<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 Section240.14a-11(c) or
Section240.14a-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/ 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:
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/ / 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>
[LOGO]
BRITE VOICE SYSTEMS, INC.
250 INTERNATIONAL DRIVE, SUITE 300
LAKE MARY, FLORIDA 32746
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 11, 1999
---------------------
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Brite
Voice Systems, Inc. will be held at the Company's corporate headquarters, 250
International Parkway, Suite 300, Lake Mary, Florida, on Tuesday, May 11, 1999
at 9:30 a.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, 1999,
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
[SIGNATURE]
Glenn A. Etherington
SECRETARY
April 12, 1999
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.
250 INTERNATIONAL PARKWAY, SUITE 300
LAKE MARY, FLORIDA 32746
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 11, 1999
---------------------
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 11, 1999, at the
Company's corporate headquarters, 250 International Parkway, Suite 300, Lake
Mary, Florida, 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 12, 1999.
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, 1999, the record date established for the Annual Meeting,
will be entitled to vote at the meeting. On March 31, 1999, there were
12,271,178 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.
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.
<PAGE>
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 1, 1999 (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 executive 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 ........................................................ 1,166,962(3) 9.51%
250 International Parkway, Suite 300
Lake Mary, Florida 32746
Alan C. Maltz ............................................................. 1,305,106(4) 10.64%
29 Chelsea Drive
Livingston, New Jersey 07039
Putnam Investments, Inc. .................................................. 767,700(5) 6.26%
One Post Office Square
Boston, Massachusetts 02109
Gerald V. Butler........................................................... 57,500 *
Glenn A. Etherington....................................................... 102,821 *
C. MacKay Ganson, Jr....................................................... 35,362(6) *
David S. Gergacz........................................................... 13,000 *
J. Darrell Kelley.......................................................... 0 *
John F. Kelsey, III........................................................ 16,333 *
Scott A. Maltz............................................................. 472,621 3.85%
Ray S. Naeini.............................................................. 15,000 *
Donald R. Walsh............................................................ 84,948 *
All Directors and Executive Officers as a Group (15 persons)............... 3,300,340 26.26%
</TABLE>
- ------------------------
* 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.
(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 1, 1999 upon exercise of stock options. The options
held by the named individuals and the group are: Gerald V. Butler -- 52,500;
Glenn A. Etherington -- 77,000; C. MacKay Ganson, Jr. -- 14,500; David S.
Gergacz -- 13,000; John F. Kelsey, III -- 14,500; Ray S. Naeini -- 15,000;
Donald R. Walsh -- 81,250; and the group -- 297,000.
(3) Includes 25,000 shares owned by Mr. Brannan's wife. Also includes 10,000
shares owned by Mr. Brannan's children, beneficial ownership of which is
disclaimed by Mr. Brannan.
(4) Includes 80,000 shares held by Mr. Maltz as custodian for his two minor
daughters, beneficial ownership of which is disclaimed by Mr. Maltz.
(5) Information is as of December 31, 1998 based upon a Schedule 13G filed by
Putnam Investments, Inc. on behalf of itself and its parent, Marsh &
McLennan Companies, Inc., and two subsidiaries which are registered
investment advisors, Putnam Investment Management, Inc.
2
<PAGE>
(investment advisor to the Putnam family of mutual funds) and The Putnam
Advisory Company, Inc. (investment advisor to Putnam's institutional
clients). Both subsidiaries have dispository power over the shares as
investment managers. Each of the mutual fund's trustees have voting power
over the shares held by each fund and The Putnam Advisory Company, Inc. has
shared voting power over 372,000 shares held by institutional clients. The
percentage is calculated as of March 1, 1999.
(6) 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 Charles M. Ganson Trust dated December 19, 1968 for the benefit
of Carol Ganson, as to which Mr. Ganson is trustee.
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.......................... 49 President, Chief Executive Officer and October 1984
Chairman of the Board
C. MacKay Ganson, Jr. (1)(3)................ 59 Director August 1993
J. Darrell Kelley........................... 56 Director January 1999
John F. Kelsey, III (1)(3).................. 52 Director May 1994
Alan C. Maltz (2)........................... 48 Director August 1995
Scott A. Maltz (1)(2)....................... 42 Director August 1995
</TABLE>
- ------------------------
(1) Member of Nominating Committee
(2) Member of Compensation Committee
(3) Member of Audit Committee
STANLEY G. BRANNAN, the Company's founder, served as President, Chief
Executive Officer and Chairman of the Board from the Company's inception until
resigning as President and Chief Executive Officer in December 1996. Mr. Brannan
subsequently resigned as Chairman of the Board in January 1998. Upon the
resignation of David S. Gergacz in November 1998, Mr. Brannan accepted the
positions of President and Chief Executive Officer on an interim basis. 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,
Inc. was acquired by Allied Corporation in 1980, Mr. Brannan was employed by
Allied and eventually became president of the company's Merganthaler USA
Division.
C. MACKAY GANSON, JR. is a partner 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.
J. DARRELL KELLEY has been president and chief executive officer of the
Economic Development Commission of Mid-Florida, Inc. since September 1998. He is
responsible for the management of business development and marketing activities
for a four-county region in central Florida, including the City of Orlando. Mr.
Kelley has nearly 40 years of experience in the telecommunications industry,
3
<PAGE>
including positions as chief executive officer of Sprint/United Telephone's
North Central Operations, and United Telephone's Texas Operations. Most
recently, he served as president of Southern Operations for Sprint Corporation
from 1994 to 1997. Mr. Kelley serves as a director of several privately-held
companies.
JOHN F. KELSEY, III is the founder and president of The Kelsey Group, Inc.,
a strategic planning and marketing analysis company in the interactive
publishing field. Founded in 1986, The Kelsey Group provides information and
decision-support services through publishing, consulting, conferences and
research. Its clients include numerous directory and newspaper publishers, new
media companies, technology suppliers and systems providers. Mr. Kelsey has been
involved in the electronic information services industry since 1978 when he was
responsible for strategic planning of interactive services at AT&T. Mr. Kelsey
also held several executive positions with Dow Jones & Company in the 1980s.
ALAN C. MALTZ became Executive Vice President and a Director of the Company
in August 1995, immediately following the Company's acquisition of Telecom
Services Limited (U.S.) Inc., Telecom Services Limited (West), Inc. ("TSL
West"), TSL Software Services, Inc., and TSL Management Group, Inc.
(collectively the "TSL Companies"), and resigned his position as Executive Vice
President upon fulfillment of the term of his employment contract in December
1997. Mr. Maltz served as vice president and a director of TSL (West) and as
president and a director of each of the other TSL Companies since their
incorporation at various times between July 1986 and December 1992. Prior to the
founding of the TSL Companies, Mr. Maltz was vice president of
telecommunications systems at Bankers Trust Company, where he managed the
engineering, design and operation of all global telecommunications systems.
Prior to his employment by Bankers Trust Company, Mr. Maltz was employed as a
project engineer by Western Union and New York Telephone Company.
SCOTT A. MALTZ became a Vice President and a Director of the Company in
August 1995, immediately following the Company's acquisition of the TSL
Companies, and was Senior Vice President and General Manager-TSL from June 1996
until August 1998. Mr. Maltz was president of TSL (West) since its formation in
1989. Prior to joining TSL, Mr. Maltz was employed by Bain & Company, a
management consulting firm, where he consulted with clients in the
telecommunications, financial services and personal computer industries.
Under the terms of the Agreement and Plan of Reorganization and Merger
relating to the Company's acquisition of the TSL Companies, those persons who
were the stockholders of the TSL Companies had the right to designate two
persons to be nominated for election to the Company's Board of Directors during
the period that they collectively owned at least 20% of the issued and
outstanding shares of Common Stock, and will continue to have the right to
designate one person to be nominated for election until their collective
ownership is less than 10% of the issued and outstanding shares of Common Stock.
Alan C. Maltz and Scott A. Maltz were originally designated as nominees to the
Company's Board of Directors in August 1995 following consummation of the
merger. Alan C. Maltz and Scott A. Maltz are brothers.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held eight meetings during 1998,
including regularly scheduled and special meetings.
The Company currently has an Audit Committee, a Compensation Committee and a
Nominating Committee of the Board of Directors. The 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. The Compensation Committee determines the cash compensation for all
Board-elected officers of the Company and determines the recipients and amounts
of stock option grants. The Nominating Committee makes recommendations to the
Board of Directors regarding potential nominees to the Board. During 1998, the
Audit Committee met twice and the Compensation Committee met once. The
Nominating Committee held no formal meetings during 1998.
4
<PAGE>
During 1998, all Directors attended at least 75% of the aggregate of all
meetings of the Board of Directors and the Committees, if any, on which they
served and which were held during the period that such persons served on the
Board or such Committees.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTOR COMPENSATION
Directors of the Company who are not officers currently receive $1,000 for
each Board meeting personally attended, $250 for each conference telephone call
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. Directors assigned to special
projects are compensated at the rate of $125 per hour.
Under the Company's Amended and Restated 1990 Non-Employee Director Stock
Option Plan (the "Director Plan"), each Director who is neither an officer nor
other salaried employee of the Company, receives an option to purchase 4,500
shares of the Company's Common Stock on each date of election of such person to
the Board of Directors. Each such option vests and becomes exercisable
cumulatively as to one-third of the shares of common stock on each of the first,
second and third anniversaries of the grant date. A maximum of 150,000 shares of
common stock may be issued under the Director Plan.
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows the cash and other
compensation paid or to be paid by the Company and its subsidiaries to (i) each
of the persons who served as the Company's chief executive officer during 1998,
and (ii) the four most highly compensated executive officers, other than the
chief executive officer, who were serving as executive officers as of December
31, 1998, and an additional person who served as an executive officer during
1998 and would have been one of the four most highly compensated executive
officers had he been serving as such as of December 31, 1998 (the "Named
Executive Officers"), during the years indicated and for services rendered in
all capacities in which they served:
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION ------------- ALL OTHER
------------------------ AWARDS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) ($)
- ------------------------------------------------ --------- ------------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Stanley G. Brannan ............................. 1998 172,577(1) 0 4,500 3,324(4)
President and Chief 1997 210,000 0 0 43,445(5)
Executive Officer 1996 210,000 15,218 44,000 3,351(6)
David S. Gergacz ............................... 1998 367,500 182,253 10,000 354(4)
President and Chief 1997 350,000 175,000 300,000 217,587(5)
Executive Officer 1996 36,673(2) 14,583 504,500 18(6)
Gerald V. Butler ............................... 1998 176,400 81,696 10,000 3,641(4)
Senior Vice President 1997 176,400 35,097 0 3,279(5)
of Worldwide Operations 1996 168,000 51,425 22,000 3,351(6)
Ray S. Naeini .................................. 1998 180,000 109,019 110,000 3,643(4)
Executive Vice 1997 152,539 82,186 20,000 108,451(5)
President of Global Products 1996 140,000 0 10,000 108,451(6)
Donald R. Walsh ................................ 1998 180,000 103,293 20,000 5,943(4)
Executive Vice President 1997 176,400 70,000 0 134,433(5)
of Worldwide Sales 1996 168,000 46,350 44,000 5,651(6)
Scott A. Maltz ................................. 1998 126,385(3) 163,000 10,000 3,492(4)
Senior Vice President/General 1997 190,629 17,500 0 9,925(5)
Manager -- TSL 1996 179,375 66,625 22,000 10,551(6)
Glenn A. Etherington ........................... 1998 185,000 81,517 20,000 3,645(4)
Chief Financial Officer 1997 176,000 32,000 0 103,435(5)
1996 168,000 9,511 44,000 6,951(6)
</TABLE>
- ------------------------
(1) Includes severance and consulting fees of $155,000 and director fees of
$9,500.
(2) Includes director fees of $9,750.
(3) Includes director fees of $2,000 and consulting fees of $5,000.
(4) Includes (a) matching contributions under the Company's 401(k) plan in the
amounts of $3,300 on behalf of Messrs. Brannan, Butler, Naeini, Walsh, Maltz
and Etherington; (b) term life insurance premiums of $24 on behalf of Mr.
Brannan, $354 for Mr. Gergacz, $341 for Mr. Butler, $343 for Mr. Naeini,
$2,643 for Mr. Walsh, $192 for Mr. Maltz, and $245 for Mr. Etherington; and
(c) an automobile allowance of $3,600 to Mr. Etherington.
(5) Includes (a) matching contributions under the Company's 401(k) plan in the
amounts of $3,135 on behalf of Messrs. Brannan, Butler, Naeini, Walsh, Maltz
and Etherington; (b) term life insurance premiums in the amounts of $2,444
on behalf of Mr. Walsh and $144 on behalf of each of Messrs. Brannan,
Butler, Gergacz, Naeini, Maltz and Etherington; (c) relocation expense
reimbursements in the amounts of $40,166 to Mr. Brannan, $217,443 to Mr.
Gergacz, $105,172 to Mr. Naeini, $128,854 to Mr. Walsh, and $96,694 to Mr.
Etherington; and (d) automobile allowances of $6,646 to Mr. Maltz and $3,462
to Mr. Etherington.
(6) Includes (a) matching contributions under the Company's 401(k) plan in the
amounts of $3,135 on behalf of Messrs. Brannan, Butler, Naeini, Walsh, Maltz
and Etherington; (b) term life insurance premiums in the amounts of $2,516
on behalf of Mr. Walsh, $18 on behalf of Mr. Gergacz, and $216 on behalf of
each of Messrs. Brannan, Butler, Naeini, Maltz and Etherington; and (c)
automobile allowances of $7,200 to Mr. Maltz and $3,600 to Mr. Etherington.
6
<PAGE>
The following table sets forth information concerning options to purchase
Common Stock granted during 1998 to the Named Executive Officers. The potential
realizable value amounts shown below represent values that might be realized
upon exercise immediately prior to the expiration of the term of the options
using 0%, 5% and 10% appreciation rates set by the Securities and Exchange
Commission, compounded annually, and therefore are not intended to forecast
possible future appreciation, if any, of the price of the Company's Common
Stock.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENT OF POTENTIAL REALIZABLE VALUE AT
TOTAL MARKET ASSUMED ANNUAL RATES OF STOCK
OPTIONS/SAR'S EXERCISE PRICE PURCHASE PRICE APPRECIATION FOR
NUMBER GRANTED TO OR AT OPTION TERM
OF EMPLOYEES BASE DATE OF EXPIRATION -------------------------------------
NAME SECURITIES IN FISCAL YEAR PRICE GRANT DATE 0%($) 5%($) 10%($)
- ------------------------- ----------- --------------- --------- --------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David S. Gergacz......... 10,000 2.18% $ 9.000 $ 9.000 1/12/08 $ 0 $ 56,610 $ 143,451
Stanley G. Brannan....... 4,500 0.98% $ 10.656 $ 10.656 5/12/08 $ 0 $ 30,163 $ 76,433
Gerald V. Butler......... 10,000 2.18% $ 9.000 $ 9.000 1/12/08 $ 0 $ 56,610 $ 143,451
Ray S. Naeini............ 10,000 2.18% $ 9.000 $ 9.000 1/12/08 $ 0 $ 56,610 $ 143,451
100,000 21.82% $ 8.125 $ 8.125 11/18/08 $ 0 $ 511,063 $ 1,295,044
Donald R. Walsh.......... 10,000 2.18% $ 9.000 $ 9.000 1/12/08 $ 0 $ 56,610 $ 143,451
10,000 2.18% $ 8.125 $ 8.125 11/18/08 $ 0 $ 51,106 $ 129,504
Scott A. Maltz........... 10,000 2.18% $ 9.000 $ 9.000 1/12/08 $ 0 $ 56,610 $ 143,451
Glenn A. Etherington..... 10,000 2.18% $ 9.000 $ 9.000 1/12/08 $ 0 $ 56,610 $ 143,451
10,000 2.18% $ 8.125 $ 8.125 11/18/08 $ 0 $ 51,106 $ 129,504
</TABLE>
All of the above options were granted under either the Company's 1994 Stock
Option Plan or the Director Plan. Options granted under the 1994 Stock Option
Plan vest cumulatively at 25% per year beginning on the first anniversary of the
date of the grant. Options granted under the Director Plan vest cumulatively as
to one-third per year beginning on the first anniversary of the date of grant.
The following table sets forth information concerning the acquisition of
shares of Common Stock under the Company's Employee Stock Purchase Plan during
1998 by the only Named Executive Officers to so acquire shares, and by all
executive officers as a group and all other employees as a group.
SHARES ACQUIRED UNDER EMPLOYEE STOCK PURCHASE PLAN
<TABLE>
<CAPTION>
NUMBER OF SHARES DOLLAR VALUE
NAME OF INDIVIDUAL OR IDENTITY OF GROUP PURCHASED ($)
- ------------------------------------------------------------------------------ ----------------- ---------------
<S> <C> <C>
Gerald V. Butler.............................................................. 1,000 2,178
Donald R. Walsh............................................................... 1,000 2,178
Glenn A. Etherington.......................................................... 840 1,763
All Executive Officers as a Group (7 persons)................................. 4,011 8,662
All Other Employees as a Group................................................ 58,587 123,864
</TABLE>
Shares are purchased at an exercise price equal to 85% of the lower of the
fair market value of the Common Stock on the grant date or the exercise date.
The dollar value equals the market value on the date of purchase minus the
purchase price.
The following table sets forth, for each of the Named Executive Officers,
information concerning each exercise of options to purchase Common Stock during
the year ended December 31, 1998 and the fiscal year-end value of unexercised
options.
7
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FISCAL OPTIONS AT FISCAL
ACQUIRED VALUE YEAR-END YEAR-END ($)
ON REALIZED ----------------------- -----------------------
NAME EXERCISE ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------------------------- ----------- ----------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
David S. Gergacz....................... 0 0 213,000/1,500 10,000/0
Stanley G. Brannan..................... 0 0 4,500/0 0/0
Gerald V. Butler....................... 0 0 50,000/32,000 0/7,500
Ray S. Naeini.......................... 0 0 15,000/125,000 6,250/188,750
Donald R. Walsh........................ 0 0 78,750/64,000 49,219/23,750
Scott A. Maltz......................... 0 0 0/0 0/0
Glenn A. Etherington................... 22,222 $ 87,777 75,000/64,000 28,750/23,750
</TABLE>
EMPLOYMENT AGREEMENTS; CHANGE IN CONTROL ARRANGEMENTS
Under an Employment Agreement dated December 2, 1996, David S. Gergacz
served as President and Chief Executive Officer of the Company until his
resignation on November 13, 1998. The Company will make severance payments to
Mr. Gergacz in an aggregate amount of approximately $555,000 over a one-year
period from the date of his resignation. In addition, the Company will continue
to pay Mr. Gergacz's health insurance premiums during such one-year period.
Upon Stanley G. Brannan's resignation as Chairman of the Board of the
Company on January 12, 1998, the Company and Mr. Brannan entered into an
agreement pursuant to which the Company paid Mr. Brannan $105,000 as severance.
Mr. Brannan performed certain consulting services for the Company through June
1998, for which he was paid $50,000. As a part of the agreement, Mr. Brannan
agreed not to compete with the Company for a period of 18 months from the
effective date of the agreement.
In connection with the relocation of the Company's corporate headquarters to
Lake Mary, Florida, the Company entered into employment agreements with certain
executive officers, including certain of the Named Executive Officers, which
assured the continued employment of such persons for a period of one year from
the effective date of their relocation. The agreements provided for a base
salary, participation in incentive compensation programs and guaranteed payment
of the annual salary amount in the event of termination other than for Cause (as
defined in the related agreement). The one-year term of the agreements with
Donald R. Walsh and Ray S. Naeini expired during 1998.
Glenn A. Etherington is serving as the Company's Chief Financial Officer
under an Employment Agreement dated June 23, 1997. The Agreement provides for a
base salary and participation in the Company's executive bonus program. In
addition, if the Agreement is terminated other than for Cause (as defined in the
Agreement), Mr. Etherington will be entitled to severance pay equal to one year
of salary and benefits.
Certain of the Company's executive officers have been granted options under
the Company's stock option plans. 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 to a corporation or other
entity, person or group of affiliated persons (hereafter "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. However, 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 therefor
comparable options of such successor corporation.
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Beginning in January 1998, Perry E. Esping, C. MacKay Ganson, Jr. and John
F. Kelsey, III, each of whom was an independent non-employee Director of the
Company, were members of the Compensation Committee of the Company's Board of
Directors. Mr. Esping passed away in July 1998. Mr. Ganson and Mr. Kelsey
continued to serve as members of the Compensation Committee until November 1998
when they were succeeded by Alan C. Maltz and Scott A. Maltz. Alan C. Maltz
previously served as an Executive Vice President of the Company until his
resignation effective December 31, 1997. Scott A. Maltz also served as a Senior
Vice President of the Company until his resignation in August 1998. Otherwise,
no person who served as a member of the Compensation Committee during the past
fiscal year was an officer or an employee of the Company or any of its
subsidiaries, was formerly an officer of the Company or 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, one of whose
executive officers served as a Director of the Company. David S. Gergacz, while
serving as President, Chief Executive Officer and Chairman of the Board of the
Company, participated in the Compensation Committee's deliberations concerning
executive compensation, other than deliberations concerning his own
compensation.
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.
In January 1998, the Committee, then composed of non-employee directors Perry E.
Esping, C. MacKay Ganson, Jr., and John F. Kelsey, III, established the
executive compensation provisions for calendar year 1998.
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.
David S. Gergacz served as President and Chief Executive Officer of the
Company from December 2, 1996 until November 13, 1998, under an Employment
Agreement negotiated by Mr. Gergacz and the Board of Directors. The Committee
believes that the overall compensation established under the Employment
Agreement was comparable to, and competitive with, the compensation programs in
effect for chief executive officers of companies with which the Company
competes.
During 1998, Mr. Gergacz participated in deliberations regarding the
compensation of other executive officers. Mr. Gergacz made 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 recommended programs and
pay levels to the full Board for approval. In making its recommendations to the
Board, the Committee considered 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.
Under the Company's Executive Compensation Plan in 1998, executive officers
were entitled to receive bonuses based upon the achievement of certain criteria
established by the Board of Directors. Each executive was assigned a target
bonus based upon achieving on-plan performance. The target bonuses ranged from
20% to 50% of base salary depending upon the executive's experience,
contribution and job responsibilities.
9
<PAGE>
In general, executives in charge of a principal business unit were
compensated based upon the attainment of revenue and profit contribution
objectives of their business units as established at the beginning of the year.
Revenue and contribution were weighted equally, with minimum thresholds of
achievement below which no bonus would be earned. Executives not in charge of
principal business units were compensated by a combination of overall corporate
performance and achievement of objectives as established by Mr. Gergacz.
Corporate performance consisted of a combination of revenue and operating income
objectives, with each component weighted equally.
Upon Mr. Gergacz's resignation in November 1998, Stanley G. Brannan assumed
the positions of President and Chief Executive Officer of the Company on an
interim basis. Upon recommendation of the Committee, Mr. Brannan is being
compensated at the rate of $1,000 per working day and will not participate in
the Company's executive bonus program. Mr. Brannan intends to resign as
President and Chief Executive Officer upon the successful conclusion of the
Board of Directors' current search for a new Chief Executive Officer.
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 industry and related industries.
Individual grants may vary within the range to reflect individual performance
and potential. During 1998, options to purchase an aggregate 215,000 shares of
common stock were granted to the Company's executive officers under the 1994
Stock Option Plan. The options vest cumulatively at the rate of 25% per year
beginning one year from the applicable grant date. The Board believes that the
actions taken on these options were consistent with the Board's intent of
providing meaningful incentives to the Company's executives.
THE PRECEDING REPORT WAS ISSUED BY THE COMPENSATION COMMITTEE, COMPRISED OF:
Alan C. Maltz
Scott A. Maltz
C. MacKay Ganson, Jr.
John F. Kelsey, III
10
<PAGE>
COMPANY PERFORMANCE
Set forth below is a line graph comparing the cumulative total return to
holders of the Company's Common Stock against the cumulative total return of the
Standard & Poor's 500 Stock Index, and the Standard & Poor's High Technology
Composite Index for the period of five fiscal years commencing December 31, 1993
and ended December 31, 1998. Total return is based on an assumed investment of
$100 on December 31, 1993 and reinvestment of dividends through December 31,
1998.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BRITE VOICE S & P 500
<S> <C> <C> <C>
Systems, Inc.
1993 $100.00 $100.00
1994 $168.24 $101.32
1995 $130.59 $139.40
1996 $140.00 $171.40
1997 $91.76 $228.59
1998 $72.94 $293.91
*TOTAL RETURN BASED ON $100 INITIAL INVESTMENT & REINVESTMENT OF DIVIDENDS
DESCRIPTION 1993 1994
BRITE VOICE SYS $100.00 $168.24
S & P 500 $100.00 $101.32
S & P Technology $100.00 $116.55
<CAPTION>
S & P TECHNOLOGY-
<S> <C>
Sector
1993 $100.00
1994 $116.55
1995 $167.88
1996 $238.17
1997 $300.32
1998 $519.48
*TOTAL RETURN BASED ON $100 INITIAL INVESTMENT & REINVESTMENT OF DIVIDENDS
DESCRIPTION 1995 1996 1997
BRITE VOICE SYS $130.59 $140.00 $91.76
S & P 500 $139.40 $171.40 $228.59
S & P Technology $167.88 $238.17 $300.32
<CAPTION>
1993
1994
1995
1996
1997
1998
*TOTAL RETURN BASED ON $100 INITIAL INVESTMENT & REINVESTMENT OF DIVIDENDS
DESCRIPTION 1998
BRITE VOICE SYS $72.94
S & P 500 $293.91
S & P Technology $519.48
</TABLE>
DESCRIPTION 1993 1994 1995 1996 1997 1998 ----------- ---- ---- ---- ---- ----
- ----BRITE VOICE SYS $100.00 $168.24 $130.59 $140.00 $ 91.76 $ 72.94 S & P 500
$100.00 $101.32 $139.40 $171.40 $228.59 $293.91 S & P Technology - Sector
$100.00 $116.55 $167.88 $238.17 $300.32 $519.48
11
<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, 1999. Arthur
Andersen LLP has served as the Company's auditors for the past six years. 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, 1999.
COMPLIANCE WITH SECTION16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section16(a) of the Securities Exchange Act of 1934 requires officers,
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 Section 16(a) forms they file. On the basis of
reports and representations submitted by the Directors and executive officers of
the Company, the Company believes that all Forms 3, 4 and 5 showing ownership
of, and changes of ownership in, the Company's Common Stock during 1998, were
timely filed with the Securities and Exchange Commission, except Stanley G.
Brannan was late in filing a report on Form 4 and a report on Form 5.
ANNUAL REPORT
The Company's Annual Report for the year ended December 31, 1998 (which
includes a copy of the Company's Annual Report on Form 10-K) has been enclosed
in the same mailing with this Proxy Statement and is not a part of the Proxy
solicitation material. The Company will provide, without charge, a copy of the
Annual Report on Form 10-K (without exhibits) to any stockholder upon written
request to Brite Voice Systems, Inc., 250 International Parkway, Suite 300, Lake
Mary, Florida 32746, Attention: Secretary.
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 1999 Annual Meeting of
Stockholders in May 2000. The date by which stockholder proposals must be
received by the Company for inclusion in the Proxy Statement and form of proxy
for its Annual Meeting of Stockholders to be held in 2000 is December 15, 1999.
Such stockholder proposals should be submitted to Brite Voice Systems, Inc., 250
International Parkway, Suite 300, Lake Mary, Florida 32746, Attention:
Secretary.
[SIGNATURE]
Glenn A. Etherington
SECRETARY
April 12, 1999
12
<PAGE>
BRITE VOICE SYSTEMS, INC. THIS PROXY IS SOLICITED
250 INTERNATIONAL PARKWAY, STE. 300 ON BEHALF OF THE
LAKE MARY, FLORIDA 32746 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, 1999 at the annual
meeting of stockholders to be held on May 11, 1999, or any adjournment
thereof.
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, C. MacKay Ganson, Jr., J. Darrell Kelley,
John F. Kelsey, III, Alan C. Maltz, Scott A. Maltz
(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 1999.
FOR AGAINST ABSTAIN
To be signed on other side.
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. In their discretion, the
Proxies are authorized to vote upon such other business as may properly come
before the meeting.
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:_____________________________________, 1999
_________________________________________________
Signature
_________________________________________________
Signature if held jointly
Please mark, date, sign and return the proxy card
promptly using the enclosed envelope.
