UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10- K/A

(Mark One)

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-21055

TeleTech Holdings, Inc.

Delaware		84-1291044
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

9197 South Peoria Street
Englewood, Colorado 80112
(Address of principal executive offices)

Registrant’s telephone number, including area code:
(303) 397-8100

Securities registered pursuant to Section 12(b) of the Act:
Nasdaq Stock Market LLC

Common Stock, $0.01 par value per share
(Title of Class)

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes o No þ

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of June 30, 2006, the last business day of the registrant’s most recently completed second fiscal quarter, there were 68,824,244 shares of the registrant’s common stock outstanding. The aggregate market value of the registrant’s voting and non-voting common stock that was held by non-affiliates on such date was $381,931,678 based on the closing sale price of the registrant’s common stock on such date as reported on the NASDAQ National Market.

As of February 1, 2007, there were 70,137,732 shares of the registrant’s common stock outstanding.

 

 

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-K/A (“Amendment No. 1”) is being filed solely to remove the section for Documents Incorporated by Reference on the cover page and to replace Part III, Item 10 through Item 14 and to update Item 15 of the Registrant’s Annual Report on Form 10-K as filed by the Registrant on February 7, 2007 (the “Original Filing”). Except as otherwise stated herein, no other information contained in the Original Filing has been updated by this Amendment No. 1. The information in this Amendment No. 1 does not modify or update disclosures in the Original Filing (including the exhibits to the Original Filing, except for the updated Exhibits 31.1, 31.2 and 32) and other than as set forth herein.

This Amendment No. 1 should be read in conjunction with our periodic filings made with the Securities and Exchange Commission or the SEC, subsequent to the date of the Original Filing, including any amendments to those filings, as well as any Current Reports filed on Form 8-K subsequent to the date of the Original Filing. In addition, in accordance with the applicable rules and regulations promulgated by the SEC, this Form 10-K/A includes updated certifications from our Chief Executive Officer and Chief Financial Officer as Exhibits 31.1, 31.2 and 32.

FORWARD LOOKING STATEMENT

The following discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2006. Except for historical information, the discussion below contains certain forward-looking statements that involve risks and uncertainties. The projections and statements contained in these forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.

All statements not based on historical fact are forward-looking statements that involve substantial risks and uncertainties. In accordance with the Private Securities Litigation Reform Act of 1995, following are important factors that could cause our actual results to differ materially from those expressed or implied by such forward-looking statements, including but not limited to the following: our belief that we are continuing to see strong demand for our services and that sales cycles are shortening; risks associated with successfully integrating Direct Alliance Corporation (“DAC”), which we acquired on June 30, 2006 and achieving anticipated future revenue growth, profitability and synergies; estimated revenue from new, renewed and expanded client business as volumes may not materialize as forecasted or be sufficient to achieve our business outlook; achieving continued profit improvement in our International BPO operations; the ability to close and ramp new business opportunities that are currently being pursued or that are in the final stages with existing and/or potential clients in order to achieve our business outlook; our ability to execute our growth plans, including sales of new products (such as OnDemand); our ability to achieve our year-end 2007 financial goals, including those set forth in our business outlook; the possibility of our Database Marketing and Consulting segment not increasing revenue, lowering costs, or returning to profitability resulting in an impairment of its $13.4 million of goodwill; the possibility of lower revenue or price pressure from our clients experiencing a business downturn or merger in their business; greater than anticipated competition in the BPO services market, causing adverse pricing and more stringent contractual terms; risks associated with losing or not renewing client relationships, particularly large client agreements, or early termination of a client agreement; the risk of losing clients due to consolidation in the industries we serve; consumers’ concerns or adverse publicity regarding our clients’ products; our ability to find cost effective locations, obtain favorable lease terms and build or retrofit facilities in a timely and economic manner; risks associated with business interruption due to weather, pandemic, or terrorist-related events; risks associated with attracting and retaining cost-effective labor at our delivery centers; the possibility of additional asset impairments and restructuring charges; risks associated with changes in foreign currency exchange rates; economic or political changes affecting the countries in which we operate; changes in accounting policies and practices promulgated by standard setting bodies; and new legislation or government regulation that impacts the BPO and customer management industry. See Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

DIRECTORS AND EXECUTIVE OFFICERS

Information concerning our directors to be nominated for election at our 2007 stockholder’s meeting and our executive officers is set forth below:

Kenneth D. Tuchman, 47, founded TeleTech’s predecessor company in 1982 and has served as the chairman of the board of directors since TeleTech’s formation in 1994. Mr. Tuchman served as our president and chief executive officer from TeleTech’s inception until October of 1999. In March 2001, Mr. Tuchman resumed the position of chief executive officer.

James E. Barlett, 63, 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., now known as Deloitte & Touche. Mr. Barlett also serves on the boards of Korn/Ferry International, Celanese Corporation and Covansys.

William A. Linnenbringer, 58, 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 firm’s 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 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, 63, was elected to the board of directors of TeleTech in June 2004. Mr. Mehta is president and chief executive officer 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, 71, 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 and chair of its cultural associate, US-China Cultural Institute. Previously, Ms Young served as corporate vice president of General Motors responsible for China strategic development 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 currently serves on the board of directors of SalesForce.com.

Brian Delaney, 49, joined TeleTech as Vice President of Technology in December, 2002 and moved into the Senior Vice President, North America Operations position in January, 2004. Since October, 2005, Mr. Delaney has been operating as the Executive Vice President of Global Service Delivery. Mr. Delaney is a member of the Board of Trustees for the National 4-H Council.

Kamalesh Dwivedi, 51, joined TeleTech in August, 2003 as Executive Vice President and Chief Information Officer (“CIO”). Prior to joining TeleTech, Mr. Dwivedi was Vice President and CIO of ADC Telecommunications, a global manufacturer of broadband equipment to the telecom and cable industries. Prior to ADC, he was the CIO of Scientific-Atlanta, now a division of Cisco and a global manufacturer and supplier of integrated technology products in video, voice and data to telecom and cable industries.

John Simon, 44, joined TeleTech in 1999 and served as TeleTech’s Associate General Counsel. In 2001 he became Senior Vice President of Global Human Capital. Mr. Simon also temporarily served as TeleTech’s interim General Counsel. Beginning in October, 2005, Mr. Simon was promoted to Executive Vice President of Global Human Capital. Prior to joining TeleTech, Mr. Simon was a partner at the New York law firm Hallenbeck, Lascell, Norris and Heller. Mr. Simon’s private law practice focused on litigating employment and commercial matters, as well as business counseling for institutional clients. Mr. Simon holds an undergraduate degree from Colorado College and a law degree from Georgetown University. Mr. Simon resigned from the Company as of April 13, 2007.

Alan Schutzman, 50, joined TeleTech in July 2006 as Executive Vice President, General Counsel and Secretary. From September 2003 through March 2006, Mr. Schutzman was Senior Vice President, General Counsel and Secretary of Concord Camera Corp. From January 2001 until September 2001, he served as Associate General Counsel of Jacuzzi Brands, Inc. (“Jacuzzi”) and Vice President, Associate General Counsel and Assistant Secretary of Jacuzzi from September 2001 through September 2003. During the Fall 2005 Semester, Mr. Schutzman served as an Adjunct Professor of Law at the Shepard Broad Law Center, Nova Southeastern University, in Fort Lauderdale, Florida where he taught a corporate workshop on mergers and acquisitions.

John R. Troka, Jr., 44, was named TeleTech’s Interim Chief Financial Officer in August 2006 and has served as TeleTech’s Vice President of Global Finance since joining the company in 2002. Prior to joining TeleTech, Mr. Troka was Vice President of Finance for Qwest Communications, formerly known as US West Communications.

Information Regarding the Board of Directors and Committees Thereof

The board of directors held four meetings during our 2006 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, all of our directors attended the annual meeting.

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.

Audit Committee The audit committee is responsible for, among other things, overseeing our accounting and financial reporting processes and the audits of TeleTech’s financial statements, the appointment of our independent public accountants, the scope and fees of the prospective annual audit and the results thereof, compensation, retention and oversight of the independent registered public accounting firm engaged to prepare and issue audit reports on the Company’s financial statements and to perform other audit, review or attest services for the Company, compliance with TeleTech’s accounting and financial policies and management’s procedures and policies relative to the adequacy of TeleTech’s 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. Our board of directors determined that each of the members of the audit committee is able to read and understand fundamental financial statements, including TeleTech’s 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 2006, the audit committee held four regularly scheduled meetings and four 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 audit committee reviews and assesses the adequacy of its charter on an annual basis.

Compensation 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; and such other employee benefit plans as may be adopted by TeleTech from time to time. The current members of the compensation committee are Shrikant Mehta (chairman) and Ruth Lipper each of whom is independent within the meaning of SEC regulations and the NASDAQ listing standards. During 2006, the compensation committee held four regularly scheduled meetings and one special meeting 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.

Nominating and Governance Committee The nominating and governance committee is responsible for, among other things, identifying and recommending to the board of directors qualified candidates for election or appointment to the board of directors, and 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 satisfies the independence requirements for nominating committee members pursuant to the NASDAQ listing standards. During 2006, the nominating and governance committee held four regularly scheduled meetings and no special meetings. The nominating and governance committee is governed by the nominating and governance committee charter adopted by our board of directors. No changes have been made to the written charter during the past year.

Committee Composition: The following table provides the composition of each of our committees as of December 31, 2006.

						Nominating and Governance
Director		Audit Committee		Compensation Committee		Committee
James E. Barlett
William A. Linnenbringer		ü				ü
Ruth C. Lipper		ü		ü		ü
Shrikant Mehta				ü
Kenneth D. Tuchman
Shirley Young		ü

Code of Conduct and Committee Charters

We have adopted a code of conduct applicable to all of our directors, officers (including our chief executive officer, 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 code of conduct is available on our website, and we intend to disclose any waivers of, or amendments to, the code on our website. The code of conduct, audit committee charter, the nominating and governance committee charter and compensation committee charter, may be viewed on our 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.

ITEM 11. EXECUTIVE COMPENSATION

Compensation, Discussion & Analysis

Role of Compensation Committee

The compensation committee of TeleTech is charged with and has the following responsibilities: (i) consider and make recommendations to the board of directors regarding the chief executive officer’s salary, annual incentives and bonuses, perquisites, benefits, stock option grants, and employment agreements and other compensation matters, and all changes thereto; (ii) review with TeleTech management and approve the compensation policy for executive officers, and such other managers as directed by the board; (iii) consider and approve all other executive officers’ (as defined by Section 16 of the Exchange Act) salaries, annual incentives and bonuses, perquisites, benefits, stock option grants, RSU grants, and employment agreements and compensation matters, and all changes thereto; (iv) consider and approve the terms of offers of employment for all Section 16 officers and employees that shall report directly to the chief executive officer; (v) evaluate the need for, and provisions of, employment contracts/severance arrangements for the chief executive officer and other executive officers; (vi) evaluate the performance of the office of the chief executive officer (and such other executive officers as deemed appropriate) in light of TeleTech’s current business environment and strategic objectives; (vii) review with management and approve recommendations with regard to aggregate salary budget and guidelines for all employees; (viii) act as administrator of the stock option plans and make recommendations to the board of directors with respect to amendments to the plans and changes in the number of shares reserved for issuance thereunder; (ix) consider and make recommendations to the board of directors with respect to a pool of stock options and RSUs available for grant under the annual management stock option and RSU program; (x) consider and approve management proposals regarding the establishment, termination or modification of retirement, long-term disability and other management welfare and benefit plans; (xi) prepare a report (to be included in the proxy statement) which describes (a) the criteria on which compensation paid to the chief executive officer for the last completed fiscal year is based, (b) the relationship of such compensation to TeleTech’s performance and (c) the compensation committee’s executive compensation policies applicable to executive officers, specifically addressing the other “named executive officers” included in the proxy statement; (xi) review and discuss management succession at least annually; and (xii) monitor summary data on the employee population (e.g., total personnel costs, compensation benchmark data, employee diversity, turnover levels).

Executive Compensation Philosophy and Policies

Elements of Executive Compensation

Our primary compensation philosophy is: (i) to develop a compensation package that attracts highly qualified executives to work for TeleTech; (ii) to provide appropriate incentives and to reward superior executive performance that creates long-term investor value; and (iii) to encourage executives who deliver that performance to remain with TeleTech and to continue that level of performance. Under the supervision of the compensation committee, TeleTech has developed and implemented compensation policies, plans and programs that are designed to closely align the financial interests of the senior executives with those of our stockholders in order to enhance the long-term growth and profitability of our company and therefore the creation of long-term stockholder value. Our compensation programs provide a balanced mix of cash, incentive and equity-based compensation that we believe meets these goals.

Executive Compensation Policies

We approve all of the policies, plans and programs under which compensation is paid to executive management. We strive to ensure that executive compensation relates to the measures of TeleTech’s financial performance that are important to investors, such as revenue, EBIT, and operating income as well as completion of strategic projects and demonstration of success principles including innovation to continuously improve performance, open communication, hands on business problem solving, wise business decisions and business ownership. We identify, quantify and assess performance goals of executive management and annually review the collective and individual performance of these executives.

The main components used to support these objectives are base salary, annual bonus, stock awards and certain other benefits. The combined mix of these pay elements is what allows us to provide a competitive total rewards package to our executives. To date, we have not specified a target percentage of the overall compensation package to be represented by the various compensation elements but equity compensation represents the largest component. For each element of compensation, our strategy has been to examine peer group compensation practices and set target awards around the 50^th percentile of the peer group for each element of compensation. This is the same target pay position for all our employee levels. However, we have historically approved actual compensation levels for officers above and below the 50^th percentile target as these approvals were based on individual and company performance relative to internal goals and the peer group to ensure an appropriate pay-for-performance alignment. Moreover, the heavy emphasis on variable, or at-risk compensation, helps calibrate actual compensation to performance since executives do not receive value if TeleTech does not meet its performance objectives.

Overall Factors Considered in Making Specific Compensation Decisions

Our executive compensation program is designed around five overreaching principles:

	1.		Structure compensation programs with a significant portion of variable, or at-risk, compensation to ensure that the actual compensation realized by executive officers is directly and demonstrably linked to individual and company performance, such that actual executive officer compensation is significantly below target in low-performing years and above-target in high-performing years.
	2.		Offer market competitive compensation opportunities that will allow us to attract and retain executive officers capable of leading us to the fulfillment of our business objectives.
	3.		Ensure that our executive officers are focused on individual operational goals to build the foundation for our longer-term success.
	4.		Align the interests of executive officers and stockholders to achieve long-term stock price performance by incentivizing executive officers through equity compensation.
	5.		Maintain an egalitarian culture with respect to compensation programs, such that, generally, all employees are eligible to participate in the same programs as the executive officers.

We retain the services of independent compensation consultants to review and benchmark our compensation policies and results. An independent consultant provides additional assurance that our programs are reasonable and consistent with our company’s objectives. We regularly meet in executive session without any management or employee directors present.

Compensation Benchmarking

We engage an independent consultant on at least an annual basis to benchmark our executives compensation results to those companies in our peer group to assess the competitiveness of our executive compensation. The peer group we examined in 2006 included 12 BPO and service provider companies that were similar to us with respect to several metrics, principally including: business strategy, labor market competitors, market capitalization, revenue and number of employees. The peer group companies include some, but not all, of the companies that are included in the market indices in the graph.

The companies in the peer group have the following profile (as of December 2006):

Revenue

Market Capitalization

Employee Size

Industry Sector

Range

Median

Range

Median

Range

Median

Peer Group

BPO and Service Provider

$116M to $5.5B

$

1.03B

$159M to $15B

$1.3B

377 to 58,000

8,986

TeleTech

$1.2B

$1.7B

47,000

In addition, we evaluated the pay practices of a number of BPO and service provider companies that are larger than us with respect to market capitalization, revenue and employees. The purpose of this evaluation is to understand compensation practices of industry leaders to help us plan for our next stage of anticipated growth. These pay levels are reviewed for informational purposes and are not included in the market comparables used to make compensation decisions.

We review the companies in our peer group at least annually and make adjustments as necessary to ensure the group continues to properly reflect the market in which we compete for talented executives. We also review annually the executive pay practices of other similarly situated companies as reported in industry surveys and reports from compensation consulting firms. We request customized reports of these surveys so that the compensation data reflects the practices of companies that are similar to us. This information is also considered when making recommendations for each element of compensation.

Elements of Compensation

Annual Base Salaries

The chief executive officer has authority to hire all members of executive management, subject to the compensation committee’s 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 and annual salary increases for members of executive management. The board, at the recommendation of the compensation committee, determines adjustments to the chief executive officer’s 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 executive’s contribution to overall operating effectiveness, strategic success and profitability; the executive’s role in developing and maintaining key client relationships; the level of responsibility, scope and complexity of such executive’s position relative to other executive management; and the executive’s leadership growth and management development over the past year. Additionally, as stated earlier, compensation is determined in a manner consistent with remaining competitive (between the 50^th and 75^th percentile) with that paid to industries that we believe have financial, operational and risk factors sufficiently similar to the Company and to provide an adequate degree of financial stability to those individuals who are crucial to our business both strategically and operationally. The salaries of the 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.

Short Term/Annual Incentive Compensation

Management Incentive Plan

TeleTech pays annual incentive compensation to executive officers under the management incentive plan. Pursuant to the management incentive plan, cash performance bonuses for executives are determined and approved annually by the compensation committee based on achievement of an operating income goal set by the board of directors. Each participant’s award can vary from zero to 200% of their incentive target. In addition to operating income goals, the Company also considers completion of strategic projects and demonstration of TeleTech’s success principles including innovation to continuously improve performance, open communication, hands on business problem solving, wise business decisions and business ownership. In February 2006, the compensation committee conducted annual performance reviews of all executive management.

In December 2006, the compensation committee approved the 2007 management incentive plan which supersedes all previous incentive/bonus plans for eligible participants.

Sales Incentive Plan (Sales Executive)

The TeleTech sales incentive plan (sales executive) is intended to reward sales executives for their substantial efforts in securing profitable long term revenue under a new logo contract (i.e. a new client introduction with no pre-existing relationship with TeleTech) and to reward sales executives for their continued efforts in ensuring customer satisfaction under new logo contracts they are responsible for securing.

Incentive payments are based on securing new logos business in four business areas. Payments are calculated based upon projected annualized revenue, the length of the contract and other financial and strategic measures.

Sales Incentive Plan (Client Executive)

The TeleTech sales incentive plan (client executive) is intended to reward sales executives for their substantial efforts in maintaining and growing long term revenue under existing client relationships and to reward sales executives for their continued efforts in ensuring customer satisfaction and growing accounts.

Payments are calculated based upon two components including quarterly booked revenue incentive targeted at 50% of participant’s base pay based on meeting quarterly booked revenue goals for assigned clients and new program incentive based on the successful generation of new contracts for assigned clients.

General Manager Incentive Plan

The general manager incentive plan is designed to motivate the eligible executives to achieve the revenue, operating income, and EBIT goals and objectives contained in TeleTech’s strategic plan as approved by the board of directors for each region or business unit for which they are responsible. The plan includes an annual incentive target of 100% of base pay with a stretch goal of 200% of base pay calculated based upon metrics which set a target based upon annual revenue achieved and annual EBIT percentage.

Site Management Incentive Plan

The site management incentive plan is designed to motivate each site’s management team to achieve the goals and objectives of TeleTech’s strategic plan. The plan is applicable to all full time regular employees hired prior to the start of a performance period and dedicated to one site. The plan is designed to generate an incentive pool for each site based on the relative achievement of its monthly employee related gross margin goal. Payouts under the plan occur in a two-step process: (i) an incentive pool is created based on the level of achievement of our pre-set employee related gross margin goals; and (ii) individual incentive payouts are determined based on each employee’s relative achievement of goals and objectives, impact on business and financial results and the available incentive pool.

Long-Term Incentive Compensation

Long term incentive compensation is primarily comprised of equity based incentive in the form of (i) options and more recently (ii) RSUs. Stock-based compensation is an important element of our compensation policy. Stock options have generally been offered to induce an executive to accept employment with TeleTech. The compensation committee believed that stock options, which vest over time and are subject to forfeiture, align the interests of executive management with the interests of TeleTech’s stockholders. In February 2007, we moved to a RSU program. Under the RSU program, shares of restricted stock are granted to eligible employees. RSUs vest in two ways: time based and performance based. The RSU program operates under the same philosophy as stock options, and the compensation committee also believes that substantial equity ownership by individuals in leadership positions ensure that these individuals will remain focused on building stockholder value. An executive officer level committee, consisting of the chief executive officer, the chief financial officer and the

executive vice president of global human capital, has the authority to administer the stock option and RSU plans with respect to grants of not more than 100,000 RSUs to employees who are not executive officers. Any grants in excess of 100,000 RSUs or to an executive officer must be approved by the compensation committee.

In December 2004, the board of directors approved the long term incentive plan under which executive management and other key leaders were eligible. Under the long term incentive plan, participants were eligible to earn an incentive award upon completion of the 2007 fiscal year provided the company met certain revenue and EBIT targets approved by the board of directors. In February 2007, the long term incentive plan was replaced by the RSU program and participating individuals received grants of RSUs which contain vesting based upon company performance and time.

Share Retention and Securities Trading Policy

We believe that to the extent our executive officers hold significant ownership in TeleTech, their interests will remain aligned with those of our stockholders, and they will be appropriately motivated to enhance TeleTech’s performance and value. We encourage our executive officers and board members to hold a significant ownership interest. TeleTech is currently reviewing several options for a stock ownership program including: (i) a multiple of salary; (ii) a fixed number of shares; (iii) a retention ratio; and (iv) a combination of a retention ratio and multiple of salary. The compensation committee expects to implement a share retention plan during 2007. Our executive officers and directors are also subject to a pre-clearance policy whereby directors and executive officers and any other persons designated by the legal department as being subject to TeleTech’s pre-clearance procedures, together with their family members, may not engage in any transaction involving TeleTech securities (including a stock plan transaction such as an option exercise, a gift, a loan or pledge or hedge, a contribution to a trust, or any other transfer) without first obtaining pre-clearance of the transaction from the legal department. A request for pre-clearance is submitted to the legal department which then determines whether the transaction may proceed and, if so, assist in complying with reporting requirements. All directors, executive officers and key personnel are also subject to TeleTech’s insider trading policy and regular blackout periods thereunder.

Compensation of the Chief Executive Officer

Mr. Tuchman was originally paid a base salary of $250,000. In September 2004, the board of directors increased Mr. Tuchman’s salary to $350,000. Mr. Tuchman also received a cash bonus for 2005 of $500,000 that was paid 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. Tuchman’s performance once annually.

Fiscal year 2006 compensation for Mr. Tuchman can be categorized as follows:

Cash and Benefits
Salary		$	350,000
Incentive		$	-0-
Company Match in 401K Plan			-0-
Company Match in Deferred Compensation Plan			-0-
Deferred Compensation Balance		$	1,718,645
Healthcare (medical, disability and life insurance)		$	114,884
Total Cash and Benefit Tally		$	2,183,529
Equity
Total Number of Stock Options Granted in 2006			-0-
Upon Severance and Change in Control
Salary-based cash payment		$	700,000
Value of health plan, life insurance		$	114,884
Bonus-based cash payment		$	-0-
Deferred Compensation Balance		$	1,718,645
Total for non-stock benefits		$	2,533,529
Value of immediate vesting of stock option awards(1)		$	19,677,000
Value of remaining stock awards due to assumed termination(2)		$	2,506,000
Total value of severance and change in control		$	24,716,529

GRANTS OF PLAN BASED AWARDS IN 2006

The following table sets forth information regarding each grant of stock awards to each executive officer in the year ended December 31, 2006 as well as estimated future payouts related to the management incentive plan.

														Estimated Future												Estimated Future
														Payouts Under												Payouts Under
														Non-Equity Incentive												Equity Incentive
														Plan Awards1												Plan Awards
																																						All
																																						Other				All Other
										Number of																												Stock Awards:				Option Awards:
										Non-Equity																												Number of				Number of				Exercise or				Closing
										Incentive Plan																												Shares of Stock				Securities				Base Price				Price on
		Grant				Approval				Units Granted				Threshold				Target				Maximum				Threshold				Target								or Units				Underlying Options				of Option				Grant Date
Name		Date				Date				(#)				($)				($)				($)				(#)				(#)				Maximum (#)				(#)				(#)				Awards ($ / Sh)				($ / Sh)
Kenneth D. Tuchman			—				—				—				—				—				—				—				—				—				—				—				—				—
John R. Troka, Jr.2			2/15/06				2/15/06				—				—				—				—				—				—				—				10,000				10,000				12.75				12.75
			12/31/06				2/15/07				—				-0-				45,000				—				—				—				—				—				—				—				—
Dennis J. Lacey			—				—				—				—				—				—				—				—				—				—				—				—				—
Brian J. Delaney			12/31/06				2/15/07				—				-0-				300,000				600,000				—				—				—				—				—				—				—
Kamalesh Dwivedi			12/31/06				2/15/07				—				-0-				180,000				450,000				—				—				—				—				—				—				—
Greg Hopkins			12/31/06				2/15/07				—				-0-				275,000				550,000				—				—				—				—				—				—				—
John R. Simon			12/31/06				2/15/07				—				-0-				300,000				450,000				—				—				—				—				—				—				—

	1	Represents potential target and maximum compensation for 2006 as described in “Compensation Discussion and Analysis”. Amounts actually earned for 2006 are included in the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table.
	2	Mr. Troka was the only executive officer named herein to receive both an equity grant and non-equity incentive payment during 2006. Stock options awarded to Mr. Troka are not performance based and vest in equal installments of 25% per year beginning on the first anniversary of the grant date.

Review of All Components of Executive Compensation

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.

Benefits We provide benefit programs to executive officers and to other employees. The following table generally identifies such benefit plans and identifies those employees who are eligible to participate:

Benefit Plan		Executive Officers		Certain Managers		Full Time Employees
Medical/Dental/Vision		ü		ü		ü
Life and Disability Insurance (1)		ü		ü		ü
Accident Insurance (2)		ü		ü		ü
Basic Life and Accidental Death and Dismemberment (AD&D) (3)		ü		ü		ü
Management Incentive Plan (4)		ü		ü
Long Term Incentive Plan (5)		ü		ü
Equity Incentive Plans		ü		ü
Change in Control and Severance Plan		ü		ü
Deferred Compensation Plan (6)		ü		ü
Supplemental Early Retirement Plan		Not Offered		Not Offered		Not Offered
Employee Stock Ownership Plan		Not Offered		Not Offered		Not Offered
Defined Benefit Pension Plan		Not Offered		Not Offered		Not Offered

We believe perquisites for executive officers should be extremely limited in scope and value. As a result, TeleTech has historically given nominal perquisites. The following table generally illustrates the perquisites we do and do not provide and identifies those employees who may be eligible to receive them:

Types of Perquisites		Executive Officers		Certain Managers		Full Time Employees
Employee Discount with certain clients		ü		ü		ü
Financial Planning Allowance		Not Offered		Not Offered		Not Offered
Automobile Allowance (1)		ü		ü
Country Club Memberships		Not Offered		Not Offered		Not Offered
Personal Use of Company Aircraft(1)		ü
Security Services		Not Offered		Not Offered		Not Offered
Dwellings for Personal Use (2)		Not Offered		ü		Not Offered

Summary Compensation Table

The following table sets forth information with respect to compensation earned by Kenneth D. Tuchman, our principal executive officer, John R. Troka, Jr., our interim principal financial officer, Dennis J. Lacey who served as our chief financial officer through August 2006 and the next three most highly compensated executive officers who were serving as executive officers as of December 31, 2006 (collectively the “named executive officers”) as well as other executive officers as appropriate.

																										Change in
																										Pension
																										Value and
																						Non-Equity				Nonqualified
Name and																						Incentive				Deferred
Principal														Stock				Option				Plan				Compensation				All other
Position		Year				Salary ($)				Bonus1 ($)				Awards($)				Awards($)3				Compensation($)2				Earnings				Compensation($)4				Total ($)
Kenneth D. Tuchman (PEO)			2006				350,000				-0-				-0-				-0-				-0-				-0-				60,985				410,985
			2005				350,000				-0-				-0-				5,376,000				500,000				-0-				55,292				6,281,292
			2004				289,615				-0-				-0-				-0-				-0-				-0-				45,486				335,101
John R. Troka, Jr. (CFO)(5)			2006				180,000				-0-				-0-				62,600				121,000				-0-				190				363,790
			2005				180,000				-0-				-0-				-0-				6,500				-0-				182				186,682
			2004				178,462				7,000				-0-				112,600				26,800				-0-				4,777				329,639
Dennis J. Lacey (CFO)(5)			2006				226,579	6			-0-				-0-				-0-				-0-				-0-				1,582,139				1,808,718
			2005				300,000				-0-				-0-				-0-				300,000				-0-				12,579				612,579
			2004				312,482				-0-				-0-				430,500				300,000				-0-				4,715				1,047,697
Brian James Delaney (EVP Global Service Delivery)			2006				250,000				-0-				-0-				-0-				400,000				-0-				137,462				787,462
			2005				246,154				-0-				-0-				524,000				250,000				-0-				41,007				1,061,161
			2004				202,981				-0-				-0-				326,100				162,000				-0-				75				691,156
Kamalesh Dwivedi (EVP CIO)			2006				250,000				-0-				-0-				-0-				300,000				-0-				37,545				587,545
			2005				250,000				-0-				-0-				-0-				250,000				-0-				488,091				988,091
			2004				259,615				-0-				-0-				430,500				225,000				-0-				349,747				1,264,862
Gregory Hopkins (EVP Global Accounts)			2006				275,000				-0-				-0-				-0-				550,000				-0-				904,391				1,729,391
			2005				275,000				-0-				-0-				-0-				275,000				-0-				12,406				562,406
			2004				195,673	6			-0-				-0-				1,248,000				100,000				-0-				6,138				1,549,811
John R. Simon (EVP — Human Capital)(7)			2006				250,000				-0-				-0-				-0-				350,000				-0-				8,886				608,886
			2005				250,000				-0-				-0-				438,200				250,000				-0-				10,010				948,210
			2004				259,615				-0-				-0-				287,000				200,000				-0-				65,627				812,242

Prequisite Table

The following table sets forth the perquisites for the executive officers named herein as of December 31, 2006.

						Mr. Tuchman				Mr. Troka				Mr. Lacey				Mr. Delaney				Mr. Dwivedi				Mr. Hopkins				Mr. Simon
Personal Use of Company Aircraft			2006				19,991				—				—				—				—				1,265				—
			2005				14,773				—				1,877				—				—				—				—
			2004				7,704				—				—				—				—				—				—
Automobile Allowance			2006				35,372				—				—				—				—				—				—
			2005				34,855				—				—				—				—				—				—
			2004				37,071				—				—				—				—				—				—
Value Realized from exercise of Stock Options			2006				—				—				1,573,263				129,923				—				892,147				—
			2005				—				—				—				38,730				448,284				—				—
			2004				—				4,600				—				—				259,156				—				58,224
Relocation Allowance			2006				—				—				—				—				—				—				—
			2005				—				—				—				—				15,248				—				—
			2004				—				—				—				—				76,262				—				—
Sign on or Guaranteed Bonus			2006				—				—				—				—				—				—				—
			2005				—				—				—				—				—				—				—
			2004				—				—				—				—				—				—				—
Housing & Utilities			2006				—				—				—				—				—				—				—
			2005				—				—				—				—				—				—				—
			2004				—				—				—				—				—				—				—
Executive Health/Dental/Vision			2006				4,884				—				3,342				2,892				5,112				5,112				5,112
			2005				4.884				—				5,112				2,169				5,112				5,112				5,112
			2004				—				—				4,548				—				4,548				3,221				4,548
Group Term/Executive Life			2006				108				72				5,534				4,647				19,504				5,867				2,812
			2005				108				72				5,590				108				19,447				7,294				2,812
			2004				74				74				167				75				9,781				2,917				2,807
Deferred Death Benefit			2006				630				118				—				—				—				—				42
			2005				672				110				—				—				—				—				48
			2004				637				103				—				—				—				—				48
Miscellaneous & taxable fringe			2006				—				—				—				—				12,929				—				920
			2005				—				—				—				—				—				—				2,038
			2004				—				—				—				—				—				—				—
Total			2006				60,985				190				1,582,139				137,462				37,545				904,391				8,886
			2005				55,292				182				12,579				41,007				488,091				12,406				10,010
			2004				45,486				4,777				4,715				75				349,747				6,138				65,627

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2006

     The following table sets forth information concerning all unexercised stock options outstanding and unvested restricted stock awards for the executive officers named herein as of December 31, 2006.

Option Awards																						Stock Awards
																																		Equity
																																		Incentive
																														Equity				Plan
																														Incentive				Awards:
										Equity																				Plan				Market or
										Incentive																				Awards:				Payout
										Plan																Market				Number of				Value of
										Awards:												Number of				Value of				Unearned				Unearned
										Number of												Shares or				Shares or				Shares,				Shares,
		Number of				Number of				Securities												Units of				Units of				Units or				Units or
		Securities				Securities				Underlying												Stock				Stock				Other				Other
		Underlying				Underlying				Unexercised				Option								That				That Have				Rights				Rights
		Unexercised				Unexercised				Unearned				Exercise				Option				Have Not				Not				That Have				That Have
		Options				Options				Options				Price				Expiration				Vested				Vested				Not Vested				Not Vested
Name		(#)				(#)				(#)				($)				Date				(#)				($)				(#)				($)
		Exercisable				Unexercisable
Kenneth D. Tuchman			420,000				420,000				—				6.98				10/1/2011				—				—				—				—
			420,000				420,000				—				11.83				2/25/2012				—				—				—				—
			200,000				600,000				—				11.35				11/4/2015				—				—				—				—
John R. Troka, Jr.			35,000				35,000								13.10				1/14/2012				—				—				—				—
			7,500				7,500				—				11.63				2/29/2012				—				—				—				—
			2,000				1,000				—				5.01				9/13/2004				—				—				—				—
			10,000				10,000				—				8.36				6/23/2014				—				—				—				—
			-0-				10,000				—				12.75				2/15/2016				—				—				—				—
Dennis J. Lacey			—				—				—				—				—				—				—				—				—
Brian J. Delaney			3,000				3,000				—				8.86				12/2/2012				—				—				—				—
			-0-				750				—				5.01				3/3/2013				—				—				—				—
			-0-				18,000				—				7.78				6/7/2014				—				—				—				—
			-0-				15,000				—				8.36				6/23/2014				—				—				—				—
			25,000				75,000				—				8.59				9/9/2015				—				—				—				—
Kamalesh Dwivedi			42,300				50,000				—				4.09				8/4/2013				—				—				—				—
			18,750				37,500				—				8.57				9/7/2014				—				—				—				—
Greg Hopkins			-0-				150,000				—				6.24				4/12/2014				—				—				—				—
John Simon			15,000				15,000				—				12.62				10/21/2009				—				—				—				—
			6,000				6,000				—				30.87				3/30/2010				—				—				—				—
			35,000				35,000				—				11.63				2/29/2012				—				—				—				—
			16,000				4,000				—				6.25				9/30/2012				—				—				—				—
			25,000				25,000				—				8.57				9/7/2014				—				—				—				—
			17,500				52,500				—				10.58				10/25/2015				—				—				—				—

OPTION EXERCISES AND STOCK VESTED DURING 2006

The following table sets forth information concerning the value realized from the exercise of option and the vesting of restricted stock for the executive officers named herein for the year ended December 31, 2006.

		Option Awards								Stock Awards
		Number of Shares				Value Realized on				Number of Shares				Value Realized on
		Acquired on Exercise				Exercise				Acquired on Vesting				Vesting
Name		(#)				($)				(#)				($)
Kenneth Tuchman			—				—				—				—
John R. Troka, Jr.			—				—				—				—
Dennis J. Lacey			168,750				1,573,263				—				—
Brian J. Delaney			27,750				129,922				—				—
Kamalesh Dwivedi			—				—				—				—
Greg Hopkins			150,000				892,147				—				—
John Simon			—				—				—				—

Fiscal Year Nonqualified Deferred Compensation Table

 

The following table sets forth information regarding nonqualified deferred compensation for the executive officers named herein for the year ended December 31, 2006.

 

 

Employees may defer up to seventy five percent of their salary or bonus and/or commissions. Deferrals and investment earnings are tax deferred until withdrawn or paid. There are no penalties on any scheduled withdrawals. Nonscheduled withdrawals are not available except in the case of unforeseeable emergencies. Employees may specify among different deemed investment options. The investment crediting choices are not publicly traded mutual funds and are only available through variable insurance products.

 

With respect to previous reporting periods, Mr. Simon did not participate in the Company’s non-qualified deferred compensation plan in prior years and Mr. Troka was not a named executive officer in prior years. The Company noted in appropriate prior years that Mr. Tuchman deferred one hundred percent of his salary.

 

Messrs. Tuchman, Troka and Simon did not make any withdrawals during the past three fiscal years.

Compensation of Directors

Directors who are also employees of TeleTech 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 and 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 our 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 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 Stock 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.

As of December 31, 2006, our current independent directors (over the length of their service):

	•		had received in the aggregate the option to purchase 60,000 shares of common stock in connection with their annual retainer;
	•		had been granted in the aggregate options to purchase 240,000 shares of common stock at an average weighted exercise price of $9.18 per share;
	•		had converted in the aggregate 40,000 options into shares of common stock;
	•		had exercised in the aggregate options for 25,000 shares of common stock; and
	•		had been granted no shares of restricted stock.

DIRECTOR COMPENSATION
REFLECTING CALENDAR YEAR 2006 COMPENSATION

Name		Fees Earned or Paid				Option Awards				Total
		in Cash (1)				($)(2)				($)
		($)
William A. Linnenbringer (3)		$	74,000				100,350				174,350
Ruth C. Lipper (4)		$	64,000				100,350				164,350
Shrikant Mehta (5)		$	54,000				100,350				154,350
Shirley Young (6)		$	50,000				100,350				150,350

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 2006.

REPORT OF THE
COMPENSATION COMMITTEE

The compensation committee has reviewed and discussed the compensation discussion and analysis with management. Based on such review and discussions, the committee recommended to the board of directors, and the board has approved, the inclusion of the compensation discussion and analysis in the proxy statement.

SUBMITTED BY THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS

Shrikant Mehta, Chairman
Ruth Lipper

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The information presented below regarding beneficial ownership of TeleTech’s common stock is presented in accordance with the rules of the Securities and Exchange Commission, or 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 60 days through the exercise of any stock option or other right.

Security Ownership of Certain Beneficial Owners

The following table sets forth, as of April 4, 2007, information with respect to each director and named executive officer Kenneth D. Tuchman, our chairman and chief executive officer, is the only person who was known by TeleTech to be the beneficial owner of more than 5% of TeleTech’s common stock. We have calculated the percentage of beneficial ownership pursuant to Rule 13d-3(d) under the Securities Exchange Act of 1934, referred to as the Exchange Act.

		Number of Shares
Name and Address of Beneficial Owner		Beneficially Owned				Percent of Class
Kenneth D. Tuchman 9197 S. Peoria Street Englewood, Colorado 80112			31,727,126	(1)			42.0	%

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 4, 2007 and by all directors and executive officers as a group.

		Total Number of				Shares Subject to
		Shares Beneficially				Options ***
Name		Owned **				(Included in Total)				Percent of Class
Kenneth D. Tuchman			31,727,126	(1)			1,040,000				42.0	%
James E. Barlett			887,000	(2)			687,000				1.2	%
William A. Linnenbringer			80,000				70,000				*
Ruth C. Lipper			110,000				85,000				*
Shrikant C. Mehta			100,000				40,000				*
Shirley Young			45,000				45,000				*
Kamalesh Dwivedi			61,050				61,050				*
Dennis J. Lacey			—				—				—
John R. Troka, Jr.			58,000				58,000				*
John Simon			114,500				114,500				*
Brian Delaney			28,750				28,750				*
Greg Hopkins			75,000				75,000				*
All directors and executive officers named herein as a group (12 persons)			33,286,426				2,304,300				43.2	%

Equity Compensation Plan Information

The following table sets forth, as of December 31, 2006, 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

7,034,638

$

11.28

5,073,129

Equity compensation plans not approved by security holders.

-0-

-0-

-0-

Total

7,034,638

$

11.28

5,073,129

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have entered into agreements pursuant to which Avion, LLC and AirMax, LLC 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, our chief executive officer and chairman of the board, has a direct beneficial ownership interest equal to 100% in Avion. During 2006, we paid an aggregate of $1,034,483 to Avion for services provided to TeleTech. Mr. Tuchman also purchases services from AirMax from time to time and provides short-term loans to AirMax. During 2006, the Company paid to AirMax an aggregate of $1,397,302 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 2006, we utilized the services of Salesforce.com. Shirley Young, one of our directors, is also a director of Salesforce.com. During 2006, we paid approximately $372,619 to Salesforce.com. Ms. Young’s only remuneration from Salesforce.com consists of board fees for services as a director of Salesforce.com.

TeleTech believes that all transactions disclosed above have been, and TeleTech’s 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 arm’s length transactions with unaffiliated third parties.

All related party transactions are reviewed annually by the audit committee and are compared to other vendors’ competitive bids to ensure that the terms with such related parties are fair and equitable. Upon approval, the audit committee submits their recommendation to the full board of directors for review and approval. All related party transactions named herein have been approved by the audit committee and board of directors and deemed to be fair and equitable.

Director Independence

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 were present.

ITEM 14. PRINCIPAL ACCOUNTANTS FEES AND SERVICES

INDEPENDENT AUDIT FEES FOR 2006

Our registered public accounting firm for the calendar years ended December 31, 2006 and 2005 was Ernst & Young LLP. Services provided to us by E&Y for each of the fiscal years are described below.

		2005				2006
Audit Fees		$	1,778,602			$	1,893,652
Audit Related Fees			303,239				316,022
Tax Fees			130,485				62,655
All Other Fees			-0-				-0-
Total		$	2,212,326			$	2,272,329

For the fiscal years ended December 31, 2005 and December 31, 2006, we were billed by Ernst & Young LLP aggregate fees as discussed below.

	•		Audit Fees: Fees for audit services totaled $1,893,652 in 2006 and $1,778,602 in 2005, including fees associated with the annual audit, the reviews of the quarterly reports on form 10-Q and statutory audits required internationally.
	•		Audit-Related Fees: Fees for audit-related services totaled approximately $316,022 in 2006 and approximately $303,239 in 2005. Audit-related services principally included accounting consultations, benefit plan audits, information technology audits and payroll audits.
	•		Tax Fees: Fees for tax services, including tax compliance, tax advice and tax planning totaled approximately $62,655 in 2006 and approximately $130,485 in 2005.
	•		All Other Fees. There were no other fees for other services not included above.

The audit committee has considered whether the independent auditors’ provision of non-audit services is compatible with the auditors’ independence and determined that it is compatible. All 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.

Independent Registered Public Accounting Firm

 

On May 7, 2007, the Chairman of the Audit Committee of the Board of Directors (the “Audit Committee”) of TeleTech Holdings, Inc. (the “Company”) was notified by Ernst & Young LLP (“Ernst & Young”) that it is declining to stand for re-election as the Company’s independent registered public accounting firm for the year ending December 31, 2007. Ernst & Young will perform the procedures specified by the Public Company Accounting Oversight Board (United States) for a review of the interim financial information as described in AU 722, Interim Financial Information on the unaudited consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007. Ernst & Young completed its review on May 9, 2007.

 

During the two years ended December 31, 2006 and December 31, 2005 and the quarter ended March 31, 2007 and for the period through May 9, 2007, there were no disagreements between the Company and Ernst & Young on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure that, if not resolved to Ernst & Young’s satisfaction, would have caused it to make reference to the matter in connection with its report on the Company’s consolidated financial statements for the relevant year.

 

Ernst & Young’s audit reports on the Company’s consolidated financial statements for the fiscal years ended December 31, 2005 and December 31, 2006 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.

 

Ernst & Young’s report on the December 31, 2006 financial statements included a reference to the adoption of Statement of Financial Accounting Standards No. 123^® effective January 1, 2006.

 

On May 7, 2007, the Audit Committee of the Board of Directors of the Company, after reviewing competitive proposals from several independent registered public accounting firms during the first quarter of 2007 as a part of its periodic review and corporate governance practices, determined to engage PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm beginning May 9, 2007.

 

During the two years ended December 31, 2005 and December 31, 2006, the quarter ended March 31, 2007 and through May 9, 2007, neither the Company, nor anyone on its behalf, consulted with PwC with respect to either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and no written report or oral advice was provided by PwC to the Company that PwC concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue or (ii) any matter that was the subject of either a disagreement as defined in Item 3.04 (a)(1)(iv) of Regulation S-K or a reportable event as described in Item 3.04(a)(1)(v) of Regulation S-K.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services

In accordance with the audit committee’s charter, the audit committee has established a policy to pre-approve audit and permissible non-audit services provided by the independent registered public accounting firm as follows:

Any and all services to be provided by TeleTech’s external audit firm must be approved by the audit committee. Any director, officer or employee of the company proposing to engage the services of TeleTech’s external audit firm for any reason (regardless of scope of the project or associated costs) must submit a request for approval, in writing, to TeleTech’s 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 will 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 audit committee 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.

31.1*		Rule 13a-14(a) Certification of CEO of TeleTech
31.2*		Rule 13a-14(a) Certification of CFO of TeleTech
32*		Written Statement of Chief Executive Officer and Interim Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)

PART IV

ITEM 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

The following documents are included as part of this Amendment No. 1 to the Annual Report:

(3)

Exhibits

     The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as a part of this Amendment No. 1 to the Annual Report.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned; thereunto duly authorized on May 15, 2007.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on May 15, 2007, by the following persons on behalf of the registrant and in the capacities indicated:

Signature		Title
/s/ Kenneth D. Tuchman   Kenneth D. Tuchman		PRINCIPAL EXECUTIVE OFFICER Chief Executive Officer and Chairman of the Board
/s/ John R. Troka, Jr.   John R. Troka, Jr.		PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER Vice President Finance — Global Operations and Interim Chief Financial Officer
/s/ James E. Barlett   James E. Barlett		DIRECTOR
/s/ William A. Linnenbringer   William A. Linnenbringer		DIRECTOR
/s/ Ruth C. Lipper   Ruth C. Lipper		DIRECTOR
/s/ Shrikant Mehta   Shrikant Mehta		DIRECTOR
/s/ Shirley Young   Shirley Young		DIRECTOR

EXHIBIT INDEX

Exhibit Number		Description of Document
31.1		Certification of Chief Executive Officer as required by Rule 13a-14(a) of the Securities and Exchange Act of 1934, as amended
31.2		Certification of Chief Financial Officer as required by Rule 13a-14(a) of the Securities and Exchange Act of 1934, as amended
32		Written Statement of Chief Executive Officer and Interim Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)