<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
Logility, 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)(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:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
LOGILITY, INC.
470 East Paces Ferry Road
Atlanta, Georgia 30305
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Logility,
Inc. will be held at the Swissotel, 3391 Peachtree Road, N.E., Atlanta,
Georgia, on Wednesday, August 25, 1999 at 3:00 p.m. for the following
purposes:
1. To elect one director of the Company for a term to expire at the 2002
annual meeting of stockholders.
2. To consider and transact such other business as may properly come before
the meeting.
Only stockholders of the Company of record at the close of business on July
9, 1999 will be entitled to vote at the meeting.
Stockholders are requested to vote, date, sign and mail their proxies in the
form enclosed even though they now plan to attend the meeting. If stockholders
are present at the meeting, their proxies may be withdrawn, and they may vote
personally on all matters brought before the meeting, as described more fully
in the enclosed Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
James R. McGuone,
Secretary
August 3, 1999
<PAGE>
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
OF LOGILITY, INC.
----------------
TO BE HELD AT THE
SWISSOTEL
3391 PEACHTREE ROAD, N.E.
ATLANTA, GEORGIA
ON AUGUST 25, 1999
This Proxy Statement is furnished to the stockholders by the Board of
Directors of Logility, Inc., 470 East Paces Ferry Road, N.E., Atlanta, Georgia
30305 (the "Company"), in connection with the solicitation by the Board of
Directors of proxies for use at the Annual Meeting of Stockholders on
Wednesday, August 25, 1999 at 3:00 p.m., and at any adjournment or
adjournments thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders. This Proxy Statement and accompanying proxy
card and Notice of Annual Meeting are first being mailed to stockholders on or
about August 3, 1999.
If the enclosed form of proxy is properly executed and returned, the shares
represented thereby will be voted in accordance with its terms. If no choices
are specified, the proxy will be voted:
FOR--Election of James C. Edenfield as Director for a term ending with the
2002 Annual Meeting of Stockholders and until his successor is elected
and qualified.
In addition, a properly executed and returned proxy card gives the authority
to vote in accordance with the proxy-holders' best judgment on such other
business as may properly come before the meeting or any adjournment thereof.
Any proxy given pursuant to this solicitation may be revoked, either in
writing furnished to the Secretary of the Company prior to the meeting or
personally by attendance at the meeting, by the person giving the proxy
insofar as the proxy has not been exercised at the meeting.
VOTING SECURITIES
Record Date and Voting of Securities
The Board of Directors has fixed the close of business on July 9, 1999 as
the record date for determining the holders of common stock entitled to notice
of and to vote at the meeting. On July 9, 1999, the Company had outstanding
and entitled to vote a total of 13,398,200 shares of Common Stock, no par
value ("Common Stock").
Each outstanding share of Common Stock is entitled to one vote per share on
all matters to come before the meeting. The affirmative vote of a majority of
the shares represented at the meeting is necessary for election of directors.
Any other matter submitted to the meeting also must be approved or ratified by
the affirmative vote of a majority of the shares represented at the meeting.
One-third of the outstanding shares of Common Stock will represent a quorum at
the meeting.
Security Ownership
Five Percent Stockholders. The only persons known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock of the
Company are those set forth below. This information is as of June 30, 1999.
Except as disclosed in the notes to the table, each person has sole voting and
investment power with respect to the entire number of shares shown as
beneficially owned by that person.
1
<PAGE>
<TABLE>
<CAPTION>
Shares
Name and Address of Beneficially
Beneficial Owner Owned Percent (1)
------------------- ------------ -----------
<S> <C> <C>
American Software, Inc......................... 11,300,000 84.3%
470 East Paces Ferry Road, N. E.
Atlanta, Georgia 30305
James C. Edenfield............................. 11,300,000(2) 84.3%
c/o American Software, Inc.
470 East Paces Ferry Road, N. E.
Atlanta, Georgia 30305
</TABLE>
- --------
(1) Based on a total of 13,398,200 shares outstanding.
(2) Consists solely of shares held by American Software, Inc. Mr. Edenfield
owns .4% of the outstanding Class A Common Shares and 53.8% of the
outstanding Class B Common Shares of American Software. Under the American
Software articles of incorporation, the holders of Class B Common Shares,
as a class, have the right to elect a majority of the board of directors
of American Software. Accordingly, Mr. Edenfield may be deemed to share
beneficial ownership of the Common Stock of the Company held by American
Software.
Directors and Executive Officers. The following table shows the shares of
Common Stock beneficially owned, as of June 30, 1999, by each present director
and nominee for director, by each executive officer named in the Summary
Compensation Table and by all directors and executive officers of the Company
as a group. The statements as to securities beneficially owned are, in each
instance, based upon information provided by the person(s) concerned. Except
as disclosed in the notes to the table, each person has sole voting and
investment power with respect to the entire number of shares shown as
beneficially owned by that person.
<TABLE>
<CAPTION>
Shares of
Common Stock
Name of Beneficial Owner Beneficially
or Description of Group Owned Percent (1)
- ------------------------ ------------ -----------
<S> <C> <C>
James C. Edenfield.................................. 11,300,000(2) 84.3%
J. Michael Edenfield................................ 25,500(3) .2%
Parker H. Petit..................................... 8,000(4) .1%
Dr. John A. White................................... 10,500(5) .1%
Larry R. Olin....................................... 11,250(6) .1%
Donald L. Thomas.................................... 4,500(7) --%
James M. Modak...................................... 17,850(8) .1%
Andrew G. White..................................... 4,000(9) --%
All Directors and Executive Officers
as a Group (Eight Persons)......................... 11,381,600(10) 84.5%
</TABLE>
- --------
(1) Based on a total of 13,398,200 shares outstanding, plus any shares
issuable pursuant to options held by the person or group in question that
may be exercised within 60 days.
(2) Consists solely of shares held by American Software, Inc. Mr. Edenfield
owns .4% of the outstanding Class A Common Shares and 53.8% of the
outstanding Class B Common Shares of American Software. Under the American
Software articles of incorporation, the holders of Class B Common Shares,
as a class, have the right to elect a majority of the board of directors
of American Software. Accordingly, Mr. Edenfield may be deemed to share
beneficial ownership of the Common Stock of the Company held by American
Software.
(3) Includes 22,500 shares subject to options exercisable within 60 days.
(4) Consists of 8,000 shares subject to options exercisable within 60 days.
2
<PAGE>
(5) Includes 8,000 shares subject to options exercisable within 60 days.
(6) Consists of 11,250 shares subject to options exercisable within 60 days.
(7) Includes 4,000 shares subject to options exercisable within 60 days.
(8) Includes 11,250 shares subject to options exercisable within 60 days.
(9) Consists of 4,000 shares subject to options exercisable within 60 days.
(10) Includes 69,000 shares subject to options exercisable within 60 days.
Also includes 11,300,000 shares held by American Software, Inc., the
beneficial ownership of which is attributable to James C. Edenfield, as
discussed in footnote (2).
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's executive officers and directors, and persons who own
more than 10% of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "Commission"). Officers, directors and holders of
more than 10% of the Common Stock of the Company are required under
regulations promulgated by the Commission to furnish the Company with copies
of all Section 16(a) forms they file.
Based upon a review by the Company of filings made under Section 16(a) of
the Exchange Act, the Company believes that since May 1, 1998, all Section
16(a) filing requirements applicable to its directors, officers and greater
than 10% beneficial owners were complied with.
ELECTION OF DIRECTOR
AND INFORMATION REGARDING DIRECTORS
The Company's By-Laws, as amended, provide that directors shall be divided
into three classes, with staggered three-year terms. The term of one of the
present directors, James C. Edenfield, will expire at the Annual Meeting of
Stockholders in 1999. The Board of Directors has nominated this incumbent
director for a term expiring at the Annual Meeting of Stockholders in 2002 and
until his successor is elected and qualified.
The following information is provided concerning the nominees for election
as director, each of whom originally was elected in 1998:
James C. Edenfield, age 64, has served as Chairman of the Board of Directors
of the Company since January 1997. He is a co-founder of American Software,
where he has served as Chief Executive Officer and Director since 1971. Prior
to founding American Software, Mr. Edenfield held several executive positions
at and was a director of Management Science America, Inc., an applications
software development and sales company. He holds a Bachelor of Industrial
Engineering degree from the Georgia Institute of Technology.
If this nominee becomes unwilling or unable to serve, which is not expected,
the proxies are intended to be voted for a substitute person to be designated
by the Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE
COMPANY VOTE "FOR" THE PROPOSAL TO ELECT JAMES C. EDENFIELD AS DIRECTOR OF THE
COMPANY TO HOLD OFFICE UNTIL THE 2002 ANNUAL MEETING OF STOCKHOLDERS AND UNTIL
HIS SUCCESSOR IS ELECTED AND QUALIFIED.
3
<PAGE>
The following director was elected in 1997 and his present term expires with
the Annual Meeting of Stockholders in 2000:
Parker H. Petit, age 59, was the founder of Healthdyne, Inc. and served as
its Chairman and Chief Executive Officer from 1970 to March 1996. Healthdyne
spun off to its shareholders two of its subsidiaries, Healthdyne Technologies
(Nasdaq: HDTC) and Healthdyne Information Enterprises (Nasdaq: HDIE) in 1995.
Subsequently, its remaining subsidiary, Healthdyne Maternity Management, was
merged with Tokos Medical Corporation to form Matria Healthcare, Inc. (Nasdaq:
MATR) in 1996. Mr. Petit currently serves as Chairman of the Board of Matria
Healthcare, a provider of specialized home healthcare services. Mr. Petit is a
member of the Board of Directors of Healthdyne Information Enterprises, Inc.,
Atlantic Southeast Airlines, Inc., Intelligent Systems Corporation and Norell
Corporation. He is also a director of the Georgia Research Alliance, a
coalition of government and industry leaders formed to encourage development
of high technology business in Georgia, and has been elected to the Georgia
Technology Hall of Fame.
The following directors were elected in 1998 and their present terms expire
with the Annual Meeting of Stockholders in 2001:
J. Michael Edenfield, age 41, has served as a Director and as President and
Chief Executive Officer of the Company since January 1997. He also serves as a
director of INSIGHT, Inc., in which the Company owns a minority interest.
Until the Company's initial public offering in October 1997, he served as
Chief Operating Officer of American Software, Inc., a position he had held
since June 1994. Mr. Edenfield has served as Executive Vice President of
American Software from June 1994 to the present. Prior to June 1994, Mr.
Edenfield served in the following positions with American Software USA, Inc.:
Senior Vice President of North American Sales and Marketing from July 1993 to
June 1994, Senior Vice President of North American Sales from August 1992 to
July 1993, Group Vice President from May 1991 to August 1992 and Regional Vice
President from May 1987 to May 1991. Mr. Edenfield holds a Bachelor of
Industrial Management degree from the Georgia Institute of Technology. Mr.
Edenfield is the son of James C. Edenfield, Chairman of the Board of Directors
of the Company.
Dr. John A. White, age 59, is Chancellor of the University of Arkansas. From
July 1991 to July 1997, Dr. White served as Dean of Engineering at Georgia
Institute of Technology, having been a member of the faculty since 1975. From
July 1988 to September 1991, he served as Assistant Director of the National
Science Foundation in Washington, D.C. Dr. White is a member of the Board of
Directors of J.B. Hunt Transport Services, Inc., Motorola, Eastman Chemical
Company and Russell Corporation. He is a member of the National Science Board
and the National Academy of Engineering, a past President of the Institute of
Industrial Engineers and past Chairman of the American Association of
Engineering Societies. Dr. White founded SysteCon, a logistics consulting
firm, and served as its Chairman and Chief Executive Officer until its
acquisition by Coopers and Lybrand. Dr. White received a B.S.I.E. degree from
the University of Arkansas, a M.S.I.E. degree from Virginia Polytechnic
Institute and State University and a Ph.D. from The Ohio State University.
From May 1, 1998 through April 30, 1999, the Board of Directors held four
meetings and acted by written consent on two occasions. No director of the
Company attended fewer than 75% of the total meetings of the Board of
Directors and committee meetings on which such Board member served and was
eligible to attend during this period.
The Board of Directors has an Audit Committee, which consists of Dr. John A.
White (Chairman) and Mr. Parker H. Petit. The functions of the Audit Committee
include recommending independent public accountants to the Company, reviewing
the scope and results of the independent public accountants' audit, and
monitoring the adequacy of the Company's accounting, financial and operating
controls. The Audit Committee held two meetings during fiscal 1999.
The Company has a Stock Option Committee, consisting of Messrs. James C.
Edenfield and J. Michael Edenfield. During fiscal 1999, this Committee met or
acted by written consent on twelve occasions. The functions
4
<PAGE>
of this Committee are to consider the grant of stock options under the 1997
Stock Plan to employees other than directors and executive officers and
establish the terms of those options, as well as to construe and interpret the
Plan and to adopt rules in connection therewith.
The Company has a Compensation Committee, consisting of Mr. Parker H. Petit
(Chairman) and Dr. John A. White, described below in "Certain Information
Regarding Executive Officers and Directors--Report on Executive Compensation."
Among other functions, the Compensation Committee members act as the Special
Stock Option Committee under the 1997 Stock Plan, with authority to grant
stock options to Executive Officers and establish the terms of those options,
as well as to construe and interpret the 1997 Stock Plan and adopt rules in
connection therewith. The Compensation Committee held one formal meeting
during fiscal 1999 and acted twice by written consent.
The Board has no nominating committee or any other committee performing
similar functions.
CERTAIN INFORMATION REGARDING EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and the four other executive officers of the Company
(determined as of April 30, 1999) whose annual compensation exceeded $100,000
during fiscal 1999 (referred to herein as the "named executive officers") for
the fiscal years ended April 30, 1999, 1998 and 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term All
Bonus or Compensation Other
Annual Other Annual Awards/Number Compen-
Name and Principal Fiscal Salary Compensation of Option sation
Position Year $ $ Shares Granted(1) ($)(2)
- ------------------ ------ ------- ------------ ----------------- -------
<S> <C> <C> <C> <C> <C>
J. Michael Edenfield 1999 240,000 -0- 70,000(6) -0-
Executive Vice 1998 240,000 63,533(5) 20,000(7) -0-
President, Logility,
Inc. (3)(4) 1997 240,000 102,735 30,000 -0-
Larry R. Olin 1999 175,000 49,627 35,000(6) -0-
Vice President--Sales, 1998 175,000 45,617 10,000(7) -0-
The Americas 1997 175,000 55,375 -0- -0-
James M. Modak 1999 159,000 7,960 35,000(6) -0-
Chief Financial Officer 1998 112,500 12,000 10,000(7) -0-
and Senior Vice
President(8)
Donald L. Thomas 1999 136,333 -0- 10,000 -0-
Vice President, 1998 133,000 1,500 6,000 -0-
Customer Service 1997 121,917 4,000 -0- -0-
Andrew G. White 1999 131,448 -0- 20,000 -0-
Vice President, 1998 125,600 -0- 6,000(7) -0-
Product Strategy 1997 115,519 -0- 20,000 -0-
</TABLE>
- --------
(1) All compensation and stock options shown in this table for fiscal 1997
were paid or granted by American Software.
(2) The aggregate amount of perquisites and other personal benefits,
securities or property given to each named executive officer, valued on
the basis of aggregate incremental cost to the Company, was less than
either $50,000 or 10% of the total annual salary and bonus for that
executive officer during each of these years.
5
<PAGE>
(3) At the beginning of fiscal 1998, Mr. Edenfield served as Chief Operating
Officer and Executive Vice President of American Software, Inc., resigning
from his position as Chief Operating Officer in October 1997 and
continuing as Executive Vice President. American Software, Inc. owns
approximately 84.3% of the Common Stock of the Company. See "Relationship
with American Software and Certain Transactions."
(4) James C. Edenfield, Chairman of the Board of Directors, is the father of
J. Michael Edenfield.
(5) This amount excludes $282,136 in bonuses paid by American Software for the
portion of fiscal 1998 during which he served as Chief Operating Officer
of American Software.
(6) Excludes options granted by American Software in the following amounts:
Mr. Edenfield--151,000 shares; Mr. Olin--10,000 shares; Mr. Modak--80,000
shares.
(7) Excludes options granted by American Software in the following amounts:
Mr. Edenfield--50,000 shares; Mr. Olin--10,000 shares; Mr. Modak--35,000
shares; Mr. White--10,000 shares.
(8) Mr. Modak joined the Company in July 1997. In May 1999, Mr. Modak was
elected Chief Financial Officer and Senior Vice President of American
Software. He will serve in that position for both the Company and American
Software, with his compensation to be allocated between the two companies
in connection with the general allocation of expenses between the
companies relating to shared financial and other services.
Summary of Logility Stock Plan
The 1997 Plan was adopted by the Board of Directors, approved by the sole
stockholder of the Company in August 1997 and amended by the shareholders of
the Company at the 1998 Annual Meeting. Up to 1,200,000 shares of Common Stock
(subject to adjustment in the event of stock splits and other similar events)
may be issued pursuant to stock options granted under the Plan. Up to 300,000
stock appreciation right ("SAR") units may be granted under the Plan, each SAR
unit being equivalent to the appreciation in the market value of one share of
Common Stock.
The authorization of up to 1,200,000 shares for stock option grants is
subject to the limitation, as set forth in the Plan, that stock options may be
granted only if, following the exercise of those options, American Software
would retain the 80% stock ownership percentage it requires to retain the
Company as a member of American Software's consolidated group for federal and
state income tax purposes. Of the 1,200,000 authorized option shares, as of
June 30, 1999, no shares have been purchased pursuant to the exercise of stock
options and 661,146 shares were subject to outstanding options, leaving
538,854 shares available for new options. As of June 30, 1999, based on the
number of outstanding shares held by American Software, up to 65,654 shares
could be granted under the 80% limitation described above. No SARs have been
granted under the Plan.
Purpose of Plan. The purpose of the Plan is to attract and retain the best
available talent and encourage the highest level of performance by officers,
employees, directors, advisors and consultants, and to provide them with
incentives to put forth maximum efforts for the success of the Company's
business.
Automatic Option Grants to Nonemployee Directors. Under the terms of the
Plan, each independent, nonemployee director automatically receives an option
to purchase 2,000 shares of Common Stock upon his or her election to the
Board. Each non-employee director also automatically receives an option to
purchase an additional 1,000 shares on the last day of each fiscal quarter.
The exercise price of each option is equal to the fair market value of the
Common Stock on the date the option is granted.
Administration. The Plan is administered by the Board of Directors and by
the Stock Option Committee and the Special Stock Option Committee. The Special
Stock Option Committee, composed of nonemployee directors, is responsible for
the administration and granting of stock options and stock appreciation rights
(SARs) to executive officers of the Company. The Stock Option Committee,
consisting of other directors of the Company, is responsible for the
administration and granting of stock options and SARs (collectively, "Awards")
to other employees and eligible persons. The Stock Option Committee, is
composed of James C. Edenfield and J. Michael Edenfield. The Special Stock
Option Committee is composed of Parker H. Petit and Dr. John A. White.
6
<PAGE>
Eligibility. All employees (approximately 170 persons as of June 30, 1999)
and Directors of the Company are eligible to participate in the Plan. In
addition, advisors and consultants to the Company may be eligible for Award
grants if deemed appropriate by the Stock Option Committee.
Exercise Price of Stock Options and SARs. The exercise price per share of
any stock option granted under the Plan is set in each case by the respective
Committee. For incentive stock options granted under the Plan, the exercise
price must be at least 100% of the fair market value of Common Stock on the
date of grant (at least 110% for options granted to 10% stockholders). For
nonqualified stock options granted the Plan, the exercise price may be less
than the fair market value per share of Common Stock on the date upon which
the option is granted. The exercise price of a SAR unit granted under the Plan
must be at least 100% of the fair market value of the Common Stock on the date
of grant. As of the close of business on June 30, 1999, the market value of
the Common Stock was $5.125 per share.
Terms and Exercisability of Options and SARs. Options granted pursuant to
the Plan generally expire on the tenth anniversary of the grant date, except
for incentive stock options granted to 10% stockholders, which expire on the
fifth anniversary of the date of grant. SARs granted under the Plant expire
not later than the fifth anniversary of the date of grant. Awards granted
pursuant to the Plan generally become exercisable in equal portions over a
four-year period (other than formula options granted to non-employee
directors, which vest immediately upon grant).
Death, Disability, Retirement or Termination of Employment. Following a
participant's termination of employment, Awards held by such person pursuant
to the Plan are generally exercisable only with respect to the portions
thereof in which the participant is then vested. Under the Plan, upon
termination of employment, stock options remain exercisable for 90 days, or
twelve months if termination results from death or disability, but in any
event not beyond the original option term. SARs are automatically deemed to be
exercised upon termination of employment, to the extent vested.
Change of Control. The stock option agreements and SAR agreements provide
that in the event of a Change in Control (as defined in the Plan) of the
Company, or a threatened Change in Control of the Company as determined by the
Board of Directors, outstanding Awards will automatically become fully
exercisable, subject to the right of the individual Award holder to accept a
substitute stock option or similar equity right from the surviving entity in
the Change of Control transaction.
American Software Option Plans. So long as the Company remains a majority-
owned subsidiary of American Software, officers and other employees of the
Company will be eligible to receive grants of stock options under stock option
plans of American Software. The grant of such options, if any, will be
entirely within the discretion of the respective committees of the American
Software Board of Directors. James C. Edenfield, a Director of the Company,
serves on a committee of the American Software Board that has authority over
one of the American Software stock option plans.
Termination. The Plan terminates after August 2007, unless sooner terminated
by the Board of Directors. Except as expressly contemplated by the terms of
the Plan, no amendment, discontinuance or termination of the Plan will have
any effect on options or SARs outstanding thereunder at the time of
termination.
7
<PAGE>
Stock Option Grants
The following table sets forth information with respect to stock options
granted pursuant to its 1997 Stock Plan (the "Plan") during fiscal 1999 to
each of the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential
Realized
Value at
Assumed Annual
INDIVIDUAL GRANTS Rates of
------------------------------------------------ Stock Price
Percent of Exercise Appreciation
Total Options or for
Number of Granted to Base Price Option Term(2)
Options Employees in (Per Share) Expiration 5% 10%
Name Granted(1) Fiscal 1999 ($) Date ($)
---- --------- ------------- ----------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
J. Michael Edenfield.... 151,000(3) 5.45% 2.750 08/31/2008 261,148/661,802
70,000 11.59% 2.813 08/27/2008 123,836/313,824
Larry R. Olin........... 10,000(3) .36% 2.750 08/31/2008 17,295/43,828
35,000 5.79% 2.813 08/27/2008 61,918/156,912
James M. Modak.......... 5,000(3) .18% 2.219 01/04/2009 6,978/17,683
10,000(3) .36% 2.250 12/14/2008 14,150/35,859
65,000(3) 2.35% 2.750 08/31/2008 112,415/284,881
35,000 5.79% 2.813 08/27/2008 61,918/156,912
Donald L. Thomas........ 10,000 1.66% 2.813 08/27/2008 17,691/44,832
Andrew G. White......... 10,000 1.66% 2.813 08/27/2008 17,691/44,832
10,000 1.66% 4.000 11/24/2008 25,156/63,750
Parker H. Petit(4)...... 4,000 0.64% (4) (4) 12,461/31,576
Dr. John A. White(4).... 4,000 0.64% (4) (4) 12,461/31,576
</TABLE>
- --------
(1) Such options may not be exercised earlier than one year after the date of
grant. Options vest ratably over a period of four years.
(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Company's or American Software's, as the case may be,
common stock and overall market conditions. The amounts reflected in this
table may not necessarily be achieved.
(3) These grants were grants of American Software stock options and the
percentage and fair market value information for those option grants
relate to American Software stock options and American Software Class A
Common Stock.
(4) For Mr. Petit and Dr. White, these option grants consisted of four
quarterly grants of 1,000 option shares each, each representing 0.16% of
total options granted to Company employees in fiscal 1999. The option
exercise prices, expiration dates and 5%/10% appreciation values are
broken down as follows for both Mr. Petit and Dr. White: $7.125,
07/31/2008 and $4,481/$11,355; $4.625, 10/30/2008 and $2,909/$7,371;
$4.00, 01/29/2009 and $2,516/$6,375; and $4.063, 04/30/2009 and
$2,555/$6,475.
8
<PAGE>
Stock Option Exercises and Outstanding Options
The following table contains information, with respect to (i) the number of
stock options exercised during the last fiscal year, and the values realized
in respect thereof, by the named executive officers, and (ii) the number stock
options and the value of said stock options held by the named executive
officers as of April 30, 1999.
<TABLE>
<CAPTION>
Shares Value of Unexercised
Acquired on Value Number of Securities In-the-Money Options
Exercise Realized Underlying Unexercised Options Exercisable/Unexercisable
Name (#) ($) Exercisable/Unexercisable (1) $
- ---- ----------- -------- ------------------------------ -------------------------
<S> <C> <C> <C> <C>
J. Michael Edenfield.... -0- 5,000/85,000 -0-/87,500
3,939 23,746 106,062/151,000(2)(3) -0-/-0-
Larry R. Olin........... -0- 2,500/42,500 -0-/43,750
-0- 56,000/10,000(2) -0-/-0-
James M. Modak.......... -0- 2,500/42,500(4) -0-/43,750
-0- /80,000(2) -0-/7,655
Donald L. Thomas........ -0- 15,000/14,500 -0-/12,500
-0- 41,250/3,750(2) -0-/-0-
Andrew G. White......... -0- 1,500/24,500 -0-/13,130
-0- 12,500/17,500 -0-/-0-
</TABLE>
- --------
(1) The market price of the Company's Common Stock on April 30, 1999 was
$4.063 The market price of American Software's Class A Common Stock on
April 30, 1999 was $2.75.
(2) These relate to stock options granted by American Software. Values are
based in part on the market price of American Software Class A Common
Stock.
(3) James Michael Edenfield exercised options to purchase 3,938 shares of
American Software Class A Common Stock on May 6, 1999 at a price of $2.22
per share.
Employment Agreements
The Compensation Committee and the Chief Executive Officer of the Company,
J. Michael Edenfield, have established that for fiscal 2000 he will receive a
base salary of $259,200 and a bonus targeted at 50% of that amount, if he
meets certain performance targets. These targets include factors such as pre-
tax earnings and growth in revenue of the Company. The amount of the bonus may
be higher than that amount, depending on the degree to which the targets are
exceeded. Unless both of the targets are equaled or exceeded, Mr. Edenfield
will not receive a bonus for fiscal 2000.
The Company entered into an employment agreement with Mr. Modak on July 24,
1997, pursuant to which he serves as Chief Financial Officer and Senior Vice
President of the Company. Currently, under his agreement Mr. Modak is entitled
to receive a base salary, currently $175,000 per year, and is eligible to
receive an incentive bonus based upon certain performance targets. In the
event there is a change in control of the Company, and if Mr. Modak's
employment with the Company is terminated by him or by the Company within six
months of such change of control, he will be entitled to receive severance
compensation in an amount equal to two years of his then-current salary.
None of the other executive officers of the Company has entered into an
employment agreement with the Company. Each of the other executive officers,
however, will be entitled to incentive compensation based on individualized
fiscal year performance standards.
Director Compensation
During fiscal 1999, the Company compensated Directors who were not employed
by the Company or its affiliates at the rate of $5,000 per annum, plus $1,000
for each meeting of the Board of Directors and $600 for each meeting of any
committee of the Board that they attended.
9
<PAGE>
Directors are eligible to receive stock option grants under the Plan. Under
the terms of the Plan, Directors who are not employed by the Company
automatically receive stock option grants of 2,000 shares each upon his
initial election and additional 1000-share grants at the last day of each
fiscal quarter thereafter, with exercise prices equal to the market price on
those respective dates. These options become exercisable at the time of grant
and expire ten years thereafter. They do not terminate if the Director ceases
to serve on the Board of the Company. Under this program, Mr. Petit and Dr.
White each received options to purchase an aggregate of 4,000 shares in fiscal
1999.
Compensation Committee Interlocks and Insider Participation
The following persons served as members of the Compensation Committee of the
Board of Directors during fiscal 1999: Parker H. Petit, Chairman, and Dr. John
A. White. Neither of the members of the Compensation Committee was an officer
or employee of the Company or had any relationship with the Company requiring
disclosure under Securities and Exchange Commission regulations.
Report on Executive Compensation
The following is the report of the Compensation Committee of the Board of
Directors of Logility, Inc. for the fiscal year ended April 30, 1999.
Meetings. During fiscal year 1999, the Compensation Committee met on one
occasion formally and has conferred informally a number of times, among the
members of the Committee and with management and the other members of the
Board of Directors concerning the authority and responsibilities of the
Committee. The Committee has also acted by written consent on two occasions
during fiscal 1999 for the purpose of granting stock options.
Executive Compensation Philosophy. The Committee believes that a
compensation program which enables the Company to attract and retain
outstanding executives will assist the Company in meeting its long-range
objectives, thereby serving the interests of the Company's shareholders. The
compensation program of the Company is designed to achieve the following
objectives:
1.Provide compensation opportunities that are competitive with those of
companies of a similar size within the same industry.
2.Create a strong link between the executive's compensation and the
Company's annual and long-term financial performance.
3.Include above-average elements of financial risk through performance-
based incentive compensation that offers an opportunity for above-average
financial reward to the executives.
Compensation of Chief Executive Officer. The Compensation Committee has the
responsibility and authority to review and establish compensation for the
Chief Executive Officer of the Company, including his participation in the
Logility 1997 Stock Plan and the re-evaluation and negotiation of the terms of
his employment. Following discussions with the Chief Executive Officer, J.
Michael Edenfield, the Committee and Mr. Edenfield have established that for
fiscal 2000, he will receive a base salary of $259,200, which is an increase
of 8% above his salary for fiscal 1999, and a bonus targeted at 50% of that
amount if plan targets are met. Those targets include Company performance
factors such as pre-tax earnings and growth in revenue. The amount of the
bonus would be higher than the targeted bonus amount, depending on the degree
to which the targets are exceeded and no bonus will be paid unless both
targets are met. The Committee's selection of this basis for incentive
compensation reflects its belief that the Chief Executive Officer's
compensation should be tied substantially to growth in revenue and pre-tax
earnings.
The Committee believes Mr. Edenfield is paid a reasonable salary, and that
any potential bonus is based upon corporate financial goals that align his
interests directly with those of other shareholders.
10
<PAGE>
The Chief Executive Officer's cash compensation from the Company in fiscal
1999, both salary and bonus, was determined under the terms of an incentive
compensation arrangement established by the Compensation Committee at the
beginning of fiscal 1999. Based on the Company's results in fiscal 1999, Mr.
Edenfield did not receive a bonus for that fiscal year.
The Chief Executive Officer received, on August 27, 1998, a grant of a stock
option consisting of 70,000 shares of common stock. That option is exercisable
at the market price on that date, $2.813 per share, with a term of ten years.
That option was granted by the Compensation Committee as discussed in the
Report on Executive compensation for fiscal 1998. Effective June 16, 1999, the
Compensation Committee granted to Mr. Edenfield an option to purchase 25,000
shares of common stock at $4.50 per share, the market price on that date. Any
further participation by the Chief Executive Officer in the Stock Plan during
fiscal 2000 will be determined in the discretion of the Compensation Committee
based upon its authority to grant options under that Plan.
Other Executive Officers. The Compensation Committee has responsibility for
the review of compensation of other executive officers of the Company and
consults with the Chief Executive Officer as he structures their compensation
plans. To assist in this process, the Committee has reviewed compensation of
officers having similar responsibilities with peer group companies, based upon
publicly available information. The Committee understands that it is the
policy of the Company, which is supported by the Committee, to base a
substantial portion of executive officer compensation upon the achievement of
Company-wide or divisional goals, relating in some cases to revenue
generation, in some cases to total annual earnings, as well as other factors.
The bonus plans for each of the most highly compensated executive officers
reflect this approach. As James M. Modak, the Chief Financial Officer of the
Company, has been elected Chief Financial Officer of American Software as
well, his compensation plan will be established by American Software, rather
than by the Chief Executive Officer of the Company in consultation with this
Committee. The Committee understands, however, that his fiscal 2000
compensation plan includes multiple incentive targets, including targets
related to the operating earnings and stock price of the Company. His
compensation will be allocated among the two companies in connection with the
general allocation of expenses between the companies relating to shared
financial and other services.
The Compensation Committee has direct and exclusive authority over the
granting of stock options to executive officers of the Company by acting as
the Special Stock Option Committee under the Stock Plan. In addition, the
Compensation Committee assists the Chief Executive Officer in evaluating and
consulting on executive compensation plans, which are customized for each
executive officer. Stock option grants under the Stock Plan are utilized as
both a motivating and a compensating factor. Because the performance of
executive officers can substantially influence performance of the entire
enterprise, the Committee believes that grants of stock options and carefully
structured incentive compensation plans can create greater incentives for
improving Company performance, which the Compensation Committee believes may
positively influence the market price for Company stock.
During fiscal 1999, the Compensation Committee formally and informally
considered the exercise of its authority under the Stock Plan to grant options
to executive officers of the Company. The term and size of the options granted
to the executive officers were intended and calculated by the Compensation
Committee to reward those officers for their prior performance, to serve as
incentive for promotion of Company profitability and other long-term
objectives, as well as to maintain their overall compensation at competitive
levels. Thus, the option grants reflect both a retrospective and prospective
approach to executive compensation.
During fiscal 2000, the Compensation Committee will continue to consult with
the Chief Executive Officer with respect to executive officer compensation
packages, including salary, bonus, stock options and fringe benefits, to
ensure that compensation is appropriately related to individual and Company
performance as well as competitive compensation standards and other relevant
criteria. The Compensation Committee will continue its investigation of
compensation arrangements in peer group companies as guides for future
consultations with the Chief Executive Officer.
11
<PAGE>
Limitations on Deductibility of Executive Compensation. Since 1994, the
Omnibus Budget Reconciliation Act of 1993 has limited the deductibility of
executive compensation paid by publicly held corporations to $1 million per
employee, subject to various exceptions, including compensation based on
performance goals. The deductibility limitation does not apply to compensation
based on performance goals where (1) the performance goals are established by
a compensation committee which is comprised solely of two or more outside
directors; (2) the material terms are disclosed to shareholders and approved
by majority vote of the shareholders eligible to vote thereon before the
compensation is paid; and (3) before the compensation is paid, the
compensation committee certifies that the performance goals and other material
terms have been satisfied. The Company has not adopted a policy with respect
to deductibility of compensation since no executive officer currently
receives, or has previously received, taxable income in excess of $1 million
per year from the Company. The Compensation Committee will monitor
compensation levels closely, particularly in areas of incentive compensation.
As revenues and income of the Company grow, incentive compensation also can be
expected to increase and it may become necessary to adopt a long-term
incentive compensation plan in compliance with the foregoing criteria.
By the Compensation Committee:
Parker H. Petit, Chairman
Dr. John A. White
RELATIONSHIP WITH AMERICAN SOFTWARE AND CERTAIN TRANSACTIONS
The Company and American Software have entered into various agreements (the
"Intercompany Agreements"), including a Services Agreement, a Facilities
Agreement, a Marketing License Agreement and a Tax Sharing Agreement. These
Agreements and the other Intercompany Agreements are further described in the
Company's Annual Report on Form 10-K for the fiscal year ended April 30, 1999,
filed with the Securities and Exchange Commission. In fiscal 1999, the Company
paid the following aggregate amounts to American Software under the terms of
the Intercompany Agreements: Services Agreement--$1,481,000; Facilities
Agreement--$342,000; and Marketing License Agreement--$308,000. Under the Tax
Sharing Agreement, the Company was not allocated any federal, state and local
taxes for fiscal 1999.
As a result of the various transactions between the Company and American
Software, amounts payable to and receivable from American Software arise from
time to time. However, at April 30, 1999, there was no payable or receivable
between the Company and American Software.
James R. McGuone, Secretary of the Company, is a partner in the firm of
Gambrell & Stolz, L.L.P., general counsel to the Company and to American
Software. Legal fees in the amount of $451,058 were paid by the Company and by
American Software to that firm during fiscal year 1999 for legal services
rendered as general counsel to the Company and American Software.
12
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The Common Stock commenced trading on the Nasdaq National Market on October
7, 1997. The graph below reflects the cumulative stockholder return (assuming
the reinvestment of dividends) on the Common Stock compared to the return of
the Nasdaq Composite Index and a peer group index for the periods indicated.
The graph reflects the investment of $100 on October 7, 1997 in the Company's
Common Stock, the Nasdaq Stock Market--U.S. Companies ("Nasdaq Composite
Index") and in a published industry peer group index. The peer group is the
Robertson Stephens Hi-Tech Index-Software Group, which is an index of the
stock price performance of 67 software companies maintained by Robertson
Stephens & Company, an investment banking firm.
Peer Group Nasdaq Composite Logility
31-Oct-97 100 100 100
31-Jan-98 98.85 101.62 79.49
30-Apr-98 125.92 117.24 75.21
7/31/98 111.69 117.49 48.72
10/31/98 110.9 111.16 31.62
1/31/99 149.93 157.25 27.35
4/30/99 145.42 159.57 27.78
INDEPENDENT AUDITORS
The Board of Directors has selected KPMG LLP, who were auditors for fiscal
1999, to continue as independent auditors of the Company.
Representatives of KPMG LLP are expected to attend the Stockholders Meeting.
These representatives will be available to respond to appropriate questions
raised orally and will be given the opportunity to make a statement if they so
desire.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2000 Annual
Meeting of Stockholders must be forwarded in writing and received at the
principal executive offices of the Company no later than April 5, 2000
directed to the attention of the Secretary, for consideration for inclusion in
the Company's proxy statement for the 2000 Annual Meeting of Stockholders. Any
such proposals must comply in all respects with the rules and regulations of
the Securities and Exchange Commission.
13
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to present, and has not been informed that any other person intends to
present, any matter for action at the Annual Meeting other than those
specifically referred to in this Proxy Statement. If other matters properly
come before the meeting, it is intended that the holders of the proxies will
act in respect thereto in accordance with their best judgment.
The cost of this solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, employees of the Company may solicit proxies
by telephone, in writing or in person. The Company may request brokerage
houses, nominees, custodians and fiduciaries to forward soliciting material to
the beneficial owners of stock held of record and will reimburse such persons
for any reasonable expense in forwarding the material.
Copies of the 1999 Annual Report of the Company are being mailed to
stockholders together with this Proxy Statement, proxy card and Notice of
Annual Meeting of Stockholders. Additional copies may be obtained from Pat
McManus, 470 East Paces Ferry Road, Atlanta, Georgia 30305.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED APRIL 30, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS
BENEFICIALLY OR OF RECORD AT THE CLOSE OF BUSINESS ON JULY 9, 1999 ON
REQUEST TO PAT MCMANUS, 470 EAST PACES FERRY ROAD, ATLANTA, GEORGIA
30305.
By Order of the Board of Directors,
James R. McGuone, Secretary
Atlanta, Georgia
August 3, 1999
14
<PAGE>
LOGILITY, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
AUGUST 25, 1999 AT 3:00 P.M.
THE SWISSOTEL
3391 PEACHTREE ROAD, N.E.
ATLANTA, GEORGIA
The undersigned hereby appoints Michael J. Edenfield and James M. Modak,
or either of them, attorneys and proxies, each with full power of substitution
to vote, in the absence of the other, all shares of LOGILITY, INC. held by the
undersigned and entitled to vote at the Annual Meeting of Shareholders to be
held on August 25, 1999 and at any adjournment or adjournments thereof, in the
transaction of such business as may properly come before the meeting, and
particularly the proposal stated on the reverse side, all in accordance with and
as more fully described in the accompanying Proxy Statement.
It is understood that this proxy may be revoked at any time insofar as
it has not been exercised and that the shares may be voted in person if the
undersigned attends the meeting.
- -------------------------------------------------------------------------------
PLEASE VOTE,SIGN DATE AND RETURN THIS PROXY CARD PROMPTLY, USING
THE ENCLOSED ENVELOPE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
IMPORTANT: Please sign this Proxy exactly as your name or names appears
hereon. If shares are held jointly, signatures should include both names.
Executors, administrators, trustees, guardians and others signing in a
representative capacity should please give their full titles.
- -------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
<TABLE>
<S> <C>
- ---------------------------------------------- THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
LOGILITY, INC. FOLLOWING PROPOSAL:
- ----------------------------------------------
COMMON STOCK 1. Election of Director. One Director to be elected.
-------------------- For the With-
Nominee held
James C. Edenfield [ ] [ ]
CONTROL NUMBER:
RECORD DATE SHARES: THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED SHAREHOLDER ON THE REVERSE OF THIS PROXY CARD, OR IF NO
DIRECTION IS GIVEN, THEY WILL BE VOTED FOR THE ABOVE PROPOSAL. IN THEIR
DISCRETION, THE PROXYHOLDERS ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Please be sure to sign and date this Proxy. Date Mark box at right if comments or address change have [ ]
- ---------------------------------------------------------------- been noted on the reverse side of this card.
- ---------------------------- -------------------------------
Shareholder sign here Co-owner sign here
DETACH CARD DETACH CARD
</TABLE>
