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2002 Performance Incentive Plan

This is an actual contract by ACT Teleconferencing.
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Sectors: Telecommunications
Effective Date: January 01, 2002
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EXHIBIT 10.46

This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.


2002 PERFORMANCE INCENTIVE PLAN

1. Scope of Plan

The 2002 Performance Incentive Plan ("Project Peach") is offered to all employees of ACT Teleconferencing, Inc. and its affiliates ("ACT"). It is designed firstly to reduce demands on our cash. Although we believe that ACT is on an upswing, it will take awhile for the new volumes that we expect to achieve to begin to flow in. In the meantime, we urgently need to improve our cost management.

2. Elements of Plan

2.1 Salary Reduction; Stock Grant. In exchange for a voluntary, irrevocable compensation reduction in an amount to be chosen by each participating employee (choice is from 4% to 20%) effective October 1, 2002 for a 15-month period, we will issue shares of ACT common stock, valued at $1.41 per share (the closing market price of our common stock on September 30, 2002), in an amount equal to 30% of the total dollar amount of the employee's elected salary reduction. This stock will be issued in equal amounts at the end of each of the five quarters through December 31, 2003, though the Board (or the Compensation Committee thereof) may cause ACT to issue all stock not yet issued hereunder on any date prior to December 31, 2003, in the sole discretion of the Board or the Compensation Committee. In accordance with U.S. GAAP, we will recognize an expense for the stock compensation over the 15-month period of each participant's salary reduction.


2.2 Stock Options. In addition, for each share of common stock to which a participant is entitled under the calculation stated above, ACT will also grant such participant one stock option under our Stock Option Plan of 2000, as amended (the "Option Plan"), each of which will be immediately vested. The exercise price of the options will be $1.41.

2.3 Cash Bonus. Participants will be entitled to receive a lump-sum cash bonus (the "Project Peach Bonus") in an amount to be determined based on ACT's cumulative EBITDA (calculated as described below) for the 15 months from October 1, 2002 to December 31, 2003. The amount of the Project Peach Bonus will be calculated as follows:


Amount of EBITDA
10/1/02 to 12/31/01

Project Peach Bonus

I.

Less than $4 million

None

II.

$4,000,000 to $4,999,999

A total cash bonus pool of $100,000 will be established, to be shared equally by all participants.

III.

$5,000,000 to $5,999,999

A total cash bonus pool of $200,000 will be established, to be shared equally by all participants.

IV.

$6,000,000

Each participant will receive a bonus equal to 100% of the amount of the participant's total salary reduction, in dollars, over the 15 months from October 1, 2002 to December 31, 2003 (the "Salary Reduction"), adjusted as described below.

V.

$8,000,000

Each participant will receive a bonus equal to double the participant's Salary Reduction, adjusted as described below.

VI.

$9,000,000

Each participant will receive a bonus equal to triple the participant's Salary Reduction, adjusted as described below.

VII.

$10,000,000 or higher

Each participant will receive a bonus equal to quadruple the participant's Salary Reduction.


The bonus amounts determined in IV. through VI. above will be adjusted upwards, on a proportionate basis, to reflect EBITDA achievement in excess of the base line for each such bonus level. The bonus amounts determined in IV. through VII. above will include the value of the stock received by each participant in accordance with Section 2.1, at a fixed valuation of $1.41/share.


The following is an example for an individual earning US$40,000 per annum (all amounts in US Dollars):


Elected Salary Reduction

Percentage %

Monthly Salary Reduction

30%
Stock
Value*

Audited Ebitda Company Achievement**

Bonus
Principle

Total Cash
Bonus
Payment***

6%

$200

$900

$4,000,000

None


6%

$200

$900

$5,000,000

$200K Pool

$200K/# of participants

6%

$200

$900

$6,000,000

100%

$ 2,100

6%

$200

$900

$6,500,000

100% (adjusted)

$ 2,850

6%

$200

$900

$7,000,000

100% (adjusted)

$ 3,600

6%

$200

$900

$7,500,000

100% (adjusted)

$ 4,350

6%

$200

$900

$8,000,000

Double

$ 5,100

Double
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