IQ SOFTWARE CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on
June 9, 1998
The Annual Meeting ("Meeting") of Shareholders of IQ Software
Corporation will be held at 11:00 A.M. (local time), Tuesday, June 9, 1998
at the Holiday Inn Atlanta, Peachtree Corners, 6050 Peachtree Industrial
Boulevard, N.W., Norcross, Georgia 30071, for the following purposes:
1. To elect one director;
2. To transact such other business as may properly be brought before the
Meeting and any adjournments thereof.
Only shareholders of record of Common Stock of the Corporation on
April 24, 1998 are entitled to notice of and to vote at the Meeting and any
adjournment thereof.
You are cordially invited to attend the Meeting. Whether or not you
plan to attend, it is important that your stock be represented and voted at
the Meeting. Enclosed is a proxy which you are urged to complete, sign and
forward in the accompanying envelope, which requires no postage if mailed
in the United States.
By Order of the Board of Directors,
UGO F. IPPOLITO
Secretary
May 11, 1998
<PAGE>
IQ SOFTWARE CORPORATION
3295 River Exchange Drive, Suite 550
Norcross, Georgia 30092
May 11, 1998
PROXY STATEMENT FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 9, 1998
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of IQ Software Corporation
("Corporation") to be voted at the Annual Meeting of Shareholders of the
Corporation ("Meeting") to be held at the Holiday Inn Atlanta, Peachtree
Corners, 6050 Peachtree Industrial Boulevard, N.W., Norcross, Georgia
30071, on June 9, 1998 at 11:00 A.M. local time, and at any adjournment
thereof. This Proxy Statement and the enclosed proxy are being sent to
shareholders on or about May 11, 1998.
All proxies delivered pursuant to this solicitation are revocable at
any time at the option of the person executing the proxy by giving written
notice of revocation to the Corporation, by executing another proxy bearing
a later date, or by voting in person at the Meeting. All properly executed
proxies delivered pursuant to this solicitation and not revoked will be
voted at the Meeting in accordance with the directions given. Unless
contrary instructions are given, the persons named on the proxy intend to
vote the shares so represented "FOR" the election of the one (1) nominee
for director named in this Proxy Statement. As to any other business which
may come before the Meeting, the persons named on the proxy will vote
according to their best judgment.
Only holders of Common Stock of the Corporation of record on April 24,
1998 are entitled to vote at the Meeting. Each shareholder of record on the
record date is entitled to one vote for each share of Common Stock of the
Corporation so held. On April 24, 1998, there were 4,674,216 shares of
Common Stock of the Corporation issued and outstanding.
The presence of a majority of the outstanding shares of Common Stock
represented in person or by proxy at the Meeting will constitute a quorum.
The two nominees receiving the highest vote totals will be elected as
directors of the Corporation. All other matters to be voted upon will be
decided by the affirmative vote of the majority of the shares
present or represented at the Meeting and entitled to vote.
Abstentions, withheld votes and broker non-votes will be included in
the calculation of the number of shares of Common Stock represented in
person or by proxy at the Meeting in determining whether the quorum
requirement is satisfied, but will not be counted as votes cast for the
matters to be voted upon. Broker "non-votes" occur when a broker holding
shares for a beneficial owner votes on one matter pursuant to its
discretionary authority or instructions from the beneficial owner, but does
not vote on another matter for the reason that the broker does not have
discretionary authority to vote such shares on such other matter and has
not received voting instructions from the beneficial owner. Since all
matters, except the election of directors, requires the affirmative vote of
the holders of a majority of the shares present or represented at the
Meeting for quorum purposes, abstentions, withheld votes and broker
non-votes increase the number
<PAGE>
of shares present or represented at the Meeting for quorum purposes and
thereby increase the number of affirmative votes necessary to approve such
other matters.
Item 1 - Election of Directors.
Board of Directors.
Pursuant to the By-laws of the Corporation, the Board of Directors
consists of five members. The directors are divided into three classes,
each class serving for a period of three years. Approximately one-third of
the members of the Board of Directors are elected by the shareholders
annually.
The Board of Directors (excluding such nominee) has nominated Said
Mohammadiour to stand for election as director at the 1998 Annual Meeting
of Shareholders to hold office until the 2001 Annual Meeting of
Shareholders and until his successor is elected and qualified.
Should this nominee become unable to serve for any reason, which is
not anticipated, the Board of Directors may, unless the Board by resolution
provides for a lesser number of directors, designate a substitute nominee.
In such event, the persons named on the enclosed proxy will vote for the
election of such substitute nominee.
<PAGE>
Information on Nominee and Incumbent Directors.
<TABLE>
<S> <C> <C> <C>
Name Age Year First Business Experience During Past Five
Elected Years and Other Information
NOMINEE FOR ELECTION TO TERM EXPIRING IN 2001
Said Mohammadioun(2) 50 1997 Chief Executive Officer of Synchrologic, Inc. since October, 1996 and its
Chairman since September, 1995. He was Vice President of Lotus Development
Corporation from December, 1990 to March 1995. He is also a Director of
Firstwave Technologies, Inc.
INCUMBENT DIRECTORS ELECTED TO TERM EXPIRING IN 2000
Richard L. Jackson (1) 44 1988 Chairman, President and Chief Executive Officer of Allegiant Physician Services,
Inc., a physician management service for hospitals and physicians. In addition,
he is chairman and/or president of several companies which provide specialized
medical services. (3)
J. Leland Strange (2) 56 1991 Chairman, President and Chief Executive Officer of Intelligent Systems
Corporation. Intelligent Systems Corporation has operations and investments in
micro computer-related technologies and products, as well as specialized health
care services. He is also a director of Healthdyne Technologies, Inc.
INCUMBENT DIRECTORS ELECTED TO TERM EXPIRING IN 1999
Charles R. Chitty 46 1984 Chairman of the Board, President and Chief Executive Officer of the Corporation.
J. William Goodhew, III(1) 60 1987 Vice President of Intelligent Systems
Corporation since January, 1997. Prior to January, 1997, he was President of
Peachtree Software, Inc., a computer software company, a subsidiary of Automatic
Data Processing, Inc.
(1) Member of the Compensation Committee of the Board of Directors
(2) Member of the Audit Committee of the Board of Directors
(3) Allegiant Physician Services, Inc. filed a voluntary petition for
reorganization under Chapter 11 of the Bankruptcy Code on October 29,
1996 in the United States Bankruptcy Court for the Northern District
of Georgia.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ABOVE NOMINEE
FOR DIRECTOR.
<PAGE>
Ownership of Equity Securities of the Corporation.
The following table sets forth information regarding beneficial
ownership of the Corporation's Common Stock of each director and named
executive officer and persons known to the Corporation to own beneficially
more than 5% of the Corporation's Common Stock on May 2, 1998.
Aggregate Number
of Shares Percent
Directors, Executive Officers and Five Beneficially Outstanding
Percent Shareholders Owned(1) Shares(2)
George Valente 459,100 9.8%
Metro Leasing & Investment
44465 N. El Macero Drive
El Macero, CA 95616
Charles R. Chitty(3) 336,803 7.2
c/o IQ Software Corporation
3295 River Exchange Drive, Suite 550
Norcross, GA 30092
Michael J. Durnwald 38,875 *
David C. Cormack (4) 137,500 2.8
J. William Goodhew, III 21,000 *
Ugo F. Ippolito(5) 27,261 *
Richard L. Jackson 4,000 *
Said Mohammadioun 1,000 *
J. Leland Strange(6) 9,000 *
All Directors and Executive Officers 578,439 12.2
as a group, including affiliates
(9 persons) (1)(6)
*Indicates less than 1%
(1) For purposes of this table, a person is deemed to be the beneficial
owner of any shares of Common Stock that such person has the right to
acquire within sixty (60) days of May 2, 1998. For purposes of
computing the percentage of outstanding shares held by each person
named above, any shares of Common Stock such person has a right to
acquire within sixty (60) days of May 2, 1998 are deemed to be
outstanding, but are not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person. The number of
shares beneficially owned as set forth in the above schedule includes
the designated number of shares of Common Stock subject to stock
option grants under the Corporation's stock option plans to the
following persons: Mr. Chitty, 30,000 shares; Mr. Goodhew, 4,000
shares; Mr. Ippolito, 4,000; Mr. Jackson, 4,000 shares; Mr.
Mohammadioun, 1,000 shares; Mr. Strange, 4,000 shares; Mr. Durnwald,
26,875 shares and Mr. Cormack, 7,500 shares; and directors and
executive officers as a group, 84,375 shares.
(2) Based on 4,674,216 shares of Common Stock outstanding on May 2, 1998.
(3) Includes 130,000 shares of Common Stock held by trusts, of which Mr.
Chitty or his spouse is a trustee.
(4) Includes 83,100 shares of Common Stock held by a trust, of which Mr.
Cormack's spouse and Mr. Chitty are trustees.
<PAGE>
(5) Includes 5,611 shares of Common Stock owned by Mr. Ippolito's spouse.
(6) Does not include 53,801 shares of Common Stock owned by Intelligent
Systems Corporation, of which Mr. Strange is a director and officer
and the holder of approximately 21.06%of its outstanding stock.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 and regulations
of the Securities and Exchange Commission thereunder require the
Corporation's executive officers and directors and certain persons who own
more than ten percent of the Common Stock to file initial reports of
ownership and changes in ownership with the Securities and Exchange
Commission. Executive officers, directors and certain persons owning more
than ten percent of the Common Stock are required by Securities and
Exchange Commission regulations to furnish the Corporation with copies of
all Section 16(a) forms they file. Based on the Corporation's review of the
copies of such forms received by it, the Corporation believes
that all filing requirements applicable to such persons have been complied
with for the 1998 fiscal year, except for the following inadvertent
omissions, each of which has been subsequently reported: the reporting on
Form 5 of the grant of a stock option by Messrs. Chitty, Goodhew, Ippolito,
Jackson, Mohammadioun and Strange and the initial reporting on Form 3
by Mr. Elmer, an executive officer.
The Board of Directors and its Committees.
There were four meetings of the Board of Directors during fiscal year
1998. The Board of Directors has two standing Committees; the Audit
Committee and the Compensation Committee. The Compensation Committee held
two meetings during fiscal year 1998 and the Audit Committee held one
meeting. The Corporation does not have a nominating committee.
All nominees for the Board of Directors are nominated by the entire Board
of Directors (excluding the nominees). All directors attended at least 75%
of the meetings of the Board of Directors and committees thereof of which
the director is a member, except that Mr. Jackson attended 71% of such
meetings as he was unable to attend one meeting of the Board
of Directors and of the Compensation Committee held on the same day.
The Audit Committee reviews the scope of the audits as recommended by
the independent auditors, the scope of the internal auditing procedures of
the Corporation and the systems of internal accounting controls, and
reviews reports to the Audit Committee by the independent auditors. The
Audit Committee also has the power to select the independent auditors to
audit the books and records of the Corporation and to discharge such
independent auditors.
The Compensation Committee administers the stock option plans of the
Corporation and determines the salaries and other compensation of the
chairman and chief executive officer of the Corporation. The Committee has
the power to establish the compensation of all other officers and to
recommend approval, termination or amendment of all compensation
programs for officers of the Corporation.
Non-employee directors receive a fee of $1,250 for each quarterly
Board of Directors meeting attended. The Directors receive no fees for
serving on committees thereof. Pursuant to the 1994 Non-Employee Directors
Stock Option Plan, each non-employee director is awarded an option to
purchase 1,000 shares of Common Stock at its then market value
on the day following each annual meeting.
<PAGE>
Executive Compensation.
The following tables and narrative text set forth the compensation of
the most highly compensated executive officers (determined as of the end of
1998 fiscal year) of the Corporation (who earned more than $100,000 for the
1998 fiscal year) for services rendered during the fiscal years ended
January 31, 1998, 1997 and 1996 in all capacities.
</TABLE>
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation
Incentive
Compensation Other
Name and Principal Position Fiscal Year Salary (Bonus) Compensation
<S> <C> <C> <C> <C>
Charles R. Chitty, Chairman 1998 $225,000 $25,000 $ 1,031(4)
President and Chief Executive Officer 1997 185,000 75,000 462(4)
1996 185,000 74,761 --
David S. Cormack(1) 1998 $163,750 $98,333(2) --
Senior Vice President - Sales 1997 155,000 83,333(3) --
1996 51,667 41,667(3) $35,000(5)
Michael J. Durnwald 1998 $115,000 $35,000 $ 690(4)
Vice President - Product Planning 1997 115,000 15,000 510(4)
1996 108,000 5,000 --
</TABLE>
(1) David C. Cormack commenced employment with the Corporation on October
1, 1995.
(2) $83,333 represents the portion of the nonrefundable bonus paid upon
initial employment attributable to the 1998 fiscal year.
(3) This represents the portion of the nonrefundable bonus paid upon
initial employment attributable to the fiscal year.
(4) Includes the Corporation's contribution to the executive's account in
the 401(k) Plan of the Corporation.
(5) Reflects relocation allowances paid by the Corporation.
<PAGE>
<TABLE>
STOCK OPTION GRANTS FOR THE FISCAL YEAR ENDED JANUARY 31, 1998(1)
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option
Individual Grants Term (7 years)(2)
Number % of Total Exercise At 5% At 10%
of Options Granted or Base Annual Annual
Options to Employees in Price Expiration Growth Growth
Name Granted Fiscal Year ($/Sh) Date Rate Rate
<S> <C> <C> <C> <C> <C>
Charles R. Chitty 30,000 4.8% $ 6.81 12/22/04 $83,171 $193,823
Michael J. Durnwald 10,000 1.6% 10.875 3/21/04 44,272 103,173
</TABLE>
(1) No stock appreciation rights have been granted by the Corporation.
(2) The dollar gains under these columns are the result of calculations
assuming a 5% and a 10% annual appreciation for the term of the stock
option, i.e., 7 years. These calculations are required to be included
in accordance with rules promulgated by the Securities and Exchange
Commission and are not intended to forecast possible future
appreciation of the stock prices of the Common Stock of the
Corporation.
The following table sets forth information with respect to the
executive officers named in the "Summary Compensation Table" during the
1998 fiscal year and the unexercised stock options held as of the end of
the 1998 fiscal year, including stock options granted prior to the 1998
fiscal year.
<TABLE>
AGGREGATE STOCK OPTION EXERCISES IN FISCAL YEAR ENDED
JANUARY 31, 1998 AND FISCAL YEAR-END STOCK OPTION VALUES
Value Realized Value of
Number of ($) (Market Number of Unexercised
Shares price at time of Unexercised In-the-Money
Acquired on exercise less Stock Options Stock Options
Name Exercise exercise price) at FY-End at FY-End
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Charles R. Chitty -- -- 15,000 45,000 -- $41,325
Michael J. Durnwald -- -- 23,125 24,375 $49,406 --
David A. Cormack -- -- 7,500 22,500 -- --
</TABLE>
(1) The fair market value of a share of Common Stock of the Corporation at
fiscal year end, January 31, 1998 was $8.1875.
<PAGE>
Stock Option Repricing.
On March 12, 1996, the Compensation Committee granted a seven year
stock option to Mr. Chitty, Chairman, President and Chief Executive Officer
of the Corporation, to purchase 60,000 shares of Common Stock, at $12.00
per share. The options vested 25% per year, commencing on the first
anniversary of the grant. The Compensation Committee canceled
options to purchase 30,000 shares of Common Stock granted pursuant to that
option and replaced such canceled options with a seven year stock option to
purchase 30,000 shares of Common Stock with 50% of the options vesting per
year commencing, however, on the third anniversary of the grant. Both
options provide for acceleration of vesting upon a change in control.
The following table sets forth the information concerning the
repricing of stock options to the named executive officers since the
Corporation became a reporting company pursuant to the Securities Exchange
Act of 1934.
<TABLE>
STOCK OPTION REPRICING
Number of Market
Securities Price of Exercise Length of Original
Underlying Stock at Price at New Option Term
Options Time of time of Exercise Remaining at Date
Name Date Repriced Repricing Repricing Price of Repricing
<S> <C> <C> <C> <C> <C> <C>
Charles R, Chitty 12/22/97 30,000 shares $6.81 $12.00 $6.81 5 years, 3 months
Chairman, President and
Chief Executive Officer
Michael J. Durnwald 6/29/93 7,500 shares $10.75 $14.625 $10.75 6 years, 9 months
Vice President - Product
Planning
</TABLE>
Report of Compensation Committee on Repricing of Stock Options.
The Compensation Committee concluded that it was in the best interest
of the Corporation to replace, in part, the stock option granted to Mr.
Chitty on March 12, 1996 with a stock option with a stock option price
equal to the fair market value of the stock on December 22, 1997. It was
the opinion of the members of the Compensation Committee that
the December 22, 1997 stock option price would provide greater incentive to
the optionee in light of the drop in the fair market value of a share of
Common Stock in the months following the March 12, 1996 grant. The
replacement stock option vests at the rate of 50% per year, commencing on
the third anniversary of the stock option grant and, as did the
original stock option grant, accelerates upon a change in control.
Compensation Committee
J. William Goodhew, III
Ugo F. Ippolito
Richard L. Jackson
<PAGE>
Employment Contracts.
Mr. Cormack has a three year contract of employment with the
Corporation, which commenced October 1, 1995, providing for an annual
salary of $155,000 per year subject to change upon mutual agreement. Mr.
Cormack received a bonus advance of $250,000 upon commencement of
employment. Mr. Cormack is eligible for annual bonuses subject to meeting
mutually agreed upon business targets. Assuming such business targets are
met, for the period October 1, 1997 to September 30, 1998 the bonus may
equal $235,000. Mr. Cormack's employment contract includes payment of
relocation expenses not to exceed $35,000, and includes a covenant not to
compete with the Corporation for one year following termination of the
contract.
401(k) Plan.
The Corporation has adopted a tax-qualified savings plan ("401(k)
Plan") which is intended to qualify under Section 401(k) of the Internal
Revenue Code of 1986, as amended ("Code"). The Corporation pays the
administrative expenses of the 401(k) Plan and currently matches 10% of
each employee's contributions to the extent the employee's contributions do
not exceed 6% of his/her compensation. All permanent employees, including
officers, who have met the eligibility requirements may participate in the
401(k) Plan. Each employee may elect to contribute to the 401(k) Plan,
through payroll deductions, up to the statutory limitation and may direct
the investment of their account in various investment funds. Under Section
401(k) of the Code, the employee's contribution to the 401(k) Plan are not
taxable to the employee until such amounts are distributed to the employee.
Compensation Committee Interlocks and Inside Participation.
The members of the Compensation Committee of the Board of Directors
consist of Messrs. Goodhew, Ippolito and Jackson.
Ugo F. Ippolito, a director and Secretary of the Corporation, is a
partner of Miller & Martin LLP, Atlanta, Georgia, and during the 1998
fiscal year was a partner of Glass, McCullough, Sherrill & Harrold, LLP
("GMSH"). In the normal course of business legal services were rendered to
the Corporation by GMSH during the 1998 fiscal year and by Miller & Martin
LLP thereafter.
On April 18, 1995, the Corporation loaned $1.8 million to Daystar
Digital, Inc. pursuant to a note receivable ("Note"). Under the terms of
the agreement, the Note was payable one year from the date of the
agreement. In an amendment dated April 18, 1996, the maturity of the Note
was extended to January 17, 1997 and later was further extended
to July 31, 1997. At the time the maturity of the Note was first extended,
the interest rate was increased to prime plus 11/2%. The Note was
guaranteed by Intelligent Systems Corporation and was secured by shares of
the Corporation's common stock and certificates of deposits owned by
Intelligent Systems Corporation. J. Leland Strange, a director of
the Corporation, is a director and the chief executive officer of
Intelligent Systems Corporation and owns approximately 21% of the
outstanding stock of Intelligent Systems Corporation. The Note was paid in
full on July 31, 1997.
<PAGE>
Report of the Compensation Committee on Executive Compensation.
The Corporation's executive compensation program is designed to foster
revenue growth and increased profits.
The executive compensation program consists of three elements: a base
salary, an annual bonus and long term incentive through stock ownership.
The compensation program for each executive officer is reviewed at least
annually by the Compensation Committee. The annual bonus for the executive
officers is determined on the overall financial performance of the
Corporation, and, if an executive officer is responsible for an operation,
it will be determined, in part, on the financial performance of that
operation.
Numerous factors are taken into account in determining the
compensation of the Chief Executive Officer, including historic
compensation levels, compensation levels of other executive employees of
the Corporation and the amounts paid to the executive officers of other
corporations. The Compensation Committee reviews surveys prepared by
industry groups and accountants setting forth salary levels of executive
officers in other companies. In the case of executive officers, other than
the Chairman, President and Chief Executive Officer, the Committee has
authorized the Chief Executive Officer to establish such executives'
compensation.
Annual Bonus.
For the 1998 fiscal year the Chief Executive Officer established the
incentive compensation for the other executive officers based upon
predetermined revenue and pretax profit margin objectives. The program was
designed to encourage both revenue and profit growth. Partial payments of
the annual bonus are made during the fiscal year and the balance
upon the definitive calculation of the amounts payable after the end of the
fiscal year. The annual incentive compensation of Mr. Chitty, the Chief
Executive Officer, is determined in the sole discretion of the Committee
based upon revenue and operating income of the Corporation and the
Committee's assessment of the performance of the Chairman
as well as total compensation paid to chief executive officers of other
companies.
Long Term Incentive.
The Committee believes that significant stock ownership in the
Corporation provides an economic incentive to the management to grow the
Corporation for the long term. Stock options have been granted to
executive officers during the past nine years. The stock options normally
vest at the rate of 25% a year and are for a term of seven years. In some
instances they vest upon a change in control of the Corporation. The
options are designed to provide the recipients with a greater interest in
the long term growth and performance of the Corporation through increases
in the value of the shares they can acquire pursuant to the stock option
grants.
Compensation of Chief Executive Officer.
For fiscal 1998 the Committee established the Chief Executive
Officer's base salary at $225,000 and a bonus $25,000. The Chief Executive
Officer was granted a seven year stock option to purchase 30,000 shares of
Common Stock at
<PAGE>
$6.81 per share, the fair market value of a share of Common Stock on the
date the option was granted. This stock option replaces options for 30,000
shares of the stock option granted in March 1996 at $12.00 per share to
purchase 60,000 shares.
The Committee took into account the fact that the Chief Executive
Officer is not provided with any prequisites, including motor vehicle. The
Compensation Committee believes that the compensation programs are designed
to improve financial results and provide long term goals to grow the
Corporation and the value of its Common Stock.
Compensation Committee
J. William Goodhew
Ugo F. Ippolito
Richard L. Jackson
<PAGE>
Comparison of Cumulative Total Return.
Set forth below is a line graph presentation showing the comparison of
the cumulative total return on the Corporation's Common Stock to both the
NASDAQ Stock Market Index for U.S. Companies and the S&P Software &
Services Index selected by the Corporation. The graph assumes $100
invested on February 1, 1993 in Common Stock of the Corporation and in the
two indexes. The comparison assumes that all dividends are reinvested.
<TABLE>
[FIVE YEAR CUMULATIVE GRAPH GOES HERE]
Cumulative Total Return
1/93 1/94 1/95 1/96 1/97 1/98
<S> <C> <C> <C> <C> <C> <C>
IQ Software Corp. 100.00 50.75 77.61 65.67 94.03 50.00
NASDAQ Stock Markt (U.S.) 100.00 115.01 109.72 155.07 203.28 240.44
S & P Computers (Software & Services) 100.00 121.48 137.91 210.79 342.92 470.64
</TABLE>
<PAGE>
Other Information.
The solicitation of proxies may be made personally, by telephone, by
telegraph or by mail by officers and other employees of the Corporation and
its subsidiaries who will not be additionally compensated therefor. In
addition, the Corporation has engaged its transfer agent to assist in
connection with the solicitation of proxies from shareholders
whose shares are held in a nominee's name by various brokerage firms and
banks. The cost of such solicitation is estimated to be less than $5,000.
Brokerage houses and other nominees, fiduciaries and custodians nominally
holding shares of the Corporation's Common Stock as of the record date will
be requested to forward proxy soliciting materials to the beneficial owners
of such shares and will be reimbursed by the Corporation for their
reasonable expenses. The cost of preparing, assembling and mailing this
proxy soliciting material and the Notice of Annual Meeting of Shareholders
will be paid by the Corporation.
Shareholder Proposals for 1999 Annual Meeting.
In order to be eligible for inclusion in the Corporation's proxy
statement for the 1999 Annual Meeting of Shareholders, shareholder
proposals must be received by the Corporation at its principal office,
addressed to the President at 3295 River Exchange Drive, Suite 550,
Norcross, Georgia 30092 by January 17, 1999.
Independent Auditors.
Ernst & Young LLP were the independent auditors of the Corporation for
the fiscal year ending January 31, 1998. A representative of Ernst & Young
LLP is expected to be present at the Meeting and will have the opportunity
to make a statement if desired and such representative is expected to be
available to respond to appropriate questions.
Other Business.
It is not anticipated that any matter, other than those set forth in
the Notice of Annual Meeting of Shareholders and described in this Proxy
Statement, will be brought before the Meeting. However, if any other
matter should properly come before the Meeting, it is the intention of the
persons named on the enclosed proxy to vote the executed proxies
received by them in accordance with their best judgment on such business
and other matters including those dealing with the conduct of the Meeting.
By Order of the Board of Directors,
UGO F. IPPOLITO
Secretary
May 11, 1998
