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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 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 Atlanta, 3391 Peachtree Road, N.E.,
Atlanta, Georgia 30326, on Wednesday, August 23, 2000 at 4:00 p.m. for the
following purposes:
1. To elect two directors of the Company for terms to expire at the 2003
annual meeting of stockholders.
2. To consider and transact such other business as may properly come before
the meeting.
Only stockholders of record of the Company at the close of business on July
7, 2000 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 2, 2000
<PAGE>
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
OF LOGILITY, INC.
----------------
TO BE HELD AT
SWISSOTEL ATLANTA
3391 PEACHTREE ROAD, N.E.
ATLANTA, GEORGIA 30326
ON AUGUST 23, 2000
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 23, 2000 at 4:00 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 2, 2000.
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 Parker H. Petit and Frederick E. Cooper as Directors for
terms ending with the 2003 Annual Meeting of Stockholders and until
their successors are 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 attending 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 7, 2000 as
the record date for determining the holders of common stock entitled to notice
of and to vote at the meeting. On July 7, 2000, the Company had outstanding
and entitled to vote a total of 13,307,182 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, 2000.
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.
<PAGE>
<TABLE>
<CAPTION>
Shares
Name and Address of Beneficially
Beneficial Owner Owned Percent (1)
------------------- ------------ -----------
<S> <C> <C>
American Software, Inc. ....................... 11,300,000 84.9%
470 East Paces Ferry Road, N. E.
Atlanta, Georgia 30305
James C. Edenfield............................. 11,300,000(2) 84.9%
c/o American Software, Inc.
470 East Paces Ferry Road, N. E.
Atlanta, Georgia 30305
</TABLE>
--------
(1) Based on a total of 13,307,182 shares outstanding.
(2) Consists solely of shares held by American Software, Inc. Mr. Edenfield
owns 0.7% of the outstanding Class A Common Shares and 52.5% 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, 2000, 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) 84.9%
J. Michael Edenfield................................ 54,250(3) 0.4%
Parker H. Petit..................................... 12,000(4) 0.1%
Dr. John A. White................................... 14,500(5) 0.1%
Larry R. Olin....................................... 26,250(4) 0.2%
Donald L. Thomas.................................... 7,800(4) 0.1%
Andrew G. White..................................... 13,000(4) 0.1%
Frederick E. Cooper................................. 5,000(4) --%
All Directors and Executive Officers as a Group
(Eight Persons).................................... 11,432,800(6) 85.1%
</TABLE>
--------
(1) Based on a total of 13,307,182 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 0.7% of the outstanding Class A Common Shares and 52.5% 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 51,250 shares subject to options exercisable within 60 days.
(4) Consists of shares subject to options exercisable within 60 days.
(5) Includes 12,000 shares subject to options exercisable within 60 days.
(6) Includes 127,300 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).
2
<PAGE>
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, not all of the reports required to be filed during fiscal
2000 were filed on a timely basis. The Company is aware of the following
reports that were filed by officers, directors and 10% stockholders of the
Company after their respective due dates: Frederick E. Cooper (Initial
Statement of Beneficial Ownership) and Donald L. Thomas (Statement of Changes
in Beneficial Ownership). To the Company's knowledge, James M. Modak, an
officer of the Company who resigned during fiscal 2000, has not made the
required Section 16(a) filings with respect to stock options exercised at the
time of his departure and with respect to the resale of such shares. Based
upon its review of copies of filings received by it, the Company believes that
since May 1, 1999, all other Section 16(a) filing requirements applicable to
its directors, officers and greater than 10% beneficial owners were complied
with.
ELECTION OF DIRECTORS
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 terms of two of the
present directors, Parker H. Petit and Frederick E. Cooper, will expire at the
Annual Meeting of Stockholders in 2000. The Board of Directors has nominated
these incumbent directors for terms expiring at the Annual Meeting of
Stockholders in 2003 and until their successors are elected and qualified.
The following information is provided concerning the nominees for election
as directors:
Parker H. Petit, age 60, was the founder of Healthdyne, Inc. and served as
its Chairman and Chief Executive Officer from 1970 to March 1996. Healthdyne
spun off two of its subsidiaries to its shareholders, Healthdyne Technologies
(Nasdaq: HDTC) and Healthdyne Information Enterprises (now Healthcare.com
Corporation; Nasdaq: HCDC) 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 Healthcare.com Corporation and Intelligent Systems 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. Mr. Petit first became a director of the Company in 1997.
Frederick E. Cooper, age 58, has served as Chairman of the Board of Cooper
Capital, a private investment firm, since 1998. From 1990-1998, Mr. Cooper
served as Chairman of the Board of Directors of Cooper Smith, Inc., a
wholesale baked foods company. He is not currently serving as a director of
any other company. Mr. Cooper earned his B.A. in 1964 from Washington & Lee
University and his J.D. in 1967 from the University of Georgia School of Law.
Mr. Cooper first became a director of the Company in 1999.
If these nominees become unwilling or unable to serve, which is not
expected, the proxies are intended to be voted for substitute persons to be
designated by the Board of Directors.
3
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE
COMPANY VOTE "FOR" THE PROPOSAL TO ELECT PARKER H. PETIT AND FREDERICK E.
COOPER AS DIRECTORS OF THE COMPANY TO HOLD OFFICE UNTIL THE 2003 ANNUAL
MEETING OF STOCKHOLDERS AND UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED.
The following directors were elected in 1998 and their present terms expire
with the Annual Meeting of Stockholders in 2001:
J. Michael Edenfield, age 42, has served as President and Chief Executive
Officer of the Company since January 1997. He also serves as a director of
INSIGHT, Inc. and ShipSolutions, Inc., in which the Company owns minority
interests. 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. Mr. Edenfield first became a director of
the Company in 1997.
Dr. John A. White, age 60, 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, an M.S.I.E. degree from Virginia Polytechnic
Institute and State University and a Ph.D. from Ohio State University. Dr.
White first became a director of the Company in 1997.
The following director was elected in 1999 and his present term expires with
the Annual Meeting of Stockholders in 2002:
James C. Edenfield, age 65, 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. Mr. Edenfield
first became a director of the Company in 1997.
From May 1, 1999 through April 30, 2000, the Board of Directors held four
meetings. 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 presently consists of
Dr. John A. White (Chairman) and Mr. Parker H. Petit. The Audit Committee held
one meeting during fiscal 2000. The Securities and Exchange Commission and
National Association of Securities Dealers have promulgated new rules
regarding the composition and function of audit committees for listed
companies. These rules require audit committees to be composed of not less
than three members who are "independent," as that term is defined in the
rules. The
4
<PAGE>
Company's Audit Committee as it currently exists does not comply with the new
composition requirements. However, the rule regarding audit committee
composition provides for a transition period so that companies can restructure
their audit committees to comply with the new composition requirements. The
Company intends to restructure its audit committee in a manner that complies
with the new requirements within the transition period granted by the rule.
The new rules also require companies to adopt a written charter for their
audit committee that outlines the composition of the Audit Committee as
described above, as well as its duties and responsibilities. The Company
amended the written charter of its Audit Committee on May 17, 2000 in a manner
that it believes complies with these new requirements. Under the current
charter, the primary responsibility of the Audit Committee is to oversee the
Company's financial reporting process on behalf of the Board. The functions of
the Audit Committee include making an annual recommendation of independent
public accountants to the Company, reviewing the scope and results of the
independent public accountants' audit, monitoring the adequacy of the
Company's accounting, financial and operating controls, and reviewing with
management and the independent auditors the Company's interim and annual
financial statements to be included in its public filings.
The Company has a Stock Option Committee, consisting of Messrs. James C.
Edenfield and J. Michael Edenfield. During fiscal 2000, this Committee met or
acted by written consent on three occasions. The functions 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. Frederick E.
Cooper (Chairman) and Mr. Parker H. Petit, 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 three
meetings during fiscal 2000.
The Board has no nominating committee or any other committee performing
similar functions.
5
<PAGE>
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 three executive officers of the Company
(determined as of April 30, 2000) whose annual compensation exceeded $100,000
during fiscal 2000 (referred to herein as the "named executive officers") for
the fiscal years ended April 30, 2000, 1999 and 1998:
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)
------------------ ------ ------- ------------ -------------- -------
<S> <C> <C> <C> <C> <C>
J. Michael Edenfield 2000 259,200 -0- 45,000(4) 2,400(5)
President and Chief
Executive 1999 240,000 -0- 70,000(6) -0-
Officer (2)(3) 1998 240,000 63,533(7) 20,000(8) -0-
Larry R. Olin 2000 189,000 121,952 25,000(4) 2,500(5)
Vice President--Sales, 1999 175,000 49,627 35,000(6) -0-
The Americas 1998 175,000 45,617 10,000(8) -0-
Donald L. Thomas 2000 140,000 -0- 9,000 2,115(5)
Vice President, 1999 133,993 -0- 10,000 -0-
Customer Service 1998 133,000 1,500 6,000 -0-
Andrew G. White 2000 140,000 11,250 20,000 -0-
Vice President, 1999 129,408 -0- 20,000 -0-
Product Strategy 1998 125,600 -0- 6,000(8) -0-
</TABLE>
--------
(1) 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.
(2) 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."
(3) James C. Edenfield, Chairman of the Board of Directors, is the father of
J. Michael Edenfield.
(4) Excludes options granted by American Software in the following amounts:
Mr. Edenfield--90,000 shares; Mr. Olin--26,000 shares.
(5) This figure consists of a matching payment amount contributed by the
Company into the officer's 401(k) Plan account.
(6) Excludes options granted by American Software in the following amounts:
Mr. Edenfield--151,000 shares; Mr. Olin--10,000 shares.
(7) 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.
(8) Excludes options granted by American Software in the following amounts:
Mr. Edenfield--50,000 shares; Mr. Olin--10,000 shares; Mr. White--10,000
shares.
6
<PAGE>
Summary of Logility Stock Plan
The 1997 Stock Plan (the "Plan") was adopted by the Board of Directors,
approved by the sole stockholder of the Company in August 1997 and amended by
the stockholders 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, 2000, 43,454 shares have been purchased pursuant to the exercise of
stock options and 807,243 shares were subject to outstanding options, leaving
349,303 shares available for new options. As of June 30, 2000, based on the
number of outstanding shares held by American Software, up to 10,635
additional option 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.
Eligibility. All employees (approximately 206 persons as of June 30, 2000)
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, 2000, the market value of
the Common Stock was $3.844 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. SARs
granted under the Plan 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).
7
<PAGE>
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. As 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 in 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.
8
<PAGE>
Stock Option Grants
The following table sets forth information with respect to stock options
granted pursuant to the 1997 Stock Plan (the "Plan") during fiscal 2000 to
each of the Company's directors and to 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 2000 ($) Date ($)
---- ---------- ------------- ----------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
J. Michael Edenfield.... 25,000 6.02% 4.50 06/16/2009 70,751/179,296
20,000 4.81% 10.00 12/20/2009 125,779/318,748
95,000(3) 8.39%(3) 2.875 05/19/2009 171,767/435,291
Larry R. Olin........... 15,000 3.61% 4.50 06/16/2009 42,250/107,578
10,000 2.41% 10.00 12/20/2009 62,889/159,374
26,000(3) 2.30%(3) 2.875 10/20/2009 50,260/122,382
Donald L. Thomas........ 4,000 0.96% 4.50 06/16/2009 11,320/28,687
5,000 1.20% 10.00 12/20/2009 31,445/79,687
Andrew G. White......... 10,000 2.41% 4.50 06/16/2009 28,300/71,718
10,000 2.41% 10.00 12/20/2009 62,889/159,374
Frederick E. Cooper..... 2,000 0.48% 4.4380 08/25/2009 5,582/14,146
1,000 0.24% 2.875 10/29/2009 1,808/4,582
1,000 0.24% 16.25 01/31/2010 10,220/25,898
1,000 0.24% 7.75 04/28/2010 4,874/12,352
Parker H. Petit......... 1,000 0.24% 4.00 07/30/2009 2,516/6,375
1,000 0.24% 2.875 10/29/2009 1,808/4,582
1,000 0.24% 16.25 01/31/2010 10,220/25,898
1,000 0.24% 7.75 04/28/2010 4,874/12,352
Dr. John A. White....... 1,000 0.24% 4.00 07/30/2009 2,516/6,375
1,000 0.24% 2.875 10/29/2009 1,808/4,582
1,000 0.24% 16.25 01/31/2010 10,220/25,898
1,000 0.24% 7.75 04/28/2010 4,874/12,352
</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 common stock, as the
case may be, 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.
9
<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, 2000.
<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- -0- 27,500/107,500 86,398/340,443
106,062(2) 1,440,939 37,750/208,250 179,313/977,313
Larry R. Olin........... 56,000(2) 686,000 28,500/7,500 135,375/35,625
Donald L. Thomas........ 1,200 17,024 4,300/19,500 6,418/50,028
22,000(2) 302,500 23,000/-0- 96,125/-0-
Andrew G. White......... -0- -0- 8.000/38,000 21,718/96,652
-0-(2) -0- 20,000/10,000 35,500/12,500
</TABLE>
--------
(1) The market price of the Company's Common Stock on April 30, 2000 was
$7.75. The market price of American Software's Class A Common Stock on
April 30, 2000 was $7.50.
(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.
Employment Agreements
The Compensation Committee and the Chief Executive Officer of the Company,
J. Michael Edenfield, have established that for fiscal 2001 he will receive a
base salary of $259,200 and a bonus targeted at approximately 54% of that
amount, if the Company meets certain performance targets. These targets
include pre-tax earnings and growth in revenue of the Company. The amount of
the bonus may be lower or higher than that amount, depending on the degree to
which the targets are met. Mr. Edenfield's bonus plan is described in greater
detail under the heading "Report on Executive Compensation," below.
None of the other executive officers of the Company have 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 2000, 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.
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, Dr. White and Mr.
Petit each received options to purchase an aggregate of 4,000 shares in fiscal
2000. Mr. Cooper received options to purchase an aggregate of 5,000 shares in
fiscal 2000.
10
<PAGE>
Compensation Committee Interlocks and Insider Participation
The following persons served as members of the Compensation Committee of the
Board of Directors during fiscal 2000: Frederick E. Cooper, Chairman, and
Parker H. Petit. 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, 2000.
Meetings. During fiscal year 2000, the Compensation Committee met on two
occasions 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.
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 2001 he will receive a base salary of $259,200, which is unchanged from
fiscal 2000, and a bonus targeted at $140,000, or 54% of that amount, if plan
targets are met. Those targets consist of the Company's pre-tax earnings and
growth in revenue.
Approximately 57% of the targeted bonus is tied to pre-tax earnings, with
the balance based on revenue growth. The amount of the bonus could be higher
or lower than the targeted bonus amount, depending on the degree to which the
targets are met or exceeded, subject in each case to minimum performance
levels.
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 pre-tax earnings and revenue growth.
The Committee believes Mr. Edenfield is paid a reasonable salary in light of
salaries paid to chief executives of other companies of similar size operating
in the software industry. His salary was not changed from fiscal 2000. The
Committee believes also that Mr. Edenfield's potential bonus for fiscal 2001
is based upon challenging but achievable financial goals that align his
interests directly with those of the Company's other shareholders.
The Chief Executive Officer's cash compensation from the Company in fiscal
2000, both salary and bonus, was determined under the terms of an incentive
compensation arrangement established by the Compensation Committee at the
beginning of fiscal 2000. Based on the Company's results in fiscal 2000, Mr.
Edenfield did not receive a bonus for that fiscal year.
11
<PAGE>
Mr. Edenfield was granted options to purchase shares of the Company and of
American Software on three occasions during fiscal 2000 as follows: (a) On May
16, 1999, Mr. Edenfield received an option to purchase 25,000 shares of the
Company's common stock at an exercise price of $4.50 per share; (b) on
December 20, 1999 he received an option to purchase 20,000 shares of the
Company at an exercise price of $10.00 per share; and (c) on May 19, 1999 he
was granted an option to purchase 95,000 shares of American Software at an
exercise price of $2.875 per share. Stock option grants under American
Software stock option plans are determined by the committees responsible for
those plans and not by this Committee. Any further participation by the Chief
Executive Officer in the Logility Stock Plan during fiscal 2001 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. 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. Because Vincent
C. Klinges, 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 2001 compensation plan includes multiple incentive
targets, including targets related to the operating earnings and stock price
of the Company. Mr. Klinges' compensation will be allocated between 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 2000, 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 2001, 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.
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
12
<PAGE>
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:
Frederick E. Cooper, Chairman
Parker H. Petit
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, 2000,
filed with the Securities and Exchange Commission. In fiscal 2000, the Company
paid the following aggregate amounts to American Software under the terms of
the Intercompany Agreements: Services Agreement--$1,007,000; Facilities
Agreement--$417,505; and Marketing License Agreement--$730,660. Under the Tax
Sharing Agreement, the Company was not allocated any federal, state and local
taxes for fiscal 2000.
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. At April 30, 2000, there was a receivable to the Company from
American Software in the amount of $2,204,000.
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 aggregate amount of $544,024 were paid by the
Company and by American Software to that firm during fiscal year 2000 for
legal services rendered as general counsel to the Company and American
Software.
13
<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 on a monthly basis. The
graph reflects the investment of $100 on October 31, 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.
[GRAPH APPEARS HERE]
DATE LGTY NASDAQ RS Software
------------------------------------------------------------------
Oct-97 100.0 100.0 100.0
Nov-97 94.9 100.4 100.2
Dec-97 66.7 98.5 97.0
Jan-98 79.5 101.6 98.8
Feb-98 59.8 111.1 115.8
Mar-98 76.5 115.2 123.2
Apr-98 75.2 117.2 125.9
May-98 67.1 111.6 116.7
Jun-98 66.7 118.9 123.7
Jul-98 48.7 117.5 111.7
Aug-98 19.7 94.1 88.2
Sep-98 18.2 106.3 102.1
Oct-98 31.6 111.2 110.9
Nov-98 34.2 122.3 127.1
Dec-98 23.9 137.6 144.6
Jan-99 27.4 157.2 149.9
Feb-99 29.9 143.6 140.4
Mar-99 25.2 154.5 143.7
Apr-99 27.8 159.6 145.4
May-99 33.8 151.8 142.6
Jun-99 35.0 168.6 155.6
Jul-99 27.4 165.6 154.6
Aug-99 32.5 171.9 154.3
Sep-99 25.2 172.3 170.2
Oct-99 19.7 186.1 186.4
Nov-99 49.1 209.3 237.5
Dec-99 133.3 255.4 310.8
Jan-00 111.1 247.3 291.2
Feb-00 109.4 294.7 375.1
Mar-00 93.6 286.9 367.1
Apr-00 53.0 242.3 343.2
INDEPENDENT AUDITORS
The Board of Directors has selected KPMG LLP, who were auditors for fiscal
2000, to continue as independent auditors of the Company for fiscal 2001.
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 2001 Annual
Meeting of Stockholders must be forwarded in writing and received at the
principal executive offices of the Company no later than April 4, 2001
directed to the attention of the Secretary, for consideration for inclusion in
the Company's proxy statement for the 2001 Annual Meeting of Stockholders. Any
such proposals must comply in all respects with the rules and regulations of
the Securities and Exchange Commission.
14
<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 2000 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, 2000, 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 7, 2000 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 2, 2000
15
<PAGE>
FOLD AND DETACH HERE
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
LOGILITY, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
AUGUST 23, 2000 AT 4:00 P.M.
SWISSOTEL ATLANTA
3391 PEACHTREE ROAD, N.E.
ATLANTA, GEORGIA
FOR HOLDERS OF COMMON SHARES
The undersigned hereby appoints James C. Edenfield and J. Michael Edenfield,
or either of them, attorneys and proxies, each with full power of substitution
to vote, in the absence of the other, all Common Shares of LOGILITY, INC. held
by the undersigned and entitled to vote at the Annual Meeting of Stockholders
to be held on August 23, 2000 and at any adjournment or adjournments thereof,
in the transaction of such business as may properly come before the meeting,
and particularly the proposals stated below, 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSAL:
Election of Directors. Two Directors to be elected.
Nominees: Parker H. Petit [_] FOR [_] WITHOLD AUTHORITY
Frederick E. Cooper [_] FOR [_] WITHOLD AUTHORITY
<PAGE>
FOLD AND DETACH HERE
-- -- -- -- -- -- -- -- -- - -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED STOCKHOLDER 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.
---------------------------------
Signature
---------------------------------
Signature if held jointly
Please vote, sign, date and
return this proxy card promptly,
using the enclosed envelope.
Dated: ____________________, 2000
IMPORTANT:
Please sign this Proxy
exactly as your name or
names appear 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.
