<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED
NOVEMBER 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-13616
INTERVOICE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 75-1927578
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
17811 WATERVIEW PARKWAY DALLAS, TX 75252
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
972-454-8000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------------- --------------
The Registrant had 14,576,407 shares of common stock, no par value per share,
outstanding as of the close of the period covered by this report.
================================================================================
<PAGE> 2
InterVoice, Inc.
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
November 30, February 28,
ASSETS 1997 1997
- ------------------------------------ ------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 6,483,528 $ 24,162,024
Accounts and notes receivable, net of allowance
for doubtful accounts of $365,000 in 1998 and
$250,950 in 1997 31,394,844 33,506,747
Inventory 14,436,891 12,107,738
Prepaid expenses and other assets 2,473,254 3,833,248
Deferred taxes 1,419,495 1,419,495
------------- -------------
56,208,012 75,029,252
PROPERTY AND EQUIPMENT
Building 16,202,970 16,140,989
Computer equipment and software 24,021,316 20,663,578
Furniture, fixtures and other 3,529,143 5,322,288
Service equipment 2,593,086 1,975,825
------------- -------------
46,346,515 44,102,680
Less allowance for depreciation 14,371,746 13,676,956
------------- -------------
31,974,769 30,425,724
OTHER ASSETS
Intangible assets, net of amortization
of $2,398,943 in 1998 and
$1,802,708 in 1997 5,405,129 3,723,533
------------- -------------
$ 93,587,910 $ 109,178,509
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 12,505,321 $ 12,893,725
Customer deposits 2,007,582 3,403,739
Deferred income 5,836,114 4,995,231
Income taxes payable 243,541 --
------------- -------------
20,592,558 21,292,695
DEFERRED TAXES 1,695,294 1,695,294
CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred Stock, $100 par value--2,000,000
shares authorized: none issued
Common Stock, no par value, at nominal
assigned value--62,000,000 shares
authorized: 19,394,907 issued,
14,576,407 outstanding in 1998
and 19,353,973 issued, 16,353,973
outstanding in 1997 9,681 9,667
Additional paid-in capital 43,257,343 43,028,780
Unearned compensation (120,299) (493,634)
Treasury stock - at cost (42,238,920) (24,003,245)
Retained earnings 70,392,253 67,648,952
------------- -------------
71,300,058 86,190,520
------------- -------------
$ 93,587,910 $ 109,178,509
============= =============
</TABLE>
<PAGE> 3
InterVoice, Inc.
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------- -------------------------
November 30, November 30, November 30, November 30,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales $25,545,358 $24,335,974 $79,563,975 $77,195,497
Cost of goods sold 11,755,893 9,788,985 34,652,227 29,052,321
----------- ----------- ----------- -----------
Gross margin 13,789,465 14,546,989 44,911,748 48,143,176
----------- ----------- ----------- -----------
Research and development expenses 3,256,266 2,996,496 9,758,871 8,610,129
Selling, general and administrative
expenses 10,250,538 8,094,980 31,641,530 24,121,521
Litigation settlement -- 1,800,000 -- 1,800,000
----------- ----------- ----------- -----------
Income from operations 282,661 1,655,513 3,511,347 13,611,526
Other income 83,422 157,444 407,655 515,322
----------- ----------- ----------- -----------
Income before income taxes 366,083 1,812,957 3,919,002 14,126,848
Income taxes 109,825 562,967 1,175,701 4,626,543
----------- ----------- ----------- -----------
Net income $ 256,258 $ 1,249,990 $ 2,743,301 $ 9,500,305
=========== =========== =========== ===========
Earnings per common and
common equivalent share $ .02 $ .08 $ .17 $ .57
=========== =========== =========== ===========
Weighted average number of common
and common equivalent shares 15,557,589 16,524,457 16,090,923 16,675,136
=========== =========== =========== ===========
</TABLE>
<PAGE> 4
InterVoice, Inc.
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
-------------------------- Paid-in Unearned Treasury Retained
Shares Amount Capital Compensation Stock Earnings Total
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at February 28, 1997 16,353,973 $ 9,667 $ 43,028,780 $ (493,634) $(24,003,245) $ 67,648,952 $ 86,190,520
Purchase of treasury
stock (1,818,500) -- -- -- (18,235,675) -- (18,235,675)
Exercise of stock
options 31,070 14 228,563 -- -- -- 228,577
Issuance of restricted
stock, net of
forfeitures 9,864 -- -- 373,335 -- -- 373,335
Net Income -- -- -- -- -- 2,743,301 2,743,301
----------------------------------------------------------------------------------------------------
Balance at November 30, 1997 14,576,407 $ 9,681 $ 43,257,343 $ (120,299) $(42,238,920) $ 70,392,253 $ 71,300,058
====================================================================================================
</TABLE>
<PAGE> 5
InterVoice, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- ---------------------------
November 30, November 30, November 30, November 30,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 256,258 $ 1,249,990 $ 2,743,301 $ 9,500,305
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 2,277,451 1,203,460 6,496,907 3,433,518
Changes in operating assets
and liabilities: 1,989,553 (5,837,558) 905,274 (13,267,465)
------------ ------------ ------------ ------------
NET CASH FROM OPERATIONS 4,523,262 (3,384,108) 10,145,482 (333,642)
INVESTING ACTIVITIES
Purchase of property
and equipment (1,416,896) (1,170,571) (7,539,049) (3,349,036)
Purchased software (432,675) (1,226,538) (2,277,831) (3,296,588)
Decrease in notes
receivable -- -- -- 40,412
------------ ------------ ------------ ------------
(1,849,571) (2,397,109) (9,816,880) (6,605,212)
FINANCING ACTIVITIES
Exercise of stock options 20,716 578,306 228,577 2,300,165
Purchase of Treasury Stock (16,438,576) (18,235,675)
------------ ------------ ------------ ------------
(16,417,860) 578,306 (18,007,098) 2,300,165
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (13,744,169) (5,202,911) (17,678,496) (4,638,689)
Cash and cash equivalents,
beginning of period 20,227,697 24,138,198 24,162,024 23,573,976
------------ ------------ ------------ ------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 6,483,528 $ 18,935,287 $ 6,483,528 $ 18,935,287
============ ============ ============ ============
</TABLE>
<PAGE> 6
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NINE MONTHS ENDED NOVEMBER 30, 1997
NOTE A -- BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information. The
Balance Sheet at February 28, 1997 has been derived from audited financial
statements at that date. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the unaudited November 30, 1997 and 1996 financial statements
have been included. Operating results for the nine month period ended November
30, 1997 are not necessarily indicative of the results that may be expected for
the year ending February 28, 1998 as they may be affected by a number of
factors, including the timing and ultimate receipt of orders from significant
customers which continue to constitute a large portion of the Company's sales,
the sales channel mix of products sold, and changes in general economic
conditions, any of which could have an adverse effect on operations.
NOTE B -- EARNINGS PER SHARE
Earnings per share are computed based on the sum of the average outstanding
common shares and common equivalent shares. Common equivalent shares assume the
exercise of all dilutive stock options using the treasury stock method. Primary
and fully diluted earnings per share are not materially different for the
periods presented.
On February 28, 1998, the Company will be required to adopt Statement No. 128
"Earnings per Share" issued by the Financial Accounting Standards Board. Under
the new method of computing
<PAGE> 7
earnings per share, the dilutive effect of stock options will be excluded. At
the time of adoption, the Company will compute earnings per share under the new
method and will restate all prior periods.
NOTE C -- CONTINGENCIES
The Company is subject to certain legal proceedings and claims that arise in the
ordinary course of its business. In the opinion of management, based on
discussions with and advice of legal counsel, the amount of ultimate liability
with respect to these actions will not materially affect the consolidated
results of operations or financial condition of the Company.
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SALES. Sales in the first nine months and third quarter of fiscal 1998
increased approximately $2.4 million and $1.2 million, respectively, or 3% and
5%, respectively, when compared to the same periods of fiscal 1997. These
increases were due primarily to increased domestic customer premise equipment
(CPE) sales and international telecommunications (Telco) sales, particularly to
Latin American telecommunications companies. Domestic CPE sales for the first
nine months and third quarter of fiscal 1998 constituted 58% and
56%,respectively, of the Company's total sales and increased 14% and 16%,
respectively, when compared to the same periods of fiscal 1997.
Worldwide Telco sales for the third quarter of fiscal 1998 constituted 18%
of the Company's total sales and increased 45% when compared to the same period
of fiscal 1997. Even though worldwide Telco sales improved during the third
quarter, such sales in the first nine months of fiscal 1998 were approximately
equal to Telco sales in the same period of fiscal 1997, due to lower domestic
Telco sales in the first half of fiscal 1998. As a result, worldwide Telco sales
constituted 17% of the Company's total sales for the first nine months of both
fiscal 1998 and fiscal 1997. Sales to international Telco customers constituted
75% and 73% of the Company's worldwide telecommunications sales during the first
nine months and third quarter of fiscal 1998, respectively, compared to 19% and
54%, respectively, in the same periods of fiscal 1997. The Company believes that
beginning in the second half of fiscal 1997 some domestic telecommunications
companies began to temporarily delay their implementation of call automation
solutions while they further evaluate marketing investment strategies in the
light of new opportunities resulting from deregulation.
<PAGE> 9
International CPE sales and service revenue constituted the remaining 25%
of the Company's total sales during the first nine months of fiscal 1998
compared to 30% in the same period of fiscal 1997. International sales and
service revenues were 26% of the Company's total sales during the third quarter
of fiscal 1998 as compared to 37% in the same period of fiscal 1997. The Company
enjoyed a large sale to a Latin American CPE customer in the third quarter of
fiscal 1997. No customer accounted for 10% of the Company's total sales during
the first nine months or third quarter of fiscal 1998.
The Financial Accounting Standards Board has approved the American
Institute of Certified Public Accountants Statement of Position 97-2 (SOP ) on
software revenue recognition on sales requiring a high degree of software
customization, which currently account for approximately 30% of the Company's
total sales. The SOP must be adopted by the Company effective with the beginning
of its fiscal 1999. The Company, however, may consider early adoption of the
SOP, but has not yet determined when it will do so. While at this time the
Company cannot predict or quantify the impact of the new SOP, it may delay the
recognition of revenue on certain sales when adopted by the Company.
COST OF GOODS SOLD. Cost of goods sold as a percentage of sales increased
to 44% and 46% in the first nine months and the third quarter of fiscal 1998,
respectively, compared to 38% and 40%, respectively, in the same periods of
fiscal 1997. This was the result of less than anticipated sales in the first
nine months and third quarter of fiscal 1998 and the Company's continued
investment in applications engineering and customer service resources to pursue
opportunities in both the CPE and Telco markets.
RESEARCH AND DEVELOPMENT. Research and development expenses in the first
nine months and third quarter of fiscal 1998 increased approximately $1.1
million and approximately $0.3 million, or 13% and 9%, respectively, over the
same periods of fiscal 1997. Such expenses in
<PAGE> 10
the first nine months and third quarter of fiscal 1998 increased to 12% and 13%,
respectively, of the Company's total sales, versus 11% and 12%, respectively, in
the same periods of fiscal 1997. Research and development expenses in the first
nine months and third quarter of fiscal 1998 included porting the Company's
InterSoft core software to the UNIX and Windows NT operating systems; developing
computer platform independent voice automation hardware and software; and the
development of VisualConnect (the ability to communicate with OneVoice Systems
via the Internet) and InVision (the Company's next generation custom application
development tool).
The Company continued development of its OneVoice Software Agent Platform
including OneVoice Systems (the Company's Interactive Voice Response (IVR)
system), OneVoice 5000 (the Company's high density IVR system), InterDial (the
Company's outbound predictive dialer system), OneLink (a digital interface for
analog switches), and digital VocalCard software and hardware functionality.
Expenditures also were made for the completion of the Company's "InControl"
product line including the NSP5000 platform, which addresses the worldwide Telco
market.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased approximately $7.5 million and approximately $2.1 million in
the first nine months and third quarter of fiscal 1998, respectively, or 31% and
27%, respectively, as compared to fiscal 1997. As a percentage of the Company's
total sales, selling, general and administrative expenses in the first nine
months and third quarter of fiscal 1998 both increased to 40%. This was the
result of the Company's continued investments in hiring and training new and
existing sales, service and support personnel and in marketing and advertising
programs worldwide to pursue opportunities in both the CPE and Telco markets,
despite less than anticipated sales.
OTHER INCOME. Other income during the first nine months and third quarter
of fiscal 1998 were comparable with the same periods of fiscal 1997.
<PAGE> 11
INCOME FROM OPERATIONS. Operating income during the first nine months and
third quarter of fiscal 1998 of approximately $3.5 million and $0.3 million,
respectively, declined 75% and 83%, respectively, from the same periods in the
previous year. Despite less than anticipated sales, the Company increased its
investments in sales, marketing, application engineering and research and
development during the first half of fiscal 1998 in order to continue to pursue
opportunities in both the CPE and Telco markets. Net income during the first
nine months and third quarter of fiscal 1998 of approximately $2.5 million and
$2.2 million, respectively, declined 71% and 80%, respectively, from the same
periods in the previous year for the same reasons as operating income. The
Company has undertaken measures to control expenses, particularly selling,
general and administrative expenses. These expense control measures should begin
to reduce the Company's ratio of expenses to sales in future quarters, assuming
sales in future quarters remain at or above third quarter sales, and further
assuming that expense levels are not unduly influenced by unusually high one
time expenses related to litigation matters, any potential mergers or
acquisitions, any major research and development efforts which are not currently
contemplated but which become necessary in light of market or strategic
requirements, or any other future contingencies which are not currently
contemplated by the Company.
LIQUIDITY AND CAPITAL RESOURCES. At November 30, 1997, the Company had cash
reserves of approximately $6.5 million. The Company generated positive net cash
from operations of approximately $10.1 million and $4.5 million during the first
nine months and third quarter of fiscal 1998, respectively. Investing activities
(consisting of the acquisition and purchase of fixed assets and third party
software) and financing activities (consisting primarily of the repurchase of
shares of the Company's common stock) together used approximately $27.8 million
and $18.3 million of cash during the first nine months and third quarter of
fiscal 1998, respectively. Investment activities totaling approximately $9.8
million and $1.8 million during the first nine months and third quarter of
fiscal 1998 included purchasing computing hardware and software to
<PAGE> 12
update the Company's enterprise systems and to provide the information systems
infrastructure needed to support the Company's worldwide growth. Expenditures
were also made to acquire third party developed software to be integrated into
the Company's InterSoft software to allow the Company to offer its customers
greater functionality and to ensure the Company's products comply with an
increasing variety of hardware and software technologies and standards.
Financing activities during the nine months and third quarter of fiscal 1998
included the repurchase of 1,818,500 and 1,637,836 shares of the Company's
common stock, respectively, at a cost of approximately $18.2 million and $16.4
million, respectively, pursuant to authorization by its Board of Directors to
repurchase up to an aggregate of 2,000,000 shares. The Company believes that
market conditions made such shares of value to its shareholders. As a result of
these financing and investing activities, the Company experienced a reduction of
its cash reserves of approximately $17.7 million and $16.5 million during the
first nine months and third quarter of fiscal 1998, respectively. Subsequent to
the end of the third quarter of fiscal 1998 and as of December 31, 1997, the
Company repurchased an additional 181,500 shares of the Company's stock at a
cost of $1,358,960 to complete the share repurchase authorization mentioned
above. The Company reviews share repurchase and acquisition opportunities from
time to time and believes it has access to the financial resources necessary to
pursue attractive opportunities as they arise. On January 8, 1998, the Company's
Board of Directors authorized the repurchase of an additional 2,000,000 shares
of the Company's stock. As of January 14, 1998, the Company has not repurchased
shares of the Company's stock pursuant to the January 8, 1998 authorization.
On December 16, 1997, the Company announced the purchase, subject to normal
closing conditions, of the Enhanced Service Platform (ESP) product line from
Integrated Telephony Products, Inc., (ITP). The purchase is expected to close
during January, 1998. As consideration for the purchase, the Company is paying
ITP $4.0 million in cash and will issue ITP unregistered shares of the Company's
common stock with a market value equivalent to $0.5 million. While, as of
January 14, 1998, a final determination has not been made, the Company expects
to write off
<PAGE> 13
during the fourth quarter of fiscal 1998 a portion of the purchase price which
is attributable to in-process research and development
On December 17, 1997, the Company announced the resignation of Michael W.
Barker as its President and Chief Operating Officer and as a Director of the
Company. The Company expects to record expenses of approximately $0.5 million
during the fourth quarter of fiscal 1998 associated with Mr. Barker's
resignation.
On November 3, 1997, the Company completed an unsecured revolving credit
line agreement with NationsBank for $15 million. As of January 14, 1998, the
Company's credit line is available in its entirety. The Company believes that
its cash reserves, internally generated cash flow and credit line are sufficient
to meet its cash requirements for the foreseeable future.
DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS. This Form 10-Q
announcement includes "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. All statements other than statements of
historical facts included in this Form 10-Q announcement regarding the Company's
financial position, business strategy, plans and objectives of management of the
Company for future operations, and industry conditions, are forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to be correct. The following significant factors,
among others, sometimes have affected, and in the future could affect, the
Company's actual results and could cause such results during fiscal 1998, and
beyond, to differ materially from those expressed in any forward-looking
statements made by or on behalf of the Company:
<PAGE> 14
o The Company faces intense competition based on product capabilities and
experiences ever increasing demands from its actual and prospective
customers for its products to be compatible with a variety of rapidly
proliferating computing, telephony and computer networking technologies and
standards. The ultimate success of the Company's products is dependent, to
a large degree, on the Company allocating its resources to developing and
improving products compatible with those technologies, standards and
functionalities that ultimately become widely accepted by the Company's
actual and prospective customers. The Company's success is also dependent,
to a large degree, on the Company's ability to implement arrangements with
other vendors with complementary product offerings to provide actual and
prospective customers greater functionality and to ensure that the
Company's products are compatible with the increased variety of
technologies and standards.
o Continued availability of suitable non-proprietary computing platforms and
system operating software that are compatible with the Company's products.
o Certain of the components for the Company's products are available from
limited suppliers. The Company's operating results could be adversely
affected if the Company were unable to obtain such components in the
future.
o Increasing litigation with respect to the enforcement of patents,
copyrights and other intellectual property.
o The ability of the Company to retain its customer base and, in particular,
its more significant customers (such as Siemens AG, an InterVoice
distributor, which accounted for over ten percent of the Company's total
sales during fiscal 1997 and MCI Telecommunications, which accounted for
over ten percent of the Company's total sales during fiscal 1996 and 1995),
since
<PAGE> 15
such customers generally are not contractually obligated to place further
orders with the Company.
o Legislative and administrative changes and, in particular, changes
affecting the telecommunications industry, such as the recently enacted
Telecommunications Act of 1996. While many industry analysts expect the
Telecommunications Act of 1996 ultimately to result in at least a temporary
surge in the procurement of telecommunications equipment and related
software and other products, there is no assurance that the Company can
estimate with sufficient accuracy those products which will ultimately be
purchased, the timing of any such purchases or the quantities to be
purchased.
o Risks involved in the Company's international distribution and sales of its
products, including unexpected changes in regulatory requirements,
unexpected changes in exchange rates, the difficulty and expense of
maintaining foreign offices and distribution channels, tariffs and other
barriers to trade, difficulty in protecting intellectual property rights,
and foreign governmental regulations that may limit or restrict the sales
of call automation systems. Additionally, changes in foreign credit markets
and currency exchange rates may result in requests by many international
customers for extended payment terms and may have an adverse impact on the
Company's cash flow and its level of accounts receivable.
o The quantity and size of large sales (sales valued at approximately $1
million or more) during any fiscal quarter, which can cause wide variations
in the Company's sales and earnings on a quarter to quarter basis.
o Ability of the Company to properly estimate costs under fixed price
contracts in developing application software and otherwise tailoring its
systems to customer-specific requests.
<PAGE> 16
o The Company's ability to hire and retain, within the Company's compensation
parameters, qualified technical talent and outside contractors in highly
competitive markets for the services of such personnel.
o Mergers and acquisitions between companies in the telecommunications
industry which could result in fewer companies purchasing the Company's
products for Telco applications, and /or delay such purchases by companies
that are in the process of reviewing their strategic alternatives in light
of a merger or acquisition.
o Extreme price and volume trading volatility in the U.S. stock market, which
has had a substantial effect on the market prices of securities of many
high technology companies, frequently for reasons other than the operating
performance of such companies. These broad market fluctuations could
adversely affect the market price of the Company's common stock.
<PAGE> 17
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
10.1 Letter concerning resignation of Michael W. Barker
<PAGE> 18
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERVOICE, INC.
Date: 1/14/98 By: /s/ ROB-ROY J. GRAHAM
----------------------------------
Rob-Roy J. Graham
Chief Financial Officer
(Chief Accounting Officer)
<PAGE> 19
INTERVOICE, INC.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------- -------
<S> <C>
10.1 Letter concerning resignation of Michael W. Barker
27.1 Financial Data Schedule
Furnished upon request
</TABLE>
<PAGE> 1
EXHIBIT 10.1
[INTERVOICE LETTERHEAD]
December 17, 1997
Mr. Michael W. Barker
17811 Waterview Parkway
Dallas, Texas 75252
Dear Mike:
Reference is made to the Amended and Extended Employment Agreement between
you and InterVoice, Inc. (the "Company") effective as of March 1, 1996 (such
agreement, as at any time amended, is referred to in this letter as your
"Agreement"). All terms used in this letter but not defined in this letter
shall have the meanings given to them in the Agreement.
The Company intends to terminate your employment by the Company pursuant
to the terms of the Agreement. The Company is willing, however, to announce that
you have resigned to pursue other interests, and that the Company appreciates
your years of faithful service, and wishes you the best of luck in all your
future endeavors. If you wish for the company to treat your departure as a
voluntary resignation of your employment, effective February 28, 1998, please
sign below and, hand deliver the signed letter to me, or fax a signed copy to
my attention at 972/454-8120, by 6:30 p.m. this afternoon to evidence that you
are resigning from your employment with the Company. If you do resign from your
employment with the company effective February 28, 1998 pursuant to and in
accordance with this letter, you will also resign, effective December 31, 1997,
from you office as President of the Company, and any other office with the
company and any subsidiary of the Company, and furthermore, you will resign as
a member of the Board of Directors of the Company and any subsidiary of the
Company.
If you agree to make the resignations referenced in this letter, as
evidenced by signing and returning this letter by 6:30 p.m. this afternoon, the
Company will, for all purposes of your Agreement, treat the termination of your
employment as a termination by the Company without Cause. You will be required
to execute a separate letter of resignation that I will furnish you. Without
limiting the foregoing, the Company will make available to you the compensation
set forth in Section 10.1 of the Agreement if you resign in accordance with
this letter. If you do resign pursuant to and in accordance with this letter,
for purposes of Section 4(b) of your Agreement, you will earn the annual bonus
for the fiscal year ending February 28, 1998, in addition to the Remaining
Compensation pursuant to Section 10.1 of your Agreement as determined effective
February 28, 1998.
Furthermore, if you resign pursuant to and in accordance with this letter,
the Company will reimburse your payments of premiums through February 28, 1999,
for The Company's group health insurance coverage on you and any covered
dependents as in effect on February 28, 1998, to the same extent as if you had
continued as an employee, i.e. the Company will reimburse you for the
employer's share of the premium amount. To receive this coverage, you must make
your COBRA election and timely make the monthly premium payments that will be
specified. The Company will
<PAGE> 2
Mr. Michael W. Barker
December 17, 1997
Page -2-
also reimburse for your life insurance premiums currently being paid by the
Company with respect to your life insurance for the same period that COBRA
premiums are being reimbursed, to the extent and only to the of the premiums
being paid by the Company as of February 28, 1998, and the continuation of the
contract for your coverage under such life insurance plans (and the
contemplated reimbursement hereunder) is permitted by the applicable insurance
plan and under applicable laws. The Company will reimburse you for the
appropriate share of each premium within 10 days after receipt of your payment.
For purposes of the covenant not to compete in Section 6(b) of your
Agreement following your voluntary resignation pursuant to and in accordance
with this letter, the corporations which compete "with the Company's
activities" only include the following companies and their affiliates (you and
the Company acknowledge that the following are only approximate names of the
companies which may not be identical to the official names of such companies):
Periphonics, Brite Voice Systems, Syntellect and Edify.
In connection with your registration pursuant to and in accordance
with this letter, you may keep one of each of the following items which has
been made available to you by the Company: (a) a computer; (b) a computer
monitor; and (c) a computer keyboard.
/s/ DANIEL D. HAMMOND
Daniel D. Hammond
Chairman of the Board and
Chief Executive Officer
AGREED TO AND ACCEPTED BY:
/s/ MICHAEL W. BARKER
- ------------------------------
Michael W. Barker
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