<PAGE>
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
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
BRITE VOICE SYSTEMS, 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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>
[LOGO]
BRITE VOICE SYSTEMS, INC.
7309 EAST 21ST STREET NORTH
WICHITA, KANSAS 67206-1083
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 9, 1995
---------------------
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of Brite
Voice Systems, Inc. will be held at Fleet Bank, 8th Floor, Room F, 75 State
Street, Boston, Massachusetts, on Tuesday, May 9, 1995 at 1:00 p.m., for the
following purposes:
1. To elect a Board of Directors (six members) to serve until the next
Annual Meeting of Stockholders and until their respective successors have
been elected and qualified;
2. To approve and ratify the appointment of Arthur Andersen LLP,
independent public accountants, as auditors for the current fiscal year;
and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The enclosed Proxy Statement includes information relating to these
proposals.
All stockholders of record as of the close of business on March 31, 1995,
are entitled either to attend and vote in person any shares held by them or to
attend and vote by proxy any shares held by them. A majority of the outstanding
shares of the Company is required for a quorum.
The Board of Directors and management sincerely desire your presence at the
meeting. However, so that we may be sure that your vote will be included, please
sign and return the enclosed proxy promptly. If you attend the meeting, you may
revoke your proxy and vote in person.
By Order of the Board of Directors
/s/ GLENN A. ETHERINGTON
--------------------------------------
Glenn A. Etherington,
SECRETARY
April 7, 1995
IMPORTANT
PLEASE SIGN AND DATE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED STAMPED ENVELOPE. THE PROXY MAY BE REVOKED BY YOU AND THE SUBMISSION OF
YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING.
<PAGE>
BRITE VOICE SYSTEMS, INC.
7309 EAST 21ST STREET NORTH
WICHITA, KANSAS 67206-1083
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 9, 1995
---------------------
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished by the Board of Directors of Brite Voice
Systems, Inc. (the "Company") in connection with the solicitation of proxies for
use at the Annual Meeting of Stockholders to be held May 9, 1995, at Fleet Bank,
8th Floor, Room F, 75 State Street, Boston, Massachusetts, and at any
adjournment thereof. The shares represented by the form of proxy enclosed
herewith will be voted in accordance with the specifications noted thereon. If
no choice is specified, said shares will be voted in favor of the proposals set
forth in the attached notice. The proxy also confers discretionary authority
with respect to amendments or variations to matters identified in the Notice of
Meeting and other matters which may properly come before the meeting. There are
no rights of appraisal or similar rights of dissenters with respect to any of
the matters proposed to be considered at the meeting. The approximate date on
which this Proxy Statement and the enclosed proxy are first being sent to
stockholders is April 7, 1995.
A stockholder who has given a proxy may revoke it as to any motion on which
a vote has not already been passed by signing a proxy bearing a later date or by
a written notice delivered to the Secretary of the Company at the office of the
Company, at any time up to the meeting or any adjournment thereof, or delivered
to the Chairman of the meeting on the day of the meeting or any adjournment
thereof. A stockholder may appoint a person, other than the Board of Directors'
nominees, to represent him at the meeting. This right may be exercised by the
insertion of said person's name in the blank space provided and by striking out
the names of the Board of Directors' nominees, or by the submission of a similar
form of proxy.
The cost of solicitation of these proxies will be paid by the Company,
including reimbursements paid to brokerage firms and other custodians, nominees
and fiduciaries for reasonable costs incurred in forwarding the proxy material
to, and solicitation of proxies from, the beneficial owners of shares held of
record by such persons. The Company has not engaged any person to solicit
proxies in connection with the meeting.
VOTING AT MEETING
Only stockholders of record on the books of the Company at the close of
business on March 31, 1995, the record date established for the Annual Meeting,
will be entitled to vote at the meeting. On March 31, 1995, there were 8,089,523
shares of Common Stock outstanding and no other voting securities. Stockholders
of the Company have the right to cumulate votes in the election of Directors
(i.e., each stockholder is entitled to as many votes as equals the number of
shares of stock held by him or her on the record date, multiplied by the number
of Directors to be elected, and such votes may all be cast for a single
candidate, or may be distributed among several or all of the candidates, as the
stockholder sees fit). On all other matters, all stockholders are entitled to
one vote per share. Directors are elected by a plurality vote. All other
proposals will be determined by a vote of a majority of the shares present in
person or represented by proxy and voting on such matters.
1
<PAGE>
Shares represented by proxies containing abstentions, or indicating broker
non-votes, will be considered as present at the meeting for purposes of
determining the presence of a quorum. However, abstentions and broker non-votes
will not otherwise be counted on any matters.
COMMON STOCK OWNERSHIP
The following table sets forth certain information, furnished by the persons
named below, concerning beneficial ownership of the Company's Common Stock as of
March 31, 1995 (except as otherwise indicated) by (i) each person known by the
Company to own beneficially more than 5% of the outstanding shares of Common
Stock; (ii) each Director and nominee for Director of the Company; (iii) each of
the executive officers named in the table under the heading "Compensation of
Directors and Executive Officers -- Summary Compensation Table"; and (iv) all
Directors and officers of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENT OF
NAME OWNED (1) CLASS (2)
- - ------------------------------------------------------------------------------------ ----------------- -----------
<S> <C> <C>
Stanley G. Brannan ................................................................. 1,422,562(3) 17.24
7309 East 21st Street North
Wichita, Kansas 67206
Perry E. Esping .................................................................... 447,000(4) 5.42
1111 West Mockingbird
Suite 1400
Dallas, Texas 75247
Morton H. Sachs & Co. .............................................................. 502,500(5) 6.09
DBA The Sachs Co. and
Morton H. Sachs
1346 South Third Street
Louisville, Kentucky 40208
FMR Corp. .......................................................................... 520,800(6) 6.31
Fidelity Management & Research Co.
and Edward C. Johnson 3d
82 Devonshire Street
Boston, Massachusetts 02109
Glenn A. Etherington................................................................ 44,472 *
Leon A. Ferber...................................................................... 180,000 2.18
C. MacKay Ganson, Jr................................................................ 27,362(7) *
David S. Gergacz.................................................................... 2,500 *
David F. Hemmings................................................................... 84,200(8) *
John F. Kelsey, III................................................................. 5,333 *
Donald R. Walsh..................................................................... 22,999 *
All Directors and Executive ........................................................ 2,236,428 27.11
Officers as a Group
(9 persons)
<FN>
- - ------------------------
* Less than 1% of the outstanding Common Stock
(1) Except as otherwise indicated, the listed beneficial owner has sole voting
and investment power with respect to such shares.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(2) In calculating the percentages shown, as required by the proxy solicitation
rules of the Securities and Exchange Commission, the number of shares owned
by the named individuals includes the shares they had the right to purchase
within 60 days of March 31, 1995 upon exercise of stock options. The
options held by the named individuals and the group are: Perry E. Esping --
10,000; Glenn A. Etherington -- 43,472; C. MacKay Ganson, Jr. -- 6,500;
David S. Gergacz -- 2,500; David F. Hemmings -- 80,000; John F. Kelsey, III
-- 2,500; Donald R. Walsh -- 16,250; and the group -- 161,222.
(3) Includes 25,000 shares owned by Mr. Brannan's wife. Also includes 2,000
shares held in trust for the benefit of Mr. Brannan's children, beneficial
ownership of which is disclaimed by Mr. Brannan.
(4) Includes 2,000 shares held in trust for the benefit of Mr. Esping's adult
children, as to which Mr. Esping's wife is trustee. Mr. Esping disclaims
beneficial ownership of such shares.
(5) The Sachs Co. is an investment adviser registered under Section203 of the
Investment Advisers Act of 1940 and Morton H. Sachs is an individual
controlling shareholder thereof. The information is derived from a Schedule
13G jointly filed with the Securities and Exchange Commission by the
reporting persons. The number of shares owned is as of February 10, 1995.
The percentage is calculated as of March 31, 1995.
(6) Fidelity Management & Research Co. is a wholly owned subsidiary of FMR
Corp. and an investment adviser registered under Section203 of the
Investment Advisers Act of 1940. Edward C. Johnson 3d is Chairman of FMR
Corp. The information is derived from a Schedule 13G jointly filed with the
Securities and Exchange Commission by the reporting persons. The number of
shares owned is as of December 31, 1994. The percentage amount is
calculated as of March 31, 1995.
(7) Includes 4,300 shares held by Tucker Anthony & R.L. Day, Inc. for the
benefit of the C. MacKay Ganson, Jr. SEP IRA. Also includes 3,081 shares
held by the CMG Trust u/d/t 12/19/68 for the benefit of Carol Ganson, as to
which Mr. Ganson is trustee.
(8) Includes 1,000 shares owned by Mr. Hemmings' son, beneficial ownership of
which is disclaimed by Mr. Hemmings.
</TABLE>
COMPLIANCE WITH SECTION16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section16(a) of the Securities Exchange Act of 1934 requires officers and
directors and persons who beneficially own more than 10% of the Company's Common
Stock to file initial reports of ownership and reports of changes in ownership
with the Securities and Exchange Commission. Officers, directors and greater
than 10% beneficial owners are required by applicable regulations to furnish the
Company with copies of all Section16(a) forms they file. On the basis of reports
and representations submitted by the Directors and executive officers of the
Company, all Forms 3, 4 and 5 showing ownership of, and changes of ownership in,
the Company's Common Stock during 1994, were timely filed with the Securities
and Exchange Commission, except that (1) the April 27, 1994 purchase of 2,000
shares of Common Stock by a trust administered by the wife of Perry E. Esping, a
Director, the beneficiaries of which are Mr. Esping's adult children, which
should have been reported currently on Form 4, was instead reported late on Form
5 for year-end 1994, when Mr. Esping became aware of the transaction; and (2)
the November 3, 1993 purchase of 200 shares of Common Stock by David F.
Hemmings, Executive Vice President, which should have been reported currently on
Form 4, was not reported on Form 4 until June 1994, because of an oversight.
3
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
Pursuant to the Company's Bylaws, the Board of Directors has fixed the
number of Directors at six and approved the slate of nominees identified below.
If any individual nominated for election as a Director is not available at the
time of the Annual Meeting to serve as a Director if so elected, proxies cast on
behalf of that nominee may be voted for the remaining nominees and for a
substitute nominee designated by the proxy holders or the current Board of
Directors. The Company expects all nominees to be available to serve if elected
as Directors. The nominees, and certain information with respect to each of
them, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY DIRECTOR SINCE
- - --------------------------------- --- -------------------------------------------- ----------------
<S> <C> <C> <C>
Stanley G. Brannan 45 Chairman of the Board and President October, 1984
Perry E. Esping (1) 60 Director May, 1990
Glenn A. Etherington 40 Chief Financial Officer, Secretary and --
Nominee for Director
C. MacKay Ganson, Jr. (1)(2) 55 Director August, 1993
David S. Gergacz (1) 46 Director May, 1994
John F. Kelsey, III (1)(2) 48 Director May, 1994
<FN>
- - ------------------------
(1) Member of Compensation Committee
(2) Member of Audit Committee
</TABLE>
STANLEY G. BRANNAN is Brite's founder and has been President, Chief
Executive Officer and
Chairman of the Board since its inception. Prior to founding the Company, 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 was acquired by Allied Corporation in 1980,
Mr. Brannan was employed by Allied and eventually became president of the
company's Merganthaler USA Division.
PERRY E. ESPING has served as President, Chief Executive Officer and
Director of Business Records Corporation, a publicly held corporation
headquartered in Dallas, Texas, since 1988. Business Records Corporation
provides services to county governments and manufactures election products. In
1971, Mr. Esping founded First Data Resources, Inc. and served as its Chairman
and Chief Executive Officer until January 1988. After American Express acquired
First Data Resources, Mr. Esping also served as President of American Express'
Data Based Services Group USA from 1986 until 1988.
GLENN A. ETHERINGTON has been Chief Financial Officer of the Company since
August 1988. He was Treasurer from August 1988 until August 1993 and has been
Secretary since August 1993. From April 1984 until joining the Company, he
served in various capacities including Vice President of Finance, Controller and
Treasurer of American City Business Journals, Inc., a publisher of weekly
business newspapers. Mr. Etherington is a certified public accountant.
C. MACKAY GANSON, JR. is a principal of Ganson & Company Fiduciary Services,
formerly Taylor, Ganson & Perin Fiduciary Services, a small, privately-held firm
providing fiduciary and trust services for individuals. Prior to 1982, Mr.
Ganson was Vice President with Bank of Boston's venture capital affiliate. Mr.
Ganson is active in venture capital investing and serves as a Director of
several privately-held companies. He became a Director of the Company in 1993,
having served as a Director of Perception Technology Corporation since 1982.
DAVID S. GERGACZ has been President, Chief Executive Officer and a Director
of Rogers Cantel, Inc., the wireless communications company providing cellular
voice, data and messaging
4
<PAGE>
services throughout Canada, since March 1993. From July 1991 to February 1993,
Mr. Gergacz was Chief Executive Officer of Boston Technology, Inc., a leading
manufacturer of computer products designed to enhance services of telephone
companies around the world. As a founder of Sprint Corporation, Mr. Gergacz was
primarily responsible for developing the first global fiber optic network. From
1986 until 1991, Mr. Gergacz held a number of management positions with Sprint
and, as President of the Network Systems Division, led Sprint in winning the
Federal Telecommunications System contract. Mr. Gergacz is a director of
Micrografx, Inc.
JOHN F. KELSEY, III has been President and sole stockholder of The Kelsey
Group, Inc. since 1986. The Kelsey Group serves as a consultant to directory and
newspaper publishers, telephone companies, industry suppliers and entrepreneurs
in identifying opportunities in, and developing products for, the electronic
publishing market. The Kelsey Group also publishes industry-specific analytical
studies on emerging technologies, including THE KELSEY
REPORT-Registered Trademark-, distributed to subscribing industry clients, and
regularly sponsors conferences for Yellow Pages and newspaper publishers. Mr.
Kelsey has been involved in the electronic information services industry since
1978 when, as District Manager at AT&T, he was responsible for strategic
planning of interactive services. Mr. Kelsey also held several positions with
Dow Jones & Company beginning in 1980.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held six meetings during 1994.
The Company's Audit Committee recommends selection of the Company's
independent auditors, reviews the scope and results of the audit, makes
inquiries as to the adequacy of the Company's accounting, financial and
operating controls, and reports findings and recommendations to the Board.
During 1994, this Committee met on two occasions.
The Company's Compensation Committee determines the cash compensation for
all Board-elected officers of the Company and determines the recipients and
amounts of stock option grants. During 1994, this Committee met on two
occasions.
The Company has no standing nominating committee.
During 1994, no Director attended less than 75% of the aggregate of all
meetings of the Board of Directors and the Committees, if any, on which such
Director served and which were held during the period that such person served on
the Board or such Committee.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTOR COMPENSATION
Directors of the Company who are not officers currently receive $500 for
each Board meeting attended and an annual fee of $5,500. Each Director also
receives $500 for each Committee meeting attended which is held other than in
conjunction with a regularly scheduled Board meeting. Directors are also
reimbursed for expenses incurred in attending such meetings.
5
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows the cash and other
compensation paid or to be paid by the Company and its subsidiaries to (i) the
Company's Chief Executive Officer, and (ii) the Company's four most highly
compensated executive officers, other than the Chief Executive Officer, who were
serving as executive officers at the end of 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION -------------
------------------------ AWARDS ALL OTHER
NAME AND SALARY BONUS OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) (#) ($)
- - -------------------------- --------- ------------- --------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Stanley G. Brannan 1994 159,250 78,000 0 2,718(3)
Chairman of the 1993 141,000 56,772 0 4,275(4)
Board and President 1992 134,000 0 0 3,545(5)
Donald R. Walsh 1994 131,667 63,000 0 4,504(3)
Executive Vice 1993 123,550 47,310 70,000 4,906(4)
President 1992 120,400 1,500 0 4,665(5)
David F. Hemmings 1994 150,000 83,000 0 2,718(3)
Executive Vice 1993 97,211(1) 35,695 150,000 0
President
Leon A. Ferber 1994 150,001 49,000 0 2,718(3)
Executive Vice 1993 151,925(2) 13,386 0 0
President
Glenn A. Etherington 1994 123,475 37,000 0 41,429(3)
Chief Financial 1993 95,475 18,709 60,000 3,006(4)
Officer and Secretary 1992 80,600 16,750 0 2,515(5)
<FN>
- - ------------------------
(1) Includes consulting fees of $50,000 paid to Mr. Hemmings prior to
commencement of his employment with the Company.
(2) Includes $89,424 cash compensation paid to Mr. Ferber in his capacity as an
officer of Perception Technology Corporation during 1993, prior to the
merger of Perception Technology Corporation with the Company.
(3) Includes (a) matching contributions under the Company's 401(k) plan in the
amounts of $2,036 on behalf of Mr. Walsh and $2,550 on behalf of each of
Messrs. Brannan, Hemmings, Ferber and Etherington; (b) term life insurance
premiums in the amounts of $2,468 on behalf of Mr. Walsh and $168 on behalf
of each of Messrs. Brannan, Hemmings, Ferber and Etherington, and (c)
relocation expense reimbursements to Mr. Etherington of $38,711, which
amount includes income tax reimbursement of $10,704.
(4) Represents amounts paid as matching contributions under the Company's
401(k) plan and a $1,507 term life insurance premium paid on behalf of Mr.
Walsh.
(5) Represents amounts paid as matching contributions under the Company's
401(k) plan and a $1,155 term life insurance premium paid on behalf of Mr.
Walsh.
</TABLE>
6
<PAGE>
The following table sets forth information concerning options to purchase
Common Stock granted during 1994 to the individuals identified in the Summary
Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED
ANNUAL
RATES OF
STOCK
PURCHASE
PRICE
% OF TOTAL APPRECIATION
OPTIONS MARKET FOR
OPTIONS GRANTED TO EXERCISE PRICE ON OPTION TERM
GRANTED EMPLOYEES IN PRICE DATE OF EXPIRATION -----------
NAME (#) FISCAL YEAR ($/SH) GRANT DATE 0% ($)
- - --------------------------------------------- ------------ ------------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Donald R. Walsh.............................. 499(1) .34 9.24 10.87 12/31/94 814
<CAPTION>
NAME 5% ($) 10% ($)
- - --------------------------------------------- ----------- -----------
<S> <C> <C>
Donald R. Walsh.............................. 950 1,085
<FN>
- - ------------------------
(1) Granted on July 1, 1994 under the Company's Employee Stock Purchase Plan
and deemed exercised on December 31, 1994, for the exercise price of $9.24
per share which is equal to 85% of the lower of the fair market value of
the Common Stock on such dates.
</TABLE>
The following table sets forth, for each of the Executive Officers named in
the Summary Compensation Table above, information concerning each exercise of
options to purchase Common Stock during the year ended December 31, 1994 and the
fiscal year-end value of unexercised options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE- MONEY OPTIONS AT
OPTIONS AT FISCAL FISCAL
SHARES VALUE YEAR-END YEAR-END ($)
ACQUIRED ON REALIZED ------------------------ -------------------------
NAME EXERCISE ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - ----------------------------------- ----------- --------- ------------------------ -------------------------
<S> <C> <C> <C> <C>
Stanley G. Brannan................. 0 0 0/ 0 0/ 0
Donald R. Walsh.................... 26,250 150,938 8,750/ 70,000 111,563/ 577,500
David F. Hemmings.................. 0 0 15,000/ 135,000 168,750/ 1,593,750
Leon A. Ferber..................... 0 0 0/ 0 0/ 0
Glenn A. Etherington............... 0 0 35,972/ 61,250 357,376/ 510,469
</TABLE>
EMPLOYMENT AGREEMENT; CHANGE IN CONTROL ARRANGEMENTS
David F. Hemmings is serving as Executive Vice President of the Company
under an Employment Agreement dated September 8, 1993 (hereinafter the
"Agreement"). The Agreement provides for a base salary of $150,000 per year,
subject to review by the Compensation Committee, and participation in the
Company's executive incentive compensation program. The Agreement also provides
for reimbursement of Mr. Hemmings' relocation costs and the provision of
benefits generally provided to other Company executives. The Agreement is
terminable by either party on two weeks' notice. If the Agreement is terminated
by the Company for cause, Mr. Hemmings is not entitled to any severance pay or
other benefits. If the Agreement is terminated other than for cause prior to
September 9, 1995, Mr. Hemmings will receive a severance payment of one-half of
his then current base salary, but not less than $75,000.
On September 8, 1993, Mr. Hemmings entered into a Non-Statutory Stock Option
Agreement pursuant to which Mr. Hemmings was granted options to purchase 100,000
shares of the Company's Common Stock. The Agreement provides, in part, that in
the event of a dissolution or liquidation of the Company, a merger or
consolidation in which the Company is not the surviving corporation, or a change
of ownership involving the transfer of in excess of 50% of the then outstanding
Common Stock
7
<PAGE>
to a corporation or other entity, person or group of affiliated persons
(hereafter a "Transaction"), Mr. Hemmings shall have the right, immediately
prior to the Transaction, to exercise all options granted under the Agreement
which have not previously been exercised or terminated.
Certain of the Company's executive officers have been granted options under
both the Company's 1984 Incentive Stock Option Plan and the Company's 1994 Stock
Option Plan. Under the 1984 Incentive Stock Option Plan, in the event of a
Transaction, holders of options will have the right, immediately prior to
consummation of the Transaction, to exercise all options granted thereunder
without regard to the vesting provisions contained in the applicable option
agreements. The 1994 Stock Option Plan contains a similar provision, except that
the Board of Directors may, in its sole discretion, determine that such
immediate vesting of the right to exercise outstanding options is not in the
best interests of the Company, in which event the successor corporation would be
required to agree to assume the outstanding options or substitute comparable
options of such successor corporation.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Company's Compensation Committee determines the cash compensation for
all Board-appointed officers. Stanley G. Brannan, President of the Company, has
participated in the Compensation Committee deliberations concerning executive
compensation, other than deliberations concerning his own compensation.
Pursuant to a Rental Agreement between the Company and Brannan Leasing,
Inc., a corporation owned and controlled by Mr. Brannan, the Company pays
Brannan Leasing, Inc. $450 per hour for use of its airplane. Brannan Leasing
assumes responsibility for all expenses associated with the airplane, other than
fuel. Rentals paid or accrued during the year ended December 31, 1994, were
approximately $78,000.
During the year ended December 31, 1994, the Company sold enhanced network
services, including voice dialing and directory call completion systems, to
Rogers Cantel, Inc. The aggregate amount of such sales was approximately
$2,900,000, of which $359,000 was payable in the ordinary course of business as
of December 31, 1994. The Company anticipates that it will provide additional
services and equipment to Rogers Cantel, although it is unable to predict the
timing and amount of such future business. David S. Gergacz, a Director of the
Company, is President, Chief Executive Officer and a Director of Rogers Cantel,
Inc.
The Company retains Personnel Solutions, Inc., a corporation owned and
controlled by the wife of Glenn A. Etherington, Chief Financial Officer and a
nominee for Director of the Company, to provide consulting services on human
resources issues. Aggregate payments to Personnel Solutions, Inc. during the
year ended December 31, 1994 were approximately $10,900.
Other than as set forth above, no person who served as a member of the
Compensation Committee was, during the past fiscal year, an officer or employee
of the Company or any of its subsidiaries, was formerly an officer of the
Company or of any of its subsidiaries, or had any relationship requiring
disclosure herein. No executive officer of the Company served as a member of the
compensation committee (or other board committee performing equivalent functions
or, in the absence of any such committee, the entire board of directors) of
another entity.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company (the "Committee") determines the
Company's executive compensation policies and sets specific executive salaries.
The Committee is composed of the non-employee directors of the Company, Perry E.
Esping, C. MacKay Ganson, Jr., David S. Gergacz and John F. Kelsey, III.
8
<PAGE>
The Company's executive compensation program is designed to attract, retain
and motivate executive officers who are believed to have the abilities necessary
for the long-term success of the Company. This program consists of a base
salary, incentive compensation based upon the achievement of certain specified
revenue and operating profit goals, and stock options.
Stanley G. Brannan, President of the Company, participates in deliberations
regarding the compensation of other executive officers, but does not participate
in determining his own compensation. Mr. Brannan makes recommendations to the
Committee on the incentive compensation program to be followed by the Company,
as well as specific compensation levels for each executive officer. After
evaluating these recommendations, the Committee recommends programs and pay
levels to the full Board for approval. In making its recommendations to the
Board, the Committee considers such factors as the salaries of executive
officers in similar positions with comparably sized companies, primarily within
the Company's industry; survey data obtained from various sources; the
experience and contribution levels of each executive officer; and the Company's
financial performance during the last fiscal year. Mr. Brannan's compensation is
set in accordance with the policies and practices established for the other
executive officers of the Company.
Under the Company's executive incentive compensation plan for 1994,
executive officers were entitled to receive bonuses based upon the achievement
by the Company of certain revenue and operating income targets established by
the Board of Directors at the commencement of the year. Each executive was
assigned a target bonus based upon achieving on-plan performance. Target bonuses
ranged from approximately 27% of base salary to approximately 45% of base salary
depending upon each executive's experience, contribution and job
responsibilities. In computing executive bonuses, a formula was used to
determine the percentage of incentive compensation earned by each executive.
Under the formula, attainment of operating income is weighted three times as
heavily as revenue attainment. Below specified levels of operating income, no
bonus is earned.
In November 1994, the Committee engaged William M. Mercer Incorporated
("Mercer") to evaluate the Company's practices with respect to executive
compensation. In particular, Mercer was to evaluate the Company's executive
compensation program to insure that it properly incented the executives to
provide maximum stockholder returns over both the short-term and long-term. It
is expected that the 1995 executive compensation program will be based primarily
on the findings of the Mercer study and will be substantially similar to the
1994 program.
The Committee also grants stock options to executive officers in order to
provide long-term incentives to the executives and to align the executives with
the goal of maximizing stockholder value over time. Stock options are generally
granted at fair market value, with vesting occurring at various dates. Grant
ranges have been established for the executives based upon the practices of
comparably-sized companies in the Company's and related industries. Individual
grants may vary within the range to reflect individual performance and
potential. In late 1993, stock options were granted to 14 employees of the
Company, including three of the executive officers named in the Summary
Compensation Table, other than Mr. Brannan. Under the terms of the option
agreements, vesting of portions of the options was dependent, in part, on the
Company attaining a certain level of operating income in either 1994 (the "1994
Options") or 1995 (the "1995 Options"). The agreements further provided that if
the targeted level of operating income was not met, the options for that year
would terminate. In November 1994, the Board, on the recommendation of the
Committee, and based upon the Company's performance to date and anticipated
results through the end of 1994, took action to assure that the 1994 Options
would vest in the grantees, barring any unforeseen adverse developments during
the remainder of the year. In order to assure that all of the effects of the
option agreements contemplated at the time the agreements were entered into
would be realized, the Board subsequently authorized amendments to the
agreements which would cause any previously unvested option to remain in effect
and become vested in the grantee, on the ninth anniversary of the grant date
with respect to the 1994 Options, and the tenth anniversary of the grant date
with respect to the 1995 Options, assuming the grantee's continued employment
and compliance with other terms of the agreements. The Board believes that the
actions taken on the option agreements were consistent with
9
<PAGE>
the Board's intent of providing both meaningful incentives to the Company's
executives and appropriate recognition for outstanding performance. No incentive
stock options were granted to any executive officer of the Company during 1994.
COMPENSATION COMMITTEE
Perry E. Esping
C. MacKay Ganson, Jr.
David S. Gergacz
John F. Kelsey, III
COMPANY PERFORMANCE
The following graph shows a comparison of cumulative total returns for the
Company's Common Stock, the Standard & Poor's 500 Stock Index, and the common
stock of a composite group of peer companies selected by the Company, for the
period from December 31, 1989 through December 31, 1994:
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BRITE VOICE SYS S&P 500 PEER GROUP ONLY
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 43.66 96.89 33.72
1991 67.61 126.42 48.64
1992 30.99 136.05 90.69
1993 119.72 149.76 94.46
1994 201.41 151.74 114.36
</TABLE>
The self-determined peer group consists of Boston Technology, Inc.,
Cognitronics Corporation, Digital Sound Corporation, Electronic
Tele-Communications, Inc., InterVoice, Inc., Microlog Corporation and
Syntellect, Inc.
10
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Arthur Andersen LLP, independent public
accountants, to serve as auditors for the year ending December 31, 1995. Arthur
Andersen LLP served as the Company's auditors for the years ended December 31,
1993 and 1994. Baird, Kurtz & Dobson served as the Company's auditors for each
of the years ended December 31, 1985 through December 31, 1992.
In making its decision to select Arthur Andersen LLP in 1993, the Board of
Directors considered the fact that Arthur Andersen LLP had audited the financial
statements of the Company's subsidiary, Brite Voice Systems Group, Ltd., since
the year ended December 31, 1991, the need for increasing international tax and
audit coordination as the Company grows, and the fact that Baird, Kurtz & Dobson
does not have offices in either Manchester, England or Boston, Massachusetts.
There were no disagreements between the Company and Baird, Kurtz & Dobson.
It is expected that a representative of Arthur Andersen LLP will be present
at the Annual Meeting and will have an opportunity to make a statement, if
desired, and will be available to respond to appropriate questions from
stockholders.
The Board of Directors unanimously recommends a vote FOR the appointment of
Arthur Andersen LLP as auditors for the year ending December 31, 1995.
OTHER MATTERS
The Board of Directors does not intend to bring any matters before the
Annual Meeting, other than those specifically set forth in the Notice of
Meeting, and is not aware of any matter to be brought before the Annual Meeting
by others. If any other matters properly come before the meeting, it is the
intention of the persons named in the accompanying Proxy to vote such Proxy in
accordance with the judgment of the Board of Directors.
STOCKHOLDER PROPOSALS
The Company currently intends to hold its 1996 Annual Meeting of
Stockholders in May 1996. The date by which stockholder proposals must be
received by the Company for inclusion in the Proxy Statement and form of proxy
for its 1996 Annual Meeting of Stockholders is December 1, 1995. Such
stockholder proposals should be submitted to Brite Voice Systems, Inc., 7309
East 21st Street North, Wichita, Kansas 67206, Attention: Secretary.
April 7, 1995
/s/ GLENN A. ETHERINGTON
--------------------------------------
Glenn A. Etherington,
SECRETARY
11
<PAGE>
BRITE VOICE SYSTEMS, INC.
7309 East 21st Street North
Wichita, Kansas 67206
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints Stanley G. Brannan and Glenn A. Etherington
( ) as Proxies, each with the power to act alone and
to appoint his substitute, and hereby authorizes them to represent and to vote,
as designated below, all shares of Common Stock of Brite Voice Systems, Inc.
held of record by the undersigned on March 31, 1995 at the annual meeting of
stockholders to be held on May 9, 1995, or any adjournment thereof.
PROXY
1. ELECTION OF DIRECTORS
FOR all nominees listed below (except as marked to the contrary below)
WITHHOLD AUTHORITY to vote as indicated below
Stanley G. Brannan, Perry E. Esping, Glenn A. Etherington, C. MacKay
Ganson, Jr., David S. Gergacz, John F. Kelsey, III
(INSTRUCTIONS: To withhold authority to vote for any nominee, strike a line
through the nominee's name.)
2. PROPOSAL TO APPROVE AND RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP as the
independent public accountants for the Company for 1995.
FOR AGAINST ABSTAIN
To be signed on other side.
<PAGE>
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR the nominees and FOR Proposal 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, give full title as such. If a corporation, sign in full
corporate name by President or other authorized officer. If a partnership, sign
in partnership name by authorized person.
Dated:__________________________,1995
Signature_______________________________________
Signature if held jointly_______________________________________________________
Please mark, date, sign and return the proxy card
promptly using the enclosed envelope.
