<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
--------------------------------------------------------------------------------
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Davox Corporation
(Name of Registrant as Specified In Its Charter)
Davox Corporation
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
--------------------------------------------------------------------------------
<PAGE> 2
DAVOX CORPORATION
6 TECHNOLOGY PARK DRIVE
WESTFORD, MASSACHUSETTS 01886
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
APRIL 26, 1995
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Davox Corporation, a Delaware corporation (the "Company"), will be held on
Wednesday, April 26, 1995 at 10:00 a.m. local time at the offices of the
Company, 6 Technology Park Drive, Westford, Massachusetts, for the following
purposes:
1. To fix the number of directors constituting the Board of
Directors at four and to elect a Board of Directors for the ensuing year.
2. To ratify the selection of the firm Arthur Andersen, LLP as
auditors for the fiscal year ending December 31, 1995.
3. To transact such other business as may properly come before the
meeting and any adjournments thereof.
Only stockholders of record at the close of business on March 1, 1995
are entitled to notice of and to vote at the meeting and any adjournment
thereof.
By Order of the Board of Directors
Timothy C. Maguire,
SECRETARY
Boston, Massachusetts
March 24, 1995
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE
ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES.
<PAGE> 3
DAVOX CORPORATION
6 TECHNOLOGY PARK DRIVE
WESTFORD, MASSACHUSETTS 01886
-------------------------
PROXY STATEMENT
-------------------------
MARCH 24, 1995
Proxies in the form enclosed with this proxy statement are solicited by
the Board of Directors of Davox Corporation (the "Company" or "Davox") for use
at the Annual Meeting of Stockholders to be held on April 26, 1995 at 10:00
a.m. local time at the offices of the Company, 6 Technology Park Drive,
Westford, Massachusetts 01886.
Only stockholders of record as of March 1, 1995 (the "Record Date")
will be entitled to vote at the meeting and any adjournments thereof. As of
that date, 6,612,745 shares of Common Stock, $.10 par value, of the Company
were issued and outstanding. Each share of Common Stock outstanding as of the
Record Date will be entitled to one vote and stockholders may vote in person or
by proxy. Execution of a proxy will not in any way affect a stockholder's
right to attend the meeting and vote in person. Any stockholder giving a proxy
has the right to revoke it by written notice to the Secretary of the Company at
any time before it is exercised or by delivering a later executed proxy to the
Secretary of the Company at any time before the original proxy is exercised.
The persons named as attorneys in the proxies are directors and/or
officers of the Company. All properly executed proxies returned in time to be
counted at the meeting will be voted as stated below under "Election of
Directors." Any stockholder giving a proxy has the right to withhold authority
to vote for any individual nominee to the Board of Directors by writing that
nominee's name in the space provided on the proxy. In addition to the election
of directors, the stockholders will consider and vote upon a proposal to ratify
the selection of auditors, as further described in this proxy statement. Where
a choice has been specified on the proxy with respect to the foregoing matters,
the shares represented by the proxy will be voted in accordance with the
specifications and will be voted FOR if no specification is indicated.
The representation in person or by proxy of at least a majority of all
shares of Common Stock issued, outstanding and entitled to vote at the meeting
is necessary to constitute a quorum for the transaction of business. Votes
withheld from any nominee for election as director, as well as abstentions and
broker "non-votes" with respect to all other matters being submitted to
stockholders, are counted as present or represented for purposes of determining
the presence or absence of a quorum for the meeting. A "non-vote" occurs when a
nominee holding shares for a beneficial owner votes on one proposal, but does
not vote on another proposal because, in respect of such other proposal, the
nominee does not have discretionary voting power and has not received
instructions from the beneficial owner.
The election of directors by the stockholders shall be determined by a
plurality of the votes cast by stockholders entitled to vote. Votes may be
cast in favor of or withheld from each nominee. On all other matters being
submitted to stockholders, an affirmative vote of a majority of the shares
present in person or by proxy and entitled to vote on each such matter is
required for approval. Abstentions and broker "non-votes" will have the
practical effect of voting against each such matter since they are included in
the number of shares present and voting on each such matter.
<PAGE> 4
The Board of Directors of the Company knows of no other matters to be
presented at the meeting. If any other matter should be presented at the
meeting upon which a vote properly may be taken, shares represented by all
proxies received by the Board of Directors will be voted with respect thereto
in accordance with the judgment of the persons named as attorneys in the
proxies.
An Annual Report to Stockholders, containing financial statements for
the fiscal year ended December 31, 1994, is being mailed together with this
proxy statement to all stockholders entitled to vote. This proxy statement and
the form of proxy were first mailed to stockholders on or about March 24, 1995.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth, as of March 1, 1995, certain
information regarding the ownership of shares of the Company's Common Stock by
(i) each person who, to the knowledge of the Company, owned beneficially more
than 5% of the shares of Common Stock of the Company outstanding at such date,
(ii) each Director and nominee of the Company, (iii) each Named Officer (as
defined below) and (iv) all Directors, nominees and Executive Officers as a
group:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership (1) Percent of Class
---------------- ------------------------ ----------------
<S> <C> <C>
Entities and individuals associated with 1,423,937(2) 21.5%
Gilder, Gagnon, Howe & Co.
1775 Broadway
New York, NY 10019
Entities and individuals associated with 637,809 (3) 9.6%
Hambrecht & Quist Venture Partners
One Bush Street
18th Floor
San Francisco, CA 94104
Entities and individuals associated with 1,658,459 (4) 25.0%
MK Global Ventures
2471 East Bayshore Road
Suite 520
Palo Alto, CA 94303
Entities and individuals associated with 603,860 (5) 9.1%
Pioneer III, L.P. and Pioneer IV, L.P.
224 East 49th Street
New York, NY 10017
Alphonse M. Lucchese 78,726 (6) 1.2%
Michael D. Kaufman 1,658,459 (4) 25.0%
R. Scott Asen 603,860 (5) 9.1%
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C> <C>
Walter J. Levison 0 (7) *
James F. Mitchell 60,556 (8) *
Mark Donovan 34,201 (9) *
John E. Cambray 20,846 (10) *
Edward D. Kay 9,500 (11) *
Charles E. Carney 0 *
James Lawrence Doherty 0 *
All Directors, Nominees and Executive
Officers as a group (11 Persons) 2,491,184 (12) 36.2%
<FN>
* Less than 1.0%
______________________________
(1) Except as otherwise noted, each person or entity named in the table
has sole voting and investment power with respect to the shares.
Includes all shares which the named person has the right to acquire
within 60 days following March 1, 1995.
(2) Includes 19,718 shares beneficially owned by Gilder, Gagnon, Howe & Co.
Also includes the following shares as to which Gilder, Gagnon, Howe & Co.
disclaims beneficial ownership: (i) 874,269 shares held in customer
accounts over which one or another of its partners or employees may have
discretion to purchase or dispose of but over which Gilder, Gagnon, Howe
& Co. does not have discretion; (ii) 516,850 shares held in accounts
owned by its partners and by its partners' families and controlled by its
partners; and (iii) 13,100 shares held in the account of its firm profit
sharing plan controlled by certain of its partners.
(3) No entity or individual associated with Hambrecht & Quist Venture
Partners beneficially owns in excess of 5% of the shares of Common Stock
of the Company outstanding on such date.
(4) Includes 717,847 shares held by MK Global Ventures, 533,333 shares
held by MK GVD Fund, 248,880 shares held by MK GVS Fund, 145,899 shares
individually owned by Michael D. Kaufman, a director of the Company and
12,500 shares subject to options held by Mr. Kaufman which are
exercisable within 60 days of March 1, 1995. Excludes 17,500 shares
subject to options held by Mr. Kaufman which will not be exercisable
within 60 days of March 1, 1995. Mr. Kaufman is the sole general partner
of MK Global Management, which is the sole general partner of MK Global
Ventures, which is the sole general partner of MK GVS Fund. Mr. Kaufman
is the sole general partner of MK GVD Management, which is the sole
general partner of MK GVD Fund.
(5) Includes 112,434 shares held by Pioneer III, L.P., 114,210 shares
held by Pioneer IV, L.P., 20,000 shares owned by Asen and Co. f/b/o SDFJ,
Inc., 324,716 shares individually owned by R. Scott Asen, a Director of
the Company, and 32,500 shares subject to options held by Mr. Asen that
are exercisable within 60 days of March 1, 1995. Excludes 17,500 shares
subject to options which will not be exercisable within 60 days of
March 1, 1995. Mr. Asen
</TABLE>
3
<PAGE> 6
[FN]
and James G. Niven are the two general partners of Pioneer III, L.P. and
Pioneer IV, L.P. They may therefore be deemed to be the beneficial owners
of shares held by such entities. No entity or individual associated with
Pioneer III, L.P. or Pioneer IV, L.P. beneficially owns in excess of 5% of
the shares of Common Stock of the Company outstanding on such date, except
for Mr. Asen who owns 5.4% including options exercisable within 60 days of
March 1, 1995.
(6) Includes 77,726 shares subject to options held by Mr. Lucchese
exercisable within 60 days following March 1, 1995. Also includes 1,000
shares held by an immediate family member of Mr. Lucchese. Excludes
424,079 shares subject to options held by Mr. Lucchese which will not be
exercisable within 60 days of March 1, 1995.
(7) Excludes 40,000 shares subject to options granted to Mr. Levison which
will not be exercisable within 60 days of March 1, 1995.
(8) Includes 60,500 shares subject to options held by Mr. Mitchell
exercisable within 60 days following March 1, 1995. Excludes 146,250
shares subject to options held by Mr. Mitchell which will not be
exercisable within 60 days of March 1, 1995.
(9) Includes 30,627 shares subject to options held by Mr. Donovan exercisable
within 60 days following March 1, 1995. Excludes 44,373 shares subject
to options held by Mr. Donovan which will not be exercisable within 60
days of March 1, 1995.
(10) Includes 20,433 shares subject to options held by Mr. Cambray exercisable
within 60 days following March 1, 1995. Excludes 56,259 shares subject
to options held by Mr. Cambray which will not be exercisable within 60
days of March 1, 1995.
(11) Includes 8,000 shares subject to options held by Mr. Kay exercisable
within 60 days following March 1, 1995. Also includes 1,000 shares
owned by an immediate family member of Mr. Kay. Excludes 54,000 shares
subject to options held by Mr. Kay which will not be exercisable within
60 days of March 1, 1995.
(12) Includes 267,322 shares subject to options held by officers and
non-employee Directors which are exercisable within 60 days following
March 1, 1995. Also includes shares held by entities associated with
Messrs. Asen and Kaufman as described in footnotes 3 and 5. Excludes
973,330 shares subject to options held by officers and non-employee
Directors which will not be exercisable within 60 days of March 1, 1995.
ELECTION OF DIRECTORS
The directors of the Company are elected annually and hold office until
the next annual meeting of stockholders and until their successors shall have
been elected and shall have qualified. Shares represented by all proxies
received by the Board of Directors and not so marked as to withhold authority
to vote for any individual director or for all directors will be voted (unless
one or more nominees are unable to serve) for fixing the number of directors
for the ensuing year at four and for the election of the nominees named below.
The Board of Directors knows of no reason why any such nominee should be unable
or unwilling to serve, but if such should be the case, proxies will be voted
for the election of some other person or for fixing the number of directors at
a lesser number.
4
<PAGE> 7
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors met nine times, including written consents,
during the fiscal year ended December 31, 1994. The Audit Committee of the
Board of Directors, of which R. Scott Asen, Michael D. Kaufman and Walter J.
Levison are members, oversees the accounting and tax functions of the Company,
including matters relating to the appointment and activities of the Company's
independent auditors. The Audit Committee met once during the year ended
December 31, 1994. The Compensation Committee of the Board of Directors, of
which R. Scott Asen, Michael D. Kaufman and Walter J. Levison are members,
reviews and makes recommendations concerning executive compensation. The
Compensation Committee met twice during the year ended December 31, 1994. The
Board of Directors does not currently have a standing nominating committee.
Each of the directors attended at least 75% of the aggregate of the total
number of meetings of the Board of Directors and of all Committees on which he
serves.
<TABLE>
OCCUPATIONS OF DIRECTORS
The following table sets forth the nominees for Director, their ages as
of the Record Date and their present positions with the Company.
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Alphonse M. Lucchese 59 Chairman of the Board of
Directors, President and Chief
Executive Officer
Michael D. Kaufman (1)(2) 53 Director
Walter J. Levison (1)(2) 76 Director
R. Scott Asen (1)(2) 50 Director
<FN>
___________________
(1) Member of Compensation Committee
(2) Member of Audit Committee
</TABLE>
The By-Laws of the Company provide that the Board of Directors shall be
elected annually. Officers are elected by, and serve at the discretion of, the
Board of Directors.
Mr. Lucchese has served as President and Chief Executive Officer of the
Company since July 1, 1994 and has served as Chairman of the Board of the
Directors since August 9, 1994. Prior to his employment with the Company, Mr.
Lucchese was President and Chief Executive Officer of Iris Graphics, Inc., a
computer graphics hardware company, from 1987 until 1994. Mr. Lucchese is
currently a director of Computer Telephone Company.
Mr. Kaufman has been a Director of the Company since 1982. From 1981 to
1987, he was employed by Oak Management Corporation, which provides management
and advisory services to Oak Investment Partners II, L.P. ("Oak II") and Oak
Investment Partners III, L.P. ("Oak III"). From June 1981 to September 1986,
Mr. Kaufman served as a general partner of Oak
5
<PAGE> 8
II and Oak III. Mr. Kaufman is currently serving as the managing general
partner of MK Global Ventures, an investment company, which is a stockholder of
the Company. Mr. Kaufman currently serves as a director of Document
Technologies, Inc., DISC, Inc., Proxim, Inc. and Hypermedia Communications,
Inc.
Mr. Levison has been a Director of the Company since June 1994. Mr.
Levison has been a general partner of the Aegis Venture Funds, a group of
limited partnerships, since 1982. Mr. Levison formerly served as a director of
Chipcom Corporation and Scitex Corporation, and currently serves as a director
of D.M. Management Company.
Mr. Asen has been a Director of the Company since April 1992. Mr. Asen
has been President of Asen & Co., Inc., an investment management firm, since
1983. He is also a general partner of Pioneer Associates, L.P., Pioneer III,
L.P. and Pioneer IV, L.P., each a venture capital fund. Mr. Asen currently
serves as a director of Biomagnetic Technologies, Inc.
DIRECTOR COMPENSATION
All Non-employee Directors are compensated at a rate of $1,000 per
meeting attended, plus normal travel expenses incurred in connection with
attendance at such meetings. All Non-employee Directors are also compensated
on an annual basis at the rate of $8,000. Non-employee Directors are also
entitled to receive stock options pursuant to the 1988 Non-employee Director
Stock Option Plan (the "1988 Plan").
6
<PAGE> 9
COMPENSATION AND OTHER INFORMATION
CONCERNING DIRECTORS AND OFFICERS
Executive Compensation
The following table shows compensation information with respect to
services rendered to the Company in all capacities during the years ended
December 31, 1994, 1993 and 1992 for (i) the individual who served as the Chief
Executive Officer as of December 31, 1994; (ii) the other four most highly
compensated executive officers of the Company; and (iii) two other individuals
who would have been listed but for the fact that they were no longer with the
Company at year end (collectively, the "Named Officers"):
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation (1) Long-Term Compensation Awards (2)
----------------------- ---------------------------------
Securities Underlying All Other
Name and Principal Position Year Salary($) Bonus ($) (3) Options / SARs (#) Compensation
--------------------------- ---- --------- ------------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Alphonse M. Lucchese (4) 1994 131,734 202,500 (9) 501,805 1,343 (10)
Chairman, President and 1993 - - - -
Chief Executive Officer 1992 - - - -
James F. Mitchell 1994 149,133 22,000 150,000 0
Senior Vice President and 1993 140,016 0 0 45,407 (11)
Chief Technical Officer 1992 140,016 0 65,000 20,687 (12)
John E. Cambray (5) 1994 117,121 0 50,000 0
Vice President - 1993 106,988 0 10,000 0
Development 1992 - - - -
Edward D. Kay (6) 1994 107,515 0 50,000 0
Vice President - 1993 - - - -
Customer Service 1992 - - - -
Mark Donovan 1994 95,391 0 50,000 0
Vice President - Operations 1993 95,016 0 0 0
1992 95,016 0 15,000 0
Charles E. Carney (7) 1994 105,000 0 100,000 66,555 (13)
1993 180,000 0 0 0
1992 180,000 0 135,000 0
J. Lawrence Doherty (8) 1994 70,008 0 50,000 67,002 (14)
1993 140,016 0 0 0
1992 140,016 0 75,000 0
<FN>
_______________
(1) Excludes perquisites and other personal benefits, the aggregate annual
amount of which for each officer was less than the lesser of $50,000 or 10%
of the total salary and bonus reported.
(2) The Company did not grant any restricted stock awards or stock
appreciation rights ("SARs") or make any long term incentive plan payouts during
the fiscal years ended December 31, 1994, 1993 and 1992.
</TABLE>
7
<PAGE> 10
[FN]
(3) Indicates bonus payments earned by the Named Officers in the year
indicated, for services rendered in such year, most of which were paid in the
next subsequent year.
(4) Mr. Lucchese was elected President and Chief Executive Officer effective
July 1, 1994. Mr. Lucchese was elected Chairman of the Board of Directors
on August 9, 1994.
(5) Mr. Cambray was elected Vice President - Development in November 1993.
(6) Mr. Kay joined the Company in October 1992 as Director of Technical
Support and was elected Vice President - Customer Service on August 9, 1994.
(7) Mr. Carney served as President and Chief Executive Officer of the Company
from June 1991 until June 30, 1994. Mr. Carney resigned from the Company
effective August 1, 1994.
(8) Mr. Doherty resigned as Senior Vice President and Chief Financial Officer
effective July 1, 1994.
(9) Includes: (i) a signing bonus of $112,500; and (ii) a performance based
bonus of $90,000.
(10) Consists of life insurance premiums paid by the Company.
(11) Consists of forgiveness of obligations under advances made in a previous
year.
(12) Consists of accrued vacation payments.
(13) Includes: (i) severance payments of $66,250 pursuant to a severance
agreement between Mr. Carney and the Company; (ii) and life insurance premiums
in the amount of $305 paid by the Company.
(14) Consists of severance payments paid pursuant to a severance agreement
between Mr. Doherty and the Company.
8
<PAGE> 11
<TABLE>
OPTION GRANTS IN 1994
The following table shows information regarding grants of stock options to the Named Officers during the
year ended December 31, 1994. The Company did not grant any stock appreciation rights in 1994.
Option Grants in 1994
Individual Grants
--------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Percent of Total Annual Rates of Stock
Options Price Appreciation for
Granted to Exercise or Option Term (2)
Options Granted Employees in Base Price Expiration ---------------
Name (#) (1) Fiscal Year ($ / share) Date 5%($) 10%($)
---- ------- ----------- ----------- ---- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Alphonse M. Lucchese 400,000 28.1% 2.50 5/24/04 628,900 1,593,700
101,805 7.1% 3.50 9/23/04 244,088 567,863
James F. Mitchell 100,000 7.0% 5.25 2/1/04 330,173 863,693
50,000 3.5% 2.50 5/24/04 78,613 199,213
John E. Cambray 30,000 2.1% 5.25 2/1/04 99,052 251,008
20,000 1.4% 4.875 11/16/04 53,173 142,417
Edward D. Kay 10,000 * 2.50 5/24/04 15,723 39,843
40,000 2.8% 4.875 11/16/04 106,347 284,835
Mark Donovan 50,000 3.5% 5.25 2/1/04 165,086 418,346
Charles E. Carney 100,000 (3) 7.0% 5.25 - - -
J. Lawrence Doherty 50,000 (4) 3.5% 5.25 - - -
<FN>
*Less than 1.0%
----------------------
(1) The exercise price per share of each option was determined by the Compensation Committee to be equal to the fair
market value per share of the Common Stock on the date of grant.
(2) Amounts represent hypothetical gains that could be achieved for the respective options exercised at the end of
the option term. These gains are based on assumed rates of appreciation of 5% and 10% compounded annually from the date
the respective options granted to their expiration date. The gains shown are net of the option exercise price, but do not
include deductions for taxes or other expenses associated with the exercise of the options or sale of the underlying shares.
The actual gains, if any, on the stock option exercises will depend on the future performance of the Common Stock, the
optionholder's continued employment through the option period, and the date on which the options are exercised.
(3) Mr. Carney's options terminated pursuant to their terms on August 30, 1994, thirty days after Mr. Carney's resignation from
the Company.
</TABLE>
9
<PAGE> 12
(4) Mr. Doherty's options terminated pursuant to their terms on July 30,
1994, thirty days after Mr. Doherty's resignation from the Company.
OPTION EXERCISES AND YEAR-END VALUES
Shown below is information with respect to options to purchase the
Company's Common Stock granted to the Named Officers under the Company's stock
option plans, including the number of unexercised options outstanding at
December 31, 1994 and the value of such unexercised in-the-money options at
December 31, 1994.
<TABLE>
<CAPTION>
Option Values at December 31, 1994
Number of Unexercised Value of Unexercised
Shares Options at In-the-money
Acquired December 31, 1994 Options at
on Value (#) December 31, 1994 ($)(1)
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alphonse M. Lucchese 0 0 65,000 436,805 186,875 1,154,009
James F. Mitchell 12,000 34,500 48,625 168,125 108,484 259,297
John E. Cambray 0 0 19,846 60,846 45,949 40,824
Edward D. Kay 0 0 6,750 55,250 20,719 62,781
Mark Donovan 0 0 21,252 53,748 48,601 38,275
Charles E. Carney 33,500 20,938 0 0 0 0
J. Lawrence Doherty 27,500 3,438 0 0 0 0
<FN>
_______________________
(1) Options granted to the Named Officers become fully vested
immediately prior to the merger, consolidation, liquidation or sale of
substantially all of the assets of the Company and terminate immediately after
the effective date of such merger, consolidation, liquidation or sale.
(2) Value is based on the difference between the option exercise price
and the fair market value of the Company's Common Stock on December 31, 1994
($5.375 per share, the last reported sales price of the Company's Common Stock
on the Nasdaq National Market System on December 31, 1994) multiplied by the
number of shares underlying the option.
</TABLE>
10
<PAGE> 13
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
three member Compensation Committee of the Board of Directors (the
"Compensation Committee"). The three members of the Compensation Committee are
non-employee Directors. Pursuant to the authority delegated by the Board of
Directors, the Compensation Committee establishes each year the compensation of
the Chief Executive Officer, and together with the Chief Executive Officer,
establishes the compensation of the other executive officers of the Company.
Under the supervision of the Compensation Committee, the Company
developed and implemented 1994 Executive Compensation Plans for the Chief
Executive Officer and certain of the executive officers of the Company (the
"Plans"). The Plans are designed to reward executive officers whose
performance yields improvement in corporate operating results, market share and
shareholder value. The ultimate goal of the Plans is to align the interests of
management with those of the stockholders. Compensation under the Plans is
comprised of cash compensation in the form of annual base salary, incentive
compensation in the form of performance-based cash bonuses, and long-term
incentive compensation in the form of stock options.
In setting cash compensation levels for executive officers (including
the Chief Executive Officer), the Compensation Committee takes into account
such factors as: (i) the Company's past financial performance and future
expectations, (ii) the general and industry-specific business environment,
(iii) annual performance goals and (iv) corporate and individual performance.
The base salaries are fixed at levels comparable to the amounts paid to senior
executives with comparable qualifications, experience and responsibilities at
other companies located in the northeastern United States of similar size and
engaged in a similar business to that of the Company.
Incentive compensation in the form of performance-based bonuses for the
Chief Executive Officer and the Company's other executive officers is based
upon management's success in meeting the Company's financial and strategic
goals. The Chief Executive Officer is given quantitative goals such as specific
goals for revenue generation and net profit. The other executive officers are
evaluated using a method that measures performance against the achievement of
both quantitative and qualitative criteria. The other executive officers are
given quantitative goals such as specific targets for revenue generation and
net profit, as well as specific functional objectives which are tailored to the
requirements of their offices in the Company. Based on its evaluation and
consideration of management's performance with respect to these criteria, the
Compensation Committee determines cash bonuses.
Incentive compensation in the form of stock options is designed to
provide long term incentives to executive officers and other employees, to
encourage the executive officers and other employees to remain with the Company
and to enable optionees to develop and maintain a significant, long-term stock
ownership position in the Company's Common Stock. The Compensation Committee
grants stock options to the Company's executive officers in consideration of
the strategic goals and direction of the Company. The Company's 1986 Stock
Plan (the "1986 Plan"), administered by the Board of Directors, is the vehicle
for the granting of stock options.
The 1986 Plan permits the Board of Directors to grant stock options to
eligible employees, including executive officers. Options become exercisable
in increments over time, contingent upon continued employment. The value
realizable from exercisable options is
11
<PAGE> 14
dependent upon the extent to which the Company's performance is reflected in
the market price of the Company's Common Stock at any particular point in time.
The Company also maintains the 1991 Employee Stock Purchase Plan (the
"Stock Purchase Plan") in which all executives may participate on the same
terms as non-executive employees who meet applicable eligibility criteria. The
Stock Purchase Plan provides for the sale of shares of the Company's Common
Stock to full-time employees of the Company pursuant to nontransferable options
at less than fair market value. Employees who own 5% or more of the Common
Stock of the Company and non-employee directors are not eligible to participate
in the Stock Purchase Plan. As of the date hereof, 13,806 shares of Common
Stock have been issued under the Stock Purchase Plan.
The Revenue Reconciliation Act of 1933 limits the Company's ability to
deduct for federal income tax purposes compensation in excess of $1,000,000 per
executive for the Chief Executive Officer and four additional executive
officers who are highest paid and employed at year end, except to the extent
such excess constitutes performance-based compensation. The policy of the
Board of Directors and the Compensation Committee is to qualify future
compensation arrangements to ensure deductibility, except in those limited
cases where stockholder value is maximized by an alternate approach.
The Compensation Committee is satisfied that the executive officers of
the Company are dedicated to achieving significant improvements in the
long-term financial performance of the Company and that the compensation
policies and programs implemented and administered have contributed and will
continue to contribute towards achieving this goal.
This report has been submitted by the members of the Compensation Committee:
R. Scott Asen
Michael D. Kaufman
Walter J. Levison
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<PAGE> 15
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the
cumulative total stockholder return on the Company's Common Stock for the five
fiscal years ended December 31, 1994, with the cumulative total return on (i)
the Nasdaq Market Value Index and (ii) a broad peer group index prepared by
Media General consisting of Nasdaq listed companies grouped under SIC Code 366,
Communications Equipment. The comparison assumes $100 was invested on December
31, 1989 in the Company's Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends, if any.
<TABLE>
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
<CAPTION>
--------------------------------------------------FISCAL YEAR ENDING----------------------------------------
COMPANY 1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
DAVOX CORPORATION 100 47.44 46.15 46.15 102.56 110.26
PEER GROUP INDEX 100 85.22 100.41 120.43 172.15 195.02
NASDAQ MARKET INDEX 100 81.12 104.14 105.16 126.14 132.44
</TABLE>
SEVERANCE ARRANGEMENTS
Pursuant to the terms of Mr. Lucchese's 1994 Executive Compensation
Plan, if Mr. Lucchese is terminated without cause he will receive 12 monthly
severance payments totaling the greater of (i) Mr. Lucchese's annual base
salary in the year of termination; or (ii) Mr. Lucchese's prior year base
salary plus any bonus earned in the prior year.
Pursuant to the terms of Mr. Mitchell's 1994 Executive Compensation
Plan, the Company shall continue Mr. Mitchell's base salary and medical
benefits for a period of 12 months if Mr. Mitchell is terminated due to an
economic layoff, a downsizing that eliminates his position or a reorganization
that would require Mr. Mitchell to relocate.
Pursuant to the terms of the Executive Compensation Plan for John J.
Connolly, Vice President Finance and Chief Financial Officer, the Company shall
continue Mr. Connolly's base salary and medical benefits for a period of 6
months if Mr. Connolly is terminated due to an economic layoff, a downsizing
that eliminates his position or a reorganization of the finance department that
would require Mr. Connolly to relocate.
13
<PAGE> 16
Pursuant to the terms of the Executive Compensation Plan for Douglas W.
Smith, Vice President Sales and Marketing, the Company shall continue Mr.
Smith's base salary and medical benefits for a period of 6 months if Mr. Smith
is terminated due to an economic layoff, a downsizing that eliminates his
position or a reorganization of the sales department that would require Mr.
Smith to relocate.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has adopted a policy that all transactions between the
Company and its officers, directors, principal stockholders and their
affiliates be on terms no less favorable to the Company than could be obtained
from unrelated third parties and that any loans by the Company to officers,
directors, principal stockholders and their affiliates must be approved by a
majority of the outside independent and disinterested directors.
In September and October of 1994, the Company completed a private
placement pursuant to which it sold 1,066,666 shares of its Common Stock at a
price of $1.875 per share to a group of investors led by a current investor in
the Company. In the private placement (i) R. Scott Asen, a director of the
Company, purchased 106,667 shares and Asen & Company, of which Mr. Asen is a
principal, purchased for the benefit of SDFJ, Inc. an additional 10,000 shares;
(ii) Michael Kaufman, also a director of the Company, purchased 53,333 shares
and MK GVD, of which Mr. Kaufman is a principal, purchased an additional
533,333 shares; and (iii) Faherty Property Company, of which Michael Faherty, a
director of the Company until August 9, 1994, is a principal, purchased 53,333
shares. Entities and individuals participating in the private placement were
granted certain registration rights regarding the shares of Common Stock they
purchased in the private placement.
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the firm of Arthur Andersen, LLP
independent certified public accountants, to serve as auditors for the fiscal
year ending December 31, 1995. Arthur Andersen, LLP has served as the
Company's auditors since fiscal year ended December 31, 1983. It is expected
that a member of the firm will be present at the meeting with the opportunity
to make a statement if so desired and will be available to respond to
appropriate questions. The Board of Directors recommends a vote FOR the
ratification of this selection.
SECTION 16 REPORTING
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and holders of more than 10% of the Company's Common Stock
(collectively, "Reporting Persons") to file with the Commission initial reports
of ownership and reports of changes in ownership of Common Stock of the
Company. Such persons are required by regulations of the Commission to furnish
the Company with copies of all such filings. Based solely on its review of the
copies of such filings received by it with respect to 1994, the Company
believes that all Reporting Persons complied with all Section 16(a) filing
requirements in 1994 , with the following exceptions: Hambrecht & Quist filed
late one Form 4.
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<PAGE> 17
STOCKHOLDER PROPOSALS
Proposals of stockholders intended for inclusion in the proxy statement
to be furnished to all stockholders entitled to vote at the next annual meeting
of stockholders of the Company must be received at the Company's principal
executive offices not later than November 24, 1995. In order to curtail
controversy as to the date on which a proposal was received by the Company, it
is suggested that proponents submit their proposals by Certified Mail, Return
Receipt Requested.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Company, and
in addition to soliciting stockholders by mail through its regular employees,
the Company may request banks, brokers and other custodians, nominees and
fiduciaries to solicit their customers who have stock of the Company registered
in the names of a nominee and, if so, will reimburse such banks, brokers and
other custodians, nominees and fiduciaries for their reasonable out-of-pocket
costs. Solicitation by officers and employees of the Company may also be made
of some stockholders in person or by mail, telephone or telegraph following the
original solicitation.
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<PAGE> 18
DAVOX CORPORATION
PROXY SOLICITATION ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Alphonse M. Lucchese and James F. Mitchell and
each or either of them, proxies with full power of substitution to vote all
shares of stock of Davox Corporation (the "Company") which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of the Company to be
held on Wednesday, April 26, 1995, at 10:00 a.m. at the offices of the Company,
6 Technology Park Drive, Westford, Massachusetts, and at any adjournment
thereof, upon matters set forth in the Notice of Annual Meeting and Proxy
Statement dated March 24, 1995, a copy of which has been received by the
undersigned.
(TO BE SIGNED ON REVERSE SIDE.)
<PAGE> 19
/ X / PLEASE MARK YOUR
VOTES AS THIS
EXAMPLE.
NOMINEES: A.M. Lucchese, M.D. Kaufman,
W.J. Levinson and R.S. Asen
<TABLE>
<S><C> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. To fix the num- / / / / 2. To ratify the selection of the firm of / / / / / /
ber of directors Arthur Andersen, LLP as auditors for
constituting the the Company for the fiscal year ending
Board of Direc- December 31, 1995.
tors at four and
to elect a Board
of Directors for
the ensuing year.
</TABLE>
INSTRUCTIONS: To withhold for a specific nominee write that nominee's name on
the space provided.
------------------------------------------------------------------------------
SIGNATURE(S) DATE
--------------------------------------------------- ----------
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH
SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE AS SUCH.
