<PAGE> 1
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
/ X / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240 .14a-11(c) or Section
240.14a-12
MICROS Systems, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
MICROS Systems, Inc.
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act 0-11:(1)
-----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(1)Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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:
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<PAGE> 2
MICROS SYSTEMS, INC.
12000 BALTIMORE AVENUE
BELTSVILLE, MARYLAND 20705-1291
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 22, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
MICROS Systems, Inc., ("MICROS" or the "Company") will be held at 2:00 p.m.
Eastern Standard Time on Friday, November 22, 1996, at the corporate offices of
MICROS, 12000 Baltimore Avenue, Beltsville, Maryland, for the following
purposes:
(1) To approve an amendment to the Company's Articles of
Incorporation that provides for a classified Board of
Directors serving staggered three-year terms (Proposal 1); and
(2) To elect seven directors to serve for designated terms
(Proposal 2); and
(3) To approve the appointment of Price Waterhouse LLP as
independent public accountants for the 1997 fiscal year
(Proposal 3); and
(4) To approve an amendment to the Company's 1991 Stock Option
Plan (Proposal 4); and
(5) To transact such other business as may properly come before
the Annual Meeting or any adjournments thereof.
The close of business on October 4, 1996, has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting. Only holders of Common Stock of record at the close of
business on that date will be entitled to notice of and to vote at the Annual
Meeting or any adjournments thereof. The transfer books of the Company will
not be closed.
By Order of the Board of Directors,
Judith F. Wilbert
Corporate Secretary
Beltsville, Maryland
October 28, 1996
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 3
MICROS SYSTEMS, INC.
12000 Baltimore Avenue
Beltsville, Maryland 20705-1291
PROXY STATEMENT
Annual Meeting of Stockholders
November 22, 1996
VOTING RIGHTS AND PROXY SOLICITATION
This Proxy Statement is furnished to stockholders of MICROS Systems,
Inc. ("MICROS" or the "Company") in connection with the solicitation by the
Board of Directors of MICROS of proxies to be used at the Annual Meeting of
Stockholders to be held on Friday, November 22, 1996 at 2:00 p.m. Eastern
Standard Time at the corporate offices of MICROS, 12000 Baltimore Avenue,
Beltsville, Maryland 20705-1291 and at any adjournments thereof.
It is anticipated that this Proxy Statement and form of proxy will
initially be mailed to stockholders on or about October 28, 1996.
If the enclosed form of proxy is properly executed and returned to the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon.
EXECUTED BUT UNMARKED PROXIES WILL BE VOTED FOR THE ELECTION OF MANAGEMENT'S
NOMINEES FOR DIRECTORS AND FOR ALL OTHER PROPOSALS. If any other matters are
properly brought before the Annual Meeting, the persons named in the
accompanying proxy will vote the shares represented by such proxies on such
matters according to their best judgment.
The presence of a stockholder at the Annual Meeting will not
automatically revoke such stockholder's proxy. Stockholders may, however,
revoke a proxy at any time prior to its exercise by filing with the Secretary
of the Company a written notice of revocation, by delivering to the Company a
duly executed proxy bearing a later date, or by attending the Annual Meeting
and voting in person.
The cost of solicitation of proxies in the form enclosed herewith will
be borne by the Company. In addition to the solicitation of proxies by mail,
the Company, through its Directors, officers and regular employees, may also
solicit proxies personally or by telephone or telegraph. The Company will
request persons, firms and corporations holding shares in their names or in the
names of their nominees, which are beneficially owned by others, to send proxy
materials to and obtain proxies from such beneficial owners and will reimburse
such holders for their reasonable out-of-pocket expenses in doing so. The
Company may retain a proxy solicitor if it were to determine subsequently that
such action is appropriate.
The securities which can be voted at the Annual Meeting consist of
shares of Common Stock of the Company with each share entitling its owner to
one vote. The close of business on October 4, 1996, has been fixed as the
record date for determination of stockholders entitled to vote at the meeting.
The number of shares outstanding on October 4, 1996, was 7,957,984. The
presence in person or by proxy of stockholders holding of record a majority of
all votes entitled to be cast at the Annual Meeting is necessary to constitute
a quorum.
A majority of all votes cast at the meeting, a quorum being present,
is required for the adoption of each of the Proposals, other than Proposal 1
which requires approval of two thirds all votes entitled to be cast. Under
applicable Maryland law, proxies marked as abstentions and broker non-votes
(where a nominee holding shares for a beneficial owner has not received voting
instructions from the beneficial owner with respect to a particular matter and
such nominee does not possess or choose to exercise discretionary authority
with respect thereto) will be considered as present at the meeting for purposes
of determining existence of a quorum but not entitled to vote with respect to
the particular matter and will therefore have no effect on the vote. A proxy
marked to withhold a vote from a nominee in the case of election of Directors
shall have the effect of a negative vote. Each stockholder of record on the
record voting date is entitled to one vote per share. There are no cumulative
voting rights.
1
<PAGE> 4
A copy of the Company's Annual Report to Stockholders for its fiscal
year ended June 30, 1996 accompanies this Proxy Statement. The Company has
filed an Annual Report on Form 10-K for its fiscal year ended June 30, 1996
with the Securities and Exchange Commission. Stockholders may obtain, free of
charge, a copy of such Annual Report on Form 10-K by writing to the Corporate
Secretary at the Company's address set forth above.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is the number of shares of the Company's Common Stock
and the percentage of total outstanding shares beneficially owned by each
Director of the Company, the Chief Executive Officer, the four most highly
compensated executive officers, all Directors and executive officers as a group
and, to the knowledge of the Company, all persons beneficially owning 5% or
more of the Company's Common Stock as of August 30, 1996. Also set forth below
is the address of each such 5% beneficial owner.
<TABLE>
<CAPTION>
Number of Shares
of Common Stock
Beneficially Owned
as of
August 30, Percent of
Individual or Group (1) 1996 (2) Class
----------------------- -------- -----------
<S> <C> <C>
Louis M. Brown, Jr. 26,000 (3) Less than 1%
Director, Chairman of the Board
Daniel Cohen 10,000 Less than 1%
Director
A. L. Giannopoulos 9,333 (4) Less than 1%
Director, President and Chief Executive Officer
John G. Puente 2,000 Less than 1%
Director
Alan M. Voorhees 20,000 (5) Less than 1%
Director
Edward T. Wilson 17,000 (6) Less than 1%
Director
T. Paul Armstrong 18,001 (7) Less than 1%
Senior Vice President and General Manager, Table
Service Restaurant Group
Daniel Interlandi 12,967 (8) Less than 1%
Senior Vice President and General Manager, Leisure
and Entertainment Group
Gary C. Kaufman 5,167 (9) Less than 1%
Senior Vice President, Finance and Administration/Chief
Financial Officer
Ronald J. Kolson 49,000 (10) Less than 1%
Executive Vice President/Chief Operating Officer
Directors and Executive 187,634 (11) 2.3%
Officers as a Group (14 persons, including the
above-named persons)
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C> <C>
Massachusetts Financial Services Company 467,000 5.8%
500 Boylston Street
Boston, MA 02116
RCM Capital Management 786,913 9.8%
4 Embarcadero Center, Suite 3000
San Francisco, CA 94111
SAFECO Asset Management Company 996,000 12.4%
SAFECO Plaza
Seattle, WA 98185
State of Wisconsin Investment Board 407,500 5.1%
P.O. Box 7842
Madison, WI 53707
Strong Funds 421,625 5.3%
P.O. Box 2936
Milwaukee, WI 53201
</TABLE>
(1) As of August 30, 1996, CEDE & Co., nominee for Stock Clearing
Corporation, Box 20, Bowling Green Station, New York, New York, a central
certificate service, held of record 7,740,353 shares (97.4%) of the outstanding
shares of Common Stock. Those shares are believed to be owned beneficially by a
large number of beneficial owners and, except as indicated in this table, the
Company is not aware of any other individual or group owning beneficially more
than 5% of the outstanding Common Stock.
(2) Information with respect to beneficial ownership is based on
information furnished by each shareholder. Sole voting and sole investing power
is exercised by each individual.
(3) Includes options to purchase 5,000 shares exercisable within 60 days.
(4) Includes options to purchase 7,333 shares exercisable within 60 days.
(5) Does not include 30,000 shares held by irrevocable trusts created for
the benefit of the adult children of Mr. Voorhees, with respect to which he
disclaims any beneficial interest.
(6) Does not include 23,500 shares held in custody for the children of Mr.
Wilson, with respect to which he disclaims any beneficial interest.
(7) Includes options to purchase 14,667 shares exercisable within 60 days.
(8) Includes options to purchase 12,667 shares exercisable within 60 days.
(9) Includes options to purchase 4,667 shares exercisable within 60 days.
Mr. Kaufman disclaims any beneficial interest in 600 shares of Common Stock,
not included here, held in custody for his dependent children.
(10) Includes options to purchase 7,000 shares exercisable within 60 days.
(11) Includes stock options for the purchase of 67,000 shares of Common
Stock which are exercisable as of or within 60 days of August 30, 1996 and
assumes 8,015,317 shares outstanding upon the exercise of such options.
PROPOSAL TO AMEND THE
ARTICLES OF INCORPORATION OF MICROS
TO PROVIDE FOR A CLASSIFIED BOARD OF DIRECTORS
(PROPOSAL 1)
Directors of the Company presently are elected annually by the
stockholders to serve until the next annual meeting and until their successors
are elected and qualified. The Board of Directors has approved and recommends
that the stockholders adopt an amendment (the "Classified Board Amendment") to
3
<PAGE> 6
the Company's Articles of Incorporation to add a new article which would
classify the Board of Directors into three classes of directors.
The Board of Directors is recommending the adoption of the Classified
Board Amendment in order to further continuity and stability in the leadership
and policies of the Company and to discourage certain types of tactics which
could involve actual or threatened changes of control that are not in the best
interests of the stockholders.
The Classified Board Amendment provides for the Board of Directors to
be divided into three classes of directors serving staggered three-year terms.
If adopted, the Classified Board Amendment would divide the Board into three
approximately equal classes, designated Class I, Class II and Class III. At
the 1996 Annual Meeting, at which seven directors are to be elected, the first
class, consisting of three directors, would be elected for a term expiring at
the 1997 Annual Meeting, the second class, consisting of two directors, would
be elected for a term expiring at the 1998 Annual Meeting, and the third class,
consisting of the remaining two directors, would be elected for a term expiring
at the 1999 Annual Meeting (and in each case until their respective successors
are duly elected and qualified). Commencing with the reelection of directors
to Class I in 1997, each class of directors elected at an Annual Meeting would
be elected to three-year terms. If the number of directors constituting the
Board is increased or decreased, the resulting number would be apportioned by
the Board of Directors among the three classes so as to make all classes as
nearly equal in number as possible. The Company presently has no agreement or
plans to increase or decrease the size of the Board.
Information concerning the current nominees for election as directors
at the 1996 Annual Meeting and the terms for which they will serve if the
Classified Board Amendment is adopted is contained under the caption "Election
of Directors." If the Classified Board Amendment is not adopted, all directors
will be elected to serve until the 1997 Annual Meeting and until their
successors are elected and qualified.
The Board of Directors believes that the Classified Board Amendment
will encourage persons who may seek to acquire control of the Company to
initiate such an acquisition through negotiations with the Board of Directors.
The Board believes that it will therefore be in a better position to protect
the interests of all the stockholders. In addition, the stockholders of the
Company will have a more meaningful opportunity to evaluate any such action.
The Classified Board Amendment would facilitate director continuity
and experience, since a majority of the Company's directors at any given time
will have prior experience as Company directors. While the Company has not
experienced any problems with such continuity in the past, it wishes to ensure
that this experience will continue. If adopted, the provisions of the
amendment would be applicable to every election of directors.
The Classified Board Amendment would significantly extend the time
required to make any change in composition of a majority of the Board and will
tend to discourage any unsolicited takeover bid for the Company. Presently, a
change in control of the Board can be made by a majority of the Company's
stockholders at a single annual meeting. Under the proposed amendment, it will
take at least two annual meetings to effect a change in the majority control of
the Board of Directors, except in the event of vacancies resulting from
removal. Because of the additional time required to change control of the
Board, the Classified Board Amendment may tend to perpetuate present management
and to discourage certain tender offers, perhaps including some tender offers
which stockholders may feel would be in their best interests. The Classified
Board Amendment will also make it more difficult for the stockholders to change
the composition of the Board even if the stockholders believe such a change
would be desirable.
Upon adoption of the Classified Board Amendment by the stockholders,
the Board of Directors will amend the Bylaws of the Company to conform to the
Articles of Incorporation as amended by the Classified Board Amendment. The
Board of Directors does not currently contemplate recommending the adoption of
any further amendments to the Articles of Incorporation or Bylaws which would
affect the ability of a third party to take over or change control of the
Company. Classified board provisions are permitted under the Maryland General
Corporation Law and are consistent with applicable securities laws. The
Classified Board Amendment is not in response to any specific efforts of which
the Company is aware to accumulate shares of Common Stock or to obtain control
of the Company.
Recommendation
The Board of Directors recommends that you vote FOR approval of the
amendment to the Company's Articles of Incorporation providing for a classified
Board of Directors. Approval of the amendment requires the affirmative vote of
the holders of two thirds of the Company's outstanding shares of Common Stock.
Proxies received by the Board of Directors will be voted for this resolution
unless stockholders specify in their proxies a contrary choice.
4
<PAGE> 7
RESOLVED, that the Company's stockholders hereby approve the following
new Article TENTH of the Company's Articles of Incorporation:
"TENTH. The authorized number of directors of this Corporation shall
be not less than 5 and not more than 9. The number of directors within this
range shall be stated in the Corporation's Bylaws, as may be amended from time
to time. When the number of directors is changed, the Board of Directors shall
determine the class or classes to which the increased or decreased number of
directors shall be apportioned; provided that the directors in each class shall
be as nearly equal in number as possible. No decrease in the number of
directors shall have the effect of shortening the term of any incumbent
director.
Effective as of the annual meeting of stockholders in 1996, the Board
of Directors shall be divided into three classes, designated as Class I, Class
II and Class III, as nearly equal in number as possible, and the term of office
of directors of one class shall expire at the annual meeting of stockholders,
and in all cases until their successors shall be elected and shall qualify, or
until their earlier resignation, removal from office, death or incapacity. The
initial term of office of Class I shall expire at the annual meeting of
stockholders in 1997, that of Class II shall expire at the annual meeting in
1998, and that of Class III shall expire at the annual meeting in 1999, and in
all cases as to each director until his successor shall be elected and shall
qualify, or until his earlier resignation, removal from office, death or
incapacity.
Subject to the foregoing, at each annual meeting of stockholders the
successors to the class of directors whose term shall then expire shall be
elected to hold office for a term expiring at the third succeeding annual
meeting and until their successors shall be elected and qualified.
The directors remaining in office acting by a majority vote, or a sole
remaining director, although less than a quorum, are hereby expressly delegated
the power to fill any vacancies in the Board of Directors, however occurring,
whether by an increase in the number of directors, death, resignation,
retirement, disqualification, removal from office or otherwise, and any
director so chosen shall hold office until the next election of the class for
which such director shall have been chosen and until his successor shall have
been elected and qualified, or until his earlier resignation, removal from
office, death or incapacity."
ELECTION OF DIRECTORS
(PROPOSAL 2)
Subject to the amendment of MICROS' Articles of Incorporation as
described above, seven directors are to be elected at the MICROS Meeting, each
to hold office for the term specified below and until his or her successor is
elected and qualified. Unless authority so to vote is withheld, proxies
received pursuant to this solicitation will be voted for the election of the
seven nominees named below.
Unless otherwise specified on the proxy, it is the intention of the
persons named in the proxy to vote the shares represented by each properly
executed proxy for the election of Directors of the nominees listed below for
the term as provided below. Management believes that all such nominees will
stand for election and will serve if elected as Directors. If any of the
nominees should for any reason not be available for election, proxies will be
voted for the election of the remaining nominees and such substitute nominees
as may be designated by the Board of Directors.
Pursuant to the Company's By-Laws, the number of Directors shall be no
less than five and no more than nine. There are currently seven Directors and
the Board has nominated seven individuals for election. Proxies cannot be
voted for a greater number of persons than the seven nominees named.
During the fiscal year ended June 30, 1996, the Board of Directors
held five regular meetings and one special meeting. Each incumbent Director
attended more than 75% of the aggregate of the total number of meetings of the
Board of Directors and meetings of committees of the Board of Directors of
which he was a member.
The Board of Directors had an Audit Committee for fiscal 1996. The
Audit Committee was chaired by Mr. Wilson, and included Mr. Voorhees and Mr.
Brown, until his resignation from the Audit Committee effective May 13, 1996,
at which time Mr. Puente assumed the seat vacated by Mr. Brown. The Audit
Committee for fiscal 1997 is comprised of Mr. Wilson as its Chairman, Mr.
Puente and Mr. Voorhees. The Audit Committee reviews the financial statements
of the Company and the scope of the independent annual audit and internal
audits. It also reviews the Company's internal accounting procedures and the
independent accountants' recommendations to management concerning the
effectiveness of the Company's internal financial and accounting controls. In
addition, the Audit Committee reviews and recommends to the Board of Directors
the firm to be engaged as the Company's independent accountants. The Audit
Committee also examines and considers other matters relating to the financial
affairs of the Company as it determines appropriate. The Audit Committee met
5
<PAGE> 8
two times during the fiscal year ended June 30, 1996. Representatives of Price
Waterhouse LLP attended both meetings of the Audit Committee in fiscal 1996.
Additionally, the Board of Directors had a Compensation Committee for
fiscal 1996 comprised of Mr. Brown, who is the Compensation Committee chairman,
Mr. Voorhees and Mr. Wilson. The Compensation Committee is comprised of the
same members for fiscal 1997. The Compensation Committee met two times during
the fiscal year ended June 30, 1996. The Board of Directors has assigned the
Compensation Committee with the function of providing analysis and
recommendations to the Board of Directors with respect to, among other things,
executive compensation, bonuses and the issuance of stock options under the
1991 Option Plan.
Further, the Board of Directors has established a Nominating Committee
comprised of Mr. Giannopoulos, who is the Nominating Committee chairman, Mr.
Brown, Mr. Voorhees and Mr. Wilson. The Nominating Committee has been assigned
with the responsibility of identifying and interviewing individuals who may be
qualified to serve as new Board members. The Nominating Committee shall act
unilaterally, and accordingly, will not currently consider proposed
recommendations from shareholders. In fiscal 1996, the Nominating Committee
met one time, and several times informally to interview and screen potential
Board members. In fiscal 1996, the Nominating Committee recommended for
approval to the Board the appointment of Mr. Puente as a new Board independent
member. Furthermore, immediately prior to the issuance of this Proxy, the
Nominating Committee recommended for approval to the Board the appointment of
Ms. F. Suzanne Jenniches. The Board approved the appointments to the Board of
both Mr. Puente and Ms. Jenniches.
At the Annual Meeting on November 17, 1995, the holders of 7,871,280
outstanding shares of Common Stock were eligible to cast votes in the election
of Directors. Of such shares, 85% were present in person or by proxy and voted
or withheld authority to vote in the election of Directors.
Nominees for Term to Expire in 1997 (Class I)
Daniel A. Cohen
F. Suzanne Jenniches
John G. Puente
Nominees for Term to Expire in 1998 (Class II)
Alan M. Voorhees
Edward T. Wilson
Nominees for Term to Expire in 1999 (Class III)
Louis M. Brown, Jr.
A.L. Giannopoulos
Information As To Nominees
The following table sets forth the names of management's nominees for
election as Directors to serve until the next Annual Meeting and until their
successors are elected and qualified. Also set forth is certain other
information, some of which has been obtained from the Company's records and
some of which has been supplied by the nominees, with respect to each nominee's
principal occupation or employment, his/her background, his/her age as of
August 30, 1996, the periods during which he/she has served as a Director of
the Company and positions held with the Company.
<TABLE>
<CAPTION>
Nominees for Director Position
Directors Since Held in MICROS
- - --------- ------ --------------
<S> <C> <C>
Louis M. Brown, Jr. 1977 Director, Chairman of the Board
Daniel A. Cohen 1992 Director, Managing Director, Fidelio-Micros France, S.A.
A.L. Giannopoulos 1992 Director, President and Chief Executive Officer
F. Suzanne Jenniches 1996 Director
John G. Puente 1996 Director
Alan M. Voorhees 1982 Director
Edward T. Wilson 1981 Director
</TABLE>
6
<PAGE> 9
Louis M. Brown, Jr., 53, has been a Director of the Company since
1977. Mr. Brown held the position of President/Chief Executive Officer from
January 1986 until his appointment as Chairman of the Board in January 1987.
He also serves as President and a director of IDEAS, Inc., a supplier of high
technology, custom-engineered products and services. Mr. Brown serves as
President/Chief Executive Officer and as a director of Autometric, Inc. and
Chairman of Planning Systems, Inc. He is a graduate of The Johns Hopkins
University (B.E.S.-E.E.).
Daniel A. Cohen, 41, has been a Director of the Company since November
1992. He is Managing Director of Fidelio MICROS France, S.A., a subsidiary of
MICROS Systems, Inc. and distributor of the Company's products. Formerly, Mr.
Cohen was Managing Director and principal shareholder of D.A.C. Systemes/MICROS
France. Mr. Cohen founded D.A.C. Systemes in 1986 and took over the
distribution of MICROS products in France, having previously worked for the
Company's former distributor in France and having previously started
representation of MICROS in Israel. In 1992, the Company acquired a 15%
equity interest in D.A.C. Systemes, and the name was changed to D.A.C.
Systemes/MICROS France. An additional 8% equity interest was acquired by the
Company in fiscal 1994, and the remainder of the stock was acquired by the
company in fiscal 1996. Mr. Cohen is a graduate of the Hotel School of
Lausanne, Switzerland, from which he holds a Masters degree in Hotel
Administration.
A.L. Giannopoulos, 56, has been a Director since March 1992 and was
elected President and Chief Executive Officer in May 1993. Effective as of
June 1, 1995, Mr. Giannopoulos resigned as General Manager of the Westinghouse
Information and Security Systems Divisions having been with Westinghouse for 30
years and was hired by the Company pursuant to an Employment Agreement to
terminate December 31, 1999. In prior assignments at Westinghouse, Mr.
Giannopoulos was General Manager of the Automation Division and National
Industrial Systems Sales Force, Industries Group. Mr. Giannopoulos is a
graduate of Lamar University with a Bachelor of Science degree in Electrical
Engineering.
F. Suzanne Jenniches, 48, has been a Director of the Company since
October 1996. She is Vice President and General Manager of Automation and
Information Systems (AIS) for the Electronic Sensors and Systems Division of
Northrop Grumman, which, either directly or through subsidiaries, designs and
develops postal automation systems, intelligent material management systems,
enterprise management systems, airline reservation systems and information
systems for the travel industry, license plate readers, imaging inspection
systems, and records management systems. Ms. Jenniches is past president of
the national Society of Women Engineers, has served on the board of governors
for the American Association of Engineering Societies, and is currently a board
member of the State of Maryland's Greater Baltimore Committee Technology
Council. Ms. Jenniches is a graduate of Clarion College and holds a Masters
degree in environmental engineering from The Johns Hopkins University.
John G. Puente, 66, has been a Director since May 1996. He is the
Chairman of Telogy Networks, Inc., a developer of communications software
products. Mr. Puente is also on the board of directors of Orion Network
Systems, a company which provides satellite services and facilities.
Previously, he was Chairman and CEO of Orion. Prior to joining Orion, Mr.
Puente was Vice Chairman of M/A-Com, a supplier of microwave components and
systems to the telecommunications industry. He was a founder and Chairman of
Digital Communications Corporation (now Hughes Network Systems) and
SouthernNet, a fiber optic long distance company which merged to form Telecom
USA and was later acquired by MCI. Mr. Puente is a graduate of Polytechnic
Institute of New York and now serves on the Board of Trustees of that
institution, and he holds a Masters degree from Stevens Institute of
Technology. He is Chairman of the Board of Trustees of Capitol College.
Alan M. Voorhees, 73, has been a Director of the Company since 1982.
He is Chairman of Summit Enterprises, Inc. of Virginia, a privately-held
investment company. Mr. Voorhees also is the Chairman of the Board of
Autometric, Inc., and IDEAS, Inc., a supplier of high technology,
custom-engineered products and services, and a member of the Board of Directors
of Atlantic Southeast Airlines, Inc. Mr. Voorhees is a graduate of Rensselaer
Polytechnic Institute and holds a Masters degree from Massachusetts Institute
of Technology.
Edward T. Wilson, 55, has been a Director of the Company since 1981.
He is currently a private investment advisor and President of the Fund for Fine
Arts. Previously, Mr. Wilson held senior management positions in domestic and
international banking with Riggs National Bank, The Bank of America and in
trade relations with the U.S. Chamber of Commerce and the U.S. Commerce
Department. Mr. Wilson holds a Doctorate in international relations from The
Johns Hopkins University.
The Board of Directors recommends a vote FOR election of the seven
nominees as Directors as provided for the designated term.
EXECUTIVE COMPENSATION
The following table sets forth the total annual compensation paid or
accrued by the Company for services in all capacities for the Chief Executive
Officer and the four most highly compensated executive officers of the Company
whose aggregate compensation exceeded $100,000.
7
<PAGE> 10
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION> Long-Term
Annual Compensation Compensation
---------------------------------------------------------- --------------
Name and Other Securities
Principal Annual Underlying All Other
Position Year Salary Bonus (1) Compensation (2) Options (#) Compensation (3)
-------- ---- ------ --------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
A. L. Giannopoulos 1996 $ 203,000 $ 114,000 $ 0 0 $ 3,000
President and Chief 1995 16,523 115,346 0 22,000 0
Executive Officer 1994 (4)
Ronald J. Kolson 1996 124,500 82,900 334,600 0 49,800
Executive Vice 1995 107,885 93,916 118,125 18,000 49,924
President/Chief 1994 89,726 73,020 0 0 2,819
Operating Officer
T. Paul Armstrong 1996 106,000 73,400 309,900 0 47,500
Senior Vice President 1995 86,986 86,576 0 17,000 47,734
and General Manager, 1994 83,271 75,499 0 0 2,483
Table Service
Restaurant Group
Daniel G. Interlandi 1996 106,400 73,400 133,900 0 48,900
Senior Vice President 1995 91,463 86,576 0 17,000 48,372
and General Manager, 1994 86,723 75,499 62,500 0 1,032
Leisure and
Entertainment Group
Gary C. Kaufman 1996 122,000 57,000 0 0 41,100
Senior Vice President, 1995 105,117 49,646 0 14,000 38,268
Finance and 1994 (5)
Administration/Chief
Financial Officer
</TABLE>
(1) Bonus - Bonuses were paid to all recipients pursuant to decisions made
by the Board of Directors based on financial performance of the Company,
including profitability and growth of the Company as measured by pre-tax income
and net revenue, and satisfaction of individual performance objectives.
(2) Represents the aggregate difference between the actual exercise price
of options granted and the fair market value of the Common Stock as of the date
of option exercise.
(3) All Other Compensation-includes the Company's contributions to the
401(k) savings plan for the named executives for fiscal 1994 and 1995, and in
fiscal 1996 of $3,000 for Mr. Giannopoulos, $2,627 for Mr. Kolson, $2,467 for
Mr. Armstrong, $2,402 for Mr. Interlandi, and $2,832 for Mr. Kaufman. Also
included in this column is the Westinghouse incentive bonus payments of $47,173
for Mr. Kolson, $45,033 for Mr. Armstrong, $46,498 for Mr. Interlandi and
$38,268 for Mr. Kaufman. Specifically, Westinghouse, as an incentive to 11 key
officers to remain with the Company for a period of two years following June 1,
1995, agreed to make payments to such officers aggregating up to approximately
$1.25 million, payable in three equal installments promptly after such date
(subject to the officer remaining employed by the Company on the relevant
payment date). In June 1995, the first installment of $409,100 was paid for
these key officers of the Company. In June 1996, the second installment of
$360,000, reduced by $48,300 from the June 1995 payment due to the resignation
of one of the 11 key officers, was paid by Westinghouse. The final installment
is to be paid in June 1997. Even though such payments are funded by
Westinghouse and do not require any use of the Company's cash, for accounting
purposes, they are required to be reflected as compensation expense in the
Company's financial statements.
(4) Mr. Giannopoulos was elected President and Chief Executive Officer in
May 1993. Inasmuch as he was a full-time employee of Westinghouse until May
31, 1995, he received no compensation in this capacity, nor stock options,
until June 1, 1995. As of June 1, 1995, Mr. Giannopoulos became a full-time
MICROS employee.
(5) Mr. Kaufman was elected Vice President, Finance and Administration,
Chief Financial Officer in May 1994. Inasmuch as he was a full-time employee
of Westinghouse until July 31, 1994, he received no compensation in this
capacity, nor was he eligible to receive stock options, until August 1, 1994.
As of August 1, 1994, Mr. Kaufman became a full-time MICROS employee.
Employment Agreements
The Company has entered into an Employment Agreement with Mr.
Giannopoulos that expires on December 31, 1999. The Agreement provides that
Mr. Giannopoulos will be paid an annual salary of $213,000 for fiscal 1997 and
is eligible for a bonus targeted at $130,000 for fiscal 1997. The actual
amount of the bonus is tied to certain performance criteria but cannot exceed
200% of the targeted amount. The annual salary and target bonus will each
increase $10,000 each year of the Agreement.
8
<PAGE> 11
The Company has also entered into a Management Agreement with Mr.
Cohen that expires on August 25, 2000. The Agreement provides for an annual
salary of FF600,000 (approximately $119,000 at exchange rates in effect at the
time the Agreement was executed) plus a bonus based on the future operating
results of the subsidiaries that Mr. Cohen will be managing. Furthermore, the
Company has entered into a Consulting Agreement with Mr. Cohen dated July 1,
1995 under which Mr. Cohen provides additional consulting services to the
Company during the term of his Management Agreement. Mr. Cohen receives an
annual consulting fee equal to 4.62% of the sales by the Company to Fidelio
MICROS France S.A. of MICROS POS hardware and software in the immediately
preceding fiscal year, which amounted to $63,834 for fiscal 1996.
Stock Options
Certain full-time, salaried officers and employees (including
Directors) and non-employee Directors of the Company and its subsidiaries are
eligible to participate in the 1991 Option Plan which provides for the issuance
of incentive stock options, non-qualified stock options and stock appreciation
rights. The Company initially had an Option Plan which became effective as of
November 25, 1981, and terminated on November 25, 1991. Unexercised options
issued under the Company's 1981 Option Plan may be exercised according to their
terms.
The 1991 Option Plan currently in effect was approved by the
stockholders at the Annual Meeting held on November 22, 1991 and amended at the
Annual Meetings held on November 19, 1993, and November 17, 1995. The Company
has reserved 473,803 shares of the Company's Common Stock for issuance under
the Option Plan. Options to purchase 467,901 shares were outstanding as of
August 30, 1996.
An option may not be exercised within one year after the date of grant
and is exercisable in installments during its term as determined by the Board
of Directors or Compensation Committee. If an option holder dies or becomes
disabled, his or her option becomes fully exercisable and may be exercised for
one year following the termination of employment. If the option holder
retires, his or her option becomes fully exercisable and may be exercised for
three months following retirement. If termination occurs for any other reason,
an option may be exercised, to the extent exercisable at termination, for 30
days after termination of employment. No option may be exercised after the
expiration of its term.
The exercise price of the shares of Common Stock covered by an option
may not be less than the fair market value of the Common Stock on the date of
grant, which is defined under the Option Plan to be not less than the average
of the highest bid and lowest asked prices of the Common Stock on NASDAQ on the
date of grant.
The following table sets forth the details of stock options granted to
the individuals listed in the Summary Compensation Table during fiscal 1996.
The second table in this section shows the value of exercised and unexercised
options for the individuals listed in the Summary Compensation Table.
OPTION GRANTS TABLE
<TABLE>
<CAPTION>
Potential Realizable Value At
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term
------------------------------------------------------------------------------------------------------------------
% of Total
Options
Granted To Exercise
Options Employees Price Expiration
Name Granted (1) in 1996 Per Share Date 5% ($) 10%($)
---- ------------ ------- --------- ---- ------ ------
<S> <C>
A. L. Giannopoulos 0
Ronald J. Kolson 0
T. Paul Armstrong 0
Daniel G. Interlandi 0
Gary C. Kaufman 0
</TABLE>
(1) Options to purchase 99,450 shares of Common Stock were granted to
Company employees during fiscal 1996; however, no options were granted to these
five individuals.
9
<PAGE> 12
OPTION EXERCISES AND YEAR-END VALUE TABLE
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Shares Acquired Value Options at 6/30/96 Options at 6/30/96 (2)
Name On Exercise (#) Realized (1) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------ ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
A. L. Giannopoulos 0 $0 7,333 14,667 $0 $0
Ronald J. Kolson 19,500 334,600 6,000 12,000 0 0
T. Paul Armstrong 7,334 309,900 13,666 11,333 154,000 0
Daniel G. Interlandi 3,000 133,900 11,666 11,335 115,500 0
Gary C. Kaufman 0 0 4,667 9,333 0 0
</TABLE>
(1) Represents market value of the Company's Common Stock at exercise date
less the exercise price.
(2) Represents market value of the Company's Common Stock at June 30, 1996
less the exercise price.
Employee Savings Plan
The Company sponsors an employee savings plan (the "Savings Plan")
which conforms to the provisions of Section 401(k) of the Internal Revenue
Code. The Savings Plan covers substantially all full-time employees and allows
employees to voluntarily defer a certain percentage of their income through
contributions to the Savings Plan. Prior to January 1, 1995, the Company
elected to contribute to the Savings Plan at its discretion. Effective January
1, 1995, the Company amended the Savings Plan to provide for a contribution of
one percent of the salary of all eligible, non-highly compensated employees and
to match fifty percent of the first five percent of each participating
employee's voluntary contributions. The Company may elect to make additional
contributions, at its discretion. Company contributions were made during the
years ended June 30, 1996, 1995, and 1994 totaling $649,000, $346,100 and
$241,200, respectively.
The Company does not have any obligations to past or present employees
related to post-employment benefits.
Director Compensation
Directors received a fee of $2,000 per quarter during fiscal 1996 and
an additional $750 for each Board of Directors meeting attended. The
compensation for Directors for fiscal 1997 has been set at $2,500 per quarter
and $1,000 for each Board of Directors meeting attended. The Audit Committee
members were compensated during fiscal 1996 at $250 per meeting attended while
the Chairman of the Audit Committee received $500 per meeting attended. The
compensation for Audit Committee members, Compensation Committee members and
Nominating Committee members for fiscal 1997 has been set at $750 per meeting
attended. Members of the Board of Directors are reimbursed for travel and
other reasonable out-of-pocket expenses. Directors who are full-time, salaried
employees of the Company or any of its subsidiaries or affiliates do not
receive any fees for their services as members of the Board of Directors or any
of its committees. Mr. Brown and Mr. Giannopoulos will not receive any
compensation for serving on the Board-appointed committees.
In addition to the above-mentioned fees, Mr. Brown was compensated
$217,000, $182,900 and $154,000 in fiscal 1996, 1995 and 1994, respectively,
for consulting services provided to the Company. See "Certain Relationships
and Related Transactions" below.
BOARD REPORT ON EXECUTIVE COMPENSATION
In fiscal 1996, the Company's compensation for executives, including
grants under the Stock Option Plan, was administered exclusively by the
Compensation Committee. In fiscal 1996, there were two meetings of the
Compensation Committee. Set forth below is a report submitted by Messrs.
Brown, Voorhees and Wilson, as members of the Company's Compensation Committee,
addressing the Company's compensation policies for the last completed fiscal
year, as they affected Mr. Giannopoulos, in his capacity as President and Chief
Executive Officer of the Company, and the four executive officers other than
Mr. Giannopoulos, who, for the last completed fiscal year, were the Company's
most highly compensated executives (collectively with Mr. Giannopoulos, the
"Named Executive Officers").
Components of Executive Compensation
The basic premise of the Company's executive compensation policy is to
ensure a link between executive compensation and the creation of stockholder
value, while motivating and retaining key employees. The primary components
10
<PAGE> 13
of the compensation packages offered to the Company's executive officers by the
Company for the last completed fiscal year consisted of three basic elements -
base salary, annual incentive bonus, and long-term incentives in the form of
stock options.
Compensation Committee Interlocks and Insider Participation
Louis M. Brown, Jr. served on the Compensation Committee during fiscal
1996. Mr. Brown held the position of President/Chief Executive Officer from
January 1986 until January 1987.
Salary
Base salaries of the executive officers, including the Named Executive
Officers, reflect the evaluation of the Compensation Committee of the
performance of the Company's executive officers in the point-of-sale and
property management computer systems industry (specifically, information
systems for the hospitality industry) on an international, rather than a
national, regional or local level. Although there is no fixed relationship
between corporate performance and base salary, the Compensation Committee
considers several factors in determining base salaries of the Company's
executive officers, including corporate performance, the increasing importance
of their role in the Company's operations on a consolidated basis, and the
general effect of increases in the cost of living.
The Company is one of the leading suppliers of information systems to
the hospitality industry and has grown significantly over the past few years.
The Compensation Committee considers the base salary and incentive bonus
components of total compensation to be generally in the middle range of
compensation as compared to compensation levels of other senior executives of
companies in the same industry. The Company considers that the compensation
levels are comparable to those companies in the computer software and services
peer group.
Bonuses
Bonuses for the last completed fiscal year were determined by the
Compensation Committee based on the assessment of the Compensation Committee of
various factors relating to both corporate and individual performance, as
further discussed below.
Stock Options
No stock options were granted to executive officers during fiscal
1996, other than to two executive officers who commenced employment with the
Company during the fiscal year. Options were granted in the fiscal year to
employees who are not executive officers. To the extent stock options are
exercised, the benefit derived therefrom provides additional compensation to
those executives whom the Compensation Committee believes are deserving of such
benefits on the basis of the value of their efforts on behalf of the Company
and its stockholders. Stock options constitute the element of executive
compensation most linked to stockholder value inasmuch as their value increases
directly with any increase in the price of the Company's Common Stock. The
real value recognized by the award recipient is directly related to future
corporate performance. The stock option grants tie executive compensation to
stock performance, since the stock options will only have value if and to the
extent the market price of the Company's stock increases from the exercise
price of the stock options. Recommendations with respect to recipients and the
number of options to be granted thereto are made by the President and CEO based
on performance. The Compensation Committee is vested with the authority to
make all option grants.
Compensation Policies Toward Executive Officers
The Compensation Committee executive compensation policies are
designed to provide competitive levels of compensation by integrating into
total compensation the Company's annual and long-term performance goals. The
Compensation Committee acknowledges and emphasizes the importance of stock
ownership by management and, accordingly, stock-based performance compensation
arrangements. Stock-based incentives create a nexus between stockholder and
management interests by providing motivation for executives over the long term.
The Company's 1991 Option Plan is designed to attract, motivate and retain the
valuable executive talent necessary to ensure the continued success of the
Company. As a result of the use of long-term compensation as part of executive
officers' total compensation, actual compensation levels in any particular year
may be above or below those of the Company's competitors, depending upon the
Company's overall performance.
11
<PAGE> 14
Relationship of Corporate Performance to Executive Compensation
The determination of bonuses for the last completed fiscal year was
based primarily on corporate performance as measured by pre-tax income and net
revenue. Individual performance was taken into consideration as well.
In reviewing corporate performance, pre-tax income and growth of net
revenue serve as the focal points in the analysis by the Compensation
Committee. Additionally, the Compensation Committee considers the competitive
climate in which the Company must operate. It is the Compensation Committee's
policy that the total compensation package, the sum total of base salaries and
incentive bonuses, for executive officers, including the Named Executive
Officers, eligible for incentive compensation should be equal to competitive
average total compensation as presented in appropriate wage surveys. Target
bonus amounts vary according to salary levels and positions comparable to those
established in the previous fiscal year. The total amount of the incentive
bonuses can vary from zero to six percent of the pre-tax income of the Company
when positive operating income is achieved.
The financial position of the Company is reviewed annually to
determine which aspects of the executive officers' performance need to be
emphasized, and accordingly, which factors will be taken into consideration in
the determination of the incentive bonuses. The measures of corporate
performance that were considered by the Compensation Committee for the last
completed fiscal year included pre-tax income and net revenue. In addition to
these performance factors, the Compensation Committee considered the
"individual" factor. This factor is based on the recommendation of the Chief
Executive Officer and may be quantitative or qualitative, depending on emphasis
desired, but not necessarily derived from normal financial reports.
As in most other executive compensation packages, the subjective
factor of human judgment plays a key role in determining the Company's
incentive bonuses. Individual bonuses are reviewed and judgment is applied by
the Compensation Committee based upon the executive's individual contribution
to the performance of the Company as a whole and his or her primary area of
responsibility in particular. No bonuses are paid where an executive fails to
perform duties in accordance with the Company's Code of Business Practices.
Chief Executive Officer Compensation
The Company considers that the compensation level of the Chief
Executive Officer should be comparable to those companies in the computer
software and services peer group. Mr. A. L. Giannopoulos was elected President
and Chief Executive Officer in May 1993. Until May 31, 1995, however, Mr.
Giannopoulos was a full-time employee of Westinghouse Electric Corporation and
as such received no compensation from the Company. Effective June 1, 1995, Mr.
Giannopoulos became a full-time employee of the Company pursuant to the terms
of an Employment Agreement in effect until December 31, 1999. Under the
Agreement for fiscal 1996, Mr. Giannopoulos received a base salary of $203,000
and a bonus of $114,000. In determining Mr. Giannopoulos' fiscal 1996 bonus,
the Compensation Committee considered a number of factors, including the
Company's revenue growth, income before taxes and certain personal performance
factors. The Compensation Committee also evaluated Mr. Giannopoulos' execution
and management of the acquisition of Fidelio Software GmbH. Mr. Giannopoulos'
compensation arrangement with the Company provides for a fiscal 1997 salary at
an annual rate of $213,000 and a fiscal 1997 target bonus of $130,000, the
actual amount of the bonus paid to be based on certain performance criteria and
not to exceed 200% of the target bonus. Such annual salary and target bonus
will each increase $10,000 each July 1 thereafter.
The Committee has considered the impact of the provisions of the
Internal Revenue Code that, in certain circumstances, disallow compensation
deductions in excess of $1 million for any year with respect to the Company's
CEO and four other most highly compensated officers. These disallowance
provisions do not apply to performance-based compensation. The Company expects
that these provisions will not limit its tax deductions for executive
compensation in the near term.
LOUIS M. BROWN, JR.
ALAN M. VOORHEES EDWARD T. WILSON
Members of the Compensation Committee
12
<PAGE> 15
Common Stock Performance Graph
The following line graph compares (1) the cumulative total stockholder return
on the Company's Common Stock during the past five fiscal years, based on the
market price of MICROS Systems, Inc. Common Stock, with (2) the cumulative
total yearly return of the S&P 500 Index and (3) the S&P Computer Software and
Services composite index.
<TABLE>
<CAPTION>
SHAREHOLDER RETURN
(Dividends Reinvested)
Company/Index Jun91 Jun92 Jun93 Jun94 Jun95 Jun96
------------- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
MICROS Systems, Inc. 100 152.63 289.47 557.89 694.74 586.84
S&P 500 INDEX 100 113.41 128.87 130.68 164.75 207.59
COMPUTER 100 112.84 166.67 188.81 293.92 391.51
(SOFTWARE&SVC) -500
</TABLE>
Note to graph:
Assumes $100 invested on July 1, 1991 in MICROS Systems, Inc. Common Stock, and
an identical amount in the S&P 500 Index or the Computer Software and Services
composite index.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Westinghouse Holdings Corporation, a wholly-owned subsidiary of
Westinghouse Electric Corporation ("Westinghouse"), held a 49% interest in
MICROS until September 19, 1995, at which time Westinghouse Holdings
Corporation sold all of its remaining interest in MICROS. In previous fiscal
years, MICROS was a majority-owned subsidiary of Westinghouse. Westinghouse, as
13
<PAGE> 16
an incentive to 11 key officers to remain with the Company for a period of two
years following June 1, 1995, agreed to make payments to such officers
aggregating up to approximately $1.25 million, payable in three equal
installments promptly after such date and on the first and second anniversaries
of such date (subject to the officer remaining employed by the Company on the
relevant payment date). In June 1995, the first installment of $409,100 was
paid for these key officers of the Company. In June 1996, the second
installment of $360,800, reduced by $48,300 from the June 1995 payment due to
the resignation of one of the eleven key officers, was paid by Westinghouse.
The final installment is to be paid in June 1997. Even though such payments
are entirely funded by Westinghouse and will not require any use of the
Company's cash, for accounting purposes, they are required to be reflected as
compensation expense in the Company's financial statements.
The Company has purchased certain raw materials and has contracted for
certain sub-assembly operations through Westinghouse to take advantage of more
competitive pricing available through off-shore manufacturing locations. The
Company estimates that it has purchased approximately $195,000, $964,700 and
$1,691,200, in such materials and labor from Westinghouse during fiscal 1996,
1995 and 1994, respectively. The fiscal 1996 activity represents only
purchases for the period from July through September 1995, as no related party
relationship existed after September 1995.
During fiscal 1996, 1995 and 1994, the Company also purchased from
Westinghouse and its subsidiaries approximately $170,000, $877,600 and
$667,400, respectively, for other products and services provided to the
Company, including insurance coverage, office space, consulting, office
furniture, and telecommunications services. In fiscal 1996, the Company's
purchases were limited to telecommunications services and represents purchases
for the period from July through September 1995, as no related party
relationship existed after September 1995.
During fiscal 1996, 1995 and 1994, the Company sold approximately
$344,000, $1,208,200 and $1,107,500, respectively, in products to D.A.C.
Systemes/MICROS France, under the same terms and conditions offered to other
independently-owned dealers/distributors of the Company. D.A.C.
Systemes/MICROS France was principally owned by Daniel Cohen, a Director of the
Company, until August 25, 1995, when MICROS acquired controlling interest. The
fiscal 1996 activity covers only the period from July through August 1995,
since sales are eliminated as intercompany after that date.
During fiscal 1996, 1995 and 1994, the Company compensated Louis M.
Brown, Jr., Chairman of the Board, $216,500, $182,900 and $154,000,
respectively, for consulting services provided to the Company. Effective June
30, 1995, the Company and Mr. Brown entered into a Consulting Agreement
pursuant to which Mr. Brown is to provide on the average 20 hours per week of
consulting services to the Company terminating on June 30, 2000 in exchange for
a base consulting fee commencing at $150,000, plus a target bonus of $70,000,
with annual adjustments.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 3)
The Company's Board of Directors has selected the firm of Price
Waterhouse LLP as the independent public accountants for the Company for the
year ending June 30, 1997. The approval of its selection is to be voted upon
at the Annual Meeting. Price Waterhouse LLP has served in this role since
August 1990 and its selection was approved by the stockholders at the last
Annual Meeting. It is expected that representatives of Price Waterhouse LLP
will be present at the Annual Meeting and available to respond to appropriate
questions, and will have the opportunity to make a statement if they so desire.
The Board of Directors recommends a vote FOR the approval of Price
Waterhouse LLP as independent public accountants for the 1997 fiscal year.
APPROVAL OF AN INCREASE IN THE NUMBER OF SHARES
AUTHORIZED FOR ISSUANCE PURSUANT TO THE
MICROS SYSTEMS, INC. 1991 STOCK OPTION PLAN
(PROPOSAL 4)
Introduction
Under the MICROS Systems, Inc. 1991 Stock Option Plan (the "1991
Option Plan"), as approved by stockholders at the 1991 Annual Meeting, 250,000
shares of Common Stock were reserved for issuance in the form of incentive
stock options and non-qualified stock options to officers, Directors and other
key employees of the Company and its subsidiaries. In addition, non-qualified
options may be granted to non-employee Directors.
14
<PAGE> 17
At this Annual Meeting, the stockholders are being requested to
consider and approve the adoption of an amendment to the 1991 Option Plan to
authorize the issuance of up to 1,150,000 shares of Common Stock, an increase
of 600,000 shares to the 250,000 shares originally authorized pursuant to
shareholder approval at the 1991 Annual Meeting; the additional 100,000 shares
authorized pursuant to shareholder approval at the 1993 Annual Meeting; and the
additional 200,000 shares authorized pursuant to shareholder approval at the
1995 Annual Meeting.
In the current fiscal year, the Board has enacted two new programs in
an effort both to encourage increased stock ownership of Company Common Stock,
and to align closely the financial interests of the senior executives with
those of the Company shareholders. First, subject to compliance by the Company
with applicable tax and securities law requirements, the Board has mandated
that all senior executives who receive certain stock option grants satisfy a
prepayment requirement. Specifically, optionees will be required to make,
within 60 days of grant of such options, a nonrefundable, forfeitable
prepayment of the stock exercise price in an amount equal to 5% of the total
exercise price. Options will immediately expire in the event the optionee
fails to make the mandatory prepayment in a timely manner. The optionee will
forfeit the prepayment if he or she voluntarily terminates or if the option
expires prior to exercise. The Board believes that this prepayment
requirement, which is expected to apply to 400,000 of the shares to be
available under the 1991 Option Plan, will encourage Company executives to make
greater personal and financial commitments to the Company.
Second, the Company has established a policy designed to encourage
increased Company stock ownership by all officers and certain other selected
individuals (together, the "Participants") throughout the Company and its
subsidiaries. Pursuant to the policy guidelines, the Participants are
encouraged to own Company Common Stock in minimum amounts determined by such
participant's position within the Company as well as annual salary
compensation. Specifically, the policy recommends that the President and CEO,
the Executive Vice President and COO, and the Senior Vice President and CFO
each own an amount of Common Stock in value not less than two times each such
officer's base salary. All other Participants are encouraged to own an amount
of Common Stock in value not less than one times each such Participant's base
salary. The policy was enacted effective October 1, 1996. All participants
have until September 30, 2000 to achieve the recommended level of Common Stock
ownership.
The affirmative vote of a majority of all votes cast by stockholders
at a meeting at which a quorum is present is required in order to adopt the
amendment to the 1991 Option Plan. As of the record date, Directors and
officers of the Company have the power to vote approximately 1.5% of the
outstanding shares of Common Stock. All of the Directors and officers have
expressed an intent to vote in favor of the proposed amendment to the 1991
Option Plan.
The principal features of the 1991 Option Plan, as proposed to be
amended, are summarized below. The summary is qualified by reference to the
complete text of the 1991 Option Plan, as amended, which is attached as Exhibit
A.
Purpose
The purpose of the 1991 Option Plan, as amended, is to provide a
performance incentive to certain Directors, officers, and other key employees
of the Company and its subsidiaries in order that such persons may acquire a
(or increase their) proprietary interest in the Company and to encourage such
persons to remain in the employ of the Company and its subsidiaries. In
addition, non-employee Directors may participate in the 1991 Option Plan, as
amended.
Administration
The 1991 Option Plan, as amended, may be administered by either a
committee (which, commencing in fiscal 1996, is the "Compensation Committee" of
the Company's Board of Directors) or by the Board of Directors itself (the
"Administrating Committee"). It is intended that at all times the 1991 Option
Plan will be administered by Directors who are "disinterested persons" within
the meaning of Rule 16b-3 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934 (the "1934 Act").
In general, the Administrating Committee determines the persons to
whom options are granted, the terms of the options and the number of shares
covered by each option.
Duration, Amendment and Termination
The 1991 Option Plan became effective as of September 23, 1991 and
will terminate on September 23, 2001, unless sooner terminated by the Board of
Directors.
15
<PAGE> 18
In addition to the power to terminate the 1991 Option Plan at any
time, the Board of Directors also has the power to amend the 1991 Option Plan;
provided, no amendment to the 1991 Option Plan may be made without stockholder
approval if the amendment would (i) change the minimum option prices set forth
in the 1991 Option Plan, (ii) increase the maximum term of options, (iii)
materially increase the benefits accruing to the participants under the 1991
Option Plan, or (v) materially modify the requirements as to eligibility under
the 1991 Option Plan.
Eligibility
The 1991 Option Plan provides for the grant of options to directors,
officers and other key employees of the Company and its subsidiaries. As
described below, non-employee Directors may be granted only non-qualified
options. As of September 30, 1996, 546,098 options have been granted under the
1991 Option Plan.
16
<PAGE> 19
Awards Under the 1991 Option Plan
550,000 shares of the Company's Common Stock have been subject to
options under the 1991 Option Plan since its inception. As of October 6, 1996,
the closing market price for the Company's Common Stock was $32.00 per share.
The 1991 Option Plan provides for the grant of Incentive Stock Options as
defined under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") and non-qualified options.
The type and terms of each option granted under the 1991 Option Plan
are determined by the Compensation Committee. The option price per share shall
not be less than the fair market value of the Company's Common Stock at the
date of grant of the option. Fair market value will be determined by the
Compensation Committee pursuant to the criteria set forth in the 1991 Option
Plan. An option may contain such terms as are deemed appropriate by the
Administrating Committee, including a provision that allows the Company to
re-acquire an option for cash.
Exercise of Options
An option may be exercised by an optionee by delivery to the Company
of the exercise price which must be paid either: (i) in cash or cash
equivalent; or (ii) in the discretion of the Compensation Committee, by
delivery of previously owned shares of Common Stock or by a combination of cash
and Common Stock.
The term of an option may not exceed ten (10) years. An option is
exercisable in such installments and at such times during its term as
determined by the Administrating Committee. To the extent not exercised,
installments are cumulative and may be exercised in whole or in part at any
time after becoming exercisable until the option expires.
With respect to Incentive Stock Options, the aggregate fair market
value of shares that may be exercised by an optionee for the first time during
any year may not exceed $100,000.
Termination of Employment
In the event the optionee's employment (or service as a non-employee
Director) terminates by reason of death, all options become fully exercisable
and may be exercised by the optionee's estate within one year after the date of
such death but not later than the date on which such options would otherwise
expire.
If the optionee's employment (or service as a non-employee Director)
is terminated as a result of disability, all options become fully exercisable
and may be exercised within one year after such termination but not later than
the date on which such options would otherwise expire.
If an optionee's employment is terminated in accordance with the
Company's normal retirement policies, as determined by the Compensation
Committee, all options become fully exercisable and may be exercised for a
period of three months after such termination but not later than the date on
which the options would otherwise expire.
If an optionee's employment (or service as a non-employee Director)
terminates other than for retirement, death or disability, the options held by
such optionee, to the extent exercisable as of the date of termination, may be
exercised at any time during the thirty (30) day period immediately following
the date of termination, but not after the date on which such options would
otherwise expire. However, if termination is on account of cause, all options
expire as of the date of termination.
An optionee's estate means the optionee's legal representative or any
person who acquires the right to exercise an option by reason of the optionee's
death.
Restriction on Transfer
Options are transferable only by will or by the laws of descent and
distribution. During an optionee's lifetime, an option may be exercised only
by the optionee.
Federal Income Tax Treatment
Treatment of Grants
The grant of Incentive Stock Options or non-qualified options will not
result in tax consequences to the Company or the optionees.
17
<PAGE> 20
Incentive Stock Options
Incentive Stock Options under the 1991 Option Plan are intended to
meet the requirements of Section 422 of the Code. There are no tax liabilities
to the optionee upon the grant of an Incentive Stock Option. In general, if an
optionee acquires stock upon the exercise of an Incentive Stock Option, no
income will result to the optionee upon such exercise and the Company will not
be allowed a deduction as a result of such exercise provided the optionee makes
no disposition of the stock within two years from the date of grant and one
year after the option is exercised. The basis to the optionee of shares
acquired on the exercise of an Incentive Stock Option will be equal to the
exercise price. Any gain or loss realized upon the sale of the shares acquired
will be treated as long term capital gains or loss, as applicable.
If the optionee fails to satisfy the one or two-year holding periods
described above, the optionee will be treated as having received ordinary
income at the time of the disposition of the stock equal to the excess of the
value of the stock on the date of exercise (or, if less, the amount realized
from the disposition) over the exercise price. Any gain in excess of the
amount treated as ordinary income will be treated as capital gain. The Company
will be entitled to a deduction for the amount taxable to the optionee as
ordinary income.
Although the exercise of an Incentive Stock Option will not result in
regular income tax liability to an optionee, it may subject the optionee to
liability for the "alternative minimum tax."
Non-Qualified Options
There are no tax liabilities to the optionee upon the grant of a
non-qualified option. In general, an optionee who exercises a non-qualified
option will realize ordinary income in an amount equal to the difference
between the option price and the fair market value of the shares on the date of
exercise and the Company will be entitled to a deduction in the same amount.
The Company will withhold federal and state income and employment taxes due on
this compensation from amounts otherwise payable to the optionee. The
optionee's basis in such shares will generally be their fair market value on
the date of exercise, and when he disposes of the shares he will recognize
capital gain or loss, either long-term or short-term, depending on the holding
period of the shares.
The Board of Directors believes that approval of an increase in the
number of shares issuable under the MICROS Systems, Inc. 1991 Stock Option Plan
is in the best interests of all stockholders and recommends a vote FOR the
proposal.
NEW PLAN BENEFITS
The following table sets forth the number of shares of Common Stock
subject to options granted to each of the following under the 1991 Option Plan
during fiscal 1996. Future awards under the 1991 Option Plan as proposed to be
amended are not determinable at this time. The Company does not believe that
the amount of awards granted during fiscal 1996 or since the inception of the
1991 Option Plan would have been different if the 1991 Option Plan had been
amended at the time such grants were made.
<TABLE>
<CAPTION>
1991 Option
-----------
Name and Position Plan (1)
----------------- --------
<S> <C>
A. L. Giannopoulos. . . . . . . . . . . . . . . . 0
President and Chief Executive Officer
Ronald J. Kolson. . . . . . . . . . . . . . . . . . 0
Executive Vice President/Chief
Operating Officer
T. Paul Armstrong. . . . . . . . . . . . . . . . . 0
Senior Vice President and General Manager,
Table Service Restaurant Group
Daniel G. Interlandi. . . . . . . . . . . . . . . . 0
Senior Vice President and General
Manager, Leisure and Entertainment Group
</TABLE>
18
<PAGE> 21
<TABLE>
<S> <C>
Gary C. Kaufman. . . . . . . . . . . . . . . . . . 0
Senior Vice President, Finance and
Administration/Chief Financial Officer
Executive Officers as a Group. . . . . . . . . . 6,000
(9 executive officers, including those named
above)
Non-Executive Director Group (5 persons) 0
Non-Executive Officer Employee Group 93,450
</TABLE>
(1) A copy of such plan, as amended, is included as Exhibit A.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934 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 "SEC"). Executive officers, directors and greater than 10% beneficial
owners are required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it,
the Company believes that during fiscal 1996 all filing requirements applicable
to its executive officers, directors and greater than 10% beneficial owners
have been satisfied, except that Mr. Cohen was inadvertently late in filing a
Form 4 reporting upon his February 1996 sale of 2,000 shares of the Company's
Common Stock.
SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the fiscal 1997
Annual Meeting of Stockholders must be received by the Company by June 30,
1997, to be considered for inclusion in the proxy statement and form of proxy
relating to that meeting.
OTHER MATTERS
The Board of Directors is not aware of any matters other than those
discussed herein which are to be presented for action at the Annual Meeting.
If any other business properly comes before the Annual Meeting, the persons
named in the accompanying form of proxy will vote in regard thereto according
to their best judgment.
By Order of The Board of Directors
Judith F. Wilbert
Corporate Secretary
Beltsville, Maryland
October 28, 1996
19
<PAGE> 22
EXHIBIT A
MICROS SYSTEMS, INC.
STOCK OPTION PLAN
1. PURPOSE OF PLAN. The purpose of the MICROS Systems, Inc. 1991 Stock
Option Plan, as amended (the "Plan"), is to serve as a performance incentive
and to encourage the ownership of MICROS Systems, Inc. (the "Company") stock by
key employees of the Company and its subsidiaries (including officers and
directors) so that the person to whom the option is granted may acquire a (or
increase his or her) proprietary interest in the Company and its subsidiaries
and in order to encourage such person to remain in the employ of the Company or
its subsidiaries. In addition, nonemployee directors may participate in the
Plan as provided herein. Options granted pursuant to the Plan may consist of
incentive stock options ("ISOs") (within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code")) and nonqualified
options.
2. ADMINISTRATION. The Plan shall be administered by a committee (the
"Committee") appointed by the Board of Directors; except that if and to the
extent that no Committee exists which has the authority to administer the Plan,
the functions of the Committee shall be exercised by the Board of Directors.
The Committee shall consist of not less than two (2) members of the Board of
Directors. Members of the Committee shall be "disinterested persons" (within
the meaning of Rule 240.16(b)-3(c) of the Securities and Exchange Commission)
who are not employees of the Company of its subsidiaries.
The Committee shall determine the purchase price of the stock covered by
each option, the employees and nonemployee directors to whom, and the time or
times at which, options shall be granted, the number of shares to be covered by
each option, and the term of each option. In addition, the Committee shall
have the power and authority to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine the terms and
provisions of the respective option agreements (which need not be identical)
and to make all other determinations deemed necessary or advisable for the
administration of the Plan.
If the Committee is appointed, the Board of Directors shall designate one
of the members of the Committee as chairman and the Committee shall hold
meetings at such times and places as it shall deem advisable. A majority of
the Committee members shall constitute a quorum. All determinations of the
Committee shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by all the Committee members shall
be fully as effective as if it had been made by a vote at a meeting duly called
and held. The Committee shall keep minutes of its meetings and shall make such
rules and regulations for the conduct of its business as it shall deem
advisable.
3. EFFECTIVENESS AND TERMINATION OF PLAN.
(a) The Plan shall become effective as of September 23, 1991.
(b) This Plan shall terminate on the earliest of (i) the tenth anniversary
of the effective date (i.e., September 23, 2001), (ii) the date when all shares
of the Company's Common Stock (the "Shares") reserved for issuance under the
Plan have been acquired through the exercise of options granted under the Plan,
or (iii) such earlier date as determined by the Board of Directors. Any option
outstanding under the Plan at the time of the Plan's termination shall remain
in effect in accordance with its terms and conditions and those of the Plan.
4. GRANTEES. Subject to Section 2, options may be granted to key employees
(including directors and officers) and nonemployee directors of the Company and
its subsidiaries as determined by the Committee (each such employee or
director, a "Grantee"); provided, however, ISOs shall only be granted to
employees.
5. THE SHARES. Subject to Section 7, the aggregate number of Shares which
may be issued under the Plan shall be 1,150,000. Such number of Shares may be
set aside out of the authorized but unissued Common Stock not reserved for any
other purpose or out of Common Stock held in or acquired for the treasury of
20
<PAGE> 23
the Company. If all or part of an expired option is unexercised, the Shares
which were not exercised may again be available for grant under the Plan.
6. GRANT, TERMS AND CONDITIONS OF OPTIONS. Options may be granted by the
Committee at any time and from time to time prior to the termination of the
Plan. Except as hereinafter provided, options granted pursuant to the Plan
shall be subject to the following terms and conditions.
(a) Price. The purchase price of the Shares subject to an option shall be
no less than the fair market value of the Shares at the time of grant;
provided, however, if an ISO is granted to a person owning Common Stock of the
Company possessing more than 10% of the total combined voting power of all
classes of stock of the Company as defined in Section 422 of the code ("10%
Stockholder"), the purchase price shall be no less than 110% of the fair market
value of the Shares. The fair market value of the Shares shall be determined
by and in accordance with procedures to be established by the Committee, whose
determination shall be final.
Notwithstanding the foregoing, if the Company's Common Stock is admitted to
quotation on the National Association of Securities Dealers Automated Quotation
system on the date the option is granted, fair market value shall not be less
than the average of the highest bid and lowest asked prices of the Common Stock
on such system on such date. If the Common Stock is admitted to trading on a
national securities exchange on the date the option is granted, fair market
value shall not be less than the last sales price reported for the Common Stock
on such exchange on such date or on the last date preceding such date on which
a sale was reported.
The exercise price shall be paid in full in United States dollars in cash
or by check at the time of exercise. At the discretion of the Committee, the
exercise price may be paid with (i) Common Stock already owned by, and in
possession of, the Grantee or (ii) any combination of United States dollars or
Common Stock. Anything contained herein to the contrary notwithstanding, any
required withholding tax shall be paid by the Grantee in full at the time of
exercise of an option. Common Stock used to satisfy the exercise price of an
option shall be valued at its fair market as of the close of business on the
day of exercise. The exercise price shall be subject to adjustment, but only
as provided in Section 7 hereof.
(b) Limit on Incentive Option Amount. Notwithstanding any provisions
contained herein to the contrary, the Shares covered by an ISO granted to a
Grantee which are exercisable for the first time during any calendar year shall
not exceed the $100,000 limitation in Section 422 of the Code.
(c) Duration and Exercise of Options. An option may be granted for a term
as determined by the Committee but not exceeding ten (10) years from the date
of grant; provided, however, the term of an ISO granted to a 10% Stockholder
may not exceed five (5) years. Options shall be exercised at such time and in
such amounts (up to the full amount thereof) as may be determined by the
Committee at the time of grant. If an option is exercisable in installments,
the Committee shall determine what events, if any, will accelerate the exercise
of the option.
The Plan shall be subject to approval by the Company's stockholders within
one (1) year from the date on which it was adopted. Prior to such stockholder
approval, options may be granted under the Plan, but any such option shall not
be exercisable prior to such stockholder approval. If the Plan is not approved
by the Company's stockholders, the Plan shall terminate and all options
theretofore granted under the Plan shall terminate and become null and void.
(d) Termination of Employment. Except as otherwise determined by the
Committee, upon the termination of a Grantee's employment (or service as a
nonemployee director), the Grantee's rights to exercise an option shall be as
follows:
i) If the Grantee's employment (or service as a nonemployee director) is
terminated on account of total and permanent disability (pursuant to the
Company's long-term disability plan for Grantees who are employees) and as
defined in Section 22(e)(3) of the Code), any option shall become fully (100%)
vested as of the date of termination and may be exercised by the Grantee (or by
the Grantee's estate if the Grantee dies after termination) at any time within
one (1) year after termination on account of disability but in no event after
the expiration of the term of the option.
21
<PAGE> 24
ii) In the case of a Grantee whose employment (or service as a nonemployee
director) is terminated by death, any option shall become fully (100%) vested
as of the date of death and the Grantee's estate shall have the right for a
period of one (1) year following the date of such death to exercise the option
but in no event after the expiration of the term of the option.
iii) In the case of a Grantee who retires from the Company and its
subsidiaries after attaining age 62, an option shall become fully (100%) vested
as of the date of retirement and the Grantee may, within the three-month period
following retirement, exercise such option but in no event after the expiration
of the term of the option. If the Grantee dies during such three-month period,
the Grantee's estate may exercise such option during the period ending on the
first anniversary of the Grantee's retirement but in no event after the
expiration of the term of the option.
iv) In the Case of a Grantee whose employment with the Company and its
subsidiaries (or service as a nonemployee director) is terminated for any
reason other than death, disability or retirement, the Grantee (or the
Grantee's estate in the event of the Grantee's death after such termination)
may, within the 30-day period following such termination, exercise an option to
the extent the right to exercise had accrued prior to such termination but in
no event after the expiration of the term of the option. Notwithstanding the
foregoing, if the Grantee's termination of employment is on account of
misconduct or any act that is adverse to the Company, the Grantee's option
shall expire as of the date of termination of employment.
v) A Grantee's "estate" shall mean the Grantee's legal representative or
any person who acquires the right to exercise an option by reason of the
Grantee's death. The Committee may in its discretion require the transferee of
a Grantee to supply it with written notice of the Grantee's death or disability
and to supply it with written notice of the Grantee's death or disability and
to supply it with a copy of the will (in the case of the Grantee's death) or
such other evidence as the Committee deems necessary to establish the validity
of the transfer of an option. The Committee may also require the agreement of
the transferee to be bound by all of the terms and conditions of the Plan.
(e) Transferability of Option. Options shall be transferable only by will
or the laws of descent and distribution and shall be exercisable during the
Grantee's lifetime only by the Grantee.
(f) Form, Modification, Extension and Renewal of Options. Subject to the
terms and conditions and within the limitations of the Plan, an option shall be
evidenced by such form of agreement as is approved by the Committee, and the
Committee may modify, extend or renew outstanding options (up to the extent not
theretofore exercised) and authorize the granting of new options in
substitution therefor (to the extent not theretofore exercised).
Notwithstanding the foregoing, no modification of an option shall, without the
consent of the Grantee, alter or impair any rights or obligations under any
option theretofore granted under the Plan nor shall any modification be made
which shall adversely affect the status of an ISO as an incentive stock option
under Section 422 of the Code.
(g) Minimum Number of Shares. The minimum number of Shares for which an
option may be exercised at any time shall be 100 shares, unless the unexercised
portion of the option covers a lesser number of Shares.
(h) Other Terms and Conditions. Options may contain such other
provisions, which shall not be inconsistent with any of the foregoing terms of
the Plan, as the Committee shall deem appropriate, including a provision
permitting the Company or a subsidiary to reacquire an option for cash.
7. CAPITAL STRUCTURE CHANGES.
(a) If the outstanding shares of the Company's Common Stock are increased,
decreased or changed into, or exchanged for a different number or kind of
shares or securities of the Company, whether through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock
split, combination of shares, exchange of shares, change in corporate structure
or the like, the Board of Directors shall make appropriate and proportionate
adjustments in the number and kinds of shares available for options pursuant to
the Plan or subject to any outstanding options and in the purchase price
therefor. The determination of the Board of Directors as to such adjustments
shall be conclusive.
22
<PAGE> 25
(b) Fractional Shares resulting from any adjustment in options pursuant to
Section 7 shall be eliminated at the time of exercise by rounding-down for
fractions less than one-half (1/2) and rounding-up for fractions equal to or
greater than one-half (1/2). No cash settlements shall be made with respect to
fractional Shares eliminated by rounding. Notice of any adjustments shall be
given by the Committee to each Grantee whose option has been adjusted and such
adjustment (whether or not such notice is given) shall be effective and binding
for all purposes of the Plan.
(c) Upon dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation in which the Company is not the
surviving corporation, or upon the sale of substantially all of the property of
the Company to another corporation, the Plan and options issued thereunder
shall terminate, unless provision is made in connection with such transaction
for the assumption of options theretofore granted, or the substitution for such
options of new options of the successor employer corporation or a parent or
subsidiary thereof, with appropriate adjustment as to the number and kinds of
shares and the per share exercise price. In the event of such termination, all
outstanding options shall be exercisable in full for at least 30 days prior to
the termination date whether or not otherwise exercisable during such period.
(d) Options may be granted under this Plan from time to time in
substitution for similar options held by employees of corporations who become
or are about to become employees of the Company or a subsidiary as the result
of a merger or consolidation, the acquisition by the Company or a subsidiary of
the assets of the employing corporation, or the acquisition by the Company or a
subsidiary of the fifty percent (50%) or more of the stock of the employing
corporation causing it to become a subsidiary.
8. SECURITIES LAW REQUIREMENTS. No option granted pursuant to this Plan
shall be exercisable in whole or in part nor shall the Company be obligated to
sell any Shares subject to any such option if such exercise or sale, in the
opinion of counsel for the Company, violates the Securities Act of 1933 (or
other federal or state statutes having similar requirements). Each option
shall be subject to the further requirement that, if at any time the Committee
shall determine in its discretion that the listing, registration nor
qualification of the Shares subject to such option under any securities
exchange requirements or under any applicable law, or the consent or approval
of any governmental regulatory body, is necessary as a condition of, or in
connection with, the granting of such option or the issuance of Shares
thereunder, such option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Committee.
The Committee may require each person purchasing Shares pursuant to an option
to represent to and agree with the Company in writing that he is acquiring the
Shares without a view to distribution thereof. The certificates for such
Shares may include any legend which the Committee deems appropriate to reflect
any restrictions on transfer. All certificates for Shares delivered under the
Plan shall be subject to stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable federal or state
securities law, and the Committee may cause a legend or legends to be put on
any such certificates to make appropriate reference to such restrictions.
9. AMENDMENTS. The Board of Directors may amend or terminate the Plan in
whole or in part as it deems appropriate and proper; provided, however, except
as provided in Section 7, (i) without stockholder approval no action may be
taken which changes the minimum option price, increases the maximum term of
options, materially increases the benefits accruing to Grantees under the Plan,
materially increases the number of Shares which may be subject to options
pursuant to this Plan, or materially modifies the requirements as to
eligibility for participation hereunder, and (ii) without the consent of the
Grantee, no action may be taken which adversely affects the rights of such
Grantee concerning an option.
10. NO EMPLOYMENT RIGHT. Neither this Plan nor any action taken hereunder
shall be construed as giving any right to any individual to be retained as an
officer or employee of the Company or any of its subsidiaries.
11. INDEMNIFICATION. Each person who is or at any time serves as a member
of the Board of Directors or the Committee shall be indemnified and held
harmless by the Company against and from (i) any loss, cost, liability or
expense that may be imposed upon or reasonably incurred by such person in
23
<PAGE> 26
connection with or resulting from any claim, action, suit or proceeding to
which such person may be a party or in which such person may be involved by
reason of any action or failure to act under this Plan and (ii) any and all
amounts paid by such person in satisfaction of judgment in any such action,
suit or proceeding relating to this Plan.
Each person covered by this indemnification shall give the Company an
opportunity, at its own expense, to handle and defend the same before such
person undertakes to handle and defend the same on such person's own behalf.
The foregoing persons may be entitled under the charter or by-laws of the
Company or any of its subsidiaries, as a matter of law, or otherwise, or any
power that the Company or a subsidiary may have to indemnify such person or
hold such person harmless.
12. GOVERNING LAW. Except to he extent preempted by federal law, all
matters relating to this Plan or to options granted hereunder shall be governed
by the laws of the State of Maryland.
13. EXPENSES; PROCEEDS. The expenses of implementing and administering
this Plan shall be borne by the Company and its subsidiaries. Proceeds from
the sale of Common Stock under the Plan shall constitute general funds of the
Company.
14. TITLES AND HEADINGS. The titles and headings of the Sections in this
Plan are for convenience of reference only; in the event of any conflict, the
text of this Plan, rather than such titles or headings, shall control.
24
<PAGE> 27
<TABLE>
<CAPTION>
/X/ PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE MICROS SYSTEMS, INC.
<S> <C>
FOR AGAINST ABSTAIN
THIS PROXY IS SOLICITED ON BEHALF OF 1. Proposal to amend the
THE BOARD OF DIRECTORS Company's Articles of / / / / / /
Incorporation to provide
The undersigned stockholder of MICROS Systems, Inc. (the "Company") for a Classified Board of
hereby appoints Louis M. Brown, Jr. and A.L. Giannopoulos as Proxies, Directors (Proposal 1)
each with the power to appoint his substitute, and hereby authorizes FOR WITHHOLD
either of them to represent and to vote, as designated below, all the all nominees listed AUTHORITY
shares of Common Stock of the Company held on record by the undersigned below (except as to vote
on October 4, 1996 at the Annual Meeting of Stockholders to be held at marked to the for all
2:00 PM on November 22, 1996 at MICROS Systems, Inc., 12000 Baltimore contrary below) nominees
Avenue, Beltsville, Maryland or at any adjournments thereof. The Board below
of Directors recommends votes FOR Proposals 1 through 4.
2. Election of Directors
(Proposal 2) / / / / / /
Louis M. Brown, Jr.,
Daniel A. Cohen, A.L.
Giannopoulos, F. Suzanne
Jenniches, John G. Puente,
Alan M. Voorhees, Edward T.
Wilson
INSTRUCTION: To withhold authority to vote for any
individual nominee, write the nominee's name in the
space provided below.
----------------------------------------------------
FOR AGAINST ABSTAIN
3. Proposal to approve the / / / / / /
appointment of Price
Waterhouse LLP as the
independent public
accountants of the
Company (Proposal 3)
FOR AGAINST ABSTAIN
4. Proposal to approve the / / / / / /
amendment to the
Company's 1991 Stock
Option Plan (Proposal 4)
This proxy will be voted as directed by the
undersigned stockholder. UNLESS CONTRARY DIRECTION
IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1,
---------------------- 2, 3, AND 4. The Proxies are authorized, in their
Please sign and date this Proxy in the boxes Date discretion, to vote upon such other business as may
provided. When shares are held by joint tenants, properly come before the Annual Meeting or any
both should sign. adjournments thereof. The undersigned stockholder may
- - ----------------------------------------------------------------------- revoke this proxy at any time before it is voted by
delivering to the Secretary of the Company either a
written revocation of the proxy or a duly executed
proxy bearing a later date, or by appearing at the
Annual Meeting and voting in person. The undersigned
- - ----Stockholder sign above----------Co-holder (if any) sign above----- stockholder hereby acknowledges receipt of the Notice
of Annual Meeting and Proxy Statement.
+ "Sign your name exactly as it appears above. +
</TABLE>
- - --------------------------------------------------------------------------------
/\ Detach above card, sign, date and mail in postage paid envelope provided. /\
MICROS SYSTEMS, INC.
- - --------------------------------------------------------------------------------
PLEASE PROMPTLY COMPLETE,
DATE, SIGN AND MAIL YOUR PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE
- - --------------------------------------------------------------------------------
If you receive more than one proxy card, please sign and return all cards in
the accompanying envelope. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
