<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
INTERVOICE, 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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) 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.:
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(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
[INTERVOICE, INC. LETTERHEAD]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 24, 1997
To the Shareholders of INTERVOICE, INC.:
The annual meeting of shareholders of InterVoice, Inc., a Texas
corporation (the "Company"), will be held on Thursday, July 24, 1997, at 10:00
a.m., local time, at the Grand Kempinski Hotel, 15201 Dallas Parkway, Dallas,
Texas, for the following purposes:
1. To elect the Board of Directors for the ensuing year; and
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed June 6, 1997 as the record date for the
determination of shareholders entitled to notice of and to vote at the meeting
or any adjournment thereof. Only shareholders of record at the close of
business on the record date are entitled to notice of and to vote at the
meeting. A complete list of such shareholders will be available for
examination at the offices of the Company in Dallas, Texas, during ordinary
business hours for a period of 10 days prior to the meeting.
A record of the Company's activities during the fiscal year ended
February 28, 1997 and the financial statements for such fiscal year are
contained in the accompanying 1997 Annual Report. The 1997 Annual Report does
not form any part of the material for the solicitation of proxies.
All shareholders are cordially invited to attend the meeting.
SHAREHOLDERS ARE URGED, WHETHER OR NOT THEY PLAN TO ATTEND THE MEETING, TO
COMPLETE, DATE AND SIGN THE ACCOMPANYING PROXY AND TO RETURN IT PROMPTLY IN THE
POSTAGE-PAID RETURN ENVELOPE PROVIDED. If a shareholder who has returned a
proxy attends the meeting in person, such shareholder may revoke the proxy and
vote in person on all matters submitted at the meeting.
By order of the Board of Directors
Daniel D. Hammond
Chairman of the Board
and Chief Executive Officer
Dallas, Texas
June 27, 1997
<PAGE> 3
[INTERVOICE, INC. LETTERHEAD]
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 24, 1997
INTRODUCTION
The accompanying proxy is solicited by and on behalf of the Board of
Directors of the Company for use at the annual meeting of shareholders of the
Company to be held at the time and place and for the purposes set forth in the
foregoing notice. The approximate date on which this proxy statement and the
accompanying proxy were first sent to shareholders of the Company is June 27,
1997.
Shares represented by valid proxies will be voted at the meeting in
accordance with the directions given. If no direction is indicated, the shares
will be voted for the election of the Board's nominees for director.
The Board of Directors is not aware of any other matter to be presented
for consideration at the meeting. If any other matter is properly presented
for action at the meeting, the proxy holders will vote the proxies in
accordance with their best judgment in such matters. The proxy holders may
also, if it is deemed to be advisable, vote such proxies to adjourn the meeting
from time to time.
Any shareholder of the Company returning a proxy has the right to revoke
the proxy at any time before it is exercised by giving written notice of such
revocation to the Company addressed to Daniel D. Hammond, Chairman of the Board
and Chief Executive Officer, InterVoice, Inc., 17811 Waterview Parkway, Dallas,
Texas 75252; however, no such revocation shall be effective until such notice
of revocation has been received by the Company at or prior to the meeting.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDER
Only holders of record of Common Stock at the close of business on June
6, 1997, the record date for the meeting, are entitled to notice of and to vote
at the meeting or any adjournment(s) thereof. The presence of a majority of
the Common Stock outstanding on the record date is necessary to constitute a
quorum. On the record date for the meeting, there were issued and outstanding
16,192,252 shares of Common Stock. At the meeting, each shareholder of record
on the record date will be entitled to one vote for each share registered in
such shareholder's name on the record date. The Articles of Incorporation of
the Company deny cumulative voting rights.
The following table sets forth as of June 15, 1997 information with
respect to the only shareholder who was known to the Company to be a beneficial
owner of more than five percent of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned of Class
------------------- ------------------ --------
<S> <C> <C>
PaineWebber Group Inc. 835,988 (1) 5.2%
1000 Harbor Boulevard
Weehawken, New Jersey 07087
</TABLE>
(1) A Schedule 13G dated February 14, 1997 was filed by PaineWebber Group
Inc., disclosing the ownership of 835,988 shares of Common Stock. The
Schedule 13G indicates that 24,138 shares were purchased by PaineWebber
Inc., and 811,850 shares were purchased by Mitchell Hutchins Asset
Management, Inc. Mitchell Hutchins Institutional Investors Inc. and
Financial Counselors, Inc. are wholly-owned subsidiaries of Mitchell
Hutchins Asset Management Inc., which in turn is a wholly-owned
subsidiary of PaineWebber Inc., which is in turn a wholly-owned
subsidiary of PaineWebber Group Inc. All shares are held subject to sole
voting power and sole dispositive power. Beneficial ownership of the
securities of an issuer may be reported on a Schedule 13G only in the
event that the reporting person has acquired such securities in the
ordinary course of business and not with the purpose nor with the effect
of changing or influencing the control of the issuer, nor in connection
with or as a participant in any transaction having such purpose or
effect.
<PAGE> 4
VOTING PROCEDURES AND TABULATION
The Company will appoint one or more inspectors of election to act at the
meeting and to make a written report thereof. Prior to the meeting, the
inspectors will sign an oath to perform their duties in an impartial manner and
to the best of their abilities. The inspectors will ascertain the number of
shares outstanding and the voting power of each of such shares, determine the
shares represented at the meeting and the validity of proxies and ballots,
count all votes and ballots and perform certain other duties as required by
law. The inspectors will tabulate the number of votes cast for or withheld as
to the vote on each nominee for director.
With regard to the election of directors, votes may be cast in favor of
or withheld from each nominee. Votes that are withheld will be excluded
entirely from the vote and will have no effect on the voting on the election of
directors, provided a quorum is present, because directors are elected by a
plurality of the shares of Common Stock of the Company present in person or by
proxy at the meeting and entitled to vote.
Under the rules of the Nasdaq National Market, brokers who hold shares in
street name have the authority to vote on certain items when they have not
received instructions from beneficial owners. Brokers who do not receive
instructions are entitled to vote on the election of directors.
EXECUTIVE OFFICERS
Following is certain information regarding certain executive officers of
the Company. Information regarding the only other executive officers of the
Company, Daniel D. Hammond, Chairman of the Board and Chief Executive Officer,
and Michael W. Barker, President and Chief Operating Officer, is included under
"Proposal 1. Election of Directors".
ROB-ROY J. GRAHAM, age 44, is currently Chief Financial Officer and Secretary,
a position he has held since August 1994; Chief Accounting Officer of the
Company, a position he has held since April 1994; and Controller of the
Company, a position he has held since August 1992. From June 1990 to August
1992, Mr. Graham served as Vice President and Chief Financial Officer of NAC,
Inc., a company engaged in the manufacture and sale of telecommunications
equipment.
DWAIN H. HAMMOND, age 40, is currently Senior Vice President of Engineering, a
position he has held since April 1997. From September 1994 to April 1997, Mr.
Hammond served as Vice President of Research and Development. Prior thereto,
he served the Company as Vice President - Research and Development Core Systems
from September 1993 to September 1994, and as Director of Hardware Development
from 1990 to September 1993. Mr. Hammond, who has been an employee of the
Company since 1984, is the brother of Daniel D. Hammond, Chairman of the Board
and Chief Executive Officer.
JAMES A. BARTON, age 55, is currently Vice President - Customer Operations, a
position he has held since December 1995. From August 1995 to December 1995,
he held the position of Vice President-Customer Operations with AMTECH, Inc., a
company engaged in the radio frequency identification business. From June 1990
to February 1995, Mr. Barton served as Center Director-TELINQ Development
Center for ADC Telecommunications, Inc., a provider of telecommunications
equipment and services.
GORDON GIVENS, age 54, is currently Managing Director of European Strategic
Business Unit, a position he has held since July 1996. From March 1994 to July
1996, he served as Vice President-Technical Services. Prior thereto, he served
as Vice President-Professional Services from March 1993 to March 1994, and was
Director of Client Services from 1987 to March 1993.
M. GREGORY SMITH, age 49, is currently Senior Vice President - Sales, the
Americas and Asia Pacific, a position he has held since August 1996. From July
1994 to May 1996, he served as Vice President and General Manager of SRX
Corporation, a company which engaged in the manufacture and sale of
telecommunications equipment. Prior thereto, from May 1992 to July 1994, Mr.
Smith served as Regional Sales Manager of Rockwell International, a
manufacturer and contractor in the telecommunications industry.
JOHN P. LENIHAN, age 42, is Vice President - Marketing and Business
Development, a position he has held since May, 1997. From February 1995 to
April 1997, he served as Director - Marketing; Multimedia Messaging for Nortel,
a company which designs, manufactures, and markets telecommunications
equipment. From June 1992 to February 1995, Mr. Lenihan served as Director -
Product Management for Rockwell International, a manufacturer and contractor in
the telecommunications industry.
2
<PAGE> 5
PROPOSAL 1. ELECTION OF DIRECTORS
The business and affairs of the Company are managed by and under the
direction of the Board of Directors, which exercises all corporate powers of
the Company and establishes broad corporate policies. The Articles of
Incorporation of the Company provide that the number of directors constituting
the Board of Directors shall not be less than three nor more than nine as from
time to time shall be fixed and determined by a vote of a majority of the
Company's directors serving at the time of such vote. The number of director
positions constituting the Board will be increased from five to six as of the
date of the annual meeting of shareholders. The six directors, constituting
the entire Board of Directors, are to be elected at the meeting to serve until
the next annual meeting of shareholders and until their successors have been
elected and qualified. David W. Brandenburg, who served on the Board of
Directors from 1990 to 1995, is a nominee for director. The other five
nominees for director are the current directors of the Company. During the
fiscal year ended February 28, 1997 ("fiscal 1997"), the Board of Directors
held five meetings.
The six nominees for election to the Board of Directors who receive the
greatest number of votes cast at the meeting will be elected to the Board of
Directors. All duly submitted and unrevoked proxies in the form accompanying
this proxy statement will be voted for the nominees selected by the Board of
Directors except where authorization so to vote is withheld. If any nominee
becomes unable or unwilling to serve (which is not presently foreseen), the
persons designated as proxies will have full discretion to cast votes for
another person designated by the Board. THE BOARD RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE ELECTION OF SUCH NOMINEES. Set forth below is certain information
with respect to the six nominees for director.
DANIEL D. HAMMOND, a founder of the Company, is currently the Chairman of
the Board, a position he has held since December 1990, and the Chief Executive
Officer of the Company, a position he has held since July 1986. Mr. Hammond,
age 45, has served as a director since 1984.
MICHAEL W. BARKER is currently the President and Chief Operating Officer
of the Company and has held these positions since September 1994. From March
1994 to September 1994, Mr. Barker served as Executive Vice President and Chief
Operating Officer of the Company. Prior thereto, he served the Company as
Senior Vice President of Sales and Marketing from April 1991 to March 1994.
Mr. Barker, age 48, has served as a director since 1994.
JOSEPH J. PIETROPAOLO is the former Chief Financial Officer of
Transactive Corporation, a company which specializes in electronic benefits
transfers, a position he held from August 1994 to March 1997. Mr. Pietropaolo
is also the former Vice President and Treasurer of GTECH Corporation, a company
specializing in on-line lottery systems, positions he held from 1990 to August
1994. Mr. Pietropaolo, age 41, has served as a director since 1989.
GEORGE C. PLATT is currently the President and Chief Executive Officer of
InteCom Inc., a wholly-owned subsidiary of Matra-Hachette, a company engaged in
the manufacture and sale of telephone switching systems. He has held this
position since January 1991. Mr. Platt, age 56, has served as a director
since 1991.
GRANT A. DOVE is currently a Managing Partner of Technology Strategies
and Alliances, a firm which provides investment banking and consulting
services, a position he has held since January 1993. From March 1991 until
July 1992, Mr. Dove served as Chairman and Chief Executive Officer of
Microelectronics and Computer Technology Corporation, an information technology
research consortium. Mr. Dove currently serves as a director of U.S. West,
Inc., Cooper Cameron Corp., Control Data Systems, Inc., Forefront Group, Inc.,
and Optek Technology, Inc. Mr. Dove, age 69, has served as director since
1997.
DAVID W. BRANDENBURG is currently retired. Mr. Brandenburg served as
Vice Chairman of the Company from December 1994 to May 1995. Prior thereto,
Mr. Brandenburg served as President of the Company from July 1990 to December
1994. Mr. Brandenburg's age is 52.
3
<PAGE> 6
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The tabulation below sets forth certain information with respect to the
beneficial ownership of shares of Common Stock, as of June 6, 1997, of each
director and nominee for director of the Company, each executive officer listed
in the Summary Compensation Table included elsewhere in this proxy statement,
and all directors, nominees for director and executive officers of the Company
as a group.
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned (1)
-------------------
Number Percent
Name of Shares of Class
- ---- --------- --------
<S> <C> <C>
Directors and Nominees for Director
Daniel D. Hammond . . . . . . . . . . . . . . . . . . . . . . . . . . . 779,689 (2) 4.8%
Michael W. Barker . . . . . . . . . . . . . . . . . . . . . . . . . . . 357,770 (3) 2.2%
David W. Brandenburg . . . . . . . . . . . . . . . . . . . . . . . . . 502,051 (4) 3.1%
Joseph J. Pietropaolo . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 (5) *
George C. Platt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 (5) *
Grant A. Dove . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,000 (5) *
Named Executive Officers (who are not a director or nominee
named above)
Rob-Roy J. Graham . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,371 (5) *
Dwain H. Hammond . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,490 (5) *
James A. Barton . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,407 (5) *
All directors, nominees for director and executive officers
as a group (12 persons) . . . . . . . . . . . . . . . . . . . . . . . . 1,886,453 (6) 11.7%
</TABLE>
* Less than 1%
(1) Unless otherwise indicated, all shares listed are directly held with sole
voting and investment power.
(2) Includes 268,200 shares not outstanding but subject to currently
exercisable stock options.
(3) Includes 180,999 shares not outstanding but subject to currently
exercisable stock options.
(4) Includes 375,851 shares held jointly with wife, 75,500 shares held in his
individual retirement account ("IRA"), 50,700 shares held in his wife's
IRA and 1,500 shares held in Mr. Brandenburg's life foundation.
(5) Shares are not outstanding but are subject to currently exercisable stock
options, other than 15,039 shares held by Mr. Graham; 24,490 shares held
by Mr. Dwain Hammond; 74 shares held by Mr. Barton; 1,000 shares held by
Mr. Dove; and 1,600 shares held by Mr. Platt's IRA.
(6) Includes 127,800 shares held in an IRA of a director or a director's
spouse, 1,500 shares held in a director's foundation, and 577,998 shares
not outstanding but subject to currently exercisable stock options.
COMPENSATION OF DIRECTORS
All directors who are not employees of the Company receive a fee of
$1,000 per month for serving as a director of the Company. The Company also
reimburses all directors for travel, lodging and related expenses incurred in
attending Board and committee meetings. Directors who are not employees of the
Company also receive a fee of $500 for each Board or committee meeting
attended. In addition, non-employee directors are eligible for stock option
grants under the Company's 1990 Nonqualified Stock Option Plan for
Non-Employees (the "Nonqualified Plan"). Pursuant to the Nonqualified Plan, on
August 1, 1996 each of Messrs. Pietropaolo and Platt were automatically granted
an option to purchase 4,000 shares of Common Stock, and Mr. Dove was
automatically granted an option to purchase 18,000 shares of Common Stock,
which options can be exercised commencing July 24, 1997, the date of the next
annual meeting of shareholders, at the closing market price of the Common Stock
on the date of grant. If Mr. Brandenburg is elected as a new non-employee
director at the 1997 annual meeting of shareholders, he will be granted an
option to purchase 18,000 shares of Common Stock on August 1, 1997 at the
closing market price of the Common Stock on that date, which option can be
exercised commencing the date of the 1998 annual meeting of shareholders. If
elected as directors at the 1997 annual meeting of shareholders, Messrs.
Pietropaolo, Platt and Dove each will automatically be granted an option to
4
<PAGE> 7
purchase 4,000 additional shares of Common Stock on August 1, 1997, at the
closing market price of the Common Stock on the date of grant. These options
will also become exercisable on the date of the next annual meeting of
shareholders.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established committees which deal with certain
specific areas of the Board's responsibility. These committees include the
Audit Committee, Compensation Committee, Executive Committee and Nominating
Committee.
The Audit Committee, which held nine meetings during fiscal 1997, has the
primary responsibility to ensure the integrity of the financial information
reported by the Company. Its functions are to: (a) make recommendations on
the selection of independent auditors; (b) review the scope of the annual audit
to be performed by the independent auditors prior to commencement of the audit;
(c) review the results of those audits; (d) review the organization and scope
of the Company's internal system of audit and financial controls; (e) meet
periodically with management and the independent public accountants to review
financial, accounting and internal control matters; and (f) meet periodically
with the independent public accountants to discuss the results of their audit
work and their opinions as to the adequacy of internal accounting controls and
the quality of financial reporting. Its current members are Joseph J.
Pietropaolo, Chairman, George C. Platt and Grant A. Dove.
The Compensation Committee, which held five meetings during fiscal 1997,
has the authority to determine and approve all the terms of the employment,
compensation and benefits payable to officers of the Company, including those
officers who are also directors. The Company's management is from time to time
directed by the Compensation Committee to review certain compensation matters
and make recommendations to the Compensation Committee concerning such matters.
The Compensation Committee also has the authority to administer and award stock
options and restricted stock under the 1990 Incentive Stock Option Plan and the
Restricted Stock Plan. The Compensation Committee is composed of George C.
Platt, Chairman, Joseph J. Pietropaolo and Grant A. Dove.
The Executive Committee, which generally held monthly meetings during
fiscal 1997, may, to the extent permitted by law, exercise the power of the
Board of Directors when the Board is not in session. It also has the
responsibility for reviewing long-range plans, capital expenditure programs,
acquisitions and general corporate financing matters and making related
recommendations to the Board of Directors. Its current members are Daniel D.
Hammond, Chairman, and Michael W. Barker.
The Nominating Committee, which did not meet in fiscal 1997, has the
function to identify and propose to the full Board of Directors nominees to
fill vacancies on the Board of Directors. Although the Nominating Committee
has no formal policy on the subject, it will consider persons brought to its
attention by officers, directors and shareholders. The names of proposed
nominees should be sent to the Company at the address shown on the cover of
this Proxy Statement, Attention: Nominating Committee. The current members of
the Nominating Committee are Daniel D. Hammond, Chairman, Grant A. Dove and
Michael W. Barker.
5
<PAGE> 8
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
To the Shareholders of InterVoice, Inc.:
COMPENSATION POLICY. The goal of the Company's executive compensation
policy is to ensure that an appropriate relationship exists between executive
pay and the creation of shareholder value, while at the same time motivating
and retaining key employees. To achieve this goal, officers are offered
compensation opportunities which are linked to the Company's business
objectives and performance, individual performance and contributions to the
Company's success and enhanced shareholder value. The Company's compensation
programs are designed and revised from time to time to be competitive within
the software and data industry and the telecommunications industry.
For fiscal 1997, the Company's executive compensation program consisted
primarily of (i) base salary, (ii) incentive cash bonus opportunities based
upon individual and corporate performance and (iii) long-term equity based
incentives. All officers were eligible for and did participate in the
Company's incentive cash bonus and equity based incentive programs during
fiscal 1997. The Company generally targets the aggregate of annual base
salary, bonus opportunities and long-term equity based incentives made
available to officers, who successfully perform their responsibilities, above
the mid-point level for officers with similar positions in companies of
comparable size in the software and data/telecommunications industries. The
Compensation Committee believes that compensation opportunities above the
mid-point for its comparison group are appropriate based on the Company's above
average long term historical growth in revenue and earnings.
Generally, both cash bonus and equity-based incentive compensation
opportunities for officers increased at a greater rate than their base salaries
from fiscal 1995 through fiscal 1997. The Compensation Committee determined to
put a greater emphasis on incentive compensation commencing with fiscal 1995 to
encourage further the achievement of corporate and individual objectives. In
order to help implement the Company's compensation policy, Ernst & Young LLP
was hired to serve as an independent compensation consultant for fiscal 1995
through fiscal 1997. In this capacity, Ernst & Young LLP analyzed the
compensation paid to officers of the Company based on market surveys of
executive compensation for software and data companies, and telecommunications
companies, particularly companies with sales of less than $200 million per
year. These surveys included a separate study of companies within the SIC code
for Telephone and Telegraph Apparatus used in the "Performance Graph" contained
in this proxy statement.
STOCK OWNERSHIP GUIDELINES. In April 1995, the Compensation Committee
established stock ownership guidelines for key executives of the Company.
These guidelines provide that executives should hold shares in varying amounts
as a multiple of salary, currently ranging from a minimum of three and one-half
times annual salary for the Chairman of the Board and Chief Executive Officer
to one-half times annual salary for key executives below the vice president
level.
Although some executives are already at or above the prescribed levels,
the Compensation Committee recognizes that newer employees or those recently
promoted may require some period of time to achieve these levels. Therefore,
the guidelines have provided for a transition period of approximately five
years for the suggested levels to be met. The Compensation Committee intends
to monitor each executive's progress towards achieving these guidelines when
deciding on future stock option awards and other equity incentive
opportunities.
FISCAL 1997 COMPENSATION.
Base Salary. The Compensation Committee annually reviews and sets base
salaries for each of the Company's officers at levels within the range of those
persons holding comparably responsible positions at other companies in the
Company's comparison group. In establishing base salaries for officers, the
Compensation Committee and the Executive Committee reviewed the compensation
surveys provided by Ernst & Young LLP. Annual salaries, including increases to
salaries, for fiscal 1997 were reviewed and approved on the basis of the
individual performance of the executive, as determined through a formal written
evaluation by the officer's immediate supervisor in consultation with the
Executive Committee, by the executive's tenure and level of responsibility, the
Company's expected financial performance, and changes in competitive pay
levels.
The Company entered into a new employment agreement with the Chairman of
the Board and Chief Executive Officer of the Company, Daniel D. Hammond, for
fiscal 1997 which requires the Compensation Committee to conduct an annual
review of Mr. Hammond's base salary. The Compensation Committee analyzed the
compensation surveys provided by Ernst & Young LLP pertaining to base salaries
for chief executive officers of corporations in the Company's comparison group
as part of its review of Mr. Hammond's base salary. In connection with the
execution of his new employment agreement, Mr. Hammond's annual base salary
was increased for the first time in two years from $284,700 to $341,640. The
Compensation Committee believes that this salary level, which was above the
median base salary for chief executive officers in the Company's comparison
group, was appropriate based upon Mr. Hammond's individual performance and the
Company's performance for the prior fiscal year. The Company's revenues
increased 27% and earnings increased 32% from fiscal 1995 to fiscal 1996
(excluding the one-time charge for the Company's acquisition of VoicePlex).
See "Agreements with Executive Officers" for a discussion of the employment
agreement with Mr. Hammond.
6
<PAGE> 9
Annual Incentives. The Company has a bonus program that provides for the
payment of periodic cash bonuses to executive officers and other key employees
contingent upon the achievement of certain earnings targets and/or other
individual and corporate performance targets. The program is intended to
reward the accomplishment of corporate objectives, reflect the Company's
priority on maintaining growth and stability of earnings, and to provide a
fully competitive compensation package which will attract, reward and retain
quality individuals. Targets and objectives vary for the specific officers
involved. For example, bonus opportunities for the Chairman of the Board and
Chief Executive Officer and the Company's President and Chief Operating Officer
were based on formulas which compensated such officers for any increases to
revenues and earnings per share achieved for fiscal 1997. The bonus opportunity
for the Company's Chief Financial Officer was based on a formula which
compensated him for earnings per share achieved for fiscal 1997. These
officers are responsible for making and implementing strategic decisions
concerning how the Company plans to achieve its long-term goals for growth and
stability of earnings and revenues. The Compensation Committee believes that
the amount of growth in the Company's annual earnings per share and revenues
should continue to serve as a basis for a significant component of the total
compensation for these officers.
The other officers were eligible to receive annual incentive bonuses and
in some cases quarterly incentive bonuses for fiscal 1997 established in
connection with their annual performance reviews, based upon the attainment of
one or more associated individual performance goals. A significant amount of
the annual bonuses for these other executive officers was generally contingent
upon the Company attaining a targeted annual earnings per share objective
determined by the Compensation Committee, which was not achieved for fiscal
1997. The performance goals for officers were based on factors such as sales
volume, receipt of purchase orders and cost containment. The aggregate of
quarterly and annual bonuses paid to officers, including members of the
Executive Committee, for fiscal 1997 ranged from approximately 4% to 90% of
base salary.
Pursuant to his new employment agreement, the bonus payable to the
Chairman of the Board and Chief Executive Officer, Daniel D. Hammond, was
modified from his prior agreement to only reward Mr. Hammond for increases to
the Company's earnings per share and revenues. Under his prior employment
agreement, Mr. Hammond had received a bonus for each cent of earnings per
share, irrespective of the Company's earnings or revenues for the prior fiscal
year. Specifically, Mr. Hammond's annual bonus opportunity was revised so as
to be based 50% on any increase to earnings per share, and 50% on any increase
to revenues, in each case as compared to the immediately preceding fiscal year
unless revenues or earnings per share are less than they were for fiscal 1996.
Based on this revised formula, Mr. Hammond received a bonus of $85,410, which
was 79% less than the $414,000 bonus he received for fiscal 1996. Mr.
Hammond's bonus reflected the 8% increase in the Company's revenues. Mr.
Hammond did not receive a bonus based on earnings per share for the fiscal
year. Under the bonus provisions of Mr. Hammond's prior employment agreement,
he would have received a bonus of $288,000 based on the Company's earnings per
share for fiscal 1997. Mr. Hammond's combined salary and bonus decreased 39%
from fiscal 1996 to fiscal 1997.
The employment agreement with Mr. Hammond also permits payment of an
additional discretionary bonus if the Compensation Committee determines that
such a bonus is appropriate. No such discretionary bonus was paid to Mr.
Hammond for fiscal 1997. Mr. Hammond's employment agreement is discussed below
in the section entitled "Agreements with Executive Officers".
Long-Term Equity Based Incentives. Long-term equity based incentive
awards strengthen the ability of the Company to attract, motivate and retain
executives of superior capability and more closely align the interests of
management with those of shareholders. The Compensation Committee believes
that such equity based compensation provides executives with a continuing stake
in the long term success of the Company, and will assist them to achieve the
share ownership targeted under the stock ownership guidelines discussed above.
Long-term awards granted in fiscal 1997 consisted of incentive stock options
granted under the Company's 1990 Incentive Plan and restricted stock awarded
under the Company's Restricted Stock Plan. Unlike cash, the value of a stock
option or a share of restricted stock will not be immediately realized and does
not result in a current expense to the Company.
The stock options are granted at the prevailing market value and will
only have value if the Company's stock price increases, resulting in a
commensurate benefit to the Company's shareholders. Generally, grants vest in
equal amounts over a three-year to five-year period. Executives generally must
be employed by the Company at the time of vesting in order to exercise the
options. Shares of restricted stock will only have value to the employee if
the employee remains with the Company until the restrictions have lapsed, which
was two years in the case of all restricted stock awards for fiscal 1997.
The Compensation Committee determines from time to time the executive
officers who shall receive options or shares of restricted stock under the
Company's 1990 Incentive Plan and Restricted Stock Plan, the timing of such
awards, the number of shares of Common Stock to be subject to each award and
the other terms of each award. During fiscal 1997, stock option and restricted
stock awards were made in light of a compensation review and recommendations
prepared by Ernst & Young LLP comparing stock option and restricted stock
awards to officers by the Company to awards made by 11 companies in the
telephone and telegraph apparatus industry whose description of business and
revenues
7
<PAGE> 10
most closely approximated those of the Company (these companies are
included in the Company's peer group index set forth in the section entitled
"Stock Performance Graph").
Grants to individual officers during fiscal 1997 by the Compensation
Committee were based on their annual performance evaluations, relative salary
levels, the number of shares under options previously granted, and their
potential contribution to the long-term performance of the Company. The
emphasis placed on equity based incentive opportunities was also considered by
the Compensation Committee in determining stock option and restricted stock
awards. The Compensation Committee granted options covering 459,500 shares of
Common Stock to officers of the Company during fiscal 1997. The Compensation
Committee granted stock options covering 180,000 shares of Common Stock to Mr.
Hammond during fiscal 1997 in connection with the execution of his new
employment agreement. The Compensation Committee issued 35,548 shares of
restricted stock to officers of the Company during fiscal 1997. Mr. Hammond was
awarded up to 46,145 shares of restricted stock during fiscal 1996. The
Company will issue Mr. Hammond 20% of the maximum number of shares awarded to
him if and when the closing price per share of Common Stock as quoted on the
Nasdaq National Market first equals or exceeds each of the following targets
for 20 consecutive market days: $18.91; $23.63; $29.54; $36.93; and $46.16.
The Company issued 9,229 shares of restricted stock to Mr. Hammond under this
award during fiscal 1996, and issued 9,229 additional shares during fiscal
1997.
The Compensation Committee believes that linking executive compensation
to corporate performance results in a better alignment of compensation with
corporate goals and shareholder interest. As performance goals are met or
exceeded, resulting in an increased value to shareholders, executives are
rewarded commensurately. The Compensation Committee believes that compensation
levels during fiscal 1997 adequately reflect the Company's compensation goals
and policies.
June 25, 1997
COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS
George C. Platt
Joseph J. Pietropaolo
Grant A. Dove
8
<PAGE> 11
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information concerning the
compensation paid or awarded to the Chief Executive Officer and the other four
most highly compensated executive officers of the Company in fiscal 1997 (the
"Named Officers") for services rendered in all capacities to the Company and
its subsidiaries for the fiscal years ended February 28, 1997, February 29,
1996 and February 28, 1995.
<TABLE>
<CAPTION> LONG TERM COMPENSATION
------------------- ----------------------
ANNUAL COMPENSATION AWARDS
- ---------------------------------------------------------------------------------------------------------------
RESTRICTED SECURITIES ALL OTHER
STOCK UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY (1) BONUS AWARDS (2) OPTIONS SATION (3)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Daniel D. Hammond 1997 $341,640 $ 85,410 $271,679 180,000 $4,133
----
Chairman of the Board and 1996 284,700 414,000 197,270 42,300 7,297
----
Chief Executive Officer 1995 284,700 334,700 ---- ---- 4,723
----
Michael W. Barker 1997 250,000 50,000 $226,374 100,000 4,900
----
President and Chief Operating 1996 220,000 212,000 164,374 52,700 7,475
----
Officer 1995 210,000 162,523 ---- 137,500 ----
----
Rob-Roy J. Graham 1997 163,542 42,500 $135,825 16,500 4,906
----
Secretary 1996 119,063 53,000 98,624 17,150 5,851
----
Chief Financial Officer 1995 100,000 41,608 ---- 17,400 3,000
----
Chief Accounting Officer
Controller
Dwain H. Hammond 1997 150,000 18,900 $135,825 9,650 2,571
----
Senior Vice President of 1996 124,146 23,960 98,624 10,750 2,636
----
Engineering 1995 107,303 20,947 ---- 18,000 2,426
----
James A. Barton (4) 1997 128,750 9,656 ---- 8,250 2,714
----
Vice President-Customer 1996 21,795 4,385 ---- 16,000 ----
----
Operations 1995 ---- ---- ---- ---- ----
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes amounts deferred at the Named Officer's election pursuant to the
Company's 401(k) Employee Savings Plan.
(2) Four of the Named Officers were issued shares of restricted Common Stock
(the "Restricted Shares") on July 26, 1995 and April 2, 1996. Awards of 9,229
Restricted Shares to Mr. Daniel Hammond, 7,690 Restricted Shares to Mr. Barker
and 4,614 Restricted Shares to each of Messrs. Rob-Roy Graham and Dwain Hammond
were made under the InterVoice, Inc. Restricted Stock Plan during each of
fiscal 1996 and fiscal 1997. Any Restricted Shares awarded to a Named Officer
will be forfeited if the Named Officer's employment with the Company
voluntarily or involuntarily terminates for any reason (including death,
disability or retirement) within two years after the date upon which the
Restricted Shares were issued to such Named Officer. The value of Restricted
Shares is based on the closing price of the Company's Common Stock on the
Nasdaq National Market on July 26, 1995, for shares issued during fiscal 1996,
and April 2, 1996 for shares issued during fiscal 1997. At February 28, 1997,
the aggregated Restricted Share holdings in shares (and dollars) were 18,458
($203,038) for Mr. Daniel Hammond, 15,380 ($169,180) for Mr. Barker and 9,228
($101,508) for each of Messrs. Graham and Dwain Hammond, based on the closing
price of the Company's Common Stock on February 28, 1997. The Restricted
Shares disclosed in this table will earn dividends when, as, and if dividends
are declared on the Common Stock by the Board of Directors, subject to vesting
of the shares of Common Stock.
(3) Represents Company contributions on behalf of the Named Officers under the
Company's 401(k) Employee Savings Plan and amounts includable in compensation
for Company-paid group term life insurance and spousal travel.
(4) Mr. Barton commenced his employment with the Company effective December,
1995.
9
<PAGE> 12
OPTION GRANTS
The following table sets forth certain information with respect to grants
of stock options pursuant to the Company's 1990 Incentive Plan during fiscal
1997 to the Named Officers.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
POTENTIAL
REALIZED VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- ---------------------------------------------------------------------------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE
OPTIONS IN FISCAL PRICE EXPIRATION
NAME GRANTED (1) 1997 (/SH) DATE 5% 10%
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Daniel D. Hammond(2) 180,000 29.8% $20.75 6/20/02 $1,270,257 $2,881,780
Michael W. Barker(2) 100,000 16.6% 20.75 6/20/02 705,698 1,600,989
Rob-Roy J. Graham(2) 16,500 2.7% 27.25 4/08/02 152,916 346,913
Dwain H. Hammond(3) 9,650 1.6% 27.25 4/08/06 165,376 419,095
James A. Barton(3) 8,250 1.4% 27.25 4/08/06 141,383 358,293
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) All options were granted at fair market value (the closing price of the
Common Stock on the Nasdaq National Market) on the date of grant. The options
granted to Messrs. Daniel Hammond, Barker and Graham become exercisable in
equal amounts on the first three anniversaries of the date of grant and expire
six years from the date of grant. The options granted to Messrs. Dwain Hammond
and James Barton become exercisable in equal amounts on the first five
anniversaries of the date of grant and expire ten years from the date of grant.
(2) The assumed 5% and 10% rates of stock price appreciation are specified by
the proxy rules and do not reflect expected appreciation. The amounts shown
represent the assumed value of the stock options (less exercise price) at the
end of the six-year period beginning on the date of grant and ending on the
option expiration date. For a six-year period beginning February 28, 1997,
based on the closing price on the Nasdaq National Market of the Common Stock of
$11.00 on such date a share of the Common Stock would have a value on February
28, 2003 of approximately $14.74 at an assumed appreciation rate of 5% and
approximately $19.49 at an assumed appreciation rate of 10%.
(3) The assumed 5% and 10% rates of stock price appreciation are specified by
the proxy rules and do not reflect expected appreciation. The amounts shown
represent the assumed value of the stock options (less exercise price) at the
end of the ten-year period beginning on the date of grant and ending on the
option expiration date. For a ten-year period beginning February 28, 1997,
based on the closing price on the Nasdaq National Market of the Common Stock of
$11.00 on such date a share of the Common Stock would have a value on February
28, 2003 of approximately $17.92 at an assumed appreciation rate of 5% and
approximately $28.53 at an assumed appreciation rate of 10%.
10
<PAGE> 13
OPTION EXERCISES AND HOLDINGS
The following table provides information concerning option exercises in
fiscal 1997 and the value of unexercised options held by each of the Named
Officers at the end of fiscal 1997.
<TABLE>
<CAPTION> --------------------------------------------
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR END FISCAL YEAR END(1)
- ---------------------------------------------------------------------------------------------------------------
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Daniel D. Hammond 0 0 194,100 / 208,200 0 / 0
Michael W. Barker 91,667 $711,566 100,933 / 180,967 0 / $42,188
Rob-Roy J. Graham 0 0 36,651 / 33,733 $81,652 / $8,326
Dwain H. Hammond 0 0 22,583 / 22,817 $17,999 / $9,001
James A. Barton 0 0 5,333 / 18,917 0 / 0
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Values stated are based upon the closing price ($11.00) of the Company's
Common Stock as reported on the Nasdaq National Market on February 28,
1997 and the exercise prices of the options.
AGREEMENTS WITH EXECUTIVE OFFICERS
Employment Agreement of Daniel D. Hammond. On June 21, 1996 the Company
entered into a new renewed and extended employment agreement with Mr. Hammond
for the three-year period commencing March 1, 1996. Under the new agreement,
Mr. Hammond's salary was increased for the first time in two years from
$284,700 to $341,640. Additionally, Mr. Hammond's annual bonus opportunity
was revised so as to be based 50% on any increase in earnings per share and 50%
on any increase in revenues, in each case as compared to the immediately
preceding fiscal year unless revenues or earnings per share are less than they
were for fiscal 1996. If revenues or earnings per share, as the case may be,
for the immediately preceding fiscal year are less than they were for fiscal
1996, then such change will be compared to fiscal 1996. With respect to
earnings per share, Mr. Hammond's bonus opportunity ranges from 10% of his base
salary if earnings per share do not decrease more than 10% from the base fiscal
year to 125% of his base salary if earnings per share increase by 40% or more.
With respect to revenues, Mr. Hammond's bonus opportunity ranges from 25% of
his base salary if revenues increase by less than 10% to 125% of his base
salary if revenues increase by 40% or more.
Mr. Hammond's prior employment agreement awarded him a bonus for each
cent of earnings per share, irrespective of the amount of earnings per share
for the preceding fiscal year. Mr. Hammond received a bonus of $85,410 for
fiscal 1997, as compared to a bonus of $414,000 for fiscal 1996. See the
"Summary Compensation Table" for a discussion of the bonuses and salary paid to
Mr. Hammond for the three-year period ending February 28, 1997. Finally, in
connection with the renewal and extension of Mr. Hammond's employment
agreement, he was awarded a stock option covering 180,000 shares of Common
Stock under the Company's 1990 Incentive Stock Option Plan.
Except as discussed below, Mr. Hammond's agreement requires that he not
compete with the Company while he renders services under the agreement and for
a period of eighteen months thereafter. The new agreement also provides that
the Company may pay Mr. Hammond an additional discretionary bonus in an amount
to be approved by the Board of Directors of the Company. The agreement further
provides that the Company may only terminate Mr. Hammond for cause or because
he has become disabled (as such terms are defined in the agreement). If Mr.
Hammond is terminated for cause, the Company will have no liability for further
payments to him. If Mr. Hammond becomes completely disabled, the Company is
obligated to pay him an amount equal to his base salary in effect at the
11
<PAGE> 14
time of disability through the expiration date of the agreement. If, however,
following a change of control of the Company (defined as a triggering event in
the agreement), Mr. Hammond's employment is terminated without cause, if Mr.
Hammond terminates his employment for good reason (as defined in the
agreement), or if he terminates his employment without good reason by giving
twelve months' prior notice, the Company must pay him a lump sum amount (the
"Change in Control Amount") equal to 2.99 multiplied by an amount of salary and
bonus which he would have received for the year in which he was terminated (as
determined in accordance with the agreement). The agreement also provides
that, if the Change in Control Amount is subject to certain federal excise
taxes, the Company will "gross-up" the Change in Control Amount such that Mr.
Hammond would receive a net amount after such taxes, equal to the Change in
Control Amount that he would have received had such taxes not been imposed. In
addition, following a change in control of the Company, Mr. Hammond may
terminate his employment for any reason by giving twelve months' prior written
notice. Mr. Hammond will be released from his covenant not to compete if he is
terminated by the Company without cause and without being disabled, or if he
elects to terminate his employment after a default by the Company prior to a
triggering event or after a triggering event for good reason. If Mr. Hammond's
employment is terminated without cause, the Company shall be obligated to pay
him an amount equal to the remaining compensation he would have received under
the agreement (as determined in accordance with the agreement), and the option
to purchase 180,000 shares of Common Stock that Mr. Hammond was granted in
connection with his agreement will become completely exercisable, to the extent
that the option is not already exercisable as of such date.
Employment Agreement of Michael W. Barker. On June 21, 1996 the Company
renewed and extended Mr. Barker's employment agreement for the three-year
period commencing March 1, 1996. Under the new agreement, Mr. Barker's salary
was increased from $220,000 to $250,000. Additionally, Mr. Barker's annual
bonus opportunity was revised so as to be based 50% on any increase to earnings
per share and 50% on any increase to revenues, in each case as compared to the
immediately preceding fiscal year unless revenues or earnings per share are
less than they were for fiscal 1996. If revenues or earnings per share, as the
case may be, for the immediately preceding fiscal year are less than they were
for fiscal 1996, then such change will be compared to fiscal 1996. With
respect to earnings per share, Mr. Barker's bonus opportunity ranges from 10%
of his base salary if earnings per share do not decrease more than 10% from the
base fiscal year to 100% of his base salary if earnings per share increase by
40% or more. With respect to revenues, Mr. Barker's bonus opportunity ranges
from 20% of his base salary if revenues increase by less than 10% to 100% of
his base salary if revenues increase by 40% or more. Other than the matters
discussed in this paragraph, Mr. Barker's employment agreement is substantially
the same as Mr. Hammond's new renewed and extended employment agreement, which
is discussed above. Mr. Barker's prior employment awarded him a bonus for each
cent of earnings per share irrespective of the amount of earnings per share for
the preceding fiscal year. Mr. Barker received a bonus of $50,000 for fiscal
1997, as compared to a bonus of $212,000 for fiscal 1996. See the "Summary
Compensation Table" for a discussion of the bonuses and salary paid to Mr.
Barker for the three-year period ending February 28, 1997. Finally, in
connection with the renewal and extension of Mr. Barker's employment agreement,
he was awarded the previously described option covering 100,000 shares of
Common Stock under the 1990 Incentive Plan.
12
<PAGE> 15
STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total shareholder return
(assuming reinvestment of dividends) to the Company's shareholders during the
five-year period ended February 28, 1997, as well as an overall broad stock
market index, the Nasdaq Market Index, and a peer group index for the Company,
the index for SIC Code 3661 Telephone and Telegraph Apparatus. The stock
performance graph assumes $100 was invested on March 1, 1992 in the Company's
Common Stock and each such index.
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
[GRAPH]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) INTERVOICE, INC. INDUSTRY INDEX BROAD MARKET
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 167.57 117.65 100.16
1994 243.24 140.74 127.62
1995 327.03 160.01 121.85
1996 516.22 231.09 168.25
1997 237.84 286.28 201.94
- --------------------------------------------------------------------------------------------
</TABLE>
ASSUMES $100 INVESTED ON MARCH 1, 1992
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDED FEBRUARY 28, 1997
13
<PAGE> 16
CERTAIN TRANSACTIONS
For information concerning agreements between the Company and Daniel D.
Hammond and Michael W. Barker see "Agreements With Executive Officers".
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During the year ended February 28, 1997, Mr. Grant A. Dove inadvertently
failed to report the award of a stock option on a Statement of Changes in
Beneficial Ownership on Form 4. The transaction was subsequently reported on a
Statement of Changes in Beneficial Ownership on Form 4. In making this
disclosure the Company has relied solely on written representations of its
current and former executive officers and directors and copies of the reports
filed by them with the Securities and Exchange Commission.
AUDITORS
The Board of Directors has appointed the firm of Ernst & Young LLP as
independent auditors of the Company for the fiscal year ending February 28,
1998. Ratification or other action by the Company's shareholders concerning
the appointment of the independent auditors of the Company for fiscal 1998 is
not required.
During the fiscal year ended February 28, 1997, Ernst & Young LLP
provided audit services to the Company consisting of examination of the
financial statements of the Company and services related to filings with the
Securities and Exchange Commission. Ernst & Young LLP also provided consulting
services relating to tax compliance, compensation and information system
security. All services provided were approved, and the possible effect on the
independence of such firm were considered, by the Board of Directors prior to
the time the services were provided. Ernst & Young LLP has advised the Company
that no material relationship exists between Ernst & Young LLP or any of its
partners and the Company and that it is independent from the Company in all
respects.
Representatives of Ernst & Young LLP are expected to attend the 1997
annual meeting. These representatives will have the opportunity to make a
statement at the meeting if they desire to do so and will also be available to
respond to appropriate questions.
SHAREHOLDER PROPOSALS AND OTHER MATTERS
Shareholder proposals intended to be included in the Company's proxy
statement relating to the 1998 annual meeting of shareholders must be received
by the Company at its office in Dallas, Texas, addressed to the Secretary of
the Company, no later than February 27, 1998.
The cost of solicitation of proxies will be borne by the Company.
Solicitation may be made by mail, personal interview, telephone and/or
telegraph by officers and regular employees of the Company, who will receive no
additional compensation therefor. To aid in the solicitation of proxies, the
Company has employed the firm of Corporate Investor Communications, Inc., a
proxy solicitation firm in Carlstadt, New Jersey, to solicit proxies from
brokers, banks, nominees, institutional holders and individual holders for use
at the meeting at a fee of approximately $5,000 plus out- of-pocket expenses.
The Company will bear the reasonable expenses incurred by banks, brokerage
firms and custodians, nominees and fiduciaries in forwarding proxy material to
beneficial owners.
INTERVOICE, INC.
DANIEL D. HAMMOND
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
Dallas, Texas
June 27, 1997
14
<PAGE> 17
PROXY INTERVOICE, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael W. Barker and Daniel D. Hammond,
and either of them, proxies with power of substitution in each, and hereby
authorizes them to represent and to vote, as designated below, all shares of
common stock, no par value per share ("Common Stock"), of INTERVOICE, INC. (the
"Company"), standing in the name of the undersigned at the close of business on
June 6, 1997, at the annual meeting of shareholders to be held on July 24,
1997, at Dallas, Texas, and at any adjournment thereof and especially to vote
on the items of business specified herein, as more fully described in the
notice of the meeting dated June 27, 1997, and the proxy statement accompanying
the same, the receipt of which is hereby acknowledged.
This proxy when duly executed will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES FOR DIRECTOR NAMED HEREIN, AND IN THE DISCRETION OF THE
PROXIES ON ANY OTHER BUSINESS.
(Continued and to be signed on reverse side)
<PAGE> 18
INTERVOICE, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. Election of Directors
NOMINEES: DANIEL D. HAMMOND, MICHAEL W. BARKER, JOSEPH J. PIETROPAOLO,
GEORGE C. PLATT, GRANT A. DOVE AND DAVID W. BRANDENBURG
FOR all WITHHOLD FOR all nominees, except
nominees AUTHORITY vote withheld for those named below:
to vote for
all nominees
[ ] [ ] [ ]
------------------
Nominee Exceptions
2. In their discretion, the proxies are authorized to vote upon such other
business or matters as may properly come before the meeting or any
adjournment thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The undersigned hereby revokes any proxy or proxies heretofore given to
represent or vote such Common Stock and hereby ratifies and confirms all action
that said proxies, their substitutes, or any of them, might lawfully take in
accordance with the terms hereof.
- --------------------------------------------------------------------------------
Signature Date
- --------------------------------------------------------------------------------
Signature Date
NOTE: This proxy should be signed exactly as name appears hereon. Joint owners
should both sign. If signed as attorney, executor, guardian, or in some other
representative capacity, or as an officer of a corporation, please indicate
full title or capacity. Please complete, date and return it in the enclosed
envelope, which requires no postage if mailed in the United States.
