 35,000 2.125 15.50 3.50 8.07 years
Executive Vice President
Michael P. May 12/26/96 175,000 15.50 17.75 15.50 9.88 years
Former Chief Executive Officer
Barry S. Major 12/26/96 110,000 15.50 17.75 15.50 9.88 years
Former Executive
Vice President--
North America
Edward R. Taylor 12/26/96 110,000 15.50 17.75 15.50 9.88 years
Former Executive
Vice President
</TABLE>
- ------------------------
(1) The listed options held by Messrs. Lynch, Clough, Richlin, and Vanparys were
repriced to $3.50 per share. These repriced options were also amended to
become exercisable after a $9.00 stock price is reached for a specified
period. At that time, these options are exercisable at the rate of 20% per
year for each annual anniversary since a specified date (June 1, 1996 for
Mr. Lynch; January 7, 1997 for Mr. Clough as to his 290,000 options; March
19, 1998 for Mr. Richlin; and October 16, 1998 for Mr. Vanparys and for Mr.
Clough as to his 110,000 options). Continuing 20% installments, if any,
become exercisable on subsequent anniversary dates. If the $9.00 stock price
is not reached earlier, these options become exercisable in all events on a
specified date (May 1, 2001 for Mr. Lynch as to 37,380 shares, but subject
to certain resale restrictions through May 12, 2006; December 1, 2005 for
Mr. Lynch as to 970 shares; and May 12, 2006 for Messrs. Clough, Richlin,
and Vanparys).
(2) These options granted to Messrs. May, Major and Taylor replaced options
which were cancelled before issuance in connection with a December 26, 1996
amendment to the Employee Plan. The amendment, which changed the
determination of the fair market value of the Common Stock to the grant date
(rather than the trading day preceding the grant date), was necessary to
permit option grants on the same date and with the same exercise price to
exempt employees worldwide without adverse tax consequences in one or more
countries presented by the previous fair market value
12
<PAGE>
definition under the plan. Following the amendment, replacement options were
granted on December 26, 1996 to all eligible exempt employees, including
Messrs. May, Major and Taylor, at the fair market value of the Common Stock
on that date. The replacement options expired when Messrs. May, Major and
Taylor left the Company.
(3) For purposes of this table, the market price is deemed to be the fair market
value of the Common Stock as defined by the Employee Plan, which is the
average of the high and low sales prices for the Common Stock as quoted by
the New York Stock Exchange (or Nasdaq prior to December 31, 1996).
EMPLOYMENT AGREEMENTS
JAMES F. LYNCH. Mr. Lynch's employment agreement dated May 1995 provides
for 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 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 is to 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.
BENEFIT PLANS
STOCK OPTION PLAN FOR REPLACEMENT OF EXISTING OPTIONS ("REPLACEMENT PLAN")
and STOCK OPTION PLAN ("EEB REPLACEMENT PLAN"). Under the Replacement Plan,
options for 4,541,780 shares were granted in 1995, with an option price of
$.0025 per share, as replacements for 3,110,000 options outstanding at February
28, 1995. Under the EEB Replacement Plan, options for 7,381,720 shares were
granted in 1995, with an option price of $.0025 per share, as replacements for
12,655,000 units outstanding at February 28, 1995 under the Company's employee
equity benefit plan ("EEB Plan"). With respect to both of these plans, the
options are exercisable in five equal annual installments from January 1996 to
May 2000 and were vested as of the date of the grant. The Company recorded these
options at the estimated fair value at date of grant ($2.91), with a
corresponding charge to special compensation expense totaling $34.6 million. No
further options may be granted under these two plans.
1995 EMPLOYEE STOCK OPTION PLAN ("EMPLOYEE PLAN"). The Employee Plan
provides for the granting of various types of incentive awards (including
incentive stock options, nonqualified options, stock appreciation rights,
restricted shares, and performance shares or units) for the issuance of up to an
aggregate of 9,800,000 shares of Common Stock to employees and independent
consultants of the Company and its subsidiaries. Vesting terms vary with each
grant, and option terms may not exceed ten years. Option prices, set by the
Compensation Committee of the Board of Directors, may not be less than
13
<PAGE>
the fair market value at date of grant for incentive stock options or less than
par value for nonqualified stock options. At December 31, 1998, there were
approximately 3.1 million shares available for issuance pursuant to future
grants under the Employee Plan. If the SITEL Corporation 1999 Stock Incentive
Plan is approved by stockholders at the meeting, no further grants will be made
under the Employee Plan following the meeting date.
1995 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN ("DIRECTORS PLAN"). The
Directors Plan provides for automatic, formula grants of nonqualified options to
each non-employee director of the Company. Each non-employee director is granted
options to purchase 18,000 shares of Common Stock upon election or re-election
to a three-year term on the Board of Directors. Options vest and become
exercisable in three equal annual installments commencing one year after grant.
The Board of Directors may grant additional options at their discretion. Vesting
and exercise terms may vary with each discretionary grant. The option prices
under all grants, whether formula or discretionary, may not be less than the
fair market value of the Common Stock on the date of grant. If the SITEL
Corporation 1999 Stock Incentive Plan is approved by stockholders at the
meeting, no further grants will be made under the Directors Plan following the
meeting date.
The Company's option plans are administered by the Compensation Committee of
the Board of Directors, except the Directors Plan which is administered by the
Board members who are not eligible to participate in that plan. All of these
option plans require optionees to enter into a ten-year Voting Agreement in
favor of James F. Lynch at the time of exercise of the options and to comply
with a right of first refusal granted to the Company under the plans in
connection with transfer of shares acquired upon exercise. Under the Voting
Agreement, each optionee (and his successors in interest) agrees to vote all of
the shares of Common Stock acquired upon his exercise of options in the manner
directed by Mr. Lynch. Mr. Lynch is required to release shares covered by the
Voting Agreement if a stockholder intends to sell such 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 competing against the Company.
The right of first refusal requires optionees, before publicly or privately
selling any shares underlying options, to 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 terminates as to shares sold into the public
market.
EXECUTIVE WEALTH ACCUMULATION PLAN ("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
The Compensation Committee (the "Committee") of the Board of Directors is
responsible for administering SITEL's executive compensation programs. 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 and bonuses
of the executive officers. The Committee administers the stock option plans in
which executive officers participate.
14
<PAGE>
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. The Committee also considers the range of
compensation paid by other public companies in the teleservicing industry
(including but not limited to those companies comprising the "Competitors Index"
used in the Performance Graph section of this Proxy Statement) and other
relevant industries. 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 also
occasionally engages compensation consultants to review and make recommendations
to the Committee on executive compensation programs. The Committee makes a
subjective determination based upon a collective consideration of the foregoing
factors and information.
The Committee's policy is to structure compensation awards for executive
officers that will be deductible without limitation under Section 162(m) of the
Internal Revenue Code of 1986, as amended, where doing so will further the
purposes of the Company's executive compensation programs. The Committee also
considers it important to retain flexibility to design compensation programs
that recognize a full range of performance criteria important to the Company's
success, even where compensation payable under such programs may not be fully
deductible.
FACTORS AND CRITERIA OF EXECUTIVE COMPENSATION
Executive compensation consists primarily of (1) annual compensation and (2)
long-term incentives.
ANNUAL COMPENSATION
Annual compensation consists of base salary and bonus. The Company seeks to
have competitive base salaries. Any increases in an individual's base salary are
determined primarily by individual performance and added responsibilities.
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.
When 1998 began, the Company's organizational structure included three
levels: SWW, regional business units, and local business units. The Company had
different bonus plans at each of these levels. Although the Company restructured
its organizational structure in October 1998, eliminating the North American and
European regional management layers and consolidating its U.S. businesses into
four industry-focused units with fourteen business units reporting directing to
the Company's Executive Committee, the original bonus plans remained operative
throughout 1998 for the executives still with the Company. The Committee had
discretion to adjust upward or downward bonus amounts computed according to any
of the bonus plans.
The 1998 bonus plans at the SWW level for the Chief Executive Officer and
other executive officers were tied to the Company's achievement of predetermined
earnings per share (EPS) targets for 1998. The bonus plans provided for bonus
levels graded to performance against the EPS targets, with the bonus potential
ranging from 0% to 200% of base salary based on the executive's level of
responsibilities. The Chief Executive Officer's maximum bonus potential was 200%
of base salary. Bonuses for other officers at
15
<PAGE>
the SWW level were tied to achievement of personal objectives as well as the
Company's achievement of the predetermined EPS targets. The SWW level bonuses
were generally payable annually.
The regional executives' 1998 bonus plans were tied to achievement of
regional and personal objectives as well as the predetermined EPS targets for
1998. The regional objectives were based on revenue and pre-tax earnings
targets. The bonus plans reflected a similar grading of bonus levels to
performance as at the SWW level, with the bonus potential ranging from 0% to 50%
of base salary based on the executive's level of responsibilities. The regional
level bonuses were generally payable quarterly, with a portion of the bonuses
payable at year-end.
Bonuses to executives for 1998 generally were paid only per the 1998 bonus
plans or per contractual obligations which predated the Company's acquisitions
of certain businesses. In cases of changed circumstances or extraordinary
individual performance despite the 1998 bonus plan not being achieved, a
judgment was made as to the relative contributions of the executives in
determining whether a bonus should nevertheless be paid. Antoon Vanparys,
Executive Vice President, and Barry S. Major, former Executive Vice President,
were the only SWW executive officers who received a bonus for 1998. Mr.
Vanparys' bonus was paid in recognition of his extraordinary individual
performance during 1998 and Mr. Major's bonus was paid according to his 1998
bonus plan.
LONG-TERM INCENTIVES
Stock options are a form of long-term incentive used for executive officers
and other employees. This incentive emphasizes the long-term focus necessary for
the Company's continued success. Stock options also promote success by aligning
employee financial interests with long-term shareholder value. Stock options
have traditionally been granted broadly and deeply within the Company. During
1998 options for approximately 1.6 million shares were granted to more than
1,200 employees worldwide, excluding options cancelled and granted in the
repricing. As of December 31, 1998, more than 3,000 SITEL employees worldwide
owned common stock or options to acquire common stock.
Most of the Company's stock option awards during 1998 were granted under the
Company's performance-vesting stock award program implemented in December 1996.
This award program was tied to the Company's five-year business plan and
replaced the previous program under which grants were made annually to selected
employees. Under the award program, one-time options were originally granted in
December 1996 to existing exempt employees worldwide, one-time options were
subsequently granted each month through December 1998 to new exempt employees
joining the Company, and additional award program options were granted to exempt
employees promoted to a management level or a higher management level.
Generally, the size of the option grants under the award program increased with
an employee's level of job responsibilities. The award program also provided for
possible annual awards to top-performing exempt employees who had responsibility
for executing defined goals in support of the Company's business plan, which
excluded senior management and business unit leaders, based upon their
individual performance during the year subject to the Company meeting its
revenue and operating margin goals. The Company did not meet both its revenue
and operating margin goals for 1998 and therefore no 1998 annual performance
awards were made under the award program. No further awards are being made under
the award program following December 31, 1998. The Committee awarded certain
stock options under the Employee Plan in January 1999 to the Company's top 1998
performers at the SWW and business unit levels. The Committee has adopted a new
option program effective for 1999 for employees at the five highest levels of
job responsibilities within the Company. Under the new option program, one-time
option awards are generally expected to be granted on a semi-annual basis to
employees hired or promoted to these levels during the year and options are
expected to be granted annually following year-end, on a discretionary basis, to
the top-performing employees at these levels.
16
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
The 1998 compensation of Phillip A. Clough, Chief Executive Officer,
consisted principally of his base salary of $300,000 and certain option awards.
Mr. Clough received an award of 200,000 options in February 1998 in recognition
of his performance as President during his first year with the Company. Mr.
Clough received an additional award of 275,000 options in January 1999 in
recognition of the additional responsibilities as Chief Executive Officer which
he assumed during 1998. As discussed above, Mr. Clough's bonus potential for
1998 was tied to the Company's achievement of predetermined 1998 EPS targets.
Because these EPS targets were not achieved, Mr. Clough did not receive a bonus
for 1998.
Michael P. May served as Chief Executive Officer until his resignation on
May 12, 1998. Mr. May's 1998 compensation, excluding amounts paid in accordance
with his separation agreement, consisted principally of his base salary. Mr.
May's bonus potential for 1998 was tied to the Company's achievement of the same
predetermined 1998 EPS targets. Because these EPS targets were not achieved, Mr.
May did not receive a bonus for 1998.
SUBMITTED BY THE
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
OF SITEL CORPORATION
Bill L. Fairfield
George J. Kubat
17
<PAGE>
PERFORMANCE GRAPH
The following line graph compares the yearly percentage changes in the
cumulative stockholder return on the Common Stock for the period since the
Company's initial public offering in June 1995 with the cumulative total return
of a "Competitors Index" (computed by the Company) and with the Standard and
Poors 500 Index through the year ended December 31, 1998. The comparison assumes
$100 was invested on June 8, 1995 in the 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 COMPETITOR INDEX S&P 500
<S> <C> <C> <C>
6/8/95 $100.00 $100.00 $100.00
12/31/95 $195.78 $132.18 $115.70
12/31/96 $364.45 $236.24 $139.15
12/31/97 $233.38 $110.38 $182.29
12/31/98 $62.40 $147.03 $230.91
</TABLE>
Since the Company's initial public offering, other teleservices firms have gone
public. The five largest, in terms of market capitalization, were used to
compute the "Competitors Index", using their period end stock prices and
respective market capitalization values to appropriately weight their stock
prices. The companies included in the "Competitors Index" are APAC Teleservices,
Inc., West Teleservices Corporation, Sykes Enterprises, Incorporated, Teletech
Holdings, Inc. and Precision Response Corporation.
18
<PAGE>
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 1998 its officers and directors and greater
than 10% beneficial owners complied with such filing requirements, except as
follows. Kelvin C. Berens filed two reports and Henk P. Kruithof filed one
report after the due date thereof relating to certain transactions during 1998.
Former Chief Executive Officer Michael P. May filed one report and former
Executive Vice President Barry S. Major filed two reports after the due date
thereof for certain transactions during 1998 occurring after their respective
dates of separation from the Company.
APPROVE THE SITEL CORPORATION 1999 STOCK INCENTIVE PLAN
The Board of Directors has adopted the SITEL Corporation 1999 Stock
Incentive Plan ("Incentive Plan"), subject to stockholder approval. Approval of
the Incentive 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 describes the material terms of the Incentive Plan, a
copy of which is attached as Appendix A. This summary is not complete and is
subject to the full terms of the Incentive Plan.
PURPOSE
The Incentive Plan seeks to promote the long-term financial success of the
Company and its subsidiaries, and thereby increase stockholder value, by
providing stock-based incentives to employees, consultants, and non-employee
directors who contribute, or are likely to contribute, significantly to such
success.
ADMINISTRATION
The Incentive Plan is administered by the Compensation Committee (the
"Committee").
AUTHORITY TO GRANT AWARDS
The Committee selects the employees and independent consultants of the
Company and its subsidiaries (collectively "Employees") who will participate in
the Incentive Plan and grants awards to Employees. The Committee may grant
awards under the Incentive Plan to any Employee that the Committee determines
has contributed, or is likely to contribute, significantly to the success of the
Company and its subsidiaries. The Committee may delegate to any officer or
officers of the Company the Committee's powers under the Incentive Plan,
including the authority to select Employees and grant awards, except that only
the Committee may select and grant awards to Employees who are subject to
Section 16 of the Securities and Exchange Act.
The Board of Directors selects the non-employee directors ("Directors") who
will participate in the Incentive Plan and grants awards to Directors.
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PERMITTED AWARDS
The Incentive Plan permits the grant of various types of incentive awards,
in any combination ("Awards") including:
- Stock Options
- Stock Appreciation Rights
- Performance Unit Awards
- Restricted Stock Awards
- Stock Bonus Awards
- Other Stock-Based Awards
The aggregate number of shares of Common Stock which may be issued or utilized
in respect of Awards granted under the Incentive Plan is 7,000,000. The
aggregate number of shares of Common Stock which may be issued or utilized in
respect of Awards granted under the Incentive Plan in any calendar year to any
individual is 1,000,000. The above numbers are subject to adjustment for certain
events resulting in an increase or decrease in the number of issued shares of
Common Stock. The aggregate market value of the Common Stock underlying the
Awards permitted by the Incentive Plan is $19,250,000, based upon the $2.75
closing price of the Common Stock on the New York Stock Exchange on March 10,
1999.
STOCK OPTIONS: Stock Options may be intended to qualify as incentive stock
options within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code") ("Incentive Options") or may be non-qualified stock
options which do not qualify as Incentive Options ("Non-Qualified Options").
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 (or less than fair
market value for Employees who at the time of grant are a "covered employee"
within the meaning of Section 162(m) of the Code). The Incentive Plan is not
qualified under Section 401 of the Code. The tax consequences of the issuance
and exercise of Options granted under the Incentive 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 will be taxed at ordinary income rates at the time of the disqualifying
disposition and the Company 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.
STOCK APPRECIATION RIGHTS: Stock Appreciation Rights 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 Stock Appreciation Right. Stock Appreciation Rights are granted at exercise
prices as determined by the Committee or the Board, as applicable. The Company
may settle the Stock Appreciation Right 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.
PERFORMANCE UNIT AWARDS: Performance Unit Awards grant the right to receive
future payments based upon and subject to the achievement of preestablished
performance targets. Performance Unit Awards 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 Units
in the form of cash
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(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. The
maximum compensation that may be paid to any individual for any calendar year in
respect of a Performance Unit Award is $500,000.
RESTRICTED STOCK AWARDS: A Restricted Stock Award is an award of Common
Stock which is restricted against transfer, subject to a substantial risk of
forfeiture, and other terms and conditions as determined by the Committee or the
Board, as applicable. 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.
STOCK BONUS AWARDS: Stock Bonus Awards are awards of shares of Common Stock
or an amount of money which is determined by reference to the fair market value
of shares of Common Stock, or a combination thereof. Stock Bonus Awards to
participants who are "covered employees" within the meaning of Section 162(m) of
the Code must satisfy the requirements for "qualified performance-based
compensation" within the meaning of Section 162(m).
OTHER STOCK-BASED AWARDS: Other Stock-Based Awards are awards of shares of
Common Stock or an award that is valued by reference to or based on Common
Stock, including without limitation awards of convertible preferred stock,
convertible debentures, exchangeable securities and options. The Committee or
the Board, as applicable, may establish performance goals, restricted periods,
conversion prices, maturities, and security, if any, for an Other Stock-Based
Award. Other Stock-Based Awards may be sold at face value or at a discount from
face value, or awarded for no consideration or such minimum consideration as may
be required by applicable law.
AWARD AGREEMENTS
Each participant's award agreement will specify the term of the Award and
the events upon which the Award shall expire earlier than the stated term. Award
agreements may also contain, among other things, restrictions on exercise or
settlement of awards or on the vesting or transfer of shares of Common Stock to
which an award relates.
NON-ASSIGNABILITY
Awards under the Incentive Plan are exercisable only by the participant or
the participant's guardian or legal representative during the participant's
lifetime. They are not assignable or transferable by the participant except upon
death by will or laws of descent and distribution, or as may be permitted by the
Committee in specific cases pursuant to a qualified domestic relations order, or
by such other means as the Committee may approve in specific cases with respect
to holders whose transactions in the Common Stock are not subject to Section
16(b) of the Securities and Exchange Act.
TERMS OF PAYMENT
The Committee determines the time, form and manner of any payment by a
participant with respect to shares of Common Stock which are the subject of an
Award. The Committee in its discretion may allow a participant to pay the
exercise price by exchanging shares of Common Stock previously acquired by the
participant within the preceding six months, and may grant new Stock Options to
a participant who exercises a Stock Option with previously acquired shares of
Common Stock.
ADJUSTMENTS
The Committee may make any adjustments it deems appropriate to prevent
dilution or enlargement of the participants' rights in connection with any
increase or decrease in the number of issued shares of
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Common Stock resulting from the payment of a stock dividend, stock split,
reverse stock split, recapitalization, combination, reclassification, or other
similar event.
DISSOLUTION AND CHANGE OF CONTROL
Unless otherwise provided in the particular award agreement, upon the:
- dissolution or liquidation of the Company,
- merger or consolidation of the Company with another entity pursuant to
which the Company is not the surviving entity,
- sale or lease of all or substantially all the business assets of the
Company, or
- the sale of more than 80% of the outstanding Common Stock 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 Company 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 involved "substantially equivalent"
Awards being determined by the Committee within its complete discretion) then
(b) each Award 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 the exercisable portion of his or her Awards (in the manner provided in
the Award Agreement) prior to the effective date of such transaction. The
Committee, in its discretion, may accelerate the exercisability of any Award,
provide for the purchase of the Award, adjust the terms of the Award to reflect
the dissolution or change in control, cause the Award to be assumed or new
rights substituted therefor by another entity, or make such other provision as
the Committee determines advisable.
TERM AND TERMINATION OF PLAN
Awards may be granted pursuant to the Incentive Plan through December 31,
2009. All awards which are outstanding on such date remain in effect until they
are exercised or expire by their terms. The Board is authorized to extend the
Incentive Plan for an additional term at any time; however, no Incentive Stock
Options may be granted under the Incentive 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 Committee may amend or terminate the Incentive 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
Incentive Plan, or (ii) change the designation of the class of persons eligible
to receive Incentive Stock Options.
EFFECT ON EMPLOYEE PLAN AND DIRECTORS PLAN
If the Incentive Plan is approved by the stockholders at the meeting, no
further awards will be made under the Employee Plan or the Directors Plan
following the date of the meeting.
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 SITEL
Corporation 1999 Stock Incentive Plan which is set forth in Appendix A to
the Proxy Statement for the 1999 Annual Meeting.
THE BOARD RECOMMENDS A VOTE FOR THE RESOLUTION APPROVING THE SITEL
CORPORATION 1999 STOCK INCENTIVE PLAN. Proxies received by the Board of
Directors of the Company will be voted for such Resolution
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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.
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, 1999. The same firm conducted the examination for fiscal year 1998.
The stockholders are asked to approve the Board's appointment of KPMG Peat
Marwick LLP for the fiscal year ending December 31, 1999.
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 acquired by the Company
in 1996 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 had 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 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 &
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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.
2000 STOCKHOLDER PROPOSALS
The date by which stockholder proposals must be received by the Company for
inclusion in the proxy materials relating to the 2000 Annual Meeting of
Stockholders is January 6, 2000.
The Company's bylaws set forth certain procedures which a stockholder must
follow in order to nominate a director or present any other business at an
annual stockholders meeting. Generally, a stockholder must give timely notice to
the Secretary of the Company. To be timely, such notice must be received by the
Company not less than one hundred twenty days prior to one year after the date
of the previous year's annual meeting. Any stockholder may obtain a copy of this
provision of the bylaws upon request to the Secretary of the Company.
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.
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APPENDIX A
SITEL CORPORATION
1999 STOCK INCENTIVE PLAN
1. PURPOSE.
The SITEL Corporation 1999 Stock Incentive Plan seeks to promote the
long-term financial success of the Company and its Subsidiaries, and thereby
increase stockholder value, by providing stock-based incentives to employees,
consultants, and non-employee directors who contribute, or are likely to
contribute, significantly to such success.
2. CERTAIN DEFINITIONS.
"BOARD" means the Board of Directors of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto. References to a particular section of the Code
shall include any regulations issued under such section.
"COMMITTEE" shall have the meaning provided in Section 3.
"COMMON STOCK" means the Common Stock, $.001 par value per share, of the
Company.
"COMPANY" means SITEL Corporation, a Minnesota corporation.
"DISABILITY" means (i) with respect to the exercise of an Incentive Stock
Option after termination of employment, a disability within the meaning of
Section 22(e)(3) of the Code and (ii) for all other purposes, a mental or
physical condition which, in the opinion of the Committee, renders a grantee
unable or incompetent to carry out the job responsibilities which such grantee
held or the tasks to which such grantee was assigned at the time the disability
was incurred and which is expected to be permanent or for an indefinite duration
exceeding six months.
"EMPLOYEE" means any employee of, or independent consultant to, the Company
or any Subsidiary.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time.
"FAIR MARKET VALUE" means, as determined by the Committee:
(i) If the Common Stock is traded on a national securities exchange, the
average of the high and low prices of the Common Stock on the trading day
for which the determination is being made on the principal national exchange
on which the Common Stock is traded (or, if there are no sales on that day,
the last preceding day on which there was a sale);
(ii) If the Common Stock is not traded on a national securities exchange
but is traded on a formal over-the-counter quotation system in general use
in the United States, the average of the high and low prices of the Common
Stock on the trading day for which the determination is being made on the
principal system on which the Common Stock is traded (or, if there are no
such quotations on that day, the last preceding day on which there were such
quotations); or
(iii) If neither of the foregoing is applicable, then the fair market
value of the Common Stock as determined in good faith by the Committee.
"INCENTIVE STOCK OPTION" means any Stock Option intended to qualify as an
"incentive stock option" within the meaning of Section 422 of the Code.
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"NON-QUALIFIED STOCK OPTION" means any Stock Option that is not intended to
be an Incentive Stock Option, including any Stock Option that provides (as of
the time such option is granted) that it will not be treated as an Incentive
Stock Option.
"OTHER STOCK-BASED AWARD" means an award granted pursuant to Section 11.
"OUTSIDE DIRECTOR" means any director of the Company who is not an employee
of the Company or any Subsidiary.
"PARTICIPANT" means an Employee or Outside Director who has been granted an
award under the Plan.
"PERFORMANCE UNIT AWARD" means an award granted pursuant to Section 8.
"PLAN" means this SITEL Corporation 1999 Stock Incentive Plan, as amended
from time to time.
"RESTRICTED STOCK AWARD" means an award granted pursuant to Section 9.
"RULE 16B-3" means Rule 16b-3 under the Exchange Act, as in effect from time
to time.
"STOCK APPRECIATION RIGHT" means an award granted pursuant to Section 7.
"STOCK BONUS AWARD" means an award granted pursuant to Section 10.
"STOCK OPTION" means an award granted pursuant to Section 6.
"SUBSIDIARY" means (i) as it relates to Incentive Stock Options, any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if, at the time of granting of the option, each of
the corporations (other than the last corporation in the unbroken chain) owns
stock possessing 50% of more of the total combined voting power of all classes
of stock in one of the other corporations in such chain and (ii) for all other
purposes, any business entity, domestic or foreign, now or hereafter existing,
in which not less than 50% of the total combined voting power is owned or
controlled by the Company or by a Subsidiary.
"VEST" or "VESTED" means that portion, if any, of an award which is
exercisable as of the date for which the determination of vested or unvested
status is being made.
3. ADMINISTRATION.
(a) COMMITTEE. The Plan shall be administered by a committee of two or
more members of the Board (the "Committee") selected by the Board, each of whom
shall qualify as a "Non-Employee Director" within the meaning of Rule 16b-3 and
as an "outside director" within the meaning of Section 162(m) of the Code.
(b) AUTHORITY TO GRANT AWARDS. The Committee shall have authority to grant
to eligible Employees, and the Board shall have authority to grant to Outside
Directors, pursuant to the terms of the Plan, (i) Stock Options, (ii) Stock
Appreciation Rights, (iii) Restricted Stock Awards, (iv) Performance Unit
Awards, (v) Stock Bonus Awards, (vi) Other Stock-Based Awards, or (vii) any
combination of the foregoing. No member of the Board shall act upon the granting
of an award to himself or herself.
(c) COMMITTEE AND BOARD POWERS. Subject to the applicable provisions of
the Plan, the Committee shall have authority to: (i) interpret the provisions of
the Plan, any award agreement, and any other agreement or document executed
pursuant to the Plan and to decide all questions of fact arising in the
application of such provisions; (ii) select the eligible Employees to whom
awards shall be granted under the Plan; (iii) determine whether and to what
extent awards shall be granted under the Plan to eligible Employees; (iv)
determine the types of awards to be granted under the Plan and the amount, size,
terms and conditions of each such award; (v) determine the time when awards
shall be granted under the Plan; (vi) determine whether awards will be granted
singly, in combination or in tandem with, in replacement of, or as alternatives
to, other awards under the Plan or any other incentive or compensation plan of
the
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Company; (vii) determine whether a Participant's employment with the Company or
any Subsidiary has terminated and whether such termination is with or without
cause, or because of death or Disability or otherwise; (viii) determine whether
any leave of absence constitutes a termination of employment or service and the
impact of such leave of absence on outstanding awards; (ix) accelerate or, with
the consent of the Participant, defer the vesting of any award and/or the
exercise date of any award; (x) determine whether an award has been earned
and/or become vested; (xi) with the consent of the Participant if such action
will materially impair any rights or materially increase any obligations of such
Participant, reprice, cancel and reissue, or otherwise adjust the terms of an
award previously issued to the Participant; (xii) without the consent of the
Participant, if such action with not materially impair any rights or materially
increase any obligations of such Participant, reprice, cancel, and reissue, or
otherwise adjust the terms of an award previously issued to the Participant;
(xiii) determine whether, to what extent and under what circumstances the
payment of Common Stock and other amounts payable with respect to an award
granted under the Plan shall be deferred either automatically or at the election
of the grantee; (xiv) determine the Fair Market Value of the Common Stock from
time to time; (xv) authorize persons to execute on behalf of the Company any
agreement required to be entered into under the Plan; (xvi) adopt, alter and
repeal such administrative rules, guidelines and practices governing the Plan as
the Committee from time to time shall deem advisable; (xvii) correct any defect
or omission, or reconcile any inconsistency in the Plan, any award, or any award
agreement; and (xviii) and make all other determinations necessary or advisable
for the administration of the Plan. Subject to the provisions of the Plan, the
Board shall have and may exercise the foregoing powers in respect of awards
granted or to be granted to Outside Directors.
(d) COMMITTEE AND BOARD DETERMINATIONS. Unless otherwise expressly
provided in the Plan, all decisions and determinations made by the Committee or
Board pursuant to the provisions of the Plan shall be made in the sole
discretion of the Committee or Board, respectively, and shall be final and
binding on all persons, including but not limited to the Company and its
Subsidiaries, the eligible Employees or Outside Directors to whom awards are
granted under the Plan, the heirs and legal representatives of such eligible
Employees or Outside Directors, and the personal representatives and
beneficiaries of the estates of such eligible Employees or Outside Directors.
(e) COMMITTEE DELEGATION. The Committee may delegate to any officer or
officers of the Company any of the Committee's duties, powers, and authorities
under the Plan upon such conditions and with such limitations as the Committee
may determine; PROVIDED that only the Committee may select for awards under the
Plan, and make grants of awards under the Plan to, Employees who are subject to
Section 16 of the Exchange Act at the time of such selection or the making of
such a grant.
4. COMMON STOCK PROVISIONS.
(a) SHARES SUBJECT TO THE PLAN. The aggregate number of shares of Common
Stock which may be issued or utilized in respect of (i) Stock Options, (ii)
Stock Appreciation Rights, (iii) Performance Unit Awards, (iv) Restricted Stock
Awards, (v) Stock Bonus Awards, (vi) Other Stock-Based Awards, or (vii) any
combination of the foregoing, granted under the Plan shall not exceed seven
million (7,000,000) shares, subject to adjustment under Section 13(a). The
aggregate number of shares of Common Stock which may be issued or utilized in
respect of (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Performance
Unit Awards, (iv) Restricted Stock Awards, (v) Stock Bonus Awards, (vi) Other
Stock-Based Awards, or (vii) any combination of the foregoing, granted under the
Plan in any calendar year to any individual may not exceed one million
(1,000,000) shares, subject to adjustment under Section 13(a). The foregoing
shares may consist in whole or in part of authorized and unissued shares or
treasury shares or any combination thereof.
(b) AWARDS NOT TO EXCEED SHARES AVAILABLE. The number of shares of Common
Stock issued or utilized in respect of awards which have been granted under the
Plan at any time during the Plan's term shall not, in the aggregate at any time,
exceed the number of shares authorized for issuance under the Plan.
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The number of shares of Common Stock subject to a Stock Appreciation Right that
is settled in cash shall count as shares issued or utilized under the Plan and
shall not again be available for issuance under the Plan. The number of shares
of Common Stock subject to a Performance Unit Award, Stock Bonus Award or Other
Stock-Based Award that is settled in cash shall not count as shares issued or
utilized under the Plan and shall again be available for issuance under the
Plan. The number of shares of Common Stock which may be issued or utilized in
respect of an award which expires, is canceled, is forfeited or is terminated
for any reason shall not count as shares issued or utilized under the Plan and
shall again be available for issuance under the Plan.
5. ELIGIBILITY TO RECEIVE AWARDS.
(a) EMPLOYEES. Awards may be granted under the Plan to any Employee that
the Committee determines has contributed, or is likely to contribute,
significantly to the success of the Company and its Subsidiaries. The granting
of an award under the Plan to an Employee shall conclusively evidence the
Committee's determination that such grantee so qualifies as an eligible
Employee.
(b) OUTSIDE DIRECTORS. The Corporation believes that Outside Directors
have contributed, and are likely to contribute in the future, significantly to
the success of the Company and its Subsidiaries. The Board may discretionarily
grant Non-Qualified Stock Options and any other awards under the Plan from time
to time to any Outside Director.
6. STOCK OPTIONS.
(a) STOCK OPTION DEFINED. A Stock Option is an award of an option to
purchase one or more shares of Common Stock. A Stock Option may be an Incentive
Stock Option or a Non-Qualified Stock Option. To the extent that a Stock Option
does not qualify as an Incentive Stock Option, it shall constitute a separate
Non-Qualified Stock Option.
(b) STOCK OPTION AWARD AGREEMENTS. Each Stock Option shall be evidenced by
a written award agreement which shall set forth the terms and conditions
pertaining to such Stock Option, provided that all such terms shall be subject
to and consistent with the Plan. The award agreement shall identify the Stock
Option evidenced thereby as an Incentive Stock Option or a Non-Qualified Stock
Option.
(c) NUMBER OF SHARES COVERED BY A STOCK OPTION. Each award agreement shall
state the number of shares of Common Stock for which the Stock Option is
exercisable, subject to adjustment of such shares pursuant to Section 13(a).
(d) EXERCISE PRICE. Each award agreement shall state the exercise price
for the shares of Common Stock to which the Stock Option pertains. The exercise
price of an Incentive Stock Option shall not be less than 100% of the Fair
Market Value of the shares of Common Stock to which the Stock Option pertains on
the date the Stock Option is granted (substituting "110%" for "100%" for any
Incentive Stock Option granted to an employee described in the second sentence
of Section 6(g)). The exercise price of a Stock Option granted to an Employee
who at time of grant is a "covered employee" within the meaning of Section
162(m) of the Code shall not be less than 100% of the Fair Market Value of the
shares of Common Stock to which the Stock Option pertains on the date the Stock
Option is granted. Furthermore, in any event, the exercise price of a Stock
Option may not be below the par value of the shares of Common Stock to which the
Stock Option pertains.
(e) EXERCISE OF STOCK OPTIONS. Each award agreement shall include a
schedule describing the date, event or act upon which a Stock Option shall
become exercisable, in whole or in part, with respect to the shares of Common
Stock covered by such Stock Option. Each award agreement shall also specify the
manner and procedure for exercising a Stock Option and the effective date of
such exercise. Subject to Section 12(h), only a Participant may exercise a Stock
Option, and the Participant may exercise a Stock
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Option only on or after the date on which the Stock Option becomes exercisable
and only on or before the date on which the term of the Stock Option expires.
(f) TERM AND EXPIRATION OF STOCK OPTIONS. Each award agreement shall
specify the term of the Stock Option and any events upon which the Stock Option
shall expire earlier than the stated term. Without limitation, each award
agreement shall specify the effect on the Stock Option of termination of
employment of a Participant, whether by reason of death, Disability, or
otherwise and the extent (if any) to which and the period (if any) after
termination of employment during which the Participant, his legal
representative, guardian or heirs may exercise the Stock Option. Unless
expressly provided otherwise in the award agreement, a Stock Option shall also
expire earlier than the stated term upon the effective date of a transaction
described in the second sentence of Section 13(b).
(g) ELIGIBILITY FOR INCENTIVE STOCK OPTIONS. Incentive Stock Options may
be granted only to persons who are employed by the Company or a Subsidiary
within the meaning of Section 3401 of the Code. An employee who owns stock of
the Company possessing more than 10% of the combined voting power of all classes
of outstanding stock of the Company or any Subsidiary within the meaning of
Section 422 of the Code is eligible to be granted an Incentive Stock Option only
if the exercise price of each share subject to such Incentive Stock Option, when
granted, is equal to or exceeds 110% of the Fair Market Value of a share of
Common Stock and the term of the Incentive Stock Option does not exceed five
years.
(h) NO DISQUALIFICATION OF INCENTIVE STOCK OPTIONS. Notwithstanding any
other provision of the Plan, the Plan shall not be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify the Plan under Section 422 of the Code.
(i) LIMITATION ON INCENTIVE STOCK OPTIONS. The aggregate Fair Market Value
(determined with respect to each Incentive Stock Option as of the date of grant
of such Incentive Stock Option) of all shares of Common Stock with respect to
which a Participant's Incentive Stock Options are exercisable for the first time
by the Participant during any calendar year (under the Plan and under other
incentive stock option plans of the Company, if any) shall not exceed
US$100,000. Any purported Incentive Stock Options in excess of such limitation
shall be recharacterized as Non-Qualified Stock Options.
7. STOCK APPRECIATION RIGHTS.
(a) STOCK APPRECIATION RIGHT DEFINED. A Stock Appreciation Right is a
right to receive all or a portion of the future appreciation in the Fair Market
Value of a share of Common Stock over the exercise price of such right.
(b) STOCK APPRECIATION RIGHT AWARD AGREEMENTS. Each Stock Appreciation
Right shall be evidenced by a written award agreement which shall set forth the
terms and conditions pertaining to such Stock Appreciation Right, provided that
all such terms shall be subject to and consistent with the Plan.
(c) NUMBER OF SHARES COVERED BY A STOCK APPRECIATION RIGHT. Each Stock
Appreciation Right award agreement shall state the number of shares of Common
Stock to which it pertains and the exercise price which is the basis for
determining future appreciation, subject to adjustment pursuant to Section
13(a). The exercise price of a Stock Appreciation Right granted to an Employee
who at time of grant is a "covered employee" within the meaning of Section
162(m) of the Code shall not be less than 100% of the Fair Market Value of the
shares of Common Stock to which the Stock Appreciation Right pertains on the
date the Stock Appreciation Right is granted.
(d) STOCK APPRECIATION RIGHTS ISSUED AND EXERCISED WITHOUT PAYMENT OF
CONSIDERATION. Stock Appreciation Right shall be issued to and exercised by a
Participant without payment by the Participant of any consideration.
(e) EXERCISE OF STOCK APPRECIATION RIGHTS. Each award agreement shall
include a schedule describing the date, event or act upon which the Stock
Appreciation Right to which it pertains becomes exercisable, in
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whole or in part. Each award agreement shall also specify the manner and
procedure for exercising a Stock Appreciation Right, and shall specify the
effective date of such exercise. The Stock Appreciation Right may be settled 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 award agreement prescribes.
Subject to Section 12(h), only a Participant may exercise a Stock Appreciation
Right, and the Participant may exercise a Stock Appreciation Right only on or
after the date on which the Stock Appreciation Right becomes exercisable and
only on or before the date on which the Stock Appreciation Right expires.
(f) TERM AND EXPIRATION OF STOCK APPRECIATION RIGHTS. Each award agreement
shall specify the term of the Stock Appreciation Right and any event(s) upon
which the Stock Appreciation Right shall expire earlier than the stated term.
Without limitation, each award agreement shall specify the effect on the Stock
Appreciation Right of termination of employment of a Participant, whether by
reason of death, Disability, or otherwise and the extent (if any) to which and
the period (if any) after termination of employment during which the
Participant, his legal representative, guardian or heirs may exercise the Stock
Appreciation Right. Unless expressly provided otherwise in the award agreement,
a Stock Appreciation Right shall also expire earlier than the stated term upon
the effective date of a transaction described in the second sentence of Section
13(b).
8. PERFORMANCE UNIT AWARDS.
(a) PERFORMANCE UNIT AWARD DEFINED. A Performance Unit Award means an
award which grants the right to receive future payments based upon and subject
to the achievement of preestablished performance targets.
(b) PERFORMANCE UNIT AWARD AGREEMENTS. Each Performance Unit Award shall
be evidenced by a written award agreement which shall set forth the terms and
conditions pertaining to such Performance Unit Award, provided that all such
terms shall be subject to and consistent with the Plan.
(c) PERFORMANCE PERIOD. The Committee shall establish with respect to each
Performance Unit the performance period during which performance shall be
measured.
(d) UNIT VALUE. The Committee shall establish with respect to each
Performance Unit Award a value for each unit which shall not change thereafter
or which may vary thereafter on the basis of criteria specified by the
Committee; provided, however, that the maximum amount of compensation that may
be paid to any individual for any calendar year in respect of a Performance Unit
Award is $500,000.
(e) PERFORMANCE TARGETS. The Committee shall establish with respect to
each Performance Unit Award maximum and minimum performance targets to be
achieved during the applicable performance period. The achievement of the
maximum targets shall entitle a Participant to payment with respect to the full
value of a Performance Unit Award. The achievement of less than the maximum
targets, but in excess of the minimum targets, shall entitle a grantee to
payment with respect to a portion of the Performance Unit Award according to the
level of achievement of the applicable targets as specified by the Committee. To
the extent the Committee deems necessary or appropriate to protect against the
loss of deductibility pursuant to Section 162(m) of the Code, such targets shall
be established in conformity with the requirements of Section 162(m) of the
Code.
(f) BUSINESS CRITERIA. The Committee shall select from among the following
list one or more objective business criteria to be used to establish performance
targets under Performance Unit Awards, each of which criteria may be based on
absolute standards or peer industry group comparatives, may have the same or
different weighting, and may be applied at various organizational levels (e.g.
corporate, division, subsidiary, group or business unit): (i) earnings per
share, (ii) return on equity, (iii) pre-tax profit, (iv) after-tax profit, (v)
consolidated net income, (vi) stock price, (vii) market share, (viii) revenues,
(ix) return on assets, (x) return on invested capital, (xi) cash flow, (xii)
discounted cash flow,
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(xiii) EBITDA, (xiv) economic value added, and (xv) total shareholder return. To
the extent the Committee deems necessary or appropriate to protect against the
loss of deductibility pursuant to Section 162(m) of the Code, such business
criterion or criteria shall be selected and applied in conformity with the
requirements of Section 162(m) of the Code.
(g) ADJUSTMENTS. At any time prior to the settlement of a Performance Unit
Award, the Committee may adjust previously established performance targets or
other terms and conditions of such Performance Unit Award, including the
Company's or another company's financial performance for Plan purposes, in order
to reduce or eliminate, but not to increase, the payment with respect to a
Performance Unit Award that otherwise would be due upon the attainment of such
previously established performance targets. Such adjustments shall be made to
reflect major unforeseen events such as changes in laws, regulations or
accounting practices, mergers, acquisitions or divestitures or other
extraordinary, unusual or nonrecurring items or events.
(h) SETTLEMENT OF A PERFORMANCE UNIT AWARD. Following the end of the
performance period applicable to a Performance Unit Award, the Committee shall
determine the extent to which the applicable performance targets have been
attained and any other terms and conditions have been satisfied for such
performance period and shall provide such certification thereof as may be
necessary to satisfy the requirements of Section 162(m) of the Code. The
Committee shall determine what, if any, payment is due on a Performance Unit
Award and, subject to the limitations set forth in Section 4, whether such
payment shall be made in cash (in a lump sum payment or in installments), in
shares of Common Stock (valued at their then Fair Market Value), or a
combination thereof, as the award agreement prescribes.
(i) TERM AND EXPIRATION OF PERFORMANCE UNIT AWARD. Each award agreement
shall specify the term of the Performance Unit Award and any event(s) upon which
the Performance Unit Award shall expire earlier than the stated term. Without
limitation, each award agreement shall specify the effect on the Performance
Unit Award of termination of employment of a Participant, whether by reason of
death, Disability, or otherwise and the extent (if any) to which and the period
(if any) after termination of employment during which the Participant, his legal
representative, guardian or heirs may receive payment under the Performance Unit
Award. Unless expressly provided otherwise in the award agreement, a Performance
Unit Award shall also expire earlier than the stated term upon the effective
date of a transaction described in the second sentence of Section 13(b).
9. RESTRICTED STOCK.
(a) RESTRICTED STOCK AWARD DEFINED. A Restricted Stock Award means an
award of Common Stock which is restricted against transfer, subject to a
substantial risk of forfeiture, and subject to other terms and conditions
intended to further the purpose of the Plan as the Committee may determine.
(b) RESTRICTED STOCK AWARD AGREEMENTS. Each Restricted Stock Award shall
be evidenced by a written award agreement which shall set forth the terms and
conditions pertaining to such Restricted Stock Award, provided that all such
terms shall be subject to and consistent with the Plan.
(c) NUMBER OF SHARES COVERED BY A RESTRICTED STOCK AWARD. Each award
agreement shall state the number of shares of Common Stock to which a Restricted
Stock Award pertains and the purchase price per share that the Participant paid
for such shares, subject to adjustment pursuant to Section 13(a).
(d) RESTRICTED STOCK MAY BE ISSUED WITH OR WITHOUT PAYMENT OF
CONSIDERATION. A Restricted Stock Award may be issued to a Participant with or
without payment by the Participant of any consideration, unless the Participant
is required to pay a minimum purchase price for such shares, such as par value.
(e) VESTING OF RESTRICTED STOCK. Each award agreement shall include a
vesting schedule describing the date, event or act upon which the shares of
Common Stock to which the Restricted Award pertains shall vest, in whole or in
part.
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(f) FORFEITURE OF RESTRICTED STOCK. Each award agreement shall specify the
term of the Restricted Stock Award and any event(s) upon which a Restricted
Stock Award which is not vested shall be forfeited earlier than the stated term.
Without limitation, each award agreement shall specify the effect on the
Restricted Stock Award which is not vested of termination of employment of a
Participant, whether by reason of death, Disability, or otherwise. Unless
expressly provided otherwise in the award agreement, a Restricted Stock Award
which is not vested shall also be forfeited earlier than the stated term upon
the effective date of a transaction described in the second sentence of Section
13(b).
10. STOCK BONUS AWARDS.
(a) STOCK BONUS AWARD DEFINED. A Stock Bonus Award means an award of
shares of Common Stock or an amount of money which is determined by reference to
the Fair Market Value of shares of Common Stock, or a combination thereof.
(b) STOCK BONUS AWARD AGREEMENTS. Each Stock Bonus Award shall be
evidenced by a written award agreement which shall set forth the terms and
conditions pertaining to such Stock Bonus Award, provided that all such terms
shall be subject to and consistent with the Plan.
(c) QUALIFIED PERFORMANCE-BASED COMPENSATION. Stock Bonus Awards granted
to Participants who are "covered employees" within the meaning of Section 162(m)
of the Code shall satisfy the requirements for "qualified performance-based
compensation" within the meaning of Section 162(m). Without limitation, Stock
Bonus Awards granted to such Participants shall be subject to the same
requirements and limitations (to the extent applicable) as stated in Section
8(c) through (i) of the Plan.
11. OTHER STOCK-BASED AWARDS.
(a) OTHER STOCK-BASED AWARDS DEFINED. An Other Stock-Based Award means an
award of shares of Common Stock or an award that is valued in whole or in part
by reference to or is otherwise based on Common Stock. The Committee may make
Other Stock-Based Awards, including without limitation, awards of convertible
preferred stock, convertible debentures, exchangeable securities and options.
Such other awards shall be evidenced by a written award agreement in such form
as the Committee shall approve from time to time. The agreement shall contain in
substance such terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem appropriate.
(b) PERFORMANCE GOALS AND OTHER CRITERIA. The Committee may establish
performance goals, which may be based on performance goals related to book
value, Company or Subsidiary performance, or such other criteria as the
Committee may establish, restricted periods, conversion prices, maturities and
security, if any, for any Other Stock-Based Award. Other Stock-Based Awards may
be sold to Participants at the face value thereof or any discount therefrom or
awarded for no consideration or such minimum consideration as may be required by
applicable law.
12. GENERAL PROVISIONS APPLICABLE TO AWARDS.
(a) OTHER PROVISIONS IN AWARD AGREEMENT An award agreement may contain
such other provisions as the Committee deems advisable which are not
inconsistent with the terms of the Plan, including but not limited to: (i)
restrictions on the exercise or settlement of awards or on the vesting of shares
of Common Stock to which an award relates; (ii) restrictions on transfer of
shares of Common Stock to which an award relates; (iii) establishment of an
escrow agreement which enables the Company to hold shares of Common Stock to
which a Restricted Stock Award pertains on behalf of the Participant until such
shares vest in such Participant; (iv) submission by the Participant of such
forms and documents as the Committee may require; and/or (v) procedures to
facilitate the payment of the exercise price of an award under any method
allowable under Section 12(f). An award agreement need not be signed by a
Participant unless required by the Committee.
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(b) MULTIPLE AWARDS. Multiple forms of awards or combinations thereof may
be evidenced either by a single agreement or by multiple agreements, as
determined by the Committee.
(c) DIVIDENDS AND CASH AWARDS. The Committee may provide in an award
agreement that a Participant shall receive (i) dividends or dividend equivalents
payable currently or deferred with or without interest, or (ii) cash payments in
lieu of or in addition to an award.
(d) LOANS. The Committee may authorize the making of loans or cash
payments to Participants in connection with any award under the Plan, which loan
may be secured by any security, including Common Stock, underlying or related to
such award (provided that such loan shall not exceed the Fair Market Value of
the security subject to such award), and which may be forgiven upon such terms
and conditions as the Committee may establish at the time of such loan or at any
time thereafter.
(e) GENERAL RESTRICTIONS. Each award under the Plan shall be subject to
the requirement that if at any time the Committee shall determine that (i) the
listing, registration or qualification of the shares of Common Stock subject or
related thereto upon any securities exchange or under any state or federal law,
(ii) the consent or approval of any governmental regulatory body, or (iii) an
agreement by the grantee of an award with respect to the disposition of the
shares of Common Stock subject or related thereto is necessary or desirable as a
condition of, or in connection with, such award or the issuance or purchase of
shares of Common Stock thereunder, then such award may not be consummated and
any rights thereunder may not be exercised in whole or in part unless such
listing, registration, qualification, consent, approval or agreement shall have
been effected or obtained upon conditions acceptable to the Committee. Awards
under the Plan shall be subject to such additional terms and conditions, not
inconsistent with the Plan, as the Committee deems necessary or desirable,
including but not limited to such terms and conditions as are necessary to
enable a grantee to avoid any short-swing profit recapture liability under
Section 16 of the Exchange Act.
(f) TERMS OF PAYMENT. Subject to any other applicable provisions of the
Plan and to any applicable laws, whenever payment by a grantee is required with
respect to shares of Common Stock which are the subject of an award under the
Plan, the Committee shall determine the time, form and manner of such payment,
including but not limited to lump-sum payments and installment payments upon
such terms and conditions as the Committee may prescribe. Installment payment
obligations of a grantee may be evidenced by full-recourse, limited-recourse or
non-recourse promissory notes or other instruments, with or without interest and
with or without collateral or other security, as the Committee may determine.
The Committee may allow a Participant to pay, in whole or in part, the exercise
price of a Stock Option by exchanging a share or shares of Common Stock that the
Participant had acquired pursuant to the exercise of another Stock Option during
the preceding six months (under the Plan or any other plan or program of the
Company) or had otherwise acquired from the Company during the preceding six
months. The Committee may grant new Stock Options to a Participant who exercises
a Stock Option with previously acquired shares of Common Stock, with the number
of new Stock Options being equal to the number of shares the Participant submits
to the Company to pay for Stock Options just exercised.
(g) WITHHOLDING. The Company's obligation to (i) deliver shares of Common
Stock or pay cash upon the exercise of any Stock Option or Stock Appreciation
Right, (ii) deliver shares of Common Stock or pay cash in payment of any
Performance Unit Award, (iii) deliver stock certificates upon the vesting of any
Restricted Stock Award, (iv) deliver shares of Common Stock upon the grant of
any Stock Bonus Award, and (v) deliver shares of Common Stock or pay cash in
respect of any Other Stock-Based Award, shall be subject to applicable federal,
state and local tax withholding requirements. If permitted in any specific case
by the Committee, amounts required to be withheld for taxes may be paid by the
grantee in cash or shares of Common Stock (either through the surrender of
previously held shares of Common Stock or the withholding of shares of Common
Stock otherwise issuable upon the exercise or payment of such award) having a
Fair Market Value equal to the required tax withholding amount and upon such
other terms and conditions as the Committee shall determine; PROVIDED that any
election by a grantee subject to
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Section 16(b) of the Exchange Act to pay any tax withholding in shares of Common
Stock shall be subject to and must comply with Rule 16b-3(e) under the Exchange
Act.
(h) NON-ASSIGNABILITY. An award under the Plan shall, during the lifetime
of the Participant, be exercisable only by the Participant or the Participant's
guardian or legal representative. No award under the Plan shall be assignable or
transferable by the Participant except by will, by the laws of descent and
distribution or, with respect to awards other than Incentive Stock Options, if
permitted in any specific case by the Committee, pursuant to a qualified
domestic relations order or by such other means (if any) as the Committee may
approve from time to time with respect to holders whose transactions in the
Common Stock are not subject to Section 16(b) of the Exchange Act. Any exercise
of an award under the Plan following the Participant's death shall be made only
by the deceased Participant's executor or administrator or other duly appointed
representative reasonably acceptable to the Board, unless the deceased
Participant's will specifically devises such award, in which case such exercise
shall be made only by the beneficiary of such specific devise, and in each case
subject to the terms and conditions of the Plan and the applicable award
agreement. The Participant may not cause or permit any encumbrance, pledge or
charge of any nature to be imposed on any award or right to receive an award. No
right or benefit under the Plan shall in any manner be subject to the debts,
contracts, liabilities or torts of the person entitled to such right or benefit.
(i) POOLING. Notwithstanding anything in the Plan to the contrary, if any
right under or feature of the Plan would cause a transaction to be ineligible
for pooling of interests accounting that would, but for such right or feature,
be eligible for such pooling of interests accounting treatment, the Board may
modify or adjust the right or feature so that the transaction will be eligible
for pooling of interests accounting. Such modification or adjustment may include
without limitation payment of cash or issuance to a Participant of shares of
Common Stock having a Fair Market Value equal to the cash value of such right or
feature.
13. RECAPITALIZATION, DISSOLUTION, AND CHANGE OF CONTROL.
(a) RECAPITALIZATION. If the Committee determines that adjustments are
appropriate to prevent the dilution or enlargement of the rights of Participants
under the Plan in connection with any increase or decrease in the number of
issued shares of Common Stock resulting from the payment of a Common Stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification or any other similar event which results in a change in the
number or kind of shares of Common Stock, or other property, to which
outstanding awards pertain or an increase or decrease in the number of issued
shares of Common Stock without receipt of adequate consideration by the Company
(as determined by the Committee), then the Committee may make any adjustments
which it deems appropriate to the aggregate number of shares of Common Stock
reserved for issuance under the Plan, the aggregate number of shares of Common
Stock for which awards may be made to an individual grantee, the number and kind
of shares of Common Stock, or other property, to which each outstanding award
pertains, and the exercise or other applicable price related to outstanding
awards, and/or any other adjustments as it deems equitable under the
circumstances, provided that the number of shares subject to any award always
shall be a whole number.
(b) DISSOLUTION; CHANGE IN CONTROL. Unless otherwise provided in an award
agreement, this Section 13(b) shall apply upon the (i) dissolution or
liquidation of the Company or (ii) merger or consolidation of the Company with
another corporation or other entity pursuant to which the Company is not the
surviving entity, (iii) sale or lease of all or substantially all the business
assets of the Company, or (iv) the sale of more than 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. In any of the events
in the preceding sentence, if the surviving or acquiring corporation or entity,
or an affiliated corporation or entity, does not assume the outstanding awards,
then each award 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 the exercisable portion of his or her awards prior to
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the effective date of such transaction. Assumption of outstanding awards may
take the form of replacement of the outstanding awards with substantially
equivalent awards from the surviving or acquiring or affiliated corporation or
entity. The Committee shall determine whether the outstanding awards have been
assumed and whether the assumption involved "substantially equivalent" awards.
In any of the events described in the first sentence of this Section 13(b), the
Committee may instead (i) provide for the acceleration of any time period
relating to the exercise or realization of the award, (ii) provide for the
purchase of the award upon the Participant's request for an amount of cash or
other property that could have been received upon the exercise or realization of
the award had the award been currently exercisable or payable, (iii) adjust the
terms of the award in a manner determined by the Committee to reflect the
dissolution or change in control event, (iv) cause the award to be assumed, or
new rights substituted therefor, by another entity, or (v) make such other
provision as the Committee may consider equitable and in the best interests of
the Company.
14. RIGHTS AS A STOCKHOLDER.
Unless otherwise provided by the Plan, the grantee of any award under the
Plan shall have no rights as a stockholder of the Company with respect to any
shares of Common Stock subject or related to such award unless and until a stock
certificate for such shares of Common Stock is issued to such grantee or a
book-entry crediting shares to the Participant's account is made. No adjustment
shall be made for dividends (ordinary or extraordinary or whether in currency,
securities, or other property), distributions, or other rights for which the
record date is prior to the date such stock certificate is issued or such
book-entry credit is made.
15. RIGHTS AS AN EMPLOYEE, CONSULTANT OR DIRECTOR.
Nothing in the Plan or in any award agreement entered into pursuant to the
Plan shall confer upon any individual the right to continue in the employment of
the Company or any Subsidiary or affect any right which the Company or any
Subsidiary may have to terminate such individual's status as an employee,
consultant, or director at any time, with or without cause.
16. INDEMNIFICATION.
No member of the Board or the Committee, nor any officer or employee of the
Company or a Subsidiary acting on behalf of the Board or the Committee, shall be
personally liable for any action, determination or interpretation taken or made
in good faith with respect to the Plan; and all members of the Board or the
Committee and any officer or employee of the Company or any Subsidiary acting on
their behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company in respect of any such action, determination or
interpretation.
17. NONUNIFORM DETERMINATIONS.
The Committee's determinations under the Plan (including but not limited to
determinations of the persons to receive awards, the form, amount and timing of
awards, the terms and provisions of awards, and the agreements evidencing
awards, the establishment of values and performance targets, and actions in
respect of outstanding awards) need not be uniform and may be made by the
Committee selectively among the persons who have received, who receive, or who
are eligible to receive awards under the Plan, whether or not such persons are
similarly situated.
18. SEVERABILITY.
With respect to Participants subject to Section 16 of the Exchange Act, (i)
the Plan is intended to comply with all applicable conditions of Rule 16b-3 or
any successor to such rule, (ii) all transactions involving grantees who are
subject to Section 16(b) of the Exchange Act are subject to such conditions,
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regardless of whether the conditions are expressly set forth in the Plan, and
(iii) any provision of the Plan that is contrary to a condition of Rule 16b-3
shall not apply to grantees who are subject to Section 16(b) of the Exchange
Act. If any of the terms or provisions of the Plan, or awards made under the
Plan, conflict with the requirements of Section 162(m) or Section 422 of the
Code with respect to awards subject to or governed by Section 162(m) or Section
422 of the Code, as the case may be, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of
Section 162(m) or Section 422 of the Code, as the case may be. With respect to
an Incentive Stock Option, if the Plan does not contain any provision required
to be included in the Plan under Section 422 of the Code (as amended from time
to time) or any successor to such section, then such provision shall be deemed
to be incorporated in the Plan with the same force and effect as if such
provision had been expressly set out in the Plan.
19. EFFECT ON OTHER PLANS.
Participation in the Plan shall not affect an employee's eligibility to
participate in any other benefit or incentive plan of the Company or any
Subsidiary. Any grants or awards made pursuant to the Plan shall not be taken
into account in determining the benefits provided or to be provided under any
other plan of the Company or any Subsidiary unless otherwise specifically
provided in such other plan.
20. GOVERNING LAW.
The Plan shall be governed by and construed in accordance with the laws of
Nebraska except that any matters relating to the internal governance of the
Company shall be governed by the general corporate laws of the State of
Minnesota.
21. TERM OF PLAN.
The Plan was adopted by the Board effective February 11, 1999, subject to
the approval of the Company's stockholders in accordance with this Section. The
Plan shall be subject to approval by the affirmative vote of the holders of a
majority of the outstanding shares present and entitled to vote at the first
annual meeting of stockholders of the Company following the adoption of the
Plan, and in any event no later than February 11, 2000. The Plan shall terminate
for purposes of further grants on the first to occur of (i) December 31, 2009 or
(ii) the effective date of the termination of the Plan by the Board pursuant to
Section 22. No awards may be granted under the Plan after the termination of the
Plan, but such termination shall not affect any awards outstanding at the time
of such termination or the authority of the Committee to continue to administer
the Plan apart from the making of further grants.
22. TERMINATION AND AMENDMENT OF PLAN.
The Board may terminate or amend the Plan or any portion thereof at any
time, including but not limited to amendments to the Plan necessary to comply
with the requirements of Section 16(b) of the Exchange Act. The termination or
amendment of the Plan shall not, without the consent of a grantee, adversely
affect such grantee's rights under an award previously made to such grantee
under the Plan.
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<TABLE>
<CAPTION>
SITEL CORPORATION
PROXY
PLEASE VOTE AND SIGN BELOW
THIS PROXY IS SOLICITED BY YOUR BOARD OF DIRECTORS
FOR THE MAY 6, 1999 ANNUAL STOCKHOLDERS MEETING
<S> <C>
P The undersigned hereby appoints James F. Lynch and Phillip A. Clough, and
R each of them, proxies, with full power of substitution in each of them, for
O and on behalf of the undersigned to vote as directed and permitted herein, at
X the annual meeting of stockholders of the Company to be held at the
Y Renaissance Harborplace Hotel, 202 E. Pratt Street, Baltimore, Maryland, on
May 6, 1999 at 9:30 a.m. Eastern Daylight Savings Time, 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, AND
3. SO, IF YOU ARE FOR ITEMS 1, 2 AND 3, 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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<PAGE>
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<S> <C> <C> <C>
/X/ Please mark your CLEAR AREA 2984
votes as in this
example
</TABLE>
- ------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2 and 3.
- ------------------------------------------------------------------------------
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<S> <C> <C> <C> <C> <C> <C>
1. ELECT DIRECTORS- VOTE FOR ALL WITHHOLD VOTE 2. APPROVE THE SITEL FOR AGAINST ABSTAIN
NOMINEES: NOMINEES FOR ALL NOMINEES CORPORATION 1999 --- ------- -------
------------ ---------------- STOCK INCENTIVE PLAN / / / / / /
BILL L. FAIRFIELD / / / /
AND HENK P. KRUITHOF 3. RATIFY APPOINTMENT OF FOR AGAINST ABSTAIN
INDEPENDENT ACCOUNTANTS --- ------- -------
FOR FISCAL 1999 / / / / / /
WITHHOLD VOTE FOR THE
FOLLOWING NOMINEE(S):
- ---------------------
_____________________
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<S> <C>
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.
___________________________________________
___________________________________________
SIGNATURE(S) DATE
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