UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed
by
the Registrant
x
Filed
by
a Party other than the Registrant
¨
Check
the
appropriate box:
¨
Preliminary
Proxy Statement
¨
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x
Definitive
Proxy Statement
¨
Definitive Additional Materials
¨
Soliciting
Material Under Rule 14a-12
MICROS
SYSTEMS, INC.
(Name
of
Registrant as Specified In Its Charter)
______________________________________________________________
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
x
No
fee
required.
¨
Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
|
1)
|
Title
of each class of securities to which transaction applies:
____________
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2)
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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)
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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)
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Amount
Previously Paid:
______________________________
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2)
|
Form,
Schedule or Registration Statement No.
___________________________
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3)
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Filing
Party: _________________________
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4)
|
Date
Filed: __________________________
|
MICROS
SYSTEMS, INC.
7031
Columbia Gateway Drive
Columbia,
Maryland 21046-2289
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD ON NOVEMBER 21, 2008
The
Annual Meeting of Shareholders of MICROS Systems, Inc. will be held on Friday,
November 21, 2008, at 11:00 a.m., at the MICROS corporate headquarters building,
7031 Columbia Gateway Drive
,
Columbia, Maryland, 21046. The items of business for the meeting are
:
|
(1)
|
Election
of six directors to hold office for one year terms and until their
respective successors are duly elected and qualified (“Proposal 1”)
(the
Board of Directors recommends a vote FOR the election of the nominated
directors)
;
|
|
(2)
|
Ratification
of the appointment of PricewaterhouseCoopers LLP as the company’s
independent registered public accounting firm for the 2009 fiscal
year
(“Proposal 2”)
(the
Board of Directors recommends a vote FOR this
proposal)
;
|
|
(3)
|
Consideration
of an amendment to the Company’s 1991 Stock Option Plan to authorize the
issuance of an additional 1,200,000 shares of Common Stock under
the plan
(“Proposal 3”)
(the
Board of Directors recommends a vote FOR this
proposal)
;
and
|
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(4)
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Such
other business as may properly come before the Annual
Meeting.
|
The
close
of business on October 6, 2008, has been fixed as the record date for the
determination of shareholders entitled to notice of and to vote at the Annual
Meeting. Only holders of Common Stock of record at the close of business on
that
date will be entitled to notice of and to vote at the Annual Meeting or any
adjournments or postponements thereof.
Finally,
as the term for Mr.
William
S. Watson, a director of the Company since 2000, expires in November 2008,
the
Board of Directors, management and employees of the Company wish to acknowledge
with gratitude and appreciation the deep industry domain expertise and common
sense business approach Mr. Watson has provided to the Company over the past
8
years. The Company wishes Mr. Watson well in his future
endeavors.
|
By
Order of the Board of Directors,
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|
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Columbia,
Maryland
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/s/
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Thomas
L. Patz
|
October
18, 2008
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Thomas
L. Patz, Executive Vice President,
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|
|
Strategic
Initiatives, General Counsel and Corporate
Secretary
|
Whether
or not you plan to be present in person at the annual meeting, please sign
and
date the enclosed proxy and return it in the enclosed envelope, which requires
no postage if mailed in the United States.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING
OF
SHAREHOLDERS TO BE HELD ON NOVEMBER 21, 2008:
The
proxy statement, form of proxy, and annual report (which includes consolidated
financial statements) are also available to be read or downloaded from the
following website:
www.micros.com/InvestorRelates/ProxyAndAnnualReport/2008/.
MICROS
SYSTEMS, INC.
7031
Columbia Gateway Drive
Columbia,
Maryland 21046-2289
PROXY
STATEMENT
Annual
Meeting of Shareholders
November
21, 2008
VOTING
RIGHTS AND PROXY SOLICITATION
This
Proxy Statement is furnished to shareholders of MICROS Systems, Inc. (“MICROS”
or the “Company”) in connection with the solicitation by MICROS’s Board of
Directors of proxies to be used at the Annual Meeting of Shareholders to be
held
on Friday, November 21, 2008, at 11:00 a.m., at the MICROS corporate
headquarters building, 7031 Columbia Gateway Drive
,
Columbia, Maryland, 21046,
and at
any adjournments or postponements of the meeting.
This
Proxy Statement and the form of proxy and annual report are being mailed to
shareholders beginning on or about October 21, 2008.
You
can
ensure that your shares are voted at the meeting by submitting your instructions
by completing, signing, dating, and returning the proxy form in the envelope
provided. Submitting your instructions or proxy by any of these methods will
not
affect your right to attend and vote at the meeting, although your presence
at
the Annual Meeting will not automatically revoke a previously submitted proxy.
You are encouraged to submit proxies in advance of the meeting. A shareholder
who gives a proxy may revoke it at any time before it is exercised by voting
in
person at the Annual Meeting, by delivering a subsequent proxy, or by filing
with the Secretary of the Company a written notice of revocation.
If
you
execute and return the proxy to the Company in time to be voted at the Annual
Meeting, then the shares represented by the proxy will be voted in accordance
with the instructions marked on the proxy. Executed but unmarked proxies will
be
voted FOR the election of the nominees for directors and FOR proposals 2 and
3.
If any other matters are properly brought before the Annual Meeting, the persons
named in the proxy will vote the shares represented by those proxies on those
matters in their discretion.
We
bear
the cost of solicitation of proxies in the enclosed form. In addition to our
solicitation of proxies by mail, we (acting through our directors, officers,
and
other employees) may also solicit proxies personally or by telephone, e-mail,
or
fax. We will reimburse brokers and other custodians, nominees, and fiduciaries
for their reasonable out-of-pocket expenses in forwarding soliciting materials
to beneficial owners of shares of MICROS Common Stock. We may retain a proxy
solicitor if we determine that such action is appropriate.
Each
share of Company Common Stock entitles the holder to one vote. There are no
cumulative voting rights.
The
close
of business on October 6, 2008 has been fixed as the record date for
determination of shareholders entitled to vote at the meeting. On that date,
80,628,632 shares of Common Stock were outstanding. The presence in person
or by
proxy of shareholders holding of record a majority of all votes entitled to
be
cast at the Annual Meeting is necessary to constitute a quorum. Abstentions
and
broker “non-votes” are counted as present and entitled to vote for purposes of
determining a quorum. A broker “non-vote” occurs when a bank, broker, or other
holder of record does not vote on a particular proposal because that holder
does
not have discretionary voting power with respect to the proposal and has not
received voting instructions from the beneficial owner.
If
there
are not sufficient votes for a quorum or to approve any proposal at the Annual
Meeting, the Annual Meeting may be adjourned to permit the further solicitation
of proxies.
A
plurality of all votes cast at the meeting is required for the election of
directors. This means that the six individuals who receive the highest number
of
votes cast will be elected as directors. A majority of all votes cast at the
meeting is required for the adoption of each of Proposal 2 and Proposal 3.
Abstentions and broker non-votes are not counted for purposes of voting on
Proposals 2 and 3.
The
Company has filed an Annual Report on Form 10-K for its fiscal year ended June
30, 2008, with the U.S. Securities and Exchange Commission (“SEC”). Shareholders
may obtain, free of charge, a copy of the Annual Report on Form 10-K by writing
to the Corporate Secretary at the Company’s address set forth above. Our Annual
Report on Form 10-K is also available from the SEC website, www.sec.gov, or
through the Company’s website www.micros.com. The information on our website is
not incorporated into and is not a part of the Proxy Statement or the Annual
Report.
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
Beneficial
ownership is determined in accordance with
SEC
regulations, and means voting or investment power with regard to shares of
Company Common Stock.
For
purposes of the table below, the number of shares beneficially owned by a person
includes shares of the Company’s Common Stock subject to options held by that
person that are currently exercisable or that will be exercisable within 60
days
of August 31, 2008. The shares issuable upon exercise of these options are
deemed outstanding for purposes of computing the percentage ownership of the
person holding these options but are not deemed outstanding for the purposes
of
computing the percentage ownership of any other person.
The
following table lists the number of shares of the Company’s Common Stock
beneficially owned as of August 31, 2008, unless otherwise noted, by
(1) all shareholders known by the Company to beneficially own more than
five percent of the Company’s outstanding Common Stock, (2) each of the
Directors, (3) each executive officer of the Company named in the Summary
Compensation Table that is included in the “Executive Compensation” section of
this proxy statement, and (4) all Directors and executive officers of the
Company as a group:
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Number of Shares
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of Common Stock
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Beneficially
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Owned as of
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Percent of
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Individual or Group
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August 31, 2008
(1)
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Class
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A.
L. Giannopoulos
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570,000
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(2)
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Less
than 1
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%
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Chairman
of the Board, President and Chief Executive Officer
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Louis
M. Brown, Jr.
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502,704
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(3)
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Less
than 1
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%
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Vice
Chairman of the Board
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B.
Gary Dando
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6,000
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(4)
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Less
than 1
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%
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Director
|
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John
G. Puente
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52,000
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(5)
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Less
than 1
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%
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Director
|
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|
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Dwight
S. Taylor
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6,550
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Less
than 1
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%
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Director
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William
S. Watson
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4,400
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Less
than 1
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%
|
Director
|
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|
|
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F.
Suzanne Jenniches
|
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15,288
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Less
than 1
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%
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Nominee
for Director
|
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Bernard
Jammet
|
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183,864
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(6)
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Less
than 1
|
%
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Executive
Vice President, Latin American Region
|
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|
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Gary
C. Kaufman
|
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198,251
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(7)
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Less
than 1
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%
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Executive
Vice President, Finance and Administration and
Chief
Financial Officer
|
|
|
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Jennifer
Kurdle
|
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60,844
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(8)
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Less
than 1
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%
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Executive
Vice President, Chief Administrative Officer
|
|
|
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Thomas
L. Patz
|
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277,503
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(9)
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Less
than 1
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%
|
Executive
Vice President, Strategic Initiatives, General Counsel and
Corporate
Secretary
|
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Directors
and Executive Officers as a group (12 persons)
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2,414,807
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(10)
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2.9
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%
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|
|
|
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|
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Neuberger
Berman Inc.
605
Third Avenue, New York, NY 10158
|
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5,946,092
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(11)
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7.4
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%
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|
|
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Barclays
Global Investors, NA.
45
Fremont Street, San Francisco, CA 94105
|
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4,386,588
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(12)
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5.4
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%
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|
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|
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|
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Columbia
Wanger Asset Management, L.P
227
West Monroe, Suite 3000, Chicago, IL 60606
|
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4,460,710
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(13)
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5.5
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%
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(1)
|
Information
with respect to beneficial ownership is based on information furnished
to
the Company by the beneficial owner. Unless otherwise noted, the
beneficial owner has sole voting and sole investing power with
respect to
the listed shares.
|
(2)
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Includes
options to purchase 520,000 shares that are currently
exercisable.
|
(3)
|
Includes
options to purchase 212,440 shares that are currently
exercisable.
|
(4)
|
Includes
4,000 shares of Common Stock jointly owned with his wife and 2,000
shares
of Common Stock held by his wife, with respect to which Mr. Dando
has
investment power.
|
(5)
|
Does
not include 4,000 shares of Common Stock held by Mr. Puente’s wife, with
respect to which Mr. Puente disclaims any beneficial
ownership.
|
(6)
|
Includes
options to purchase 170,000 shares currently exercisable or exercisable
within 60 days. Does not include 8,000 shares of Common Stock held
by Mr.
Jammet’s mother, with respect to which Mr. Jammet disclaims any beneficial
ownership.
|
(7)
|
Includes
options to purchase 149,999 shares currently exercisable or exercisable
within 60 days.
|
(8)
|
Includes
options to purchase 60,000 shares currently exercisable or exercisable
within 60 days.
|
(9)
|
Includes
options to purchase 231,651 shares currently exercisable or exercisable
within 60 days.
|
(10)
|
Includes
options to purchase 1,872,089 shares currently exercisable or exercisable
within 60 days.
|
(11)
|
The
information in the table is as of December 31, 2007. The amounts
of shares
stated in the table above and in this footnote have been adjusted
for the
subsequent stock split. Neuberger Berman Inc. owns Neuberger Berman
LLC
and Neuberger Berman Management Inc., Neuberger Berman LLC, and
Neuberger
Berman Management Inc. are, respectively, a sub-adviser and investment
manager of various Neuberger Berman mutual funds. Neuberger Berman
LLC
also has shared investment power and in some cases sole voting
power over
securities of unrelated clients. Of the shares listed in the table,
Neuberger Berman Inc. and Neuberger Berman LLC have sole voting
power with
respect to 70,914 shares, shared voting power (with Neuberger Berman
Management Inc.) with respect to 5,003,182 shares and shared investment
power with respect to 5,946,092 shares (which investment power,
as to
5,003,182 shares is shared with Neuberger Berman Management Inc.)
The
information in this footnote is derived from Amendment No. 1 to
Schedule
13G filed with the Securities and Exchange Commission on February
12, 2008
by Neuberger Berman Inc., Neuberger Berman LLC, Neuberger Berman
Management Inc. and Neuberger Berman Equity
Funds.
|
(12)
|
The
information in the table is as of December 31, 2007. The amounts
of shares
stated in the table above and in this footnote have been adjusted
for the
subsequent stock split. Of the shares listed in the table, Barclays
Global
Investors, NA., Barclays Global Fund Advisors and Barclays Global
Investors, Ltd., respectively have sole voting power with respect
to
1,793,184 shares; 2,509,522 shares; 83,882 shares, respectively.
The
information in this footnote is derived from Schedule 13G filed
with the
Securities and Exchange Commission on February 5, 2008 by Barclays
Global
Investors, NA.
|
(13)
|
The
information in the table is as of December 31, 2007. The amounts
of shares
stated in the table above and in this footnote have been adjusted
for the
subsequent stock split. The information in this footnote is derived
from
Schedule 13G filed with the Securities and Exchange Commission
on January
28, 2008 by Columbia Wanger Asset Management LP
.
|
ELECTION
OF DIRECTORS
(PROPOSAL
1)
Six
Directors are to be elected at the Annual Meeting, each to hold office until
the
2009 Annual Meeting of Shareholders and until his successor is elected and
qualified. Unless authority to vote is expressly withheld,
the
persons named in the form of proxy will vote the shares represented by each
properly executed proxy for the election of the Director nominees listed below.
Management believes that each of the nominees will serve if elected as
Directors.
If for
any reason any of the nominees are unable or unwilling to serve, the proxies
will be voted for a substitute nominee designated by the Board of Directors,
unless the Board of Directors decides to reduce the size of the
Board.
We
strongly encourage members of the Board of Directors to attend each Annual
Meeting. All members of the Board of Directors attended last year’s Annual
Meeting (held on November 16, 2007), and all currently intend to attend the
2008
Annual Meeting.
Information
as to Nominees
The
following table sets forth information regarding nominees for election as
Directors:
Nominees for Directors
|
|
Age
|
|
Director
Since
|
|
Position Held in MICROS
|
A.
L. Giannopoulos
|
|
68
|
|
1992
|
|
Chairman,
President, and Chief Executive Officer
|
Louis
M. Brown, Jr.
|
|
65
|
|
1977
|
|
Vice
Chairman of the Board
|
B.
Gary Dando
|
|
66
|
|
2003
|
|
Director
|
F.
Suzanne Jenniches
|
|
60
|
|
N/A
|
|
Director
|
John
G. Puente
|
|
78
|
|
1996
|
|
Director
|
Dwight
S. Taylor
|
|
63
|
|
1997
|
|
Director
|
Please
note that the slate of Board members has remained the same as last year, other
than F. Suzanne Jenniches, who has been nominated to replace William S.
Watson.
The
following are the brief biographical descriptions of
the
nominees for election as Directors:
A.
L. Giannopoulos
,
68, has
been the Company’s President and Chief Executive Officer of the Company since
May 1993, and the Company’s Chairman of the Board since April 2001. He has been
a Director of the Company since March 1992. Before joining MICROS in 1992,
Mr.
Giannopoulos served in a variety of positions for Westinghouse, most recently
as
General Manager of the Westinghouse Information and Security Systems Divisions.
Mr. Giannopoulos is a graduate of Lamar University with a Bachelor of Science
degree in Electrical Engineering.
Louis
M. Brown, Jr.
,
65, has
been a Director of the Company since 1977. Mr. Brown held the position of
President and Chief Executive Officer of the Company from January 1986 until
his
appointment as Chairman of the Board in January 1987. In April 2001, Mr.
Brown tendered his resignation as Chairman, and was appointed Vice
Chairman. He currently also serves as Chairman of Precision Auto Care,
Inc., and as President and a director of IDEAS, Inc. He is a graduate of the
Johns Hopkins University (B.E.S.-E.E.).
B.
Gary Dando
,
66, has
been a Director of the Company since November 2003. Mr. Dando worked for
Ernst & Young LLP for 37 years, the last 25 of which as a partner, until his
retirement in June 2001. Additionally, Mr. Dando is currently a member of
the Board of Trustees, University System of Maryland Foundation, Inc., and
from
July 2001 to June 2007 the University of Maryland College Park Foundation,
where
he was a member of the Budget and Audit Committee. Mr. Dando is a 1964
graduate of the University of Maryland, with a Bachelor of Science degree in
Accounting.
F.
Suzanne Jenniches
,
60, is
currently Vice President and General Manager of Northrop Grumman Government
Systems Division in Linthicum, Maryland. The Division designs and develops
advanced electro-mechanical and networking systems for both government and
commercial applications and includes the businesses for Postal Automation
Systems; International Air Defense and Command and Control Infrastructure
Systems; and Homeland Defense. In addition, she is responsible for the
Division’s operational sites in Belgium, France, the Middle East and North
Africa. She leads the Northrop Grumman Electronic System Sector's International
Campaign Council, an internal business strategy and coordination Council, and
Diversity and Inclusion Council. She is past president of the National Society
of Women Engineers and served as a Member of the United States Army Science
Board from 1999 to 2005. Ms. Jenniches is a graduate of Clarion College and
holds a Masters degree in Environmental Engineering from the Johns Hopkins
University. Ms. Jenniches previously served on the MICROS Board of Directors
from October 1996 to November 2003.
John
G. Puente
,
78, has
been a Director of the Company since May 1996. Mr. Puente is also currently
on
the Board of Directors of Primus Telecommunications, and is currently Chairman
of the Board of Trustees of Capitol College. Previously, Mr. Puente has served
as Chairman of Telogy Networks, Inc., Chairman and Chief Executive Officer
of
Orion Network Systems, and Vice Chairman of M/A-Com. He was also a founder
and Chairman of Digital Communications Corporation (now Hughes Network Systems)
and SouthernNet. Mr. Puente is a graduate of Polytechnic Institute of New
York, and holds a Masters degree from Stevens Institute of Technology.
Dwight
S. Taylor
,
63, has
been a Director of the Company since 1997. Mr. Taylor currently also
serves on the Trustee Boards of the Baltimore Polytechnic Institute Foundation,
Capitol College, and Lincoln University, and sits on the Board of Directors
of
T. Rowe Price Group, Inc. Since 1999, Mr. Taylor has served as President of
COPT
Development & Construction Services, LLC, a subsidiary of Corporate Offices
Properties Trust, a publicly held real estate investment trust. From 1984
to 1998, Mr. Taylor was employed by Constellation Real Estate, Inc. as Senior
Vice President. Mr. Taylor is also past President of the Maryland Chapter
of the National Association of Industrial and Office Properties (“NAIOP”), and
is a member of the NAIOP National Board. Mr. Taylor is a 1968 graduate of
Lincoln University with a Bachelor of Arts degree in Economics.
The
Board of Directors recommends a vote FOR election of the six nominees as
Directors.
CORPORATE
GOVERNANCE
Corporate
Governance Guidelines and Other Corporate Governance
Documents
Our
Corporate Governance Guidelines, including board membership criteria and
guidelines for board meetings, board committees, succession planning, and other
matters, are available at
www.micros.com/companyinformation/investorrelations/corporategovernance.
Also
available at that web address are the charters of the Audit Committee, the
Compensation Committee, and the Nominating Committee, as well as our Code of
Ethics and Business Practices.
Board
Meetings and Director Attendance
During
the fiscal year ended June 30, 2008, the Board of Directors held four meetings.
Each incumbent Director attended at least 75% of the total number of meetings
of
the Board of Directors and meetings of committees of the Board of Directors
of
which he was a member.
Director
Independence
The
Board
of Directors has determined that each of B. Gary Dando, John G. Puente, Dwight
S. Taylor is an independent director within the meaning of the rules of the
NASDAQ Stock Market. The Board also determined that William S. Watson was an
independent director within the meaning of the rules of the NASDAQ Stock Market,
and that F. Suzanne Jenniches, if elected, will be an independent director
within the meaning of the rules of the NASDAQ Stock Market. In addition, the
Board has determined that each of the members of the three Board committees
is
also independent within the meaning of the rules of the NASDAQ Stock Market,
including additional requirements relating to Audit Committee
members.
Audit
Committee
During
the fiscal year ended June 30, 2008, the Audit Committee of the Board of
Directors was comprised of Mr. Dando, who is the Audit Committee chairman,
and
Messrs. Puente and Watson. The Board of Directors has determined that Mr. Dando
is an “audit committee financial expert” as that term is defined in SEC
regulations. The Audit Committee met four times during the fiscal year ended
June 30, 2008. The Audit Committee is responsible for reviewing our financial
reporting functions and financial information provided to shareholders and
others, and internal control over financial reporting. In addition, the Audit
Committee (subject to shareholder ratification) selects the firm to be engaged
as our independent registered public accounting firm, and reviews and approves
the firm’s performance of accounting services and other permissible non-audit
services. The Audit Committee also has oversight responsibility for our internal
audit function. The Audit Committee has a charter that defines its roles and
responsibilities, which is available on our website at the url provided
above.
Compensation
Committee
During
the fiscal year ended June 30, 2008, the Compensation Committee of the Board
of
Directors was comprised of Mr. Puente, who is the Compensation Committee
chairman, and Messrs. Taylor and Watson. The Compensation Committee met three
times in the fiscal year ended June 30, 2008. The Compensation Committee is
responsible for analyzing and approving, among other things, executive
compensation, including executive bonuses, and the issuance of stock options
under the 1991 Stock Option Plan. The Compensation Committee has a charter
that
is available on our website at the url listed above.
Nominating
Committee
During
the fiscal year ended June 30, 2008, the Nominating Committee of the Board
of
Directors was comprised of Messrs. Taylor and Watson. The Nominating Committee
is responsible for identifying and interviewing individuals who may be qualified
to serve as new Board members. Our Corporate Governance Guidelines provide
that,
in recommending the appropriate skills and characteristics required of Board
members, the Nominating Committee’s assessment should include considerations of
relevant experience, intelligence, independence, commitment, compatibility
with
the Chief Executive Officer and the Board culture, prominence, diversity, age,
and other factors deemed relevant. The Nominating Committee will also consider
recommendations for Director candidates from shareholders. Shareholder
recommendations of candidates should be submitted in writing to: MICROS Systems,
Inc., 7031 Columbia Gateway Drive, Columbia, Maryland 21046-2289, Attention:
Corporate Secretary. To enable consideration of the candidate in connection
with
our 2009 Annual Meeting, a shareholder must have submitted the following
information by June 19, 2009: (i) the name of the candidate and information
about the candidate that would be required to be included in a proxy statement
under the rules of the Securities and Exchange Commission; (ii) information
about the relationship between the candidate and the recommending shareholder;
(iii) the consent of the candidate to serve as a Director; and (iv) proof of
the
number of shares of our common stock that the recommending shareholder owns
and
the length of time the shares have been owned. In considering any candidate
proposed by a shareholder, the Nominating Committee will reach its conclusion
based on the same criteria as are applied to other candidates. The Committee
may
seek additional information regarding the candidate. After full consideration,
the shareholder proponent will be notified of the decision of the Committee.
The
Nominating Committee has a charter that is available on our website at the
url
listed above.
The
Nominating Committee did not convene any formal meetings in fiscal year 2008.
However, our independent directors recommended, for the Board of Directors'
selection, the nominees listed in this proxy statement.
Correspondence
to the Board
Shareholders
may send correspondence to the Board of Directors or to any individual Director
at the following address: MICROS Systems, Inc., 7031 Columbia Gateway Drive,
Columbia, Maryland 21046, Attention: Corporate Secretary. The communication
should indicate that the sender is a shareholder. The Corporate Secretary will
review and log all communications. Based on procedures approved by the Board
of
Directors, the Corporate Secretary will retain and not send to Directors
communications that are purely promotional or commercial in nature or that
address topics that clearly are unrelated to Director responsibilities. All
other communications will be delivered to the appropriate
Directors.
Code
of Ethics and Business Practices
We
have a
Code of Ethics and Business Practices, which applies to all directors, officers,
and U.S.-based employees (foreign employees are subject to similar codes that
have some variations designed to address local law). Among other things, the
Code of Ethics and Business Practices is designed to deter wrongdoing and to
promote honest and ethical conduct, including the ethical handling of actual
or
apparent conflicts of interest between personal and professional relationships;
to promote full, fair, accurate, timely, and understandable disclosure in
periodic reports we are required to file; and to promote compliance with
applicable governmental laws, rules and regulations. The code of Ethics and
Business Practices provides for the prompt internal reporting of violations
of
the Code to an appropriate person identified in the Code and contains provisions
regarding accountability for adherence to the Code.
EXECUTIVE
COMPENSATION
COMPENSATION
DISCUSSION AND ANALYSIS
In
this
Compensation Discussion and Analysis, we discuss the compensation provided
to
our principal executive officer, our principal financial officer, and our three
other most highly compensated executive officers. We refer to these officers
as
our “named executive officers.”
INTRODUCTION
Our
compensation programs are designed to fairly compensate our executive officers
and enable us to attract and retain highly qualified managers. The Compensation
Committee determines the compensation to be paid to our executive officers,
and
its determination is based on its evaluation of the individual performance
of
our executive officers, the financial results achieved by the business units
that they manage, and our overall financial results for the period. In most
respects, the process used by the Compensation Committee is qualitative rather
than quantitative. Except with regard to certain elements of our annual
incentive bonus payout, the Compensation Committee does not use quantitative
measures in determining compensation levels.
We
did
not use the services of a compensation consultant in fiscal year 2008. We
subscribe to various compensation surveys (including Culpepper and Associates,
Business and Legal Reports, and various online surveys) and from time to time
we
consider other publicly available compensation information such as the proxy
statements of other publicly-traded companies. However, these surveys are used
only as a point of reference by the Compensation Committee; in making its
compensation determinations, the Compensation Committee does not benchmark
the
executive compensation of other companies’ executives.
FISCAL
YEAR 2008 COMPENSATION
As
described below, the principal elements of fiscal year 2008 compensation for
our
named executive officers were base salary, annual bonus, and long-term
incentives in the form of stock options.
Base
Salary
We
determine salary increases for our executive officers, including our named
executive officers, based on three discrete objectives: rewarding individual
performance, protecting against inflation, and retaining our executive officers.
Accordingly, the Compensation Committee considers overall corporate performance
and, for those executives with management responsibility for particular business
units, the financial results for those business units. The Compensation
Committee also generally considers the impact of increases in the cost of
living. The Compensation Committee does not use a mathematical formula to
determine increases, but makes a qualitative assessment in consultation with
Mr.
Giannopoulos. Mr. Giannopoulos’ salary is mandated by the terms of his
employment agreement.
For
fiscal 2008, the Compensation Committee authorized the following salary
increases:
Name
|
|
Salary Increase (%)
|
|
Fiscal 2008
Annual Base Salary ($)
|
|
A.
L. Giannopoulos
|
|
|
33.3
(contractually
provided
)
|
|
|
2,000,000
|
|
Gary
C. Kaufman
|
|
|
5.0
|
|
|
798,000
|
|
Thomas
L. Patz
|
|
|
5.0
|
|
|
650,000
|
|
Jennifer
Kurdle
|
|
|
10.0
|
|
|
341,000
|
|
Bernard
Jammet
|
|
|
5.2
|
|
|
382,000
|
|
Bonus
We
pay
incentive bonuses to the named executive officers. The objective of the
incentive bonuses is to provide additional motivation and reward to the named
executive officers to improve performance on a company-wide or
business-unit-wide basis, as appropriate, thereby enhancing the prospects for
increased shareholder return.
Before
the commencement of each fiscal year, the Compensation Committee establishes
target bonuses for each of the named executive officers (other than for
Mr. Giannopoulos, whose $800,000 target bonus was stipulated in his
employment agreement), based on the named executive officer’s position and
responsibilities. In fiscal year 2008, the target bonuses ranged from 50 to
100
percent of the base salary of the named executive officers. The Compensation
Committee did not determine the amount of the target bonuses on the basis of
any
arithmetic formula.
As
described more fully below, the annual incentive bonuses for
Messrs. Giannopoulos, Kaufman and Patz were based on the extent to which
our actual fiscal year 2008 revenues and income before taxes exceeded our
budget. We selected revenues as a performance measure for our incentive bonuses
because we believe revenue growth is a principal indicator of our ability to
compete effectively, increase market share, and realize economies of scale
that
can enhance margins. We selected income before taxes as the other performance
measure because we believe that it provides a fundamental, “bottom line”
indication of executive performance. We use income before taxes, rather than
after-tax income, because tax rate fluctuations often are related to factors
that are out of control of management, and we believe that bonus awards should
not be affected positively or negatively by these fluctuations. For fiscal
2008,
our budgeted revenue and income before taxes amounts were $910,000,000 and
$164,684,000, respectively.
In
computing the bonus payout, we multiply one-half of the target bonus by a
percentage computed by dividing actual revenue by budgeted revenue, and the
remaining one-half of the target bonus is computed by multiplying it by a
percentage computed by dividing actual income before taxes by budgeted income
before taxes, in each case only if the percentage is at least 100 percent.
In
other words, if we do not achieve budgeted revenue or budgeted income before
taxes, no bonus is paid with respect to the relevant measure. In fiscal year
2008, our actual revenues were 104.86 percent of budgeted revenues, and our
actual income before taxes was 104.18 percent of budgeted income before taxes.
Accordingly, the incentive bonus amounts to which Messrs. Giannopoulos, Kaufman
and Patz were entitled equaled 104.52 percent of their respective target
bonuses.
For
Mr.
Jammet and Ms. Kurdle, we used a similar methodology, but applied the revenues
and income before taxes measures to their respective business units: for Mr.
Jammet, the Latin America region; for Ms. Kurdle, the Leisure and Entertainment
Business Unit (which is the business unit that she managed during fiscal year
2008, before her appointment, effective as of July 1, 2008, as Chief
Administrative Officer). The reasons for selecting these measures for Mr.
Jammet’s and Ms. Kurdle’s business unit were essentially similar to those
described above with respect to Messrs. Giannopoulos, Kaufman and Patz.
The
Compensation Committee has the discretion to reduce the incentive bonuses
calculated pursuant to the measures described above, but did not exercise this
discretion in fiscal 2008.
We
sometimes supplement the bonuses payable in accordance with the methodology
described above with additional discretionary bonuses. For fiscal year 2008,
the
Compensation Committee awarded each of the named executive officers additional
discretionary bonuses in recognition of our strong performance for the 2008
fiscal year, noting particularly that our operating profit on a consolidated
basis after accrual of all discretionary bonuses exceeded our internally-set
expectations. The Compensation Committee also considered worldwide growth rates
and new customer contract signings.
The
following table provides information regarding our bonus payments in fiscal
2008:
Name
|
|
Target Bonus
Based on Budgeted
Measures ($)
|
|
Target Bonus
as a Percentage
of Salary (%)
|
|
Bonus Paid Based
on Performance
Related to Budgeted
Measures ($)
|
|
Total
Bonus ($)
|
|
A.
L. Giannopoulos
|
|
|
800,000
|
|
|
40.0
|
|
|
836,160
|
|
|
1,540,680
|
|
Gary
C. Kaufman
|
|
|
798,000
|
|
|
100.0
|
|
|
834,070
|
|
|
998,000
|
|
Thomas
L. Patz
|
|
|
650,000
|
|
|
100.0
|
|
|
679,380
|
|
|
850,000
|
|
Jennifer
Kurdle
|
|
|
341,000
|
|
|
100.0
|
|
|
476,479
|
|
|
476,479
|
|
Bernard
Jammet
|
|
|
385,000
|
|
|
100.0
|
|
|
95,550
|
|
|
175,000
|
|
Stock
Options
S
tock
options are directly linked
to
shareholder value, since the value of stock options is dependent on increases
in
the market price of our stock. The principal objective of our stock option
grants accordingly is to align the interests of our executives to our
shareholders. In addition, our stock option awards are designed to serve as
an
incentive to continued employment, since they typically vest over a period
of
three years.
The
Compensation Committee’s grant of stock options in fiscal year 2008 was not
based on objective or mathematical criteria. Mr.
Giannopoulos
recommended to the Committee the number of shares underlying stock options
to be
granted to employees, including the named executive officers. He recommended
that the named executive officers with company-wide authority, namely
Messrs. Kaufman and Patz, each be granted options to purchase 160,000
shares; he further recommended that Ms. Kurdle and Mr. Jammet, each of whom
have
responsibility over particular business units, receive a grant of 80,000 shares
and 40,000, respectively. The principal factors underlying the recommendations
included our overall financial performance, the responsibilities and performance
of each named executive officer, and an evaluation of the strategic assignments
on which the named executive actively works. The factors were not weighted,
and
the number of shares underlying granted options was not based on any arithmetic
formula. For fiscal year 2008, the Compensation Committee approved the
recommendations made by Mr. Giannopoulos, and further directed the Company
to grant to Mr. Giannopoulos options to purchase 240,000 shares. This was the
first grant of options to Mr. Giannopoulos since 2004.
The
number of shares underlying stock options granted to the named executive
officers are set forth below in the Grants of Plan Based Awards table under
the
column heading, “All Other Option Awards: Number of Securities Underlying
Options.” For additional information regarding stock option terms, see the
narrative accompanying the Grants of Plan Based Awards table. The dollar amounts
shown in the Summary Compensation Table generally reflect the dollar amounts
recognized for financial statement purposes. Therefore, it includes amounts
with
respect to only a portion of the stock options granted in fiscal years 2008
and
2007, while also including amounts from earlier option grants. See the footnotes
to the Summary Compensation Table for further information.
Other
We
do not
provide perquisites or personal benefits to the named executive officers other
than standard health benefits available to all employees. For example, we do
not
offer to the named executive officers any reimbursement for financial services,
air travel (other than reimbursement for business travel), country club
memberships, or car allowances.
STOCK
OPTION GRANT PRACTICES
While
the
Compensation Committee generally makes decisions regarding the grant of options
throughout the year, it limits the effective dates of any grant to the next
succeeding “authorized grant date.” There are five authorized grant dates each
year:
(i)
the
day of the annual meeting of stockholders; (ii) the third business day after
the
public release of the quarterly earnings for the quarter ending March 31; (iii)
the third business day after the public release of the annual earnings for
the
fiscal year ending June 30; (iv) the third business day after the public release
of the quarterly earnings for the quarter ending September 30; and (v) the
third
business day after the public release of the quarterly earnings for the quarter
ending December 31.
We
believe that our stock option grant practices are appropriate and eliminate
any
questions regarding “timing” of grants in anticipation of material
events.
RETIREMENT
AND OTHER POST-EMPLOYMENT PLANS AND AGREEMENTS
We
provide retirement benefits to all named executive officers under our 401(k)
Retirement Plan. Additionally, Mr. Giannopoulos is entitled to benefits under
our Supplemental Executive Retirement Plan. Further, some of the named executive
officers have provisions in their employment agreements that provide severance
benefits upon certain types of employment termination events. These plans and
agreements have been designed to be a part of a competitive compensation
package, and have been amended from time to time.
The
MICROS Systems Inc. 401(k) Retirement Plan
–
This plan is a tax-qualified defined contribution plan available to all of
our
employees. All of the named executive officers participate in this plan. Under
the plan, an employee may contribute, subject to Internal Revenue Code
limitations (which, among other things, limited annual contributions in 2008
to
$15,500), up to a maximum of 100 percent of his or her eligible
compensation on a pre-tax basis. The plan does not permit after-tax
contributions. We provide matching contributions targeted at 50 percent of
the first 5 percent of eligible compensation contributed by the employee.
Amounts credited to an employee’s account in the plan may be invested among a
number of funds. MICROS Systems, Inc. common stock is not currently offered
as
an investment. A participant’s account is adjusted to reflect the rate of
return, positive or negative, of the investment.
Supplemental
Executive Retirement Plan (“SERP”)
–
In
November 2004, we adopted the SERP, which is a defined benefit plan that
provides ten annual payments, each equal to a percentage of the participant’s
annual salary, at the time of the participant’s retirement or earlier death.
While initially all of the named executive officers participated in the SERP,
the Compensation Committee in June 2008 decided to eliminate the benefits for
all participants other than those who were already vested as of June 30, 2008.
Accordingly, the twelve participants who were not vested as of that date were
removed from the SERP; the two participants who were vested as of that date
(by
virtue of their being 62 or older) will continue to participate. Mr.
Giannopoulos is the only named executive officer who continues to participate
in
the SERP. The percentage of salary subject to the annual payment ranges from
18 percent to 30 percent depending on the age of the participant at
the time of retirement or death. See the narrative accompanying the Nonqualified
Deferred Compensation table for further information.
Change
of Control and Severance Provisions in Employment Agreements with
Messrs. Giannopoulos, Kaufman and Patz and Ms. Kurdle
–
Our
employment agreements with Messrs. Giannopoulos, Kaufman and Patz and Ms.
Kurdle each provide for payments upon termination by MICROS other than for
“good
cause” and upon a termination by the executive for “good reason.” Additionally,
the employment agreements with Messrs. Giannopoulos, Kaufman and Patz each
provide for payments upon termination following a “change of control.”
Mr. Giannopoulos’ agreement differs from Messrs. Kaufman’s and Patz’s
with respect to the scope of the payments and the definition of “change of
control.” See “Potential Payments upon Termination” below for additional
information. We included the change of control payment provisions to provide
some financial security to the executives, which we believe should enhance
management stability during a period
where
there
may be uncertainty associated with a change of control. These change of control
arrangements also are designed to assure that the covered executives consider
fully and support, if appropriate, any proposed corporate transactions involving
a change of control that may be in the best interests of our shareholders.
The
termination payment provisions also provide clear statements of the rights
of
the executive officers, and protect against a change in employment and other
terms that would be unfavorable to the executive officer.
TAX
CONSIDERATIONS
Section 162(m)
of the Internal Revenue Code limits to $1 million the deductibility for
federal income tax purposes of annual compensation paid by a publicly held
company to its chief executive officer and its three other highest paid
executive officers, other than the chief financial officer, unless certain
conditions are met. To the extent feasible, we structure executive compensation
to preserve deductibility for federal income tax purposes. In this regard,
our
stock option plan is designed to preserve, to the extent otherwise available,
the deductibility of income realized upon the exercise of stock
options.
H
owever,
the availability of tax deductions is not a factor that the Compensation
Committee considers in determining the amounts or types of compensation offered.
ROLE
OF CHIEF EXECUTIVE OFFER IN COMPENSATION DETERMINATIONS
As
noted
above, in connection with fiscal year 2008 compensation for executive officers,
Mr. Giannopoulos provided recommendations to the Compensation Committee;
however, Mr. Giannopoulos did not make recommendations as to his own
compensation, as his compensation is contractually provided. While the
Compensation Committee used this information and valued Mr. Giannopoulos’
recommendations, the
Compensation
Committee made the ultimate decisions regarding executive compensation.
COMPENSATION
COMMITTEE REPORT
The
Company’s Compensation Committee has reviewed and discussed with management the
foregoing Compensation Discussion and Analysis. Based on its review and
discussions, the Compensation Committee has recommended to the Company’s Board
that the foregoing Compensation Discussion and Analysis be included in this
Proxy Statement.
JOHN
G.
PUENTE (Chairman)
DWIGHT
S.
TAYLOR and WILLIAM S. WATSON
Members
of the Compensation Committee
Summary
Compensation Table (Fiscal 2008)
The
following table provides information on the compensation paid to each of the
five named executive officers during fiscal years 2008 and 2007.
Name and
Principal Position
|
|
Fiscal
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
(1)
|
|
Non-
Equity
Incentive
Plan
Compen-sation
($)
|
|
Change in
Pension
Value and
Non-qualified
Deferred
Compen-sation
Earnings
($)
(2)
|
|
All
Other
Compen-sation
($)
(3)
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A.
L. Giannopoulos
|
|
|
2008
|
|
|
2,000,000
|
|
|
1,540,680
|
|
|
N/A
|
|
|
3,180,036
|
|
|
0
|
|
|
199,620
|
|
|
5,500
|
|
|
6,925,848
|
|
Chairman,
|
|
|
2007
|
|
|
1,500,000
|
|
|
1,125,270
|
|
|
N/A
|
|
|
0
|
|
|
0
|
|
|
1,197,486
|
|
|
5,500
|
|
|
3,828,256
|
|
President
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief
Executive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary
C. Kaufman
|
|
|
2008
|
|
|
798,000
|
|
|
998,000
|
|
|
N/A
|
|
|
1,748,724
|
|
|
0
|
|
|
0
|
|
|
5,500
|
|
|
3,550,224
|
|
Executive
Vice
|
|
|
2007
|
|
|
760,000
|
|
|
643,718
|
|
|
N/A
|
|
|
1,553,431
|
|
|
0
|
|
|
192,169
|
|
|
5,500
|
|
|
3,154,818
|
|
President,
Finance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
Administration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
Chief
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
L. Patz
|
|
|
2008
|
|
|
650,000
|
|
|
850,000
|
|
|
N/A
|
|
|
1,727,380
|
|
|
0
|
|
|
0
|
|
|
5,500
|
|
|
3,232,880
|
|
Executive
Vice
|
|
|
2007
|
|
|
619,000
|
|
|
571,191
|
|
|
N/A
|
|
|
1,470,103
|
|
|
0
|
|
|
48,339
|
|
|
6,902
|
|
|
2,715,535
|
|
President,
Strategic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initiatives,
General
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Counsel
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jennifer
Kurdle
|
|
|
2008
|
|
|
341,000
|
|
|
476,479
|
|
|
N/A
|
|
|
810,666
|
|
|
0
|
|
|
0
|
|
|
7,125
|
|
|
1,635,270
|
|
Executive
Vice
|
|
|
2007
|
|
|
310,000
|
|
|
212,347
|
|
|
N/A
|
|
|
784,777
|
|
|
0
|
|
|
14,325
|
|
|
5,863
|
|
|
1,327,312
|
|
President,
Chief
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bernard
Jammet
|
|
|
2008
|
|
|
382,000
|
|
|
175,000
|
|
|
N/A
|
|
|
499,217
|
|
|
0
|
|
|
0
|
|
|
5,738
|
|
|
1,061,955
|
|
Executive
Vice
|
|
|
2007
|
|
|
363,000
|
|
|
200,739
|
|
|
N/A
|
|
|
466,988
|
|
|
0
|
|
|
38,720
|
|
|
5,912
|
|
|
1,075,359
|
|
President,
Latin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American
Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This
column represents the dollar amount recognized for financial statement
reporting purposes for the indicated fiscal year, in accordance with
Statement of Financial Accounting Standards No. 123 (revised) (“SFAS
123R”) for the stock options granted to each of the named executive
officers but in accordance with SEC regulations, without giving effect
to
estimated forfeitures related to service-based vesting conditions.
For
additional information on the assumptions underlying the valuation
of
these awards, see Note 2 of the Company’s financial statements in the Form
10-K for the fiscal year ended June 30, 2008, as filed with the
SEC.
|
(2)
|
In
accordance with SEC regulations, this column does not reflect the
effective decrease in actuarial value of the Supplemental Executive
Retirement Plan.
As
discussed above under “Compensation Discussion and Analysis –
Retirement and other Post-Employment Plans and Agreements –
Supplemental Executive Retirement Plan,” the Compensation Committee in
June 2008 eliminated the benefits of all participants other than
those who
were already vested as of June 30, 2008; accordingly, Mr. Kaufman,
Mr.
Patz, Mr. Jammet, and Ms. Kurdle no longer participate in the
SERP.
|
(3)
|
Represents
our contributions to the 401(k) savings plan for the named executive
officers.
|
Each
of
Messrs. Giannopoulos, Kaufman, and Patz and Ms. Kurdle has an employment
agreement. Under Mr. Giannopoulos’ employment agreement, which, as amended, is
in effect until June 30, 2011, Mr. Giannopoulos is entitled to receive a base
salary of $2,000,000 and has a target bonus set at $800,000 during fiscal year
2008, and a target bonus of $900,000 during fiscal years 2009 through
2011.
Mr.
Kaufman’s, Mr. Patz’s and Ms. Kurdle’s employment agreements are in effect until
September 30, 2011. Thereafter, the agreements renew each year for additional
one-year periods, unless either party elects to terminate the agreement in
accordance with its provisions. While the agreements do not specify an annual
salary or a target bonus for fiscal year 2008 or any subsequent year, the
agreements provide that each named executive officer’s respective salary and
bonus cannot be reduced. Subject to this limitation, the determination of salary
and target bonus each year for Mr. Kaufman, Mr. Patz, and Ms. Kurdle is left
to
the discretion of the Compensation Committee.
See
“Potential Payments upon Termination” for information regarding provisions of
the employment agreements applicable to specified events of
termination.
Grants
of Plan-Based Awards (Fiscal 2008)
The
following table provides information regarding stock options awarded to the
named executive officers during fiscal year 2008.
Name
|
|
Grant date
|
|
All Other Option
Awards (#)
|
|
Exercise or Base
Price of Option
Awards ($/Sh)
|
|
Grant Date Fair
Value of Stock and
Option Awards ($)
|
|
|
|
|
|
|
|
|
|
|
|
A.
L. Giannopoulos
|
|
|
11/16/07
|
|
|
240,000
|
|
|
35.28
|
|
|
3,180,036
|
|
Gary
C. Kaufman
|
|
|
11/16/07
|
|
|
160,000
|
|
|
35.28
|
|
|
2,184,568
|
|
Thomas
L. Patz
|
|
|
11/16/07
|
|
|
160,000
|
|
|
35.28
|
|
|
2,184,568
|
|
Jennifer
Kurdle
|
|
|
11/16/07
|
|
|
80,000
|
|
|
35.28
|
|
|
1,092,284
|
|
Bernard
Jammet
|
|
|
11/16/07
|
|
|
40,000
|
|
|
35.28
|
|
|
546,142
|
|
Except
as
noted below, the terms of the stock options awarded to each named executive
officer, including vesting provisions and the determination of the exercise
price are as provided generally in our stock option plan. Accordingly, vesting
of all stock options occurs over a three-year period commencing on the date
of
grant (except for Mr. Giannopoulos, because his employment agreement specifies
vesting of options over a one-year period). The exercise price is determined
on
the date of grant, by the closing price of our stock on the NASDAQ market on
that date.
Mr.
Giannopoulos’s employment agreement provides that, at his retirement, any
options that had not yet vested at that time will vest immediately. Further,
even after his termination of employment, whether because of retirement,
disability or death, his options will remain exercisable by either him or his
estate, as the case may be, until the tenth anniversary of the grant date.
Outstanding
Equity Awards at Fiscal 2008 Year End
The
following table provides information concerning all of the unexercised stock
options held by the named executive officers as of June 30, 2008. The vesting
schedule for each outstanding award is shown following this table, based on
the
option award grant date.
|
|
Option Awards
|
|
Name
|
|
Number of Securities
Underlying Unexercised
Options (#)
Exercisable
|
|
Number of Securities
Underlying Unexercised
Options (#)
Unexercisable
(1)
|
|
Option Exercise
Price ($)
|
|
Option Expiration Date
|
|
A. L. Giannopoulos
|
|
|
280,000
|
|
|
0
|
|
|
16.68
|
|
|
11/18/14
|
|
|
|
|
240,000
|
|
|
0
|
|
|
35.28
|
|
|
11/15/17
|
|
|
|
|
520,000
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary
C. Kaufman
|
|
|
106,666
|
|
|
53,334
|
|
|
23.71
|
|
|
11/17/15
|
|
|
|
|
43,333
|
|
|
86,667
|
|
|
25.91
|
|
|
11/16/16
|
|
|
|
|
0
|
|
|
160,000
|
|
|
35.28
|
|
|
11/15/17
|
|
|
|
|
149,999
|
|
|
300,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
L. Patz
|
|
|
81,652
|
|
|
0
|
|
|
16.68
|
|
|
11/18/14
|
|
|
|
|
106,666
|
|
|
53,334
|
|
|
23.71
|
|
|
11/17/15
|
|
|
|
|
43,333
|
|
|
86,667
|
|
|
25.91
|
|
|
11/16/16
|
|
|
|
|
0
|
|
|
160,000
|
|
|
35.28
|
|
|
11/15/17
|
|
|
|
|
231,651
|
|
|
300,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jennifer
Kurdle
|
|
|
40,000
|
|
|
20,000
|
|
|
23.71
|
|
|
11/17/15
|
|
|
|
|
20,000
|
|
|
40,000
|
|
|
25.91
|
|
|
11/16/16
|
|
|
|
|
0
|
|
|
80,000
|
|
|
35.28
|
|
|
11/15/17
|
|
|
|
|
60,000
|
|
|
140,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bernard
Jammet
|
|
|
80,000
|
|
|
0
|
|
|
10.52
|
|
|
11/20/13
|
|
|
|
|
40,000
|
|
|
0
|
|
|
16.68
|
|
|
11/18/14
|
|
|
|
|
40,000
|
|
|
20,000
|
|
|
23.71
|
|
|
11/17/15
|
|
|
|
|
10,000
|
|
|
20,000
|
|
|
25.91
|
|
|
11/16/16
|
|
|
|
|
0
|
|
|
40,000
|
|
|
35.28
|
|
|
11/15/17
|
|
|
|
|
170,000
|
|
|
80,000
|
|
|
|
|
|
|
|
(1)
|
Under
the terms of the 1991 Stock Option Plan, all options, including unvested
options, are exercisable for 30 days prior to the termination of
the Plan
as a result of our dissolution or liquidation or upon a reorganization,
merger or consolidation in which we are not the surviving corporation,
or
upon the sale of substantially all of our property to another corporation.
Acceleration of the unvested options in the event of a change in
control,
as defined, is also provided in the individual option agreements
with
Messrs Kaufman and Patz. See “Potential Payments upon Termination” for
additional information.
|
Option
Awards Vesting Schedule
Grant Date
|
|
Expiration Date
|
|
Vesting Schedule
|
11/19/2004 and earlier
|
|
Ten years from the date of grant
|
|
Fully Vested as of three years from the date of grant.
|
11/18/2005
|
|
11/17/2015
|
|
1/3 vests each year for three years from date of grant
(2006 – 2008)
|
11/17/2006
|
|
11/16/2016
|
|
1/3 vests each year for three years from date of grant
(2007 – 2009)
|
11/16/2007
|
|
11/15/2017
|
|
1/3 vests each year for three years from date of grant
(2008 – 2010)
|
Option Exercises
and Stock Vested (Fiscal 2008)
The
following table provides information concerning stock options that were
exercised during fiscal year 2008 by the named executive officers.
|
|
Option Awards
|
|
Name
|
|
Number of Shares Acquired
on Exercise (#)
|
|
Value Realized on Exercise ($)
(1)
|
|
A. L. Giannopoulos
|
|
|
280,000
|
|
|
5,365,951
|
|
Gary
C. Kaufman
|
|
|
189,504
|
|
|
3,189,728
|
|
Thomas
L. Patz
|
|
|
165,996
|
|
|
3,479,600
|
|
Jennifer
Kurdle
|
|
|
120,000
|
|
|
2,151,776
|
|
Bernard
Jammet
|
|
|
64,100
|
|
|
1,848,442
|
|
(1)
|
Determined
b
ased
on the market price of our Common Stock on the exercise date less
the
option exercise price paid for those
shares.
|
Pension
Benefits (Fiscal 2008)
Mr.
Giannopoulos is the only named executive officer who participates in the SERP.
In June 2008, the Company eliminated the benefits of all participants other
than
those who were already vested as of June 30, 2008; accordingly, Mr. Kaufman,
Mr.
Patz, Mr. Jammet, and Ms. Kurdle no longer participate in the SERP.
Under
the
SERP, participants who are vested (or their designated beneficiaries upon death)
will receive 10 annual payments over nine years commencing 6 months after the
earlier of death or retirement on or after age 62. A participant becomes vested
after
completing eight years of service and then upon the first to occur of: (i)
the
participant attaining age 62 (provided the person is employed by us on his
or
her 62
nd
birthday); or (ii) a change in control of MICROS (which, under the SERP, is
generally deemed to occur if a person acquires 50% or more of our outstanding
shares of common stock or the combined voting power of our securities entitled
to vote generally in the election of directors, or upon the occurrence of other
specified corporate transactions immediately after which persons who hold 50%
or
more of the outstanding voting securities entitled to vote generally in the
election of directors of the surviving entity did not hold our common stock
before the transaction); or (iii) the participant dies before attaining age
62.
The
value
of benefits under the SERP is not based on years of service. Rather, it is
determined
based on the (1) participant’s age at retirement or at death (as applicable),
and (2) the base salary received by the participant during the 12 months
immediately preceding his or her retirement or death. The annual benefit rates
are as follows:
Benefit
Rate
|
|
|
18%
|
|
Participant’s
retirement between 62
nd
and 63
rd
birthday, or death
before 63
rd
birthday
|
21%
|
|
Participant’s
retirement or death after 63
rd
birthday but before
64
th
birthday
|
24%
|
|
Participant’s
retirement or death after 64
th
birthday but before
65
th
birthday
|
30%
|
|
Participant’s
retirement or death after 65
th
birthday
|
The
benefit rate is multiplied by the participant’s
base
salary for the twelve months prior to termination of employment to determine
the
annual payment amount. Because Mr. Giannopoulos is over 65 years of age, he
is entitled to receive annual payments equal to 30% of his base salary for
the 12 months prior to his termination of employment.
Based
on
his base salary for fiscal 2008, Mr. Giannopoulos would have received an annual
benefit of $600,000 if his employment terminated on June 30, 2008.
As
of
June 30, 2008, the present value of accumulated benefits under the SERP for
each
of the named executive officers was as follows:
Name
|
|
Plan Name
|
|
Number of Years
Credited Service
(#)
|
|
Present
Value of
Accumulated
Benefit ($)
(1)
|
|
Payments
During Last Fiscal
Year ($)
|
|
A. L. Giannopoulos
|
|
|
SERP
|
|
|
N/A
|
|
|
3,656,221
|
|
|
0
|
|
Gary
C. Kaufman
|
|
|
SERP
|
|
|
N/A
|
|
|
0
|
|
|
0
|
|
Thomas
L. Patz
|
|
|
SERP
|
|
|
N/A
|
|
|
0
|
|
|
0
|
|
Jennifer
Kurdle
|
|
|
SERP
|
|
|
N/A
|
|
|
0
|
|
|
0
|
|
Bernard
Jammet
|
|
|
SERP
|
|
|
N/A
|
|
|
0
|
|
|
0
|
|
(1)
|
Assumptions
used to measure present value of accumulated benefit as of June 30,
2008
are retirement on or after age 65, the named executive officer’s base
salary remaining constant at fiscal year 2008 amounts and discount
rate of
6.1%, which is based on the internal rate of return for a portfolio
of
high-quality bonds (Moody’s Aa Corporate bonds) with maturities that are
consistent with projected future cash
flows.
|
Nonqualified
defined contribution and other nonqualified deferred compensation
plans
We
do not
currently offer any nonqualified defined contribution or other nonqualified
deferred compensation plans.
Potential
Payments upon Termination
In
this
section, we describe payments that may be made to our named executive officers
upon several events of termination, including termination in connection with
a
change in control, assuming the termination event occurred on June 30, 2008.
The
information in this section does not include information relating to the
following:
•
distributions
under the SERP – see “Pension Benefits (Fiscal 2008) for information
regarding this plan;
•
other
payments and benefits provided on a nondiscriminatory basis to salaried
employees generally upon termination of employment, including under our 401(k)
Retirement Plan.
Termination
Payments under Employment Agreements
Pursuant
to his employment agreement, if Mr. Giannopoulos is terminated other than for
“good cause” or if he resigns for “good reason,” then he would be eligible to
receive payment of all of the salary and target bonus payments provided for
in
his employment agreement for the period beginning on the date of termination
of
employment and ending on June 30, 2011.
Messrs.
Kaufman and Patz, and Ms. Kurdle are entitled to certain benefits upon
termination, in accordance with the terms of their employment agreements. If
Messrs. Kaufman or Patz, or Ms. Kurdle, are terminated other than for “good
cause” or if they resign for “good reason,” then the executive would be eligible
to receive all base salary through the then-current expiration date of their
employment agreement plus three times the target bonus for which they were
eligible for the fiscal year in which their employment was
terminated.
Under
the
employment agreements, “good cause” is generally defined as (i) felony
conviction, (ii) a breach of the confidentiality or non-compete clauses in
the
agreements, or (iii) a material failure to perform the employee’s duties not
cured within a specified notice-and-cure period. “Good Reason” is generally
defined as (i) our assignment to the employee of material duties inconsistent
with his position, (ii) our efforts to reduce the employee’s salary or target
bonus, or fringe benefits without the consent of the employee, or (iii) our
failure to obtain the agreement of any successor-in-interest to assume our
obligations under the agreement.
Termination
Payments in Connection with a Change of Control
Pursuant
to his employment agreement, Mr. Giannopoulos is eligible to receive a
termination payment equal to the aggregate balance of his salary and bonus
for
the remaining term of his Employment Agreement upon a change of control, which
is occurs when a “person, firm or group … by virtue of his or their acquisition
or ownership of at least twenty percent (20%) of the Common Stock of the
Company, shall have the power to control and direct the management and business
affairs of the Company.”
Under
their employment agreements, Messrs. Kaufman and Patz are entitled to receive
termination payments if the executive terminates his employment within 30 days
following the change of control. Under their agreements, a change of control
generally occurs (a)
when
a
person or entity owns at least 40% or more of our voting stock, unless in a
transaction in which MICROS becomes a subsidiary of another corporation, our
shareholders immediately before the transaction beneficially own, immediately
after the transaction, more than 60% of the voting power of the parent company,
(b) the consummation of a merger or consolidation of MICROS with another
corporation where the shareholders of MICROS immediately before the transaction
will not own, immediately after the transaction at least 60% of the voting
power
of the resulting entity or where the members of the Board of Directors
immediately before the transaction would not constitute a majority of the board
immediately after the transaction, (c) a sale or other disposition of all or
substantially all of our assets, or our liquidation or dissolution, or (d)
a
change in the board of directors such that a majority of the new members of
the
board are different than the directors who were members before the election,
unless the election of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors before
the
election. For each of Mr. Patz and Mr. Kaufman, the change of control payment
equals 2.99 times the sum of (i) his highest annual base salary prior to his
date of termination and (ii) his eligible target bonus for the fiscal year
of
his termination.
None
of
the named executive officers has any contractual entitlement to receive tax
gross up payments in connection with a change in control payment.
The
following table shows the amounts that under employment agreements with the
named executive officers (other than Mr. Jammet, who does not have an employment
agreement) would be paid to each named executive officer in case of the
indicated termination of employment events, assuming that the termination
occurred on June 30, 2008 (the last business day of fiscal 2008).
|
|
Termination by Company
|
|
|
|
Resignation or Termination
In Connection With
a Control Change
|
|
Name
|
|
With Good Cause or
Voluntary
Resignation ($)
|
|
Without
Good Cause ($)
|
|
Resignation for
Good Reason ($)
|
|
Cash
Payment ($)
|
|
Value of
Unvested
Options ($)
(1)
|
|
A. L. Giannopoulos
|
|
|
0
|
|
|
8,700,000
|
|
|
8,700,000
|
|
|
8,700,000
|
|
|
0
|
|
Gary
C. Kaufman
|
|
|
0
|
|
|
4,788,000
|
|
|
4,788,000
|
|
|
4,772,040
|
|
|
758,406
|
|
Thomas
L. Patz
|
|
|
0
|
|
|
3,900,000
|
|
|
3,900,000
|
|
|
3,887,000
|
|
|
758,406
|
|
Jennifer
Kurdle
|
|
|
0
|
|
|
2,046,000
|
|
|
2,046,000
|
|
|
0
|
|
|
318,750
|
|
Bernard
Jammet
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
227,150
|
|
(1)
|
Under
the terms of the 1991 Stock Option Plan, all options, including unvested
options, are exercisable for 30 days prior to the termination of
the Plan
as a result of our dissolution or liquidation or upon a reorganization,
merger or consolidation in which we are not the surviving corporation,
or
upon the sale of substantially all of our property to another corporation.
Acceleration of the unvested options in the event of a change in
control,
as defined, is also provided in the individual option agreements
with
Messrs Kaufman and Patz. The value of acceleration of the unvested
options
represents the product of the difference between the
closing
price of our Common Stock as of June 30, 2008 and the option exercise
price for those unvested option shares outstanding as of June 30,
2008,
multiplied by the number of unvested
options.
|
Other
Amounts and Benefits Payable upon or in connection with
Termination
.
In
accordance with the terms of his employment agreement, Mr. Giannopoulos and
his
spouse are entitled to continue to receive, for a period of up to ten years
following the termination of expiration of his employment agreement, health
insurance coverage through the Company in consideration of his or their payment
to the Company of amounts equal to the full COBRA premiums in effect at that
time. Also upon and after termination, Mr. Giannopoulos is entitled to the
benefits referenced above under “Grants of Plan-Based Awards (Fiscal
2008).”
Director
Compensation – Fiscal 2008
Directors
other than Messrs. Giannopoulos and Mr. Brown receive a fee of $5,000 per
quarter for Board service, and $1,500 for each Board meeting attended. In
addition, each member of a Board committee receives an additional $1,500 for
each committee meeting attended, and the Chairman of the Audit Committee
receives an additional fee of $3,000 per quarter because he has additional
review responsibilities and because he must also participate in certain
financial review meetings with the Finance Department and PricewaterhouseCoopers
LLP. The table below provides information regarding director compensation in
fiscal 2008, which reflects the standard compensation described above. The
table
does not include compensation for reimbursement of travel expenses related
to
attending board and board committee meetings, or other reasonable out-of-pocket
expenses arising from Board service.
During
fiscal year 2008, Messrs. Giannopoulos and Brown were not compensated for
service on the Board. See the Summary Compensation Table and other tables above
for information regarding compensation of Mr. Giannopoulos, and “Certain
Relationships and Related Party Transactions” below for information relating to
our consulting agreement with Mr. Brown.
We
have
determined that any Director who is not “independent,” as defined by the rules
of the NASDAQ Stock Market, shall not be entitled to receive any fees associated
with serving on the Board of Directors, or any of its committees, other than
reimbursement for actual and usual costs and expenses associated with Board
service. Accordingly, neither Mr. Giannopoulos nor Mr. Brown received additional
compensation for serving as directors during fiscal year 2008. Mr. Giannopoulos’
compensation is described above. Mr. Brown’s consulting agreement, which expired
according to its terms effective June 30, 2008 is described below under Certain
Relationships and Related Transactions.
Name
|
|
Fees
Earned or
Paid in
Cash ($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation ($)
|
|
Change in Pension
Value and Non-
qualified Deferred
Compensation
Earnings
($)
|
|
All Other
Compensation
($)
|
|
Total
($)
|
|
Louis M. Brown, Jr.
|
|
|
0
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
0
|
|
B.
Gary Dando
|
|
|
44,000
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
44,000
|
|
John
G. Puente
|
|
|
36,500
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
36,500
|
|
Dwight
S. Taylor
|
|
|
30,500
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
30,500
|
|
William
S. Watson
|
|
|
36,500
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
36,500
|
|
Cash
Compensation Detail
Name
|
|
Overall Board
Service Fees ($)
|
|
Board Meeting
Fees ($)
|
|
Audit
Committee
Fees ($)
|
|
Compensation
Committee Fees ($)
|
|
Nominating
Committee Fees
($)
(2)
|
|
Total ($)
|
|
Louis M. Brown, Jr.
|
|
|
0
|
|
|
0
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
0
|
|
B.
Gary Dando
|
|
|
20,000
|
|
|
6,000
|
|
|
18,000
|
(1)
|
|
N/A
|
|
|
N/A
|
|
|
44,000
|
|
John
G. Puente
|
|
|
20,000
|
|
|
6,000
|
|
|
6,000
|
|
|
4,500
|
|
|
N/A
|
|
|
36,500
|
|
Dwight
S. Taylor
|
|
|
20,000
|
|
|
6,000
|
|
|
N/A
|
|
|
4,500
|
|
|
0
|
|
|
30,500
|
|
William
S. Watson
|
|
|
20,000
|
|
|
6,000
|
|
|
6,000
|
|
|
4,500
|
|
|
0
|
|
|
36,500
|
|
(1)
|
This
consists of $1,500 for each of the four meetings convened, and the
additional fee of $3,000 per quarter for serving as the chairman
of the
Audit Committee.
|
(2)
|
There
were no Nominating Committee meetings during fiscal year
2008.
|
AUDIT
COMMITTEE REPORT
Management
is responsible for the Company’s financial statements and the financial
reporting process, and for an assessment of the effectiveness of the Company’s
internal control over financial reporting. The independent registered public
accounting firm is responsible for performing an independent audit of the
Company’s consolidated financial statements and internal control over financial
reporting in accordance with generally accepted auditing standards and for
issuing a report thereon. The Audit Committee’s responsibility is to monitor and
oversee these processes.
In
this
context, the Audit Committee has reviewed and discussed with management and
with
PricewaterhouseCoopers LLP, the Company’s independent registered public
accounting firm, the audited financial statements for the fiscal year ended
2008. The Audit Committee has also discussed with the Company’s internal
auditors and with PricewaterhouseCoopers LLP the overall scope of and plans
for
their respective audits.
The
Audit
Committee has met with the internal auditors and with PricewaterhouseCoopers
LLP, separately and together, with and without management present, to discuss
the Company’s financial reporting process and internal accounting controls in
addition to the other matters required to be discussed by Statement on Auditing
Standards No. 61, as adopted by the Public Company Accounting Oversight
Board.
The
Audit
Committee has received the written disclosures and the letter from
PricewaterhouseCoopers LLP required by applicable requirements of the Public
Company Accounting Oversight Board regarding that firm's communications with
the
audit committee concerning independence, and has discussed with
PricewaterhouseCoopers LLP that firm's independence.
Based
upon the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the Company’s audited consolidated
financial statements for the year ended June 30, 2008, be included in the
Company’s Annual Report on Form 10-K, for filing with the Securities and
Exchange Commission.
B.
GARY
DANDO (Chairman)
JOHN
G.
PUENTE and WILLIAM S. WATSON
Members
of the Audit Committee
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Effective
June 30, 1995, MICROS and Louis M. Brown, Jr., Vice Chairman of the Board,
entered into a consulting agreement that, as amended, expired on June 30, 2008
according to its terms. Under that agreement, Mr. Brown was to provide on the
average 20 hours per week of consulting services to us in exchange for a base
consulting fee of $250,000 per year plus an annual
target
bonus
.
During
fiscal 2008, we compensated Mr. Brown $250,000 for consulting fees, with an
additional annual bonus of $150,000.
RATIFICATION
OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
(PROPOSAL
2)
The
Audit
Committee of the Company’s Board of Directors has selected the firm of
PricewaterhouseCoopers LLP (“PwC”) as the independent registered public
accounting firm for the Company for the fiscal year ending June 30, 2009. The
ratification of its selection is to be voted upon at the Annual Meeting. PwC
has
served in this role since August 1990, and its selection was ratified by the
shareholders at the last Annual Meeting. It is expected that representatives
of
PwC will be present at the Annual Meeting and available to respond to
appropriate questions, and will have the opportunity to make a statement if
they
so desire. If the shareholders do not ratify the Audit Committee’s selection of
PwC, the Audit Committee will consider the selection of another independent
registered public accounting firm.
The
following is a summary of PwC fees incurred by the Company for fiscal years
2008
and 2007 for audit and other professional services:
|
|
2008
|
|
2007
|
|
AUDIT
FEES
include fees for the annual audit of the consolidated financial statements
and of the effectiveness of the company’s internal control over financial
reporting, the review of interim consolidated financial statements,
required statutory audits of certain foreign subsidiaries and assistance
with SEC filings
|
|
$
|
3,248,310
|
|
$
|
2,989,620
|
|
AUDIT
RELATED
FEES
|
|
|
0
|
|
|
0
|
|
TAX
FEES
include fees for assistance with foreign tax matters
|
|
|
19,315
|
|
|
98,304
|
|
ALL
OTHER
FEES
include license fees for online
financial reporting and assurance literature
|
|
|
2,400
|
|
|
10,321
|
|
TOTAL
FEES
|
|
$
|
3,270,025
|
|
$
|
3,098,245
|
|
The
Board of Directors recommends a vote FOR the ratification of the appointment
of
PricewaterhouseCoopers LLP as independent registered public accounting firm
for
the 2009 fiscal year.
AMENDMENT
TO THE
1991
STOCK OPTION PLAN
(INCREASE
IN THE NUMBER OF SHARES ISSUABLE UNDER THE PLAN)
(PROPOSAL
3)
Introduction
The
MICROS Systems, Inc. 1991 Stock Option Plan (the “1991 Option Plan”) was
initially approved by shareholders at the 1991 Annual Meeting. Past amendments
approved by shareholders have increased the number of shares authorized for
issuance under the 1991 Option Plan to 34,000,000, after giving effect to stock
splits effected in the form of stock dividends. At this Annual Meeting, the
shareholders will consider the adoption of an amendment to the 1991 Option
Plan
to authorize the issuance of an additional 1,200,000 shares of Common Stock
under the 1991 Option Plan. The increase is being requested to assure that
the
Company has a sufficient number of options available to compensate, reward
and
provide incentives to current employees, and also to recruit new employees.
If
this
proposal is approved by the shareholders at the 2008 Annual Meeting, the total
number of shares reserved for issuance under the plan will increase to
35,200,000.
As
of
September 30, 2008, 24,818,062 shares have been issued upon exercise of options
and 3,375,928 shares underlie currently exercisable options. As of September
30,
2008, the closing market price for the Company’s Common Stock was $26.66 per
share.
The
Company last sought and obtained the approval of the shareholders to authorize
additional shares of Common Stock at the 2007 Annual Meeting of Shareholders.
The affirmative vote of a majority of all votes cast by shareholders at the
Annual Meeting is required to adopt the amendment to the 1991 Option Plan.
The
principal features of the 1991 Option Plan are summarized below. The summary
is
qualified by reference to the complete text of the 1991 Option Plan, which
is
attached as Exhibit A (the Exhibit reflects the amendment described
above).
Purpose
The
main
purposes of the 1991 Option Plan are: (i) to provide a performance incentive
to
certain officers and other key employees of the Company and its subsidiaries
so
that they may acquire a (or increase their) proprietary interest in the Company
and (ii) to encourage those officers and key employees to remain in the employ
of the Company and its subsidiaries. In addition, non-employee Directors may
participate in the 1991 Option Plan.
Administration
The
1991
Option Plan may be administered by the Board of Directors or a committee
appointed by the Board of Directors (the “Administrating Committee”).
Currently,
the
Compensation Committee
of
the
Board of Directors serves as the Administrating Committee. The members of the
Administrating Committee must be
“non-employee
directors” within the meaning of Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934. The
Administrating Committee determines the persons to whom options are granted,
the
terms of the options and the number of shares covered by each option, vesting
conditions, and other terms of the option.
Duration,
Amendment and Termination
The
1991
Option Plan became effective as of September 23, 1991, and currently will
terminate on December 31, 2010, unless sooner terminated by the Board of
Directors. In addition to the power to terminate the 1991 Option Plan at any
time, the Board of Directors also has the power to amend the 1991 Option Plan;
provided, no amendment to the 1991 Option Plan may be made without shareholder
approval if the amendment would (i) change the minimum option prices set forth
in the 1991 Option Plan, (ii) increase the maximum term of options, (iii)
materially increase the benefits accruing to the participants under the 1991
Option Plan, (iv) materially
increase
the number of shares of Common Stock that may be subject to options under the
1991 Stock Option Plan, or (v) materially
modify
the requirements as to eligibility under the 1991 Option Plan.
Eligibility
The
1991
Option Plan provides for the grant of options to non-employee directors,
officers and other key employees of the Company and its subsidiaries. As
described below, non-employee directors may be granted only non-qualified
options. In fiscal year 2008, 145 officers and other key employees had been
granted options under the 1991 Option Plan. All full-time salaried employees
are
eligible to receive options, as well as all officers of the Company and any
non-employee directors. As of June 30, 2008, we employed 4,619 full-time
employees.
Awards
under the 1991 Option Plan
The
1991
Option Plan provides for the grant of incentive stock options as defined under
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and
other options, which are referred to as “non-qualified” options. If an option
expires without being exercised in full, the shares of Company Common Stock
underlying options that were not exercised are again available for grant under
the 1991 Option Plan. The type and term of each option granted under the 1991
Option Plan are determined by the Administrating Committee. The option price
per
share cannot be less than the fair market value of the Company’s Common Stock at
the date of grant of the option. Fair market value is equal to the last sale
price on the date of grant reported for the Common Stock on the NASDAQ Stock
Market. An option may contain other provisions not inconsistent with the terms
of the 1991 Option Plan that the Administrating Committee deems appropriate,
including a term that enables the Company to purchase an option for
cash.
Exercise
of Options
An
option
may be exercised by an optionee by delivery to the Company of the exercise
price, which must be paid either: (i) in cash or check; or (ii) at the
discretion of the Administrating Committee, by delivery of previously owned
shares of Common Stock or by a combination of cash and Common Stock. The term
of
an option may not exceed ten years. An option is exercisable in such
installments and at such times during its term as determined by the
Administrating Committee. With respect to incentive stock options, the aggregate
fair market value of shares underlying options that first may become exercisable
by an optionee during any year may not exceed $100,000.
Termination
of Employment
Except
as
otherwise determined by the Administrating Committee, the following terms will
apply upon an optionee’s termination of employment or service as a non-employee
Director.
•
If
the
optionee’s employment (or service as a non-employee Director) terminates by
reason of death, all options granted at least one year prior to death become
fully exercisable and may be exercised by the optionee’s estate within one year
after the date of such death but not later than the date on which the options
would otherwise expire. An “optionee’s estate” means the optionee’s legal
representative or any person who acquires the right to exercise an option by
reason of the optionee’s death.
•
If
the
optionee’s employment (or service as a non-employee Director) is terminated as a
result of disability, all options become fully exercisable and may be exercised
within one year after termination but not later than the date on which the
options would otherwise expire.
•
If
an
optionee retires on or after age 62, all options become fully exercisable and
may be exercised for a period of three months after such retirement, but not
later than the date on which the options would otherwise expire;
if
the
optionee dies during the three month period, the optionee’s estate may exercise
the option until the first anniversary of the date of the optionee’s
termination, but no later than the date on which such options would otherwise
expire.
•
If
an
optionee’s employment (or service as a non-employee Director) terminates other
than for retirement, death or disability, the options, to the extent exercisable
as of the date of termination, may be exercised at any time during the thirty
(30) day period immediately following the date of termination, but not after
the
date on which such options would otherwise expire. However, if termination
is on
account of misconduct or any act that is adverse to the Company, all options
expire as of the date of termination.
Restriction
on Transfer
Options
are transferable only by will or by the laws of descent and distribution. During
an optionee’s lifetime, an option may be exercised only by the
optionee.
Federal
Income Tax Treatment
Incentive
Stock Options
-
Incentive stock options under the 1991 Option Plan are intended to meet the
requirements of Section 422 of the Code. There are no tax liabilities to the
optionee upon the grant of an incentive stock option. In general, if an optionee
acquires stock upon the exercise of an incentive stock option, no taxable income
will result upon such exercise and the Company will not be allowed a deduction
as a result of such exercise provided the optionee makes no disposition of
the
stock within two years from the date of grant and one year after the option
is
exercised. The basis to the optionee of shares acquired on the exercise of
an
incentive stock option will be equal to the exercise price. Any gain or loss
realized upon the sale of the shares acquired will be treated as capital gains
or loss, as applicable. If the optionee fails to satisfy the one- or two-year
holding periods described above, the optionee will be treated as having received
ordinary income at the time of the disposition of the stock generally equal
to
the excess of the value of the stock on the date of exercise (or, if less,
the
amount realized from the disposition) over the exercise price. Any gain in
excess of the amount treated as ordinary income will be treated as capital
gain.
The Company will be entitled to a deduction for the amount taxable to the
optionee as ordinary income. Although the exercise of an incentive stock option
will not result in regular income tax liability to an optionee, it may subject
the optionee to alternative minimum tax liability.
Non-Qualified
Options
- There
are no tax liabilities to the optionee upon the grant of a non-qualified option.
In general, an optionee who exercises a non-qualified option will recognize
ordinary income in an amount equal to excess of the fair market value of the
shares on the date of exercise over the exercise price, and the Company will
be
entitled to a deduction in the same amount. The optionee’s basis in such shares
will generally be the fair market value on the date of exercise, and when the
optionee disposes of the shares, he or she will recognize capital gain or
loss.
The
Board of Directors recommends a vote FOR the proposal to amend the MICROS
Systems, Inc. 1991 Stock Option Plan.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934 requires the Company’s executive
officers and Directors, and persons who own more than 10% of the Company’s
common stock, to file reports of ownership and changes in ownership with the
U.S. Securities and Exchange Commission (“SEC”).
To
our
knowledge, based on information provided to us, Directors and greater than
10%
beneficial owners have satisfied applicable filing requirements for fiscal
year
2008.
EQUITY
COMPENSATION PLAN INFORMATION
|
|
As of June 30, 2008
|
|
Plan Category
|
|
Number of Securities to
be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
|
Number of Securities
Remaining Available for
Future Issuance Under Equity
Compensation Plans (Excluding
Securities Reflected in Column (a))
|
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
Equity compensation plans
|
|
|
|
|
|
|
|
|
|
|
approved
by security holders
|
|
|
6,246,928
|
|
$
|
22.46
|
|
|
3,068,537
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans not
|
|
|
|
|
|
|
|
|
|
|
approved
by security holders
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
6,246,928
|
|
$
|
22.46
|
|
|
3,068,537
|
|
SUBMISSION
OF SHAREHOLDER PROPOSALS
Any
proposals submitted by Shareholders for inclusion in the Company’s proxy
statement and proxy for the
2009
Annual
Meeting of Shareholders
of
the
Company
must be
addressed to the attention of the Corporate Secretary
c/o
MICROS Systems, Inc., 7031 Columbia Gateway Drive, Columbia, Maryland
21046,
and received no later than
June
19,
2009. Such proposals must comply in all other respects with applicable rules
and
regulations of the Securities and Exchange Commission relating to such
inclusion.
In
connection with any proposal submitted by a Shareholder for consideration at
the
2009 Annual Meeting of Shareholders, other than proposals submitted for
inclusion in the Company’s proxy statement and proxy, the persons named in the
form of proxy provided by the Company may exercise discretionary voting
authority with respect to proxies solicited for that meeting, without inclusion
in the proxy statement of advice on the nature of the matter and how such
persons intend to vote on the proposal, if appropriate notice of the
stockholder’s proposal is not received by the Company at the address included in
the preceding paragraph by September 3, 2009.
OTHER
MATTERS
The
Board
of Directors is not aware of any matters other than those discussed herein
that
are to be presented for action at the Annual Meeting. If any other business
properly comes before the Annual Meeting, the persons named in the accompanying
form of proxy will vote in regard to those matters according to their
discretion.
|
By
Order of the Board of Directors,
|
|
|
Columbia,
Maryland
|
/s/Thomas
L. Patz
|
October
18, 2008
|
Thomas
L. Patz, Executive Vice President,
|
|
Strategic
Initiatives, General Counsel and
|
|
Corporate
Secretary
|
EXHIBIT
A
MICROS
SYSTEMS, INC.
1991
STOCK OPTION PLAN
(REFLECTING
PROPOSED AMENDMENTS)
1.
PURPOSE
OF PLAN.
The
purpose of the MICROS Systems, Inc. 1991 Stock Option Plan, as amended (the
“Plan”), is to serve as a performance incentive and to encourage the ownership
of MICROS Systems, Inc. (the “Company”) stock by key employees of the Company
and its subsidiaries (including officers and directors) so that the person
to
whom the option is granted may acquire a (or increase his or her) proprietary
interest in the Company and its subsidiaries and in order to encourage such
person to remain in the employ of the Company or its subsidiaries. In addition,
nonemployee directors may participate in the Plan as provided herein. Options
granted pursuant to the Plan may consist of incentive stock options (“ISOs”)
(within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”)) and nonqualified options.
2.
ADMINISTRATION.
The Plan
shall be administered by a committee (the “Committee”) appointed by the Board of
Directors; except that if and to the extent that no Committee exists which
has
the authority to administer the Plan, the functions of the Committee shall
be
exercised by the Board of Directors. The Committee shall consist of not less
than two (2) members of the Board of Directors. Members of the Committee shall
be “non-employee directors” (within the meaning of Rule 240.16(b)-3 of the
Securities and Exchange Commission). The Committee shall determine the purchase
price of the stock covered by each option, the employees and nonemployee
directors to whom, and the time or times at which, options shall be granted,
the
number of shares to be covered by each option, and the term of each option.
In
addition, the Committee shall have the power and authority to interpret the
Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the terms and provisions of the respective option agreements
(which need not be identical) and to make all other determinations deemed
necessary or advisable for the administration of the Plan. If the Committee
is
appointed, the Board of Directors shall designate one of the members of the
Committee as chairman and the Committee shall hold meetings at such times and
places as it shall deem advisable. A majority of the Committee members shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. Any decision or determination reduced to writing and
signed by all the Committee members shall be fully as effective as if it had
been made by a vote at a meeting duly called and held. The Committee shall
keep
minutes of its meetings and shall make such rules and regulations for the
conduct of its business as it shall deem advisable.
3.
EFFECTIVENESS
AND TERMINATION OF PLAN.
(a)
The
Plan shall become effective as of September 23, 1991.
(b)
This
Plan shall terminate on the earliest of (i) December 31, 2010, (ii) the date
when all shares of the Company’s Common Stock (the “Shares”) reserved for
issuance under the Plan have been acquired through the exercise of options
granted under the Plan, or (iii) such earlier date as determined by the Board
of
Directors. Any option outstanding under the Plan at the time of the Plan’s
termination shall remain in effect in accordance with its terms and conditions
and those of the Plan.
4.
GRANTEES.
Subject
to Section 2, options may be granted to key employees (including directors
and
officers) and nonemployee directors of the Company and its subsidiaries as
determined by the Committee (each such employee or director, a “Grantee”);
provided, however, ISOs shall only be granted to employees.
5.
THE
SHARES.
Subject
to Section 7, the aggregate number of Shares which may be issued under the
Plan
shall be
35,200,000
.
Such
number of Shares may be set aside out of the authorized but unissued Common
Stock not reserved for any other purpose or out of Common Stock held in or
acquired for the treasury of the Company. If all or part of an expired option
is
unexercised, the Shares which were not exercised may again be available for
grant under the Plan.
6
.
GRANT, TERMS AND CONDITIONS OF OPTIONS.
Options
may be granted by the Committee at any time and from time to time prior to
the
termination of the Plan. Except as hereinafter provided, options granted
pursuant to the Plan shall be subject to the following terms and
conditions.
(a)
Price. The purchase price of the Shares subject to an option shall be no less
than the fair market value of the Shares at the time of grant; provided,
however, if an ISO is granted to a person owning Common Stock of the Company
possessing more than 10% of the total combined voting power of all classes
of
stock of the Company as defined in Section 422 of the code (“10% Shareholder”),
the purchase price shall be no less than 110% of the fair market value of the
Shares. The fair market value of the Shares shall be determined by and in
accordance with procedures to be established by the Committee, whose
determination shall be final. If the Common Stock is admitted to trading on
a
national securities exchange on the date the option is granted, fair market
value shall not be less than the last sales price reported for the Common Stock
on such exchange on such date or on the last date preceding such date on which
a
sale was reported.
Except
as
set forth in the following sentence, the exercise price shall be paid in full
in
United States dollars in cash or by check at the time of exercise. At the
discretion of the Committee, the exercise price may be paid (i) by delivery
of
Common Stock already owned by, and in possession of, the Grantee; (ii) by
delivery of any combination of United States dollars or Common Stock or (iii)
through a broker in accordance with procedures permitted by Regulation T of
the
Federal Reserve Board or any successor regulation of the agency then responsible
for administering margin regulations pertaining to securities
brokers.
(b)
Limit
on Incentive Option Amount. Notwithstanding any provisions contained herein
to
the contrary, the Shares covered by an ISO granted to a Grantee which are
exercisable for the first time during any calendar year shall not exceed the
$100,000 limitation in Section 422 of the Code.
(c)
Duration and Exercise of Options. An option may be granted for a term as
determined by the Committee but not exceeding ten (10) years from the date
of
grant; provided, however, the term of an ISO granted to a 10% Shareholder may
not exceed five (5) years. Options shall be exercised at such time and in such
amounts (up to the full amount thereof) as may be determined by the Committee
at
the time of grant. If an option is exercisable in installments, the Committee
shall determine what events, if any, will accelerate the exercise of the option.
The
Plan
shall be subject to approval by the Company’s shareholders within one (1) year
from the date on which it was adopted. Prior to such shareholder approval,
options may be granted under the Plan, but any such option shall not be
exercisable prior to such shareholder approval. If the Plan is not approved
by
the Company’s shareholders, the Plan shall terminate and all options theretofore
granted under the Plan shall terminate and become null and void.
(d)
Termination of Employment. Except as otherwise determined by the Committee,
upon
the termination of a Grantee’s employment (or service as a nonemployee
director), the Grantee’s rights to exercise an option shall be as
follows:
i)
If the
Grantee’s employment (or service as a nonemployee director) is terminated on
account of total and permanent disability (pursuant to the Company’s long-term
disability plan for Grantees who are employees) and as defined in Section
22(e)(3) of the Code), any option shall become fully (100%) vested as of the
date of termination and may be exercised by the Grantee (or by the Grantee’s
estate if the Grantee dies after termination) at any time within one (1) year
after termination on account of disability but in no event after the expiration
of the term of the option.
ii)
In
the case of a Grantee whose employment (or service as a nonemployee director)
is
terminated by death, any option shall become fully (100%) vested as of the
date
of death and the Grantee’s estate shall have the right for a period of one (1)
year following the date of such death to exercise the option but in no event
after the expiration of the term of the option.
iii)
In
the case of a Grantee who retires from the Company and its subsidiaries after
attaining age 62, an option shall become fully (100%) vested as of the date
of
retirement and the Grantee may, within the three-month period following
retirement, exercise such option but in no event after the expiration of the
term of the option. If the Grantee dies during such three-month period, the
Grantee’s estate may exercise such option during the period ending on the first
anniversary of the Grantee’s retirement but in no event after the expiration of
the term of the option.
iv)
In
the case of a Grantee whose employment with the Company and its subsidiaries
(or
service as a nonemployee director) is terminated for any reason other than
death, disability or retirement, the Grantee (or the Grantee’s estate in the
event of the Grantee’s death after such termination) may, within the 30-day
period following such termination, exercise an option to the extent the right
to
exercise had accrued prior to such termination but in no event after the
expiration of the term of the option. Notwithstanding the foregoing, if the
Grantee’s termination of employment is on account of misconduct or any act that
is adverse to the Company, the Grantee’s option shall expire as of the date of
termination of employment.
v)
A
Grantee’s “estate” shall mean the Grantee’s legal representative or any person
who acquires the right to exercise an option by reason of the Grantee’s death.
The Committee may in its discretion require the transferee of a Grantee to
supply it with written notice of the Grantee’s death or disability and to supply
it with a copy of the will (in the case of the Grantee’s death) or such other
evidence as the Committee deems necessary to establish the validity of the
transfer of an option. The Committee may also require the agreement of the
transferee to be bound by all of the terms and conditions of the
Plan.
(e)
Transferability of Option. Options shall be transferable only by will or the
laws of descent and distribution and shall be exercisable during the Grantee’s
lifetime only by the Grantee.
(f)
Form,
Modification, Extension and Renewal of Options. Subject to the terms and
conditions and within the limitations of the Plan, an option shall be evidenced
by such form of agreement as is approved by the Committee, and consistent with
the terms hereof. Notwithstanding the foregoing, no modification of an option
shall, without the consent of the Grantee, alter or impair any rights or
obligations under any option theretofore granted under the Plan nor shall any
modification be made which shall adversely affect the status of an ISO as an
incentive stock option under Section 422 of the Code.
(g)
Minimum Number of Shares. The minimum number of Shares for which an option
may
be exercised at any time shall be 100 shares, unless the unexercised portion
of
the option covers a lesser number of Shares.
(h)
Maximum Number of Shares. Subject to adjustments as provided in Section 7(a)
hereof, the maximum number of Shares subject to options that may be granted
hereunder during any one fiscal year of the Company to any one individual shall
be limited to 200,000 Shares.
(i)
Other
Terms and Conditions. Options may contain such other provisions, which shall
not
be inconsistent with any of the foregoing terms of the Plan, as the Committee
shall deem appropriate, including a provision permitting the Company or a
subsidiary to reacquire an option for cash, provided that any cash payment
is in
an amount per share not in excess of the difference between the closing fair
market value of the share on the day of acquisition and the option exercise
price of the share being acquired.
7.
CAPITAL
STRUCTURE CHANGES.
(a)
If
the outstanding shares of the Company’s Common Stock are increased, decreased or
changed into, or exchanged for a different number or kind of shares or
securities of the Company, whether through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate structure or
the
like, the Board of Directors shall make appropriate and proportionate
adjustments in the number, kinds and limits of shares available for options
pursuant to the Plan or subject to any outstanding options and in the purchase
price therefore. The determination of the Board of Directors as to such
adjustments shall be conclusive.
(b)
Fractional Shares resulting from any adjustment in options pursuant to Section
7
shall be eliminated at the time of exercise by rounding-down for fractions
less
than one-half (1/2) and rounding-up for fractions equal to or greater than
one-half (1/2). No cash settlements shall be made with respect to fractional
Shares eliminated by rounding. Notice of any adjustments shall be given by
the
Committee to each Grantee whose option has been adjusted and such adjustment
(whether or not such notice is given) shall be effective and binding for all
purposes of the Plan.
(c)
Upon
dissolution or liquidation of the Company, or upon a reorganization, merger
or
consolidation in which the Company is not the surviving corporation, or upon
the
sale of substantially all of the property of the Company to another corporation,
the Plan and options issued thereunder shall terminate, unless provision is
made
in connection with such transaction for the assumption of options theretofore
granted, or the substitution for such options of new options of the successor
employer corporation or a parent or subsidiary thereof, with appropriate
adjustment as to the number and kinds of shares and the per share exercise
price. In the event of such termination, all outstanding options shall be
exercisable in full for at least 30 days prior to the termination date whether
or not otherwise exercisable during such period.
(d)
Options may be granted under this Plan from time to time in substitution for
similar options held by employees of corporations who become or are about to
become employees of the Company or a subsidiary as the result of a merger or
consolidation, the acquisition by the Company or a subsidiary of the assets
of
the employing corporation, or the acquisition by the Company or a subsidiary
of
the fifty percent (50%) or more of the stock of the employing corporation
causing it to become a subsidiary.
8.
SECURITIES
LAW REQUIREMENTS.
No
option granted pursuant to this Plan shall be exercisable in whole or in part
nor shall the Company be obligated to sell any Shares subject to any such option
if such exercise or sale, in the opinion of counsel for the Company, violates
the Securities Act of 1933 (or other federal or state statutes having similar
requirements). Each option shall be subject to the further requirement that,
if
at any time the Committee shall determine in its discretion that the listing,
registration or qualification of the Shares subject to such option under any
securities exchange requirements or under any applicable law, or the consent
or
approval of any governmental regulatory body, is necessary as a condition of,
or
in connection with, the granting of such option or the issuance of Shares
thereunder, such option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Committee.
The
Committee may require each person purchasing Shares pursuant to an option to
represent to and agree with the Company in writing that he is acquiring the
Shares without a view to distribution thereof. The certificates for such Shares
may include any legend which the Committee deems appropriate to reflect any
restrictions on transfer. All certificates for Shares delivered under the Plan
shall be subject to stop-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of
the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed, and any applicable federal or state securities law, and
the Committee may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions.
9.
AMENDMENTS.
The
Board of Directors may amend or terminate the Plan in whole or in part as it
deems appropriate and proper; provided, however, except as provided in Section
7, (i) without shareholder approval no action may be taken which changes the
minimum option price, increases the maximum term of options, materially
increases the benefits accruing to Grantees under the Plan, materially increases
the number of Shares which may be subject to options pursuant to this Plan,
or
materially modifies the requirements as to eligibility for participation
hereunder, and (ii) without the consent of the Grantee, no action may be taken
which adversely affects the rights of such Grantee concerning an
option.
10.
NO
EMPLOYMENT RIGHT.
Neither
this Plan nor any action taken hereunder shall be construed as giving any right
to any individual to be retained as an officer or employee of the Company or
any
of its subsidiaries.
11.
INDEMNIFICATION.
Each
person who is or at any time serves as a member of the Board of Directors or
the
Committee shall be indemnified and held harmless by the Company against and
from
(i) any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by such person in connection with or resulting from any claim, action,
suit or proceeding to which such person may be a party or in which such person
may be involved by reason of any action or failure to act under this Plan and
(ii) any and all amounts paid by such person in satisfaction of judgment in
any
such action, suit or proceeding relating to this Plan. Each person covered
by
this indemnification shall give the Company an opportunity, at its own expense,
to handle and defend the same before such person undertakes to handle and defend
the same on such person’s own behalf. The foregoing persons may be entitled to
other indemnities under the charter or by-laws of the Company or any of its
subsidiaries, as a matter of law, or under any power that the Company or a
subsidiary may have.
12.
GOVERNING
LAW.
Except
to the extent preempted by federal law, all matters relating to this Plan or
to
options granted hereunder shall be governed by the laws of the State of
Maryland.
13.
EXPENSES;
PROCEEDS.
The
expenses of implementing and administering this Plan shall be borne by the
Company and its subsidiaries. Proceeds from the sale of Common Stock under
the
Plan shall constitute general funds of the Company.
14.
TITLES
AND HEADINGS.
The
titles and headings of the Sections in this Plan are for convenience of
reference only; in the event of any conflict, the text of this Plan, rather
than
such titles or headings, shall control.
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