<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
SCHEDULE 14D-1
(AMENDMENT NO. 3)
Tender Offer Statement
Pursuant To Section 14(d)(1)
of the Securities Exchange Act of 1934
-------------------------------
BRITE VOICE SYSTEMS, INC.
(Name of Subject Company)
INTERVOICE ACQUISITION SUBSIDIARY III, INC.
INTERVOICE, INC.
(Bidders)
-------------------------------
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
-------------------------------
110411105
(CUSIP Number Of Class of Securities)
-------------------------------
DANIEL D. HAMMOND
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
INTERVOICE, INC.
17811 WATERVIEW PARKWAY
DALLAS, TEXAS 75252
(972) 454-8000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
COPY TO:
SAM P. BURFORD, JR.
THOMPSON & KNIGHT, P.C.
1700 PACIFIC AVENUE, SUITE 3300
DALLAS, TEXAS 75201
(214) 969-1354
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<PAGE> 2
Calculation of Filing Fee
<TABLE>
<CAPTION>
Transaction Valuation* Amount of Filing Fee
--------------------------------------------------------------------
<S> <C>
$122,719,277 $24,543.86
</TABLE>
- ---------------------------
* For purposes of calculating fee only. The total transaction value is
based on 9,158,155 Shares, the number of shares for which the Offer (as
defined herein) is made, multiplied by the offer price of $13.40 per
share. The amount of the filing fee calculated in accordance with
Regulation 240.0-11 of the Securities Exchange Act of 1934, as amended,
equals 1/50 of one percentum of the value of shares to be purchased.
[x] Check box if any part of the fee is offset as provided by Rule 0-11
(a)(2) and identify the filing with which the offsetting fee was
previously paid.
Identify the previous filing by registration statement number or the
Form or Schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: $24,543.86. Filing Party: InterVoice Acquisition Subsidiary III, Inc.
InterVoice, Inc.
Form or Registration No.: Schedule 14D-1. Date Filed: May 3, 1999.
</TABLE>
<PAGE> 3
SCHEDULE 14D-1
CUSIP NO. 110411105
- --------------------------------------------------------------------------------
1. Names of Reporting Person S.S. or I.R.S. Identification Nos. of Above
Persons
INTERVOICE, INC. (75-1927578)
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds BK
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
TEXAS
- --------------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
3,090,541 (1)
(see the Offer to Purchase)
- --------------------------------------------------------------------------------
8. Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row (7)
25.18%
- --------------------------------------------------------------------------------
10. Type of Reporting Person
CO
- --------------------------------------------------------------------------------
- ---------------------
(1) The Reporting Person disclaims beneficial ownership of these shares.
(2) Based on 12,271,928 shares of Common Stock, no par value, of the
Subject Company issued and outstanding as of April 27, 1999.
<PAGE> 4
SCHEDULE 14D-1
CUSIP NO. 110411105
- --------------------------------------------------------------------------------
1. Names of Reporting Person S.S. or I.R.S. Identification Nos. of Above
Persons
INTERVOICE ACQUISITION SUBSIDIARY III, INC. (75-2816154)
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds BK
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
NEVADA
- --------------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
3,090,541 (1)
(see the Offer to Purchase)
- --------------------------------------------------------------------------------
8. Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row (7)
25.18%
- --------------------------------------------------------------------------------
10. Type of Reporting Person
CO
- --------------------------------------------------------------------------------
- ---------------------
(1) The Reporting Person disclaims beneficial ownership of these shares.
(2) Based on 12,271,928 shares of Common Stock, no par value, of the
Subject Company issued and outstanding as of April 27, 1999.
<PAGE> 5
TENDER OFFER
This Amendment No. 3 amends and supplements the Tender Offer Statement
on Schedule 14D-1, dated May 3, 1999, as amended by Amendment No. 1 dated May 5,
1999 and by Amendment No. 2 dated May 10, 1999 (collectively, the "Statement"),
of InterVoice Acquisition Subsidiary III, Inc., a Nevada corporation (the
"Purchaser") and a wholly owned subsidiary of InterVoice, Inc., a Texas
corporation ("Parent"), filed in connection with the Purchaser's offer to
purchase 9,185,155 shares of common stock, no par value (the "Shares" or "Common
Stock"), of Brite Voice Systems, Inc., a Kansas corporation (the "Company"), as
set forth in the Statement. All capitalized terms not defined herein have the
meanings given to them in the Offer to Purchase dated May 3, 1999 (the "Offer to
Purchase") filed as Exhibit (a)(1) to the Statement, the Supplemental Letter
dated May 10, 1999 filed as Exhibit (a)(11) to the Statement, and the
Supplemental Letter dated May 17, 1999 filed as Exhibit (a)(12) to the
Statement.
ITEM 1. SECURITY AND SUBJECT COMPANY
The response to Item 1 is hereby amended and supplemented as follows:
The information set forth in the supplemental letter to stockholders of
the Company dated May 17, 1999 (a copy of which has been filed as Exhibit
(a)(12) herein) is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND
The response to Item 2 is hereby amended and supplemented as follows:
The information set forth in the supplemental letter to stockholders of
the Company dated May 17, 1999 (a copy of which has been filed as Exhibit
(a)(12) herein) is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
The response to Item 3 is hereby amended and supplemented as follows:
The information set forth in the supplemental letter to stockholders of
the Company dated May 17, 1999 (a copy of which has been filed as Exhibit
(a)(12) herein) is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS
The response to Item 5 is hereby amended and supplemented as follows:
1
<PAGE> 6
The information set forth in the supplemental letter to stockholders of
the Company dated May 17, 1999 (a copy of which has been filed as Exhibit
(a)(12) herein) is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
The response to Item 6 is hereby amended and supplemented as follows:
The information set forth in the supplemental letter to stockholders of
the Company dated May 17, 1999 (a copy of which has been filed as Exhibit
(a)(12) herein) is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES
The response to Item 7 is hereby amended and supplemented as follows:
The information set forth in the supplemental letter to stockholders of
the Company dated May 17, 1999 (a copy of which has been filed as Exhibit
(a)(12) herein) is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION
The response to Item 10 is hereby amended and supplemented as follows:
The information set forth in the supplemental letter to stockholders of
the Company dated May 17, 1999 (a copy of which has been filed as Exhibit
(a)(12) herein) is incorporated herein by reference.
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
The response to Item 11 is hereby amended and supplemented as follows:
(a)(12) Supplemental letter dated May 17, 1999.
(a)(13) Transcript of InterVoice, Inc./Brite Voice Systems, Inc. Conference
Call on April 27, 1999.
2
<PAGE> 7
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
InterVoice Acquisition Subsidiary III, Inc.
By: /s/ Rob-Roy J. Graham
---------------------------------------------
Name: Rob-Roy J. Graham
Title: President and Chief Financial Officer
Date: May 17, 1999
3
<PAGE> 8
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
InterVoice, Inc.
By: /s/ Rob-Roy J. Graham
------------------------------
Name: Rob-Roy J. Graham
Title: Chief Financial Officer
Date: May 17, 1999
4
<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- -------- -------------------------------------------------------------
<S> <C>
(a)(12) Supplemental letter dated May 17, 1999.
(a)(13) Transcript of InterVoice, Inc./Brite Voice Systems, Inc.
Conference Call on April 27, 1999.
</TABLE>
<PAGE> 1
EXHIBIT 99.(a)(12)
INTERVOICE, INC.
17811 WATERVIEW PARKWAY
DALLAS, TEXAS 75252
May 17, 1999
To Stockholders of Brite Voice Systems, Inc.:
INTERVOICE ACQUISITION SUBSIDIARY III, INC., a Nevada corporation (the
"Purchaser") and a wholly owned subsidiary of InterVoice, Inc., a Texas
corporation ("Parent"), hereby supplements its Offer to Purchase dated May 3,
1999, as amended by First Supplemental Letter dated May 10, 1999 (the "Offer to
Purchase"), pursuant to which the Purchaser is offering to purchase 9,158,155
shares of common stock, no par value (the "Common Stock" or the "Shares"), of
Brite Voice Systems, Inc., a Kansas corporation (the "Company"), which represent
approximately 75% of the outstanding Shares, at a price of $13.40 per Share, net
to the seller in cash, upon the terms and subject to the conditions set forth in
the Offer to Purchase and in the related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the
"Offer"). Capitalized terms used herein but not defined shall have the
respective meanings ascribed to them in the Offer to Purchase.
THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JUNE 1, 1999, UNLESS
THE OFFER IS EXTENDED.
This supplement amends the Offer to Purchase to clarify that the Offer is
subject to a financing condition, to clarify the description of the
consideration that will be offered to stockholders of the Company in the Merger
and to explain how the parties to the Merger Agreement negotiated and arrived at
the formula used for calculating the Merger Consideration.
TO CLARIFY THAT THE OFFER IS SUBJECT TO OBTAINING DEBT FINANCING FOR WHICH
PARENT AND THE PURCHASER HAVE RECEIVED A BANK COMMITMENT LETTER, THE SECOND
PARAGRAPH OF THE COVER PAGE TO THE OFFER TO PURCHASE IS AMENDED AND RESTATED IN
ITS ENTIRETY AS FOLLOWS:
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, AT LEAST
9,158,155 SHARES OF COMMON STOCK, WHICH REPRESENT APPROXIMATELY 75% OF THE
SHARES OF COMMON STOCK OUTSTANDING, THE RECEIPT BY PARENT AND/OR THE PURCHASER
OF THE DEBT FINANCING FOR THE TRANSACTIONS CONTEMPLATED BY THE COMMITMENT LETTER
FROM BANK OF AMERICA, AND THE OTHER CONDITIONS SET FORTH IN THIS OFFER TO
PURCHASE. SEE SECTION 14.
TO CLARIFY THE DESCRIPTION OF THE CONSIDERATION THAT WILL BE OFFERED TO
STOCKHOLDERS OF THE COMPANY IN THE MERGER, THE FOURTH AND FIFTH PARAGRAPHS OF
THE INTRODUCTION TO THE OFFER TO PURCHASE ARE AMENDED AND RESTATED IN THEIR
ENTIRETY AS FOLLOWS:
At the effective time of the Merger (the "Effective Time"), each
outstanding Share other than Excluded Shares (as herein defined) will be
canceled and converted into the right to receive the merger consideration. The
relative proportions of the cash and stock components of the merger
consideration are affected by (i) the unexpended proceeds from the Debt
Financing after completion of the Offer, if any, and (ii) Parent's desire not to
issue more than approximately 19.9% of its common stock ("Parent Common Stock")
as part of the merger consideration, since the issuance of a greater number of
shares would require Parent to obtain shareholder approval under applicable
listing requirements of the Nasdaq National Market (the "Nasdaq"). Accordingly,
the merger consideration will be calculated differently depending upon whether
the Purchaser purchases at least 9,158,155 Shares (the "Minimum Condition") in
the Offer. Method (1) will be used if
1
<PAGE> 2
the Purchaser purchases 9,158,155 Shares or more in the Offer, thereby utilizing
all available cash in the Offer; Method (2) will be used if the Purchaser lowers
the Minimum Condition and purchases less than 9,158,155 Shares in the Offer and,
consequently, has cash available to apply toward the purchase of the remaining
Shares in the Merger.
Method (1) If the Purchaser purchases 9,158,155 Shares or more in the
Offer, each Share then outstanding (other than Excluded Shares) will be
converted into the right to receive that number of shares of Common Stock
of Parent equal to $13.40 divided by the average closing price (the
"Average Trading Price") of Parent Common Stock on the Nasdaq for the 25
trading days immediately preceding the Effective Time. The Average Trading
Price must be at least equal to the Lower Collar (as defined below) and may
not exceed $14.00, thereby providing limited upside and downside protection
with respect to Parent Common Stock.
Method (2) If the Purchaser lowers the Minimum Condition and purchases
less than 9,158,155 Shares in the Offer, each Share then outstanding (other
than Excluded Shares) will be converted into the right to receive (a) an
amount in cash equal to the quotient of (w) the difference between (i) the
product of $13.40 multiplied by 9,158,155 Shares and (ii) the aggregate
purchase price for the number of Shares actually purchased in the Offer,
divided by (x) a number of Shares equal to (A) the total number of Shares
issued and outstanding immediately prior to the Effective Time (B) less the
Excluded Shares (C) plus the Dissenting Shares (as herein defined) (such
quotient referred to as the "Cash Amount"), plus (b) that number of shares
of Parent Common Stock equal to the quotient of (y) the difference between
$13.40 and the Cash Amount, divided by (z) the Average Trading Price. This
method of calculating the merger consideration allows the Purchaser to
apply the cash not used in the Offer toward the purchase of the remaining
Shares outstanding on a pro rata basis.
The term "Dissenting Shares" means Shares held by stockholders who
properly perfect their dissenters' rights under Kansas law.
The term "Excluded Shares" means (i) Shares owned by Parent, the
Purchaser, any other subsidiary of Parent, the Company and any of the
Company's subsidiaries and (ii) Dissenting Shares.
The term "Lower Collar" means $8.00, except that if a Lower Collar of
$8.00 would result in Parent issuing more than 5,719,877 Shares of Parent
Common Stock, representing approximately 19.9% of the outstanding Parent
Common Stock, in the Merger, the Lower Collar will be an amount per share
equal to the product of (i) $8.00 multiplied by (ii) a fraction of which
(A) the numerator is the total number of shares of Parent Common Stock that
would be issued in the Merger if the Lower Collar were $8.00 and (B) the
denominator is 5,719,877. The purpose of the Lower Collar mechanism is to
prevent Parent from having to issue in excess of approximately 19.9% of its
outstanding Parent Common Stock in connection with the Merger after taking
into account Parent Common Stock which would be issuable as a result of the
exercise of outstanding stock options granted by the Company. Under the
listing requirements of the Nasdaq, the shareholders of Parent would have
to approve the issuance of over 20% of the then outstanding Parent Common
Stock which would delay and add another element of uncertainty to the
closing of the Merger.
The foregoing shall be referred to collectively as the "Merger
Consideration." Parent Common Stock issuable as part of the Merger Consideration
will include the associated preferred stock purchase rights (the "Rights").
As illustrated by the examples set forth on Annex A hereto, as long as the
Average Trading Price is at least $8.00 and does not exceed $14.00 at the
Effective Time, the value of the Merger Consideration (based in whole or in part
on the Average Trading Price) will equal $13.40 under either Method (1) or
Method (2). If, however, the Average Trading Price drops below $8.00 or exceeds
$14.00, the value of the Merger Consideration at the Effective Time under either
Method (1) or Method (2) may be less or greater than the $13.40 in cash per
Share payable pursuant to the Offer as illustrated in Annex A hereto.
If more than 9,158,155 Shares are validly tendered prior to the Expiration
Date (as defined) and not withdrawn, the Purchaser will, upon the terms and
subject to the conditions of the Offer, accept for payment
2
<PAGE> 3
(and thereby purchase) such Shares on a pro rata basis, with adjustments to
avoid purchases of fractional shares of Common Stock, based on the number of
Shares validly tendered prior to the Expiration Date and not withdrawn by each
tendering stockholder. Shares (other than Excluded Shares) that are not accepted
for payment and thereby not purchased in the Offer as a result of the proration
will be converted into the right to receive the Merger Consideration as
calculated above. Because of the difficulty of determining precisely the number
of Shares validly tendered and not withdrawn, if proration is required, the
Purchaser would not expect to announce the final results of the proration until
at least seven Nasdaq trading days after the Expiration Date. Preliminary
results of proration will be announced by press release as promptly as
practicable after the Expiration Date. Holders of shares of Common Stock may
obtain such preliminary information from the Depositary, and may also be able to
obtain such preliminary information from their brokers. Tendering stockholders
will not receive payment for Shares accepted for payment pursuant to the Offer
until the final proration factor is known. Subject to the terms of the Merger
Agreement, the Purchaser reserves the right (but shall not be obligated) to
accept for payment more than 9,158,155 Shares pursuant to the Offer, although
the Purchaser has no present intention of doing so.
THE SEVENTH PARAGRAPH OF THE INTRODUCTION TO THE OFFER TO PURCHASE IS
DELETED IN ITS ENTIRETY SINCE ITS SUBSTANCE IS DESCRIBED IN MORE DETAIL ABOVE.
TO EXPLAIN HOW THE PARTIES TO THE MERGER AGREEMENT NEGOTIATED AND ARRIVED
AT THE FORMULA USED FOR CALCULATING THE MERGER CONSIDERATION, THE 19TH PARAGRAPH
OF SECTION 16 -- "BACKGROUND OF THE OFFER" IS AMENDED AND RESTATED AS FOLLOWS:
Following the April 15, 1999 Board of Directors meetings, further extensive
negotiations concerning the terms of the acquisition agreement, the actual
consideration for the Company's Shares and the mix of the cash and stock
components of the consideration were conducted. In a telephone conference on
April 21, 1999 among Mr. Hammond, Mr. Graham, Mr. Brannan and Mr. Etherington,
it was agreed that the price to be paid to AT&T in cancellation of its
outstanding warrant to purchase the Company's Common Stock would be split, in
part, by the two companies, resulting in a revised offer price of $13.40 per
Share, and when the Offer and the Merger are viewed together, would consist of
$10.00 per Share in cash and $3.40 per Share in Parent Common Stock. The
transaction was still structured as a tender offer whereby the cash portion of
the consideration would be distributed followed by a merger in which the Shares
not purchased in the tender offer would receive Parent Common Stock or a
combination of any remaining cash and Parent Common Stock.
Based on 12,271,928 Shares outstanding, Parent agreed to pay $122,719,280
to purchase 9,158,155 Shares in the tender offer for $13.40 cash per Share. The
number of shares of Parent Common Stock to be issued in exchange for the
remaining Shares in the Merger would be determined by an exchange ratio based on
the trailing 25-day average price of Parent Common Stock collared between $8.00
and $14.00. The $8.00 lower collar was fixed so that Parent would in no event
have to issue more than approximately 19.9% of its outstanding Parent Common
Stock. Under the Nasdaq listing standards, Parent would be required to
separately obtain approval of its shareholders if the transaction required
Parent to issue more than 20% of its outstanding stock. This would delay and add
an additional element of uncertainty to the transaction which was unacceptable
to the Company. The $8.00 collar assumed that all outstanding stock options
under the Company's stock option plans would be cancelled prior to exercise as
contemplated by the Merger Agreement. If, however, the Company is unable to
repurchase all outstanding stock options and the exercise of the unrepurchased
options by optionees prior to the Effective Time would cause Parent to have to
issue more than 19.9% of its outstanding stock in connection with the
transaction, the parties agreed that the $8.00 lower collar would be adjusted
upward so that the maximum number of shares Parent would have to issue in such
event would be 5,719,877, representing approximately 19.9% of the outstanding
Parent Common Stock. If the Purchaser decided to waive the Minimum Condition and
purchase less than 9,158,155 Shares in the Offer, the cash not used in the Offer
would be applied toward the purchase of the remaining Shares outstanding on a
pro rata basis and the exchange ratio would be adjusted to take into account the
amount of cash to be distributed per Share in determining the number of shares
of Parent Common Stock to be issued in the Merger.
3
<PAGE> 4
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone numbers set forth below. Requests for
additional copies of the Offer to Purchase, this letter, the Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
be directed to the Information Agent or to brokers, dealers, commercial banks
and trust companies.
---------------
THE INFORMATION AGENT FOR THE OFFER IS:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
Banks and Brokers Call Collect: (201) 896-1900
All Others Call Toll Free: (877) 460-2559
4
<PAGE> 5
ANNEX A
EXAMPLES OF CALCULATING THE MERGER CONSIDERATION
EXAMPLES OF METHOD (1):
- On April 30, 1999, the Average Trading Price of Parent Common Stock was
$10.41. Based on this Average Trading Price, the exchange ratio in the
Merger is approximately 1.2872 ($13.40 / $10.41) shares of Parent Common
Stock for each Share. Applying this exchange ratio, each outstanding
Share at the Effective Time would be exchanged for Parent Common Stock
and cash in lieu of fractional shares of Parent Common Stock with a value
(based on the $10.41 Average Trading Price) of approximately $13.40, and
the maximum number of shares of Parent Common Stock that Parent would be
required to issue is 4,008,122. This assumes that all stock options
outstanding under the Company's stock option plans are cancelled as
contemplated by the Merger Agreement and that there are 3,113,773 Shares
outstanding immediately prior to the Effective Time.
- If the Average Trading Price of Parent Common Stock is $7.50, the
exchange ratio in the Merger would be 1.675 ($13.40 / the Lower Collar of
$8.00) shares of Parent Common Stock for each Share. Applying this
exchange ratio, each outstanding Share at the Effective Time would be
exchanged for Parent Common Stock and cash in lieu of fractional shares
of Parent Common Stock with a value (based on the $7.50 Average Trading
Price) of approximately $12.56, and the maximum number of shares of
Parent Common Stock that Parent would be required to issue is 5,215,569
shares. This assumes that all stock options outstanding under the
Company's stock option plans are cancelled as contemplated by the Merger
Agreement and that there are 3,113,773 Shares outstanding immediately
prior to the Effective Time.
- Assuming a $7.50 Average Trading Price, if the Company is unable to
repurchase outstanding stock options covering 1,000,000 Shares under the
Company's stock option plans and the exercise of these options would
cause Parent to issue more than 5,719,877 shares of Parent Common Stock
in the Merger, the exchange ratio ("ER") is calculated as follows, where
"X" is the total number of shares of Parent Common Stock that would be
issued in the Merger if the Average Trading Price were $8.00 and "Y" =
5,719,877:
$13.40 / ($8.00 X X) = ER
--
( Y)
For purposes of this example, assume that stock options to purchase
1,000,000 Shares are exercised prior to the Effective Time, the Purchaser
purchases 9,158,155 Shares in the Offer and there are 4,113,773 Shares
outstanding immediately prior to the Effective Time. If the Average
Trading Price were $8.00 the exchange ratio would be 1.675 as calculated
above. Parent would therefore have to issue 6,890,569 shares of the Parent
Common Stock, or "X" (4,113,773 X 1.675). Based on the formula above, the
exchange ratio (ER) based on this calculation equals approximately 1.3904
shares of Parent Common Stock for each Share. Therefore, each outstanding
Share at the Effective Time would be exchanged for Parent Common Stock and
cash in lieu of fractional shares of Parent Common Stock with a value
(based on the $7.50 Average Trading Price) of approximately $10.43 and the
number of shares of Parent Common Stock that Parent would be required to
issue in the Merger would be 5,719,877.
- If the Average Trading Price of Parent Common Stock is $15.00, the
exchange ratio in the Merger would be approximately 0.9571 ($13.40 / the
upper collar of $14.00) of a share of Parent Common Stock for each Share.
Applying this exchange ratio, each outstanding Share at the Effective
Time would be exchanged for Parent Common Stock and cash in lieu of
fractional shares of Parent Common Stock with a value (based on the
$15.00 Average Trading Price) of approximately $14.36 and the maximum
number of shares of Parent Common Stock that Parent would be required to
issue is
A-1
<PAGE> 6
2,980,325. This assumes that all outstanding stock options under the
Company's stock option plans are cancelled as contemplated by the Merger
Agreement and that there are 3,113,773 Shares outstanding immediately
prior to the Effective Time.
EXAMPLES OF METHOD (2):
For each of the following examples, assume the Purchaser only purchases
9,000,000 Shares in the Offer, so the Purchaser will have available $2,119,277
cash that it would have otherwise spent at $13.40 per Share if it purchased the
additional 158,155 Shares needed to satisfy the Minimum Condition:
- If the Average Trading Price of Parent Common Stock is $10.41, each
outstanding Share at the Effective Time would be exchanged for
approximately $.65 in cash (derived by dividing the available cash by the
number of Shares outstanding immediately prior to the Effective Time),
plus a number of shares of Parent Common Stock and cash in lieu of
fractional shares of Parent Common Stock based on an exchange ratio of
approximately 1.2248 (derived by subtracting the $.65 cash per share from
$13.40 to obtain $12.75, and dividing $12.75 by the $10.41 Average
Trading Price). Applying this exchange ratio, each outstanding Share at
the Effective Time would be exchanged in part for shares of Parent Common
Stock and cash in lieu of fractional shares of Parent Common Stock with a
value (based on the $10.41 Average Trading Price) equal to approximately
$12.75. Combined with the distributed cash, each Share outstanding at the
Effective Time would receive Merger Consideration with a combined value
of approximately $13.40. This assumes that the all outstanding stock
options under the Company's stock option plans are cancelled as
contemplated by the Merger Agreement and that there are 3,271,928 Shares
outstanding immediately prior to the Effective Time.
- If the Average Trading Price of Parent Common Stock is $7.50, each
outstanding Share would be exchanged for approximately $.65 in cash, plus
a number of shares of Parent Common Stock and cash in lieu of fractional
shares of Parent Common Stock based on an exchange ratio of 1.5938
(derived by dividing $12.75 by a Lower Collar of $8.00). Applying this
exchange ratio, each outstanding Share at the Effective Time would be
exchanged in part for shares of Parent Common Stock and cash in lieu of
fractional shares of Parent Common Stock with a value (based on the $7.50
Average Trading Price) equal to approximately $11.95. Combined with the
distributed cash, each Share outstanding at the Effective Time would
receive Merger Consideration with a combined value of approximately
$12.60. This assumes that all outstanding stock options under the
Company's stock option plans are cancelled as contemplated by the Merger
Agreement and that there are 3,271,928 Shares outstanding immediately
prior to the Effective Time.
- Assuming a $7.50 Average Trading Price, if the Company is unable to
repurchase outstanding stock options covering 1,000,000 Shares under the
Company's stock option plans and the exercise of these outstanding stock
options would cause Parent to issue more than 5,719,877 Shares of Parent
Common Stock in the Merger, each outstanding Share would be exchanged for
approximately $.50 in cash (derived by dividing the available cash by the
number of Shares outstanding immediately prior to the Effective Time)
plus a number of shares of Parent Common Stock and cash in lieu of
fractional shares of Parent Common Stock based on an exchange ratio
("ER") calculated as follows, where "X" is the total number of shares of
Parent Common Stock that would be issued in the Merger if the Average
Trading Price were $8.00 and "Y" = 5,719,877:
($13.40 - $.50) / ($8.00 X X ) = ER
---
( Y )
For purposes of this example, assume that stock options to purchase
1,000,000 Shares are exercised prior to the Effective Time and there are
4,271,928 Shares outstanding immediately prior to the Effective Time. If
the Average Trading Price were $8.00 the exchange ratio would be 1.6125
($12.90 / $8.00). Parent would therefore have to issue 6,888,483 shares of
Parent Common Stock, or "X" (4,271,928 X 1.6125). Based on the formula
above, the exchange ratio (ER) would equal 1.3389 shares of Parent Common
Stock for each Share. Applying the exchange ratio (ER), each
A-2
<PAGE> 7
outstanding Share at the Effective Time would be exchanged in part for
Parent Common Stock and cash in lieu of fractional shares of Parent Common
Stock with a value (based on the $7.50 Average Trading Price) equal to
$10.04 and the number of shares of Parent Common Stock that Parent would
be required to issue in the Merger is 5,719,877. Combined with the
distributed cash, each Share outstanding at the Effective Time would
receive Merger Consideration with a combined value of $10.54.
- If the Average Trading Price of Parent Common Stock is $15.00, each
outstanding Share would be exchanged for approximately $.65 in cash, plus
a number of shares of Parent Common Stock and cash in lieu of fractional
shares of Parent Common Stock based on an exchange ratio of 0.9107
(derived by dividing $12.75 by the upper collar of $14.00). Applying this
exchange ratio, each outstanding Share at the Effective Time would be
exchanged for shares of Parent Common Stock and cash in lieu of
fractional shares of Parent Common Stock with a value (based on the
$15.00 Average Trading Price) equal to approximately $13.66. Combined
with the distributed cash, each Share outstanding at the Effective Time
would receive Merger Consideration with a combined value of approximately
$14.31. This assumes that all outstanding stock options under the
Company's stock option plans are cancelled as contemplated by the Merger
Agreement and that there are 3,271,928 Shares outstanding immediately
prior to the Effective Time.
A-3
<PAGE> 1
EXHIBIT 99.(a)(13)
TRANSCRIPT OF INTERVOICE, INC./BRITEVOICE SYSTEMS, INC.
CONFERENCE CALL ON APRIL 27, 1999
ROB GRAHAM: Hello, I'm Rob Graham, CFO of InterVoice. This conference
call has been arranged to discuss the merger of InterVoice
and Brite Voice Systems. With me are Stan Brannan, Brite's
Chairman and CEO, Dan Hammond, InterVoice's Chairman and
CEO, Dave Berger, InterVoice's President and Chief
Operating Officer and Glenn Etherington, Brite's CFO.
Stan, Dan, Dave and I will make comments about the
InterVoice Brite merger after which we along with Glenn
will take questions for as long as time allows. But before
we start I would like to remind you that our comments and
responses may contain forward-looking statements which are
subject to the risks and uncertainties which both our
companies have detailed in our various SEC filings. These
risks and uncertainties are such that actual results could
be different from what we discuss today. This concludes
the introduction to this call. I will be back a bit later
on with comments on the financial aspects of the
transaction. Now let me turn the mike over to Dan Hammond.
DAN HAMMOND: Thanks Rob. The merging of InterVoice and Brite creates a
clear leader in the call automation industry.
Consolidation of operations will facilitate a significant
increase in leverage of our combined infrastructure and
R&D resources. This provides a worldwide platform for
growth eliminating duplicate efforts and enabling a major
increase of our investment in emerging technology such as
internet telephony, speech recognition and new phone-based
prepaid services. Our combined revenue provides a well
balanced mix between CPE and Telco, domestic and
international as well as products and managed services.
The merger will create a stronger resulting company which
we plan to call InterVoice Brite. This strength will
provide benefits to our investors, customers and
employees. First, our investors. We believe market
leadership along with the increased resource leverage will
generate faster top line growth along with EPS growth. Our
decision to use debt as the primary vehicle to facilitate
this transaction was driven by several factors including
the current valuation of InterVoice shares. We will begin
reducing debt with cash flow from day one and eliminate it
in about two and a half years. While currently debt
provides greater EPS performance, we'll consider
converting to equity when market conditions are more
favorable and only if it would be nondilutive. Second, our
customers. Our product plan secures customers' investment
in both the InterVoice and Brite product lines. CPE and
Telco customers have large investments in their existing
solutions and applications. Over the
<PAGE> 2
course of the next two quarters, we'll provide product
bridges allowing our combined installed base to benefit
from new technology such as hands- free IVR and internet
telephony. Third, employees, our most valuable resource.
Both InterVoice and Brite have spent the better part of
the last decade building world class teams of computer
telephony professionals. We believe InterVoice Brite will
provide opportunities which will continue to retain and
attract the best and brightest for continued success going
forward. As of today we have an organization plan for the
combined companies. This plan was jointly developed by
senior management from InterVoice and Brite. Every
employee deserves to know their role going forward and
those whose jobs are redundant as a result of this merger
deserve to know that as well. Suffice it to say, we will
hit the ground running when the transaction is complete
with all employees fully energized knowing their role in
the new organization. In summary, this is a defining event
in our industry. InterVoice Brite is a clear industry
leader. We will provide the best value for our investors,
innovative products and services for our customers and
career challenges and opportunities for our employees. Now
over to Stan Brannan.
STAN BRANNAN: Thanks Dan. Today is a very significant day for all Brite
shareholders, customers and employees. As Brite's founder,
chairman, CEO and the second largest shareholder, I can
say I fully support the tender offer announced today by
InterVoice. I agree with Dan Hammond that this combination
will create a much stronger company and a global leader.
Brite and InterVoice are very complementary companies. We
develop very similar technology solutions and we sell in
similar marketplaces. When you study the details it
becomes clear that these two companies bring a lot of
synergy to their combined mission. Brite continues to be
successful by growing our share of the global Telco market
and we continue to build significant recurring service
business using our technology experience. We are also very
successful in the high end of the interactive voice
response market. Upon analyzing our product and marketing
strengths it became clear that Brite and InterVoice don't
directly compete on most sales opportunities. We actually
serve strong separate customer lists with our own unique
platforms, products and services. We do see opportunities
to cross sell products in different markets where the
sales force of Brite or InterVoice is stronger. This means
that some Brite products will have better sales in markets
where today we don't have the best sales coverage. And it
also means that InterVoice products can be sold in markets
where Brite has a strong marketing presence but may not
have the platform or application the customer wants. We
will combine our global marketing efforts, support
organizations and our product
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<PAGE> 3
development programs. This will create the opportunity for
more rapid growth and better operating margins for the
combined company. By increasing our total resources we can
compete for much larger opportunities. Brite has an
outstanding employee and management team with years of
experience and a track record of bringing important
innovative new products to our customers. By combining our
employee team with InterVoice we will be able to offer
customers a more comprehensive catalog of applications and
product solutions. We will offer better global customer
support and almost double the size and scope of our
product development effort. Employees will have increased
opportunities for growth and responsibility with the
combined company. Shareholders should benefit from sales
synergies and the improvement and efficiencies gained by
combining these two similar companies. The management
teams have reviewed the plan for merger and have
identified numerous opportunities to improve operations
and save costs. Once the tender offer is successful we
expect to be ready to implement the integration plan
quickly and generate the synergies and the savings. I
think it is a very well thought out plan. I agree with Dan
that the employees will have a better company to work for
with more opportunities. The combination will eliminate
some duplicated positions and we will be communicating
directly with these employees as quickly as possible. Our
goal is to make sure the combined employee team is
motivated to implement the many synergies this combination
offers. And I'm excited about being part of the new
InterVoice Brite. Now to turn the call over to Dave
Berger, InterVoice President and Chief Operating Officer.
DAVE BERGER: Thanks Stan. Dan talked about what this merger meant for
our customers, our employees and our investors. I'd like
to add another layer of specificity to what he talked
about. A part of our due diligence in this process was
focused on two key questions. Does it make strategic sense
to merge these companies? And can we make it work
economically? Let me address the question of does it make
strategic sense first. We see these businesses as highly
complementary and when combined will provide the
opportunity to accelerate the implementation of both
companies' strategies. This is so because one company's
strong suit is the other company's strategic investment.
We fill in each others holes very nicely. This is possible
because each company is focused on the same markets,
products and customers. But they are at different stages
of maturity in each of the product lines and sales
channels. Let me give you some specific examples. Now the
numbers I'm using are approximate but they illustrate the
point. At the end of last year Brite had 100 plus million
3
<PAGE> 4
dollars of sales in their networks business and 35 million
dollars of sales in their IVR business. InterVoice, on
the other hand, was the reciprocal of that, with 35
million in the networks business and 100 million of sales
in the IVR business. Both were focused on these same two
businesses. So when combined, both the networks and IVR
businesses are about the same size. Each about 135 plus
million in sales. So Brite has their strongest suit in the
networks business and is developing the IVR business
whereas InterVoice has its strong suit in the IVR business
and is developing the networks business. Each is making
product and channel investments to grow both pieces of
their business. Let me give you some examples. In order to
grow the IVR business Brite is currently developing an NT
based IVR product and call center solutions. InterVoice
has product strength here and can accelerate Brite's
efforts. On the other hand InterVoice is currently
investing in and develop products for the network
business. Brite has product strength here and can
accelerate these efforts. Another example, Brite has a
managed services business that excites the InterVoice
sales team. The InterVoice network sales guys are excited
about having this new offering to sell immediately. And
the IVR sales guys see a base on which a future service
offering for the IVR business could be built. Another
example, Europe. Brite has a strong customer base and a
significant product development and support facility which
is located in the U.K. Now this base can accelerate
InterVoice's ability to penetrate the European market.
Likewise, in Latin America, InterVoice has a strong
presence and a strong customer base that can accelerate
Brite's efforts there. These examples and others in the
technology area like speech recognition are the basis for
our view that these businesses are highly complementary.
So the case for strategic fit can be well supported which
brings us to the question, can we make it work
economically? To answer this question and as part of our
due diligence efforts, we had a total of 15 senior
managers from both companies locked in a hotel room for
several days. Their mission was to produce a jointly
recommended road map for the integration of these
businesses and to provide a joint view of the savings that
could be achieved by combining them. As a result of this
effort we estimate that 20 plus million dollars of savings
out of the combined operating plans on an annualized basis
can be achieved. This view is based on the joint
recommendations of that team who by the way have worked
very well together throughout this process. The savings is
primarily head count based but there are other sources of
cost savings as well. The head count savings will be about
evenly split between reductions and hiring avoidance and
will be staged over time. Since none of this can be
implemented prior to completing the merger and getting the
teams together to develop a
4
<PAGE> 5
detailed operating plan, it's premature to provide further
detail on the combined operations at this time. However in
the next segment of this call Rob Graham will give you
more information about the deal structure. So in
conclusion, we think there's a good strategic fit and it
makes sense economically. Although all of the
implementation is in front of us, we have a good plan for
this stage of the game that can generate the necessary
savings and accelerate the product and channel
developments of both companies. The senior managers from
both companies support these plans and respective sales
teams are excited about the opportunities that they see.
Now let me pass the microphone back to Rob.
ROB GRAHAM: Thanks Dave. As we detailed in our press release the
aggregate consideration to be paid for Brite's 12.3
million outstanding shares is approximately $164.4
million. Of that total $122.7 million will be paid in cash
and the rest in InterVoice common stock. The press release
described the two step nature of the merger. The first
step being a cash tender offer for approximately 9.2
million Brite shares at $13.40 per share. The second step
will consist of a merger in which those Brite shares not
tendered will be exchanged into InterVoice shares. The
ratio of exchange will be determined at the day of closing
based on the average price of an InterVoice share for the
preceding 25 trading days. Now two questions should
immediately rise in your minds as to this merger process.
Number one, why a cash tender offer? And number two, why a
cash tender offer for less than 100% of Brite's shares?
The answers. Both Brite and InterVoice management teams
and their respective board of directors feel a cash tender
offer accelerates the certainty of the merger. This is
important for all InterVoice Brite constituents, certainty
for our customers, certainty for our employees and
certainty for the financial markets. Perhaps even more
important is that the acceleration of the certainty of the
merger allows both management teams to accelerate the
execution of the integration of both companies. The answer
to the second question is quite simple. There was a
practical limit to the acquisition financing available
from the private debt markets. Given the answer I gave
about financing, the next question I suppose would be
asked is: If there were a limitation on acquisition
financing, and a portion of the consideration for Brite
shares had to be InterVoice stock, why was the purchase
option versus the pooling of interest option selected? The
answer is that we firmly believe that within a few years
this merger, even though accounted for as a purchase, will
be significantly more accretive by any measure of earnings
per share than pooling. Why? Two main reasons. The first
is that fewer shares will be issued under a purchase
transaction versus pooling offsetting the impact of the
amortization of the excess of purchase price
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<PAGE> 6
over net assets. The second is that the expected synergies
of combining our companies' operations will generate
significant cash flow for rapid debt reduction, reducing
the initial interest drag on earnings. I also believe that
as we de-lever the company, we will have the opportunity
to refinance our acquisition financing with a lower cost
working capital facility or with longer-lived, lower cost
debt vehicles. Of course, with the synergies to be
generated by combining operations and if the financial
markets recognize the resulting improvement in earnings,
there may be an opportunity to replace the debt with
equity. Now before any of you hit the panic button about
that last statement, let me repeat what I've so often
said. We only want to do accretive transactions. Rest
assured we will keep this in mind before we would consider
approaching the equity markets. Now while we're on the
subject of accretiveness, this transaction will be
accretive. It would be inappropriate and premature for me
to speak about the details of the synergies to be derived
from this combination because they cannot be acted upon
until we clear regulatory and shareholder approvals. And
as with any merger there will be an initial dilutive shake
out period as we begin execution of our synergy plans.
Suffice to say that in our due diligence process we have
identified in excess of $20 million in synergy savings,
the full impact of which will be enjoyed in the fiscal
year beginning March 1, 2000. There is the potential of $5
million in synergy savings in this current fiscal year. As
mentioned in our press release Dan Hammond will be
InterVoice Brite's chairman and CEO. Stan Brannan will
become the board's vice chairman. Dave Berger will become
the InterVoice Brite president and chief operating officer
and I'll be the chief financial officer. Ray Naeini and
Scotty Walsh will become executive vice presidents
reporting to Dave Berger. Glenn Etherington has agreed to
continue with InterVoice Brite to help with integrating
the two companies. I hope to persuade Glenn to accept a
meaningful permanent position with InterVoice Brite, but
I'm respectful of his personal career objectives. We are
very pleased with this merger. I for one have been
impressed by the Brite management team as we have done our
mutual due diligence. I look forward to future conference
calls and personal meetings with many of you to keep you
abreast of this landmark transaction. Thank you.
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