-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UZeo0tsjz1i058ojavT8ZhiqfOlv/yh3Za3KkiphjJ0RYS4T+GhjOi1psVEezppP QSCbyCWgSyB1pNYPCMoRlg== 0000940180-00-000421.txt : 20000407 0000940180-00-000421.hdr.sgml : 20000407 ACCESSION NUMBER: 0000940180-00-000421 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000510 FILED AS OF DATE: 20000406 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEST TELESERVICES CORP CENTRAL INDEX KEY: 0001024657 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 470777362 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-21771 FILM NUMBER: 595245 BUSINESS ADDRESS: STREET 1: 11808 MIRACLE HILLS DR CITY: OMAHA STATE: NE ZIP: 68134 BUSINESS PHONE: 4025717700 MAIL ADDRESS: STREET 1: 9910 MAPLE ST CITY: OMAHA STATE: NE ZIP: 68134 DEF 14A 1 NOTICE & PROXY STATEMENT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] Confidential, for use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [_] Definitive Additional Materials [_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 WEST TELESERVICES 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. [_] $125 per Exchange Act Rules 0-11(c)(i)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. [_] 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: N/A (2) Aggregate number of securities to which transaction applies: N/A (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): N/A (4) Proposed maximum aggregate value of transaction: N/A (5) Total fee paid: N/A [_] 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: N/A (2) Form, Schedule or Registration Statement No.: N/A (3)Filing party: N/A (4) Date filed: N/A [LOGO OF WEST TELESERVICES CORPORATION] WEST TELESERVICES CORPORATION 11808 Miracle Hills Drive OMAHA, NEBRASKA 68154 ---------------- NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To Be Held on May 10, 2000 To the Stockholders of WEST TELESERVICES CORPORATION. You are cordially invited to attend the annual meeting of stockholders (the "Annual Meeting") of West TeleServices Corporation, a Delaware corporation (the "Company"), which will be held at the Marriott Hotel, 10220 Regency Circle, Omaha, Nebraska on May 10, 2000 at 9:00 a.m., Central Daylight Time, for the following purposes: 1. To elect two directors to serve for three-year terms until the 2003 annual meeting of stockholders; 2. To ratify the appointment by the Board of Directors of Deloitte & Touche LLP as independent auditors for the Company for the fiscal year ending December 31, 2000; and 3. To consider and transact such other business as may properly be brought before the Annual Meeting or any adjournment or postponement thereof. The Board of Directors has fixed the close of business on April 3, 2000 as the record date for the determination of stockholders entitled to receive notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof. By Order of the Board of Directors, Mary E. West Vice Chair and Secretary Dated: April 5, 2000 Whether or not you expect to be present at the Annual Meeting, please date and sign the enclosed proxy and return it promptly in the enclosed envelope. In the event you attend the Annual Meeting and vote in person, the proxy will not be used. These proxy materials are furnished in connection with the solicitation by the Board of Directors of the Company of proxies to be used at the Annual Meeting and at any adjournment or postponement thereof. WEST TELESERVICES CORPORATION 11808 Miracle Hills Drive Omaha, Nebraska 68154 ---------------- PROXY STATEMENT ---------------- You are cordially invited to attend the Annual Meeting of Stockholders on May 10, 2000, to be held at the Marriott Hotel, 10220 Regency Circle, Omaha, Nebraska at 9:00 a.m. Central Daylight Time, and at any adjournment or postponement thereof. The Company's Annual Report to Stockholders, this Proxy Statement and accompanying proxy are first being mailed to stockholders on approximately April 10, 2000. Proxy Information Your vote is important. Because many stockholders cannot personally attend the Annual Meeting, it is necessary that a large number be represented by proxy. Stockholders may sign, date and mail their proxies in the postage-paid envelope provided. Proxies may be revoked at any time before they are exercised by written notice to the Secretary, by timely notice of a properly executed later dated proxy or by voting in person at the Annual Meeting. All shares of Common Stock, par value $.01 per share, of the Company ("Common Shares") entitled to vote and represented by properly executed proxies received prior to the Annual Meeting and not revoked will be voted at the Annual Meeting in accordance with the instructions indicated on those proxies. If no instructions are indicated on a properly executed proxy, the Common Shares represented by that proxy will be voted at the discretion of the person or persons holding such proxy. If any other matters are properly presented at the Annual Meeting for consideration, including, among others things, consideration of a motion to adjourn the Annual Meeting to another time or place, the persons named in the enclosed form of proxy and acting thereunder will have discretion to vote on those matters to the same extent as the person signing the proxy would be entitled to vote. The Company does not currently anticipate that any other matters will be raised at the Annual Meeting. Stockholders Entitled To Vote Holders of record of the Common Shares at the close of business on April 3, 2000 (the "Record Date") are entitled to notice of and to vote at the Annual Meeting. On March 1, 2000, there were 63,821,365 Common Shares outstanding. Each Common Share is entitled to one vote on each matter brought before the Annual Meeting. At March 1, 2000, there were also 10,000,000 shares of authorized preferred stock, none of which have been issued. Security Ownership of Certain Beneficial Owners, Executive Officers and Directors The following table sets forth information concerning the beneficial ownership of the Common Shares as of March 1, 2000, for (a) each person known to the Company to be a beneficial owner of more than five percent of the Common Shares; (b) each director and each of the nominees for director; (c) each executive officer designated in the section of this Proxy Statement captioned "Executive Compensation"; and (d) all directors and executive officers as a group. Except as otherwise noted, each person named below had sole voting and investment power with respect to such securities.
Amount Beneficially Percent of Name and Address(1) Owned(2) Common Shares - ------------------- ------------ ------------- Gary L. West(3)..................................... 45,451,263 70.3% Mary E. West(3)..................................... 45,451,263 70.3% Troy L. Eaden(4)(5)................................. 8,516,250 13.2% Thomas B. Barker.................................... 185,000 * William E. Fisher................................... 18,000 * Greg T. Sloma(6).................................... 19,800 * Michael A. Micek.................................... 136,000 * John W. Erwin....................................... 370,100 * Nancee R. Berger.................................... 141,250 * Michael M. Sturgeon................................. -- -- All directors and executive officers as a group (13 persons)........................................... 54,837,663 84.8%
- -------- * Less than 1% (1) The address of each executive officer and director of the Company is c/o West TeleServices Corporation, 11808 Miracle Hills Drive, Omaha, Nebraska 68154. (2) Under the rules of the Securities and Exchange Commission (the "SEC"), shares are deemed to be "beneficially owned" by a person if such person directly or indirectly has or shares (i) the power to vote or dispose of such shares whether or not such person has any pecuniary interest in such shares, or (ii) the right to acquire the power to vote or dispose of such shares within 60 days, including any right to acquire through the exercise of any option, warrant or right. (3) Common Shares held by the Wests are held in joint tenancy with right of survivorship. Voting power of these Common Shares is shared between them. (4) Includes 1,516,250 Common Shares held by the Eaden Family Limited Partnership, of which Mr. Eaden is a general partner. (5) Mr. Troy L. Eaden resigned from the Board on April 3, 2000. (6) Includes 900 Common Shares held by Mr. Sloma's daughter and voted by Mr. Sloma's wife as guardian. ELECTION OF DIRECTORS The Board of Directors presently consists of six directors divided into three classes, each class serving for a period of three years. Two directors will be elected at the Annual Meeting to serve for a term expiring at the Company's annual meeting of stockholders to be held in the year 2003. The persons named in the enclosed proxy intend to vote such proxy for the election of each of the two nominees named below, unless the stockholder indicates on the proxy card that the vote should be withheld from any or all of such nominees. Each nominee elected as a director will continue in office until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation or retirement. Should any one or more of these nominees become unable to serve for any reason or, for good cause, will not serve, which is not anticipated, the Board of Directors may, unless the Board of Directors by resolution provides for a lesser number of directors, designate substitute nominees, in which event the persons named in the enclosed proxy will vote for the election of such substitute nominee or nominees. 2 The Board of Directors has proposed the following nominees for election as directors at the Annual Meeting. Nominees for Terms Expiring at the Annual Meeting of Stockholders to be held in the Year 2003: Thomas B. Barker William E. Fisher The Board of Directors Recommends a vote FOR the election of the above named nominees for election as Directors. Directors Whose Terms Will Expire in 2003 Thomas B. Barker joined the Company in 1991 as Executive Vice President of West Interactive Corporation. Mr. Barker was promoted to President and Chief Operating Officer of the Company in March 1995. Mr. Barker was promoted to President and Chief Executive Officer of the Company in September of 1998. Prior to joining the Company, he served as President and Chief Operating Officer of Cue Network Corp., a provider of nationwide paging and satellite data distribution services. Mr. Barker is 45 years of age. William E. Fisher was appointed to the Board of Directors in 1997. Since 1993, Mr. Fisher has been director, Chairman of the Board, President and Chief Executive Officer of Transaction Systems Architects, Inc. ("TSA"), an Omaha based company which develops, markets and supports a broad line of software products and services primarily focused on facilitating electronic payments. Effective November 10, 1999 Mr. Fisher resigned from his positions as President and Chief Executive Officer, but remains Chairman of the Board. Since 1991, Mr. Fisher has also served as Chief Executive Officer of Applied Communications, Inc., a subsidiary of TSA. Mr. Fisher is a director of Trizetto Group, Inc. and Hypercom Corporation. Mr. Fisher is 53 years of age. Directors Whose Terms Will Expire in 2001 Mary E. West co-founded WATS Marketing of America ("WATS") in 1978 and remained with that Company until December 1985. In January 1986, she founded the Company. Mrs. West has served as Vice Chair of the Company since 1987. Mrs. West and Mr. West are wife and husband. Mrs. West is 54 years of age. Directors Whose Terms Will Expire in 2002 Gary L. West co-founded WATS in 1978 and remained with that company until 1985. Mr. West joined the Company in July 1987 after the expiration of a noncompetition agreement with WATS. Mr. West has served as Chairman of the Board since joining the Company. Mr. West and Mary E. West are husband and wife. Mr. West is 54 years of age. Greg T. Sloma was appointed to the Board of Directors in 1997. Since 1996, Mr. Sloma has been the President and Chief Operating Officer of Data Transmission Network ("DTN"), an Omaha based provider of electronic information and communication services. Mr. Sloma served as an Executive Vice President and Chief Financial Officer of DTN prior to his promotion to his current position. Prior to joining DTN in 1993, Mr. Sloma was a tax partner with the accounting firm Deloitte & Touche. Mr. Sloma is 48 years of age. 3 BOARD OF DIRECTORS AND COMPENSATION As described in the Restated Bylaws of the Company, the Board has authority to fix the number of directors and the Board has fixed the number of its members at six. The Board of Directors currently consists of the following five directors: Gary L. West, Mary E. West, Thomas B. Barker, William E. Fisher and Greg T. Sloma. Committees of the Board of Directors The Board of Directors has established a Compensation Committee, currently comprised of Gary L. West, William E. Fisher and Greg T. Sloma (the "Compensation Committee"), which provides recommendations concerning salaries and incentive compensation for employees of, and consultants to, the Company. The Board of Directors has also established an Audit Committee, comprised of William E. Fisher and Greg T. Sloma (the "Audit Committee"), which reviews the results and scope of the annual audit of the Company's financial statements conducted by the Company's independent accountants, the scope of other services provided by the Company's independent accountants, proposed changes in the Company's financial and accounting standards and principles, and the Company's policies and procedures with respect to its internal accounting, auditing and financial controls. The Audit Committee also makes recommendations to the Board of Directors on the engagement of the independent accountants as well as other matters which may come before the Audit Committee or at the direction of the Board of Directors. The Board of Directors does not have a Nominating Committee. Attendance at Meetings of the Board of Directors and of Committees The Board of Directors met four times during the fiscal year ended December 31, 1999. Each of the directors who served during such period attended at least 75% of the aggregate number of meetings of the Board of Directors and any committee of which they were members during such period. The Compensation Committee and the Audit Committee each met once during the fiscal year ended December 31, 1999. Directors' Annual Compensation During the fiscal year ended December 31, 1999, non-employee members of the Board of Directors received $24,000 in directors' fees. The Company is obligated to reimburse the members of the Board of Directors for all reasonable expenses incurred in connection with their attendance at directors' meetings. No director made any claim for reimbursement in fiscal 1999. Members of the Board of Directors who are not employees of the Company receive $3,000 per meeting plus reasonable expenses incurred in connection with their attendance at directors' meetings. Pursuant to the 1996 Stock Incentive Plan (the "1996 Plan"), these directors are granted options to acquire 2,000 Common Shares as of the date of their first election to the Board of Directors (the "Initial Grant"). Each director also is granted options to purchase 1,000 additional Common Shares as of each of the Company's annual stockholders meetings provided that such director remains a member of the Board of Directors at such time (the "Annual Grant"). The options become vested and exercisable one year from the date such options are granted. Effective February 1, 1997, the Board of Directors adopted an amendment to the 1996 Plan that increased the Initial Grant from 2,000 Common Shares to 14,000 Common Shares and increased the Annual Grant from 1,000 Common Shares to 4,000 Common Shares. The vesting schedule for such options was changed to a three year period (for the Initial Grants and Annual Grants, respectively, options for 6,000 and 1,000 Common Shares vest on the first anniversary of the date of grant and options for 4,000 and 1,500 Common Shares vest on the second and third anniversary of the date of grant). 4 EXECUTIVE COMPENSATION Summary Compensation Table The following table provides certain summary information concerning compensation of the Company's Chief Executive Officer and the four other most highly compensated executive officers of the Company (collectively, the "Named Executive Officers") for each of the last three fiscal years. There were no stock appreciation rights outstanding during the fiscal year ended December 31, 1999.
Long-Term Annual Compensation Compensation Awards --------------- ------------ Securities Underlying All Other Name and Principal Fiscal Salary Bonus Options Compensation Position Year ($) ($) (#) ($)(1) ------------------ ------ ------- ------- ------------ ------------ Troy L. Eaden................ 1999 289,705 -- -- 5,000 Co-Chairman of the Board and Director(3) 1998 285,787 -- -- 5,000 1997 262,095 -- -- 4,750 Thomas B. Barker............. 1999 415,000 68,375 5,000 President, Chief Executive Officer and Director(4) 1998 415,000 263,048 800,000(5) 5,000 1997 306,419 59,758 650,000(2) 4,750 Nancee R. Berger............. 1999 250,000 150,000 5,000 Chief Operating Officer 1998 220,077 50,313 575,000(5) 5,000 West TeleServices Corporation(6) 1997 140,000 80,765 300,000(2) 4,750 John W. Erwin................ 1999 200,000 362,900 5,000 President--Direct TeleServices 1998 181,779 247,638 550,000(5) 5,000 1997 160,599 248,234 460,000(2) 4,716 Michael A. Micek............. 1999 200,000 213,655 4,307 Chief Financial Officer, Executive 1998 168,334 338,601 560,000(5) 5,000 Vice President--Finance and Treasurer 1997 140,151 131,417 300,000(2) 4,750 Michael M. Sturgeon.......... 1999 190,000 197,958 5,000 Executive Vice President-- Sales and Marketing 1998 203,612 212,082 360,000(5) 5,000 1997 200,960 44,601 152,000(2) 4,750
- -------- (1) These amounts, if any, reflect matching contributions made by the Company on behalf of each Named Executive Officer pursuant to the Company's Employee 401(k) Retirement Plan. (2) These awards represent a grant of additional options as well as repricing of options previously granted in November 1996. (3) Mr. Eaden served as Chief Executive Officer from March 1995 to September 1998 and as Co-Chairman of the Board from September 1998 to April 3, 2000. Mr. Eaden resigned from the Board on April 3, 2000. (4) Mr. Barker served as President and Chief Operating Officer from March 1995 to September 1998. Mr. Barker has served as President and Chief Executive Officer since September 1998. (5) These awards represent a grant of additional options as well as repricing of options previously granted in June 1997 and January 1998. (6) Ms. Berger served as President of Interactive Teleservices from October 1996 to September 1998. Ms. Berger has served as Chief Operating Officer since September 1998. Option Grants in the Last Fiscal Year No options were granted to the Named Executive Officers during the year ended December 31, 1999. 5 The following table sets forth the number of shares covered by options held by the Named Executive Officers, and the value of the options as of December 31, 1999. None of the options were exercisable in 1999. Aggregated Option Exercises In Last Fiscal Year and Fiscal Year End Option Value(1)
Number of Securities Underlying Unexercised Value of Unexercised Options at in-the Money Options Fiscal Year-End at Fiscal Year-End (#) ($) ------------------------- ------------------------- Name Exercisable Unexercisable Exercisable Unexercisable ---- ----------- ------------- ----------- ------------- Thomas B. Barker........... N/A 800,000 N/A 11,800,000 Nancee R. Berger........... N/A 575,000 N/A 8,481,250 John W. Erwin.............. N/A 550,000 N/A 8,112,500 Michael A. Micek........... N/A 560,000 N/A 8,260,000 Michael M. Sturgeon........ N/A 360,000 N/A 5,310,000
- -------- (1) Based on a closing price of $24.4375 per Common Share on December 31, 1999, all options were in the money at fiscal year end. Employment Agreements Pursuant to an employment agreement dated as of June 30, 1991 and as amended October 1, 1998, Mr. Eaden's salary and bonus are determined annually by the Board of Directors. Mr. Eaden's employment shall terminate upon certain events including Mr. Eaden's death or disability, the sale of all or substantially all of the assets of the Company, termination of employment by the Company for cause or without cause, or Mr. Eaden's resignation. Upon termination of employment for any reason, the Company shall pay Mr. Eaden all salary through the date of termination, together with any bonuses declared by the Board of Directors with respect to Mr. Eaden's services prior to the effective date of termination. Mr. Eaden also agrees, for a period of two years following the termination of his employment, not to engage in any business competing for the customers or accounts of the Company and not to induce or attempt to induce any person employed by the Company at the time of Mr. Eaden's termination to leave his employment or agency with the Company. Mr. Eaden resigned as an employee of the Company on April 3, 2000. Thomas B. Barker, Nancee R. Berger, John W. Erwin, Michael A. Micek and Michael M. Sturgeon serve the Company pursuant to employment agreements dated as of January 1, 1996, as amended September 1, 1998 for Mr. Barker, January 1, 1996, as amended September 1, 1998 for Ms. Berger, July 1, 1996, as amended September 1, 1998 for Mr. Erwin, January 1, 1996, as amended September 1, 1998 for Mr. Micek and March 17, 1997, as amended February 22, 1999 for Mr. Sturgeon (the dates of the initial agreements are collectively referred to as the "Effective Date"). Each agreement had an initial term of two years. Each agreement will be automatically renewed, subject to prior termination, for successive one-year periods on the second anniversary of the respective Effective Date and each anniversary thereafter unless either party gives notice of non-renewal. These agreements provide, respectively, for the employment of Mr. Barker as President and Chief Executive Officer of the Company, for Ms. Berger as Chief Operating Officer of the Company, for Mr. Erwin as President--Outbound Services of the Company, for Mr. Micek as Chief Financial Officer and Executive Vice President--Finance and for Mr. Sturgeon as Executive Vice President--Sales and Marketing. Under the respective agreements, Mr. Barker's base salary is $415,000 per year, Ms. Berger's base salary is $250,000 per year, Mr. Erwin's base salary is $200,000 per year, Mr. Micek's base salary is $200,000 per year and Mr. Sturgeon's base salary $190,000 per year. The agreements also provide for an annual bonus determined at the discretion of the Board of Directors. In the event of death, termination for cause or without cause or resignation, the Company will pay any salary earned through the date of termination, any bonus earned at the end of the month immediately preceding the date of termination and all vested benefits, if any, as of the date of termination. In the event of a termination without cause or resignation, the employment agreements provide for the executive to remain as a consultant to the Company for at least twenty-four months following termination of employment. 6 Board Compensation Committee Report on Executive Compensation The Company's executive compensation program is administered by the Compensation Committee. The Compensation Committee is currently composed of two non-employee directors and two employee directors. The Compensation Committee approves compensation objectives and policies as well as compensation plans and specific compensation levels for all executive officers. The Company formed the Compensation Committee in order to administer the executive compensation program commencing with the fiscal year ended December 31, 1997. The Compensation Committee seeks to provide a total compensation package that will motivate and retain key employees. The Compensation Committee also seeks to provide incentives to achieve short and long-term business objectives that will enhance the value of the Common Shares. When determining compensation amounts, the Compensation Committee considers (1) the base salary levels of executives with similar responsibilities in companies in a similar line of business, (2) the executive's experience in his or her position at the Company and in the line of business as well as his or her performance over a sustained period of time, and (3) the historical and projected financial performance of the Company and the particular division associated with the executive. An analysis of the financial performance includes a review of such measures as revenues, operating margin, net income, return on stockholders' equity, return on revenues, and total market value. The Compensation Committee makes a subjective determination based upon a collective consideration of all such factors. Compensation for the named executive officers for the fiscal year ended December 31, 1999, was comprised of three components: (1) base salary, (2) cash bonuses and (3) long-term incentive compensation. The Compensation Committee has based bonuses for executive officers on the attainment of financial targets set forth in formulas described in each of their employment agreements. The formulas are individually tailored to motivate the particular executive in accordance with his or her position, his or her prior performance, and the potential impact he or she could have on the growth of sales and profit for the Company and the division with which he or she is associated. For the fiscal year ended December 31, 1999, the results of the Company and of the applicable individual divisions met the minimum objectives as set forth in each of the executive's employment agreements, and accordingly, each received a cash bonus. Long-term incentive compensation opportunities are provided through grants of stock options, stock appreciation rights, restricted stock awards, phantom stock unit awards, performance share unit awards and other stock bonus awards under the 1996 Plan. All grants are made at exercise prices which are at least equal to the fair market value of the Common Shares on the date of grant in order that executives can gain only when stockholders gain. In making grants under the plan for fiscal 1999, the Board of Directors considered an employee's position with the Company and relevant responsibilities, service, individual and Company performance and the anticipated length of future service. In addition to the 1996 Plan, the Company also sponsors the Company's 1997 Employees Stock Purchase Plan (the "Stock Purchase Plan") which provides employees the opportunity to purchase Common Shares through annual offerings to be made during the five year period commencing July 1, 1997. Grants of options to acquire Common Shares are utilized by the Company as an employment incentive to recruit and retain persons necessary for the development and financial success of the Company. The grant of options is provided for under the 1996 Plan which has 9,499,500 Common Shares for the grant of incentive awards. On July 30, 1999, 507,000 options were granted to employees at $10.813 per Common Share. On May 12, 1999, 8,000 options were granted to the two outside directors at $8.00 per Common Share. No options were granted to the Named Executive Officers during the year ended December 31, 1999. At December 31, 1999, 7,011,400 options were outstanding to employees and directors of the Company. The Compensation Committee believes that the role of Chief Executive Officer is particularly important in reaching corporate objectives and accordingly review the Chief Executive Officer's compensation package annually based on his performance as Chief Executive Officer and the overall performance of the Company. 7 The Committee determined that Mr. Barker should receive compensation in the form of a base salary, cash bonus and long term incentives. In establishing Mr. Barker's compensation, the Committee has compared his compensation with the compensation of the chief executive officers of the industry in relation to the relative performance of the Company with respect to the industry. For setting Mr. Barker's fiscal 1999 compensation, the Committee also considered the Company's performance during the fiscal year. The Committee recognized Mr. Barker's leadership skills in assembling and developing a strong management team and his role in guiding the Company through its significant growth since 1995 in his role as President. The Committee also considered Mr. Barker's strong industry background as well as his unique ability to manage significant growth in a profitable manner for the benefit of the stockholders. For the fiscal year ended December 31, 1999 for serving as both President and Chief Operating Officer prior to September 1998 and as Chief Executive Officer and President after that time, Mr. Barker received a base salary of $415,000 and a cash bonus of $68,375. The Committee believes that Mr. Barker's actual compensation for the fiscal year was appropriate in light of the above considerations. Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") generally disallows a tax deduction to public companies for annual compensation over $1 million paid to each of the corporation's Chief Executive Officer and four other most highly compensated executive officers, except to the extent such compensation qualifies as "performance-based." Based on information currently available, the Compensation Committee believes that all compensation arrangements that could potentially result in the compensation of any Named Executive Officer exceeding $1 million will qualify as performance- based and that all compensation paid to the Company's Named Executive Officers will be fully deductible. Provided that other Company objectives are met, the Company intends to structure future incentive compensation arrangements for its Named Executive Officers in a manner that will allow such compensation to be fully deductible for Federal income tax purposes. December 15, 1999 The Compensation Committee Troy L. Eaden William E. Fisher Greg T. Sloma Gary L. West Compensation Committee Interlocks And Insider Participation The Compensation Committee is presently composed of William E. Fisher, Greg T. Sloma and Gary L. West. Mr. Troy L. Eaden resigned on April 3, 2000. During the fiscal year ended December 31, 1999, the Compensation Committee met once, and during such time made all executive officer compensation decisions. 8 Performance Graph The following performance graph compares the Company's cumulative total stockholder return for the period since its initial public offering with the cumulative total return of the S&P 500 Index and a composite group of companies (the "Composite Index") in each case assuming an investment of $100 on November 26, 1996 and the accumulation and reinvestment of dividends through December 31, 1999. The Composite Index consists of companies that provide outsourced teleservices and is comprised of the following companies: AEGIS Communications Group, Inc., APAC Teleservices, Inc., Convergys Corporation, ICT Group Inc., Precision Response Corp, RMH Teleservices Inc., Sitel Corporation, Sykes Enterprises, Inc., Telespectrum Worldwide Inc. and Teletech Holdings, Inc. The total stockholder return for each company in the Composite Index has been weighted according to its market capitalization. [GRAPH OF COMPARISON OF TOTAL CUMULATIVE TOTAL RETURN FUND APPEARS HERE] PLOT POINTS FOR GRAPH ARE AS FOLLOWS: 11/26/96 12/31/96 12/31/97 12/31/98 12/31/99 West TeleServices Corporation 100 126 66 54 135 Composite Index 100 83 39 31 53 S&P 500 100 98 131 168 204 *ASSUMES $100 INVESTED ON NOVEMBER 26, 1996. TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS. TOTAL RETURN BASED ON MARKET CAPITALIZATION. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors, officers and stockholders holding more than ten percent of the Common Shares to file reports of holdings and transactions in the Common Shares with the SEC. Officers, directors and greater than ten percent stockholders are required by the SEC to furnish the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely on a review of the copies of 9 such reports furnished to the Company or written representations that no other reports were required, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with during, or in respect of, the fiscal year ended December 31, 1999. CERTAIN TRANSACTIONS AND RELATIONSHIPS The Company leases a building located at 9910 Maple Street, Omaha, Nebraska, which houses one of its call center operations. The building has 42,000 square feet of leasable space and is situated on a parcel of land of approximately 4.4 acres. This building is owned by 99-Maple Partnership, a partnership owned and controlled by Gary L. West, the Company's Chairman of the Board, and Mary E. West, the Company's Vice Chair of the Board and Secretary. This lease commenced on April 1, 1988, and was renewed on September 1, 1994, for a term of ten years. For the period commencing September 1, 1998 and ending August 31, 1999, the rent is $66,965 per month, which rent increases each year thereafter at a rate of approximately six percent. For the period commencing September 1, 2003, and ending August 31, 2004, the rent will be $89,635 per month. In addition to payment of rent, the Company is obligated to pay all taxes, insurance and maintenance pertaining to the building. The Company, Gary L. West, Mary E. West, Troy L. Eaden and each of the former stockholders of the West Affiliates entered into a Registration Rights Agreement (the "Registration Rights Agreement") as of November 25, 1996, which, among other things, provides that upon the request of the Wests or Mr. Eaden, the Company will register under the Securities Act of 1933, as amended, any of the Common Shares currently held by or acquired in the future by the foregoing (a "Demand Registration"). The Wests, collectively, and Mr. Eaden, individually, each will have the right to request four Demand Registrations. Each of the foregoing and each of the seven other former stockholders of the West Affiliates will have the right, which may be exercised at any time and from time to time in the future, to include the Common Shares held by him or her in certain other registrations. On March 14, 2000, Mr. Eaden requested that some of his shares be registered. West Telemarketing Insurance Agency, Inc. ("West Insurance") is a Texas corporation which is wholly-owned by John W. Erwin, the Company's President of West Telemarketing Corporation Outbound. West Insurance is a licensed insurance agency formed in June 1996 under the laws of Texas to service a client of West Telemarketing Corporation Outbound in the insurance industry. These arrangements are set forth in a Personnel Company Subscriber Service Agreement, dated as of November 12, 1996. West Telemarketing Corporation Outbound pays hourly fees to West Insurance for its agents' services, which fees have averaged approximately $188,000, per month in the fiscal year ended December 31, 1999. Neither West Insurance nor Mr. Erwin has made any profit in connection with this arrangement and neither is expected to do so in the future. Mr. Erwin entered into a Stock Redemption Agreement, dated April 9, 1996, with Gary L. West, Mary E. West and Troy L. Eaden restricting the transfer of his West Insurance stock and providing for the option by the Wests and Mr. Eaden to acquire his West Insurance stock in the event of his death, disability or termination of employment with West Insurance or at any other time they desire. This Stock Redemption Agreement was assigned to the Company by the Wests and Mr. Eaden, effective upon the closing of the Company's initial public offering pursuant to an Assignment and Assumption Agreement, dated as of November 12, 1996. The Company has an option to acquire, develop and commercialize an innovative new technology that is the subject of a pending patent application. The Company intends to seek board approval and it may choose not to exercise this option. The acquisition is conditioned on the patent being issued. The patent is currently expected to be issued in the second quarter of 2000. If a venture is formed, the Company will have an initial equity interest in excess of 80% in the venture. In order to provide incentive to management to develop and pursue the commercialization process, the Company intends to grant Mr. Thomas B. Barker, Ms. Nancee R. Berger and Mr. Michael A. Micek approximately a 4.0%, 1.25% and 1.00% equity interest in the venture, respectively, which is subject to a five-year vesting period and is non-transferrable prior to such vesting. The Company's venture partner has the option, during the first 18 months of the venture, to surrender its 5% equity interest in the venture in exchange for $12 million in cash plus an option to acquire 325,000 shares of the Company's common stock, exercisable at the market price on the date of the execution of the proposed agreement. 10 RATIFICATION OF APPOINTMENT OF AUDITORS The Board of Directors has appointed Deloitte & Touche LLP ("Deloitte & Touche") to be the Company's auditors for the fiscal year ending December 31, 2000 and recommends to stockholders that they vote for ratification of that appointment. Deloitte & Touche served in this capacity for the fiscal year ended December 31, 1999. Its representative will be present at the Annual Meeting, will have an opportunity to make a statement and will be available to respond to appropriate questions. The appointment of auditors is approved annually by the Board of Directors and subsequently submitted to the stockholders for ratification. The decision of the Board of Directors is based on the recommendation of the Audit Committee, which reviews and approves in advance the audit scope, the types of nonaudit services, and the estimated fees for the coming year. The Audit Committee also reviews and approves proposed nonaudit services to ensure that they will not impair the independence of the auditors. The Board of Directors recommends a vote FOR this proposal. 11 OTHER MATTERS Required Vote The presence, in person or by proxy, of the holders of a majority of the votes entitled to be cast by the stockholders entitled to vote generally at the Annual Meeting is necessary to constitute a quorum. Abstentions and "broker non-votes" are counted as present and entitled to vote for purposes of determining a quorum. A "broker non-vote" occurs when a nominee holding Common Shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner. A plurality of the votes duly cast is required for the election of directors (i.e., the nominees receiving the greatest number of votes will be elected). The affirmative vote by the holders of the majority of the Common Shares present in person or represented by proxy and entitled to vote on the matter is required to approve any other matter to be acted upon at the Annual Meeting. For purposes of determining whether a matter has received the required number of votes for approval, abstentions will be included in the vote totals with the result that an abstention has the same effect as a negative vote. A "broker non-vote" will not be included in the vote totals and, therefore, will have no effect on the vote. Stockholder Proposals Stockholders who intend to present proposals at the 2001 annual meeting of stockholders, and who wish to have such proposals included in the Company's Proxy Statement for the 2001 annual meeting of stockholders, must ensure that such proposals are received by the Secretary of the Company at 11808 Miracle Hills Drive, Omaha, Nebraska 68154, not later than December 3, 2000. In the event that the 2001 annual meeting of stockholders is called for a date that is not within thirty (30) days before or after May 12, 2001, in order to be timely, notice by the stockholder must be received not later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever first occurs. Such proposals must meet the requirements set forth in the rules and regulations of the SEC in order to be eligible for inclusion in the Company's Proxy Statement for the 2001 annual meeting of stockholders. Any stockholder interested in making a proposal is referred to Article II Section 11 of the Company's Restated Bylaws. Solicitation of Proxies and Other Matters At the date this Proxy Statement went to press, management does not know of any other matters to be brought before the Annual Meeting other than those referred to above. If any matter should be presented at the Annual Meeting upon which a vote properly may be taken, the Common Shares represented by the proxy will be voted at the discretion of the person or persons holding such proxy. The entire cost of soliciting management proxies will be borne by the Company. In addition to the use of the mails, proxies may be solicited personally by directors, officers or regular employees of the Company, who will not be compensated for their services. Management of the Company intends to request banks, brokerage houses, custodians, nominees and fiduciaries to forward soliciting material to the beneficial owners of the Common Shares held of record by such persons and entities. The Company will provide to any stockholder a copy of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999 free of charge upon written request to its Secretary at 11808 Miracle Hills Drive, Omaha, Nebraska 68154. Thomas B. Barker President and Chief Executive Officer Dated: April 5, 2000 12 WEST TELESERVICES CORPORATION 11808 Miracle Hills Drive Omaha, Nebraska 68154 This Proxy is Solicited on Behalf of the Board of Directors The undersigned hereby appoints Mary E. West, Vice Chair and Secretary, attorney and agent, with power of substitution, for and in the name and place of the undersigned, to vote as proxy the number of shares of Common Stock that the undersigned would be entitled to vote if they were personally present at the 2000 Annual Meeting of the Stockholders of West TeleServices Corporation to be held at the Marriott Hotel, 10220 Regency Circle, Omaha, Nebraska on Wednesday, May 10,2000 at 9:00 a.m., Central Daylight Time, or at any adjournment or postponement thereof, as designated on the reverse side hereof. (change of address) -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- [UP ARROW] FOLD AND DETACH HERE [UP ARROW] Please mark your X votes as in this example. This proxy when executed will be voted in the manner directed herein. If no direction is made, this proxy will be voted FOR the nominees in proposal 1 and FOR proposals 2. - ------------------------------------------------------------------------------- The Board of Directors recommends a vote FOR the nominees in proposal 1 and FOR proposals 2. - ------------------------------------------------------------------------------- FOR ALL NOMINEES WITHOLD AUTHORITY TO VOTE 1. Election of Directors Thomas B. Barker (See reverse) William E. Fisher For, except vote witheld from the following nominee(s): Change of Address On Reverse Side - ------------------------------------------------------- FOR AGAINST ABSTAIN 2. Ratification of appointment of Deloitte & Touche LLP as auditors 3. In accordance with their discretion, upon all other matters that may properly come before said Annual Meeting and any adjournment thereof. - ------------------------------------------------------------------------------- The signer hereby revokes all proxies heretofore given by the signer to vote at said meeting or any adjournments or postponements thereof. Please sign exactly as name appears hereon, Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. ---------------------------------------------------- ---------------------------------------------------- SIGNATURES(S) DATE [UP ARROW] FOLD AND DETACH HERE [UP ARROW] -----END PRIVACY-ENHANCED MESSAGE-----