<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:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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:
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(4) Date Filed:
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<PAGE> 2
INTERVOICE, INC.
17811 WATERVIEW PARKWAY
DALLAS, TEXAS 75252
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 17, 1999
To the Shareholders of INTERVOICE, INC.:
The annual meeting of shareholders of InterVoice, Inc., a Texas
corporation (the "Company"), will be held on Thursday, August 17, 1999, at 10:00
a.m., local time, at the Plano Centre, 2000 East Spring Creek Parkway, Plano,
Texas, for the following purposes:
1. To elect the Board of Directors for the ensuing year;
2. To consider and vote upon a proposal to approve the
Company's 1999 Stock Option Plan; and
3. To consider and vote upon a proposal to amend the
Articles of Incorporation of the Company to change the
corporate name of the Company to InterVoice-Brite, Inc.;
and
4. To transact such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Directors has fixed June 21, 1999 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, 1999 and the financial statements for such fiscal year are contained in the
accompanying 1999 Annual Report. The 1999 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
July ____, 1999
<PAGE> 3
INTERVOICE, INC.
17811 WATERVIEW PARKWAY
DALLAS, TEXAS 75252
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 17, 1999
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 July ___,
1999.
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
proposal to amend the Company's Articles of Incorporation to change the
Company's corporate name and the proposal to approve the Company's 1999 Stock
Option Plan.
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 or to recess
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 SHAREHOLDERS
Only holders of record of Common Stock at the close of business on June
21, 1999, 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
____________________ 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
certain summary information with respect to the only shareholders who were known
to the Company to be beneficial owners of more than five percent of the
outstanding shares of Common Stock as of June 10, 1999.
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned of Class
- ------------------- ------------------ --------
<S> <C> <C>
FMR Corp. 1,815,400 (1) 6.3%
82 Devonshire Street
Boston, Massachusetts 02109
Daniel D. Hammond (2) 1,577,048(3) 5.4%
17811 Waterview Parkway
Dallas, Texas 75252
</TABLE>
(1) A Schedule 13G dated February 1, 1999 was filed by FMR Corp., disclosing
the ownership of 907,700 shares of Common Stock, as of December 31, 1998,
as a result of acting as investment advisor to various investment
companies registered under Section 8 of the Investment Company Act of 1940
(the "Funds"). The shares of the Company's Common Stock disclosed in the
above table are adjusted to reflect a 100% stock dividend issued on shares
of Company Common Stock in January 1999. Fidelity Management and Research
Company ("Fidelity") is a wholly-owned subsidiary of FMR Corp. FMR Corp.,
through its control of Fidelity, and Edward C. Johnson III, Chairman of
FMR Corp., and certain Fidelity Funds each has sole power to dispose of
the 1,815,400 shares (as adjusted to reflect the stock dividend). Neither
FMR Corp. nor Edward C. Johnson III has the sole power to vote or direct
the voting of shares owned directly by the Fidelity Funds, which power
resides with the Funds' Boards of Trustees. Fidelity carries out the
voting of the shares under the written guidelines established by the
Funds' Boards of Trustees. 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
<PAGE> 4
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.
(2) Mr. Hammond is the Chairman of the Board and Chief Executive Officer of
the Company.
(3) Includes 514,600 shares not outstanding but subject to currently
exercisable stock options, and 342 shares in the Company's 401(k) Employee
Savings Plan.
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, the proposal to change the Company's corporate
name and the proposal to approve the Company's 1999 Stock Option Plan.
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 and voted thereat.
The proposal to change the Company's corporate name requires an amendment
to its Articles of Incorporation, which must be approved by the affirmative vote
of a majority of the outstanding Common Stock of the Company. Votes that are
withheld will have the same effect as a vote against this proposal.
The proposal to approve the Company's 1999 Stock Option Plan must be
approved by a majority of the shares of Common Stock present or represented and
voting at the meeting. Votes that are withheld will be excluded entirely from
the vote and will have no effect on the voting on this proposal, provided a
quorum is present.
Brokers who hold shares in street name only have the authority to vote on
certain items when they have not received instructions from beneficial owners.
Any "broker non-votes" will have no effect on the election of directors or the
proposal to approve the Company's 1999 Stock Option Plan, but broker non-votes
will have the same effect as a "no" vote on the proposal to amend the Company's
Articles of Incorporation to change its corporate name.
EXECUTIVE OFFICERS
Following is certain information regarding certain executive officers of
the Company. Information regarding the only other executive officer of the
Company, Daniel D. Hammond, Chairman of the Board and Chief Executive Officer is
included under "Proposal 1. Election of Directors".
DAVID A. BERGER, age 54, is currently President and Chief Operating Officer, a
position he has held since August 1998. From June 1995 to August 1998, he served
as President of the Satellite Networks Division of Scientific Atlanta, a company
that designs, manufactures, sells and installs satellite communications networks
worldwide. From February 1994 to June 1995, he served as President of the
Satellite Communications Division of Scientific Atlanta. Prior thereto, from
November 1993 to February 1994, he served as Strategy Consultant for Scientific
Atlanta.
ROB-ROY J. GRAHAM, age 46, is currently Chief Financial Officer and Secretary,
positions 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.
DWAIN H. HAMMOND, age 42, is currently Senior Vice President, Engineering, a
position he has held since March 1997. From September 1994 to March 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.
GORDON H. GIVENS, age 56, is currently Senior Vice President, Custom Products
Line of Business, a position he has held since July 1998. From July 1996 to July
1998, Mr. Givens served as Managing Director of European Strategic Business
Unit. 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. Mr. Givens has been an employee of the Company since
1987.
<PAGE> 5
M. GREGORY SMITH, age 51, 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 that 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.
ERIC L. PRATT, age 34, is Vice President of Telco Sales and Systems Engineering,
a position he has held since October 1997. From October 1995 to October 1997, he
served as Senior Director, Sales for DSC Communications Corporation, a company
that designs, manufactures, and markets telecommunications equipment. Prior
thereto, he served as Senior Account Director, Sales for DSC Communications
Corporation from June 1993 to October 1995.
MICHAEL J. POLCYN, age 41, is Vice President - Packaged Products Line of
Business, a position he has held since March 1998. From December 1995 to March
1998, Mr. Polcyn served as the Company's Vice President, Business Development
and Product Marketing. Prior thereto, he served as Director, Product Marketing
from March 1994 to December 1995, and as Director, Call Center Engineering from
March 1992 to March 1994. Mr. Polcyn has been an employee of the Company since
1987.
PHILLIP C. WALDEN, age 54, is Vice President - Manufacturing, a position he has
held since July 1987.
MANUEL VICTOR JAMES, age 46, is Vice President - Network Services Line of
Business, a position he has held since July 1998. From January 1997 to June
1998, Mr. James served as a Senior Director for DSC Communications Intelligent
Networks Division, a company that designs, manufactures, and markets
telecommunications equipment. From June 1997 to December 1997, Mr. James served
as the General Manager for the DSC Telecom Systems Group acquired from Texas
Instruments, Incorporated. Prior thereto, Mr. James served as General Manager
for the Telecom Systems Division of Texas Instruments, a company that designs,
manufactures and markets voice dialing, fax messaging and wireless antenna
equipment, from June 1996 to May 1997, and Director of Business Development from
June 1995 to May 1996. From June 1993 to June 1995, Mr. James served as Director
Product Management AIN/PCS Products for DSC Communications.
DEAN C. HOWELL, age 41, is Vice President and Corporate Counsel, a position he
has held since March 1996. From October 1992 to February 1996, he served as
Legal Counsel.
HAROLD DON BROWN, age 43, is Vice President - Human Resources, a position he has
held since September 1995. From November 1994 to August 1995, Mr. Brown served
as Director of Human Resources. From August 1992 to September 1994, he served as
Manager of Human Resources for the Permian Basin business unit of Unocal
Corporation, a company that produces and sells energy resources and specialty
minerals.
<PAGE> 6
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 is five. The number of director positions 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. Stanley G. Brannan,
the Chairman, Chief Executive Officer and President of Brite Voice Systems, Inc.
(The Company owns 75% of the common stock of Brite Voice Systems, Inc.), 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, 1999, the
Board of Directors held 12 meetings. All members of the Board attended at least
75% of the meetings of the Board of Directors during the last fiscal year.
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, age 47, 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 has served as a director since 1984.
JOSEPH J. PIETROPAOLO, age 43, is currently an independent consultant who
has been providing consulting services related to on-line lottery systems since
March 1998. He is the former Chief Financial Officer of Transactive Corporation,
a company that 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 has
served as a director since 1989.
GEORGE C. PLATT, age 58, 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 has served as a director since 1991.
GRANT A. DOVE, age 71, 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. Mr. Dove
currently serves as a director of Media One Group, Cooper Cameron Corp., Control
Systems International, Inc., Microelectronics and Computer Technology Corp.,
Optek Technology, Inc., Object Space, Inc., Vocal Data Inc. and Spotcast
Communications, Inc. Mr. Dove has served as a director since 1996.
DAVID W. BRANDENBURG, age 54, is President of the Brandenburg Life
Foundation, a position he has held since October 1996. From November 1997 to May
1998 Mr. Brandenburg served as President and Chief Executive Officer of
AnswerSoft, Inc. 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 has served as a
director since 1997, and from 1990 to 1995.
STANLEY G. BRANNAN, age 50, the founder of Brite Voice Systems, Inc.,
served as Chairman, Chief Executive Officer and President of Brite Voice
Systems, Inc. from its inception until resigning as Chief Executive Officer and
President in December 1996. Mr. Brannan subsequently resigned as Chairman of the
Board of Brite Voice Systems, Inc. in January 1998. In November 1998 Mr.
Brannan resumed his role as Chairman, Chief Executive Officer and President of
Brite Voice Systems, Inc. on an interim basis. Prior to founding Brite Voice
Systems, Inc., Mr. Brannan founded Mycro-Tek, Inc., a company specializing in
the manufacture of microprocessor-based products used in electronic newsroom
systems and television character generators. When Mycro-Tek, Inc. was acquired
by Allied Corporation in 1980, Mr. Brannan was employed by Allied and eventually
became president of that company's Merganthaler USA Division. Mr. Brannan has
not previously served as a director of the Company.
<PAGE> 7
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 10, 1999, 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........................................................... 1,577,048(2) 5.5%
David W. Brandenburg........................................................ 689,802(3) 2.4%
Joseph J. Pietropaolo....................................................... 16,000(4) *
George C. Platt............................................................. 54,200(4) *
Grant A. Dove............................................................... 52,000(4) *
Stanley G. Brannan.......................................................... --(5) *
Named Executive Officers (who are not a director or nominee
named above)
Rob-Roy J. Graham........................................................... 143,524(6) *
Dwain H. Hammond............................................................ 95,806(7) *
M. Gregory Smith............................................................ 42,542(8) *
Eric L. Pratt............................................................... 28,332(9) *
All Directors, Nominees for Director and Executive Officers
as a Group (17 persons)..................................................... 3,101,003(10) 10.7%
</TABLE>
* Less than 1%
(1) Unless otherwise indicated, all shares listed are directly held with sole
voting and investment power.
(2) Includes 514,600 shares not outstanding but subject to currently
exercisable stock options, and 342 shares held in the Company's 401(k)
Employee Savings Plan.
(3) Includes 66,800 shares held in Mr. Brandenburg's wife's IRA, and 8,000
shares not outstanding but subject to currently exercisable stock options.
(4) Shares are not outstanding but are subject to currently exercisable stock
options, other than 22,000 shares held by Mr. Dove, and 3,200 shares held
in Mr. Platt's IRA.
(5) At the effective time of the merger of the Company and Brite Voice
Systems, Inc., it is expected that Mr. Brannan will beneficially own
approximately 293,000 shares of the Company's Common Stock based on the
estimated number of shares he will receive in exchange for his stock in
Brite Voice Systems, Inc.
(6) Includes 125,132 shares not outstanding but subject to currently
exercisable stock options, and 318 shares held in the Company's 401(k)
Employee Savings Plan.
(7) Includes 52,434 shares not outstanding but subject to currently
exercisable stock options, and 318 shares held in the Company's 401(k)
Employee Savings Plan.
(8) Includes 31,582 shares not outstanding but subject to currently
exercisable stock options, and 102 shares held in the Company's 401(k)
Employee Savings Plan.
(9) All such shares are not outstanding but subject to currently exercisable
stock options.
(10) Includes 70,000 shares held in an IRA of a director or a director's
spouse, 1,160,407 shares not outstanding but subject to currently
exercisable stock options, and 2,372 shares held in the Company's 401(k)
Employee Savings Plan.
<PAGE> 8
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, if the 1999 Stock Option Plan is approved by the shareholders at the
Annual meeting, all directors will be eligible for stock option grants under the
1999 Stock Option Plan. Pursuant to the Company's 1990 Nonqualified Stock Option
Plan, on August 1, 1998 each of Messrs. Pietropaolo, Dove, Platt and Brandenburg
were automatically granted an option to purchase 8,000 shares of Common Stock at
$9.00 per share, which options can be exercised commencing on the date of the
next annual meeting of shareholders, at the closing market price of the Common
Stock on the date of grant.
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 1999, 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, David W. Brandenburg, and Grant A. Dove.
The Compensation Committee, which held six meetings during fiscal 1999,
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, the
1998 Stock Option Plan and the Restricted Stock Plan. The Compensation Committee
also administers the Employee Stock Purchase Plan. The Compensation Committee is
composed of George C. Platt, Chairman, Joseph J. Pietropaolo, David W.
Brandenburg and Grant A. Dove.
The Executive Committee, which did not hold monthly meetings during fiscal
1999, 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 only current member is Daniel D. Hammond, Chairman.
The Nominating Committee, which met two times during fiscal 1999, 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 Grant A. Dove, Chairman, and Daniel D.
Hammond.
<PAGE> 9
PROPOSAL 2. TO APPROVE THE COMPANY'S
1999 STOCK OPTION PLAN
INTRODUCTION
On June 10, 1999, the Board of Directors adopted, subject to the
approval of the stockholders of the Company, the InterVoice, Inc. 1999 Stock
Option Plan (the "Plan"). The Board believes that stock option plans provide an
important means of attracting, retaining and motivating key personnel and
recommends that stockholders approve the Plan. Because directors and executive
officers of the Company are eligible to receive options under the Plan, each of
them has a personal interest in the approval of the Plan.
On June 9, 1999, the Company acquired 75% of the common stock of Brite
Voice Systems, Inc., and the Company will be acquiring the remaining shares of
such common stock through a merger. As a result of this acquisition, the number
of employees of the Company and its subsidiaries will approximately double.
Accordingly, the Company's existing stock option and other incentive plans will
not be sufficient to meet the Company's equity-based employee compensation and
incentive goals, and the Plan is needed to provide stock-based incentive
compensation both to the Company's current employees and to these additional
employees of the Company and its subsidiaries resulting from the acquisition of
Brite Voice Systems, Inc.
SUMMARY OF THE PLAN
A copy of the Plan is attached to this Proxy Statement as Exhibit A.
The following summary of the Plan is qualified in its entirety by reference
thereto.
Purposes. The purposes of the Plan are to attract able persons to enter
the employ of the Company, to encourage employees to remain in the employ of the
Company and to provide motivation to employees to put forth maximum efforts
toward the continued growth, profitability and success of the Company, by
providing incentives to such persons through the ownership and performance of
the Common Stock. A further purpose of the Plan is to provide a means through
which the Company may attract able persons to become directors of the Company
and to provide directors with additional incentive and reward opportunities
designed to strengthen their concern for the welfare of the Company and its
stockholders.
Administration. The Plan provides for administration by the
Compensation Committee or another committee of the Board (the "Committee"),
provided that each member of the Committee must be both a "non-employee
director" within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934 (the "Exchange Act") and an "outside director" within the meaning of
Treasury Regulation Section 1.162-27(e)(3) interpreting Section 162(m) of the
Internal Revenue Code of 1986 (the "Code"). Among the powers granted to the
Committee are the authority to interpret the Plan, establish rules and
regulations for its operation, select eligible persons to receive options under
the Plan and determine the form and amount and other terms and conditions of
such options. Notwithstanding the authority delegated to the Committee to
administer the Plan, the Board is given exclusive authority, subject to the
express provisions of the Plan, to grant options under the Plan to non-employee
directors of the Company and to determine the amount, terms and conditions of
such options. However, the Board has no authority under the Plan to select and
grant options to employees of the Company, and such authority is vested
exclusively in the Committee. The Plan authorizes the Committee to delegate its
authority under the Plan in certain circumstances; provided, however, that only
the Committee may select and grant options to employees who are subject to
Section 16 of the Exchange Act or who are "covered employees," as defined in
Section 162(m) of the Code.
Eligibility for Participation. All employees of the Company and its
subsidiaries and all non-employee directors of the Company are eligible to be
selected to participate in the Plan. The selection of employees is within the
discretion of the Committee, and the selection of non-employee directors is
within the discretion of the Board. In making this selection, the Committee and
the Board may give consideration to the functions and responsibilities of the
participant, his or her past, present and potential contributions to the growth
and success of the Company and such other factors deemed relevant by the
Committee or the Board. No employee is entitled to receive an option unless
selected by the Committee, and no non-employee director is entitled to receive
an option unless selected by the Board. As of June 9, 1999, the Company and its
subsidiaries had a total of approximately 1,404 employees, including
approximately 679 employees of Brite Voice Systems, Inc.
Stock Options. The Plan provides for the grant of nonqualified stock
options that are not intended to meet the requirements of Section 422(b) of the
Code. All options shall be subject to the terms, conditions, restrictions and
limitations of the Plan, except that the Committee or the Board may, in its sole
judgment, subject any option to such other terms, conditions, restrictions and
limitations as it deems appropriate, provided they are not inconsistent with the
terms of the Plan.
The Committee or the Board will, with regard to each stock option,
determine the number of shares subject to the option, the manner and time of the
option's exercise and the exercise price per share of Common Stock subject to
the option. In no event, however, may the exercise price of a stock option be
less than 100% of the fair market value of the Common Stock on the effective
date of the option's grant. The term of each option shall be as specified by the
<PAGE> 10
Committee or the Board, provided that, unless otherwise designated by the
Committee or the Board, no option shall be exercisable later than ten years from
the effective date of the option's grant. Upon exercise of an option, the
exercise price may be paid by a participant in cash or, in the discretion of the
Committee, by delivery to the Company or its designated agent of an executed
irrevocable option exercise form together with irrevocable instructions to a
broker-dealer to sell or margin a sufficient portion of the shares with respect
to which the option is exercised and deliver the sale or margin loan proceeds
directly to the Company to pay for the exercise price and any required
withholding taxes.
Available Shares. The maximum number of shares of Common Stock that
shall be available for grant of options under the Plan shall not exceed
4,000,000, subject to adjustment in accordance with the provisions of the Plan.
Shares of Common Stock issued pursuant to the Plan may be shares of original
issuance or treasury shares or a combination thereof.
The Committee shall have full discretion to determine the manner in
which shares of Common Stock available for grant of options under the Plan are
counted. In the absence of Committee action, the Plan sets forth certain rules
applicable for this purpose. For example, in general, unless otherwise
determined by the Committee, shares of Common Stock related to options which
terminate by expiration, forfeiture or cancellation without the issuance of
shares shall again be available for grant under the Plan.
If the Company shall effect a subdivision or a consolidation of shares
of Common Stock or the payment of a stock dividend on Common Stock without
receipt of consideration by the Company, the number of shares of Common Stock
with respect to which outstanding options granted under the Plan may thereafter
be exercised or satisfied, and the exercise prices thereof, shall be
proportionately adjusted. In the event of changes in the outstanding Common
Stock by reason of recapitalizations, reorganizations, mergers, consolidations,
combinations, separations (including a spin-off or other distribution of stock
or property), exchanges or other relevant changes in capitalization, outstanding
options under the Plan shall be subject to adjustment by the Committee at its
discretion as to the number, price and kind of shares or other consideration
subject to, and other terms of, such options to reflect such changes in the
outstanding Common Stock. Also, in the event of any such changes in the
outstanding Common Stock, the aggregate number of shares available for grant of
options under the Plan may be equitably adjusted by the Committee.
The maximum number of shares of Common Stock for which options may be
granted under the Plan to any one optionee during a calendar year is 300,000.
As of [____________], 1999, the closing sales price of the Common Stock
as reported on the Nasdaq National Market was $[______] per share.
Corporate Change. The Plan provides that, in the event of a corporate
change (defined in the Plan to include the dissolution or liquidation of the
Company, certain reorganizations, mergers or consolidations of the Company, the
sale of all or substantially all the assets of the Company or the occurrence of
a change in control of the Company), unless otherwise provided in the related
option agreement, (i) each option then outstanding under the Plan shall become
exercisable in full, (ii) all restrictions (other than restrictions imposed by
law) imposed on any Common Stock that may be delivered pursuant to the exercise
of such options shall be deemed satisfied.
Amendment. The Board may at any time suspend, terminate, amend or
modify the Plan, provided that no amendment or modification shall become
effective without the approval of such amendment or modification by the
stockholders of the Company if the Company determines that such stockholder
approval is necessary or desirable. No suspension, termination, amendment or
modification of the Plan shall adversely affect in any material way any option
previously granted under the Plan, without the consent of the optionee (except
that consent of the optionee is not required for certain tax-related amendments
or modifications to an option).
Effectiveness. The Plan will become effective as of the date of its
approval at the annual meeting. The Plan has no fixed expiration date.
<PAGE> 11
United States Federal Income Tax Consequences. The following summary is
based on an analysis of the Code as currently in effect, existing laws, judicial
decisions, administrative rulings, regulations and proposed regulations, all of
which are subject to change. Moreover, the following is only a summary of United
States federal income tax consequences. Actual tax consequences to employees and
directors may be either more or less favorable than those described below
depending on the employees' or directors' particular circumstances. Accordingly,
each participant should consult his or her own tax advisor with respect to the
tax consequences of participation in the Plan.
An optionee will not recognize income for federal income tax purposes
upon the grant of an option. The optionee will recognize ordinary income upon
exercise of an option in an amount equal to the excess of the fair market value
of the shares on the date of exercise over the option price of the shares. The
Company will be entitled to a deduction equal to the amount of ordinary income
recognized by the optionee due to the exercise of options at the time of such
recognition.
If the optionee is an employee, income recognized upon the exercise of
an option by an employee will be considered compensation subject to withholding
at the time the income is recognized. As a result, the Company must make the
necessary arrangements with such optionees to ensure that the amount of tax
required to be withheld is available for payment.
The basis of shares transferred to an optionee upon exercise of an
option is the price paid for the shares plus an amount equal to any income
recognized by the optionee as a result of the exercise of the option. If the
optionee thereafter sells shares acquired upon exercise of an option, the
difference between the amount realized by the optionee and his or her basis in
the shares will constitute capital gain or loss for federal income tax purposes.
Section 162(m) of the Code limits the deduction which the Company may
take for otherwise deductible compensation payable to certain executive officers
of the Company to the extent that compensation paid to such officers for such
year exceeds $1 million, unless such compensation is performance-based, is
approved by the Company's stockholders and meets certain other criteria.
Compensation attributable to an option is deemed to satisfy the requirements for
performance-based compensation only if (i) the grant is made by a committee
composed of two or more outside directors; (ii) the plan states the maximum
number of shares with respect to which options may be granted during a specified
period to any employee; and (iii) under the terms of the option, the amount of
compensation the optionee could receive is based solely on an increase in the
value of the stock after the date of the option grant. The Plan has been
designed such that options granted thereunder will qualify as performance-based
compensation for purposes of Section 162(m) of the Code.
The Plan is not subject to the Employee Retirement Income Security Act
of 1974, as amended.
REQUIRED AFFIRMATIVE VOTE
Provided a quorum is present, the affirmative vote of the holders of at
least a majority of the shares of Common Stock of the Company present or
represented and voting at the meeting shall be required to approve the Plan.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE OF
THE PLAN. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED IN FAVOR OF
THE PROPOSAL UNLESS SHAREHOLDERS SPECIFY OTHERWISE.
<PAGE> 12
PROPOSAL 3. TO AMEND THE COMPANY'S
ARTICLES OF INCORPORATION
TO CHANGE ITS CORPORATE NAME
On June 10, 1999, the Board of Directors of the Company approved,
subject to shareholder approval, an amendment to Article I of the Company's
Articles of Incorporation to change its name to "InterVoice-Brite, Inc." If the
amendment is approved, Article I of the Company's Articles of Incorporation will
be amended to read in its entirety as follows:
"The name of the corporation is InterVoice-Brite, Inc."
On June 9, 1997, the Company acquired 75% of the common stock of Brite
Voice Systems, Inc., and the Company will be acquiring the remaining shares of
such common stock through a merger.
The Board of Directors approved the new name in light of the pending
merger between the Company and Brite Voice Systems, Inc. The Board believes
there is substantial good will and name recognition associated with the name of
Brite Voice Systems, Inc. The name InterVoice-Brite, Inc. will allow the Company
to capitalize on the good will and name recognition attributable to Brite Voice
Systems, Inc., while maintaining the substantial good will and name recognition
associated with its current name. The Board also believes the addition of the
word "Brite" to the Company's name will more appropriately reflect the expanded
scope of the Company's operations and product offerings.
REQUIRED AFFIRMATIVE VOTE
The affirmative vote of the holders of at least a majority of the
outstanding shares of Common Stock of the Company on June 21, 1999, the record
date for the 1999 Annual Meeting of Shareholders, shall be required to approve
the proposed amendment to the Company's Articles of Incorporation.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDMENT TO
THE COMPANY'S ARTICLES OF INCORPORATION. PROXIES SOLICITED BY THE BOARD OF
DIRECTORS WILL BE VOTED IN FAVOR OF THE PROPOSAL UNLESS SHAREHOLDERS SPECIFY
OTHERWISE.
<PAGE> 13
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 that 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 1999, 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 1999. 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,
data and 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 1996 through fiscal 1999. 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 1999. 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/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 monitors each
executive's progress toward achieving these guidelines when deciding on future
stock option awards and other equity incentive opportunities.
FISCAL 1999 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 comparable positions at other companies in the Company's
comparison group. In establishing base salaries for officers, the Compensation
Committee reviewed the compensation surveys provided by Ernst & Young LLP.
Annual salaries, including increases to salaries, for fiscal 1999 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 Company's executive management, by the
executive's tenure and level of responsibility, the Company's expected financial
performance, and changes in competitive pay levels. Raises to annual base
salaries for officers of the Company, including executive officers, for fiscal
1999, ranged from 1.9% to 23%. Most of the officers received a raise of between
5% and 6%.
The Company entered into an employment agreement with the Chairman of the
Board and Chief Executive Officer of the Company, Daniel D. Hammond, during
fiscal 1997 which required the Compensation Committee to conduct an annual
review of Mr. Hammond's base salary. Mr. Hammond recommended to the Compensation
Committee that he not receive an increase to his base salary for fiscal 1999.
The Compensation Committee accepted Mr. Hammond's recommendation. Moreover, for
the eight-month period commencing October 1, 1997, Mr. Hammond voluntarily
elected to reduce his monthly base salary by 20% from $28,470 to $22,776, to
evidence his commitment to improving the Company's ratio of expenses to
revenues. Mr. Hammond reinstated his full base salary of $341,640 only after the
Company's revenues and earnings increased 32% and 138%, respectively, from
fourth quarter fiscal 1998 to first quarter fiscal 1999. 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.
The Compensation Committee believes that this salary level, which was slightly
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 during his tenure as Chief Executive
Officer. See "Agreements with Executive Officers" for a discussion of the
employment agreements with Mr. Hammond and Messrs. Berger, Graham and Pratt.
<PAGE> 14
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,
the Company's President and Chief Operating Officer, and the Chief Financial
Officer and Secretary, were based on formulas designed to compensate such
officers for any increases to revenues and earnings per share achieved for
fiscal 1999. 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 1999 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 achieved for fiscal 1999. The
performance goals for officers were based on factors such as sales volume,
receipt of purchase orders and expense containment. The aggregate of quarterly
and annual bonuses paid to officers, including executive officers, for fiscal
1999 ranged from approximately 30% to 158% of base salary.
Pursuant to his employment agreement, the bonus payable to the Chairman of
the Board and Chief Executive Officer, Daniel D. Hammond, was modified from his
prior agreement primarily to 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
earnings per share, primarily increases to earnings per share, and 50% on any
increase to revenue, 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
$512,460 for fiscal 1999. Mr. Hammond's bonus reflected a 34% increase in
revenues, and a 31% increase in earnings, for fiscal 1999 as compared to fiscal
1998. Mr. Berger, the Company's President, and Mr. Graham, the Company's Chief
Financial Officer, have employment agreements similar to Mr. Hammond's
agreement, with similar provisions governing their bonuses.
The employment agreement with Mr. Hammond also permits payment of an
additional discretionary bonus if the Compensation Committee determined that
such a bonus is appropriate. No such discretionary bonus was paid to Mr. Hammond
for fiscal 1999.
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 1999 consisted of incentive stock options granted under the
Company's 1990 Incentive Stock Option Plan, and nonqualified stock options
granted under the Company's 1998 Stock Option Plan and restricted stock under
the Company's Restricted Stock Plan. Unlike cash, the value of a stock option
will not be immediately realized and does not result in a current expense to the
Company.
The stock options are granted at the market price on the date of grant 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 (which were granted to certain executive
officers during fiscal 1996, 1997 and 1999) will only have value to the employee
if the employee remains with the Company until any conditions to issuance have
been satisfied, and the restrictions have lapsed, which was two years in the
case of all restricted stock awards for fiscal 1996 and 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 employee stock option plans 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 1999, stock option awards were
made in light of a compensation review and recommendations prepared by Ernst &
Young LLP comparing stock option 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 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".
<PAGE> 15
Grants to individual officers during fiscal 1999 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 awards. The Compensation
Committee issued 46,914 shares of restricted stock to certain executive officers
of the Company during fiscal 1999 pursuant to restricted stock awards made
during fiscal 1996 and a restricted stock award made during fiscal 1999 to
InterVoice's new President and Chief Operating Officer, David A. Berger. Mr.
Hammond was awarded up to 92,290 shares of restricted stock during fiscal 1996.
Pursuant to the award, the Company agreed to issue Mr. Hammond 20% of the
maximum number of shares awarded to him if and when the closing price per share
of the Company's Common Stock as quoted on the Nasdaq National Market first
equals or exceeds each of the following targets for 20 consecutive market days:
$9.46; $11.82; $14.77; $18.47; and $23.13. The Company issued 18,458 shares of
restricted stock to Mr. Hammond under this award during fiscal 1996, and issued
18,458 additional shares during fiscal 1997, and 18,458 shares during fiscal
1999.
The Compensation Committee granted stock options covering 1,848,700
shares of Common Stock to officers of the Company during fiscal 1999. Options
covering 120,000 shares of Common Stock were granted to Mr. Hammond during
fiscal 1999. All references to the restricted stock awards and stock options
reflect automatic adjustments to account for a 100% stock dividend issued during
January 1999.
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 1999 adequately reflect the Company's compensation goals
and policies.
June 10, 1999
COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS
George C. Platt
Joseph J. Pietropaolo
David W. Brandenburg
Grant A. Dove
<PAGE> 16
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 1999 (the
"Named Officers") for services rendered in all capacities to the Company and its
subsidiaries for the fiscal years ended February 28, 1999, February 28, 1998 and
February 28, 1997.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Long Term
Compensation
Annual Compensation Awards (1) All Other
Compensation
- ----------------------------------------------------------------------------------------------------------------------------------
All Other
Restricted Securities Cash Company
Stock Underlying Compen- Common
Name and Principal Position Year Salary (2) Bonus Issuances Options sation (4) Stock(1)(5)
(3)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Daniel D. Hammond 1999 $ 326,776(6) $ 512,460 $ 316,926 120,000 $ 9,154 --
Chairman of the Board and 1998 313,170(6) 85,410 -- 60,000 7,882 342
Chief Executive Officer 1997 341,640(6) 85,410 271,679 360,000 5,544 --
Rob-Roy J. Graham 1999 193,576 196,267 158,463 100,000 6,534 --
Chief Financial Officer 1998 185,000 72,650 -- 50,000 5,597 318
Secretary 1997 163,542 42,500 135,825 33,000 5,523 --
Chief Accounting Officer
Controller
M. Gregory Smith(7) 1999 157,419 114,128 -- 40,000 7,163 --
Senior Vice President, Sales 1998 150,001 83,117 -- 25,000 6,308 102
1997 56,250 29,802 -- 60,000 1,655 --
Dwain H. Hammond 1999 192,985 57,093 158,463 60,000 3,305 --
Senior Vice President of 1998 180,001 22,176 -- 104,800 3,197 318
Engineering 1997 150,000 18,900 135,825 19,300 2,917 --
Eric L. Pratt(8) 1999 132,772 144,178 -- 40,000 7,024 --
Vice President, Telco Sales - 1998 49,760 62,500 -- 60,000 63 --
Systems Engineering 1997 -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------
(1) The stock option and restricted stock awards, together with the
contributions of shares of the Company's Common Stock to the Company's
401(k) Employee Savings Plan in this table for fiscal 1997, 1998 and 1999
have been adjusted to reflect a 100% stock dividend issued on shares of
the Company's Common Stock in January 1999.
(2) Includes amounts deferred at the Named Officer's election pursuant to the
Company's 401(k) Employee Savings Plan.
(3) Three of the Named Officers were issued shares of restricted Common Stock
under the Company's Restricted Stock Plan on April 2, 1996 and on January
11, 1999. The following Named Officers were issued the following amounts
of restricted shares on April 2, 1996: 18,458 shares to Daniel D. Hammond
and 9,228 shares to each of Rob-Roy J. Graham and Dwain H. Hammond. The
same three Named Officers were issued the following amount of restricted
shares on January 11, 1999: 18,458 to Daniel D. Hammond and 9,228 to each
of Rob-Roy J. Graham and Dwain H. Hammond. 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 April 2, 1996, for
those shares issued during fiscal 1997 and January 11, 1999 for those
shares issued during fiscal 1999. At February 28, 1999, the aggregate
restricted share holding in shares (and dollars) were 36,916 ($401,462)
for Daniel D. Hammond and 18,456 ($200,710) for each of Rob-Roy J. Graham
and Dwain H. Hammond, based on the closing price of the Company's Common
Stock on February 28, 1999. 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.
(4) 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.
(5) Represents Company contributions of Common Stock to the Company's 401(k)
Employee Savings Plan.
(6) Mr. Hammond voluntarily elected to reduce his monthly base salary 20%,
from $28,470 to $22,776, to evidence his commitment to improving the
Company's ratio of expenses to revenues, for the eight-month period
commencing October 1, 1997.
(7) Mr. Smith became employed by the Company during August 1996.
<PAGE> 17
(8) Mr. Pratt became employed by the Company during October 1997.
OPTION GRANTS
The following table sets forth certain information with respect to grants
of stock options pursuant to the Company's 1990 Incentive Stock Option Plan and
1998 Stock Option Plan during fiscal 1999 to the Named Officers.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(2)
- --------------------------------------------------------------------------------------------------------------------------
% of Total
Number of Options
Securities Granted to
Underlying Employees Exercise
NAME Options in Fiscal Price Expiration
Granted (1) 1999 (/Sh) Date 5% 10%
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Daniel D. Hammond 120,000 6.5% $4.875 3/25/08 $1,540,707 $2,799,834
Rob-Roy J. Graham 100,000 5.4% 4.875 3/25/08 1,283,923 2,333,195
M. Gregory Smith 40,000 2.2% 4.875 3/25/08 513,569 933,278
Dwain H. Hammond 60,000 3.2% 4.875 3/25/08 770,354 1,399,917
Eric L. Pratt 40,000 2.2% 4.875 3/25/08 513,569 933,278
- --------------------------------------------------------------------------------------------------------------------------
</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
and expire ten years from the date of grant. The options become
exercisable in three equal amounts on the first three annual
anniversaries of the date of grant. All options, as applicable, have
been adjusted to reflect a 100% stock dividend issued on shares of
the Company's Common Stock in January 1999.
(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 ten-year
period beginning on the date of grant and ending on the option
expiration date. For a ten-year period beginning February 26, 1999,
based on the closing price on the Nasdaq National Market of the
Common Stock of $10.875 on such date, a share of the Common Stock
would have a value on February 28, 2009 of approximately $17.71 at
an assumed appreciation rate of 5% and approximately $28.21 at an
assumed appreciation rate of 10%.
<PAGE> 18
OPTIONS EXERCISED AND HOLDINGS
The following table provides information concerning option exercises in
fiscal 1999 and the value of unexercised options held by each of the Named
Officers at the end of fiscal 1999.
<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 360,000 $3,146,400 339,600 / 285,000 $223,998 / 1,044,375
Rob-Roy J. Graham 73,968 537,703 68,300 / 148,500 24,431 / 820,313
M. Gregory Smith 30,250 228,450 0 / 94,750 0 / 490,781
Dwain H. Hammond 48,432 573,438 0 / 132,368 0 / 785,162
Eric L. Pratt 15,000 111,563 0 / 85,000 0 / 507,188
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Values stated are based on the closing price ($10.875) of the Company's
Common Stock as reported on the Nasdaq National Market on February 26, 1999 and
the exercise price of the options.
AGREEMENTS WITH EXECUTIVE OFFICERS
Employment Agreement with Daniel D. Hammond. On June 21, 1996 the Company
renewed and extended the employment agreement with Daniel D. Hammond for the
three-year period from March 1, 1996 through February 28, 1999. Mr. Hammond and
the Compensation Committee are currently negotiating a new employment agreement
for Mr. Hammond, and hope to have the agreement negotiated prior to this year's
annual meeting. By its terms, the 1996 agreement will remain in effect until the
new employment agreement is negotiated. Under the 1996 agreement, Mr. Hammond's
salary was increased for the first time in two years to $341,640. Mr. Hammond
did not receive any increases to his base salary during the term of his 1996
agreement. In addition, Mr. Hammond voluntarily elected to reduce his monthly
base salary 20% from $28,470 to $22,776, to evidence his commitment to improving
the Company's ratio of expenses to revenues, for the eight-month period
commencing October 1, 1997. Mr. Hammond reinstated his full salary as of June 1,
1998, based on improvements to the Company's expenses to revenues ratio,
particularly for the first quarter of fiscal 1999. Mr. Hammond's annual bonus
opportunity was revised under his 1996 employment agreement so as to be based
50% on earnings per share, particularly increases to 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 would be compared to fiscal 1996. With respect to earnings per
share, Mr. Hammond's bonus opportunity under his 1996 agreement ranged from 10%
of his base salary if earnings per share did not decrease more than 10% from the
base fiscal year to 125% of his base salary if earnings per share increased by
40% or more. With respect to revenues, Mr. Hammond's bonus opportunity ranged
from 25% of his base salary if revenues were flat or increased by less than 10%,
to 125% of his base salary if revenues increased by 40% or more.
Mr. Hammond received a bonus of $512,460 for fiscal 1999. See the "Summary
Compensation Table" for a discussion of the bonuses and salary paid to Mr.
Hammond for the three-year period ended February 28, 1999. Finally, in
connection with the renewal and extension of Mr. Hammond's employment agreement,
he was awarded a stock option during fiscal 1997 covering 360,000 shares of
Common Stock under the Company's 1990 Incentive Stock Option Plan.
<PAGE> 19
Except as discussed below, Mr. Hammond's 1996 agreement requires that he
not compete with the Company while he renders services under the agreement and
for a period of 18 months thereafter. The 1996 agreement also provides that the
Company can pay Mr. Hammond an additional discretionary bonus in an amount to be
approved by the Board of Directors of the Company. No such discretionary bonus
was paid for fiscal 1999. The agreement further provides that the Company can
only terminate Mr. Hammond for cause or because he becomes 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 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 12 months' prior notice, the Company would have to 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 would "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 can terminate his employment for any reason by giving 12 months' prior
written notice. Mr. Hammond would 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 would 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 360,000 shares of Common Stock that Mr. Hammond was granted in
connection with his agreement would become completely exercisable, to the extent
that the option was not already exercisable as of such date.
On October 27, 1998 the Company's board of directors accepted an offer
from Mr. Hammond to purchase at that date's Nasdaq National Market closing price
120,000 of his shares of Common Stock (as adjusted for the 100% stock dividend
paid in January 1999). Mr. Hammond abstained from voting on the matter.
Employment Agreement with David A. Berger. David A. Berger joined the
Company as President and Chief Operating Officer on August 31, 1998. In
connection with his employment, the Company and Mr. Berger entered into an
employment agreement for the two-and-one-half year period commencing September
1, 1998. Under the agreement, Mr. Berger's salary is $250,000 per year.
Additionally, Mr. Berger's annual bonus opportunity is based 50% on any increase
to earnings per share and 50% on any increase to revenues for each fiscal year
under his agreement, 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. Berger'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 revenues were increased by 40% or more. Other than the matters
discussed in this paragraph, Mr. Berger's employment agreement (including the
terms governing any termination of his employment with the Company) are
substantially the same as Mr. Hammond's 1996 employment agreement, which is
discussed above. Mr. Berger received a bonus of $125,000 for fiscal 1999.
Furthermore, in connection with Mr. Berger's employment agreement, he was
awarded during fiscal 1999 an option covering 300,000 shares of Common Stock
under the 1998 Stock Option Plan; and an opportunity to receive up to 30,000
shares of restricted stock under the Company's Restricted Stock Plan.
Employment Agreement with Rob-Roy J. Graham. Rob-Roy J. Graham, the
Company's Chief Financial Officer and Secretary, entered into an employment
agreement with the Company for the two-and-one-half-year term commencing on
September 1, 1998. Under the agreement, Mr. Graham's salary is $196,267 per
year. Mr. Graham received a bonus of $196,267 for fiscal 1999. See the "Summary
Compensation Table" for a "discussion of the salary and bonus paid to Mr.
Graham. The agreement did not provide for Mr. Graham to receive any stock
options or restricted stock in connection with the execution of his new
agreement. Other than the matters discussed in this paragraph, Mr. Graham's
employment agreement (including the terms governing any termination of his
employment with the Company) are substantially the same as Mr. Berger's
employment agreement, which is discussed above.
Employment Agreement with Eric L. Pratt. Eric L. Pratt joined the Company
as Vice President of Telco Sales and System Engineering in October 1997. In
connection with his employment, The Company and Mr. Pratt entered into an
employment agreement for the two-year period commencing October 8, 1997. Under
the agreement, Mr. Pratt's salary started at $125,000 and was raised to $132,772
during fiscal 1999. Additionally, Mr. Pratt's agreement provides an opportunity
for him to earn quarterly and annual cash bonuses based on a sales incentive
plan provided by the Company for each fiscal year. Mr. Pratt's bonus opportunity
for fiscal 1999 was based on certain Company and departmental objectives,
including sales bookings, sales revenues and expense containment. Mr. Pratt
received incentive cash bonuses of $144,178 for fiscal 1999. See the "Summary
Compensation Table" for a discussion of the bonuses and salary paid to Mr.
Pratt. Other than the matters discussed in this paragraph, Mr. Pratt's
employment agreement (including the terms governing any termination of his
employment with the Company) are substantially the same as Mr. Hammond's 1996
<PAGE> 20
employment agreement, except for the change of control provisions in Mr.
Hammond's agreement. Mr. Pratt's agreement does not include any provisions which
award him any special compensation in the event of a change of control of the
Company (defined as a triggering event in Mr. Hammond's agreement). Furthermore,
in connection with Mr. Pratt's employment agreement, he was awarded during
fiscal 1998 an option to receive 60,000 shares of the Company's Common Stock
under the Company's 1990 Incentive Stock Option Plan.
The discussion of stock options and restricted stock awards granted to
Messrs. Hammond, Berger, Graham and Pratt reflects automatic adjustments made to
the stock options in connection with a 100% stock dividend paid on the Company's
Common Stock during fiscal 1999. The number of unexercised shares under each of
the referenced stock options and restricted stock awards was doubled as a result
of the 100% stock dividend.
<PAGE> 21
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, 1999, 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, 1994 in the Company's
Common Stock and each such index.
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
<TABLE>
<CAPTION>
TELEPHONE,
MEASUREMENT PERIOD INTERVOICE TELEGRAPH NASDAQ
(FISCAL YEAR COVERED) INC. APPARATUS MARKET INDEX
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1995 134.44 113.69 95.47
1996 212.22 164.19 131.83
1997 97.78 203.41 158.24
1998 80.00 266.07 215.21
1999 193.33 284.02 278.09
</TABLE>
ASSUMES $100 INVESTED ON MARCH 1, 1994
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDED FEBRUARY 28, 1999
<PAGE> 22
CERTAIN TRANSACTIONS
For information concerning agreements between the Company and each of
Daniel D. Hammond, David A. Berger, Rob- Roy J. Graham and Eric L. Pratt, see
"Agreements With Executive Officers".
On January 11, 1999, restricted shares of common stock were automatically
issued to four executive officers of the Company pursuant to restricted stock
agreements, because the price of the Company's common stock had exceeded $14.77
for 20 consecutive trading days. The following officers inadvertently failed to
report the automatic issuance of the restricted shares on a Form 4 to reflect a
change in their beneficial ownership of the Company's shares: Daniel D. Hammond,
David A. Berger, Rob-Roy J. Graham and Dwain H. Hammond.
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 29,
2000. Ratification or other action by the Company's shareholders concerning the
appointment of the independent auditors of the Company for fiscal 2000 is not
required.
During the fiscal year ended February 28, 1999, 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 1999
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
If a shareholder intends to present a proposal for action at the Company's
2000 annual meeting and wishes to have such proposal considered for inclusion in
the Company's proxy materials in reliance on Rule 14a-8 under the Securities
Exchange Act of 1934, the proposal must be submitted in writing and received by
the Company by February 29, 2000. Such proposals must also meet the other
requirements of the rules of the Securities and Exchange Committee relating to
shareholders' proposals.
In addition, if a shareholder submits a proposal outside of Rule 14a-8 for
the 2000 annual meeting, then the Company's proxy may confer discretionary
authority on the persons being appointed as proxies on behalf of management to
vote on the proposal. Proposals and nominations should be addressed to the
Secretary of the Company at 17811 Waterview Parkway, Dallas, Texas 75252.
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 $8,000 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 28, 1999
<PAGE> 23
[THIS PAGE INTENTIONALLY LEFT BLANK]
A-1
<PAGE> 24
EXHIBIT A
INTERVOICE, INC.
1999 STOCK OPTION PLAN
ARTICLE 1. ESTABLISHMENT AND PURPOSE
1.1 ESTABLISHMENT. InterVoice, Inc., a Texas corporation,
hereby establishes the InterVoice, Inc. 1999 Stock Option Plan, as set forth in
this document.
1.2 PURPOSE. The purposes of the Plan are to attract able
persons to enter the employ of the Company, to encourage Employees to remain in
the employ of the Company and to provide motivation to Employees to put forth
maximum efforts toward the continued growth, profitability and success of the
Company, by providing incentives to such persons through the ownership and
performance of the Common Stock of InterVoice. A further purpose of the Plan is
to provide a means through which InterVoice may attract able persons to become
directors of InterVoice and to provide directors of InterVoice with additional
incentive and reward opportunities designed to strengthen their concern for the
welfare of InterVoice and its stockholders. Toward these objectives, Options may
be granted under the Plan to Employees and Outside Directors on the terms and
subject to the conditions set forth in the Plan.
1.3 EFFECTIVE DATE OF PLAN. This Plan shall be effective as of
the date of its approval at the 1999 annual meeting of shareholders of
InterVoice by the holders of at least a majority of the shares of Common Stock
present or represented and entitled to vote at such meeting. If the Plan is not
so approved, the Plan shall terminate and any Option granted hereunder shall be
null and void.
ARTICLE 2. DEFINITIONS
2.1 AFFILIATE. "Affiliate" means a "parent corporation" or a
"subsidiary corporation" of InterVoice, as those terms are defined in Section
424(e) and (f) of the Code.
2.2 BOARD. "Board" means the Board of Directors of InterVoice.
2.3 CODE. "Code" means the Internal Revenue Code of 1986, as
amended from time to time, including regulations thereunder and successor
provisions and regulations thereto.
2.4 COMMITTEE. "Committee" means the Compensation Committee of
the Board, or such other committee of the Board as may be designated by the
Board to administer the Plan; provided that the Committee shall consist of two
or more directors of InterVoice, all of whom are both a "Non-Employee Director"
within the meaning of Rule 16b-3 under the
-1-
<PAGE> 25
Exchange Act and an "outside director" within the meaning of the definition of
such term as contained in Treasury Regulation Section 1.162-27(e)(3)
interpreting Section 162(m) of the Code, or any successor definitions adopted.
The members of the Committee shall be appointed from time to time by, and shall
serve at the discretion of, the Board.
2.5 COMMON STOCK. "Common Stock" means the Common Stock, no
par value per share, of InterVoice, or any stock or other securities of
InterVoice hereafter issued or issuable in substitution or exchange for the
Common Stock.
2.6 COMPANY. "Company" means InterVoice and its Affiliates.
2.7 CORPORATE CHANGE. A "Corporate Change" shall be deemed to
have occurred for purposes of the Plan, upon (a) the dissolution or liquidation
of InterVoice; (b) a reorganization, merger or consolidation of InterVoice with
one or more corporations (other than a merger or consolidation effecting a
reincorporation of InterVoice in another state or any other merger or
consolidation in which the shareholders of the surviving corporation and their
proportionate interests therein immediately after the merger or consolidation
are substantially identical to the shareholders of InterVoice and their
proportionate interests therein immediately prior to the merger or
consolidation) (collectively, a "Corporate Change Merger"); (c) the sale of all
or substantially all of the assets of InterVoice; or (d) the occurrence of a
Change in Control. A "Change in Control" shall be deemed to have occurred for
purposes of the Plan if (a) individuals who were directors of InterVoice
immediately prior to a Control Transaction shall cease, within two years of such
Control Transaction, to constitute a majority of the Board (or of the Board of
Directors of any successor to InterVoice or to a company which has acquired all
or substantially all its assets) other than by reason of an increase in the size
of the membership of the applicable Board that is approved by at least a
majority of the individuals who were directors of InterVoice immediately prior
to such Control Transaction or (b) any entity, person or Group acquires shares
of InterVoice in a transaction or series of transactions that result in such
entity, person or Group directly or indirectly owning beneficially 50% or more
of the outstanding shares of Common Stock. As used herein, "Control Transaction"
means (a) any tender offer for or acquisition of capital stock of InterVoice
pursuant to which any person, entity or Group directly or indirectly acquires
beneficial ownership of 20% or more of the outstanding shares of Common Stock,
(b) any Corporate Change Merger of InterVoice, (c) any contested election of
directors of InterVoice or (d) any combination of the foregoing, any one of
which results in a change in voting power sufficient to elect a majority of the
Board. As used herein, "Group" means persons who act "in concert" as described
in Sections 13(d)(3) and/or 14(d)(2) of the Exchange Act.
2.8 EFFECTIVE DATE. "Effective Date" means the date an Option
is determined to be effective by the Committee or the Board upon the grant of
such Option.
2.9 EMPLOYEE. "Employee" means any person treated as an
employee by InterVoice or an Affiliate. "Employee" shall not include an Outside
Director or any other person treated by InterVoice or an Affiliate as an
independent contractor.
-2-
<PAGE> 26
2.10 EXCHANGE ACT. "Exchange Act" means the Securities
Exchange Act of 1934, as amended from time to time, including rules thereunder
and successor provisions and rules thereto.
2.11 FAIR MARKET VALUE. "Fair Market Value" means the fair
market value of the Common Stock, as determined in good faith by the Committee
or, (i) if the Common Stock is traded in the over-the-counter market, the
average of the representative closing bid and asked prices as reported by the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
for the date the Option is granted (or if there was no quoted price for such
date of grant, then for the last preceding business day on which there was a
quoted price), or (ii) if the Common Stock is traded in the NASDAQ National
Market System, the average of the highest and lowest selling prices for such
stock as quoted on the NASDAQ National Market System for the date the Option is
granted (or if there are no sales for such date of grant, then for the last
preceding business day on which there were sales), or (iii) if the Common Stock
is listed on any national stock exchange, the average of the highest and lowest
selling prices for such stock as quoted on such exchange for the date the Option
is granted (or if there are no sales for such date of grant, then for the last
preceding business day on which there were sales).
2.12 INTERVOICE. "InterVoice" means InterVoice, Inc., a Texas
corporation, and any successor thereto.
2.13 OPTION. "Option" means an option to purchase shares of
Common Stock granted to a Participant pursuant to Article 6.
2.14 OPTION AGREEMENT. "Option Agreement" means a written
agreement between InterVoice and a Participant that sets forth the terms,
conditions, restrictions and/or limitations applicable to an Option.
2.15 OUTSIDE DIRECTOR. "Outside Director" means an individual
duly elected or chosen as a director of InterVoice who is not also an Employee.
2.16 PARTICIPANT. "Participant" means any Employee or Outside
Director to whom an Option has been granted under the Plan.
2.17 PLAN. "Plan" means this InterVoice, Inc. 1999 Stock
Option Plan.
2.18 RETIREMENT. "Retirement" means the termination of a
Participant's employment or service on or after his or her 65th birthday.
-3-
<PAGE> 27
ARTICLE 3. PLAN ADMINISTRATION
3.1. RESPONSIBILITY OF COMMITTEE. Subject to the terms and
provisions of the Plan, including, without limitation, Section 3.6, the Plan
shall be administered by the Committee. The Committee shall have total and
exclusive responsibility to control, operate, manage and administer the Plan in
accordance with its terms.
3.2 AUTHORITY OF COMMITTEE. The Committee shall have all the
authority that may be necessary or helpful to enable it to discharge its
responsibilities with respect to the Plan. Without limiting the generality of
the preceding sentence, the Committee shall have the exclusive right, subject to
the provisions of Section 3.6, to: (a) interpret the Plan and the Option
Agreements executed hereunder; (b) determine eligibility for participation in
the Plan; (c) decide all questions concerning eligibility for, and the size of,
Options granted under the Plan; (d) construe any ambiguous provision of the Plan
or any Option Agreement; (e) prescribe the form of the Option Agreements
embodying Options granted under the Plan; (f) correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Option Agreement; (g)
issue administrative guidelines as an aid to administer the Plan and make
changes in such guidelines as it from time to time deems proper; (h) make
regulations for carrying out the Plan and make changes in such regulations as it
from time to time deems proper; (i) to the extent permitted under the Plan,
grant waivers of Plan terms, conditions, restrictions and limitations; (j)
accelerate the vesting of an Option when such action or actions would be in the
best interests of the Company; (k) grant Options in replacement of Options
previously granted under the Plan or any other employee benefit plan of the
Company; and (l) take any and all other actions it deems necessary or advisable
for the proper operation or administration of the Plan.
3.3 DISCRETIONARY AUTHORITY. Subject to the provisions of
Section 3.6, (i) the Committee shall have full discretionary authority in all
matters related to the discharge of its responsibilities and the exercise of its
authority under the Plan, including, without limitation, its construction of the
terms of the Plan, and its determination of eligibility for participation under
the Plan, and (ii) the decisions of the Committee and its actions with respect
to the Plan shall be final, conclusive and binding on all persons having or
claiming to have any right or interest in or under the Plan, including
Participants and their respective estates, beneficiaries and legal
representatives.
3.4 ACTION BY THE COMMITTEE. The Committee may act only by a
majority of its members. Any determination of the Committee may be made, without
a meeting, by a writing or writings signed by all of the members of the
Committee. In addition, the Committee may authorize any one or more of its
members to execute and deliver documents on behalf of the Committee.
3.5 DELEGATION OF AUTHORITY. Notwithstanding anything
contained in the Plan to the contrary, the Committee may, in its discretion,
delegate some or all of its authority under the Plan to any person or persons;
provided, however, that any such delegation shall be in writing; and provided
further that only the Committee may grant Options to Employees who are subject
to Section 16 of the Exchange Act or who are "covered employees" within the
meaning of Section 162(m) of the Code.
-4-
<PAGE> 28
3.6 BOARD AUTHORITY. Notwithstanding the authority hereby
delegated to the Committee to administer the Plan, the Board shall have sole and
exclusive authority, subject to the express provisions of the Plan, to grant
Options to Outside Directors under the Plan, to determine the terms, conditions,
restrictions and/or limitations applicable to such Options and to make all other
determinations and take any and all other actions it deems necessary or
advisable with respect to such Options. The Board shall have no authority under
the Plan to grant Options to Employees, and such authority is vested exclusively
in the Committee.
3.7 LIABILITY; INDEMNIFICATION. No member of the Committee or
the Board nor any person to whom authority has been delegated by the Committee,
shall be personally liable for any action, interpretation or determination made
in good faith with respect to the Plan or Options granted hereunder, and each
member of the Committee and the Board shall be fully indemnified and protected
by InterVoice with respect to any liability he or she may incur with respect to
any such action, interpretation or determination, to the extent permitted by
applicable law.
ARTICLE 4. ELIGIBILITY
All Employees and Outside Directors are eligible to
participate in the Plan. The Committee shall select, from time to time,
Participants from those Employees, and the Board shall select, from time to
time, Participants from those Outside Directors, who, in the opinion of the
Committee or the Board, can further the Plan's purposes. In making this
selection, the Committee and the Board may give consideration to the functions
and responsibilities of the Participant, his or her past, present and potential
contributions to the growth and success of the Company and such other factors
deemed relevant by the Committee or the Board. Once a Participant is so
selected, the Committee or the Board shall determine the size of Option to be
granted to the Participant and shall establish in the related Option Agreement
the terms, conditions, restrictions and/or limitations applicable to the Option,
in addition to those set forth in the Plan and the administrative rules and
regulations, if any, established by the Committee. No Employee is entitled to
receive an Option unless selected by the Committee, and no Outside Director is
entitled to receive an Option unless selected by the Board.
ARTICLE 5. SHARES SUBJECT TO THE PLAN.
5.1 AVAILABLE SHARES. The maximum number of shares of Common
Stock that shall be available for grant of Options under the Plan shall not
exceed 4,000,000, subject to adjustment as provided in Sections 5.2 and 5.3.
Shares of Common Stock issued pursuant to the Plan may be shares of original
issuance or treasury shares or a combination of the foregoing, as the Board, in
its discretion, shall from time to time determine.
-5-
<PAGE> 29
5.2 ADJUSTMENTS FOR RECAPITALIZATIONS AND
REORGANIZATIONS.
(a) The shares with respect to which Options may be
granted under the Plan are shares of Common Stock as presently
constituted, but if, and whenever, prior to the expiration or
satisfaction of an Option theretofore granted, InterVoice
shall effect a subdivision or consolidation of shares of
Common Stock or the payment of a stock dividend on Common
Stock without receipt of consideration by InterVoice, the
number of shares of Common Stock with respect to which such
Option may thereafter be exercised or satisfied, as
applicable, (i) in the event of an increase in the number of
outstanding shares shall be proportionately increased, and the
exercise price per share shall be proportionately reduced, and
(ii) in the event of a reduction in the number of outstanding
shares shall be proportionately reduced, and the exercise
price per share shall be proportionately increased.
(b) If InterVoice recapitalizes or otherwise changes
its capital structure, thereafter upon any exercise of an
Option theretofore granted the Participant shall be entitled
to purchase under such Option, in lieu of the number of shares
of Common Stock then covered by such Option, the number and
class of shares of stock or other securities to which the
Participant would have been entitled pursuant to the terms of
the recapitalization if, immediately prior to such
recapitalization, the Participant had been the holder of
record of the number of shares of Common Stock then covered by
such Option.
(c) In the event of changes in the outstanding Common
Stock by reason of recapitalizations, reorganizations,
mergers, consolidations, combinations, separations (including
a spin-off or other distribution of stock or property),
exchanges or other relevant changes in capitalization
occurring after the date of grant of any Option and not
otherwise provided for by this Section 5.2, any outstanding
Options and any Option Agreements evidencing such Options
shall be subject to adjustment by the Committee at its
discretion as to the number, price and kind of shares of
Common Stock subject to, and other terms of, such Options to
reflect such changes in the outstanding Common Stock.
(d) In the event of any changes in the outstanding
Common Stock provided for in this Section 5.2, the aggregate
number of shares available for grant of Options under the Plan
may be equitably adjusted by the Committee, whose
determination shall be conclusive. Any adjustment provided for
in this Section 5.2(d) shall be subject to any required
stockholder action.
5.3 ADJUSTMENTS FOR OPTIONS. The Committee shall have full
discretion to determine the manner in which shares of Common Stock available for
grant of
-6-
<PAGE> 30
Options under the Plan are counted. Without limiting the discretion of the
Committee under this Section 5.3, unless otherwise determined by the Committee,
for the purpose of determining the number of shares of Common Stock available
for grant of Options under the Plan; (a) the grant of an Option shall reduce the
number of shares available for grant of Options under the Plan by the number of
shares subject to such Option and (b) if any Option is canceled or forfeited, or
terminates, expires or lapses, for any reason, the shares then subject to such
Option shall again be available for grant of Options under the Plan.
ARTICLE 6. OPTIONS
6.1 GENERAL. All Options granted under this Plan shall be
nonqualified stock options that are not intended to meet the requirements of
Section 422(b) of the Code.
6.2 TERMS AND CONDITIONS OF OPTIONS. All Options granted under
the Plan shall be subject to the terms, conditions, restrictions and limitations
of the Plan. The Committee or the Board may, in its sole judgment, subject any
Option or the Common Stock underlying such Option to such other terms,
conditions, restrictions and/or limitations (including, but not limited to, the
time and conditions of exercise or vesting of an Option and restrictions on
transferability of any shares of Common Stock issued or delivered pursuant to
the exercise of an Option), provided they are not inconsistent with the terms of
the Plan. Options granted under the Plan need not be uniform. Options granted
under the Plan shall be exercisable in whole or in such installments and at such
times as may be determined by the Committee or the Board. The price at which a
share of Common Stock may be purchased upon exercise of an Option shall be
determined by the Committee or the Board, but such exercise price shall not be
less than 100% of the Fair Market Value of a share of Common Stock on the
Effective Date of the Option's grant. The term of each Option shall be as
specified by the Committee or the Board; provided, however, that unless
otherwise designated by the Committee or the Board, no Options shall be
exercisable later than 10 years from the Effective Date of the Option's grant.
6.3 EXERCISE OF OPTIONS.
(a) Subject to the terms and conditions of the Plan,
Options shall be exercised by the delivery of a written notice
of exercise to InterVoice, setting forth the number of shares
of Common Stock with respect to which the Option is to be
exercised, accompanied by full payment for such shares.
(b) Upon exercise of an Option, the exercise price of
the Option shall be payable to InterVoice in full in cash.
(c) Payment of the exercise price of an Option may
also be made, in the discretion of the Committee, by delivery
to InterVoice or its designated agent of an executed
irrevocable option exercise form together with irrevocable
instructions to
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<PAGE> 31
a broker-dealer to sell or margin a sufficient portion of the
shares with respect to which the Option is exercised and
deliver the sale or margin loan proceeds directly to
InterVoice to pay for the exercise price and any required
withholding taxes.
(d) As soon as reasonably practicable after receipt
of written notification of exercise of an Option and full
payment of the exercise price and any required withholding
taxes, InterVoice shall deliver to the Participant, in the
Participant's name, a stock certificate or certificates in an
appropriate amount based upon the number of shares of Common
Stock purchased under the Option.
6.4 TERMINATION OF SERVICE. Each Option Agreement shall set
forth the extent to which the Participant shall have the right to exercise the
Option following termination of the Participant's employment or service with the
Company or an Affiliate. Such provisions shall be determined in the sole
discretion of the Committee or the Board, need not be uniform among all Options
granted under the Plan and may reflect distinctions based on the reasons for
termination of employment or service. Subject to Section 5.2 and Article 7, in
the event that a Participant's Option Agreement does not set forth such
termination provisions, the following termination provisions shall apply with
respect to such Option:
(a) RETIREMENT, DISABILITY OR DEATH. If the
employment or service of a Participant shall terminate by
reason of Retirement, permanent and total disability (within
the meaning of Section 22(e)(3) of the Code) or death,
outstanding Options held by the Participant may be exercised,
to the extent then vested, no more than two years from the
date of such termination of employment or termination of
service, unless the Options in any way expressly provide for
earlier termination.
(b) OTHER TERMINATION. If the employment or service
of a Participant shall terminate for any reason other than the
reasons set forth in paragraph (a) above, whether on a
voluntary or involuntary basis, outstanding Options held by
the Participant may be exercised, to the extent then vested,
no more than two years from the date of such termination of
employment or termination of service, unless the Options in
any way expressly provide for earlier termination.
(c) TERMINATION FOR CAUSE. Notwithstanding paragraphs
(a) and (b) above, if the employment or service of a
Participant shall be terminated by reason of such
Participant's fraud, dishonesty or performance of other acts
detrimental to the Company or an Affiliate, all outstanding
Options held by the Participant shall immediately be forfeited
to the Company and no additional exercise period shall be
allowed, regardless of the vested status of the Options.
6.5 MAXIMUM OPTION GRANTS. Notwithstanding any provision
contained
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<PAGE> 32
in the Plan to the contrary, the maximum number of shares of Common Stock for
which Options may be granted under the Plan to any one Participant during a
calendar year is 300,000 shares.
ARTICLE 7. CORPORATE CHANGE
Notwithstanding anything contained in the Plan to the
contrary, in the event of a Corporate Change, unless otherwise provided in the
related Option Agreement, all Options then outstanding shall become exercisable
in full and all restrictions imposed on any Common Stock that may be delivered
pursuant to the exercise of such Options shall be deemed satisfied.
ARTICLE 8. AMENDMENT AND TERMINATION
The Board may at any time suspend, terminate, amend or modify
the Plan, in whole or in part; provided, however, that no amendment or
modification of the Plan shall become effective without the approval of such
amendment or modification by the stockholders of InterVoice if InterVoice, on
the advice of counsel, determines that such stockholder approval is necessary or
desirable. Upon termination of the Plan, the terms and provisions of the Plan
shall, notwithstanding such termination, continue to apply to Options granted
prior to such termination. No suspension, termination, amendment or modification
of the Plan shall adversely affect in any material way any Option previously
granted under the Plan, without the consent of the Participant holding such
Option (except that such consent shall not be required in the case of an
amendment or modification required following a change in law or interpretation
thereof to cause the Options under the Plan to continue to qualify as
"performance-based compensation" within the meaning of Section 162(m) of the
Code).
ARTICLE 9. MISCELLANEOUS
9.1 OPTION AGREEMENTS. After the Committee or the Board grants
an Option under the Plan to a Participant, InterVoice and the Participant shall
enter into an Option Agreement setting forth the terms, conditions, restrictions
and/or limitations applicable to the Option and such other matters as the
Committee or the Board may determine to be appropriate. The terms and provisions
of the respective Option Agreements need not be identical. In the event of any
conflict between an Option Agreement and the Plan, the terms of the Plan shall
govern.
9.2 NONASSIGNABILITY. Except as otherwise provided in a
Participant's Option Agreement, no Option granted under the Plan may be sold,
transferred, pledged, exchanged, hypothecated or otherwise disposed of, other
than by will or pursuant to the applicable laws of descent and distribution.
Further, no such Option shall be subject to execution, attachment or similar
process. Any attempted sale, transfer, pledge, exchange, hypothecation or other
disposition of an Option not specifically permitted by the Plan or the Option
Agreement shall be null and void and without effect. All Options granted to a
Participant under the Plan shall
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<PAGE> 33
be exercisable during his or her lifetime only by such Participant or, in the
event of the Participant's legal incapacity, by his or her guardian or legal
representative.
9.3 NO FRACTIONAL SHARES. No fractional shares of Common Stock
shall be issued pursuant to any Option granted under the Plan, and no payment or
other adjustment shall be made in respect of any such fractional share.
9.4 WITHHOLDING TAXES. The Company shall be entitled to deduct
from any payment made under the Plan, regardless of the form of such payment,
the amount of all applicable income and employment taxes required by law to be
withheld with respect to such payment, may require the Participant to pay to the
Company such withholding taxes prior to and as a condition of the making of any
payment or the issuance or delivery of any shares of Common Stock under the Plan
and shall be entitled to deduct from any other compensation payable to the
Participant any withholding obligations with respect to Options under the Plan.
9.5 REGULATORY APPROVALS AND LISTINGS. Notwithstanding
anything contained in the Plan to the contrary, InterVoice shall have no
obligation to issue or deliver shares of Common Stock under the Plan prior to
(a) the obtaining of any approval from any governmental agency which InterVoice
shall, in its sole discretion, determine to be necessary or advisable, (b) the
admission of such shares to listing on the stock exchange or stock market on
which the Common Stock may be listed and (c) the completion of any registration
of any governmental body which InterVoice shall, in its sole discretion,
determine to be necessary or advisable.
9.6 BINDING EFFECT. The obligation of InterVoice under the
Plan shall be binding upon any successor corporation or organization resulting
from the merger, consolidation or other reorganization of InterVoice, or upon
any successor corporation or organization succeeding to all or substantially all
of the assets and business of InterVoice. The terms and conditions of the Plan
shall be binding upon each Participant and his or her heirs, legatees,
distributees and legal representatives.
9.7 SEVERABILITY. If any provision of the Plan or any Option
Agreement is held to be illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining provisions of the Plan or such
agreement, as the case may be, but such provision shall be fully severable and
the Plan or such agreement, as the case may be, shall be construed and enforced
as if the illegal or invalid provision had never been included herein or
therein.
9.8 NO RESTRICTION OF CORPORATE ACTION. Nothing contained in
the Plan shall be construed to prevent InterVoice or any Affiliate from taking
any corporate action (including any corporate action to suspend, terminate,
amend or modify the Plan) that is deemed by InterVoice or such Affiliate to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Options made or to be made under the Plan. No
Participant or other person shall have any claim against InterVoice or any
Affiliate as a result of such action.
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<PAGE> 34
9.9 NOTICES. All notices required or permitted to be given or
made under the Plan or any Option Agreement shall be in writing and shall be
deemed to have been duly given or made if (a) delivered personally, (b)
transmitted by first class registered or certified United States mail, postage
prepaid, return receipt requested, (c) sent by prepaid overnight courier service
or (d) sent by telecopy or facsimile transmission, answer back requested, to the
person who is to receive it at the address that such person has theretofore
specified by written notice delivered in accordance herewith. Such notices shall
be effective (a) if delivered personally or sent by courier service, upon actual
receipt by the intended recipient, (b) if mailed, upon the earlier of five days
after deposit in the mail or the date of delivery as shown by the return receipt
therefor or (c) if sent by telecopy or facsimile transmission, when the answer
back is received. InterVoice or a Participant may change, at any time and from
time to time, by written notice to the other, the address that it or such
Participant had theretofore specified for receiving notices. Until such address
is changed in accordance herewith, notices hereunder or under an Option
Agreement shall be delivered or sent (a) to a Participant at his or her address
as set forth in the records of the Company or (b) to InterVoice at the principal
executive offices of InterVoice clearly marked "Attention: Human Resources
Department."
9.10 GOVERNING LAW. The Plan shall be governed and construed
in accordance with the internal laws (and not the principles relating to
conflicts of laws) of the State of Texas, except as superseded by applicable
federal law.
9.11 NO RIGHT, TITLE OR INTEREST IN COMPANY ASSETS. No
Participant shall have any rights as a stockholder of InterVoice as a result of
participation in the Plan until the date of issuance of a stock certificate in
his or her name. To the extent any person acquires a right to receive payments
from the Company under the Plan, such rights shall be no greater than the rights
of an unsecured creditor of the Company, and such person shall not have any
rights in or against any specific assets of the Company. All of the Options
granted under the Plan shall be unfunded.
9.12 RISK OF PARTICIPATION. Nothing contained in the Plan
shall be construed either as a guarantee by InterVoice or its Affiliates, or
their respective stockholders, directors, officers or employees, of the value of
any assets of the Plan or as an agreement by InterVoice or its Affiliates, or
their respective stockholders, directors, officers or employees, to indemnify
anyone for any losses, damages, costs or expenses resulting from participation
in the Plan.
9.13 NO GUARANTEE OF TAX CONSEQUENCES. No person connected
with the Plan in any capacity, including, but not limited to, InterVoice and the
Affiliates and their respective directors, officers, agents and employees, makes
any representation, commitment or guarantee that any tax treatment, including,
but not limited to, Federal, state and local income, estate and gift tax
treatment, will be applicable with respect to any Options or payments
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<PAGE> 35
thereunder made to or for the benefit of a Participant under the Plan or that
such tax treatment will apply to or be available to a Participant on account of
participation in the Plan.
9.14 OTHER BENEFITS. No Option granted under the Plan shall be
considered compensation for purposes of computing benefits or contributions
under any retirement plan of InterVoice or any Affiliate, nor affect any
benefits or compensation under any other benefit or compensation plan of
InterVoice or any Affiliate now or subsequently in effect.
9.15 CONTINUED EMPLOYMENT OR SERVICE. Nothing contained in the
Plan or in any Option Agreement shall confer upon any Participant the right to
continue in the employ of the Company, or interfere in any way with the rights
of the Company to terminate his or her employment at any time, with or without
cause. Further, participation in this Plan shall not give any Outside Director
any right to continue as a director of InterVoice.
9.16 MISCELLANEOUS. Headings are given to the articles and
sections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
of the Plan or any provisions hereof. The use of the masculine gender shall also
include within its meaning the feminine. Wherever the context of the Plan
dictates, the use of the singular shall also include within its meaning the
plural, and vice versa.
IN WITNESS WHEREOF, this Plan has been executed this ____ day
of June, 1999.
INTERVOICE, INC.
By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
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<PAGE> 36
PROXY PROXY
INTERVOICE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Daniel D. Hammond, David A. Berger, and
Rob-Roy J. Graham, and any 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 21, 1999, at the annual meeting of shareholders to be held on
August 17, 1999, at Plano, 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 July ___, 1999, 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, FOR THE PROPOSAL TO AMEND THE
COMPANY'S ARTICLES OF INCORPORATION AND FOR THE PROPOSAL TO APPROVE THE
COMPANY'S 1999 STOCK OPTION PLAN.
(Continued and to be signed on reverse side)
<PAGE> 37
INTERVOICE, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
[ ]
<TABLE>
<CAPTION>
WITHHOLD
AUTHORITY FOR all nominees, except
FOR all to vote for vote withheld for those
nominees all nominees named below:
<S> <C> <C> <C>
1. Election of Directors
NOMINEES: DANIEL D. HAMMOND, JOSEPH J. PIETROPAOLO, [ ] [ ] [ ]
GEORGE C. PLATT, GRANT A. DOVE, DAVID W.
BRANDENBURG AND STANLEY G. BRANNAN -------------------------
Nominee Exceptions
FOR AGAINST ABSTAIN
2. To approve the Company's 1999 Stock Option Plan. [ ] [ ] [ ]
3. To amend the Articles of Incorporation of the Company to FOR AGAINST ABSTAIN
change the corporate name of the Company to InterVoice-Brite, [ ] [ ] [ ]
Inc.
4. In their discretion, the proxies are authorized to
vote upon such other business or matters as may FOR AGAINST ABSTAIN
properly come before the meeting or any adjournment [ ] [ ] [ ]
thereof.
</TABLE>
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.
