<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
SYNTELLECT 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):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
SYNTELLECT INC. LOGO
1000 Holcomb Woods Parkway, Suite 410A
Roswell, Georgia 30076
- --------------------------------------------------------------------------------
NOTICE AND PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 1997
- --------------------------------------------------------------------------------
To the Stockholders:
The 1997 Annual Meeting of Stockholders (the "Annual Meeting") of
Syntellect Inc., a Delaware corporation (the "Company"), will be held on
Tuesday, May 20, 1997, at 10:00 a.m., Atlanta, Georgia time, at the Cumberland
One Building, 3065 Cumberland Circle, Atlanta, Georgia 30339, for the following
purposes:
1. To elect one director to the Board of Directors to serve for a
three-year term; and
2. To approve an amendment to the Company's Long-Term Incentive Plan to
increase the number of shares of Syntellect common stock authorized for
issuance thereunder from 750,000 to 1,500,000.
3. To transact such other business as may properly come before the Annual
Meeting.
Each outstanding share of the Company's Common Stock entitles the holder of
record at the close of business on March 21, 1997, to vote at the Annual Meeting
or any adjournment thereof. Shares can be voted at the Annual Meeting only if
the holder is present or represented by proxy. A copy of the Company's 1996
Annual Report to Stockholders, which includes certified financial statements, is
enclosed. Management cordially invites you to attend the Annual Meeting.
By Order of the Board of Directors
/s/ Neal L. Miller
Neal L. Miller
Secretary
Atlanta, Georgia
April 9, 1997
IMPORTANT
STOCKHOLDERS ARE EARNESTLY REQUESTED TO SIGN, DATE, AND MAIL THE ENCLOSED
PROXY. A POSTAGE-PAID ENVELOPE IS PROVIDED FOR MAILING IN THE UNITED STATES.
<PAGE> 3
SYNTELLECT INC. LOGO
1000 Holcomb Woods Parkway, Suite 410A
Roswell, Georgia 30076
- --------------------------------------------------------------------------------
PROXY STATEMENT
- --------------------------------------------------------------------------------
This Proxy Statement is furnished to the stockholders of Syntellect Inc., a
Delaware corporation ("Syntellect" or the "Company"), in connection with the
solicitation of proxies on behalf of the Board of Directors of the Company for
use in voting at the Annual Meeting of Stockholders to be held on Tuesday, May
20, 1997, at 10:00 a.m., Atlanta, Georgia time (the "Annual Meeting"), and at
any adjournment or adjournments thereof. The proxy materials were mailed on or
about April 9, 1997, to stockholders of record at the close of business on March
21, 1997 (the "Record Date"). The Company had 13,486,175 shares of common stock
outstanding, par value $.01 per share ("Common Stock"), as of the close of
business on the Record Date. Only stockholders of record on the Record Date will
be entitled to vote at the Annual meeting. The holders of a majority of the
voting power of the issued and outstanding Common Stock entitled to vote,
present in person or represented by proxy, shall constitute a quorum at the
Annual Meeting.
Each stockholder is entitled to one vote per share for the election of
directors and on each proposal, as well as on all other matters that may be
properly considered at the Annual meeting. If the accompanying proxy is signed
and returned, the shares represented thereby will be voted in accordance with
any directions on the proxy. A person giving the enclosed proxy has the power to
revoke it at any time before it is exercised by either: (i) attending the Annual
Meeting and voting in person; (ii) duly executing and delivering a proxy bearing
a later date; or (iii) sending written notice of revocation to the Secretary of
the Company at 1000 Holcomb Woods Parkway, Suite 410A, Roswell, Georgia 30076.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the inspectors of election appointed for the meeting and will determine whether
or not a quorum is present. The inspectors of election will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum, but as unvoted for purposes of determining the approval of
any matter submitted to the stockholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
The Company will bear the cost of the solicitation of proxies, including
the charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of the outstanding Common Stock of
the Company. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone, or facsimile. The Company has retained Corporate
Investor Communications, Inc., at an estimated cost of $3,000, plus
reimbursement of expenses, to assist in soliciting proxies from brokers,
nominees, institutions and individuals. Arrangements will also be made with
custodians, nominees, and fiduciaries, and the Company will reimburse such
custodians, nominees and fiduciaries for reasonable expenses incurred in
connection herewith.
As of the date of this Proxy Statement, the Company knows of no matter to
be brought before the meeting other than those referred to in the accompanying
notice of annual meeting. If, however, any other matters properly come before
the meeting, it is intended that proxies in the accompanying form will be voted
thereon in accordance with the judgment of the persons voting such proxies.
1
<PAGE> 4
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors of the Company (the "Board of Directors") consists
of six members and is divided into three classes. Each director is elected for
three years and the terms are staggered so that only one class is elected by the
stockholders annually. The present term of Mr. Jack R. Kelly, Jr. will expire at
the Annual Meeting. Mr. Kelly has been nominated for re-election as a director
of the Company and, unless otherwise noted thereon, the shares represented by
the enclosed proxy will be voted for the election of Mr. Kelly as director of
the Company. If either Mr. Kelly becomes unavailable for any reason, or if a
vacancy should occur before election (which events are not anticipated), the
shares represented by the enclosed proxy may be voted for such other person as
may be determined by the holders of such proxy. The nominee receiving the
highest number of votes cast at the Annual Meeting will be elected and serve as
a director for three years or until his or her successor is duly elected and
qualified. Mr. Patrick J. Welsh resigned from the Board effective November 25,
1996. The Board has fixed the number of directors at six and, therefore, has not
nominated a person to fill Mr. Welsh's vacated seat on the Board.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
Information concerning the names, ages, terms, positions with the Company,
and business experience of the Company's current directors is set forth below:
<TABLE>
<CAPTION>
TERM
NAME AGE POSITION EXPIRES
- ------------------------------------ --- ------------------------------------ -------
<S> <C> <C> <C>
J. Lawrence Bradner................. 45 Chairman of the Board and CEO 1999
Jack R. Kelly, Jr.(2)............... 62 Director 1997
Steve G. Nussrallah................. 46 Director, President and COO 1998
Daniel D. Ross(1)(2)................ 56 Director 1998
William P. Conlin(1)................ 63 Director 1999
A. LeRoy Ellison(2)................. 60 Director 1999
</TABLE>
- ---------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
J. Lawrence Bradner became the Company's Chairman and Chief Executive
Officer upon completion of the merger with Pinnacle Investment Associates Inc.
("Pinnacle") on March 14, 1996. He had served as Chairman and Chief Executive
Officer of Pinnacle and its wholly owned subsidiary, Telecorp Systems, Inc.
since their formation in 1991. From 1977 to 1990, Mr. Bradner was employed by
Scientific-Atlanta, Inc. ("Scientific-Atlanta"), a leading provider of satellite
and other telecommunications products based in Atlanta, Georgia. Mr. Bradner
served as President of the Broadband Communications Business Division of
Scientific-Atlanta and as Corporate Vice President from 1987 to 1990. Mr.
Bradner holds a Bachelors Degree, with honors, in Industrial and Systems
Engineering from the Georgia Institute of Technology and a Master of Business
Administration degree from Harvard Business School.
Jack R. Kelly, Jr. was named a director of the Company upon the completion
of the merger with Pinnacle on March 14, 1996. Mr. Kelly had served as a
director of Pinnacle since its formation in 1991. Since 1983, Mr. Kelly has been
a partner of the general partner of Noro-Moseley Partners, a venture capital
firm located in Atlanta, Georgia. Prior to that, Mr. Kelly served as Chief
Operating Officer of Scientific-Atlanta. Mr. Kelly holds a Bachelors Degree in
Physics from Georgia State University. Since 1995, Mr. Kelly has served as a
director and a member of the Compensation Committee of Novoste Corporation, a
high-tech developer of medical devices used in cardiology and other interventive
surgery. Mr. Kelly previously served
2
<PAGE> 5
as a director of Minnesota Power, a diversified utility company serving
industrial and residential customers in Northern Minnesota.
Steve G. Nussrallah became the Company's President and Chief Operating
Officer upon completion of the merger with Pinnacle on March 14, 1996. He had
served as President of Pinnacle and Telecorp since their formation in 1991. From
1984 to 1990, Mr. Nussrallah was employed by Scientific-Atlanta. From 1988 to
1990, Mr. Nussrallah served as Vice President and General Manager of the
Subscriber Business Unit, Scientific-Atlanta's largest single business. Mr.
Nussrallah holds a Bachelors Degree, with honors, in Electrical Engineering from
the University of Cincinnati and a Masters Degree in Electrical Engineering from
the University of Michigan.
Daniel D. Ross served as Chairman of the Board of Directors of the Company
from October 1995 to March 1996, and has served as a director of the Company
since 1984. Mr. Ross is Chairman of the Company's Audit and Compensation
Committees. Mr. Ross is a venture capitalist and has served as a general partner
of Advanced Technology Development Fund, Advanced Technology Development Fund II
and various related venture capital partnerships since July 1984. Mr. Ross also
served as a director of Medaphis Corporation, a health care computer billing and
accounting service company, from 1985 through 1995, and currently serves as a
director of two privately held companies in the Advanced Technology Development
Fund Portfolio.
William P. Conlin has served as a director of the Company since February
1995. Mr. Conlin serves as a private consultant to several high-tech companies
in the Southern California area, including Odetics, Inc., Airborne Systems,
Inc., and Facilities Management, Inc. Mr. Conlin served as President and Chief
Executive Officer of CalComp, Inc., an Anaheim, California computer graphics and
distribution company, from 1983 to 1993. From 1960 to 1983, Mr. Conlin served in
a variety of management positions at Burroughs Corp. (now Unisys). Mr. Conlin
currently serves as Chairman of the Board of Directors of Structural Dynamics
Research Corp., and is on the advisory boards of the Graduate School of
Management and the School of Engineering at the University of California,
Irvine.
A. LeRoy Ellison has served as a director of the Company since 1985. Mr.
Ellison has served as Chairman of the Board of Viasoft, Inc., a software
company, since 1984, and as Viasoft's President and Chief Executive Officer from
October 1990 to February 1994. Mr. Ellison has also served as President of
AZTECH Associates, a management consulting and investment management
corporation, since 1983. From 1969 until 1983, Mr. Ellison served as President
of Capex Corporation, a software company. Mr. Ellison has served as director of
Republic National Bank of Arizona and Sherpa Corporation since 1992.
3
<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth the number and percentage of outstanding
shares of Common Stock beneficially owned by (a) each director of Syntellect,
(b) the Named Executive Officers of the Company, (c) each person known by
Syntellect to beneficially own more than 5% of such stock; and (d) all directors
and Named Executive Officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) OWNED
--------------------------------------------------------------- ------------ -----
<S> <C> <C>
Jack R. Kelly, Jr.(2).......................................... 1,277,600 9.5 %
Noro-Moseley Partners II, L.P.(3).............................. 1,225,000 9.1 %
Michael D. Kaufman(4).......................................... 1,170,000 8.7 %
Cox Communications, Inc.(5).................................... 1,150,000 8.5 %
MK GVD Fund(6)................................................. 1,070,000 7.9 %
J. Lawrence Bradner(7)......................................... 819,553 5.9 %
Steve G. Nussrallah(8)......................................... 816,953 5.9 %
Daniel D. Ross(9)(10).......................................... 457,605 3.4 %
W. Scott Coleman(11)........................................... 74,328 *
A. LeRoy Ellison(10)........................................... 49,543 *
David C. Phillips(12).......................................... 45,976 *
Neal L. Miller(13)............................................. 8,700 *
William P. Conlin(14).......................................... 6,320 *
All Directors and Named Executive Officers as a group (9
persons)(15)................................................. 3,556,578 25.0 %
</TABLE>
- ---------------
* Represents less than 1% of the outstanding Common Stock.
(1) This information regarding security ownership of Common Stock is as of
March 14, 1997, except for the security ownership information regarding
Michael D. Kaufman, which is derived from Amendment No. 1 to a Schedule 13D
filed by Mr. Kaufman with the Commission on February 14, 1997; Cox
Communications, Inc. ("Cox"), which is derived from a Schedule 13D filed by
Cox with the Commission on March 25, 1996; and MK GVD Fund, which is
derived from Amendment No. 1 to a Schedule 13D filed by MK GVD Fund with
the Commission on February 14, 1997. The percent owned calculations are
based on the number of shares of Syntellect Common Stock outstanding on
March 14, 1997, or within 60 days thereafter.
(2) The total for Mr. Kelly includes 1,225,000 shares held by Noro-Moseley
Partners II, L.P. ("Noro-Moseley"). Mr. Kelly is a general partner of
Moseley and Company II, the general partner of Noro-Moseley. Mr. Kelly
disclaims beneficial ownership of these shares; however, Mr. Kelly shares
the power to vote and control the disposition of such shares and,
therefore, may be deemed to be a beneficial owner thereof. Mr. Kelly's
total also includes 2,600 shares subject to unexercised options which were
exercisable on March 14, 1997, or within 60 days thereafter.
(3) Noro-Moseley is an Atlanta-based venture capital firm. The address of
Noro-Moseley is c/o Noro-Moseley Partners, 4200 Northside Parkway N.W.,
Building 9, Atlanta, Georgia 30327.
(4) The total for Mr. Kaufman includes 1,070,000 shares held by MK GVD Fund.
Mr. Kaufman is a general partner of MK GVD Management, the general partner
of MK GVD Fund. Mr. Kaufman disclaims beneficial ownership of these shares;
however, Mr. Kaufman shares the power to vote and control the disposition
of such shares and, therefore, may be deemed to be a beneficial owner
thereof.
4
<PAGE> 7
(5) Cox is a diversified media and broadband communications company. The
address of Cox is 1400 Lake Hearn Drive, Atlanta, Georgia 30319.
(6) MK GVD Fund is a California-based venture capital firm. The address of MK
GVD Fund is 2471 E. Bayshore Road, Suite 520, Palo Alto, California 94303.
(7) The total for Mr. Bradner includes 312,751 shares subject to unexercised
options which were exercisable on March 14, 1997, or within 60 days
thereafter.
(8) The total for Mr. Nussrallah includes 310,151 shares subject to unexercised
options which were exercisable on March 14, 1997, or within 60 days
thereafter.
(9) The total for Mr. Ross includes 349,080 shares held by Advanced Technology
Development Fund, of which Mr. Ross is a general partner, and 86,670 shares
held by Advanced Technology Development Fund II, of which Mr. Ross is a
general partner. Mr. Ross disclaims beneficial ownership of these shares;
however, Mr. Ross shares the power to vote and control the disposition of
such shares and, therefore, may be deemed to be a beneficial owner thereof.
(10) The totals for Messrs. Ross and Ellison each include 7,420 shares subject
to unexercised options which were exercisable on March 14, 1997, or within
60 days thereafter.
(11) The total for Mr. Coleman includes 60,000 shares subject to unexercised
options which were exercisable on March 14, 1997, or within 60 days
thereafter.
(12) The total for Mr. Phillips includes 20,862 shares subject to unexercised
options which were exercisable on March 14, 1997, or within 60 days
thereafter.
(13) The total for Mr. Miller includes 8,000 shares subject to unexercised
options which were exercisable on March 14, 1997, or within 60 days
thereafter.
(14) The total for Mr. Conlin includes 6,320 shares subject to unexercised
options which were exercisable on March 14, 1997, or within 60 days
thereafter.
(15) The total for all Directors and Named Executive Officers as a group
includes 735,524 shares subject to unexercised options which were
exercisable on March 14, 1997, or within 60 days thereafter.
BOARD OF DIRECTORS' MEETINGS, COMPENSATION, AND COMMITTEES
During the fiscal year ended December 31, 1996, the Company's Board of
Directors met on five occasions. Each of the directors attended 75% or more of
the regular Board and applicable Committee meetings except for Patrick J. Welsh
who resigned from the Board of Directors on November 25, 1996 to pursue other
interests.
Directors who are not officers or employees of the Company are compensated
$1,500 for attendance at regular Board of Directors meetings, $200 for
participation in telephonic Board of Directors meetings, and $200 for attendance
at, or participation by telephone in, meetings of Board of Directors committees
of which they are members. In addition, nonemployee directors also receive an
annual retainer of $5,000 in return for their service to the Company.
Nonemployee directors are reimbursed for reasonable out-of-pocket expenses
incurred in connection with their attendance at each meeting of the Board of
Directors. Pursuant to the Company's Nonemployee Director Stock Plan,
nonemployee directors are eligible to receive (i) a one-time grant of options to
purchase 10,000 shares of Common Stock on the third business day after the
nonemployee director is first elected or appointed to the Board of Directors and
(ii) an annual grant of options to purchase 2,000 shares of Common Stock on each
June 1 through and including June 1, 1998. A nonemployee director must be a
member of the Board of Directors on the relevant June 1 in order to receive the
annual grant of options for that year.
5
<PAGE> 8
The Board of Directors maintains a standing Compensation Committee and a
standing Audit Committee. The Compensation Committee, which met one time during
fiscal year 1996, reviews all aspects of compensation of executive officers of
the Company and approves or makes recommendations on such matters to the full
Board of Directors. The Audit Committee, which met two times during fiscal year
1996, is primarily concerned with the effectiveness of the audits of the Company
by its internal audit staff and by the independent auditors. Its
responsibilities include recommending the selection of independent auditors,
reviewing the organization and scope of the Company's internal system of audit
and controls, and evaluating the Company's financial reporting activities and
the accounting standards and principles followed. The Company does not maintain
a standing nominating committee or other committee performing similar functions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers, directors and persons who own
more than 10% of the Company's Common Stock to file certain reports with respect
to each such persons' beneficial ownership of the Company's Common Stock. In
addition, Item 405 of Regulation S-K requires the Company to identify in its
proxy statement each reporting person who failed to file, on a timely basis,
reports required by Section 16(a) of the Exchange Act during the most recent
fiscal year or the prior fiscal year. Based on the information supplied to the
Company, the Company believes the only matters to be reported here concern the
granting of director options in February and June 1995 to William P. Conlin, and
in June 1995 to A. LeRoy Ellison and Daniel D. Ross. An Annual Statement of
Changes of Beneficial Ownership on Form 5 was not filed in a timely manner for
any of these grants. The grants were properly disclosed in the Company's Proxy
Statement for the 1996 Annual Meeting of Stockholders, and the directors have
subsequently reported the grants to the Commission in their 1996 Form 5 filing.
RECENT DEVELOPMENTS
On March 14, 1996, Syntellect completed its acquisition of Pinnacle
Investment Associates Inc. in a transaction that was accounted for as a pooling
of interests. Pursuant to the terms of the merger, the Company issued 4,685,838
shares of Common Stock to the shareholders of Pinnacle and assumed options to
acquire Pinnacle common stock which, following the merger, were converted into
options to acquire up to 740,848 shares of the Company's Common Stock at a
weighted average exercise price of $1.04 per share. Pinnacle owns all of the
outstanding capital stock of Telecorp Systems, Inc., a developer and provider of
inbound and outbound call center systems and services primarily for the cable
television, newspaper and health care industries.
The merger provided Syntellect access to a new management team with
substantial experience in the voice processing industry. Pinnacle's Chairman and
Chief Executive Officer, J. Lawrence Bradner, and President, Steve G.
Nussrallah, were appointed to the positions of Chairman and Chief Executive
Officer and President and Chief Operating Officer, respectively, of the Company
upon consummation of the merger. David C. Phillips, Pinnacle's Executive Vice
President-Finance and Operations, assumed the position of Corporate Vice
President-Operations upon the consummation of the merger. In addition, Jack R.
Kelly, Jr., a prior Pinnacle director, was elected to serve as a director of
Syntellect in accordance with the terms of the merger.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The table below sets forth information concerning the annual and long-term
compensation for services rendered in all capacities to the Company during the
fiscal years ended December 31, 1996, 1995, and 1994, of those persons who were:
(i) the Chief Executive Officer during the fiscal year ended December 31, 1996;
and (ii) the other four most highly compensated executive officers of the
Company as of December 31, 1996 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
------------------------------------- COMPENSATION
------------
AWARDS SECURITIES
----------------- OTHER ANNUAL UNDERLYING ALL OTHER
SALARY BONUS COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(1) (#)(2) ($)(3)
- ----------------------------------- ---- ------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
J. Lawrence Bradner(4)............. 1996 198,853 63,000(5) 0 115,000 3,707(6)
Chairman of the Board and 1995 -- -- -- -- --
Chief Executive Officer 1994 -- -- -- -- --
Steve G. Nussrallah(7)............. 1996 166,847 52,500(5) 0 105,000 5,798(8)
President and 1995 -- -- -- -- --
Chief Operating Officer 1994 -- -- -- -- --
Neal L. Miller(9).................. 1996 129,859 18,750(5) 0 0 343
Corporate Vice President, 1995 6,121 0 0 25,000 19
Chief Financial Officer, 1994 -- -- -- -- --
Secretary and Treasurer
W. Scott Coleman(10)............... 1996 152,394 101,719(11) 0 20,000 388
Senior Vice President and 1995 132,162 33,500 0 60,000 482
General Manager, Call Center 1994 116,667 36,000 0 31,000 462
Solutions
David C. Phillips(12).............. 1996 97,110 18,750(5) 0 15,000 3,055(13)
Corporate Vice President of 1995 -- -- -- -- --
Operations 1994 -- -- -- -- --
</TABLE>
- ---------------
(1) Other annual compensation for the periods presented was less than 10% of
the respective executive officer's total annual salary and bonus.
(2) The amounts shown in this column represent outstanding stock options
granted pursuant to Syntellect's Long-Term Incentive Plan and Restated
Stock Option Plan. The amount shown in 1994 for Mr. Coleman includes 6,000
in previously granted options that were canceled and reissued during 1994.
(3) The amounts shown in this column for Messrs. Miller and Coleman represent
life insurance premiums paid by the Company on their behalf.
(4) Mr. Bradner joined the Company and became its Chairman and Chief Executive
Officer effective March 14, 1996. Under the terms of his employment
agreement, Mr. Bradner's salary for the fiscal year ended December 31, 1996
was based on an annual salary of $240,000. See "Recent Developments" and
"Employment Agreements".
(5) The 1996 bonus amounts shown for Messrs. Bradner, Nussrallah, Miller and
Phillips represent bonuses earned in 1996 that were not paid until 1997.
(6) The amount shown includes contributions made by the Company during 1996 on
behalf of Mr. Bradner to the Pinnacle 401(k) Plan of $2,852 and life
insurance premiums paid on Mr. Bradner's behalf of $855.
(7) Mr. Nussrallah joined the Company and became its President and Chief
Operating Officer effective March 14, 1996. Under the terms of his
employment agreement, Mr. Nussrallah's salary for the fiscal year ended
December 31, 1996 was based on an annual salary of $200,000. See "Recent
Developments" and "Employment Agreements."
(8) The amount shown includes contributions made by the Company during 1996 on
behalf of Mr. Nussrallah to the Pinnacle 401(k) Plan of $3,680 and life
insurance premiums paid on Mr. Nussrallah's behalf of $2,118.
7
<PAGE> 10
(9) Mr. Miller joined the Company and became its Corporate Vice President,
Chief Financial Officer, Secretary and Treasurer in December 1995. Mr.
Miller's salary for the fiscal year ended December 31, 1995 was based on an
annualized salary of $125,000.
(10) Mr. Coleman joined the Company and became its Vice President of Product
Development in February 1993. Mr. Coleman served in the Office of the Chief
Executive Officer from October 1995 to March 1996, and was promoted to
Senior Vice President and General Manager, Call Center Systems in March
1996.
(11) The 1996 bonus amount for Mr. Coleman includes a bonus of $26,719 for 1996
that was not paid until 1997, and a $75,000 stay-in-place bonus that was
contingent on Mr. Coleman remaining with Syntellect through the sixth month
anniversary of the Company's acquisition of Pinnacle which was effective
March 14, 1996.
(12) Mr. Phillips joined the Company and became its Corporate Vice President of
Operations effective March 14, 1996. Mr. Phillip's salary for the fiscal
year ended December 31, 1996 was based on an annual salary of $137,500. See
"Recent Developments."
(13) The amount shown includes contributions made by the Company during 1996 on
behalf of Mr. Phillips to the Pinnacle 401(k) Plan of $2,694 and life
insurance premiums paid on Mr. Phillips' behalf of $361.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning the grants of stock
options pursuant to the Company's Long-Term Incentive Plan during the fiscal
year ended December 31, 1996, to certain of the Named Executive Officers. No
SARs were granted during 1996.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS(1)(2) VALUE AT ASSUMED
---------------------------------------------------- ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK PRICE
SECURITIES TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED EXERCISE OPTION TERM(3)
OPTIONS TO EMPLOYEES IN PRICE PER EXPIRATION --------------------
NAME GRANTED(#) FISCAL YEAR SHARE($/SH) DATE 5%($) 10%($)
- ------------------------ ---------- --------------- ----------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
J. Lawrence Bradner..... 115,000 18.7% 4.625 3/14/02 180,895 409,515
Steve G. Nussrallah..... 105,000 17.1% 4.625 3/14/02 165,165 373,905
W. Scott Coleman........ 20,000 3.3% 4.625 3/14/02 31,460 71,220
David C. Phillips....... 15,000 2.4% 4.625 3/14/02 23,595 53,415
</TABLE>
- ---------------
(1) All options granted in 1996 are exercisable commencing one year from the
date of grant, with 24% of the shares of Common Stock subject to the options
vesting at that time and an additional 2% vesting monthly thereafter until
the options are fully vested.
(2) All options were granted at the fair market value (the closing price of the
Common Stock on The Nasdaq Stock Market, as reported in The Wall Street
Journal) on the date of grant. The exercise price and tax withholding
obligations related to exercise may be paid by delivery of already owned
shares or by offset of the underlying shares, subject to certain conditions.
(3) Gains are reported net of the option exercise price, but before taxes
associated with exercise. These amounts represent certain assumed rates of
appreciation. Actual gains, if any, on stock option exercises are dependent
on the future performance of the Common Stock and overall stock market
conditions, as well as the option holder's continued employment with the
Company throughout the vesting period. The amounts reflected in this table
will not necessarily be achieved.
8
<PAGE> 11
FISCAL YEAR END OPTION VALUES
The following table sets forth information concerning the fiscal year end
value of unexercised options held by the Named Executive Officers. No Named
Executive Officer exercised options in 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END(#) AT FISCAL YEAR END($)(1)
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
J. Lawrence Bradner................. 282,851 115,000 920,680 0
Steve G. Nussrallah................. 282,851 105,000 920,680 0
Neal L. Miller...................... 6,000 19,000 2,250 7,125
W. Scott Coleman.................... 46,720 68,280 25,000 19,375
David C. Phillips................... 15,688 18,257 42,371 7,768
</TABLE>
- ---------------
(1) Options are considered to be "in-the-money" if the fair market value of the
underlying securities exceeds the exercise price of the options on the
specified date. The amounts shown in these columns represent the difference
between the closing price of the Common Stock on December 31, 1996 ($4.125),
and the exercise price of the options. In those instances where the exercise
price of the options exceeds the fair market value, no value has been
reported.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
three-member Compensation Committee of the Board of Directors (the "Committee").
The members of the Committee, who are not employees of the Company, have
furnished the following report on executive compensation:
Executive Compensation Policies
Overview. The Company compensates its executives through a mix of
short-term and long-term compensation programs. The principal components of
executive compensation are base salary, an annual bonus program, or, in the case
of marketing and sales personnel, sales commissions, and stock-based
compensation incentives. The Committee believes that this balanced approach to
compensation helps the Company attract and retain senior executives and rewards
executives for their collective and individual contribution to the leadership
and short-term and long-term growth and profitability of the Company.
Base Salary. The foundation of the Company's executive compensation
package is base salary. Each executive receives a base salary which, when
aggregated with their maximum bonus amount or potential sales commissions, is
intended to be commensurate with his or her responsibilities and level of
performance and be competitive with similarly situated executives in the
electronics industry. Among the elements that the Committee considers in setting
an executive's base salary for the year are: (i) the executive's position
relative to other executives in the Company, (ii) any promotions achieved or
changes in responsibility, (iii) the achievement of performance objectives set
by the Committee, and (iv) compensation information provided by independent
surveys and outside consultants relating to the compensation of similarly
situated executives in the electronics industry.
Annual Bonus Program. The second aspect of the Company's executive
compensation package is the annual bonus. Over the past several years, the
Company has established an annual bonus program for its executive officers at
the beginning of each fiscal year. Under this program, the Committee sets a
target bonus amount for each executive, which is tied to achievement of certain
financial performance objectives that relate directly to the Company's operating
plan for the year. This program is also approved by the Board of Directors. The
9
<PAGE> 12
amount of the annual bonus varies with the position and role of the executive
within the Company. In addition, special bonuses may be awarded to an executive
for any reason that the Board of Directors or the Committee deems appropriate.
At the end of fiscal 1996, the Committee reviewed the performance of the
Company's executives in relation to the bonus program. The Company did not
achieve the financial performance targets established at the beginning of the
year. The Committee did consider, however, the Company's overall improvement in
1996, the various factors contributing to the Company's inability to achieve the
targets, and the Officers' attainment of the individual performance criteria
under the Bonus Plan. Based upon these considerations, the executive officers of
the Company received a partial payout of their annual bonuses as set forth in
the "Summary Compensation Table" on page 7 of this Proxy Statement. See
"Executive Compensation."
Stock-Based Compensation Incentives. The third aspect of the Company's
executive compensation package is stock-based compensation incentives, or stock
options. The Committee believes that executives with an equity stake in the
Company will have interests that are more closely aligned with the interests of
the Company's stockholders and that this will encourage them to remain with the
Company. Toward this end, the Committee grants options to Company executives
from time to time. Historically, all options granted have had exercise prices
set at the fair market value of the Company's Common Stock on the date of grant,
as determined by the closing price of the Common Stock on The Nasdaq Stock
Market on such date.
In selecting recipients and the number of options granted in fiscal 1996,
the Committee looked to several criteria, including (i) options granted to
executives at other technology companies, (ii) options granted to other
executives within the Company, (iii) the individual executive's specific role
and performance at the Company, and (iv) the Company's performance. The option
grants set forth in the table labeled "Option Grants in Last Fiscal Year" on
page 8 of this Proxy Statement reflect the Company's performance in fiscal 1996,
and each executive's role in achieving these results.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee is comprised of outside directors, none of whom
have any interlocking relationships with the Company.
Compliance with Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code, adopted as part of the Revenue
Reconciliation Act of 1993, generally limits to $1 million the deduction that
can be claimed by any publicly-held corporation for compensation paid to any
"covered employee" in any taxable year beginning after December 31, 1993. The
term "covered employee" for this purpose is defined generally as the Chief
Executive Officer and the four highest-paid employees of the corporation.
Performance-based compensation is outside the scope of the $1 million
limitation and, hence, generally can be deducted by a publicly-held corporation
without regard to amount; provided that, among other requirements, such
compensation is approved by stockholders. The Committee currently does not
anticipate any executive exceeding the limit. It is the policy of the Company to
comply with Section 162(m), and it will continue to do so to the extent such
compliance is consistent with the best interests of the Company's stockholders.
The Committee will continue to review the impact of this tax code section and
make appropriate recommendations to stockholders in the future.
Employment Agreements
On March 14, 1996, the Company entered into employment agreements with
Messrs. Bradner and Nussrallah, whereby they would serve as the Chairman and
Chief Executive Officer, and President and Chief Operating Officer,
respectively, of the Company. The employment agreements provide Messrs. Bradner
and Nussrallah with an annual base salary in
10
<PAGE> 13
1997 of $252,000 and $210,000, respectively; an annual target bonus opportunity
in 1997 of $151,200 and $125,500, respectively, which is tied to achievement of
certain financial performance objectives that relate directly to the Company's
operating plan for the year; and a special bonus opportunity which is subject to
the executive's achievement of certain subjective performance criteria developed
by the Compensation Committee. The employment agreements also provided both Mr.
Bradner and Mr. Nussrallah with stock options to purchase up to 282,851 shares
of Common Stock at a purchase price of $.87 per share. These options represent
part of the Pinnacle options assumed by the Company in connection with the
merger.
In the event of termination without cause, each of Messrs. Bradner and
Nussrallah would receive twelve (12) months salary plus health benefits. The
Company has no employment agreements or change-in-control arrangements with any
other executive officers.
This report is made by Daniel D. Ross, A. LeRoy Ellison and Jack R. Kelly,
Jr., members of the Compensation Committee during fiscal 1996.
COMPENSATION COMMITTEE
Daniel D. Ross, Chairman
A. LeRoy Ellison
Jack R. Kelly, Jr.
STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total return on the Company's
Common Stock with The Nasdaq Stock Market index (U.S. companies) and an index
consisting of Nasdaq Telecommunications Stocks (U.S. and foreign) for the period
from December 31, 1991 to December 31, 1996. The comparison assumes that $100
was invested on December 31, 1991 in the Company's Common Stock and in each of
the comparison indices, and assumes reinvestment of dividends.
NOTE: The performance figures shown below for '92 through '95 are different than
those reported in the '96 proxy as the index period had to be rebased to
12-31-91
<TABLE>
<CAPTION>
NASDAQ STOCK NASDAQ
MEASUREMENT PERIOD MARKET (US TELECOMMUNICATIONS
(FISCAL YEAR COVERED) SYNTELLECT INC. COMPANIES) STOCKS
<S> <C> <C> <C>
12/31/92 152.4 116.4 122.8
12/31/93 70.2 133.6 189.4
12/30/94 131 130.6 158.1
12/29/95 64.3 184.7 207
12/31/96 78.6 227.2 211.6
</TABLE>
11
<PAGE> 14
PROPOSAL 2
PROPOSED AMENDMENT TO THE SYNTELLECT LONG-TERM INCENTIVE PLAN
Stockholders are being asked to approve an amendment to the Syntellect
Long-Term Incentive Plan (the "Incentive Plan") which increases the number of
shares of Syntellect Common Stock authorized for issuance from 750,000 to
1,500,000 (the "Plan Amendment"). Shareholders approved an increase of 500,000
shares authorized for issuance under the Incentive Plan in connection with the
Special Meeting of Stockholders held on March 14, 1996; however, as of December
31, 1996, only 50,540 stock option shares were still available for grant under
the Incentive Plan. The following discussion of the Plan Amendment is qualified
in its entirety by reference to the complete text of the Incentive Plan attached
hereto as Exhibit A.
The Incentive Plan authorizes grants of Incentive Stock Options,
NonQualified Stock Options, Stock Appreciation Rights, Performance Shares,
Restricted Stock, Dividend Equivalents, and Common Stock-based awards to
approximately 400 eligible employees of Syntellect, as well as advisors and
consultants. The total number of shares of Syntellect Common Stock available for
awards under the Incentive Plan is currently 750,000, subject to a proportionate
increase or decrease in the event of a stock split, reverse stock split, stock
dividend, or other adjustment to the Company's total number of issued and
outstanding shares of Common Stock. The closing price for Syntellect's Common
Stock on December 31, 1996, as reported on The Nasdaq Stock Market, was $4.125
per share.
The Incentive Plan is administered by the Board of Directors or a committee
that is appointed by, and serves at the discretion of the Board, and consists of
at least two nonemployee directors (in either case, hereinafter referred to as
the "Syntellect Board"). The Syntellect Board has the exclusive authority to
administer the Incentive Plan, including the power to determine eligibility, the
type and number of awards to be granted, and the terms and conditions of any
award granted, including, but not limited to, the price and timing of awards.
The Syntellect Board believes that the Incentive Plan promotes the success
and enhances the value of the Company by (i) linking the personal interests of
participants to those of the Company's stockholders, and (ii) providing
participants with an incentive for outstanding performance. In addition, a
significant benefit that the Incentive Plan offers is the flexibility to choose
among a broad range of awards to create an appropriate incentive arrangement
that is specific to each key employee, consultant, or advisor, thereby giving
the Company the ability to motivate, attract, and retain the services of
employees, consultants, and advisors upon whose judgment, interest, and special
effort the successful conduct of the Company's operation is largely dependent.
The affirmative vote of the holders of a majority of the outstanding shares
of Syntellect Common Stock present at the Annual Meeting in person or by Proxy
is required for approval of the Plan Amendment. The Syntellect Board has
unanimously approved the Plan Amendment and recommends that the shareholders
vote FOR approval of the Plan Amendment.
RELATIONSHIP WITH
INDEPENDENT ACCOUNTANTS
The principal independent public accounting firm utilized by the Company
during the fiscal year ended December 31, 1996, was KPMG Peat Marwick LLP,
independent certified public accountants (the "Auditors"). It is presently
contemplated that the Auditors will be retained as the principal accounting firm
to be utilized by the Company during the current fiscal year. A representative
of the Auditors will attend the Annual Meeting for the purpose of responding to
appropriate questions and will be afforded an opportunity to make a statement if
the Auditors so desire.
12
<PAGE> 15
STOCKHOLDER PROPOSALS
Stockholder proposals may be submitted for inclusion in the Company's 1998
proxy material after the 1997 Annual Meeting but no later than 5:00 p.m.,
Atlanta, Georgia time on December 15, 1997. Proposals must be in writing and
sent via registered, certified, or express mail to: Secretary, Syntellect Inc.,
1000 Holcomb Woods Parkway, Suite 410A, Roswell, Georgia 30076. Facsimile or
other forms of electronic submissions will not be accepted.
OTHER MATTERS
The Board of Directors does not intend to present at the Annual Meeting any
matters other than those described herein and does not presently know of any
matters that will be presented by other parties. As of the date of this Proxy
Statement, the Company knows of no matters to be brought before the meeting
other than those referred to in the accompanying notice of annual meeting. If,
however, any other matters properly come before the meeting, it is intended that
proxies in the accompanying form will be voted thereon in accordance with the
judgment of the persons voting such proxies.
SYNTELLECT INC.
/s/ Neal L. Miller
Neal L. Miller
Secretary
April 9, 1997
13
<PAGE> 16
EXHIBIT A
SYNTELLECT INC.
LONG-TERM INCENTIVE PLAN
(AS AMENDED AUGUST 8, 1996)
ARTICLE 1
PURPOSE
1.1. General. The purpose of the Syntellect Inc. Long-Term Incentive Plan
(the "Plan") is to promote the success, and enhance the value, of Syntellect
Inc. (the "Company") by linking the personal interests of its employees,
consultants and advisors to those of Company shareholders and by providing its
employees, consultants and advisors with an incentive for outstanding
performance. The Plan is further intended to provide flexibility to the Company
in its ability to motivate, attract, and retain the services of employees,
consultants and advisors upon whose judgment, interest, and special effort the
successful conduct of the Company's operation is largely dependent. Accordingly,
the Plan permits the grant of incentive awards from time to time to selected
employees, consultants and advisors of the Company and any Subsidiary.
ARTICLE 2
EFFECTIVE DATE
2.1. Effective Date. The Plan is effective as of February 1, 1995 (the
"Effective Date"). Within one year after the Effective Date, the Plan shall be
submitted to the shareholders of the Company for their approval. The Plan will
be deemed to be approved by the shareholders if it receives the affirmative vote
of the holders of a majority of the shares of stock of the Company present, or
represented, and entitled to vote at a meeting duly held (or by the written
consent of the holders of a majority of the shares of stock of the Company
entitled to vote) in accordance with the applicable provisions of the Delaware
Corporation Law and the Company's Bylaws and Articles of Incorporation. Any
Awards granted under the Plan prior to shareholder approval are effective when
made (unless the Committee specifies otherwise at the time of grant), but no
Award may be exercised or settled and no restrictions relating to any Award may
lapse before shareholder approval. If the shareholders fail to approve the Plan,
any Award previously made shall be automatically canceled without any further
act.
ARTICLE 3
DEFINITIONS AND CONSTRUCTION
3.1. Definitions. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or Phrase shall generally be given the meaning ascribed to it in this
Section or in Sections 1.1 or 2.1 unless a clearly different meaning is required
by the context. The following words and phrases shall have the following
meanings:
(a) "Award" means any Option, Stock Appreciation Right, Restricted
Stock Award, Performance Share Award, Dividend Equivalent Award, or Other
Stock-Based Award, or any other right or interest relating to Stock or
cash, granted to a Participant under the Plan.
(b) "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
(c) "Board" means the Board of Directors of the Company or a Committee
thereof formed under Section 4, as the case may be.
A-1
<PAGE> 17
(d) "Cause" means (except as otherwise provided in on Option
Agreement) if the Board, in its reasonable and good faith discretion,
determines that the employee, consultant or advisor (i) has developed or
pursued interests substantially adverse to the Company, (ii) materially
breached any employment, engagement or confidentiality agreement or
otherwise failed to satisfactorily discharge his or her duties, (iii) has
not devoted all or substantially all of his or her business time, effort
and attention to the affairs of the Company (or such lesser amount as has
been agreed to in writing by the Company) (iv) is convicted of a felony
involving moral turpitude, or (v) has engaged in activities or omissions
that; are detrimental to the well-being of the Company.
(e) "Change of Control" means and includes each of the following
(except as otherwise provided in an Option Agreement):
(1) there shall be consummated any consolidation or merger of the
Company in which the Company is not the continuing or surviving entity,
or pursuant to which Stock would be converted into cash, securities or
other property, other than a merger of the Company in which the holders
of the Company's Stock immediately prior to the merger have the same
proportionate ownership of beneficial interest of common stock or other
voting securities of the surviving entity immediately after the merger
(2) there shall be consummated any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of
assets or earning power aggregating more than 40% of the assets or
taming power of the Company and its subsidiaries (taken as a whole);
(3) the stockholders of the Company shall approve any plan or
proposal for liquidation or dissolution of the Company;
(4) any person (as such term is used in Section 13(d) and 14(d) (2)
of the Exchange Act), other than any employee benefit plan of the
Company or any subsidiary of the Company or any entity holding shares of
capital stock of the Company for or pursuant to the terms of any such
employee benefit plan in its role as an agent or trustee for such plan,
shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of 20% or more of the Company's outstanding
Stock; or
(5) during any period of two consecutive years, individuals who at
the beginning of such period shall fail to constitute a majority
thereof, unless the election, or the nomination for election by the
Company's stockholders, of each new director was approved by a vote of
at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" means the committee of the Board described in Article
4.
(h) "Disability" shall mean any illness or other physical or mental
condition of a Participant which renders the Participant incapable of
performing his customary and usual duties for the Company, or any medically
determinable illness or other physical or mental condition resulting from a
bodily injury, disease or mental disorder which in the judgment of the
Committee is permanent and continuous in nature. The Committee may require
such medical or other evidence as it deems necessary to judge the nature
and permanency of the Participant's condition.
(i) "Dividend Equivalent" means a right granted to a Participant under
Article 11.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(k) "Fair Market Value" means with respect to Stock or any other
property, the fair market value of such Stock or other property as
determined by the Board in its discretion,
A-2
<PAGE> 18
under one of the following methods: (i) the average of the closing bid and
asked prices for the Stock as reported on any national securities exchange
on which the Stock is then listed (which shall include the Nasdaq National
Market System) for that date or, if no prices are so reported for that
date, such prices on the next preceding date for which closing bid and
asked prices were reported, or (ii) the price as determined by such methods
or procedures as may be established from time to time by the Board.
(l) "Incentive Stock Option" means an Option that is intended to meet
the requirements of Section 422 of the Code or any successor provision
thereto.
(m) "Non-Qualified Stock Option" means an Option that is not intended
to be an Incentive Stock Option.
(n) "Option" means a right granted to a Participant under Article 7 of
the Plan to purchase Stock at a specified price during specified time
periods. An Option may be either in Incentive Stock Option or a
Non-Qualified Stock Option.
(o) "Other Stock-Based Award" means a right, granted to a Participant
under Article 12, that relates to or is valued by reference to Stock or
other Awards relating to Stock.
(p) "Participant" means a person who, as an employee of or consultant
or advisor to the Company or any Subsidiary, has been granted an Award
under the Plan. A "Participant" shall not include any Director of the
Company or any Subsidiary who is not also an employee of or consultant to
the Company or any Subsidiary.
(q) "Performance Share" means a right granted to a Participant under
Article 9, to receive cash, Stock or other Awards, the payment of which is
contingent upon achieving certain performance goals established by the
Committee.
(r) "Plan" means the Syntellect Inc. Long-Term Incentive Plan, as
amended from time to time.
(s) "Restricted Stock Award" means Stock granted to a Participant
under Article 10 that is subject to certain restrictions and to risk of
forfeiture.
(t) "Stock" means the common stock of the Company and such other
securities of the Company that may be substituted for Stock pursuant to
Article 13.
(u) "Stock Appreciation Right" or "SAR" means a right granted to a
Participant under Article 8 to receive a payment equal to the difference
between the Fair Market Value of a share of Stock as of the date of
exercise of the SAR over the grant price of the SAR, all as determined
pursuant to Article S.
(v) "Subsidiary" means any corporation, domestic or foreign, of which
a majority of the outstanding voting stock or voting power is beneficially
owned directly or indirectly by the Company.
ARTICLE 4
ADMINISTRATION
4.1. Board/Committee. The Plan shall be administered by the Board of
Directors or, to the extent required to comply with Rule 16b-3 promulgated under
the Exchange Act, a Committee that is appointed by, and serves at the discretion
of, the Board. Any Committee shall consist of at least two individuals who are
members of the Board and are "disinterested persons," as such term is defined in
Rule 16b-3 promulgated under Section 16 of the Exchange Act or any successor
provision, except as may be otherwise permitted under Section 16 of the Exchange
Act and the regulations and rules promulgated thereunder. For purposes of this
Plan the "Board" shall mean the Board of Directors or the Committee, as the case
may be.
A-3
<PAGE> 19
4.2. Action by the Board. A majority of the Board shall constitute a
quorum. The acts of a majority of the members present at any meeting at which a
quorum is present and acts approved in writing by a majority of the Board in
lieu of a meeting shall be deemed the acts of the Board. Each member of the
Board is entitled to, in good faith, rely or act upon any report or other
information furnished to that member by any officer or other employee of the
Company or any Subsidiary, the Company's independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan.
4.3. Authority of Board. The Board has the exclusive power, authority and
discretion to:
(a) Designate Participants;
(b) Determine the type or types of Awards to be granted to each
Participant;
(c) Determine the number of Awards to be granted and the number of
shares of Stock to which an Award will relate;
(d) Determine the terms and conditions of any Award granted under the
Plan including but not limited to, the exercise price, grant price, or
purchase price, any restrictions or limitations on the Award, any schedule
for lapse of forfeiture restrictions or restrictions on the exercisability
of an Award, and accelerations or waivers thereof, based in each case on
such considerations as the Board in its sole discretion determines;
(e) Determine whether, to what extent, and under what circumstances an
Award may be settled in, or the exercise price of an Award may be paid in,
cash, Stock, other Awards, or other property, or an Award may be canceled,
forfeited, or surrendered;
(f) Prescribe the form of each Award Agreement, which need not be
identical for each Participant;
(g) Decide all other matters that must be determined in connection
with an Award;
(h) Establish, adopt or revise any rules and regulations as it may
deem necessary or advisable to administer the Plan; and
(i) Make all other decisions and determinations that may be required
under the Plan or as the Board deems necessary or advisable to administer
the Plan.
4.4. Decisions Binding. The Board's interpretation of the Plan, any Awards
granted under the Plan, any Award Agreement and all decisions and determinations
by the Board with respect to the Plan are final, binding, and conclusive on all
parties.
ARTICLE 5
SHARES SUBJECT TO THE PLAN
5.1. Number of Shares. Subject to adjustment provided in Section 15.1, the
aggregate number of shares of Stock reserved and available for Awards or which
may be used to provide a basis of measurement for or to determine the value of
an Award (such as with a Stock Appreciation Right or Performance Share Award)
shall be 1,500,000.
5.2. Lapsed Awards. To the extent that an Award terminates, expires or
lapses for any reason, any shares of Stock subject to the Award will again be
available for the grant of an Award under the Plan and shares subject to SARs or
other Awards settled in cash will be available for the grant of an Award under
the Plan, in each case to the full extent available pursuant to the rules and
interpretations of the Securities and Exchange Commission under Section 16 of
the Exchange Act, if applicable.
A-4
<PAGE> 20
5.3. Stock Distributed. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.
5.4. Limitations on Awards to Any Single Participant. No single
Participant may receive Awards covering in the aggregate more than 250,000
shares of Stock.
ARTICLE 6
ELIGIBILITY
6.1. GeneraL Awards may be granted only to individuals who are employees
(including employees who also are directors or officers) of the Company or a
Subsidiary or to consultants or advisors thereto, as determined by the Board.
ARTICLE 7
STOCK OPTIONS
7.1. General. The Board is authorized to grant Options to Participants on
the following terms and conditions:
(a) Exercise Price. The exercise price per share of Stock under an
Option shall be determined by the Board.
(b) Time and Conditions of Exercise. The Board shall determine the
time or times at which an Option may be exercised in whole or in part. The
Board also shall determine the performance or other conditions, if any,
that must be satisfied before all or part of an Option may be exercised.
(c) Payment. The Board shall determine the methods by which the
exercise price of an Option may be paid, the form of payment, including,
without limitation, cash, shares of Stock, or other property (including net
issuance or other "cashless exercise" arrangements), and the methods by
which shares of Stock shall be delivered or deemed to be delivered to
Participants. Without limiting the power and discretion conferred on the
Board pursuant to the preceding sentence, the Board may, in the exercise of
its discretion, but need not, allow a Participant to pay the Option price
by directing the Company to withhold from the shares of Stock that would
otherwise be issued upon exercise of the Option that number of shares
having a Fair Market Value on the exercise date equal to the Option price,
all as determined pursuant to rates and procedures established by the
Board.
(d) Evidence of Grant. All Options shall be evidenced by a written
Award Agreement between the Company and the Participant. The Award
Agreement shall include such provisions as may be specified by the Board.
7.2. Incentive Stock Options. The terms of any Incentive Stock Options
granted under the Plan must comply with the following additional rules:
(a) Exercise Price. The exercise price per share of Stock shall be
set by the Board, provided that the exercise price for any Incentive Stock
Option may not be less than the Fair Market Value as of the date of the
grant.
(b) Exercise. In no event, may any Incentive Stock Option be
exercisable for more than ten years from the date of its grant.
(c) Lapse of Option. An Incentive Stock Option shall lapse under the
following circumstances:
(1) The Incentive Stock Option shall lapse ten (10) years after it
is granted, unless an earlier time is set in the Award Agreement.
A-5
<PAGE> 21
(2) The Incentive Stock Option shall lapse upon termination of
employment for Cause or for any other reason, other than the
Participant's death or Disability, unless the Committee determines in
its discretion to extend the exercise period for no more than ninety
(90) days after the Participant's termination of employment.
(3) In the case of the Participant's termination of employment due
to Disability or death, the Incentive Stock Option shall lapse upon
termination of employment, unless the Committee determines in its
discretion to extend the exercise period of the Incentive Stock Option
for no more than twelve (12) months after the date the Participant
terminates employment. Upon the Participant's death, any vested and
otherwise exercisable Incentive Stock Options may be exercised by the
Participant's legal representative or representative by the person or
persons entitled to do so under the Participant's last will and
testament, or, if the Participant shall fail to make testamentary
disposition of such Incentive Stock Option or shall die intestate, by
the person or persons entitled to receive said Incentive Stock Option
under the applicable laws of descent and distribution.
(d) Individual Dollar Limitation. The aggregate Fair Market Value
(determined as of the time an Award is made) of all shares of Stock with
respect to which Incentive Stock Options are first exercisable by a
Participant in any calendar year may not exceed One Hundred Thousand
Dollars ($100,000.00).
(e) Ten Percent Owners. An Incentive Stock Option shall he granted to
my individual who, at the date of grant, owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of
Stock of the Company only if, at time such Option is granted, the Option
price is at least one hundred ten percent (110%) of the Fair Market Value
of the Stock and such Option by its terms is not exercisable after the
expiration of five (5) years from the date the Option is granted.
(f) Expiration of Incentive Stock Option. No Award of an Incentive
Stock Option may be made pursuant to this Plan after the tenth anniversary
of the Effective Date.
(g) Right to Exercise. During a Participant's lifetime, an Incentive
Stock Option may be exercised only by the Participant.
(h) Employees Only. Incentive Stock Options may be granted only to
Participants who are employees of the Company or any Subsidiary.
ARTICLE 8
STOCK APPRECIATION RIGHTS
8.1. Grant of SARs. The Board is authorized to grant SARs to Participants
on the following terms and conditions:
(a) Right to Payment. Upon the exercise of a Stock Appreciation
Right, the Participant to whom it is granted has the right to receive the
excess, if any, of:
(1) The Fair Market Value of one share of Stock on the date of
exercise; over
(2) The grant price of the Stock Appreciation Right as determined
by the Board, which shall not be less than the Fair Market Value of one
share of Stock on the date of grant in the case of any SAR related to
any Incentive Stock Option.
(b) Other Terms. All awards of Stock Appreciation Rights shall be
evidenced by an Award Agreement. The terms, methods of exercise, methods of
settlement, form of consideration payable in settlement, and any other
terms and conditions of any Stock Appreciation Right shall be determined by
the Board at the time of the grant of the Award and shall be reflected in
the Award Agreement.
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ARTICLE 9
PERFORMANCE SHARES
9.1. Grant of Performance Shares. The Board is authorized to grant
Performance Shares to Participants on such terms and conditions as may be
selected by the Board. The Board shall have the complete discretion to determine
the number of Performance Shares granted to each Participant. All Awards of
Performance Shares shall be evidenced by an Award Agreement.
9.2. Right to Payment. A grant of Performance Shares gives the Participant
rights, valued as determined by the Board, and payable to, or exercisable by,
the Participant to whom the Performance Shares are granted, in whole or in part,
as the Board shall establish at grant or thereafter. The Board shall set
performance goals and other terms or conditions to payment of the Performance
Shares in its discretion which, depending on the extent to which they are met,
will determine the number and value of Performance Shares that will be paid to
the Participant, provided that the time period during which the performance
goals must be met shall, in all cases, exceed six months.
9.3. Other Terms. Performance Shares may be payable in cash, Stock, or
other property, and have such other terms and conditions as determined by the
Board and reflected in the Award Agreement.
ARTICLE 10
RESTRICTED STOCK AWARDS
10.1. Grant of Restricted Stock. The Board is authorized to make Awards of
Restricted Stock to Participants in such amounts and subject to such terms and
conditions as may be selected by the Board. All Awards of Restricted Stock shall
be evidenced by a Restricted Stock Award Agreement.
10.2. Issuance and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Board may impose
(including, without limitation, limitations on the right to vote Restricted
Stock or the right to receive dividends on the Restricted Stock). These
restrictions may lapse separately or in combination at such times, under such
circumstances in such installments, or otherwise, as the Board determines at the
time of the grant of the Award or thereafter.
10.3. Forfeiture. Except as otherwise determined by the Board at the time
of the great of the Award or thereafter, upon termination of employment during
the applicable restriction period, Restricted Stock that is at that time subject
to restrictions shall be forfeited and required by the Company, provided,
however, that the Board may provide in any Award Agreement that restrictions or
forfeiture conditions relating to Restricted Stock will be waived in whole or in
part in the event of terminations resulting from specified causes, and the Board
may in other cases waive in whole or in part restrictions or forfeiture
conditions relating to Restricted Stock.
10.4. Certificates for Restricted Stock. Restricted Stock granted under
the Plan may be evidenced in such manner as the Board shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock, and
the Company shall retain physical possession of the certificate until such time
all applicable restrictions lapse.
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ARTICLE 11
DIVIDEND EQUIVALENTS
11.1 Grant of Dividend Equivalents. The Board is authorized to grant
Dividend Equivalents to Participants subject to such terms and conditions as may
be selected by the Board. Dividend Equivalents shall entitle the Participant to
receive payments equal to dividends with respect to all or a portion of the
number of shares of Stock subject to an Option Award or SAR Award, as determined
by the Board. The Board may provide that Dividend Equivalents be paid or
distributed when accrued or be deemed to have been reinvested in additional
shares of Stock, or otherwise reinvested.
ARTICLE 12
OTHER STOCK-BASED AWARDS
12.1. Grant of Other Stock-Based Awards. The Board is authorized subject
to limitations under applicable law, to grant to Participants such other Awards
that are payable in, valued in whole or in part by reference to, or otherwise
based on or related to shares of Stock, as deemed by the Board to be consistent
with the purposes of the Plan, including without limitation shares of Stock
awarded purely as a "bonus" and not subject to any restrictions or conditions,
convertible or exchangeable debt securities, other rights convertible or
exchangeable into shares of Stock, and Awards valued by reference to book value
of shares of Stock or the value of securities of or the performance of specified
Subsidiaries. The Board shall determine the terms and conditions of such Awards.
ARTICLE 13
PROVISIONS APPLICABLE TO AWARDS
13.1. Stand-Alone, Tandem, and Substitute Awards. Awards granted under the
Plan may, in the discretion of the Board, be granted either alone or in addition
to, in tandem with, or in substitution for, any other Award granted under the
Plan. If an Award is granted in substitution for another Award, the Board may
require the surrender of such other Award in consideration of the grant of the
new Award. Awards granted in addition to or in tandem with other Awards may be
granted either at the same time as or at a different time from the grant of such
other Awards.
13.2. Exchange Provisions. The Board may at any time offer to exchange or
buy out any previously granted Award for a payment in cash, Stock, or another
Award (subject to Section 13.1), based on the terms and conditions the Board
determines and communicates to the Participant at the time the offer is made.
13.3. Term of Award. The term of each Award shall be for the period as to
be determined by the Board, provided that in no event shall the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from the date of its grant.
13.4. Form of Payment for Awards. Subject to the terms of the Plan and any
applicable law or Award Agreement, payments or transfers to be made by the
Company or a Subsidiary an the grant or exercise of an Award may be made in such
forms as the Board determines at or after the time of grant, including without
limitation, cash, Stock other Awards, or other property, or any combination, and
may be made in a single payment or transfer, in installments, or on a deferred
basis in each case determined in accordance with rules adopted by, and at the
discretion of, the Board. The Board may also authorize payment in the exercise
of an Option by net issuance or other cashless exercise methods.
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<PAGE> 24
13.5. Limits on Transfer. No right or interest of a Participant in any
Award may be pledged, encumbered, or hypothecated to or in favor of any party
other than the Company or a Subsidiary, or shall be subject to any lien,
obligation, or liability of such Participant to any other party other than the
Company or a Subsidiary. Except as otherwise provided below, no Award shall be
assignable or transferable by a Participant other than by will or the laws of
descent and distribution or, with the consent of the Board in its sole
discretion and except in the case of an Incentive Stock Option, pursuant to a
court order that would otherwise satisfy the requirements to be a domestic
relations order as defined in Section 414(p) (t) (B) of the Code, if the order
satisfies Section 414(p) (1) (A) of the Code notwithstanding that such an order
relates to the transfer of a stock option rather than an interest in an employee
benefit plan. In the Award Agreement for any Award other than an Award that
includes an Incentive Stock Option, the Board may allow a Participant to assign
or otherwise transfer all or a portion of the rights represented by the Award to
specified individuals or classes of individuals, or to a trust benefiting such
individuals or classes of individuals, subject to such restrictions,
limitations, or conditions as the Board deems to be appropriate.
13.6. Beneficiaries. Not withstanding Section 13.5, a Participant may, in
the manner determined by the Board, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Board. If the Participant is married and resides in a jurisdiction in which
community property laws apply, a designation of a person other than the
Participant's spouse as his beneficiary with respect to more than 50 percent of
the Participant's interest in the Award shall not be effective without the
written consent of the Participant's spouse. If no beneficiary has been
designated or survives the Participant, payment shall be made to the person
entitled thereto under the Participant's will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Board.
13.7. Stock Certificates. All Stock certificates delivered under the Plan
are subject to any stop-transfer orders and other restrictions as the Board
deems necessary or advisable to comply with federal or state securities laws,
rules and regulations and the rules of any national securities exchange or
automated quotation system on which the Stock is listed, quoted, or traded. The
Board may place legends on any Stock certificate to reference restrictions
applicable to the Stock.
13.8. Tender Offers. In the event of a public tender for all or any
portion of the Stock, or in the event that a proposal to merge, consolidate, or
otherwise combine with another company is submitted for stockholder approval,
the Board may in its sole discretion declare previously granted Options to be
immediately exercisable. To the tent that this provision causes incentive Stock
Options to exceed the dollar limitation set forth in Section 7.2(d), the excess
Options shall be deemed to be Non-Qualified Stock Options.
13.9. Change of Control. A Change of Control shall, in the sole discretion
of the Committee:
(a) Cause every Award outstanding hereunder to become fully
exercisable and all restrictions on outstanding Awards to lapse and allow
each Participant the right to exercise Awards prior to the occurrence of
the event otherwise terminating the Awards over such period as the
Committee, in its sole and absolute discretion, shall determine. To the
extent that this provision causes Incentive Stock Options to exceed the
dollar limitation set forth in Section 7.2(d), the excess Options shall be
deemed to be Non-Qualified Stock Options; or
A-9
<PAGE> 25
(b) Cause every Award outstanding hereunder to terminate, provided
that the surviving or resulting corporation shall tender an option or
options to purchase its shares or exercise such rights on terms and
conditions, as to the number of shares and rights and otherwise, which
shall substantially preserve the rights and benefits of any Award then
outstanding thereunder.
ARTICLE 14
CHANGES IN CAPITAL STRUCTURE
14.1. General. In the event a stock dividend is declared upon the Stock,
the shares of Stock then subject to each Award (and the number of shares subject
thereto) shall be increased proportionately without any change in the aggregate
purchase price therefor. In the event the Stock shall be changed into or
exchanged for a different number or class of shares of Stock or of another
corporation, whether through reorganization, recapitalization, stock split-up,
combination of shares, there shall be substituted for each such share of Stock
then subject to each Award (and for each share of Stock then subject thereto)
the number and class of shares of Stock into which each outstanding share of
Stock shall be so exchanged, all without any change in the aggregate purchase
price for the shares then subject to each Award.
ARTICLE 15
AMENDMENT, MODIFICATION AND TERMINATION
15.1. Amendment, Modification and Termination. With the approval of the
Board, at any time and from time to time, the Board may terminate, amend or
modify the Plan. However, without approval of the stockholder of the Company or
other conditions (as may be required by the Code, by the insider trading rules
of Section 16 of the Exchange Act, by any national securities exchange or system
on which the Stock is listed or reported or by a regulatory body having
jurisdiction), no such termination, amendment, or modification may:
(a) Materially increase the total number of shares of Stock that may
be issued under the Plan, except as provided in Section 14-1;
(b) Materially modify the eligibility requirements for participation
in the Plan; or
(c) Materially increase the benefits accruing to Participants under
the Plan,
15.2. Awards Previously Granted No termination, amendment, or modification
of the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant.
ARTICLE 16
GENERAL PROVISIONS
16.1. No Rights to Awards. No Participant or employee or consultant shall
have any claim to be granted any Award under the Plan, and neither the Company
nor the Board is obligated to treat Participants and employees or consultants
uniformly.
16.2. No Stockholders Rights. No Award gives the Participant any of the
rights of a stockholder of the Company unless and until shares of Stock are in
fact issued to such person in connection with such Award.
16.3. Withholding. The Company or any Subsidiary shall have the authority
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy United States Federal, state, and local
taxes (including the Participant's FICA obligation and any withholding
obligation imposed by any country other than the United States in which
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<PAGE> 26
the Participant resides) required by law to be, withheld with respect to any
taxable event arising as a result of this Plan. With respect to withholding
required upon any taxable event under the Plan, Participants may elect, subject
to the Board's approval to satisfy the withholding requirement, in whole or in
part, by having the Company or any Subsidiary withhold shares of Stock having a
Fair Market Value on the date of withholding equal to the amount to be withheld
for tax purposes in accordance with such procedures as the Board establishes.
The Board may, at the time any Award is granted, require that any and all
applicable tax withholding requirements be satisfied by the withholding of
shares of Stock as set forth above.
16.4. No Right to Employment. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company or any
Subsidiary.
16.5. Unfunded Status of Awards. The Plan is intended to be an "unfunded"
plan for incentive and deferred compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan or
my Award Agreement shall give the Participant any rights that are greater than
those of a general creditor of the Company or any Subsidiary.
16.6. Indemnification. To the extent allowable under applicable law, each
member of the Committee or of the Board shall be indemnified and held harmless
by the Company from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by such member in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action or failure to act under
the Plan and against and from any and all amounts paid by him or her in
satisfaction of judgment in such action, suit, or proceeding against him or her
provided he or she gives the Company an opportunity, at its own expense, to
handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or By-Laws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless.
16.7. Relationship to Other Benefits. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance welfare or other benefit plan of the
Company or any Subsidiary.
16.8. Expenses. The expenses of administering the Plan shall be borne by
the Company and its Subsidiaries.
16.9. Titles and Readings. The titles and headings of the Sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.
16.10. Fractional Shares. No fractional shares of stock shall be issued
and the Board shall determine, in its discretion, whether cash shall be given in
lieu of fractional shares or whether such fractional shares shall be eliminated
by rounding up.
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<PAGE> 27
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SYNTELLECT INC.
1997 ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints J. Lawrence Bradner and Neal L. Miller, or any
one of them acting in the absence of the other with full powers of
substitution, the true and lawful attorneys and proxies for the undersigned and
to vote, as designated below, all shares of Common Stock of SYNTELLECT INC.,
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
(the "Meeting") to be held on Tuesday, May 20, 1997, at 10:00 a.m., Atlanta,
Georgia time at the Cumberland One Building, 3065 Cumberland Circle, Atlanta,
Georgia 30339 and at any and all adjournments thereof, and to vote all shares
of Common Stock which the undersigned would be entitled to vote, if then and
there personally present, on the matters set forth on the reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR PROPOSALS ONE AND TWO AS SAID PROXIES DEEM ADVISABLE ON SUCH
OTHER MATTERS AS MAY COME BEFORE THE MEETING.
(to be signed on the reverse side)
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FOLD AND DETACH HERE
<PAGE> 28
Please mark
your vote as /x/
indicated in
this example.
VOTE WITHHOLD
FOR AUTHORITY
nominee to vote for nominee
listed below listed below
1. RE-ELECTION OF DIRECTORS: / / / /
Nominee: Jack R. Kelly, Jr.
FOR AGAINST WITHHELD
2. Proposal to approve an amendment / / / / / /
to the Syntellect Long-Term
Incentive Plan to increase the
number of shares of Syntellect
Common Stock authorized for
issuance thereunder from 750,000
1,500,000.
Signature(s) Dated: , 1997
----------------------------------------------- --------
(This Proxy should be dated, signed by the stockholder(s) exactly as his or her
name appears hereon, and returned promptly in the enclosed envelope. Persons
signing in a fiduciary capacity should so indicate. If shares are held by joint
tenants or as community property, both shareholders should sign.)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
