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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Logility, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
LOGILITY, INC.
470 East Paces Ferry Road
Atlanta, Georgia 30305
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Logility,
Inc. will be held at the offices of the Company, 470 East Paces Ferry Road,
N.E., Atlanta, Georgia 30305, on Tuesday, August 21, 2001 at 11:00 a.m. for
the following purposes:
1. To elect two directors of the Company for terms to expire at the 2004
annual meeting of stockholders.
2. To consider and transact such other business as may properly come before
the meeting.
Only stockholders of record of the Company at the close of business on July
12, 2001 will be entitled to vote at the meeting.
Stockholders are requested to vote, date, sign and mail their proxies in the
form enclosed even though they now plan to attend the meeting. If stockholders
are present at the meeting, their proxies may be withdrawn, and they may vote
personally on all matters brought before the meeting, as described more fully
in the enclosed Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
James R. McGuone,
Secretary
August 2, 2001
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
OF LOGILITY, INC.
----------------
TO BE HELD AT
LOGILITY, INC.
470 EAST PACES FERRY ROAD, N.E.
ATLANTA, GEORGIA 30305
ON AUGUST 21, 2001
This Proxy Statement is furnished to the stockholders by the Board of
Directors of Logility, Inc., 470 East Paces Ferry Road, N.E., Atlanta, Georgia
30305 (the "Company"), in connection with the solicitation of proxies by the
Board of Directors for use at the Annual Meeting of Stockholders on Tuesday,
August 21, 2001 at 11:00 a.m., and at any adjournment or adjournments thereof,
for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. This Proxy Statement and accompanying proxy card and Notice of
Annual Meeting are first being mailed to stockholders on or about August 2,
2001.
If the enclosed form of proxy is properly executed and returned, the shares
represented thereby will be voted in accordance with its terms. If no choices
are specified, the proxy will be voted:
FOR--Election of J. Michael Edenfield and John A. White as Directors for
terms ending with the 2004 Annual Meeting of Stockholders and until
their successors are elected and qualified.
In addition, a properly executed and returned proxy card gives the authority
to vote in accordance with the proxy-holders' best judgment on such other
business as may properly come before the meeting or any adjournment thereof.
Any proxy given pursuant to this solicitation may be revoked, either in
writing furnished to the Secretary of the Company prior to the meeting or
personally by attending the meeting, by the person giving the proxy insofar as
the proxy has not been exercised at the meeting.
VOTING SECURITIES
Record Date and Voting of Securities
The Board of Directors has fixed the close of business on July 12, 2001 as
the record date for determining the holders of common stock entitled to notice
of and to vote at the meeting. On July 12, 2001, the Company had outstanding
and entitled to vote a total of 13,253,503 shares of Common Stock, no par
value ("Common Stock").
Each outstanding share of Common Stock is entitled to one vote per share on
all matters to come before the meeting. The affirmative vote of a majority of
the shares represented at the meeting is necessary for election of directors.
Any other matter submitted to the meeting also must be approved or ratified by
the affirmative vote of a majority of the shares represented at the meeting.
One-third of the outstanding shares of Common Stock will represent a quorum at
the meeting.
Security Ownership
Five Percent Stockholders. The only persons known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock of the
Company are those set forth below. This information is as of June 30, 2001.
Except as disclosed in the notes to the table, each person has sole voting and
investment power with respect to the entire number of shares shown as
beneficially owned by that person.
Name and Address Shares
of Beneficially
Beneficial Owner Owned Percent(1)
---------------- ------------ ----------
American Software, Inc......................... 11,300,000 85.2%
470 East Paces Ferry Road, N.E.
Atlanta, Georgia 30305
James C. Edenfield............................. 11,300,000(2) 85.2%
c/o American Software, Inc.
470 East Paces Ferry Road, N.E.
Atlanta, Georgia 30305
- --------
(1) Based on a total of 13,257,482 shares outstanding.
(2) Consists solely of shares held by American Software, Inc. Mr. Edenfield
owns or has the option to acquire within 60 days approximately 1.0% of the
outstanding Class A Common Shares and owns approximately 52.6% of the
outstanding Class B Common Shares of American Software. Under the American
Software articles of incorporation, the holders of Class B Common Shares,
as a class, have the right to elect a majority of the board of directors
of American Software. Accordingly, Mr. Edenfield may be deemed to share
beneficial ownership of the Common Stock of the Company held by American
Software.
Directors and Executive Officers. The following table shows the shares of
Common Stock beneficially owned, as of June 30, 2001, by each present director
and nominee for director, by each executive officer named in the Summary
Compensation Table and by all directors and executive officers of the Company
as a group. The statements as to securities beneficially owned are, in each
instance, based upon information provided by the person(s) concerned. Except
as disclosed in the notes to the table, each person has sole voting and
investment power with respect to the entire number of shares shown as
beneficially owned by that person.
Shares of
Naemof Beneficial Owner Common Stock
or Description of Beneficially
Group Owned Percent(1)
- ------------------------ ------------ ----------
Frederick E. Cooper.................................. 9,000(2) 0.1%
James C. Edenfield................................... 11,300,000(3) 85.2%
J. Michael Edenfield................................. 102,500(4) 0.8%
Parker H. Petit...................................... 19,000(5) 0.1%
John A. White........................................ 18,500(6) 0.1%
H. Allan Dow......................................... 35,222 0.3%
Donald L. Thomas..................................... 11,550(2) 0.1%
Andrew G. White...................................... 22,000(2) 0.2%
All Directors and Executive Officers as a Group
(Eight Persons)..................................... 11,517,772(7) 85.5%
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(1) Based on a total of 13,257,482 shares outstanding, plus any shares
issuable pursuant to options held by the person or group in question that
may be exercised within 60 days.
(2) Consists of shares subject to options exercisable within 60 days.
(3) Consists solely of shares held by American Software, Inc. Mr. Edenfield
owns or has the option to acquire within 60 days approximately 1.0% of the
outstanding Class A Common Shares and owns approximately 52.6% of the
outstanding Class B Common Shares of American Software. Under the American
Software articles of incorporation, the holders of Class B Common Shares,
as a class, have the right to elect a majority of the board of directors
of American Software. Accordingly, Mr. Edenfield may be deemed to share
beneficial ownership of the Common Stock of the Company held by American
Software.
(4) Includes 52,500 shares subject to options exercisable within 60 days.
(5) Includes 16,000 shares subject to options exercisable within 60 days.
(6) Includes 16,000 shares subject to options exercisable within 60 days.
(7) Includes 127,050 shares subject to options exercisable within 60 days.
Also includes 11,300,000 shares held by American Software, Inc., the
beneficial ownership of which is attributable to James C. Edenfield, as
discussed in footnote (2).
2
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's executive officers and directors, and persons who own
more than 10% of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "Commission"). Officers, directors and holders of
more than 10% of the Common Stock of the Company are required under
regulations promulgated by the Commission to furnish the Company with copies
of all Section 16(a) forms they file.
Based upon a review by the Company of filings made under Section 16(a) of
the Exchange Act, not all of the reports required to be filed during fiscal
2001 were filed on a timely basis. The Company is aware of the following
report that was filed by an officer, director or 10% stockholder of the
Company after its due date: H. Allan Dow (Initial Statement of Beneficial
Ownership). Based upon its review of copies of filings received by it, the
Company believes that since May 1, 2000, all other Section 16(a) filing
requirements applicable to its directors, officers and greater than 10%
beneficial owners were complied with.
ELECTION OF DIRECTORS
AND INFORMATION REGARDING DIRECTORS
The Company's Bylaws, as amended, provide that directors shall be divided
into three classes, with staggered three-year terms. The terms of two of the
present directors, J. Michael Edenfield and John A. White, will expire at the
Annual Meeting of Stockholders in 2001. The Board of Directors has nominated
these incumbent directors for terms expiring at the Annual Meeting of
Stockholders in 2004 and until their successors are elected and qualified.
The following information is provided concerning the nominees for election
as directors:
J. Michael Edenfield, age 43, has served as President and Chief Executive
Officer of the Company since January 1997. He also serves as a director of
INSIGHT, Inc., in which the Company owns a minority interest. Until the
Company's initial public offering in October 1997, he served as Chief
Operating Officer of American Software, Inc., a position he had held since
June 1994. Mr. Edenfield has served as Executive Vice President of American
Software from June 1994 to the present. Prior to June 1994, Mr. Edenfield
served in the following positions with American Software USA, Inc.: Senior
Vice President of North American Sales and Marketing from July 1993 to June
1994, Senior Vice President of North American Sales from August 1992 to July
1993, Group Vice President from May 1991 to August 1992 and Regional Vice
President from May 1987 to May 1991. Mr. Edenfield holds a Bachelor of
Industrial Management degree from the Georgia Institute of Technology.
Mr. Edenfield is the son of James C. Edenfield, Chairman of the Board of
Directors of the Company. Mr. Edenfield first became a director of the Company
in 1997.
Dr. John A. White, age 61, is Chancellor of the University of Arkansas. From
July 1991 to July 1997, Dr. White served as Dean of Engineering at Georgia
Institute of Technology, having been a member of the faculty since 1975. From
July 1988 to September 1991, he served as Assistant Director of the National
Science Foundation in Washington, D.C. Dr. White is a member of the Board of
Directors of J.B. Hunt Transport Services, Inc., Motorola, Inc., Eastman
Chemical Company and Russell Corporation. He is a member of the National
Science Board and the National Academy of Engineering, a past President of the
American Institute of Industrial Engineers and past Chairman of the American
Association of Engineering Societies. Dr. White founded SysteCon, a logistics
consulting firm, and served as its Chairman and Chief Executive Officer until
its acquisition by Coopers and Lybrand. Dr. White received a B.S.I.E. degree
from the University of Arkansas, an M.S.I.E. degree from Virginia Polytechnic
Institute and State University and a Ph.D. from Ohio State University. Dr.
White first became a director of the Company in 1997.
If these nominees become unwilling or unable to serve, which is not
expected, the proxies are intended to be voted for substitute persons to be
designated by the Board of Directors.
3
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE
COMPANY VOTE "FOR" THE PROPOSAL TO ELECT J. MICHAEL EDENFIELD AND JOHN A.
WHITE AS DIRECTORS OF THE COMPANY TO HOLD OFFICE UNTIL THE 2004 ANNUAL MEETING
OF STOCKHOLDERS AND UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED.
The following director was elected in 1999 and his present term expires with
the Annual Meeting of Stockholders in 2002:
James C. Edenfield, age 66, has served as Chairman of the Board of Directors
of the Company since January 1997. He is a co-founder of American Software,
where he has served as Chief Executive Officer and Director since 1971. Prior
to founding American Software, Mr. Edenfield held several executive positions
at and was a director of Management Science America, Inc., an applications
software development and sales company. He holds a Bachelor of Industrial
Engineering degree from the Georgia Institute of Technology. Mr. Edenfield
first became a director of the Company in 1997.
The following directors were elected in 2000 and their present terms expire
with the Annual Meeting of Stockholders in 2003:
Parker H. Petit, age 61, was the founder of Healthdyne, Inc. and served as
its Chairman and Chief Executive Officer from 1970 to March 1996. Healthdyne
spun off two of its subsidiaries to its shareholders, Healthdyne Technologies
(Nasdaq: HDTC) and Healthdyne Information Enterprises (Nasdaq: HDIE) in 1995.
Subsequently, its remaining subsidiary, Healthdyne Maternity Management, was
merged with Tokos Medical Corporation to form Matria Healthcare, Inc. (Nasdaq:
MATR) in 1996. Mr. Petit currently serves as Chairman of the Board of Matria
Healthcare, a provider of specialized home healthcare services. Mr. Petit is a
member of the Board of Directors of Healthcare.com Corporation and Intelligent
Systems Corporation. He is also a director of the Georgia Research Alliance, a
coalition of government and industry leaders formed to encourage development
of high technology business in Georgia, and has been elected to the Georgia
Technology Hall of Fame. Mr. Petit first became a director of the Company in
1997.
Frederick E. Cooper, age 59, has served as Chairman of the Board of Cooper
Capital, a private investment firm, since 1998. From 1990-1998, Mr. Cooper
served as Chairman of the Board of Directors of Cooper Smith, Inc., a
wholesale baked foods company. He is not currently serving as a director of
any other company. Mr. Cooper earned his B.A. in 1964 from Washington & Lee
University and his J.D. in 1967 from the University of Georgia School of Law.
Mr. Cooper first became a director of the Company in 1999.
From May 1, 2000 through April 30, 2001, the Board of Directors held four
meetings. No director of the Company attended fewer than 75% of the total
meetings of the Board of Directors and committee meetings on which such Board
member served and was eligible to attend during this period.
The Board of Directors has an Audit Committee, which presently consists of
Dr. John A. White (Chairman), Mr. Parker H. Petit, and Mr. Frederick E.
Cooper. The Audit Committee held one meeting during fiscal 2001. The
Securities and Exchange Commission and National Association of Securities
Dealers have promulgated new rules regarding the composition and function of
audit committees for listed companies. These rules require audit committees to
be composed of not less than three members who are "independent," as that term
is defined in the rules. The Company restructured its audit committee during
fiscal year 2001 in a manner that complies with the new requirements.
The Company's Audit Committee Charter, attached as Exhibit "A" hereto,
outlines the composition requirements of the Audit Committee as described
above, as well as its duties and responsibilities. Under the current charter,
the primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board. The functions of the Audit
Committee include making an annual recommendation of independent public
accountants to the Company, reviewing the scope and results of the independent
public accountants' audit, monitoring the adequacy of the Company's
accounting, financial and
4
operating controls, reviewing from time to time the Company's periodic
financial statements and other financial reports with management and with the
independent auditors, and reviewing with management and the independent
auditors the financial statements to be included in the Company's annual
report.
The Company has a Stock Option Committee, consisting of Messrs. James C.
Edenfield and J. Michael Edenfield. During fiscal 2001, this Committee met or
acted by written consent on five occasions. The functions of this Committee
are to consider the grant of stock options under the 1997 Stock Plan to
employees other than directors and executive officers and establish the terms
of those options, as well as to construe and interpret the Plan and to adopt
rules in connection therewith.
The Company has a Compensation Committee, consisting of Mr. Frederick E.
Cooper (Chairman) and Mr. Parker H. Petit, described below in "Certain
Information Regarding Executive Officers and Directors--Report on Executive
Compensation." Among other functions, the Compensation Committee members act
as the Special Stock Option Committee under the 1997 Stock Plan, with
authority to grant stock options to Executive Officers and establish the terms
of those options, as well as to construe and interpret the 1997 Stock Plan and
adopt rules in connection therewith. The Compensation Committee held one
meeting during fiscal 2001.
The Board has no nominating committee or any other committee performing
similar functions.
5
CERTAIN INFORMATION REGARDING EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and the four executive officers of the Company
(determined as of April 30, 2001) whose annual compensation exceeded $100,000
during fiscal 2001 (referred to herein as the "named executive officers") for
the fiscal years ended April 30, 2001, 2000 and 1999:
SUMMARY COMPENSATION TABLE
Long-Term
Bonus or Compensation All
Annual Other Annual Awards/Number Other
Fiscal Salary Compensation of Option Compensation
Name and Principal Position Year $ $ Shares Granted ($)(1)
- --------------------------- ------ ------- ------------ -------------- ------------
J. Michael Edenfield.......... 2001 259,200 -0- -0-(3) 4,690(4)(5)
President and Chief Executive 2000 259,200 -0- 45,000(6) 4,440(5)(7)
Officer(2) 1999 240,000 -0- 70,000(8) 2,040(5)
Larry R. Olin................. 2001 189,000 23,015 -0- 2,525(10)
Vice President--Sales, 2000 189,000 121,952 25,000(6) 2,500(10)
The Americas(9) 1999 175,000 49,627 35,000(8) -0-
Donald L. Thomas.............. 2001 144,753 -0- -0-(3) 2,650(10)
Vice President, 2000 142,040 -0- 9,000 2,115(10)
Customer Service 1999 136,333 -0- 10,000 -0-
Andrew G. White............... 2001 155,000 25,917 -0-(3) -0-
Vice President, 2000 142,133 11,250 20,000 -0-
Product Strategy 1999 131,448 -0- 20,000 -0-
H. Allan Dow.................. 2001 105,000 25,000 25,000(3) 2,650(10)
Executive Vice President of
Sales and Marketing(11)
- --------
(1) The aggregate amount of perquisites and other personal benefits,
securities or property given to each named executive officer, valued on
the basis of aggregate incremental cost to the Company, was less than
either $50,000 or 10% of the total annual salary and bonus for that
executive officer during each of these years.
(2) James C. Edenfield, Chairman of the Board of Directors, is the father of
J. Michael Edenfield.
(3) Excludes options granted by American Software in the following amounts:
Mr. Edenfield--130,000 shares; Mr. Dow--75,000 shares; Mr. Thomas--20,000
shares; Mr. White--50,000 shares.
(4) This amount includes $2,650 as the matching payment amount contributed by
the Company into Mr. Edenfield's 401(k) Plan account.
(5) This amount includes $2,040 reimbursed to Mr. Edenfield for medical
insurance coverage through the Company paid by him.
(6) Excludes options granted by American Software in the following amounts:
Mr. Edenfield--90,000 shares; Mr. Olin--26,000 shares.
(7) This amount includes $2,400 as the matching payment amount contributed by
the Company into Mr. Edenfield's 401(k) Plan account.
(8) Excludes options granted by American Software in the following amounts:
Mr. Edenfield--151,000 shares; Mr. Olin--10,000 shares.
(9) Mr. Olin left the Company effective February 6, 2001.
(10) This figure consists of a matching payment amount contributed by the
Company into the officer's 401(k) Plan account.
(11) Mr. Dow joined the Company effective September 26, 2000.
6
Summary of Logility Stock Plan
The 1997 Stock Plan was adopted by the Board of Directors, approved by the
sole stockholder of the Company in August 1997 and amended by the stockholders
of the Company at the 1998 Annual Meeting. Up to 1,200,000 shares of Common
Stock (subject to adjustment in the event of stock splits and other similar
events) may be issued pursuant to stock options granted under the Plan. Up to
300,000 stock appreciation right ("SAR") units may be granted under the Plan,
each SAR unit being equivalent to the appreciation in the market value of one
share of Common Stock.
The authorization of up to 1,200,000 shares for stock option grants is
subject to the limitation, as set forth in the Plan, that stock options may be
granted only if, following the exercise of those options, American Software
would retain the 80% stock ownership percentage it requires to retain the
Company as a member of American Software's consolidated group for federal and
state income tax purposes. Of the 1,200,000 authorized option shares, as of
June 30, 2001, 55,214 shares have been purchased pursuant to the exercise of
stock options and 836,491 shares were subject to outstanding options, leaving
363,509 shares available for new options. As of June 30, 2001, based on the
number of outstanding shares held by American Software, up to 31,027
additional option shares could be granted under the 80% limitation described
above. No SARs have been granted under the Plan.
Purpose of Plan. The purpose of the Plan is to attract and retain the best
available talent and encourage the highest level of performance by officers,
employees, directors, advisors and consultants, and to provide them with
incentives to put forth maximum efforts for the success of the Company's
business.
Automatic Option Grants to Nonemployee Directors. Under the terms of the
Plan, each independent, nonemployee director automatically receives an option
to purchase 2,000 shares of Common Stock upon his or her election to the
Board. Each non-employee director also automatically receives an option to
purchase an additional 1,000 shares on the last day of each fiscal quarter.
The exercise price of each option is equal to the fair market value of the
Common Stock on the date the option is granted.
Administration. The Plan is administered by the Board of Directors and by
the Stock Option Committee and the Special Stock Option Committee. The Special
Stock Option Committee, composed of nonemployee directors, is responsible for
the administration and granting of stock options and stock appreciation rights
(SARs) to executive officers of the Company. The Stock Option Committee,
consisting of other directors of the Company, is responsible for the
administration and granting of stock options and SARs (collectively, "Awards")
to other employees and eligible persons. The Stock Option Committee is
composed of James C. Edenfield and J. Michael Edenfield. The Special Stock
Option Committee is composed of Parker H. Petit and Dr. John A. White.
Eligibility. All employees (approximately 167 persons as of June 30, 2001)
and Directors of the Company are eligible to participate in the Plan. In
addition, advisors and consultants to the Company may be eligible for Award
grants if deemed appropriate by the Stock Option Committee.
Exercise Price of Stock Options and SARs. The exercise price per share of
any stock option granted under the Plan is set in each case by the respective
Committee. For incentive stock options granted under the Plan, the exercise
price must be at least 100% of the fair market value of Common Stock on the
date of grant (at least 110% for options granted to 10% stockholders). For
nonqualified stock options granted the Plan, the exercise price may be less
than the fair market value per share of Common Stock on the date upon which
the option is granted. The exercise price of a SAR unit granted under the Plan
must be at least 100% of the fair market value of the Common Stock on the date
of grant. As of the close of business on June 30, 2001, the market value of
the Common Stock was $3.10 per share.
Terms and Exercisability of Options and SARs. Options granted pursuant to
the Plan generally expire on the tenth anniversary of the grant date. SARs
granted under the Plan expire not later than the fifth anniversary of the date
of grant. Awards granted pursuant to the Plan generally become exercisable in
equal portions over a four-year period (other than formula options granted to
non-employee directors, which vest immediately upon grant).
7
Death, Disability, Retirement or Termination of Employment. Following a
participant's termination of employment, Awards held by such person pursuant
to the Plan are generally exercisable only with respect to the portions
thereof in which the participant is then vested. Under the Plan, upon
termination of employment, stock options remain exercisable for 90 days, or
twelve months if termination results from death or disability, but in any
event not beyond the original option term. SARs are automatically deemed to be
exercised upon termination of employment, to the extent vested.
Change of Control. The stock option agreements and SAR agreements (if any
SARs are granted) provide that in the event of a Change in Control (as defined
in the Plan) of the Company, or a threatened Change in Control of the Company
as determined by the Board of Directors, outstanding Awards will automatically
become fully exercisable, subject to the right of the individual Award holder
to accept a substitute stock option or similar equity right from the surviving
entity in the Change of Control transaction.
American Software Option Plans. As long as the Company remains a majority-
owned subsidiary of American Software, officers and other employees of the
Company will be eligible to receive grants of stock options under American
Software's stock option plan. The grant of such options, if any, will be
entirely within the discretion of the respective committees of the American
Software Board of Directors. James C. Edenfield, a Director of the Company,
serves on one of the committees of the American Software Board that has
authority over the American Software stock option plan.
Termination. The Plan terminates in August 2007, unless sooner terminated by
the Board of Directors. Except as expressly contemplated by the terms of the
Plan, no amendment, discontinuance or termination of the Plan will have any
effect on options or SARs outstanding thereunder at the time of termination.
8
Stock Option Grants
The following table sets forth information with respect to stock options
granted pursuant to the 1997 Stock Plan (the "Plan") during fiscal 2001 to
each of the Company's directors and to the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
Potential
Realized
Value at
Assumed Annual
INDIVIDUAL GRANTS Rates of
------------------------------------------------- Stock Price
Percent of Exercise Appreciation
Total Options or for
Number of Granted to Base Price Option Term(2)
Options Employees in (Per Share) Expiration 5% 10%
Name Granted(1) Fiscal 2001 ($) Date ($)
- ---- ---------- ------------- ----------- ---------- ---------------
Frederick E. Cooper..... 1,000 0.76% 4.125 07/31/10 2,594/6,574
1,000 0.76% 2.875 10/31/10 1,808/4,582
1,000 0.76% 3.50 01/31/11 2,201/5,578
1,000 0.76% 2.640 04/30/11 1,660/4,207
H. Allan Dow............ 25,000 18.94% 2.75 10/25/10 43,237/109,570
75,000(3) 4.10%(3) 1.906 11/22/10 89,900/227,825
J. Michael Edenfield.... 130,000(3) 7.11%(3) 3.938 06/22/10 321,956/815,901
Larry R. Olin(4)........ 50,000(3) 2.73%(3) 3.875 05/06/01 9,688/19,375
Parker H. Petit......... 1,000 0.76% 4.125 07/31/10 2,594/6,574
1,000 0.76% 2.875 10/31/10 1,808/4,582
1,000 0.76% 3.50 01/31/11 2,201/5,578
1,000 0.76% 2.640 04/30/11 1,660/4,207
Donald L. Thomas ....... 20,000(3) 1.09%(3) 3.875 05/23/10 48,739/123,515
Andrew G. White......... 50,000(3) 2.73%(3) 3.875 05/23/10 121,848/308,788
John A. White........... 1,000 0.76% 4.125 07/31/10 2,594/6,574
1,000 0.76% 2.875 10/31/10 1,808/4,582
1,000 0.76% 3.50 01/31/11 2,201/5,578
1,000 0.76% 2.640 04/30/11 1,660/4,207
- --------
(1) Such options may not be exercised earlier than one year after the date of
grant. Options vest ratably over a period of four years.
(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Company's or American Software's common stock, as the
case may be, and overall market conditions. The amounts reflected in this
table may not necessarily be achieved.
(3) These grants were grants of American Software stock options and the
percentage and fair market value information for those option grants
relate to American Software stock options and American Software Class A
Common Stock.
(4) Mr. Olin left the Company effective February 6, 2001.
9
Stock Option Exercises and Outstanding Options
The following table contains information, with respect to (i) the number of
stock options exercised during the last fiscal year, and the values realized
in respect thereof, by the named executive officers, and (ii) the number of
stock options and the value of said stock options held by the named executive
officers as of April 30, 2001.
Shares Value of Unexercised
Acquired on Value Number of Securities In-the-Money Options
Exercise Realized Underlying Unexercised Options Exercisable/Unexercisable
Name (#) ($) Exercisable/Unexercisable (1) $
- ---- ----------- -------- ------------------------------ -------------------------
J. Michael Edenfield.... -0- 0.00 46,250/68,750 -0-/-0-
-0- 0.00 99,250/276,750(2) -0-/-0-
Larry R. Olin(3)........ -0- 0.00 70,000/-0- -0-/-0-
-0- 0.00 86,000/-0- -0-/-0-
Donald L. Thomas........ -0- 0.00 10,550/13,250 -0-/-0-
Andrew G. White......... -0- 0.00 19,500/26,500 -0-/-0-
-0- 0.00 27,500/52,500(2) -0-/-0-
H. Allan Dow............ -0- 0.00 -0-/25,000 -0-/-0-
-0- 0.00 -0-/75,000(2) -0-/-0-
- --------
(1) The market price of the Company's Common Stock on April 30, 2001 was
$2.64. The market price of American Software's Class A Common Stock on
April 30, 2001 was $1.47.
(2) These relate to stock options granted by American Software. Values are
based in part on the market price of American Software Class A Common
Stock.
(3) Mr. Olin left the Company effective February 6, 2001.
Employment Agreements
The Compensation Committee and the Chief Executive Officer of the Company,
J. Michael Edenfield, have established that for fiscal 2002 he will receive a
base salary of $259,200 and a bonus targeted at approximately 69% of that
amount if the Company meets an operating earnings target. The amount of the
bonus may be lower or higher than that amount, depending on the degree to
which the target is met. Mr. Edenfield's bonus plan is described in greater
detail under the heading "Report on Executive Compensation," below.
None of the other executive officers of the Company has entered into an
employment agreement with the Company. Each of the other executive officers,
however, will be entitled to incentive compensation based on individualized
fiscal year performance standards.
Director Compensation
During fiscal 2001, the Company compensated Directors who were not employed
by the Company or its affiliates at the rate of $5,000 per annum, plus $1,000
for each meeting of the Board of Directors and $600 for each meeting of any
committee of the Board that they attended.
Directors are eligible to receive stock option grants under the Plan. Under
the terms of the Plan, Directors who are not employed by the Company
automatically receive stock option grants of 2,000 shares each upon his
initial election and additional 1000-share grants at the last day of each
fiscal quarter thereafter, with exercise prices equal to the market price on
those respective dates. These options become exercisable at the time of grant
and expire ten years thereafter. They do not terminate if the Director ceases
to serve on the Board of the Company. Under this program, Mr. Cooper, Mr.
Petit and Dr. White each received options to purchase an aggregate of 4,000
shares in fiscal 2001.
10
Compensation Committee Interlocks and Insider Participation
The following persons served as members of the Compensation Committee of the
Board of Directors during fiscal 2001: Frederick E. Cooper, Chairman, and
Parker H. Petit. Neither of the members of the Compensation Committee was an
officer or employee of the Company or had any relationship with the Company
requiring disclosure under Securities and Exchange Commission regulations.
Report on Executive Compensation
The following is the report of the Compensation Committee of the Board of
Directors of Logility, Inc. for the fiscal year ended April 30, 2001.
Meetings. During fiscal year 2001, the Compensation Committee met on two
occasions formally and has conferred informally a number of times, among the
members of the Committee and with management and the other members of the
Board of Directors concerning the authority and responsibilities of the
Committee.
Executive Compensation Philosophy. The Committee believes that a
compensation program which enables the Company to attract and retain
outstanding executives will assist the Company in meeting its long-range
objectives, thereby serving the interests of the Company's shareholders. The
compensation program of the Company is designed to achieve the following
objectives:
1. Provide compensation opportunities that are competitive with those of
companies of a similar size within the same industry.
2. Create a strong link between the executive's compensation and the
Company's annual and long-term financial performance.
3. Include above-average elements of financial risk through performance-
based incentive compensation that offers an opportunity for above-average
financial reward to the executives.
Compensation of Chief Executive Officer. The Compensation Committee has the
responsibility and authority to review and establish compensation for the
Chief Executive Officer of the Company, including his participation in the
Logility 1997 Stock Plan and the re-evaluation and negotiation of the terms of
his employment. Following discussions with the Chief Executive Officer, J.
Michael Edenfield, the Committee and Mr. Edenfield have established that for
fiscal 2002 he will receive a base salary of $259,200, which is unchanged from
fiscal 2001, and a bonus targeted at $180,000, or 69% of that amount, if the
plan target is met. The target is based on the Company's operating earnings.
The amount of the bonus could be higher or lower than the targeted bonus
amount, depending on the degree to which the target is met or exceeded.
The Committee's selection of this basis for incentive compensation reflects
its belief that the Chief Executive Officer's compensation should be tied
substantially to operating earnings.
The Committee believes Mr. Edenfield is paid a reasonable salary in light of
salaries paid to chief executives of other companies of similar size operating
in the software industry. His salary was not changed from fiscal 2001. The
Committee believes also that Mr. Edenfield's potential bonus for fiscal 2002
is based upon challenging but achievable financial goals that align his
interests directly with those of the Company's other shareholders.
The Chief Executive Officer's cash compensation from the Company in fiscal
2001, both salary and bonus, was determined under the terms of an incentive
compensation arrangement established by the Compensation Committee at the
beginning of fiscal 2001. Based on the Company's results in fiscal 2001, Mr.
Edenfield did not receive a bonus for that fiscal year.
11
Mr. Edenfield was not granted options to purchase shares of the Company
during fiscal 2001. On June 22, 2000 he was granted an option to purchase
130,000 shares of American Software at an exercise price of $3.938 per share.
Stock option grants under American Software stock option plans are determined
by the committees responsible for those plans and not by this Committee.
On May 31, 2001, this Committee granted to Mr. Edenfield an option to
purchase 20,000 shares of Company stock, at an exercise price of $3.30 per
share. Any further participation by the Chief Executive Officer in the
Logility Stock Plan during fiscal 2002 will be determined in the discretion of
the Compensation Committee based upon its authority to grant options under
that Plan.
Other Executive Officers. The Compensation Committee has responsibility for
the review of compensation of other executive officers of the Company and
consults with the Chief Executive Officer as he structures their compensation
plans. The Committee understands that it is the policy of the Company, which
is supported by the Committee, to base a substantial portion of executive
officer compensation upon the achievement of Company-wide or divisional goals,
relating in some cases to revenue generation, in some cases to total annual
earnings, as well as other factors. The bonus plans for each of the most
highly compensated executive officers reflect this approach. Because Vincent
C. Klinges, the Chief Financial Officer of the Company, also serves as Chief
Financial Officer of American Software, his compensation plan will be
established by American Software, rather than by the Chief Executive Officer
of the Company in consultation with this Committee. Mr. Klinges' compensation
will be allocated between the two companies in connection with the general
allocation of expenses between the companies relating to shared financial and
other services.
The Compensation Committee has direct and exclusive authority over the
granting of stock options to executive officers of the Company by acting as
the Special Stock Option Committee under the Stock Plan. In addition, the
Compensation Committee assists the Chief Executive Officer in evaluating and
consulting on executive compensation plans, which are customized for each
executive officer. Stock option grants under the Stock Plan are utilized as
both a motivating and a compensating factor. Because the performance of
executive officers can substantially influence performance of the entire
enterprise, the Committee believes that grants of stock options and carefully
structured incentive compensation plans can create greater incentives for
improving Company performance, which the Compensation Committee believes may
positively influence the market price for Company stock.
During fiscal 2001, the Compensation Committee formally and informally
considered the exercise of its authority under the Stock Plan to grant options
to executive officers of the Company. The term and size of the options granted
to the executive officers were intended and calculated by the Compensation
Committee to reward those officers for their prior performance, to serve as
incentive for promotion of Company profitability and other long-term
objectives, as well as to maintain their overall compensation at competitive
levels. Thus, the option grants reflect both a retrospective and prospective
approach to executive compensation.
During fiscal 2002, the Compensation Committee will continue to consult with
the Chief Executive Officer with respect to executive officer compensation
packages, including salaries, bonuses and fringe benefits, and will make
decisions regarding stock option grants, to ensure that compensation is
appropriately related to individual and Company performance as well as
competitive compensation standards and other relevant criteria. The
Compensation Committee will continue its investigation of compensation
arrangements in peer group companies as guides for future consultations with
the Chief Executive Officer.
Limitations on Deductibility of Executive Compensation. Since 1994, the
Omnibus Budget Reconciliation Act of 1993 has limited the deductibility of
executive compensation paid by publicly held corporations to $1 million per
employee, subject to various exceptions, including compensation based on
performance goals. The deductibility limitation does not apply to compensation
based on performance goals where (1) the performance goals are established by
a compensation committee which is comprised solely of two or more outside
directors; (2) the material terms are disclosed to shareholders and approved
by majority vote of the shareholders eligible to vote thereon before the
compensation is paid; and (3) before the compensation is paid,
12
the compensation committee certifies that the performance goals and other
material terms have been satisfied. The Company has not adopted a policy with
respect to deductibility of compensation since no executive officer currently
receives, or has previously received, taxable income in excess of $1 million
per year from the Company. The Compensation Committee will monitor
compensation levels closely, particularly in areas of incentive compensation.
As revenues and income of the Company grow, incentive compensation also can be
expected to increase and it may become necessary to adopt a long-term
incentive compensation plan in compliance with the foregoing criteria.
By the Compensation Committee:
Frederick E. Cooper, Chairman
Parker H. Petit
AUDIT COMMITTEE REPORT
The following is the Audit Committee Report of the Board of Directors of
Logility, Inc. for the fiscal year ended April 30, 2001.
The Board of Directors has adopted a written audit committee charter, a copy
of which is attached as Exhibit "A" hereto. Under the current charter, the
primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of
the Committee's activities to the Board. In fulfilling its responsibilities
with respect to the fiscal year 2001 audit, the Audit Committee: (1) reviewed
and discussed the audited financial statements for the fiscal year ended April
30, 2001 with Company management and KPMG LLP ("KPMG"), the Company's
independent auditors; (2) discussed with KPMG the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the conduct of
the audit; and (3) received written disclosures and the letter from KPMG
regarding its independence as required by Independence Standards Board No. 1.
The Audit Committee discussed with KPMG their independence from the Company.
Based on the Audit Committee's review of the audited financial statements
and discussions with management and KPMG, the Audit Committee recommended to
the Board that the audited financial statements be included in the
Corporation's Annual Report on Form 10-K for the fiscal year ended April 30,
2001 for filing with the Securities and Exchange Commission.
The Securities and Exchange Commission and National Association of
Securities Dealers have promulgated rules that require audit committees to be
composed of not less than three members who are "independent," as that term is
defined in the rules. The Audit Committee members meet the definition of
"independent" set forth in the new rules.
By the Audit Committee:
John A. White, Chairman
Parker H. Petit
Frederick E. Cooper
RELATIONSHIP WITH AMERICAN SOFTWARE AND CERTAIN TRANSACTIONS
The Company and American Software have entered into various agreements (the
"Intercompany Agreements"), including a Services Agreement, a Facilities
Agreement, a Marketing License Agreement and a Tax Sharing Agreement. These
Agreements and the other Intercompany Agreements are further described in the
Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2001,
filed with the Securities and Exchange Commission. In fiscal 2001, the Company
paid the following aggregate amounts to American Software under the terms of
the Intercompany Agreements: Services Agreement--$1,552,000; Facilities
Agreement--$763,000; and Marketing License Agreement--$367,000. Under the Tax
Sharing Agreement, the Company was not allocated any federal, state and local
taxes for fiscal 2001.
As a result of the various transactions between the Company and American
Software, amounts payable to and receivable from American Software arise from
time to time. At April 30, 2001, there was a receivable to the Company from
American Software in the amount of $2,916,000.
13
James R. McGuone, Secretary of the Company, was a partner in the firm of
Gambrell & Stolz, L.L.P. during a substantial portion of fiscal year 2001.
Gambrell & Stolz, L.L.P. provides legal services to the Company and to
American Software. Legal fees in the aggregate amount of $746,290 were paid by
the Company and by American Software to that firm during fiscal year 2001 for
legal services rendered to the Company, American Software and AmQuest, Inc., a
wholly-owned subsidiary of American Software.
STOCK PRICE PERFORMANCE GRAPH
The Common Stock commenced trading on the Nasdaq National Market on October
7, 1997. The graph below reflects the cumulative stockholder return (assuming
the reinvestment of dividends) on the Common Stock compared to the return of
the Nasdaq Composite Index and a peer group index for the periods indicated.
The graph reflects the investment of $100 on October 31, 1997 in the Company's
Common Stock, the Nasdaq Stock Market--U.S. Companies ("Nasdaq Composite
Index") and in a published industry peer group index. The peer group is the
Robertson Stephens Hi-Tech Index-Software Group, which is an index of the
stock price performance of 67 software companies maintained by Robertson
Stephens & Company, an investment banking firm.
[STOCK PRICE PERFORMANCE GRAPH]
Index 10/31/97 1/31/98 4/30/98 7/31/98 10/31/98
- ------- -------- -------- -------- -------- --------
Logility
Actual value 14.6250 11.6250 11.0000 7.1250 4.6250
Multipler 6.8376 6.8376 6.8376 6.8376 6.8376
100 base index 100.00 79.49 75.21 48.72 31.62
NASDAQ Composite
Actual value 1,593.61 1,619.36 1,868.41 1,872.39 1,771.39
Multipler 0.0628 0.0628 0.0628 0.0628 0.0628
100 base index 100.00 101.62 117.24 117.49 111.16
Robertson Stephens
Actual value 762.76 753.97 960.43 851.94 845.88
Multiplier 0.1311 0.1311 0.1311 0.1311 0.1311
100 base index 100.00 98.85 125.92 111.69 110.90
Index 1/31/99 4/30/99 7/31/99 10/31/99 1/31/00
- ------- -------- -------- -------- -------- --------
Logility
Actual value 4.0000 4.0625 4.0000 2.8750 16.5000
Multipler 6.8376 6.8376 6.8376 6.8376 6.8376
100 base index 27.35 27.78 27.35 19.66 112.82
NASDAQ Composite
Actual value 2,505.89 2,542.86 2,638.49 2,966.43 3,940.35
Multipler 0.0628 0.0628 0.0628 0.0628 0.0628
100 base index 157.25 159.57 165.57 186.15 247.26
Robertson Stephens
Actual value 1,143.64 1,109.17 1,178.87 1,421.55 2,220.83
Multiplier 0.1311 0.1311 0.1311 0.1311 0.1311
100 base index 149.93 145.42 154.55 186.37 291.16
Index 4/30/00 7/31/00 10/31/00 1/31/01 4/30/01
- ------- -------- -------- -------- -------- --------
Logility
Actual value 7.7500 4.1250 2.8750 3.5000 2.6400
Multipler 6.8376 6.8376 6.8376 6.8376 6.8376
100 base index 52.99 28.21 19.66 23.93 18.05
NASDAQ Composite
Actual value 3,860.66 3,766.99 3,369.63 2,772.73 2,116.24
Multipler 0.0628 0.0628 0.0628 0.0628 0.0628
100 base index 242.26 236.38 211.45 173.99 132.80
Robertson Stephens
Actual value 2,618.15 999.27 1,054.44 1,222.39 1,038.02
Multiplier 0.1311 0.1311 0.1311 0.1311 0.1311
100 base index 343.25 131.01 138.24 160.26 136.09
INDEPENDENT AUDITORS
General
During the fiscal year ended April 30, 2001, the Company engaged KPMG LLP
("KPMG") to provide certain audit services, including the audit of the annual
financial statements, a review of the quarterly financial data furnished by
the Company to the SEC for the quarters ended July 31, 2000, October 31, 2000
and January 31, 2001, services performed in connection with filing this Proxy
Statement and the Annual Report on Form 10-K by the Company with the SEC,
attendance at meetings with the Audit Committee and consultation on matters
relating to accounting, tax and financial reporting. KPMG has acted as
independent certified public accountants for the Company since 1997. Neither
KPMG nor any of its associates has any relationship to the Company or any of
its subsidiaries except in its capacity as independent certified public
accountants.
14
The Company expects that representatives of KPMG will attend the Annual
Meeting of Shareholders. These representatives will be available to respond to
appropriate questions raised orally and will be given the opportunity to make
a statement if they so desire. The Board of Directors has appointed KPMG to
act as the Company's independent auditors for the fiscal year ending April 30,
2002.
Principal Accounting Firm Fees
The aggregate fees billed to the Company for the fiscal year ended April 30,
2001 for services rendered are as follows:
Amount
Type of Services of Fee
---------------- --------
Audit Fees......................................................... $125,000
Financial Information Systems Design and Implementation Fees....... -0-
All Other Fees..................................................... $ 5,500
The Audit Committee has considered the compatibility of the non-audit
services performed by and fees paid to KPMG in fiscal 2001 and the proposed
non-audit services and proposed fees for fiscal 2002 and determined that such
services and fees were compatible with the independence of the auditors.
During fiscal 2001, KPMG did not utilize any leased personnel in connection
with the audit.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2002 Annual
Meeting of Stockholders must be forwarded in writing and received at the
principal executive offices of the Company no later than April 4, 2002
directed to the attention of the Secretary, for consideration for inclusion in
the Company's proxy statement for that Annual Meeting. Any such proposals must
comply in all respects with the rules and regulations of the Securities and
Exchange Commission.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to present, and has not been informed that any other person intends to
present, any matter for action at the Annual Meeting other than those
specifically referred to in this Proxy Statement. If other matters properly
come before the meeting, it is intended that the holders of the proxies will
act in respect thereto in accordance with their best judgment.
The cost of this solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, employees of the Company may solicit proxies
by telephone, in writing or in person. The Company may request brokerage
houses, nominees, custodians and fiduciaries to forward soliciting material to
the beneficial owners of stock held of record and will reimburse such persons
for any reasonable expense in forwarding the material.
Copies of the 2001 Annual Report of the Company are being mailed to
stockholders together with this Proxy Statement, proxy card and Notice of
Annual Meeting of Stockholders. Additional copies may be obtained from Pat
McManus, 470 East Paces Ferry Road, N.E., Atlanta, Georgia 30305.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED APRIL 30, 2001, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS BENEFICIALLY OR OF RECORD
AT THE CLOSE OF BUSINESS ON JULY 12, 2001 ON REQUEST TO PAT MCMANUS, 470
EAST PACES FERRY ROAD, N.E., ATLANTA, GEORGIA 30305.
By Order of the Board of Directors,
James R. McGuone, Secretary
Atlanta, Georgia
August 2, 2001
15
EXHIBIT "A"
LOGILITY, INC.
AUDIT COMMITTEE CHARTER
I. Organization.
There shall be an Audit Committee (the "Committee") selected by the Board of
Directors (the "Board") which shall be composed of not less than three members
of the Board, each of whom is independent of Company management. Committee
members shall be considered independent if they have no relationship that may
interfere with the exercise of their independence from management and the
Company. All Committee members, either at the time of their appointment to the
Committee or within a reasonable time thereafter, must be able to read and
understand fundamental financial statements, including the Company's balance
sheet, income statement, and cash flow statement. At least one Committee
member must have past employment experience in finance or accounting,
requisite professional certification in accounting or any other comparable
experience or background.
II. Statement of Policy.
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling its oversight responsibility to the shareholders, potential
shareholders, the investment community and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements, and the legal
compliance and ethics programs as established by management and the Board. In
so doing, it is the responsibility of the Committee to maintain free and open
communication between the Committee, independent auditors, the internal
auditors and management of the Company. In discharging its oversight role, the
Committee is empowered to investigate any matter brought to its attention,
with full access to all books, records, facilities, and personnel of the
Company and the power to retain outside counsel or other experts for this
purpose.
III. Responsibilities and Processes.
The primary responsibility of the Audit Committee is to oversee the
Company's financial reporting process on behalf of the Board and report the
results of the Committee's activities to the Board. Management is responsible
for preparing the Company's financial statements and the independent auditors
are responsible for auditing those financial statements. In carrying out its
responsibilities, the Committee believes its policies and procedures should
remain flexible in order to best react to changing conditions and
circumstances. The Committee should take the appropriate actions to set the
overall corporate "tone" for quality financial reporting, sound business risk
practices and ethical behavior.
The following are the principal recurring processes of the Audit Committee
in carrying out its oversight responsibilities. These processes are a guide
and may be supplemented by the Committee or the Board as it deems appropriate.
(1) The Audit Committee shall recommend annually to the Board of Directors
the accounting firm to be selected by the Board to act as independent
auditors of the Company, who shall be accountable to the Board and the
Committee as representatives of the Company's shareholders. The
Committee shall have authority to evaluate and replace the independent
auditors if appropriate. The Committee shall discuss with the auditors
their independence from management and the Company and the matters
included in the written disclosures required by the Independence
Standard Board.
(2) The Committee shall discuss with both the internal accountants and the
independent auditors the overall scope and plans for their respective
audits, including the adequacy of staffing and compensation. Also, the
Committee shall discuss with management, the internal accountants, and
the
A-1
independent auditors the adequacy and effectiveness of the accounting
and financial controls, including the Company's system to monitor and
manage business risk, and legal and ethical compliance programs.
Further, the Committee shall meet separately with the internal
accountants and the independent auditors, with and without management
present, to discuss the results of their examinations.
(3) The Committee shall from time to time review the periodic financial
statements and other financial reports of the Company with management
and with the independent auditors. The Chair of the Committee may
represent the entire Committee for the purposes of any such review. The
Committee shall also discuss matters required to be communicated to the
Company by the independent auditors under generally accepted auditing
standards.
(4) The Committee shall review with management and the independent auditors
the financial statements to be included in the Company's Annual Report
on Form 10-K (or the annual report to shareholders if distributed prior
to the filing of Form 10-K), including their judgment about the
quality, not just acceptability, of accounting principles, the
reasonableness of significant judgments, and the clarity of the
disclosures in the financial statements. Also, the Committee shall
discuss the results of the annual audit and any other matters required
to be communicated to the Committee by the independent auditors under
generally accepted auditing standards.
A-2
FOLD AND DETACH HERE
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
LOGILITY, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
AUGUST 21, 2001 AT 11:00 A.M.
AT THE OFFICES OF THE COMPANY
470 EAST PACES FERRY ROAD, N.E.
ATLANTA, GEORGIA
FOR HOLDERS OF COMMON SHARES
The undersigned hereby appoints James C. Edenfield and J. Michael Edenfield,
or either of them, attorneys and proxies, each with full power of substitution
to vote, in the absence of the other, all Common Shares of LOGILITY, INC. held
by the undersigned and entitled to vote at the Annual Meeting of Stockholders
to be held on August 21, 2001 and at any adjournment or adjournments thereof,
in the transaction of such business as may properly come before the meeting,
and particularly the proposals stated below, all in accordance with and as
more fully described in the accompanying Proxy Statement.
It is understood that this proxy may be revoked at any time insofar as it has
not been exercised and that the shares may be voted in person if the
undersigned attends the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSAL:
Election of Directors. Two Directors to be elected.
Nominees: J. Michael Edenfield [_] FOR [_] WITHHOLD AUTHORITY
John A. White [_] FOR [_] WITHHOLD AUTHORITY
FOLD AND DETACH HERE
- -- -- -- -- -- -- -- -- -- - -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED STOCKHOLDER ON THE REVERSE OF THIS PROXY CARD, OR IF NO DIRECTION
IS GIVEN, THEY WILL BE VOTED FOR THE ABOVE PROPOSAL. IN THEIR DISCRETION, THE
PROXYHOLDERS ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.
---------------------------------
Signature
---------------------------------
Signature if held jointly
Please vote, sign, date and
return this proxy card promptly,
using the enclosed envelope.
Dated: ____________________, 2001
IMPORTANT:
Please sign this Proxy
exactly as your name or
names appear hereon. If
shares are held
jointly, signatures
should include both
names. Executors,
administrators,
trustees, guardians and
others signing in a
representative capacity
should please give
their full titles.