<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-b(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
RADIANT SYSTEMS, INC.
----------------------------------------------------
(Name of Registrant as Specified in Its Charter)
NOT APPLICABLE
----------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
____________________
2) Aggregate number of securities to which transaction applies:
____________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (1)_________________________
4) Proposed maximum aggregate value of transaction:________________
5) Total fee paid:_________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: _______________________________________
2) Form, Schedule or Registration Statement No.: _________________
3) Filing Party: _________________________________________________
4) Date Filed: ___________________________________________________
- ---------------------------
(1) Set forth the amount on which the filing fee is calculated a nd
state how it was determined.
<PAGE> 2
May 24, 1999
Dear Shareholder:
This year's Annual Meeting of Shareholders of Radiant Systems, Inc.
will be held on Monday, June 28, 1999 at 10:00 a.m., local time, at the offices
of Smith, Gambrell & Russell, LLP, Promenade II Building, 1230 Peachtree
Street, N.E., 31st Floor, Atlanta, Georgia 30309. You are cordially invited to
attend.
The Notice of Annual Meeting and a Proxy Statement, which describe the
formal business to be conducted at the Annual Meeting, follow this letter.
After reading the Proxy Statement, please promptly mark, sign and
return the enclosed proxy in the prepaid envelope to assure that your shares
will be represented. Your shares cannot be voted unless you date, sign and
return the enclosed proxy or attend the Annual Meeting in person. Regardless of
the number of shares you own, your careful consideration of, and vote on, the
matters before our shareholders are important.
A copy of the Company's 1998 Annual Report is also enclosed for your
information.
We look forward to seeing you at the Annual Meeting.
Very truly yours,
/s/ Erez Goren
Erez Goren
Co-Chairman of the Board and
Chief Executive Officer
<PAGE> 3
RADIANT SYSTEMS, INC.
3925 BROOKSIDE PARKWAY
ALPHARETTA, GEORGIA 30022
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 28, 1999
The annual meeting of shareholders of Radiant Systems, Inc. (the
"Company") will be held on Monday, June 28, 1999 at 10:00 a.m., at the offices
of Smith, Gambrell & Russell, LLP, Promenade II Building, 1230 Peachtree
Street, N.E., 31st Floor, Atlanta, Georgia 30309, for the following purposes:
(1) To elect two (2) directors to the Board of Directors, to serve
for a term of three years and until their successors are elected and qualified;
and
(2) To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Only shareholders of record at the close of business on May 18, 1999
will be entitled to notice of and to vote at the meeting or any adjournments or
postponements thereof.
A Proxy Statement and a proxy solicited by the Board of Directors are
enclosed herewith. Please sign, date and return the proxy promptly. If you
attend the meeting, you may, if you wish, withdraw your proxy and vote in
person.
By Order of the Board of Directors,
/s/ Erez Goren
EREZ GOREN
Co-Chairman of the Board and
Chief Executive Officer
Alpharetta, Georgia
May 24, 1999
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY PROMPTLY SO THAT YOUR VOTE MAY BE
RECORDED AT THE MEETING IF YOU DO NOT ATTEND PERSONALLY.
<PAGE> 4
RADIANT SYSTEMS, INC.
3925 BROOKSIDE PARKWAY
ALPHARETTA, GEORGIA 30022
ANNUAL MEETING OF SHAREHOLDERS
JUNE 28, 1999
-----------------------
PROXY STATEMENT
-----------------------
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Radiant Systems, Inc. (the "Company")
for the Annual Meeting of Shareholders to be held on Monday, June 28, 1999, and
any adjournments or postponements thereof, at the time and place and for the
purposes set forth in the accompanying notice of the meeting. The expense of
this solicitation, including the cost of preparing and mailing this Proxy
Statement, will be paid by the Company. In addition to solicitations by mail,
officers and regular employees of the Company, at no additional compensation,
may assist in soliciting proxies by telephone. This Proxy Statement and the
accompanying proxy are first being mailed to shareholders on or about May 24,
1999. The address of the principal executive offices of the Company is 3925
Brookside Parkway, Alpharetta, Georgia 30022.
Any proxy given pursuant to this solicitation may be revoked by any
shareholder who attends the meeting and gives oral notice of his election to
vote in person, without compliance with any other formalities. In addition, any
proxy given pursuant to this solicitation may be revoked prior to the meeting
by delivering to the Secretary of the Company an instrument revoking it or a
duly executed proxy for the same shares bearing a later date. Proxies which are
returned properly executed and not revoked will be voted in accordance with the
shareholder's directions specified thereon. Where no direction is specified,
proxies will be voted for the election of the director nominees named below.
The record of shareholders entitled to vote at the annual meeting was
taken on May 18, 1999. On that date the Company had outstanding and entitled to
vote 16,317,410 shares of common stock, no par value per share (the "Common
Stock"), with each share of Common Stock entitled to one vote.
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of April 1, 1999 by (i)
each person known by the Company to be the beneficial owner of more than five
percent (5%) of the outstanding Common Stock; (ii) each director of the
Company; (iii) each Named Executive Officer (as defined herein); and (iv) all
directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES
NAME OF BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED (1) OF CLASS
- ---------------- ---------- --------
<S> <C> <C>
Erez Goren(2)......................................... 3,255,000 20.2%
Alon Goren(2)......................................... 3,255,000 20.2
Eric B. Hinkle........................................ 181,900 (3) 1.1
John H. Heyman........................................ 341,455 2.1
Andrew S. Heyman...................................... 32,764 (4) *
Carlyle M. Taylor..................................... 123,334 *
James S. Balloun...................................... 30,000 (5) *
Evan O. Grossman...................................... 16,200 (5) *
Warburg Pincus Asset Management, Inc.................. 1,404,200 (6) 8.7
First Union Corporation............................... 910,900 (7) 5.6
All directors and executive officers
as a group (8 persons).............................. 7,235,653 (8) 44.2
</TABLE>
- -----------------------
* Less than 1% of outstanding shares.
(1) "Beneficial Ownership" includes shares for which an individual,
directly or indirectly, has or shares voting or investment power or
both and also includes options which are exercisable within sixty days
of the date of this Proxy Statement. All of the listed persons have
sole voting and investment power over the shares listed opposite their
names. Beneficial ownership as reported in the above table has been
determined in accordance with Rule 13d-3 of the Securities Exchange
Act of 1934. Pursuant to the Rules of the Commission, certain shares
of the Company's Common Stock that a beneficial owner has the right to
acquire within 60 days pursuant to the exercise of stock options or
warrants are deemed to be outstanding for the purpose of computing the
percentage ownership of such owner but are not deemed outstanding for
the purpose of computing the percentage ownership of any other person.
(2) The business address of Erez Goren and Alon Goren is 3925 Brookside
Parkway, Alpharetta, Georgia 30022.
-2-
<PAGE> 6
(3) Represents shares of Common Stock subject to stock options exercisable
within the next 60 days.
(4) Includes 1,250 shares of Common Stock subject to stock options
exercisable within the next 60 days.
(5) Includes 15,000 shares of Common Stock subject to stock options
exercisable within the next 60 days.
(6) Based on a Schedule 13G filed with the Commission on February 11, 1999
by First Union Corporation. The Company makes no representation as to
the accuracy or completeness of the information reported. The address
of First Union is One First Union Center, 301 South College Street,
Charlotte, North Carolina 28288-0137.
(7) Based on a Schedule 13G filed with the Commission on January 13, 1999
by Warburg Pincus Asset Management, Inc. Includes (i) 858,100 shares
with respect to which Warburg Pincus has the sole power to vote or
dispose and (ii) 529,900 shares with respect to which Warburg Pincus
has shared power to vote or dispose. The Company makes no
representation as to the accuracy or completeness of the information
reported. The address of Warburg Pincus is 466 Lexington Avenue, New
York, New York 10017.
(8) Includes 213,150 shares of Common Stock subject to stock options
exercisable within the next 60 days.
AGENDA ITEM ONE
ELECTION OF DIRECTORS
The Board of Directors of the Company consists of six (6) directors,
divided into three classes, with members of each class of directors serving for
staggered three-year terms. The Board consists of two Class I directors, Erez
Goren and Alon Goren, two Class II directors, John H. Heyman and James S.
Balloun, and two Class III directors, Eric B. Hinkle and Evan O. Grossman. The
terms of the Class III directors will expire at the 1999 Annual Meeting of
Shareholders. The Board of Directors has nominated Evan O. Grossman and Eric B.
Hinkle for election as Class III directors of the Company. The Board of
Directors recommends that you vote "for" the election of these nominees.
Each of the nominees has consented to being named in this Proxy
Statement and to serve as a director of the Company if elected. In the event
that any nominee withdraws or for any reason is not able to serve as a
director, the proxy will be voted for such other person as may be designated by
the Board of Directors, but in no event will the proxy be voted for more than
two nominees. The affirmative vote of a plurality of all votes cast at the
meeting by the holders of the Common Stock is required for the election of the
two nominees standing for election. Management of the Company has no reason to
believe that any nominee will not serve if elected.
The following persons have been nominated by management for election
to the Board of Directors as Class III directors to succeed themselves for a
term of three years, expiring at the 2002 Annual Meeting of Shareholders, and
until their successors are elected and qualified:
-3-
<PAGE> 7
EVAN O. GROSSMAN, age 34, has served as President of Willow
Associates, a strategic consulting and research firm, since November 1997. Mr.
Grossman served as President and Chief Operating Officer of Share Group, Inc.,
a teleservices company, from August 1993 to November 1997. Mr. Grossman was
previously affiliated with the management consulting firm of McKinsey &
Company, Inc. from October 1990 to July 1993. Mr. Grossman has been a director
of the Company since May 1997.
ERIC B. HINKLE, age 39, has served as President, Chief Operating
Officer and a director of the Company since October 1996. Mr. Hinkle served in
various capacities with the Avionics Divisions of AlliedSignal Corporation from
January 1994 to October 1996, including most recently as Vice President of
Communications and Navigation Products. From 1989 to January 1994, Mr. Hinkle
was employed by McKinsey & Company, Inc., a consulting firm, including most
recently as Senior Engagement Manager. Mr. Hinkle has an M.B.A. from Harvard
Business School, a M.S. degree in Electrical Engineering from Stanford
University, and a B.S. degree in Computer Engineering from Brown University.
Each of the following persons is a member of the Board of Directors
who is not standing for election to the Board this year and whose term will
continue after the annual meeting of shareholders.
Class I Directors, serving for a term expiring at the 2000 Annual
Meeting of Shareholders:
EREZ GOREN, age 35, has served as Co-Chairman of the Board and Chief
Executive Officer of the Company since its inception in 1985 and as its
President from 1985 to October 1996. Mr. Goren attended State University of New
York at Stony Brook prior to devoting his full time and energy to the Company.
He is the brother of Alon Goren.
ALON GOREN, age 33, has served as Co-Chairman of the Board and Chief
Technology Officer of the Company since its inception in 1985. Mr. Goren has a
B.S. in Computer Systems Engineering from Rensselaer Polytechnic Institute. He
is the brother of Erez Goren.
Class II Directors, serving for a term expiring at the 2001 Annual
Meeting of Shareholders:
JAMES S. BALLOUN, age 60, has served as Chairman of the Board and
Chief Executive Officer of National Service Industries, Inc., a diversified
service and manufacturing company, since February 1996, and as its President
since October 1996. He was previously affiliated with the management consulting
firm of McKinsey & Company, Inc., which he served as a Director from June 1976
until January 1996. Mr. Balloun has been a director of the Company since April
1997. Mr. Balloun is a director of Georgia Pacific Corporation and Wachovia
Corporation.
JOHN H. HEYMAN, age 37, has served as Executive Vice President and
Chief Financial Officer of the Company since September 1995 and as a director
of the Company since June 1996. Mr. Heyman served as Vice President and Chief
Financial Officer of Phoenix Communications, Inc., a commercial printer, from
March 1991 to August 1995. From 1989 to 1991, Mr. Heyman served as Vice
President, Acquisitions of Forsch Corporation, a diversified manufacturing
company. From 1983 to 1987, Mr. Heyman served in a variety of capacities with
Arthur Andersen LLP, where he worked primarily with middle market companies and
technology firms. Mr. Heyman has an M.B.A. from Harvard Business
-4-
<PAGE> 8
School and a B.B.A. degree in Accounting from the University of Georgia. He is
the brother of Andrew S. Heyman, the Company's Executive Vice President -
Global Solutions.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and persons who own more than 10% of
the outstanding Common Stock of the Company, to file with the Securities and
Exchange Commission reports of changes in ownership of the Common Stock of the
Company held by such persons. Officers, directors and greater than 10%
shareholders are also required to furnish the Company with copies of all forms
they file under this regulation. To the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company and
representations that no other reports were required, during the year ended
December 31, 1998, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% shareholders were complied with,
except that James S. Balloun and Evan O. Grossman each failed to file on a
timely basis one report relating to the automatic grant of stock options to
non-employee directors.
Although it is not the Company's obligation to make filings pursuant
to Section 16 of the Securities Exchange Act of 1934, the Company has adopted a
policy requiring all Section 16 reporting persons to report monthly to the
Controller of the Company as to whether any transactions in the Company's
Common Stock occurred during the previous month.
MEETINGS OF THE BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
The Board of Directors held four meetings during the year ended
December 31, 1998. Each director attended at least 75% or more of the aggregate
number of meetings held by the Board of Directors and the committees on which
he served. The Company's Board of Directors has three (3) standing committees
- -- the Audit Committee, the Compensation Committee and the Stock Option
Committee.
The Audit Committee presently consists of James S. Balloun and Evan O.
Grossman. The Audit Committee has been assigned the principal function of
reviewing the internal and external financial reporting of the Company,
reviewing the scope of the independent audit and considering comments by the
auditors regarding internal controls and accounting procedures and management's
response to these comments. The Audit Committee held two meetings during 1998.
The Compensation Committee presently consists of Erez Goren, James S.
Balloun and Evan O. Grossman. The Compensation Committee has been assigned the
functions of approving and monitoring the remuneration arrangements for senior
management. The Compensation Committee did not meet during 1998.
The Stock Option Committee presently consists of James S. Balloun and
Evan O. Grossman. The Stock Option Committee has been assigned the functions of
administering the Company's stock option plans and granting options thereunder.
The Stock Option Committee held 12 meetings during 1998.
-5-
<PAGE> 9
The Board of Directors does not have a standing nominating committee,
such function being reserved to the full Board of Directors. Any shareholder
entitled to vote for the election of directors may nominate a person or persons
for election as a director only if written notice of such shareholder's
intention to make any such nomination is given either by personal delivery or
mailed by the United States Mail, postage prepaid, certified and return receipt
requested, to the Secretary of the Company not later than the later of (i) the
close of business on the seventh (7th) calendar day following the date on which
notice of the meeting of shareholders for the election of directors is first
given to shareholders (any such notice of meeting of shareholders shall not be
given earlier than the record date for the meeting of shareholders) and (ii) a
date ninety (90) days prior to the date of the meeting of shareholders. Each
such notice shall set forth: (a) the name and address of the shareholder who
intends to make the nomination and of the person or persons to be nominated;
(b) a representation that the shareholder is a holder of record of stock of the
Company entitled to vote at such meeting and intends to appear in person or by
proxy at the meeting to nominate the person or persons specified in the notice;
(c) a description of all arrangements or understandings between the shareholder
and each nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be made by the
shareholder; (d) such other information regarding each nominee proposed by such
shareholder as would have been required to be included in a proxy statement
filed pursuant to the proxy rules of the Commission had each nominee been
nominated, or intended to be nominated, by the Board; and (e) the consent of
each nominee to serve as a director of the Company if so elected.
-6-
<PAGE> 10
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION HELD
---- --- -------------
<S> <C> <C>
Erez Goren 35 Co-Chairman of the Board and Chief
Executive Officer
Alon Goren 33 Co-Chairman of the Board and Chief
Technology Officer
Eric B. Hinkle 39 President and Chief Operating Officer
John H. Heyman 37 Executive Vice President and Chief
Financial Officer
Andrew S. Heyman 35 Executive Vice President - Global
Solutions
Carlyle M. Taylor 45 Executive Vice President - Operations
</TABLE>
Executive officers are appointed by the Board of Directors of the
Company and hold office at the pleasure of the Board. Executive officers devote
their full time to the affairs of the Company. See "Election of Directors" for
information with respect to Erez Goren, Alon Goren, Eric B. Hinkle and John H.
Heyman.
ANDREW S. HEYMAN has served as Executive Vice President - Global
Solutions of the Company since April 1998 and as Vice President - Convenience
Store Division and Managing Director of the Radiant Solutions Group of the
Company from January 1996 to April 1998. Mr. Heyman served as a senior manager
with Andersen Consulting from 1987 to December 1995. He holds a M.S. degree in
Computer Information Systems from Georgia State University and a B.B.A. in
Finance from the University of Georgia. He is the brother of John H. Heyman.
CARYLE M. TAYLOR has served as Executive Vice President - Operations
of the Company since April 1998 and as Vice President - Integration and Support
of the Company from September 1995 to April 1998. Mr. Taylor served in various
capacities with NCR Corporation (formerly AT&T Global Information Solutions) in
the retail information systems area from 1978 to September 1995, including most
recently as Assistant Vice President of the scanner business unit. Mr. Taylor
received a B.S. degree in Mathematics from North Carolina Wesleyan College.
-7-
<PAGE> 11
EXECUTIVE COMPENSATION
The following table presents certain information for the fiscal years
ended December 31, 1998, 1997 and 1996 concerning compensation earned for
services rendered in all capacities by the Company's Chief Executive Officer
and the other executive officers of the Company whose total annual salary and
bonus exceeded $100,000 during fiscal 1998 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------- ----------------
SALARY($) BONUS($) SECURITIES
NAME AND --------- -------- UNDERLYING
PRINCIPAL POSITION YEAR OPTIONS
------------------ ---- ----------------
<S> <C> <C> <C> <C>
Erez Goren................................. 1998 $ 90,000 $ -- --
Co-Chairman and Chief Executive 1997 92,769 -- --
Officer 1996 80,769 11,197 --
Eric B. Hinkle............................. 1998 $100,592 $ -- --
President and Chief Operating 1997 103,077 100,000 --
Officer 1996(1) 15,385 -- 375,000
John H. Heyman............................. 1998 $ 99,950 $ -- --
Executive Vice President and Chief 1997 103,026 50,000 --
Financial Officer 1996 99,731 -- --
Andrew S. Heyman........................... 1998 $100,000 $ 13,990 36,000
Executive Vice President - 1997 81,462 35,559 10,000
Global Solutions 1996 62,314 -- --
Carlyle M. Taylor.......................... 1998 $100,000 $ 8,000 --
Executive Vice President - 1997 82,462 28,000 --
Operations 1996 80,000 28,000 --
</TABLE>
- ---------------------
(1) Mr. Hinkle joined the Company on October 21, 1996.
-8-
<PAGE> 12
DIRECTORS' FEES
The Company's present policy is not to pay any cash compensation to
its directors. Each non-employee director of the Company receives an automatic
grant of options to purchase 5,000 shares of Common Stock on the last business
day of each fiscal year of the Company. Each non-employee director of the
Company is also reimbursed for travel and other expenses incurred in connection
with the performance of their duties.
In addition, all new non-employee directors of the Company receive a
one-time grant of an option to purchase 15,000 shares of Common Stock at an
exercise price equal to the fair market value of such stock on the date of
grant, which options vest over a period of three years. All such options
expire, unless previously exercised or terminated, ten years from the date of
grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is currently
comprised of Erez Goren, James S. Balloun and Evan O. Grossman. With the
exception of Erez Goren, who serves as Co- Chairman of the Board and Chief
Executive Officer of the Company, none of the members of the Compensation
Committee served as an officer or employee of the Company or any of its
subsidiaries during fiscal 1998. There were no material transactions between
the Company and any of the members of the Compensation Committee during fiscal
1998.
AGREEMENTS WITH EMPLOYEES
All employees of the Company, including executive officers, are
required to sign a confidentiality and noncompete agreement with the Company
restricting the ability of the employee to compete with the Company during his
or her employment and for a period ranging from six months to two years
thereafter, restricting solicitation of customers and employees following
employment with the Company, and providing for ownership and assignment of
intellectual property rights to the Company. The agreements have an indefinite
term, but the employee may terminate employment with the Company at any time.
401(K) PROFIT SHARING PLAN
The Company maintains a 401(k) Profit Sharing Plan (the "401(k) Plan")
which is intended to be a tax-qualified defined contribution plan under Section
401(k) of the Internal Revenue Code of 1986, as amended (the "Code"). In
general, all employees of the Company who have completed six months of service
and have attained age 21 are eligible to participate. The 401(k) Plan includes
a salary deferral arrangement pursuant to which participants may contribute,
subject to certain Code limitations, a minimum of 1.0% and a maximum of 15.0%
of their salary on a pre-tax basis (up to $9,500 per year). Subject to certain
Code limitations, the Company may make both matching and additional
contributions at the discretion of the Board of Directors of the Company each
year. To date, no contributions have been made by the Company to the 401(k)
Plan. A separate account is maintained for each participant in the 401(k) Plan.
The portion of a participant's account attributable to his or her own
contributions is 100.0% vested. Distributions from the 401(k) Plan may be made
in the form of a lump-sum cash payment or in installment payments.
-9-
<PAGE> 13
STOCK OPTION PLANS
1995 Stock Option Plan. On December 20, 1995, the Company's directors
and shareholders adopted the 1995 Stock Option Plan (the "Plan") for employees
who are contributing significantly to the business of the Company or its
subsidiaries as determined by the Company's Board of Directors or the committee
administering the Plan. The Plan currently provides for the grant of incentive
and non-qualified stock options to purchase up to 6,000,000 shares of Common
Stock at the discretion of the Board of Directors of the Company or a committee
designated by the Board of Directors to administer the Plan. The option
exercise price of incentive stock options must be at least 100.0% (110.0% in
the case of a holder of 10.0% or more of the Common Stock) of the fair market
value of the stock on the date the option is granted and the options are
exercisable by the holder thereof in full at any time prior to their expiration
in accordance with the terms of the Plan. Incentive stock options granted
pursuant to the Plan will expire on or before (1) the date which is the tenth
anniversary of the date the option is granted, or (2) the date which is the
fifth anniversary of the date the option is granted in the event that the
option is granted to a key employee who owns more than 10.0% of the total
combined voting power of all classes of stock of the Company or any subsidiary
of the Company. Options granted under the Plan typically vest over a period of
four to five years. As of April 1, 1999, options to purchase 2.8 million shares
of Common Stock were outstanding pursuant to the Plan. In addition,
non-qualified options to purchase 590,690 shares of Common Stock have been
granted by the Company outside of the Plan and remain outstanding.
Directors Plan. The Company's directors and shareholders have adopted
the Non-Management Directors' Stock Option Plan (the "Directors Plan"). The
purpose of the Directors Plan is to secure for the Company the benefits of the
additional incentive inherent in the ownership of Common Stock by non-employee
directors of the Company and to help the Company secure and retain the services
of such non-employee directors. The Directors Plan is intended to be a
self-governing formula plan. To this end, the Directors Plan requires minimal
discretionary action by any administrative body with regard to any transaction
under the Directors Plan. Eligible persons under the Directors Plan are
directors of the Company who are not employees of the Company or any affiliate
of the Company ("Outside Directors"). A maximum of 100,000 shares of Common
Stock has been reserved by the Company for issuance pursuant to options under
the Directors Plan, which number is subject to adjustment in certain
circumstances in order to prevent dilution or enlargement. Each Outside
Director is granted an option to purchase 15,000 shares of Common Stock upon
joining the Board of Directors of the Company. Thereafter, each person who is
an Outside Director as of the last business day of each fiscal year during the
term of the Directors Plan shall receive an option to purchase 5,000 shares of
Common Stock as of such date.
-10-
<PAGE> 14
The following table provides certain information concerning individual
grants of stock options under the Company's 1995 Stock Option Plan made during
the year ended December 31, 1998 to the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------
POTENTIAL REALIZABLE VALUE AT
% OF TOTAL ASSUMED ANNUAL RATES OF
OPTIONS EXERCISE STOCK PRICE APPRECIATION FOR
GRANTED TO OR BASE OPTION TERM (1)
OPTIONS EMPLOYEES IN PRICE ---------------------------------
GRANTED FISCAL ($ PER EXPIRATION 5% 10%
NAME (#) YEAR SHARE) DATE ------------- ------------
- ---- ------- -------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Erez Goren.............. -- -- -- -- -- --
Eric B. Hinkle.......... -- -- -- -- -- --
John H. Heyman.......... -- -- -- -- -- --
Andrew S. Heyman........ 6,000(2) 1.4 17.88 2/17/08 67,468 170,977
30,000(3) 6.8 6.38 7/15/08 120,370 305,042
Carlyle M. Taylor....... -- -- -- -- -- --
</TABLE>
- -----------------------------------
(1) The dollar amounts under these columns represent the potential
realizable value of each grant of option assuming that the market
price of the Company's Common Stock appreciates in value from the date
of grant at the 5% and 10% annual rates prescribed by the SEC and
therefore are not intended to forecast possible future appreciation,
if any, of the price of the Company's Common Stock.
(2) Option vests in increments of 1,500 shares per year, commencing on
February 17, 2000 and on each February 17th thereafter until fully
vested.
(3) Option vests as follows: 2,236 shares on July 15, 1999; 6,382 shares
on each of July 15, 2000 and 2001; and 7,500 shares on each of July
15, 2002 and 2003
The following table provides certain information concerning options
exercised during fiscal 1998 and the value of unexercised options held by the
Named Executive Officers as of December 31, 1998.
<TABLE>
<CAPTION>
Value of Unexercised In-
Number of Unexercised the-Money Options at
Shares Options at Fiscal Year End Fiscal Year End(1)
Acquired on Value --------------------------- --------------------------
Name Exercise (#) Realized($) Exercisable Unexerciable Exercisable Unexercisable
- ---- ------------ ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Erez Goren.............. -- -- -- -- -- --
Eric B. Hinkle.......... 19,200 191,413 189,800 160,000 545,675 460,000
John H. Heyman.......... -- -- 190,000 75,000 1,211,250 478,125
Andrew S. Heyman........ 23,750 605,625 -- 112,250 -- 486,094
Carlyle M. Taylor....... 66,667 1,758,342 -- 133,333 -- 850,000
</TABLE>
- ----------------
(1) Dollar values were calculated by determining the difference between
the closing price of $7.375 per share of Common Stock, as reported by
The Nasdaq Stock Market on December 31, 1998, and the exercise price
of the options.
-11-
<PAGE> 15
CERTAIN TRANSACTIONS
In September 1998, the Company loaned $33,000 to Andrew S. Heyman, the
Company's Executive Vice President - Global Solutions. An additional $148,750
was loaned to Mr. Heyman during the first quarter of 1999. As of April 15,
1999, an aggregate of $181,750 was owed by Mr. Heyman to the Company, which
amount represents the largest aggregate amount of indebtedness outstanding
since the beginning of 1998. These loans bear interest at an annual rate of 5
1/2% and are due on demand. These loans were made to Mr. Heyman to fund certain
of his personal expenses.
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for:
(i) setting the Company's compensation philosophy and policies; (ii) review and
approval of pay recommendations for the executive officers of the Company; and
(iii) initiation of all compensation actions for the Chief Executive Officer of
the Company.
The Company's compensation policies have been designed to align the
financial interests of the Company's management with those of its shareholders,
and reflect the nature of the Company by taking into account the Company's
operating environment and the expectations for continued growth and enhanced
profitability. Compensation for each of the Company's executive officers
consists of a base salary, and in some cases, an annual performance bonus
and/or stock options. The Company does not currently provide executive officers
with other long term incentive compensation other than the ability to
contribute their earnings to the Company's 401(k) Plan.
The Compensation Committee's philosophy is that the predominant portion
of an executive's compensation should be based directly upon the value of
long-term incentive compensation in the form of stock ownership or stock option
awards. The Compensation Committee believes that providing executives with the
opportunities to acquire significant stakes in the growth and prosperity of the
Company (through grants of stock options), while maintaining other elements of
the Company's compensation program at conservative levels, will enable the
Company to attract and retain executives with the outstanding management
abilities and entrepreneurial spirit which are essential to the Company's
ongoing success. Furthermore, the Compensation Committee believes that this
approach to compensation motivates executives to perform to their full
potential.
The Compensation Committee is responsible for reviewing salary
recommendations for the Company's executives and then approveing such
recommendations, with any modifications it deems appropriate. The annual salary
recommendations are made under the ultimate direction of the Chief Executive
Officer, based on peer group and national industry surveys of total
compensation packages, as well as evaluations of the individual executive's
past and expected future performance. Similarly, the base salary of the Chief
Executive Officer is determined based on a review of competitive compensation
data, the Chief Executive Officer's overall compensation package, and an
assessment of his past performance and expected future performance in leading
the Company.
The amount of any annual bonus to be paid to executive officers is
determined based upon an evaluation of such factors as individual performance,
increases in the Company's revenue, net income,
-12-
<PAGE> 16
net income per share and market penetration, as well as the executive's
contribution to the Company's performance.
Stock options represent a substantial portion of compensation for the
Company's executive officers other than Erez Goren and Alon Goren. Stock
options are granted at the prevailing market price on the date of grant, and
will only have value if the Company's stock price increases. Generally, grants
vest in equal amounts over a period of five years (although certain special
types of grants may vest either immediately or over a shorter period) and
executives must be employed by the Company at the time of vesting in order to
exercise the options. Grants of stock options generally are based upon the
level of the executive's position with the Company and an evaluation of the
executive's past and expected future performance. The Compensation Committee
believes that dependence on stock options for a significant portion of
executives' compensation more closely aligns such executives' interests with
those of the Company's shareholders, since the ultimate value of such
compensation is linked directly to stock price.
The Compensation Committee will continually evaluate the Company's
compensation policies and procedures with respect to executives. Although the
Compensation Committee believes that current compensation policies have been
successful in aligning the financial interests of executive officers with those
of the Company's shareholders and with Company performance, it continues to
examine what modifications, if any, should be implemented to further link
executive compensation with both individual and Company performance.
Erez Goren
James S. Balloun
Evan O. Grossman
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the foregoing
Report of the Compensation Committee on Executive Compensation and the
Stockholder Return Performance Graph shall not be incorporated by reference
into any such filings.
-13-
<PAGE> 17
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage change in the
cumulative total stockholder return on the Company's Common Stock against the
cumulative total return of The Nasdaq Stock Market Index and the Nasdaq
Computer and Data Processing Stock Index for the period commencing on February
12, 1997 (the date of the Company's initial public offering of Common Stock)
and ending December 31, 1998 (the "Measuring Period"). The graph assumes that
the value of the investment in the Company's Common Stock and each index was
$100 on February 12, 1997. The change in cumulative total return is measured by
dividing (1) the sum of (i) the cumulative amount of dividends for the
Measuring Period, assuming dividend reinvestment, and (ii) the change in share
price between the beginning and end of the Measuring Period, by (iii) the share
price at the beginning of the Measuring Period. The Company has not paid any
cash dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
RADIANT SYSTEMS, INC., NASDAQ STOCK MARKET INDEX AND
NASDAQ COMPUTER AND DATA PROCESSING STOCK INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD RADIANT NASDAQ NASDAQ
(FISCAL YEAR COVERED) SYSTEMS, INC. STOCK MARKET COMPUTER
--------------------- ------------- INDEX AND DATA
----- PROCESSING
S.I.
----------
<S> <C> <C> <C>
2/12/97 100 100 100
12/31/97 300 117 115
12/31/98 78 164 206
</TABLE>
ASSUMES $100 INVESTED ON FEBRUARY 12, 1997 IN RADIANT SYSTEMS, INC.
COMMON STOCK, NASDAQ STOCK MARKET INDEX AND
NASDAQ COMPUTER AND DATA PROCESSING STOCK INDEX
-14-
<PAGE> 18
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has served as independent auditors of the Company
for the fiscal year ended December 31, 1998 and have been selected by the Board
of Directors to serve as independent auditors of the Company for the fiscal
year ending December 31, 1999. Representatives of Arthur Andersen LLP are
expected to be present at the shareholders' meeting and will have the
opportunity to make a statement if they desire to do so and to respond to
appropriate questions.
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, as filed with the Securities and Exchange Commission, is
available to shareholders who make written request therefor to the Company's
Public Relations Department, 3925 Brookside Parkway, Alpharetta, Georgia 30022.
Copies of exhibits and basic documents filed with that report or referenced
therein will be furnished to shareholders of record upon request.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's 2000
annual meeting must be received at the Company's principal executive offices by
January 25,2000 in order to be eligible for inclusion in the Company's proxy
statement and form of proxy for that meeting.
With respect to any such proposals received by the Company after April
10, 2000, the persons named in the form of proxy solicited by management in
connection with the 2000 annual meeting of shareholders of the Company will
have discretionary authority to vote on any such shareholder proposals in
accordance with their judgment of what is in the best interests of the Company.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before
the annual meeting. However, if other matters should come before the annual
meeting it is the intention of the persons named in the enclosed form of Proxy
to vote the Proxy in accordance with their judgment of what is in the best
interest of the Company.
By Order of the Board of Directors,
/s/ Erez Goren
EREZ GOREN
Co-Chairman of the Board
and Chief Executive Officer
Alpharetta, Georgia
May 24, 1999
-15-
<PAGE> 19
APPENDIX A
RADIANT SYSTEMS, INC.
3925 BROOKSIDE PARKWAY
ALPHARETTA, GEORGIA 30022
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
1999 ANNUAL MEETING OF SHAREHOLDERS.
The undersigned hereby appoints Erez Goren and John H. Heyman or either of
them, with power of substitution to each, the proxies of the undersigned to vote
the Common Stock of the undersigned at the Annual Meeting of Shareholders of
RADIANT SYSTEMS, INC. to be held on June 28, 1999, at 10:00 a.m. at the offices
of Smith, Gambrell & Russell, LLP, Promenade II Building, 1230 Peachtree Street,
N.E., 31st Floor, Atlanta, Georgia 30309, and any adjournments or postponements
thereof:
1. To elect two (2) directors to the Board of Directors to serve for a term of
three years until their successors are elected and qualified.
<TABLE>
<S> <C> <C> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all nominees
(except as marked to the contrary below) listed below
Evan O. Grossman and Eric B. Hinkle
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THE NOMINEE'S NAME IN THE SPACE PROVIDED
BELOW.
------------------------------------------------------------------------------------------------------------------------
</TABLE>
2. To transact such other business as may properly come before the meeting or
any adjournments or postponements thereof.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ABOVE PROPOSALS AND UNLESS
INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED, THIS PROXY
WILL BE SO VOTED.
(Continued and to be dated and signed on reverse side)
Please date and sign this
Proxy exactly as name(s)
appears on the mailing label.
------------------------------
Signature
------------------------------
Signature if held jointly
Print Name(s):
---------------------------------------------------------------------------
NOTE: When signing as an
attorney, trustee, executor,
administrator or guardian,
please give your title as
such. If a corporation or
partnership, give full name by
authorized officer. In the
case of joint tenants, each
joint owner must sign.
Dated: , 1999
----------------------
