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0000950134-06-007308.txt : 20060414
0000950134-06-007308.hdr.sgml : 20060414
20060414060209
ACCESSION NUMBER: 0000950134-06-007308
CONFORMED SUBMISSION TYPE: DEF 14A
PUBLIC DOCUMENT COUNT: 4
CONFORMED PERIOD OF REPORT: 20060525
FILED AS OF DATE: 20060414
DATE AS OF CHANGE: 20060414
EFFECTIVENESS DATE: 20060414
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: TELETECH HOLDINGS INC
CENTRAL INDEX KEY: 0001013880
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389]
IRS NUMBER: 841291044
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: DEF 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-11919
FILM NUMBER: 06759679
BUSINESS ADDRESS:
STREET 1: 9197 S PEORIA STREET
CITY: ENGLEWOOD
STATE: CO
ZIP: 80112
BUSINESS PHONE: 303-397-8100
MAIL ADDRESS:
STREET 1: 9197 S PEORIA STREET
CITY: ENGLEWOOD
STATE: CO
ZIP: 80112
DEF 14A
1
d34895def14a.htm
DEFINITIVE PROXY STATEMENT
def14a
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.
)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Soliciting Material Pursuant to §240.14a-12 |
TeleTech Holdings, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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TABLE OF CONTENTS
TELETECH
HOLDINGS, INC.
9197 S. Peoria Street
Englewood, Colorado 80112
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
The Annual Meeting of stockholders of TeleTech Holdings, Inc., a
Delaware corporation, will be held at 9197 S. Peoria
Street, Englewood, Colorado 80112 on Thursday, May 25,
2006, at 10:00 a.m., local time, for the following purposes:
1. To elect six directors to serve until the next Annual
Meeting of stockholders or until their successors are duly
elected and qualified (see page 5);
2. To ratify the appointment of Ernst & Young LLP
as our independent auditor for 2006 (see page 18); and
3. To transact such other business as may properly come
before the Annual Meeting.
The record date for the Annual Meeting is April 3, 2006.
Only stockholders of record at the close of business on that
date are entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors,
Christy T. OConnor
Vice President, Assistant General Counsel and
Secretary
Englewood, Colorado
April 14, 2006
YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE, DATE, SIGN AND RETURN YOUR PROXY CARD
PROMPTLY.
TELETECH
HOLDINGS, INC.
9197 S. Peoria
Street,
Englewood, Colorado 80112
ANNUAL MEETING OF
STOCKHOLDERS
To be Held on May 25,
2006
The Board of Directors of TeleTech Holdings, Inc., a Delaware
corporation (TeleTech, the Company,
we, us, or our) is
soliciting proxies to be used at our Annual Meeting of
stockholders to be held at 10:00 a.m. on May 25, 2006,
at TeleTech Holdings, Inc.s Principal Offices located at
9197 S. Peoria Street, Englewood, Colorado 80112. This
proxy statement contains important information regarding
TeleTechs Annual Meeting, the proposals on which you are
being asked to vote, information you may find useful in
determining how to vote and voting procedures.
A number of abbreviations are used in this Proxy Statement. The
term proxy materials includes this proxy statement,
the enclosed proxy card, and TeleTechs Annual Report for
2005.
The Board of Directors is sending these proxy materials on or
about April 21, 2006.
Who Can
Vote
Stockholders of record at the close of business on April 3,
2006 (the Record Date) may vote at the Annual
Meeting. On the Record Date, we had approximately 69,316,807
issued and outstanding shares of common stock, which were held
by approximately 259 record holders. If you hold shares in a
stock brokerage account or by a nominee, you are considered the
beneficial owner of shares held in street name and
these proxy materials are being forwarded to you by your broker
or nominee, who is considered the record holder with respect to
those shares. As the beneficial owner, you have the right to
direct your broker or nominee on how to vote and you are also
invited to attend the Annual Meeting. However, since you are not
the stockholder of record, you may not vote these shares in
person at the meeting unless you first obtain from your broker
or nominee a letter recognizing you as the beneficial owner of
your shares. Your broker or nominee has enclosed a voting
instruction card for you to use. You are urged to vote by
proxy regardless of whether you attend the Annual Meeting.
How You
Can Vote
You can vote your shares if you are represented by proxy or
present in person at the Annual Meeting. If you hold your shares
through your broker in street name, you may direct
your broker or nominee to vote by proxy, but you may not vote in
person at the meeting unless you first obtain from your broker
or nominee a letter recognizing you as the beneficial owner of
your shares. If you return a properly signed proxy card, we will
vote your shares as you direct. If your proxy card does not
specify how you want to vote your shares, we will vote your
shares FOR the election of all nominees for director
and as recommended by the Board with regard to all other matters.
You can also vote your shares electronically as follows:
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VOTE BY INTERNET
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VOTE BY TELEPHONE
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http://www.proxyvote.com
24 hours a
day/7 days a week
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(800) 690-6903 via touch tone
phone
toll-free 24 hours a day/7 days a week
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INSTRUCTIONS:
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INSTRUCTIONS:
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Read the accompanying Proxy
Statement. Have your
12-digit
control number located on your proxy card available.
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Read the accompanying Proxy
Statement.
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Call toll-free (800)
690-6903
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Point your browser to
http://www.proxyvote.com
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You will be asked to enter your
12-digit control number located on your proxy card.
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and follow the instructions to
cast your vote. You can also register to receive all future
shareholder communications electronically, instead of in print.
This means that the annual report, proxy statement, and other
correspondence will be delivered to you electronically via
e-mail.
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Votes submitted via the Internet or by telephone must be cast by
12:00 a.m. EDT on May 24, 2006. Votes submitted
by mail must be received on or before May 19, 2006.
Submitting your vote by mail, telephone or via the Internet will
not affect your right to vote in person if you decide to attend
the 2006 Annual Meeting.
PLEASE DO NOT RETURN THE ENCLOSED PAPER BALLOT IF YOU ARE
VOTING OVER THE INTERNET OR BY TELEPHONE.
Revocation
of Proxies
You can revoke your proxy at any time before it is voted at the
Annual Meeting by any of the following three methods:
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by voting in person at the Annual Meeting;
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by delivering to the Companys Secretary a written notice
of revocation dated after the proxy; or
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by delivering another proxy dated after the previous proxy.
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Required
Votes
Each share of common stock has one vote on all matters properly
brought before the Annual Meeting. In order to conduct business
at the Annual Meeting, a quorum of a majority of the outstanding
shares of common stock entitled to vote as of the Record Date
must be present in person or represented by proxy. The
affirmative vote of a plurality of the shares represented at the
meeting, in person or by proxy, will be necessary for the
election of directors. The affirmative vote of a majority of the
shares represented at the meeting, in person or by proxy, will
be necessary for approval of the other Company proposals.
Kenneth D. Tuchman, Chairman and Chief Executive Officer of the
Company and the beneficial owner of approximately 53.8% of the
shares of common stock entitled to vote at the meeting, has
indicated that he intends to vote for all persons nominated by
the Board of Directors for election to the Board of Directors
and as recommended by the Board with regard to other proposals
to be presented at the Annual Meeting.
Voting
Procedures
Votes cast by proxy at the Annual Meeting will be tabulated by
an automatic system administered by ADP Investor Communication
Services . Votes cast by proxy or in person at the Annual
Meeting will be counted by the persons appointed by the Company
to act as election inspectors for the Annual Meeting.
Abstentions and broker
2
non-votes (as described below) are each included in the
determination of the number of shares present at the Annual
Meeting for purposes of determining the presence of a quorum and
are tabulated separately. Abstentions are counted in tabulations
of the votes cast on proposals presented to stockholders and
except with respect to the election of directors, will have the
same effect as negative votes. With regard to the election of
directors, votes may be cast in favor or withheld; votes that
are withheld will be excluded entirely from the tabulation of
votes and will have no effect. Broker non-votes are not counted
for purposes of determining whether a proposal has been approved.
If your shares are held in the name of a broker and you do not
return a proxy card, brokerage firms have the authority to vote
your non-voted shares on certain routine matters, such as the
election of directors and the ratification of auditors.
If you hold shares in TeleTechs Employee Stock Purchase
Plan (ESPP) and you do not return a proxy card,
Wachovia Securities, as third party administrator of the ESPP
has the authority to vote your shares on certain routine
matters, such as the election of directors and the ratification
of auditors.
Cumulative voting is not permitted in the election of directors.
Consequently, you are entitled to one vote for each share of
TeleTech common stock held in your name for as many persons as
there are directors to be elected, and for whose election you
have the right to vote.
Costs of
Proxy Solicitation
The Company will bear the costs of soliciting proxies from its
stockholders. Certain directors, officers and other employees of
the Company, not specially employed for this purpose, may
solicit proxies, without additional remuneration therefore, by
personal interview, mail, telephone or other means of
communication. The Company will request brokers and other
fiduciaries to forward proxy soliciting material to the
beneficial owners of shares of common stock that are held of
record by such brokers and fiduciaries and will reimburse such
persons for their reasonable
out-of-pocket
expenses.
Admission
to the Annual Meeting
If you plan to attend the Annual Meeting, please mark the
appropriate box on the proxy card and return the proxy card
promptly. If you are a stockholder of record and arrive at the
Annual Meeting without an admission ticket, you will only be
admitted once we verify your share ownership at the
stockholders admission counter. If you are a beneficial
owner, you will only be admitted upon presentation of evidence
of your beneficial holdings, such as a bank or brokerage firm
account statement.
Stockholder
List
A complete list of stockholders entitled to vote at the Annual
Meeting will be available for examination by any stockholder,
for any purpose germane to the meeting, at the Annual Meeting
and at the Companys Principal Office located at
9197 S. Peoria Street, Englewood, Colorado 80112
during normal business hours for a period of at least
10 days prior to the Annual Meeting.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The information presented below regarding beneficial ownership
of TeleTechs common stock is presented in accordance with
the rules of the Securities and Exchange Commission
(SEC). Under these rules, beneficial ownership of
common stock includes any shares to which a person, directly or
indirectly, has or shares voting power or investment power
within sixty (60) days through the exercise of any stock
option or other right.
3
Security
Ownership of Certain Beneficial Owners
The following table sets forth, as of April 3, 2006,
information with respect to each person who was known by
TeleTech to be the beneficial owner of more than 5% of
TeleTechs common stock. We have calculated the percentage
of beneficial ownership pursuant to
Rule 13d-3(d)
under the Securities Exchange Act of 1934, as amended (the
Exchange Act).
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Number of Shares
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Name and Address of Beneficial
Owner
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Beneficially Owned
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Percent of Class
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Kenneth D. Tuchman
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9197 S. Peoria Street
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Englewood, Colorado 80112
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37,274,615
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(1)
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53.8
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%
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Pequot Capital Management,
Inc.
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500 Myala Farm Road
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Westport, Connecticut 06880
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4,546,500
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(2)
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6.3
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%
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Barclays Global Investors, NA
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45 Fremont St.
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San Francisco, CA 94105
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3,551,025
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(3)
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4.9
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%
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(1) |
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Includes (a) 36,835,449, shares subject to sole voting and
investment power, which includes (i) 5,696,554 shares
held by Mr. Tuchman, (ii) 19,992,000 shares held
by a limited liability limited partnership controlled by
Mr. Tuchman, (iii) 10,000,000 shares held by a
revocable trust controlled by Mr. Tuchman;
(iv) 306,895 shares held by a limited liability
limited partnership in which Mr. Tuchman is the controlling
general partner and (v) 840,000 shares subject to
options exercisable within 60 days and
(b) 439,166 shares subject to shared voting and
investment power, which includes (i) 100,000 shares
held by a limited liability partnership in which
Mr. Tuchman and his spouse own direct or indirect
controlling partnership interests, (ii) 300,000 shares
held by the Tuchman Family Foundation, established to benefit
entities that have been granted exempt status under
Section 501(c)(3) of the Internal Revenue Code,
(iii) 29,166 shares held by a trust for the benefit of
Mr. Tuchmans nieces and nephews, for which
Mr. Tuchmans spouse is the sole trustee and
(iv) 10,000 shares held by Mr. Tuchmans
spouse. Mr. Tuchman disclaims beneficial ownership of all
shares held by the Tuchman Family Foundation, the trust for the
benefit of Mr. Tuchmans nieces and nephews and his
spouse. |
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(2) |
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Information obtained from a statement on Schedule 13G filed
with the SEC on February 13, 2006. |
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(3) |
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Information obtained from a statement on Schedule 13G filed
with the SEC on January 26, 2006 |
Security
Ownership of Management
The following table sets forth information concerning shares of
common stock beneficially owned by each director and named
executive officer of TeleTech as of April 3, 2006 and by
all directors and executive officers as a group.
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Total Number of
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Shares Subject to
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Shares Beneficially
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Options ***
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Name
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Owned **
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(Included in Total)
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Percent of Class
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Kenneth D. Tuchman
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37,274,615
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(1)
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840,000
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53.8
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%
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James E. Barlett
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849,500
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(2)
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649,500
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1.2
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%
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William A. Linnenbringer
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65,000
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55,000
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*
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Ruth C. Lipper
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95,000
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70,000
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*
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Shrikant C. Mehta
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85,000
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25,000
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*
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Shirley Young
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30,000
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30,000
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*
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Kamalesh Dwivedi
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-0-
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-0-
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*
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Dennis J. Lacey
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176,250
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168,750
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*
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John Simon
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80,500
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80,500
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*
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All directors and executive
officers as a group (9 persons)
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38,655,865
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1,918,750
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55.8
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%
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4
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* |
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Less than 1%. |
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** |
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Includes shares subject to acquisition through exercise of stock
options within 60 days of April 3, 2006. |
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*** |
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Includes shares subject to acquisition through exercise of stock
options that are exercisable within 60 days of
April 3, 2006 |
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(1) |
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Includes 439,166 shares subject to shared voting and
investment power. |
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(2) |
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Includes 200,000 shares of restricted stock.
Mr. Barlett was originally granted 250,000 shares of
restricted stock for which restrictions on 100% of the shares
have lapsed. Mr. Barlett surrendered 50,000 shares of
restricted stock back to the Company to satisfy the tax
obligation pursuant to the terms of the Companys 1999
Amended and Restated TeleTech Holdings, Inc. Stock Option Plan. |
PROPOSAL 1:
ELECTION
OF DIRECTORS
At the Annual Meeting, six persons will be elected to the Board
of Directors of the Company to hold office until the next Annual
Meeting of stockholders and until their respective successors
are duly elected and qualified. The Nominating and Governance
Committee and the Board of Directors have nominated each of the
persons named below and it is the intention of the persons named
as proxies in the enclosed proxy to vote FOR the election
of all such nominees. Each of the nominees is currently serving
as a director of the Company and has consented to being named in
this Proxy Statement as a nominee and to continue to serve as a
director if elected. Information concerning the six nominees
proposed for election to the Board of Directors is set forth
below.
In the event any of the nominees named below becomes unable or
unwilling to serve as a director, shares represented by valid
proxies will be voted FOR the election of such other person as
the Board of Directors may nominate, or the number of directors
that constitutes the full Board may be reduced to eliminate the
vacancy.
Information
Concerning the Nominees for Election as Directors
Kenneth D. Tuchman, 46, founded TeleTechs
predecessor company in 1982 and has served as the Chairman of
the Board of Directors since TeleTechs formation in 1994.
Mr. Tuchman served as the Companys President and
Chief Executive Officer from the Companys inception until
October of 1999. In March 2001, Mr. Tuchman resumed the position
of Chief Executive Officer. Mr. Tuchman is also a member of
the State of Colorado Governors Commission on Science and
Technology and a member of the Board of Directors of the Center
for Learning and Leadership.
James E. Barlett, 62, has served as a director of
TeleTech since February 2000 and Vice Chairman of TeleTech since
October 2001. Before joining TeleTech as Vice Chairman,
Mr. Barlett served as the President and Chief Executive
Officer of Galileo International, Inc., a leading provider of
travel information and transaction processing worldwide, from
1994 to 2001, was elected Chairman in 1997 and served until
2001. Prior to joining Galileo, Mr. Barlett served as
Executive Vice President of Worldwide Operations and Systems for
MasterCard International Corporation, where he was also a member
of the MasterCard International Operations Committee.
Previously, Mr. Barlett was Executive Vice President of
Operations for NBD Bankcorp, Vice Chairman of Cirrus, Inc., and
a partner with Touche Ross and Co., currently known as
Deloitte & Touche. Mr. Barlett also serves on the
Boards of Korn/Ferry International and Celanese Corporation.
William A. Linnenbringer, 57, was elected to the Board of
Directors of TeleTech in February 2003. In his
32-year
career with PricewaterhouseCoopers (PwC), Mr. Linnenbringer
held numerous leadership positions, including Managing Partner
for the U.S. Banking and Financial Services Industry
Practice, Chairman of the Global Financial Services Industry
Practice, and a member of the firms Policy Board and World
Council of Partners. Mr. Linnenbringer retired as a partner
of PwC in 2002.
Ruth C. Lipper, 55, was elected to the Board of Directors
of TeleTech in May 2002. Ms. Lipper has spent more than
25 years working in various financial and philanthropic
leadership roles. From 1987 to 2000, Ms. Lipper was Senior
Vice President and Treasurer for Lipper Analytical Services,
Inc. Founded in 1973, Lipper Analytical
5
Services was analyzing nearly 40,000 mutual funds through
offices in the United States, London, and Hong Kong at the time
of its sale to Reuters Group PLC in 1998. Ms. Lipper is
currently a volunteer chairperson for the Lipper Family
Foundation.
Shrikant Mehta, 62, was elected to the Board of Directors
of TeleTech in June 2004. Mr. Mehta is President and CEO of
Combine International, Inc., a wholesale manufacturer of fine
jewelry since 1974. He also serves on the Board of Directors of
Distinctive Devices, Inc., Caprius, Inc. and various private
corporations.
Shirley Young, Shirley Young, 70, was elected to the
Board of Directors of TeleTech in August 2002. Ms. Young is
President of Shirley Young Associates, LLC, a business advisory
company, and serves as senior adviser to General Motors-Asia
Pacific. She is a member of the Board of Governors of The Nature
Conservancy and governor and founding chairman of the Committee
of 100, a national Chinese American leadership
organization. Previously, Ms Young served as corporate Vice
President of General Motors responsible for China Strategic
Development and Consumer Market Development in the U.S. and as
Executive Vice President of Grey Advertising and President of
Grey Strategic Marketing. She also served on the Board of
Directors for Verizon, Bank of America, Harrahs, Dayton Hudson /
Target and as Vice Chairman of the Nominating Committee of the
New York Stock Exchange and currently serves on the Board of
Directors of SalesForce.com.
Recommendation
of the Board of Directors
The Board of Directors recommends that you vote FOR
all of the nominees for election to the Board of Directors.
Information
Regarding the Board of Directors and Committees
Thereof
The Board of Directors held four (4) meetings during our
2005 fiscal year. All directors attended at least 75% of the
total number of meetings held by the Board of Directors and by
the committees of the Board of Directors on which they served.
We do not have a formal policy on Board member attendance at our
Annual Meetings although we encourage members of the Board to
attend our Annual Meetings. Last year, three of our directors
attended the Annual Meeting.
The Board of Directors determined that William Linnenbringer,
Ruth Lipper, Shrikant Mehta and Shirley Young are independent
under the NASDAQ listing standards. Beginning in 2003, we held
regularly scheduled executive sessions at least four times each
year, at which only our independent directors are present.
The Board of Directors has standing Audit, Compensation and
Nominating and Governance Committees, which assist the Board in
the discharge of its responsibilities. Members of each committee
are elected by the Board and typically serve for one-year terms.
The Audit Committee is charged, among other things, with the
responsibility of overseeing the accounting and financial
reporting processes of the Company and the audits of the
Companys financial statements, the appointment of the
independent public accountants of TeleTech, the scope and fees
of the prospective annual audit and the results thereof,
compliance with TeleTechs accounting and financial
policies and managements procedures and policies relative
to the adequacy of TeleTechs internal accounting controls.
The current members of the Audit Committee are William
Linnenbringer (Chairman), Ruth Lipper and Shirley Young, each of
whom is independent within the meaning of SEC regulations and
the NASDAQ listing standards. George H. Heilmeier did not stand
for reelection to our Board of Directors at the 2005 Annual
Meeting of Stockholders, leaving us with one vacancy on our
Audit Committee. In accordance with the NASDAQ listing
standards, we filled such vacancy and have maintained an Audit
Committee comprised of at least three independent Board members
prior to the one year anniversary of such vacancy. Our Board of
Directors determined that each of the members of the Audit
Committee is able to read and understand fundamental financial
statements, including the Companys balance sheet, income
statement and cash flow statement. In addition, our Board of
Directors has determined that William Linnenbringer qualifies as
an audit committee financial expert within the
meaning of the regulations of the SEC. During 2005, the Audit
Committee held four (4) regularly scheduled meetings and
six (6) special meetings and took all other actions
pursuant to unanimous written consent in lieu of meetings. The
Audit Committee has a written charter adopted by our Board of
Directors. No changes have been made to the written charter
during the past year. The
6
Audit Committee reviews and assesses the adequacy of its charter
on an annual basis. See Report from the Audit
Committee.
The Compensation Committee reviews performance goals and
determines or approves the annual salary and bonus for each
executive officer (consistent with the terms of any applicable
employment agreement); reviews, approves and recommends terms
and conditions for all employee benefit plans (and changes
thereto); and administers the TeleTech Holdings, Inc. Amended
and Restated 1999 Stock Option and Incentive Plan; the TeleTech
Holdings, Inc. 1995 Stock Plan; the TeleTech Holdings, Inc.
Employee Stock Purchase Plan and such other employee benefit
plans as may be adopted by TeleTech from time to time. See
Report of the Compensation Committee on Executive
Compensation. The current members of the Compensation
Committee are Shrikant Mehta (Chairman) and Ruth Lipper each of
whom is an independent non-employee director of the Company
within the meaning of SEC regulations and the NASDAQ listing
standards. During 2005, the Compensation Committee held four
(4) regularly scheduled meetings and zero (0) special
meetings and took all other actions pursuant to unanimous
written consents in lieu of meetings. The Compensation Committee
operates under the Compensation Committee Charter adopted by our
Board. No changes have been made to the written charter during
the past year.
The Nominating and Governance Committee is charged, among other
things, with identifying and recommending to the Board of
Directors qualified candidates for election or appointment to
the Board of Directors, overseeing matters of corporate
governance, including the evaluation of Board performance and
processes and assignment and rotation of Board Committee
members. The Nominating and Governance Committee utilizes a
variety of methods for identifying and evaluating nominees for
director. The current members of the Nominating and Governance
Committee are Ruth Lipper (Chairman) and William Linnenbringer
each of whom satisfy the independence requirements for
nominating committee members pursuant to the NASDAQ listing
standards. During 2005, the Nominating and Governance Committee
held four (4) regularly scheduled meetings and zero
(0) special meetings. The Nominating and Governance
Committee is governed by the Nominating and Governance Committee
Charter adopted by our Board of Directors.
We have adopted a Code of Conduct applicable to all of our
directors, officers (including its chief executive officers,
chief financial officer, controller and any person performing
similar functions) and employees which includes the prompt
disclosure of any waiver of the Code for executive officers or
directors approved by the Board of Directors. The Company has
made the Code of Conduct available on its website at
http://www.teletech.com and intends to disclose any
waivers of, or amendments to, the Code on its website. Copies of
the Audit Committee Charter, the Nominating and Governance
Committee Charter, Compensation Committee Charter, Code of
Conduct, and Corporate Governance Guidelines are available on
the Companys website at www.teletech.com under
Investors, Corporate Governance. You may
also obtain a copy of any of these documents without charge by
writing to: TeleTech Holdings, Inc., at 9197 S. Peoria Street,
Englewood, Colorado 80112, Attention: Corporate Secretary.
Communications
with the Board
Stockholders may communicate with the Board or any of the
directors by sending written communications addressed to the
Board or any of the directors c/o Corporate Secretary,
TeleTech Holdings, Inc., 9197 S. Peoria Street,
Englewood, Colorado 80112. All communications are compiled by
the Corporate Secretary and forwarded to the Board or the
individual director(s) accordingly.
Compensation
of Directors
Directors who are also employees of the Company receive no
remuneration for serving as directors or committee members.
Non-Employee directors receive (i) an annual retainer of
$40,000 paid quarterly, (ii) a meeting fee of $1,000 for
each Board and Committee meeting attended and (iii) a
meeting fee of $500 for each telephonic Board and Committee
meeting attended. The Chairmen of the Compensation and
Nominating & Governance Committees receive an
additional fee of $5,000 per year and the Chairman of the
Audit Committee receives an additional fee of $20,000 per
year. Non-Employee directors also receive options pursuant to
the TeleTech Holdings, Inc. Amended and Restated 1999 Stock
Option and Incentive Plan. Each Non-Employee director who is
first elected or appointed to the Board receives an option to
purchase 10,000 shares of common stock. Each Non-Employee
7
director also receives an option to purchase 15,000 shares
of common stock on the day of each annual meeting of
shareholders subsequent to his or her election or appointment to
the Board, provided that he or she continues in office after the
annual meeting. The exercise price for each option granted is
100% of the market value of the common stock on the date of
grant as evidenced by the closing share price on the NASDAQ
National Market. Options vest immediately upon date of grant and
are exercisable into restricted stock for which restrictions
shall lapse one year after the date of grant.
Nominations
of Directors
In the event that vacancies on the Board arise, the Nominating
and Governance Committee considers potential candidates for
director, which may come to the attention of the Nominating and
Governance Committee through current directors, professional
executive search firms, shareholders or other persons. The
Nominating and Governance Committee will consider candidates for
the Board recommended by stockholders if the names and
qualifications of such candidates are submitted in writing in
accordance with the notice provisions for stockholder proposals
set forth under the caption General
Information Next Annual Meeting of
Stockholders in this Proxy Statement to the Corporate
Secretary of TeleTech, 9197 S. Peoria Street,
Englewood, Colorado 80112. The Nominating and Governance
Committee considers properly submitted shareholder nominations
for candidates for the Board of Directors in the same manner as
it evaluates other nominees. Following verification of the
shareholder status of persons proposing candidates,
recommendations are aggregated and considered by the Nominating
and Governance Committee and the materials provided by a
shareholder to the Company for consideration of a nominee for
director are forwarded to the Nominating and Governance
Committee. All candidates are evaluated at meetings of the
Nominating and Governance Committee. In evaluating such
nominations, the Nominating and Governance Committee seeks to
achieve the appropriate balance of industry and business
knowledge and experience in light of the function and needs of
the Board of Directors. The Nominating and Governance Committee
considers candidates with excellent decision-making ability,
business experience, personal integrity and reputation. In
addition, the Nominating and Governance Committee recognizes the
benefit of a Board of Directors that reflects the diversity of
the Companys stockholders, employees and customers, and
the locations in which it operates, and will seek qualified
candidates for nomination and election to the Board of Directors
in order to reflect such diversity. The Nominating and
Governance Committee reviews, approves and oversees various
corporate governance policies and recommends changes, if any, to
the Board of Directors.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the
Companys directors, executive officers and beneficial
owners of more than 10% of the outstanding common stock
(collectively, insiders) to file reports with the
SEC disclosing their ownership of common stock and changes in
such ownership. The rules of the SEC require insiders to provide
the Company with copies of all Section 16(a) reports that
the insiders file with the SEC. Based solely upon the
Companys review of copies of Section 16(a) reports
received by it, and written representations that no such reports
were required to be filed with the SEC, the Company believes
that all of its insiders complied with all Section 16(a)
filing requirements applicable to them during 2005.
8
EXECUTIVE
COMPENSATION
The following table sets forth information with respect to
compensation earned by Kenneth D. Tuchman, the Companys
Chief Executive Officer and the next four most highly
compensated executive officers who were serving as executive
officers as of December 31, 2005 (collectively, the
named executive officers).
Summary
Compensation Table
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|
|
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|
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|
|
|
|
|
|
Long-Term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Securities
|
|
|
|
|
Annual Compensation
|
|
|
|
Restricted
|
|
Underlying
|
|
All Other
|
|
|
|
|
Salary
|
|
Bonus
|
|
Other Annual
|
|
Stock
|
|
Options
|
|
Compensation
|
Name and Principal
Position
|
|
Year
|
|
($)
|
|
($)
|
|
Compensation
|
|
Award(s)(3)
|
|
(#)
|
|
($)
|
|
Kenneth D. Tuchman
|
|
|
2005
|
|
|
|
339,230
|
|
|
|
500,000
|
(8)
|
|
|
20,329
|
(1)
|
|
|
-0-
|
|
|
|
800,000
|
|
|
|
|
|
Chairman & Chief
|
|
|
2004
|
|
|
|
289,615
|
|
|
|
-0-
|
|
|
|
45,487
|
(1)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
Executive Officer
|
|
|
2003
|
|
|
|
250,000
|
|
|
|
-0-
|
|
|
|
52,608
|
(1)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
James E. Barlett
|
|
|
2005
|
|
|
|
345,961
|
|
|
|
-0-
|
|
|
|
37,074
|
(1)
|
|
|
1,498,000
|
|
|
|
250,000
|
|
|
|
|
|
Vice Chairman
|
|
|
2004
|
|
|
|
289,615
|
|
|
|
-0-
|
|
|
|
42,154
|
(1)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
|
|
|
2003
|
|
|
|
240,384
|
|
|
|
-0-
|
|
|
|
76,233
|
(1)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
Dennis J. Lacey
|
|
|
2005
|
|
|
|
295,384
|
|
|
|
300,000
|
(8)
|
|
|
10,703
|
(2)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
Executive Vice
|
|
|
2004
|
|
|
|
311,538
|
|
|
|
300,000
|
(5)
|
|
|
5,658
|
(2)
|
|
|
-0-
|
|
|
|
75,000
|
|
|
|
|
|
President & Chief
Financial Officer
|
|
|
2003
|
|
|
|
184,615
|
(4)
|
|
|
160,000
|
(6)
|
|
|
234,207
|
(7)
|
|
|
-0-
|
|
|
|
200,000
|
|
|
|
|
|
Kamalesh D Dwivedi
|
|
|
2005
|
|
|
|
246,153
|
|
|
|
250,000
|
(8)
|
|
|
39,700
|
(2)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
Executive Vice
|
|
|
2004
|
|
|
|
259,615
|
|
|
|
300,000
|
(9)
|
|
|
90,591
|
(7)
|
|
|
-0-
|
|
|
|
75,000
|
|
|
|
|
|
President & Chief
Information Officer
|
|
|
2003
|
|
|
|
91,346
|
(4)
|
|
|
30,000
|
|
|
|
16,534
|
(7)
|
|
|
-0-
|
|
|
|
200,000
|
|
|
|
|
|
John Simon
|
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|
2005
|
|
|
|
243,269
|
|
|
|
250,000
|
(8)
|
|
|
5,112
|
(2)
|
|
|
-0-
|
|
|
|
70,000
|
|
|
|
|
|
Executive Vice
|
|
|
2004
|
|
|
|
259,615
|
|
|
|
200,000
|
(5)
|
|
|
7,403
|
(2)
|
|
|
-0-
|
|
|
|
50,000
|
|
|
|
|
|
President Global
Human Capital
|
|
|
2003
|
|
|
|
231,949
|
|
|
|
23,000
|
|
|
|
9,247
|
(2)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
|
|
|
(1) |
|
Includes auto allowance, imputed income from Deferred
Compensation Plan, Executive Life Benefit and executive benefits
paid by TeleTech. |
|
(2) |
|
Includes imputed income from Deferred Compensation Plan, and
executive benefits paid by TeleTech. |
|
(3) |
|
The value of Mr. Barletts restricted stock for which
restrictions lapsed on October 15, 2005 was $1,498,000.
These shares were valued using the closing share price of $9.99
as reported on the Nasdaq National Market on the date
restrictions lapsed. Mr. Barlett surrendered
50,000 shares of restricted stock back to the Company to
satisfy the tax obligation pursuant to the terms of the
Companys 1999 Amended and Restated TeleTech Holdings, Inc.
Stock Option Plan |
|
(4) |
|
Indicates partial year compensation. |
|
(5) |
|
Indicates bonus for 2004 paid in March 2005. |
|
(6) |
|
Includes contractually guaranteed bonus of $80,000 for 2003 paid
in March 2004 and incentive sign on bonus of $80,000 upon
commencement of employment. |
|
(7) |
|
Includes executive benefits paid by TeleTech and relocation
costs paid or reimbursed by TeleTech and taxes associated with
relocation. |
|
(8) |
|
Indicates bonus for 2005 paid in February 2006. |
|
(9) |
|
Indicates bonus for 2004 paid in February 2005 and guaranteed
bonus of $75,000 payable after six months of employment. |
9
Option
Grants in 2005
The following table sets forth information with respect to
options to purchase shares of the Companys common stock
that were granted in fiscal 2005 to the named executive officers.
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Individual Grants
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
% of Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Options
|
|
|
|
|
|
|
|
|
Potential Realizable Value
|
|
|
|
Underlying
|
|
|
Granted to
|
|
|
|
|
|
|
|
|
at Assumed Annual Rates
|
|
|
|
Options
|
|
|
Employees
|
|
|
Exercise or
|
|
|
|
|
|
of Stock Price Appreciation
|
|
|
|
Granted
|
|
|
in Fiscal
|
|
|
Base Price
|
|
|
Expiration
|
|
|
for Option Term(2)
|
|
Name
|
|
(#)(1)
|
|
|
Year
|
|
|
($/Sh)
|
|
|
Date
|
|
|
5%($)
|
|
|
10%($)
|
|
|
Kenneth D. Tuchman
|
|
|
800,000
|
|
|
|
36.0
|
%
|
|
$
|
11.35
|
|
|
|
11/4/15
|
|
|
$
|
5,710,363
|
|
|
$
|
14,471,182
|
|
James E. Barlett
|
|
|
250,000
|
|
|
|
11.2
|
%
|
|
$
|
7.34
|
|
|
|
5/13/15
|
|
|
$
|
1,154,022
|
|
|
$
|
2,924,517
|
|
Kamalesh Dwivedi
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis Lacey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Simon
|
|
|
70,000
|
|
|
|
3.1
|
%
|
|
$
|
10.58
|
|
|
|
10/25/15
|
|
|
$
|
465,759
|
|
|
$
|
1,180,326
|
|
|
|
|
(1) |
|
These stock options become exercisable in 25% increments on the
first, second, third, and fourth anniversaries of the date of
grant and expire 10 years from the grant date. |
|
(2) |
|
The potential realizable value is calculated assuming that the
fair market value on the date of grant, which equals the
exercise price, appreciates at the indicated annual rate (set by
the SEC), compounded annually, for the
10-year term
of the option. |
Aggregated
Option Exercises in 2005 and Fiscal Year-End Option
Values
The following table sets forth information with respect to
options exercised during 2005, and the aggregate number and
value of shares underlying unexercised options held as of
December 31, 2005, by each of the named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Unexercised
|
|
|
Value of Unexercised
|
|
|
|
Shares
|
|
|
Value
|
|
|
Options as of
|
|
|
In-the-Money
Options as of
|
|
|
|
Acquired on
|
|
|
Realized
|
|
|
December 31, 2005
(#)
|
|
|
December 31, 2005
($)(1)
|
|
Name
|
|
Exercise (#)
|
|
|
($)
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Kenneth D. Tuchman
|
|
|
|
|
|
|
|
|
|
|
840,000
|
|
|
|
800,000
|
|
|
$
|
2,221,800
|
|
|
$
|
560,000
|
|
James E. Barlett
|
|
|
|
|
|
|
|
|
|
|
562,000
|
|
|
|
275,000
|
|
|
$
|
1,951,230
|
|
|
$
|
1,183,000
|
|
Kamalesh Dwivedi
|
|
|
113,750
|
|
|
|
332,635
|
|
|
|
-0-
|
|
|
|
42,500
|
|
|
|
|
|
|
$
|
993,707
|
|
Dennis J. Lacey
|
|
|
|
|
|
|
|
|
|
|
118,750
|
|
|
|
156,250
|
|
|
$
|
838,250
|
|
|
$
|
968,570
|
|
John Simon
|
|
|
|
|
|
|
|
|
|
|
71,750
|
|
|
|
124,250
|
|
|
$
|
124,125
|
|
|
$
|
283,475
|
|
|
|
|
(1) |
|
The value of each option is based on $12.05, the last reported
sales price of the common stock as reported on the Nasdaq
National Stock Market on December 31, 2005, less the
exercise price payable for such shares. |
10
Equity
Compensation Plan Information
The following table sets out, as of December 31, 2005, the
number of shares of TeleTech common stock to be issued upon
exercise of outstanding options, warrants and rights, the
weighted average exercise price of outstanding options, warrants
and rights, and the number of securities available for future
issuance under equity compensation plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
Number of Securities
|
|
|
|
Remaining Available for
|
|
|
to be Issued Upon
|
|
Weighted-Average
|
|
Future Issuance Under
|
|
|
Exercise of
|
|
Exercise Price of
|
|
Equity Compensation Plans
|
|
|
Outstanding Options,
|
|
Outstanding Options,
|
|
(Excluding Securities
|
Plan Category
|
|
Warrants and Rights
|
|
Warrants and Rights
|
|
Reflected in
Column(a))
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
Equity compensation plans approved
by security holders
|
|
|
8,652,748
|
|
|
$
|
10.24
|
|
|
|
5,754,228
|
|
Equity compensation plans not
approved by security holders
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
Total
|
|
|
8,652,748
|
|
|
$
|
10.24
|
|
|
|
5,754,228
|
|
Employment
Agreements
Agreement with Kenneth D. Tuchman. The Company
entered into an employment agreement with Kenneth D. Tuchman,
the Companys Chief Executive Officer effective
October 1, 2001. Pursuant to his agreement,
Mr. Tuchman is entitled to receive an annual base salary of
$250,000. During the term, Mr. Tuchmans base salary
may be increased or decreased in a non-material way at the sole
discretion of the Board of Directors. In September 2004, the
Board of Directors voted to increase Mr. Tuchmans
salary to $350,000. In October 2001, Mr. Tuchman was also
granted an option to purchase 420,000 shares of common
stock at $6.98 per share. The option vested as to 50% on
October 1, 2001 and as to 100% on December 31, 2001.
In February 2002, Mr. Tuchman was granted an option to
purchase 420,000 shares of common stock at $11.83 per
share. The option vested as to 100% on February 25, 2003.
In November 2005, Mr. Tuchman was granted an option to
purchase 800,000 shares of common stock at $11.35 per
share. Pursuant to his agreement, Mr. Tuchman will be
entitled to participate in all other employee benefit plans, in
each case, on terms and conditions no less favorable than the
terms and conditions generally applicable to Mr. Tuchmans
peers.
If, during the term, the Company terminates
Mr. Tuchmans employment other than for cause, death
or disability or if Mr. Tuchman resigns the Company will
pay to Mr. Tuchman as severance a sum equal to twenty-four
(24) months of Mr. Tuchmans then current base salary
payable in twenty four equal installments and will cause to vest
all of Mr. Tuchmans unvested stock options that would
have vested during the twelve months following termination.
If any payments or benefits that Mr. Tuchman receives are
determined to be a parachute payment within the
meaning of Section 280G(b)(2) of the Internal Revenue Code,
his employment agreement provides for an additional payment to
him to restore him to the after-tax position that he would have
been in, if the tax had not been imposed.
During Mr. Tuchmans employment and for a period of
three years thereafter, Mr. Tuchman will be subject to
non-competition and non-solicitation of employees provisions.
During the term and thereafter, Mr. Tuchman has agreed not
to disclose confidential information or to disparage the Company
or its affiliates.
Agreement with James E. Barlett. In October
2001, the Company entered into an employment agreement with
James Barlett, a director of the Company, to serve as Vice
Chairman of the Company. As compensation for his services as
Vice Chairman of the Company, Mr. Barlett receives an
annual salary of $250,000 per year. In September 2004, the
Board of Directors voted to increase Mr. Barletts
annual salary to $350,000. In October 2001, Mr. Barlett was
also granted an option to purchase 400,000 shares of common
stock at $7.84 per share. The option vests over a period of
4 years. Mr. Barlett also received a grant of
200,000 shares of restricted common stock for which
restrictions lapsed as to 50% on October 15, 2003 and
lapsed with respect to 100% on October 15, 2005 and a grant
of 50,000 shares of restricted common stock for which
restrictions lapsed as to 100% on October 15, 2005. In May
2005, Mr. Barlett received an option to purchase
250,000 shares of common stock at $7.34 per share.
Both grants of
11
restricted stock contain provisions which provide for the
immediate lapse of all restrictions upon a change of control.
Agreement with Dennis J. Lacey. The Company
entered into an employment agreement with Dennis J. Lacey, Chief
Financial Officer effective May 5, 2003 whereby
Mr. Lacey is entitled to receive a base salary of $300,000
with an annual bonus targeted at 100% of his base salary.
Agreement with Kamalesh Dwivedi. The Company
entered into a letter agreement with Kamalesh Dwivedi, Chief
Information Officer effective July 7, 2003 whereby
Mr. Dwivedi is entitled to receive (i) a base salary
of $250,000, (ii) a guaranteed minimum bonus of $75,000
paid six months after start date; (iii) a signing bonus of
$30,000 and an annual bonus targeted at 60% of his base salary.
Executive
Change of Control and Termination Arrangements
The Companys standard option agreement for employees who
are employed at the vice president level or higher contains a
provision whereby the vesting of such stock options (which
typically have a 4 or 5 year vesting period) would
accelerate by a period of 2 years immediately upon the
occurrence of a change of control.
Certain
Relationships and Related Party Transactions
The Company has entered into agreements pursuant to which Avion,
LLC (Avion) and AirMax, LLC (AirMax)
provide certain aviation flight services to and as requested by
the Company. Such services include the use of an aircraft and
flight crew. Kenneth D. Tuchman, Chief Executive Officer and
Chairman of the Board of the Company, has a direct beneficial
ownership interest equal to 100% in Avion. During 2005, the
Company paid an aggregate of $884,715 to Avion for services
provided to the Company. Mr. Tuchman also purchases
services from AirMax from time to time and provides short-term
loans to AirMax. During 2005, the Company paid to AirMax an
aggregate of $1,134,752 for services provided to the Company.
The Audit Committee of the Board of Directors reviewed these
transactions quarterly and determined that the fees charged by
Avion and Airmax are at fair market value.
During 2005, the Company utilized the services of Salesforce.com
(SFC). Shirley Young, a director of the Company, is
also a director of SFC. During 2005, the Company paid
approximately $539,684 to SFC. Ms. Youngs only
remuneration from SFC consists of board fees for services as a
director of SFC.
TeleTech believes that all transactions disclosed above have
been, and TeleTechs Board of Directors intends that any
future transactions with its officers, directors, affiliates or
principal stockholders will be, on terms that are no less
favorable to TeleTech than those that are obtainable in
arms length transactions with unaffiliated third parties.
Compensation
Committee Interlocks and Insider Participation in Compensation
Decisions.
Shrikant Mehta and Ruth Lipper served on the Compensation
Committee of the Board of Directors. There were no Compensation
Committee interlocks during 2005.
Notwithstanding anything to the contrary set forth in any
of the Companys previous filings under the Securities Act
of 1933 (Securities Act) or the Exchange Act that
might incorporate future filings, including this proxy
statement, in whole or in part, the reports of the Audit and
Compensation Committees presented below and the performance
graph following the reports shall not be deemed to be
soliciting material or filed with the
SEC or subject to liabilities of Section 18 of the Exchange
Act except to the extent that TeleTech specifically incorporates
any of them into a document filed under the Securities Act or
Exchange Act.
REPORT OF
THE COMPENSATION
COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Companys Board of
Directors (the Compensation Committee) approves and
oversees the Companys compensation policy, approves
salaries and annual bonuses for executive
12
officers of the Company, including the named executive officers,
and administers the Companys stock option plans and stock
purchase plan. In fulfilling its responsibilities, the
Compensation Committee receives significant input from the
Companys Chief Executive Officer and other members of
senior management. The Compensation Committee is composed of
independent non-employee directors.
Compensation
Policy
Components of Compensation. The Companys
compensation policy for executive management is designed to
recruit, motivate and retain highly qualified individuals by
(i) rewarding individual achievement, (ii) enabling
individuals to share in the risks and rewards of the
Companys overall performance and (iii) paying
compensation that is competitive with industry compensation
levels. The key components of the Companys current
compensation policy, which is designed to balance short-term and
long-term considerations, are competitive salaries, annual cash
performance bonuses and long-term equity incentives. In February
2004, the Compensation Committee approved a Management Incentive
Plan (MIP) based on company profitability to
determine the specific amount of bonus compensation payable to
any member of management. The Compensation Committee also
determined that all members of management should undergo an
annual performance review.
2005
Compensation
Annual Salaries. The Chief Executive Officer
of the Company has authority to hire all members of executive
management of the Company, subject to the Compensation
Committees approval of the compensation to be paid to such
executives. Subject to the approval of the Compensation
Committee, the Chief Executive Officer also determines the
compensation payable to persons offered executive level
employment with the Company and annual salary increases for
members of the Companys executive management. The Board,
at the recommendation of the Compensation Committee, determines
adjustments to the Chief Executive Officers compensation
and evaluates the performance of the Chief Executive Officer. In
determining and approving the amount of compensation for
executive management, the Chief Executive Officer and the
Compensation Committee consider factors such as the
executives contribution to the Companys overall
operating effectiveness, strategic success and profitability;
the executives role in developing and maintaining key
client relationships; the level of responsibility, scope and
complexity of such executives position relative to other
executive management; and the executives leadership growth
and management development over the past year. The salaries of
the Companys named executive officers, which are listed in
the Summary Compensation Table located elsewhere in this proxy
statement, are governed primarily by written agreements or the
terms contained in offers of employment with the Company.
Performance Bonuses. In February 2005, the
Compensation Committee pursuant to the Companys MIP
conducted annual performance reviews of all executive
management. Pursuant to the MIP, cash performance bonuses for
executives are determined and approved annually by the
Compensation Committee based on specific metrics relative to the
Companys overall performance including revenue growth,
operating margin, capital expenditure, earnings per share and
cash flow.
Long-Term Incentives. Stock-based compensation
is also an important element of the Companys compensation
policy. Stock options are generally offered to induce an
executive to accept employment with the Company. The
Compensation Committee believes that stock options, which vest
over time and are subject to forfeiture, align the interests of
executive management with the interests of the Companys
stockholders. The Compensation Committee also believes that
substantial equity ownership by individuals in leadership
positions within the Company ensure that such individuals will
remain focused on building stockholder value. An executive
officer level committee, consisting of the Companys Chief
Executive Officer, the Companys Chief Financial Officer
and the Executive Vice President of Global Human Capital, has
the authority to administer the Companys stock option
plans with respect to option grants of not more than 100,000
options to employees who are not executive officers. Any stock
option grants in excess of 100,000 options or to an executive
officer must be approved by the Compensation Committee.
In December 2004, the Board of Directors approved a long term
incentive plan (LTIP) under which executive management and other
key leaders in the Company are eligible. Under the LTIP,
participants are eligible to earn an
13
incentive award upon completion of the 2007 fiscal year
conditional upon the Company meeting certain revenue and EBIT
targets approved by the Board of Directors.
Compensation of the Chief Executive
Officer. Pursuant to Mr. Tuchmans
employment agreement as described above, Mr. Tuchman was
not entitled to receive an annual bonus. Mr. Tuchman is
paid a base salary of $250,000. In September 2004, the Board of
Directors voted to increase Mr. Tuchmans salary to
$350,000. Mr. Tuchman also received a cash bonus for 2005
of $500,000 that was paid out in February 2006. Based upon its
review of proxy statements filed by similarly situated
companies, the Compensation Committee believes this compensation
is in line with the compensation paid to similarly situated
Chief Executive Officers. The Board reviews
Mr. Tuchmans performance once annually.
Limitations on the Deductibility of
Compensation. Under Section 162(m) of the
Internal Revenue Code of 1986, as amended, and applicable
Treasury regulations, no tax deduction is allowed for annual
compensation in excess of $1 million paid to the five most
highly compensated executive officers. Performance-based
compensation that has been disclosed to and approved by
stockholders, by a majority of the vote in a separate
stockholder vote before the payment of such compensation, is
excluded from the $1 million limit if, among other
requirements, the compensation is payable only upon attainment
of pre-established, objective performance goals and the Board
committee that establishes such goals consists only of
outside directors as defined for purposes of
Section 162(m). Each of the members of the Compensation
Committee qualify as outside directors. The
Compensation Committee intends to maximize the extent of tax
deductibility of executive compensation under the provisions of
Section 162(m) so long as doing so is compatible with its
determinations as to the most appropriate methods and approaches
for the design and delivery of compensation to executive
officers of the Company.
SUBMITTED BY THE COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS
Shrikant Mehta, Chairman
Ruth Lipper
REPORT
FROM THE AUDIT COMMITTEE
Management is responsible for the Companys financial
reporting process including its system of internal control, and
for the preparation of consolidated financial statements in
accordance with accounting principles generally accepted in the
United States of America. The Companys independent
auditors are responsible for auditing those financial
statements. Our responsibility is to monitor and review these
processes. It is not our duty or our responsibility to conduct
auditing or accounting reviews or procedures. We are not
employees of the Company and we may not be, and we may not
represent ourselves to be or to serve as, accountants or
auditors by profession or experts in the fields of accounting or
auditing. Therefore, we have relied, without independent
verification, on managements representation that the
financial statements have been prepared with integrity and
objectivity and in conformity with accounting principles
generally accepted in the United States of America and on the
representations of the independent auditors included in their
report on the Companys financial statements. Our oversight
does not provide us with an independent basis to determine that
management has maintained appropriate accounting and financial
reporting principles or policies, or appropriate internal
controls and procedures designed to assure compliance with
accounting standards and applicable laws and regulations.
Furthermore, our considerations and discussions with management
and the independent auditors do not assure that the
Companys financial statements are presented in accordance
with generally accepted accounting principles or that the audit
of our Companys financial statements has been carried out
in accordance with generally accepted auditing standards.
14
We perform the following functions:
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provide an open avenue of communication among the Companys
independent auditor, the Companys Vice President of
Internal Audit and the Board of Directors.
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oversee the adequacy of the Companys internal controls and
financial reporting process and the reliability of the
Companys financial statements.
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confirm and assure the independence of the Companys
independent auditors.
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review and approve the provision by the independent auditors all
permissible non-audit services.
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oversee the function, adequacy and progress of the
Companys internal audit department.
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conduct or authorize investigations into any matters within the
committees scope of responsibility.
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review and approve the establishment and compliance with the
Companys Code of Conduct.
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review and approve all related-party transactions.
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We meet with management periodically to consider the adequacy of
the Companys internal controls and the objectivity of its
financial reporting. We discuss these matters with the
Companys independent auditors and with appropriate Company
financial personnel, including the Companys Vice President
of Internal Audit.
We are also directly responsible for the appointment,
compensation and oversight of the work of the independent
auditors and review periodically their performance and
independence from management.
The Directors who serve on the committee are all
Independent for purposes of the NASD standards. That
is, the Board of Directors has determined that none of us has a
relationship with TeleTech that may interfere with our
independence from TeleTech and its management.
The independent auditors audit the annual financial statements
prepared by management, express an opinion as to whether those
financial statements fairly present the financial position,
results of operations and cash flows of the Company in
conformity with accounting principles generally accepted in the
United States of America and discuss with us any issues they
believe should be raised with us.
This year, we reviewed the Companys financial statements
and met with both management and Ernst & Young, LLP,
the Companys independent auditors, to discuss those
financials statements. Management has represented to us that the
financial statements were prepared in accordance with accounting
principles generally accepted in the United States of America.
We have received from and discussed with Ernst & Young,
LLP the written disclosure and the letter required by
Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and have discussed with
Ernst & Young, LLP such firms independence from
the Company. We also discussed with Ernst & Young, LLP
any matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees), as
amended.
Based on these reviews and discussions, we recommended to the
Board that the Companys audited financial statements be
included in the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005 for filing with the
Securities and Exchange Commission.
William A. Linnenbringer, Chairman
Shirley Young
Ruth Lipper
15
INDEPENDENT
AUDIT FEES FOR 2005
For the year ended December 31, 2004 and December 31,
2005, we were billed by Ernst & Young, LLP aggregate
fees as discussed below.
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Audit Fees. Fees for audit services totaled
approximately $1,778,602 in 2005 and approximately $1,865,000 in
2004, including fees associated with the annual audit, the
reviews of the Companys quarterly reports on
Form 10-Q
and statutory audits required internationally. In 2004 and 2005,
Audit fees above included fees from work related to the
attestation of managements report on the effectiveness of
internal control over financial reporting according to the
requirements of Section 404 of the Sarbanes Oxley Act of
2002.
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Audit-Related Fees: Fees for audit-related
services totaled approximately $303,239 in 2005 and
approximately $203,000 in 2004. Audit-related services
principally included due diligence in connection with proposed
acquisitions, accounting consultations, benefit plan audits and
services related to the Companys preparation to meet the
requirements of Section 404 of the Sarbanes-Oxley Act of
2002.
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Tax Fees: Fees for tax services, including tax
compliance, tax advice and tax planning (including expatriate
tax services), totaled approximately $130,485 in 2005 and
approximately $194,000 in 2004.
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All Other Fees. Fees for all other services
not included above totaled $0 in 2005 and $0 in 2004,
principally including support and advisory services related to
the Companys real estate and risk management advisory
services.
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The Audit Committee has considered whether the independent
auditors provision of non-audit services to the Company is
compatible with the auditors independence and determined
that it is compatible. One hundred percent of the services
provided by Ernst & Young, LLP were approved by the
Audit Committee pursuant to its Policy on Pre-Approval of Audit
and Permissible Non-Audit Services.
Policy on
Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services
In accordance with the Audit Committees charter, the Audit
Committee has established a policy to pre-approve audit and
permissible non-audit services provided by the independent
auditor as follows:
Any and all services to be provided by TeleTechs external
audit firm must be approved by the Audit Committee of
TeleTechs Board of Directors. Any director, officer or
employee of the company proposing to engage the services of
TeleTechs external audit firm for any reason (regardless
of scope of the project or associated costs) must submit a
request for approval, in writing, to TeleTechs Corporate
Controller. The Corporate Controller will review the request
and, if necessary, obtain additional information from the
requestor.
If the proposed services fall into one of the specified
prohibited services categories as set forth in the
Sarbanes-Oxley Act of 2002, the Corporate Controller will deny
the request.
Both the Corporate Controller and the Assistant General Counsel
should review requests that are not clearly determined to fall
into the prohibited services category. Requests that are
approved by the Corporate Controller and Assistant General
Counsel will then be forwarded to the Corporate Chief Financial
Officer for further review.
Requests that are approved by the Corporate Chief Financial
Officer will be forwarded to the Audit Committee Chairperson
(projects with a total expected cost of less than or equal to
$100,000) or to the Audit Committee (projects with a total
expected cost of more than $100,000) by the Assistant General
Counsel. The Chairperson reports all pre-approvals to the full
Audit Committee at each regularly scheduled meeting and all such
pre-approvals are ratified by the full Audit Committee.
The Corporate Controller will be responsible for tracking the
status of all requests and for reporting the final disposition
to the requestor and to the Assistant General Counsel. The
Assistant General Counsel will be responsible for maintaining
documentation supporting the disposition of all requests. No
contracts or engagement letters may be signed and no work may
commence until the requisite written approval has been received.
16
The graph below compares the cumulative total stockholder return
on the Companys common stock from close of market on
December 31, 2000 through 2005 with the cumulative total
return of the Nasdaq National Stock Market (U.S.) Index; the
Russell 2000 Index; and a customized peer group (the Peer
Group). The performance graph shows the return of $100
invested in the Companys common stock, the Nasdaq National
Stock Market (U.S.) Index, the Russell 2000 Index, and the Peer
Group at closing prices on December 31, 2000. The Peer
Group is composed of APAC Customer Services, Convergys
Corporation, SITEL Corporation, Sykes Enterprises Incorporated,
West Corporation and Electronic Data Systems. Stock price
performance shown on the graph below is not necessarily
indicative of future price performance.
PERFORMANCE
GRAPH
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG TELETECH HOLDINGS, INC.,
THE NASDAQ NATIONAL STOCK MARKET (U.S.) INDEX,
THE RUSSELL 2000 INDEX AND A PEER GROUP
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$100 invested on 12/31/00 in stock or index or index-including
reinvestment of dividends. Fiscal year ending December 31. |
17
PROPOSAL 2:
RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITORS
In accordance with its charter, the Audit Committee has selected
the accounting firm of Ernst & Young, LLP, independent
public accountants, to serve as the Companys auditors for
the year 2006 and recommends to the stockholders that they
ratify that appointment. Ernst & Young, LLP has acted
as the Companys independent auditors for the fiscal years
ended December 31, 2005, December 31, 2004,
December 31, 2003 and December 31, 2002.
Representatives of Ernst & Young, LLP are expected to
be present at the stockholders meeting and will have an
opportunity to make a statement if they desire and are expected
to be available to respond to appropriate questions.
Recommendation
of the Board of Directors
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The
Board of Directors and the Audit Committee recommends that you
vote FOR Proposal 2.
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18
GENERAL
INFORMATION
Next
Annual Meeting of Stockholders
Notice of any stockholder proposal that is intended to be
included in the Companys proxy statement and form of proxy
for its next Annual Meeting of stockholders must be received by
the Corporate Secretary of the Company no later than
December 15, 2006. Such notice must be in writing and must
comply with the other provisions of
Rule 14a-8
under the Exchange Act. In addition, the persons named in the
proxy for the next Annual Meeting will have discretionary
authority to vote with respect to any matter that is brought by
any stockholder during the meeting, not described in the proxy
statement for such meeting, unless the Company received written
notice, on or before February 28, 2007, that such
matters would be raised at the meeting. Any notices regarding
stockholder proposals must be received by the Company at its
principal executive offices at 9197 S. Peoria Street,
Englewood, Colorado 80112, Attention: Corporate Secretary.
IMPORTANT NOTICE REGARDING DELIVERY OF STOCKHOLDER DOCUMENTS
In accordance with a notice sent to certain street name
stockholders of common stock who share a single address, only
one copy of this proxy statement and the Companys 2005
Annual Report is being sent to that address unless we received
contrary instructions from any stockholder at that address. This
practice, known as householding, is designed to
reduce our printing and postage costs. However, if any
stockholder residing at such an address wishes to receive a
separate copy of this proxy statement or the Companys 2005
Annual Report, he or she may contact the company at TeleTech
Holdings, Inc., 9197 S. Peoria Street, Englewood, Colorado
80112, Attention: Corporate Secretary, or by calling
303-397-8100. Any such stockholder may also contact the
Corporate Secretary using the above contact information if he or
she would like to receive separate proxy statements and annual
reports in the future. If you are receiving multiple copies of
the Companys annual report and proxy statement, you may
request householding in the future by contacting the Corporate
Secretary.
OTHER
BUSINESS
We know of no other matter to be acted upon at the Annual
Meeting. However, if any other matters are properly brought
before the Annual Meeting, the persons named in the accompanying
proxy card as proxies for the holders of TeleTechs common
stock will vote thereon in accordance with their best judgment.
19
Annual
Report on
Form 10-K
The Companys 2005 Annual Report is being mailed to the
stockholders together with this proxy statement; however, the
report is not part of the proxy solicitation materials. Copies
of the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005 may be obtained
without charge upon request made to TeleTech Holdings, Inc.,
9197 S. Peoria Street, Englewood, Colorado 80112,
Attention: Investor Relations.
By Order of the Board of
Directors,
Christy T.
OConnor
Vice President, Assistant General Counsel and
Secretary
Englewood, Colorado
20
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![(TELETECH LOGO)](d34895d3489508.gif)
9197 SOUTH PEORIA STREET ENGLEWOOD, CO 80112
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VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 12:00 A.M. Eastern Time the day
before the cut-off date or meeting date. Have your proxy card in hand
when you access the web site and follow the instructions to obtain your
records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by TeleTech Holdings,
Inc. in mailing proxy materials, you can consent to receiving all future
proxy statements, proxy cards and annual reports electronically via e-mail
or the Internet. To sign up for electronic delivery, please follow the
instructions above to vote using the Internet and, when prompted,
indicate that you agree to receive or access shareholder communications
electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up
until 12:00 A.M. Eastern Time the day before the cut-off date or
meeting date. Have your proxy card in hand when you call and then
follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid
envelope we have provided or return it to TeleTech Holdings, Inc., c/o
ADP, 51 Mercedes Way, Edgewood, NY 11717.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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TELTH1
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KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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TELETECH HOLDINGS, INC. |
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The Board of Directors recommends a vote
FOR all Board of Directors nominees and FOR
Proposal 2.
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1.
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Election of Directors:
NOMINEES: 01) KENNETH D. TUCHMAN, 02) JAMES E. BARLETT,
03) WILLIAM A. LINNENBRINGER, 04) RUTH C. LIPPER,
05) SHRIKANT MEHTA, 06) SHIRLEY YOUNG.
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For
All
¨
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Withhold
All
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For All
Except
¨
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To withhold authority to vote for any individual
nominee(s), mark FOR ALL EXCEPT and write
the nominees name on the line below.
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Vote on Proposals |
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Abstain |
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2.
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Ratification of the appointment of Ernst & Young LLP as the Companys independent auditor.
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This proxy when properly executed will be voted in the manner directed herein. If no direction is made, the proxy
will be voted FOR all of the Board of Directors nominees and FOR Proposal 2.
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Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign.
When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.
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For address changes and/or comments, please check this box and write them on the back where indicated.
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Yes |
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No |
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Please indicate if you plan to attend this meeting. |
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HOUSEHOLDING ELECTION - Please indicate if you consent to receive certain future investor communications in a single package per household.
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Signature
[PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date |
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ADMISSION TICKET
ANNUAL MEETING OF STOCKHOLDERS OF
TELETECH HOLDINGS, INC.
May 25, 2006
10:00 a.m. MDT
TeleTechs Headquarters
9197 South Peoria Street
Englewood, CO 80112
1-800-TELETECH
Please date, sign and mail
your proxy card in the
enclosed envelope as soon as possible.
ê Please detach and mail in the envelope provided. ê
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PROXY
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PROXY
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This Proxy is Solicited on Behalf of The Board of Directors of |
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TELETECH HOLDINGS, INC. |
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The undersigned, having received
Notice of Annual Meeting and Proxy Statement, hereby appoints KENNETH D. TUCHMAN and
CHRISTY T. OCONNOR, and each of them, proxies with full power of substitution, for and in the name of the undersigned, to vote all
shares of Common Stock of TELETECH HOLDINGS, INC. owned of record by the undersigned at the 2006 Annual Meeting of
Stockholders to be held at TeleTechs headquarters located at 9197 South Peoria Street, Englewood, CO 80112 on May 25, 2006 at
10:00 a.m. local time, and any adjournments or postponements thereof, in accordance with the directions marked on the reverse
side hereof. The proxies, or each of them, in their or his or her sole discretion, are authorized to vote for the election of a person
nominated to the Board of Directors if any nominee named herein becomes unable to serve or if for any reason whatsoever, another
nominee is required, and the proxies, or each of them, in their or his or her sole discretion are further authorized to vote on other
matters which may properly come before the 2006 Annual Meeting and any adjournments or postponements thereof.
You are encouraged to specify your choices by marking the appropriate boxes (SEE REVERSE SIDE), but you need not mark any
boxes if you wish to vote in accordance with the Board of Directors recommendations. The proxies cannot vote these shares
unless you sign and return this card.
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Address Changes/Comments:
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(If you
noted Address Changes/Comments above, please mark corresponding box on the reverse side.)
(Continued and to be signed on the reverse side)
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