<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Rule 14a-11(c) or Rule 14a-12
IVI CHECKMATE CORP.
-------------------
(Name of Registrant as Specified in Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, If Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-
11.
(1) Title of each class of securities to which transaction applies:
- - -------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - -------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- - -------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - -------------------------------------------------------------------------------
(5) Total fee paid:
- - -------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- - -------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
- - --------------------------------------------------------------------------------
(1) Amount previously paid:
- - -------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- - -------------------------------------------------------------------------------
(3) Filing Party:
- - -------------------------------------------------------------------------------
(4) Date Filed:
- - -------------------------------------------------------------------------------
<PAGE>
[LETTERHEAD OF IVI CHECKMATE CORP. APPEARS HERE]
April 12, 1999
Dear Stockholder:
You are cordially invited to attend the 1999 annual meeting of stockholders
of IVI Checkmate Corp., which will take place on Thursday, May 20, 1999, at
10:00 a.m., local time. We will hold the meeting at the Holiday Inn in Roswell,
Georgia, in the Great Oaks Ballroom. We have provided a map to the hotel at the
end of the accompanying proxy statement.
The only matter to be presented to a vote of the stockholders at the
meeting is the election of directors. Additional information regarding the
election of directors is in the accompanying proxy statement. Following the
vote, management will report on the operations of the Company during the past
year.
Please mark, date, sign and return your proxy card in the enclosed envelope
at your earliest convenience. This will ensure that your shares will be
represented and voted at the meeting, even if you do not attend.
Sincerely,
/s/ L. Barry Thomson
L. Barry Thomson
President and Chief Executive Officer
<PAGE>
[Logo]
IVI CHECKMATE CORP.
1003 Mansell Road
Roswell, Georgia 30076
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
MAY 20, 1999
10:00 A.M., EASTERN TIME
NOTICE HEREBY IS GIVEN that the 1999 annual meeting of stockholders of IVI
Checkmate Corp. will be held on Thursday, May 20, 1999, at 10:00 a.m., local
time. The meeting will be held in the Great Oaks Ballroom at the Holiday Inn
located at 1075 Holcomb Bridge Road, Roswell, Georgia. The purpose of the
meeting is for the stockholders to consider and vote upon:
1. A proposal to elect directors; and
2. Any other business that is properly brought before the meeting.
Only stockholders of record at the close of business on April 1, 1999, will
be entitled to vote.
Your vote is important. Please, sign, date and return the enclosed proxy
card in the envelope provided in order that as many shares as possible will be
represented.
By order of the Board of Directors,
/s/ John J. Neubert
John J. Neubert
Corporate Secretary
Roswell, Georgia
April 12, 1999
Please read the attached proxy statement and then promptly complete, execute and
return the enclosed proxy card in the accompanying postage paid envelope. If you
attend the meeting, you may revoke the proxy card and vote in person if you so
desire.
<PAGE>
PROXY STATEMENT
TABLE OF CONTENTS
PAGE
Voting.........................................................................1
Voting Rights Resulting from the Combination.............................1
Record Date, Quorum and Vote Required....................................1
Proxy and Voting Procedures..............................................2
Stock Ownership................................................................3
* Election of Directors........................................................4
Nominees.................................................................4
Information Regarding Nominees...........................................4
Board Committees.........................................................7
Director Compensation....................................................7
Executive Compensation.........................................................8
Summary Compensation.....................................................8
Option Grants............................................................9
Option Exercises and Fiscal Year-End Option Values.......................9
Employment Agreements...................................................10
Board of Directors' Report on Executive Compensation..........................10
Compensation Policy for Executive Officers..............................11
Chief Executive Officer Compensation....................................11
Policy on Deductibility of Compensation.................................11
Compensation Committee Interlocks and Insider Participation...................12
Certain Transactions..........................................................12
Ingenico Alliance.......................................................12
Noblett Transactions....................................................13
Nordin Transaction......................................................13
Spence Agreement........................................................13
Stock Performance Graph.......................................................14
Section 16(a) Beneficial Ownership Reporting Compliance.......................15
Stockholders' Proposals for 2000 Annual Meeting...............................15
Independent Public Accountants................................................15
Information About Attending the Annual Meeting................................15
Map to Annual Meeting.........................................................16
* Denotes item to be voted on at the meeting.
NOTE: You may receive a copy of our 1998 Form 10-K report, without charge, by:
(1) writing to Investor Relations, IVI Checkmate Corp., 1003 Mansell
Road, Roswell, Georgia 30076, Attn: Corporate Secretary;
(2) calling 770-594-6000; or
(3) sending an e-mail message through our home page at
http://www.ivicheckmate.com.
<PAGE>
IVI CHECKMATE CORP.
----------
PROXY STATEMENT
FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 1999
----------
The board of directors of IVI Checkmate Corp. is furnishing this proxy
statement to solicit your proxy for the voting of your shares at the 1999 annual
meeting of stockholders and at any adjournments. The annual meeting will take
place on Thursday, May 20, 1999, at 10:00 a.m., local time. We will hold the
annual meeting in the Great Oaks Ballroom at the Holiday Inn at 1075 Holcomb
Bridge Road in Roswell, Georgia. We have provided a map to the hotel at the end
this proxy statement.
We are mailing this proxy statement and the accompanying proxy card to you
on or about April 12, 1999.
VOTING
Voting Rights Resulting from the Combination
We were formed as a Delaware corporation in 1998 in anticipation of the
combination of International Verifact Inc., which we refer to as IVI, and
Checkmate Electronics, Inc., which we refer to as Checkmate. On June 25, 1998,
the stockholders of IVI and Checkmate approved the combination of the two
companies into what is now called IVI Checkmate, and we acquired both IVI and
Checkmate as our subsidiaries on that date. We are sending this proxy statement
to you in connection with the first annual meeting of the stockholders of the
new combined company.
As part of the combination, the outstanding shares of Checkmate common
stock were converted into shares of our common stock and, at the election of the
IVI stockholders, the outstanding common shares of IVI were converted into
either shares of our common stock or exchangeable shares of IVI. Holders of IVI
exchangeable shares may convert each of their exchangeable shares into one share
of our common stock at any time through June 25, 2008.
Each share of our common stock is entitled to one vote per share. Because
the exchangeable shares are issued by IVI rather than by us, we and IVI entered
into an agreement that allows the holders of IVI exchangeable shares to vote on
IVI Checkmate matters. Under this agreement, each exchangeable share entitles
its holder to one vote on each matter presented to the stockholders of IVI
Checkmate. Montreal Trust Company of Canada, serving as trustee on behalf of
the holders of exchangeable shares, will be entitled to exercise that number of
votes for which it receives directions from the holders of exchangeable shares.
Record Date, Quorum and Vote Required
The record date for determining the holders of common stock and
exchangeable shares who are entitled to receive notice of and to vote at the
annual meeting is April 1, 1999. On the record date, 12,364,933 shares of
common stock and 5,749,207 exchangeable shares were outstanding and eligible to
be voted at the annual meeting.
The presence at the annual meeting, in person or by proxy, of the holders
of a majority of the shares entitled to be voted will constitute a quorum at the
meeting. In determining whether a quorum is present at the meeting, we will
apply the following principles:
1
<PAGE>
. Shares that you withhold from voting as to any nominee or that you abstain
from voting are "shares entitled to be voted," and, therefore, we will count
them as present for purposes of determining the presence or absence of a
quorum.
. The trustee is not entitled to cast votes with regard to exchangeable shares
as to which the registered holders do not provide voting instructions to the
trustee. We will not consider exchangeable shares as to which no instructions
have been given to the trustee to be "shares entitled to be voted," and,
therefore, we will not consider them for purposes of determining a quorum.
In voting for the proposal to elect directors, you may vote in favor of all
nominees, withhold your votes as to all nominees or withhold your votes as to
specific nominees. The vote required to approve the proposal is a plurality of
the votes cast, provided a quorum is present, and the nine nominees who receive
the most votes will be elected. As a result, votes that are withheld and
exchangeable shares as to which holders do not provide voting instructions will
have no effect.
Proxy and Voting Procedures
The accompanying proxy card is for your use if you are unable to attend the
annual meeting in person or are able to attend but do not wish to vote in
person. You should specify your choices with regard to the proposal on the
enclosed proxy card. Please then sign and date the proxy card and return it in
the enclosed envelope. If you return a properly dated and signed proxy card
that we or the trustee, as applicable, receive before the vote on the proposal
is taken at the annual meeting, the shares represented by the proxy will be
voted in accordance with your instructions by the persons named as proxies on
the enclosed proxy card or by the trustee, as applicable. In the absence of
such instructions, the shares represented by a signed and dated proxy card will
be voted "FOR" the election of all nine director nominees. If any nominee for
election as a director should become unable to serve for any reason and the
board of directors designates a substitute nominee, the persons named as proxies
on the proxy card or the trustee, as applicable, will vote all valid proxy cards
for the election of the substitute nominee.
The board of directors is not aware of any other business to be presented
to a vote at the annual meeting. The dates established in our bylaws by which
stockholders who desire to submit nominations for director or other proposals to
us for presentation to a vote of the stockholders at the annual meeting has
passed, and, therefore, no director nominations or other matters may be proposed
for action by stockholders at the annual meeting.
Your submission of a proxy will not affect your right to vote in person
should you attend the annual meeting. If you submit a proxy, you may still
revoke it at any time before it is voted by:
. giving written notice to John J. Neubert, our Corporate Secretary, at 1003
Mansell Road, Roswell, Georgia 30076 or, with regard to exchangeable
shares, the trustee, Montreal Trust Company of Canada, Proxy Department, at
151 Front Street West, 8th Floor, Toronto, Ontario M5J 2N1,
. by executing and delivering to Mr. Neubert or the trustee, as applicable, a
proxy card bearing a later date, or
. by voting in person at the annual meeting.
Holders of exchangeable shares who would like to attend the annual meeting
and vote in person, as well as holders of exchangeable shares who would like to
appoint a representative of IVIC's management rather than the trustee to vote as
his or her proxy, should notify the trustee at the address above. The trustee
will then give a proxy to the holder or the designated representative of
management, as appropriate, to authorize voting in the desired manner.
2
<PAGE>
We are soliciting your proxy on behalf of the board of directors, and we
will bear all of the related costs. The trustee, as well as brokers, banks and
others holding shares in their names or in the names of their nominees, will
forward copies of the proxy solicitation material to beneficial owners and will
seek authority for execution of proxies. We will reimburse them for their
reasonable expenses in so doing. We also have retained Corporate Investor
Communication, Inc. at a cost of approximately $4,500 to assist us in soliciting
proxies. Additionally, our employees may communicate with you to solicit your
proxies, but we will not pay them any additional compensation for doing so.
STOCK OWNERSHIP
The following table sets forth information as of December 31, 1998,
regarding the beneficial ownership of our common stock by each person known to
us to beneficially own more than 5% of the common stock, each of our directors,
each executive officer named in the table under the caption "Executive
Compensation - Summary Compensation" and all directors and executive officers as
a group.
The persons named in the table gave us the stock ownership information
about themselves. In accordance with regulations of the Securities and Exchange
Commission, beneficial ownership as reported in the table includes shares of
stock as to which a person possesses sole or shared voting or investment power
and shares which may be acquired on or before March 1, 1999, upon the exchange
of exchangeable shares or the exercise of stock options. Except as explained in
the footnotes below, the named persons have sole voting and investment power
with regard to the shares shown as beneficially owned by them.
3
<PAGE>
<TABLE>
<CAPTION>
Number Percent
Name and Relationship of Owned Shares Owned
- - --------------------- --------------- -------
<S> <C> <C>
Ingenico, S.A. ........................................ 1,544,416(1)(2) 8.7%
Principal Stockholder
J. Stanford Spence .................................... 845,331(3) 4.7
Chairman of the Board
Gregory A. Lewis ...................................... 383,250(4) 2.1
President and Chief Executive Officer of U.S.
Operations and Director
John J. Neubert ....................................... 365,801(5) 2.0
Executive Vice President - Finance and
Administration, Chief Financial Officer,
Secretary and Treasurer
L. Barry Thomson ...................................... 333,150(4) 1.8
President, Chief Executive Officer and Director
George Whitton ........................................ 207,150(6) 1.1
Vice Chairman of the Board
Peter E. Roode ........................................ 27,000(7) *
Director
Gerard Compain ........................................ 20,000(1)(2) *
Director
Bertil D. Nordin ...................................... 11,916 *
Director
Paul W. Noblett ....................................... -- --
Director
Gareth Owen ........................................... -- --
Director
All directors and executive officers as a group
(10 persons) .......................................... 3,738,014(8) 19.5
</TABLE>
- - ---------------
* Less than one percent.
(1) Under the terms of an investment agreement between Ingenico and us, if we
issue additional shares of common stock in the future, Ingenico has the
right to purchase additional shares of common stock from us to maintain its
then-current percentage ownership of our common stock. See "Certain
Transactions - Ingenico Alliance." Ingenico's address is 9 quai de Dion
Bouton, Puteaux, France.
(2) Gerard Compain, who is the Managing Director of Ingenico, is considered to
beneficially own the shares held by Ingenico because of his ability to vote
and dispose of those shares on behalf of Ingenico. In addition, Mr.
Compain individually is the beneficial owner of 20,000 shares that he may
acquire upon the exercise of stock options. Mr. Compain's address is 9
quai de Dion Bouton, Puteaux, France.
(3) The shares shown include 33,722 shares owned by Stanford Technologies,
Inc., a corporation of which Mr. Spence and his wife are the sole
stockholders, and 178,850 shares that Mr. Spence may acquire upon the
exercise of stock options.
(4) Consists of shares that the named person may acquire upon the exercise of
stock options.
(5) Includes 319,373 shares that Mr. Neubert may acquire upon the exercise of
stock options.
(6) Includes 128,850 shares that Mr. Whitton may acquire upon the exercise of
stock options.
(7) Includes 20,000 shares that Mr. Roode may acquire upon the exercise of
stock options.
(8) Includes a total of 1,383,473 shares that the directors and executive
officers may acquire upon the exercise of stock options.
4
<PAGE>
ELECTION OF DIRECTORS
Nominees
The board of directors has set the authorized number of directors at nine,
and the board currently consists of nine members. Directors are elected at
each annual meeting of stockholders to serve until the next annual meeting of
stockholders or until their earlier resignation or removal.
The terms of all nine of the current directors will expire at the annual
meeting, and each of these directors is being nominated for re-election at the
annual meeting. If re-elected, it is anticipated that each such director would
serve a one year term expiring at the 2000 annual meeting.
If any of the nine nominees should become unable to serve, the board of
directors may:
. designate a substitute nominee, in which case the named proxies or the
trustee, as applicable, will vote the shares represented by all valid
proxy cards for the election of the substitute nominee;
. allow the vacancy to remain open until a suitable candidate is
located; or
. adopt a resolution to decrease the authorized number of directors.
At this time, the Board knows of no reason why any nominee might be
unavailable to serve.
The board of directors unanimously recommends that you vote for the
election as directors of the nine persons named below to serve until the 2000
annual meeting and until their successors are elected and qualified.
Information Regarding Nominees
Listed below are the names of the board's nominees for election as
directors. Also listed is each nominee's business experience, his age as of
December 31, 1998, and the year he first became a director. Unless indicated
otherwise, the positions stated are positions which are currently held and which
have been held for at least the past five years.
Messrs. Compain and Owen were elected to the board in June 1998 as the
designees of our largest stockholder, Ingenico, in accordance with an investment
agreement entered into between Ingenico and IVI in 1992. See "Stock Ownership"
and "Certain Transactions - Ingenico Alliance." We have assumed the rights and
obligations of IVI under that agreement. Ingenico currently has the right to
have only one designee on our board of directors. That designee is Mr. Compain,
although Mr. Owen continues to serve as a director and is being nominated for
re-election as a director.
5
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation or Employment
Name and Other Business Affiliations Age Director Since
- - ------------------------- --------------------------------------------------------------------- ------------- --------------------
<S> <C> <C> <C>
Gerard Compain Mr. Compain has been Managing Director of Ingenico since 1995. 46 1998
Ingenico is in the same business as we are, with operations
throughout the world and particular strength in smart cards. From
1985 to 1995, Mr. Compain served in various executive and
operational positions with BULL PC, which is the Payment Systems
Division of Groupe Bull. Mr. Compain joined IVI's board of
directors in 1997 as a designee of Ingenico.
Gregory A. Lewis Mr. Lewis has been the President and Chief Executive Officer of 53 1998
our U.S. operations since June 1998. Mr. Lewis also is President
and a director of our majority owned subsidiary National
Transaction Network, Inc. Mr. Lewis joined Checkmate as
President and Chief Operating Officer in August 1997, and he was
named a director of Checkmate in October 1997. From 1984 until
joining Checkmate, Mr. Lewis was employed by VeriFone, Inc., an
electronic payment provider. Mr. Lewis was one of the founding
executives of VeriFone and served in various executive positions
during his employment, most recently as Vice President and General
Manager of the Emerging Markets Division. Earlier in his career,
Mr. Lewis held various executive positions during a 14 year career
at National Data Corporation, a transaction processing company,
and also served as Executive Vice President of Business
Development with BuyPass Corporation, a third party point-of-sale
processor and debit transaction acquiror.
Paul W. Noblett Mr. Noblett has been President of Noblett and Associates, Inc., a 52 1998
business development, data processing and communications
consulting firm, since 1992. Mr. Noblett has spent over 25 years
in the payments industry, including executive management positions
with NaBANCO, MasterCard and what is today MBNA.
Bertil D. Nordin Mr. Nordin is an investor in, and director or advisor to, several 64 1998
companies in computer related fields. Mr. Nordin was Chairman of
the Board of Directors of Digital Communications Associates, Inc.
from 1990 to 1993 and was President and Chief Executive Officer of
Digital Communications from 1981 to 1990. Prior to 1981, Mr.
Nordin held executive positions with a small business computer
company and a recording company and was a manager specializing in
mergers and acquisitions with a Big Six accounting firm.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C> <C> <C>
Gareth Owen Mr. Owen has been Managing Director of Ingenico International 47 1998
(Pacific) Pty Limited since 1986. Ingenico International is the
largest electronic funds transfer/point of sale supplier in
Australia and New Zealand and the third largest supplier in the
Asia Pacific region. Prior to Ingenico, Mr. Owen held various
marketing positions with companies involved in the development of
payment terminal products. Mr. Owen joined IVI's board in 1997.
Peter E. Roode Mr. Roode has been President of Triarch Corporation since 1987 and 61 1998
has been a Vice President since joining Triarch in 1976. Triarch
is an investment company investing in small to medium sized
businesses. Mr. Roode is also a Chartered Accountant. Mr. Roode
has been a director of IVI since 1992.
J. Stanford Spence Mr. Spence has been our Chairman of the Board since June 1998. Mr. 69 1998
Spence was the founder of Checkmate, has been the Chief Executive
Officer of Checkmate since July 1997 and, except for two brief
periods, has been Chairman of the Board of Checkmate and its
predecessors since its founding in 1973. He also served as interim
Chief Executive Officer of Checkmate from May 1994 until August
1994. Mr. Spence conceived of and managed the development of the
patented technology which led to the point-of-sale check readers
sold by Checkmate. Mr. Spence has been Chairman of the Board of
Directors, Chief Executive Officer and owner of Stanford
Technologies, Inc., a financial software development company in
Austin, Texas, since 1985. Mr. Spence has previously owned
companies in the mortgage banking, real estate, insurance and
software industries.
L. Barry Thomson Mr. Thomson has been our President, Chief Executive Officer and a 57 1998
director since June 1998. Mr. Thomson joined IVI in April 1994
as President and Chief Operating Officer. He was named a director
of IVI in May 1995 and was promoted to Chief Executive Officer in
May 1996. Mr. Thomson also is Chief Executive Officer and a
director of our majority owned subsidiary National Transaction
Network. Formerly President and CEO of Aluma Systems Corporation,
a construction technology company in Toronto, Mr. Thomson brought
to IVI extensive Canadian, U.S. and international experience in
managing the growth of a technological and market driven
organization. Mr. Thomson built Aluma over 21 years from start
up to the largest company in its industry in North America and one
of the four largest in the world. He also served as Executive
Vice President, director and member of the Executive Committee of
Aluma's parent company, Tridel Enterprises, Inc., Canada's largest
builder of condominium dwellings. He graduated with a degree in
mechanical engineering from the
</TABLE>
7
<PAGE>
<TABLE>
<S> <C> <C> <C>
University of Toronto in 1967 and became a member of the Ontario
Association of Professional Engineers in 1968. In 1970, Mr.
Thomson received his Chartered Accountant designation from Clarkson
Gordon (now Ernst & Young LLP).
George Whitton Mr. Whitton has been our Vice Chairman of the Board since June 63 1998
1998. Mr. Whitton has been Chairman of the Board of IVI since 1986
and was the Chief Executive Officer of IVI from 1986 to 1996.
Mr. Whitton also is a director of our majority owned subsidiary
National Transaction Network. After serving in various senior
operations and sales management positions with IBM Canada, Mr.
Whitton joined Canada Permanent Trust, a trust and banking
institution, where he served as Vice President of Information
Services from 1973 to 1976. From 1976 to 1979, Mr. Whitton was
Vice President - Systems for the Canadian Imperial Bank of
Commerce, Canada's second largest bank. From 1979 to 1987, Mr.
Whitton was President and Owner of Howarth & Smith, a typography,
printing and data management company.
</TABLE>
Board Committees
The board of directors conducts its business through meetings of the full
board and through committees of the board. In June 1998, upon the completion of
the combination between IVI and Checkmate, the board was expanded from four to
nine members and began its management of the new combined company. In August
1998, the board established four standing committees of the board. These
committees are the Audit Committee, Compensation Committee, Executive Committee
and Nomination and Governance Committee.
During 1998, the board of directors met four times and acted by unanimous
consent without a meeting on four other occasions. Each director attended at
least 75% of the aggregate of all meetings of the board and any committee on
which he served during 1998.
The Audit Committee oversees our budget and all of our financial
operations; oversees management's performance with regard to its financial
responsibilities and disclosure obligations; makes recommendations as to the
engagement or termination of our outside auditors; reviews the overall audit
plan to determine whether the plan is appropriate and recommends improvements;
reviews the internal and external audits; and reviews internal accounting
controls. The Audit Committee consists of Messrs. Roode (Chairman), Noblett,
Nordin, Spence and Whitton. The Audit Committee met once in 1998.
The Compensation Committee reviews, evaluates and approves the compensation
arrangements of senior management; administers our compensation programs,
including the design of, the establishment of performance targets under, and
grants and awards under compensation plans in which officers are eligible to
participate; and determines other forms of compensation for our officers and
employees. The Compensation Committee consists of Messrs. Nordin (Chairman) and
Roode. This committee did not meet in 1998.
8
<PAGE>
The Executive Committee acts on behalf of the full board, to the extent
permitted by law, between meetings of the full board. This committee consists of
Messrs. Spence (Chairman), Compain, Lewis, Thomson and Whitton. The Executive
Committee did not meet in 1998.
The Nomination and Governance Committee evaluates the board's performance;
recommends nominees for election to the board; recommends candidates for
membership on the committees of the board; recommends a successor Chief
Executive Officer should there be a vacancy; establishes and monitors a
corporate code of conduct; and reviews director conflicts of interest. The
Nomination and Governance Committee consists of Messrs. Spence (Chairman),
Compain and Whitton. This committee met once in 1998. The Nomination and
Governance Committee seeks potential nominees for board membership in various
ways and will consider suggestions submitted by stockholders. Such suggestions
should be submitted to our Corporate Secretary. For a description of
requirements regarding stockholder nominations for director and other
stockholder proposals, see "Stockholders' Proposals for 2000 Annual Meeting."
Director Compensation
We pay each of our non-employee directors an annual retainer of $4,000, a
fee of $1,250 for each board meeting attended in person, and a fee of $250 for
each board meeting in which the director participates by telephone. We also pay
each chairman of a board committee an annual retainer of $2,000.
We also grant each non-employee director options each year for the purchase
of 10,000 shares of our common stock. These options vest on the first
anniversary of the grant date. Options granted for service in 1998 have an
exercise price of $6.81 per share, which was not less than the market price of
our common stock on the grant date.
We do not provide retirement benefits, medical benefits or other benefit
programs to our non-employee directors.
We do not compensate directors who are employees of IVI Checkmate or its
subsidiaries for their services as directors.
EXECUTIVE COMPENSATION
Summary Compensation
The following table summarizes the compensation paid or accrued by us in
each of the fiscal years ended December 31, 1996, 1997 and 1998 with regard to
L. Barry Thomson, our Chief Executive Officer, and all other executive officers
whose annual compensation and bonus was $100,000 or more for 1998. We refer to
these executives as the Named Executive Officers. The compensation shown in the
table includes amounts paid not only by IVI Checkmate but also by IVI, Checkmate
and their subsidiaries during each of the three years, including for the periods
before the combination of IVI and Checkmate.
9
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------------ -------------------
Securities
Name and Principal Fiscal Underlying All Other
Position(1) Year Salary ($) Bonus ($) Options (#) (2) Compensation ($)(3)
- - ---------------------------------- ---------- ------------ ----------- ------------------- ---------------------
<S> <C> <C> <C> <C> <C>
L. Barry Thomson 1998 $280,000 -- 233,250 --
President and 1997 $180,530 $36,100 150,000 --
Chief Executive Officer 1996 $170,000 $36,650 30,000 --
Gregory A. Lewis (4) 1998 $321,000 -- -- $10,421
President and Chief Executive 1997 $ 70,432 $15,000 383,250 $ 8,870
Officer of U.S. Operations
John J. Neubert 1998 $228,000 -- -- $11,834
Executive Vice President - 1997 $129,600 -- -- $11,525
Finance and Administration 1996 $129,600 $43,500 -- --
Chief Financial Officer,
Secretary and Treasurer
</TABLE>
- - --------------------
(1) See "Election of Directors - Information Regarding Nominees."
(2) Represents shares underlying options to purchase common stock. We have not
granted any stock appreciation rights.
(3) Consists of (a) matching contributions that we made to our 401(k) plan
based on a percentage of the Named Executive Officer's contribution to the
401(k) plan and (b) amounts that we paid on behalf of the Named Executive
Officers for term life insurance for the benefit of the Named Executive
Officers.
(4) Mr. Lewis was not employed by us or any of our subsidiaries until he joined
Checkmate in August 1997.
Option Grants
The following table provides information regarding stock options granted to
the Named Executive Officers during 1998. We have not granted any stock
appreciation rights.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term (2)
------------------------------------------------------------------ ------------------------------
Number of
Securities Percent of Total
Underlying Options Granted Exercise or
Options Granted to Employees in Base Price Expiration
Name (#)(1) Fiscal Year ($/sh) Date 5% ($) 10% ($)
- - ---------------------- ----------------- ------------------ ------------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
L. Barry Thomson...... 233,250 20.2% $6.81 6/25/07 $876,000 $2,157,000
Gregory A. Lewis...... -0- -- -- -- -- --
John J. Neubert....... -0- -- -- -- -- --
</TABLE>
- - ----------------------
(1) The indicated options were fully vested on the date of grant.
(2) Amounts reported in these columns represent hypothetical amounts that may
be realized upon exercise of options immediately prior to the expiration of
their term, assuming the specified compounded rates of appreciation of the
common stock over the term of the options. These numbers are calculated
based on rules promulgated by the Securities and Exchange Commission and do
not reflect our estimate of future stock price growth. Actual gains, if
any, on stock option exercises and common stock holdings are dependent on
the timing of the exercises and the future performance of the common stock.
We provide no guarantee that the rates of appreciation assumed in this
table can be achieved or that the amounts reflected will be received by the
individuals. This table does not take into account any appreciation of the
price of the common stock from the date of grant to the current date.
10
<PAGE>
Option Exercises and Fiscal Year-End Option Values
The following table sets forth information regarding the number of
unexercised options held by the Named Executive Officers at December 31, 1998
and the aggregate dollar value of those unexercised options as of December 31,
1998. None of the Named Executive Officers exercised any stock options during
1998.
Aggregated Option Exercises in Last Fiscal Year
And Fiscal Year - End Option Values
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-The-Money Options at December 31,
December 31, 1998 (#) 1998 ($) (1)
----------------------------------- --------------------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
- - -------------------------------- ----------------------------------- --------------------------------------
<S> <C> <C>
L. Barry Thomson................ 333,150/0 $90,909/0
Gregory A. Lewis................ 383,250/0 0/0
John J. Neubert................. 319,373/0 0/0
</TABLE>
- - --------------------
(1) The value is equal to the difference between the option exercise price and
the closing sale price of our common stock on the Nasdaq National Market on
December 31, 1998, multiplied by the number of shares underlying the
option.
Employment Agreements
On June 25, 1998, we entered into an employment agreement with L. Barry
Thomson with regard to Mr. Thomson's services as our President and Chief
Executive Officer and as President and Chief Executive Officer of IVI. Mr.
Thomson is entitled to an annual salary of at least $325,000 for 1998, $350,000
for 1999 and $385,000 for 2000, as well as the possibility of annual bonuses if
certain performance goals are satisfied. The agreement also provided for the
grant to Mr. Thomson of options under our 1998 Long-Term Incentive Plan for the
purchase of 233,250 shares of our common stock at a price of $6.81 per share
and, on January 14, 1999, options for the purchase of 150,000 additional shares
of our common stock. The exercise price of the options for 150,000 shares is
$5.50 per share. All of the options vest upon grant and expire nine years from
the date of grant.
The agreement provides that if Mr. Thomson's employment is terminated by us
for cause or as a result of Mr. Thomson's disability or death or if terminated
by Mr. Thomson, he will be entitled to his salary earned up to the date of
termination and, other than in the case of termination for cause, pro rata
entitlement under the then current bonus program. If Mr. Thomson's employment is
terminated by us for any other reason, he will be entitled to a lump sum payment
equal to three times the aggregate of his annual salary and bonus paid and/or
earned in the immediately preceding year.
On January 1, 1998, Checkmate and Gregory A. Lewis entered into a three
year employment agreement providing for his employment as President and Chief
Operating Officer of Checkmate at a base salary of $321,000 in 1998, $345,000 in
1999 and $371,000 in 2000. Also on January 1, 1998, Checkmate and John J.
Neubert entered into a three year employment agreement providing for his
employment as Executive Vice President and Chief Financial Officer of Checkmate
at a base salary of $228,000 in 1998, $243,000 in 1999 and $258,000 in 2000. The
employment agreements also provide the opportunity for annual bonuses if certain
performance goals are satisfied. The employment agreements provide that after
the end of the second year of the employment term and at the end of each
subsequent year, the employment period will automatically be extended so as to
terminate two years from such renewal date.
11
<PAGE>
The employment agreements provide further that if the employment of Messrs.
Lewis or Neubert is terminated by Mr. Lewis or Mr. Neubert for good reason, by
Checkmate other than for cause, death or disability, or because the term
expires, the terminated employee will receive a lump sum payment equal to (1)
his unpaid base salary up to the date of termination, (2) the product of his
annual bonus for the year of the date of termination and a fraction, the
numerator of which is the number of days in the year up to the date of
termination and the denominator of which is 365, and (3) a severance payment
equal to the present value of the income stream represented by a continuation of
his base salary and target annual bonus, unless the date of termination occurs
within two years of a change of control, in which case the severance payment is
equal to two times the appropriate base salary and annual bonus for the
terminated employee in effect for that year, and all unvested stock options held
by him on the date of termination will immediately vest as of the date of
termination. If employment is terminated due to Mr. Lewis' or Mr. Neubert's
death, the employee's estate or beneficiary will be entitled to receive his
unpaid base salary up to the date of his death and a pro rata portion of his
target annual bonus for the year. If employment is terminated as a result of Mr.
Lewis' or Mr. Neubert's disability, retirement or voluntary termination without
good reason or by Checkmate for cause, the terminated employee will be entitled
to receive his unpaid base salary up to the date of termination and a pro rata
portion of his target annual bonus for the year.
BOARD OF DIRECTORS'
REPORT ON EXECUTIVE COMPENSATION
This report by the board of directors discusses the board's compensation
objectives and policies applicable to our executive officers for 1998. The
report reviews the board's policy generally with respect to the compensation of
all executive officers as a group for 1998 and specifically reviews the
compensation established for our Chief Executive Officer for 1998 as reported in
the Summary Compensation Table. We did not form the Compensation Committee until
August 1998, which was after the compensation of our executive officers for 1998
had been established.
Compensation Policy for Executive Officers
Our compensation policies for our executive officers are intended to create
a direct relationship between the level of compensation paid to our executives
and our current and long-term level of performance. The board believes that this
relationship is best implemented by providing a compensation package consisting
of separate components, all of which are designed to enhance our overall
performance. These components are base salary, annual bonus and long-term
incentive compensation in the form of stock options.
The board established the 1998 base salaries of the executive officers at
levels that are designed to reflect the executive's position and to be
competitive with the base salaries of similarly situated executives at companies
of similar size and revenue levels in our industry. The board also took into
account, among other things, the executive's performance during the prior year
and his responsibilities with the new combined company. The board did not
provide for bonuses for the executive officers in 1998 but has established
specific, performance-based bonus goals for each executive officer for 1999.
Our long-term incentive compensation plan for our executive officers is
based on our 1998 Long-Term Incentive Plan. This plan promotes ownership of our
common stock, which in turn provides a common interest between the stockholders
and the executive officers. In establishing the 1998 Long-Term Incentive Plan,
the board concluded that incentive compensation opportunities in the form of
stock option grants should be set and that any compensation received under the
plan should be directly linked to our performance, as reflected by increases in
the price of our common stock and the contribution of the executive officer to
the increase in value. Under the plan, options, usually granted annually, have
an
12
<PAGE>
exercise price equal to or greater than the fair market value of the shares on
the date of grant and, to encourage a long-term perspective, may have an
exercise period of up to ten years. Unexercised options are forfeited if the
officer leaves the company before the options vest or, if already vested, if the
officer fails to exercise them before the end of a stated period following
termination of employment. In granting options, the board reviews the amount of
options granted to executives at other comparable companies in our industry, the
awards granted to other employees within the company, the individual's position
at the company and his role in helping the company achieve its goals. During
1998, options for the purchase of a total of 233,250 shares of common stock,
equal to 20.2% of all options granted to our employees during 1998, were granted
to Mr. Thomson. We did not grant any options to our other executive officers in
1998. See "Executive Compensation -Option Grants." Year-end stock option values
are reflected in "Executive Compensation - Option Exercises and Fiscal Year-End
Option Values."
Chief Executive Officer Compensation
In structuring the 1998 compensation plan for Mr. Thomson, the board
considered the alignment of his compensation with our financial performance to
be essential. Accordingly, the board negotiated a compensation structure that
tied high levels of compensation for Mr. Thomson to a substantial improvement in
corporate performance, including new product and service developments, that
would correspondingly enhance stockholder value.
Specifically, effective as of the combination of IVI and Checkmate in June
1998, Mr. Thomson was entitled to receive a base salary at a rate of $325,000
per year. The base salary was an increase over Mr. Thomson's 1997 base salary
and was awarded to Mr. Thomson by the board in its subjective discretion based
on IVI's financial performance in 1997 and the significantly expanded role and
responsibilities to be undertaken by Mr. Thomson following the combination.
With regard to longer term incentive compensation, the board granted
Mr. Thomson options to purchase 233,250 shares of common stock in 1998 and, in
recognition of the expiration in January 1999 of other options held by
Mr. Thomson, agreed to grant to him in January 1999 options to purchase 150,000
additional shares. See "Executive Compensation - Employment Agreements." These
option grants are intended to directly link Mr. Thomson's performance and
compensation to the stockholders' return on our common stock.
Policy on Deductibility of Compensation
Section 162(m) of the Internal Revenue Code limits the tax deduction to $1
million for annual compensation paid to each of Messrs. Thomson, Lewis and
Neubert unless several requirements are met. The board has reviewed these
requirements and believes that all compensation paid to the executive officers
in 1998 is fully deductible. We also believe that compensation paid under the
1998 Long Term Incentive Plan will continue to be deductible. Our present
intention is to comply with the requirements of Section 162(m) unless and until
it is determined that compliance would not be in the best interest of IVI
Checkmate and its stockholders.
BOARD OF DIRECTORS
Gerard Compain Bertil D. Nordin J. Stanford Spence
Gregory A. Lewis Gareth Owen L. Barry Thomson
Paul W. Noblett Peter E. Roode George Whitton
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The board of directors did not create the Compensation Committee until
August 1998, and the Compensation Committee took no action in 1998. As described
in "Board of Directors' Report on Executive Compensation," the board of
directors as a whole determined the compensation of our executive officers for
1998.
During 1998, Messrs. L. Barry Thomson, Gregory A. Lewis, John J. Neubert
and George Whitton, all of whom are executive officers of IVI Checkmate or its
subsidiaries, participated as directors in deliberations of our board concerning
executive officer compensation for 1998. Messrs. Thomson, Lewis, Neubert and
Whitton also served during 1998 on the board of directors of our majority owned
subsidiary National Transaction Network, Inc., which board establishes the
compensation of the executive officers of National Transaction Network. Messrs.
Thomson, Lewis and Neubert are executive officers of National Transaction
Network. They received no cash compensation for their services as directors or
executive officers of National Transaction Network in 1998.
CERTAIN TRANSACTIONS
Ingenico Alliance
On December 17, 1996, IVI entered into a strategic alliance with Ingenico.
Ingenico owned approximately 8.7% of our outstanding common stock and
exchangeable shares of IVI as of December 31, 1998. Ingenico develops,
distributes, markets and manufactures transaction terminals with application to
payment systems, loyalty programs, electronic benefits transfer systems and
terminal systems for smart card technology, principally in Europe, Australia and
the Asia Pacific region. Gerard Compain, who is a member of our board of
directors, is the Managing Director of Ingenico, and Gareth Owen, also a member
of our board, is an officer of a subsidiary of Ingenico.
The alliance enabled IVI to gain exclusive rights to market Ingenico
products and technology in the Americas, to gain access to Ingenico's smart card
technology, to raise capital and to benefit from joint product development,
purchasing and manufacturing. The strategic alliance provides Ingenico with
access to the North American market for its products. In furtherance of their
alliance, IVI and Ingenico entered into a master alliance agreement dated
December 5, 1996, as amended on December 17, 1996, and five separate agreements,
each dealing with a separate aspect of the alliance.
The master alliance agreement established the general framework of the
alliance and set out certain provisions which govern all aspects of the
alliance. Specifically, the master alliance agreement provided that Ingenico and
IVI would enter into a marketing and distribution agreement, a Latin America
joint venture shareholders' agreement, a joint development and procurement
agreement, a technology license agreement and an investment agreement.
Pursuant to the investment agreement, Ingenico and its Chairman, Jean-
Jacques Poutrel, purchased 1,439,000 shares of IVI's common stock in December
1996, equal at the time to approximately 16.7% of IVI's outstanding common
stock, for approximately $7,240,000. Additionally, IVI granted to Ingenico a
future participation right enabling Ingenico to preserve its percentage
ownership of IVI's common stock on a non-diluted basis by subscribing to
purchase additional shares of IVI's common stock if IVI issues additional shares
of IVI's common stock. The price payable by Ingenico for additional IVI common
shares would be that offered to other purchasers in the event of a private
placement or public offering, or, in certain cases, a price equal to the
weighted average trading price of the common shares during the 30 trading days
preceding notice to Ingenico of the issuance by IVI of additional shares of
IVI's common stock.
14
<PAGE>
Under the investment agreement, IVI also agreed to take the steps necessary
to reconstitute the board of directors of IVI so that it would be comprised of
eight members, two of whom initially would be nominees of Ingenico. The board of
directors of IVI has since been expanded to nine members. One nominee of
Ingenico is to be a member of the Nomination and Governance Committee of the
board. If Ingenico's ownership position in IVI decreased to a percentage of less
than 15% but more than 5% on a non-diluted basis, then Ingenico would be
permitted only one nominee on the board of directors. If Ingenico's ownership
position in IVI decreased below 5%, it would no longer have the right to
nominate a director of IVI. Ingenico's current ownership of our stock has
decreased to approximately 8.5%. As a result, Ingenico is permitted only one
representative on our board, which is Mr. Compain.
At the time of the combination of IVI and Checkmate on June 25, 1998, IVI
Checkmate, IVI and Ingenico entered into an assignment, assumption and consent
agreement under which the agreements with Ingenico were assigned by IVI to us
and were assumed by us. The result is that we now have all of the right, title,
interest, liabilities and obligations that IVI had under the agreements with
Ingenico.
Pursuant to the marketing and distribution agreement, we purchased products
from Ingenico in 1998 for a total of $6.8 million.
Noblett Transactions
Paul W. Noblett, who is one of our directors, is President and a director
of Noblett and Associates and is a director of DMRI and Globalcard Services. In
exchange for consulting services provided to us or our subsidiaries by these
companies in 1998, we paid $50,250 to Noblett and Associates (6% of Noblett and
Associates' 1998 revenues), $34,500 to DMRI (38% of DMRI's 1998 revenues) and
$110,000 to Globalcard Services (8% of Globalcard Services' 1998 revenues). We
do not expect to do any significant amount of business with any of these
companies in 1999.
Nordin Transaction
In 1998, we paid $60,000 to Bertil D. Nordin, who is one of our directors,
for management advisory services provided to us by Mr. Nordin in connection with
the combination of IVI and Checkmate. Mr. Nordin provided these services to us
before he was elected a director.
Spence Agreement
In 1984, Checkmate entered into an agreement that gave Mr. Spence exclusive
rights to sell and market Checkmate's magnetic ink character recognition reader
products. Subsequently, after determining that Checkmate should market its own
products, Checkmate entered into a settlement agreement with Mr. Spence and
Stanford Technologies, Inc., which is owned by Mr. Spence and his wife. Under
this agreement, Mr. Spence and Stanford Technologies transferred to Checkmate
all of their rights to market Checkmate's magnetic ink character recognition
quality analyzers. Mr. Spence and Stanford Technologies also agreed to refrain
from competing against Checkmate for a period of eleven years following his
resignation or removal from Checkmate's board of directors. In exchange for
these benefits, the agreement requires Checkmate to make minimum monthly
payments totaling at least $15,000 per month (of which $10,000 is adjusted semi-
annually for inflation). Checkmate may elect to accelerate the payments by
paying 5% of sales if this amount exceeds the minimum aggregate amount due.
Payments under the agreement will terminate upon the earlier of June 30, 2000 or
that time at which payments made under the agreement equal $1,758,321 (plus
adjustments for inflation). Checkmate paid $224,323 to Stanford Technologies in
1998 under the agreement. As of December 31, 1998, a total of $1,967,497
(including $247,497 of inflation adjustments) had been paid by Checkmate to
Stanford Technologies under the agreement.
15
<PAGE>
STOCK PERFORMANCE GRAPH
Prior to the combination of IVI and Checkmate on June 25, 1998, the common
stocks of IVI and Checkmate were traded on the Nasdaq National Market under the
symbols "IVIAF" and "CMEL," respectively, and IVI's common stock was also traded
on The Toronto Stock Exchange under the symbol "IVI." Following the combination,
the IVI Checkmate common stock began trading on the Nasdaq National Market and
The Toronto Stock Exchange under the symbols "CMIV" and "IVC," respectively, and
IVI's exchangeable shares began trading on The Toronto Stock Exchange under the
symbol "IVI." The IVI exchangeable shares, which are Canadian property for
Canadian deferred benefit plans, are convertible at any time, on a one-for-one
basis, into common stock of IVI Checkmate.
The following stock performance graph and accompanying table compare the
cumulative return on each of the IVI common stock and the Checkmate common stock
from December 31, 1993 to June 25, 1998 and on the IVI Checkmate common stock
from June 26, 1998 to December 31, 1998 with the cumulative total return of the
Nasdaq Stock Market U.S. Index, the Nasdaq Computer Manufacturing Companies
Index and The Toronto Stock Exchange Index over the same period. The comparative
data assumes that:
. $100.00 was invested on December 31, 1993 proportionally by market
capitalizations in the common stock of IVI and the common stock of
Checkmate and in each of the indices referred to above,
. $100.00 was invested on June 26, 1998 in the common stock of IVI Checkmate,
and
. dividends, if any, were reinvested.
[Insert graph here]
<TABLE>
<CAPTION>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 6/25/98 12/31/98
-------- -------- -------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
NASDAQ US Index 100.00 97.75 138.23 170.04 208.75 250.89 292.94
NASDAQ Computer Manufacturing Companies Index 100.00 109.83 173.00 232.31 281.02 409.43 610.28
Checkmate Electronics, Inc. 100.00 76.32 155.26 136.84 72.37 81.58 0.00
International Verifact, Inc. 100.00 41.94 56.14 37.07 54.93 49.52 0.00
Toronto Stock Exchange Index 100.00 99.07 110.82 139.34 157.50 173.19 152.48
IVI Checkmate Corp 0.00 0.00 0.00 0.00 0.00 100.00 67.74
</TABLE>
16
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The United States securities laws require our directors and executive
officers and any persons who beneficially own more than ten percent of our
common stock to file with the Securities and Exchange Commission and the Nasdaq
Stock Market initial reports of ownership and reports of changes in ownership of
our securities. To our knowledge, based solely on a review of the copies of the
reports furnished to us and written representations that no other reports were
required, during 1998 all executive officers, directors any beneficial owners of
more than ten percent of our stock made all required filings.
STOCKHOLDERS' PROPOSALS FOR 2000 ANNUAL MEETING
Director nominations and other proposals of stockholders intended to be
presented to a vote of the stockholders at our 2000 annual meeting, together
with certain related information specified in Section 2.7 (A)(2) of our bylaws,
must be submitted to our Corporate Secretary in writing between February 20,
2000 and March 21, 2000 in order for such matters to be properly brought before
the 2000 annual meeting. Separate from the requirements of the preceding
sentence, director nominations and other proposals of stockholders intended to
be presented at the 2000 annual meeting must, in addition to satisfying the
requirements of the preceding sentence, also be submitted in writing to our
Corporate Secretary, together with the information specified in Securities and
Exchange Commission Rule 14a-8, no later than December 14, 1999 in order to be
included in our proxy materials for the 2000 annual meeting. All nominations,
proposals and related information should be submitted within the specified time
periods by certified mail, return receipt requested, to our Corporate Secretary
at 1003 Mansell Road, Roswell, Georgia, 30076. A copy of Section 2.7 (A)(2) of
our bylaws will be provided upon request in writing to our Corporate Secretary
at this address.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP has audited the financial statements of Checkmate since
1993 and of IVI Checkmate since 1998 and will continue in that capacity during
1999. Coopers & Lybrand, Chartered Accountants, has audited the financial
statements of IVI since 1984. Representatives of Ernst & Young LLP will be
present at the annual meeting and will be available to respond to appropriate
questions.
INFORMATION ABOUT ATTENDING THE ANNUAL MEETING
The annual meeting will be held in the Great Oak Ballroom at the Holiday
Inn located at 1075 Holcomb Bridge Road in Roswell, Georgia. If you plan to
attend the annual meeting, please so indicate by checking the box on your proxy
card and returning the proxy card to us. This will help us in planning for the
annual meeting. A map showing the meeting location appears on the following
page.
Roswell, Georgia
April 12, 1999
By order of the Board of Directors,
/s/ John J. Neubert
John J. Neubert
Corporate Secretary
17
<PAGE>
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7 7 7 7 7 7 7 7 7 7 7
^ FOLD AND DETACH HERE ^^
IVI Checkmate Corp.
This Proxy is Solicited by the Board of Directors for the 1999 Annual Meeting
of Stockholders
If I am a holder of shares of common stock of IVI Checkmate Corp., I hereby
appoint Margaret Burkett and John J. Neubert, and each of them, proxies, with
full power of substitution, to vote all shares of common stock of IVI
Checkmate Corp. that I am entitled to vote at the 1999 Annual Meeting of
Stockholders of IVI Checkmate Corp. and at any adjournments thereof as
indicated below. If I am a holder of exchangeable shares of IVI Checkmate
Ltd., I direct Montreal Trust Company of Canada, as trustee, acting through
its authorized representatives, to vote all exchangeable shares that I am
entitled to vote at the annual meeting and at any adjournments thereof as
indicated below. In either case, such persons are further authorized to vote
in their discretion on (1) the election of any person as a director if a
director nominee named below is unable to serve or for good cause will not
serve, (2) matters which the board of directors did not know would be
presented to the annual meeting a reasonable time before the proxy
solicitation was made, and (3) matters incident to the conduct of the meeting.
This proxy card will be voted as directed. If no instructions are specified,
this proxy card will be voted "FOR" the election of the nine nominees named
below.
The board of directors recommends a vote "FOR" the election as directors of
the nine persons named below.
1. Election of directors to serve until the 2000 annual meeting and until
their successors are elected and qualified:
[_] FOR ALL [_] WITHHOLD ALL
For, except vote withheld from the following nominee(s): _____________________
Gerard Compain, Gregory A. Lewis, Paul W. Noblett, Bertil D. Nordin, Gareth
Owen, Peter E. Roode, J. Stanford Spence, L. Barry Thomson, George Whitton
[_] I plan to attend the Annual Meeting [_] Change of address on reverse
side
SIGNATURE(S): ______________________________ DATE: ______________, 1999
________________________________
<PAGE>
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7 7 7 7 7 7 7 7 7 7 7
^ FOLD AND DETACH HERE ^^
Change of Address: ________________
_____________________
_____________________
(If you have written in the above
space, please mark the
corresponding box on the reverse
side of this card)
