SC TO-I

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE TO

TENDER OFFER STATEMENT

UNDER SECTION 14(D)(1) OR 13(E)(1)

OF THE SECURITIES EXCHANGE ACT OF 1934

RADIANT SYSTEMS, INC.

(Name of Subject Company (Issuer) and Filing Person (Offeror))

OPTIONS UNDER RADIANT SYSTEMS, INC. AMENDED AND RESTATED 1995 STOCK OPTION PLAN	75025N10
(Title of Class of Securities)	(CUSIP Number of Class of Securities) (Underlying Common Stock)

Mark E. Haidet

Chief Financial Officer

Radiant Systems, Inc.

3925 Brookside Parkway

Alpharetta, Georgia 30022

Telephone: (770) 576-6000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons)

Copy to:

Arthur Jay Schwartz, Esq.

Smith, Gambrell & Russell, LLP

1230 Peachtree Street, N.E., Suite 3100

Atlanta, Georgia 30309

(404) 815-3632

CALCULATION OF FILING FEE

Transaction Valuation*	Amount of Filing Fee
$12,260,377	$1,553.39

* For the purpose of calculating the filing fee only, this amount assumes that options to purchase 1,964,804 shares of common stock of Radiant Systems, Inc. having an aggregate value of $12,260,377 as of November 30, 2004 will be exchanged pursuant to this offer.

¨ Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

Amount Previously Paid: $	Filing party:
Form or Registration No.:	Date Filed:

¨ Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

¨ Third-party tender offer subject to Rule 14d-1.

x Issuer tender offer subject to Rule 13e-4.

¨ Going-private transaction subject to Rule 13e-3.

¨ Amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer: ¨

Item 1. Summary Term Sheet.

The information set forth under “Summary Term Sheet” in the Offer to Exchange, dated December 2, 2004 (the “Offer to Exchange”), attached hereto as Exhibit (a)(1), is incorporated herein by reference.

Item 2. Subject Company Information.

(a) The name of the issuer is Radiant Systems, Inc., a Georgia corporation (the “Company”). The address of its principal executive offices is 3925 Brookside Parkway, Alpharetta, Georgia 30022. The telephone number of its principal executive offices is (770) 576-6000. The information set forth in the Offer to Exchange under Section 9 (“Information Concerning Radiant Systems, Inc.”) is incorporated herein by reference.

(b) This Tender Offer Statement on Schedule TO relates to an offer by the Company to exchange options outstanding under the Company’s Amended and Restated 1995 Stock Option Plan (the “Option Plan”) to purchase shares of the Company’s common stock, no par value per share (the “Options”) for new options to purchase shares of the Company’s common stock to be granted under the Option Plan, upon the terms and subject to the conditions described in the Offer to Exchange and Letter of Transmittal (the “Letter of Transmittal” and, together with the Offer to Exchange, as they may be amended from time to time, the “Offer”), attached hereto as Exhibit (a)(2). The information set forth in the Offer to Exchange under “Summary Term Sheet,” “Introduction,” Section 1 (“Number of Options; Expiration Date”), Section 5 (Acceptance of Options for Exchange and Issuance of New Options”) and Section 8 (“Source and Amount of Consideration; Terms of New Options”) is incorporated herein by reference.

(c) The information set forth in the Offer to Exchange under Section 7 (“Price Range of Common Stock Underlying the Options”) is incorporated herein by reference.

Item 3. Identity and Background of Filing Person.

(a) The information set forth under Item 2(a) above and the information set forth in the Offer to Exchange under Section 10 (“Interests of Directors and Officers; Transactions and Arrangements Concerning the Options”) are incorporated herein by reference.

Item 4. Terms of the Transaction.

(a) The information set forth in the Offer to Exchange under “Summary Term Sheet,” “Introduction,” Section 1 (“Number of Options; Expiration Date”), Section 3 (“Procedures for Tendering Options”), Section 4 (“Withdrawal Rights”), Section 5 (“Acceptance of Options for Exchange and Issuance of New Options”), Section 6 (“Conditions of the Offer”), Section 8 (“Source and Amount of Consideration; Terms of New Options”), Section 11 (“Status of Options Acquired by Us in the Offer; Accounting Consequences of the Offer”), Section 12 (“Legal Matters; Regulatory Approvals”), Section 13 (“Material U.S. Federal Income Tax Consequences”), and Section 14 (Certain Tax Consequences for Australia-Based Employees) and Section 15 (“Extension of Offer; Termination; Amendment”) is incorporated herein by reference.

(b) The information set forth in the Offer to Exchange under Section 10 (“Interests of Directors and Officers; Transactions and Arrangements Concerning the Options”) is incorporated herein by reference.

Item 5. Past Contacts, Transactions, Negotiations and Arrangements.

(e) The information set forth in the Offer to Exchange under Section 10 (“Interests of Directors and Officers; Transactions and Arrangements Concerning the Options”) is incorporated herein by reference.

Item 6. Purposes of the Transaction and Plans or Proposals.

(a) The information set forth in the Offer to Exchange under Section 2 (“Purpose of the Offer”) is incorporated herein by reference.

(b) The information set forth in the Offer to Exchange under Section 5 (“Acceptance of Options for Exchange and Issuance of New Options”) and Section 11 (“Status of Options Acquired by us in the Offer; Accounting Consequences of the Offer”) is incorporated herein by reference.

(c) The information set forth in the Offer to Exchange under Section 2 (“Purpose of the Offer”) is incorporated herein by reference.

Item 7. Source and Amount of Funds or Other Consideration.

(a) The information set froth in the Offer to Exchange under Section 8 (“Source and Amount of Consideration; Terms of New Options”) and Section 16 (“Fees and Expenses”) is incorporated herein by reference.

(b) The information set forth in the Offer to Exchange under Section 6 (“Conditions of the Offer”) is incorporated herein by reference.

(c) Not applicable.

Item 8. Interest in Securities of the Subject Company.

(a) Not applicable.

(b) The information set forth in the Offer to Exchange under Section 10 (“Interests of Directors and Officers; Transactions and Arrangements Concerning the Options”) is incorporated herein by reference.

Item 9. Person/Assets, Retained, Employed, Compensated or Used.

(a) Not applicable.

Item 10. Financial Statements.

(a) The information set forth in the Offer to Exchange under Section 9 (“Information Concerning Radiant Systems”) and Section 17 (“Additional Information”), and Part I, Item 8 of the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2003 and Part I, Item 1 of the Company’s Quarterly Report on Form 10-Q for its quarter ended September 30, 2004 is incorporated herein by reference. Copies of the Company’s Annual Report and Quarterly Report are available via the Internet at the Securities and Exchange Commission’s web site at www.sec.gov. In addition, copies of these reports, excluding exhibits, may be obtained free of charge upon request to the Company and may be inspected free of charge at the Company’s principal executive offices.

Item 11. Additional Information.

(a) The information set forth in the Offer to Exchange under Section 10 (“Interests of Directors and Officers; Transactions and Arrangements Concerning the Options” and “Legal Matters; Regulatory Approvals”) is incorporated herein by reference.

(b) Not applicable.

Item 12. Exhibits.

(a) (1)	Offer to Exchange, dated December 2, 2004.
(a) (2)	Form of Letter of Transmittal.
(a) (3)	Form of Notice of Withdrawal.
(a) (4)	Form of letter to eligible option holders.
(a) (5)	Form of letter to tendering option holders.
(a) (6)	Form of “Program Highlights” to be distributed to eligible option holders
(a) (7)	Form of e-mail to eligible option holders
(a) (8)	Radiant Systems, Inc. Annual Report on Form 10-K for its fiscal year ended December 31, 2003 (incorporated herein by reference).
(a) (9)	Radiant Systems, Inc. Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004 (incorporated herein by reference).
(b)	Not applicable.
(d) (1)	Amended and Restated 1995 Stock Option Plan of Radiant Systems (incorporated by reference from the Company’s Registration Statement on Form S-1, Registration No. 333-17723).

(d	) (2)	Amendment No. 1 to Amended and Restated 1995 Stock Option Plan (incorporated by reference from the Company’s Registration Statement on Form S-8, Registration No. 333-41291).
(d	) (3)	Amendment No. 2 to Amended and Restated 1995 Stock Option Plan (incorporated by reference from the Company’s Registration Statement on Form S-8, Registration No. 333-62157).
(d	) (4)	Amendment No. 3 to Amended and Restated 1995 Stock Option Plan (incorporated by reference from the Company’s Registration Statement on Form S-8, Registration No. 333-71892).
(d	) (5) (i)	Form of Incentive Stock Option Agreement pursuant to the Amended and Restated 1995 Stock Incentive Plan of the Company for non-Australia-based employees.
(d	) (5) (ii)	Form of Incentive Stock Option Agreement pursuant to the Amended and Restated 1995 Stock Incentive Plan of the Company for Australia-based employees.
(g	)	None.
(h	)	None.

SIGNATURE

After due inquiry and to the best of its knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: December 2, 2004

RADIANT SYSTEMS, INC.
By:	/s/ Mark E. Haidet
Name:	Mark E. Haidet
Title:	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
(a) (1)	Offer to Exchange, dated December 2, 2004.
(a) (2)	Form of Letter of Transmittal.
(a) (3)	Form of Notice of Withdrawal.
(a) (4)	Form of letter to eligible option holders.
(a) (5)	Form of letter to tendering option holders.
(a) (6)	Form of “Program Highlights” to be distributed to eligible option holders
(a) (7)	Form of e-mail to eligible option holders
(a) (8)	Radiant Systems, Inc. Annual Report on Form 10-K for its fiscal year ended December 31, 2003 (incorporated herein by reference).
(a) (9)	Radiant Systems, Inc. Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004 (incorporated herein by reference).
(b)	Not applicable.
(d) (1)	Amended and Restated 1995 Stock Option Plan of Radiant Systems (incorporated by reference from the Company’s Registration Statement on Form S-1, Registration No. 333-17723).
(d) (2)	Amendment No. 1 to Amended and Restated 1995 Stock Option Plan (incorporated by reference from the Company’s Registration Statement on Form S-8, Registration No. 333-41291).
(d) (3)	Amendment No. 2 to Amended and Restated 1995 Stock Option Plan (incorporated by reference from the Company’s Registration Statement on Form S-8, Registration No. 333-62157).
(d) (4)	Amendment No. 3 to Amended and Restated 1995 Stock Option Plan (incorporated by reference from the Company’s Registration Statement on Form S-8, Registration No. 333-71892).
(d) (5) (i)	Form of Incentive Stock Option Agreement pursuant to the Amended and Restated 1995 Stock Incentive Plan of the Company for non-Australia-based employees.
(d) (5) (ii)	Form of Incentive Stock Option Agreement pursuant to the Amended and Restated 1995 Stock Incentive Plan of the Company for Australia-based employees.
(g)	None.
(h)	None.

EX-99.A1

Exhibit (a)(1)

RADIANT SYSTEMS, INC.

OFFER TO EXCHANGE OUTSTANDING STOCK OPTIONS

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE

AT 11:59 P.M., EASTERN TIME ON DECEMBER 30, 2004,

UNLESS THE OFFER IS EXTENDED

We are offering all of our employees below Director level the opportunity to exchange outstanding stock options to purchase shares of our common stock granted under our Amended and Restated 1995 Stock Option Plan (the “Option Plan”) for new options we will grant under the Option Plan.

For options with exercise prices of less than or equal to $15.00 per share, the new options will be exercisable for one share of our common stock for every two shares of our common stock issuable upon exercise of a surrendered option. For options with exercise prices greater than $15.00 per share, the new options will be exercisable for one share of our common stock for every three shares of our common stock issuable upon exercise of a surrendered option.

The exercise price of the new options will be equal to the last reported sale price of our common stock during regular trading hours as reported by the Nasdaq National Market on the grant date. The new options will become exercisable in three equal annual installments beginning on the first anniversary of the date of grant and will expire on the fifth anniversary of the grant date, or earlier in the event of the termination of your employment.

We will grant the new options on or about the first business day which is at least six months and one day following the date we cancel the options accepted by us for exchange. If you wish to exchange options, you do not need to surrender all of your eligible options. However, any eligible option that you elect to surrender must be surrendered in full. In addition, if you tender any of your options for exchange, you will be required to also tender all options granted to you during the six months immediately prior to the date we commenced this offer which have an exercise price lower than the exercise price of any other options being tendered.

We are making this offer upon the terms and conditions described in the enclosed materials, including those we describe in Section 6 of this document. This offer is not conditioned upon a minimum number of options being surrendered for exchange.

Although our board of directors has approved this offer, neither we nor our board of directors makes any recommendation as to whether you should tender or refrain from tendering your options for exchange. You must make your own decision whether to tender your options.

Shares of our common stock are quoted on the Nasdaq National Market under the symbol “RADS.” On December 1, 2004, the last reported sale price of the common stock on the Nasdaq National Market was $6.60 per share. We recommend that you obtain current market quotations for our common stock before deciding whether to tender your options.

The date of this Offer to Exchange is December 2, 2004.

IMPORTANT

If you wish to tender your options for exchange, you must complete and sign the attached Letter of Transmittal Form in accordance with its instructions, and mail or otherwise deliver it and any other required documents to us no later than 11:59 p.m., Eastern Time on December 30, 2004, at Radiant Systems, Inc., Attention: Corporate Benefits, 3925 Brookside Parkway, Alpharetta, Georgia 30022 or fax it and any required documents to us at (770) 754-7773. The Letter of Transmittal Form must be used to participate; instructions via e-mail message will not be accepted.

We are not making this offer to, nor will we accept any tender of options from or on behalf of, option holders in any jurisdiction in which the offer or the acceptance of any tender of options would not be in compliance with the laws of such jurisdiction. However, we may, at our discretion, take any actions necessary for us to make this offer to option holders in any such jurisdiction.

We have not authorized any person to make any recommendation on our behalf as to whether you should tender or refrain from tendering your options pursuant to the offer. You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to give you any information or to make any representation in connection with this offer other than the information and representations contained in this document or in the related Letter of Transmittal Form. If anyone makes any recommendation or representation to you or gives you any information, you must not rely upon that recommendation, representation or information as having been authorized by us.

ADDITIONAL INFORMATION

Documents related to this offering are posted at http://portal.radiant.com/sites/OEP. You should direct additional questions about this offer or requests for assistance to Radiant Systems, Inc., Attention: Corporate Benefits, 3925 Brookside Parkway, Alpharetta, Georgia 30022, telephone: (770) 576-6350, facsimile: (770) 754-7773 and e-mail: corporatebenefits@radiantsystems.com.

TABLE OF CONTENTS

SUMMARY TERM SHEET		1
CERTAIN RISKS OF PARTICIPATING IN THE OFFER		7
Risks Related to the Exchange Offer		7
Risks Related to our Business		7
THE OFFER		8
1.	Number of Options; Expiration Date	8
2.	Purpose of the Offer	9
3.	Procedures for Tendering Options	11
4.	Withdrawal Rights	12
5.	Acceptance of Options for Exchange and Issuance of New Options	13
6.	Conditions of the Offer	13
7.	Price Range of Common Stock Underlying the Options	15
8.	Source and Amount of Consideration; Terms of New Options	15
9.	Information Concerning Radiant Systems, Inc.	18
10.	Interests of Directors and Officers; Transactions and Arrangements
	Concerning the Options	22
11.	Status of Options Acquired by Us in the Offer; Accounting Consequences of the Offer	22
12.	Legal Matters; Regulatory Approvals	23
13.	Material U.S. Federal Income Tax Consequences	23
14.	Certain Tax Consequences for Australia-Based Employees	25
15.	Extension of Offer; Termination; Amendment	25
16.	Fees and Expenses	26
17.	Additional Information	26
18.	Forward Looking Statements; Miscellaneous	27
Schedule A — Information Concerning the Directors and Executive Officers of Radiant Systems, Inc.		A-1

SUMMARY TERM SHEET

The following are answers to some of the questions that you may have about this offer. We urge you to read carefully the remainder of this offer to exchange and the accompanying Letter of Transmittal Form because the information in this summary is not complete, and additional important information is contained in the remainder of this document and the Letter of Transmittal Form. We have included references to the relevant sections in this document where you can find a more complete description of the topics in this summary.

What options are we offering to exchange?

We are offering to exchange stock options held by eligible employees that are outstanding under our Option Plan for new options to be issued under the Option Plan. (See Section 1.)

Who is eligible to participate in the offer?

The offer is available to all employees who hold stock options, except Director-level employees and above (which include Directors, Senior Directors, Vice Presidents, Senior Vice Presidents and Executive team members). (See Section 1.) As of November 30, 2004, outstanding options to purchase 1,964,804 shares of our common stock were held by non-Director-level employees.

Why are we making the offer?

Retention of our employees is one of the keys to our continued growth and success. The offer provides an opportunity for us to offer employees a valuable incentive to stay with our company. Many of our outstanding options, whether or not they are currently exercisable, have exercise prices that are significantly higher than the current market price of our common stock. The option exchange gives employees an opportunity to reprice options by exchanging current option grants for future option grants. By making this offer to exchange outstanding options for new options that will (1) have an exercise price equal to the fair market value of our common stock on the grant date, and (2) vest in one-third increments on each of the first three anniversary dates of the grant date, we intend to provide our employees with the benefit of owning options that over time may have potential to increase in value, create performance incentives for employees and thereby maximize shareholder value. (See Section 2.)

What are the conditions to the offer?

The offer is not conditioned upon a minimum number of options being tendered. However, the offer is subject to a number of other conditions with regard to events that could occur prior to the expiration of the offer. These events include, among other things, a change in accounting principles, a lawsuit challenging the tender offer, a third-party tender offer for our common stock or other acquisition proposal or a change in your employment status with us. These and various other conditions are more fully described in Section 6.

Are there any eligibility requirements I must satisfy after the expiration date of the offer to receive the new options?

To receive a grant of new options pursuant to the offer and under the terms of the Option

Plan, you must be an employee of Radiant or one of our subsidiaries from the date you tender options through the date we grant the new options. As discussed below, we will not grant the new options until the first business day which is at least six months and one day following the date we cancel the tendered options accepted for exchange. If, for any reason, you are not an employee of Radiant Systems, Inc. or one of our subsidiaries from the date you tender options through the date we grant the new options, you will not receive any new options or any other consideration in exchange for your tendered options that have been accepted for exchange. (See Section 5.)

How many new options will I receive in exchange for my tendered options?

For options with exercise prices of less than or equal to $15.00 per share, the new options will be exercisable for one share of our common stock for every two shares of our common stock issuable upon exercise of a surrendered option. For options with exercise prices greater than $15.00 per share, the new options will be exercisable for one share of our common stock for every three shares of our common stock issuable upon exercise of a surrendered option.

Options tendered for exchange will be replaced with options to be granted under our Option Plan, unless prevented by law or applicable regulations. All new options will be subject to a new option agreement which will be in substantially the same form as the option agreement or agreements attached as Exhibit (d)(5) to the Tender Offer Statement on Schedule TO filed by us with the Securities and Exchange Commission on December 2, 2004. You must execute the new option agreement in order to receive new options.

If I choose to tender options for exchange, do I have to tender all my options?

You may tender options for all or part of the shares of common stock subject to your options as long as you tender in full options under any particular grant. In other words, no partial tenders of any particular option grant may be made. In addition, you will be required to tender all option grants that you received during the six months immediately prior to the date we commenced this offer that have an exercise price lower than the exercise price of any other options to be tendered. For example, if you received an option grant in September 2004 with an exercise price of $4.25 per share and a grant in August 2001 at an exercise price of $8.75 per share and you want to tender your August 2001 option grant, you will also be required to tender your September 2004 grant for exchange. (See Section 1.)

When will I receive my new options?

We will grant the new options on the first business day that is at least six months and one day after the date that we cancel the options accepted for exchange. For example, if we cancel the tendered options accepted for exchange on December 30, 2004, the business day following the scheduled expiration date, the grant date of the new options will be on or about July 1, 2005. However, if you are not an employee of Radiant Systems, Inc. or one of our subsidiaries from the date you tender options through the date we grant the new options, you will not receive any new options or any other consideration in exchange for your tendered options that have been accepted for exchange. (See Section 5.)

2

Why won’t I receive my new options immediately after the expiration date of the offer?

If we were to grant the new options on any date which is earlier than six months and one day after the date we cancel the options tendered for exchange, we would be required for financial reporting purposes to record compensation expense against our earnings. (See Section 5.) By deferring the grant of the new options for at least six months and a day, we believe we will not have to record such a compensation expense.

If I tender options in the offer, will I be eligible to receive other option grants before I receive my new options?

We have determined not to grant options to any non-Director-level employees for the foreseeable future other than through the exchange offer. In addition, if you tender options in the exchange and you are promoted to Director-level, you will not be eligible to receive additional options until your replacement options are granted.

Will I be required to give up all my rights to the cancelled options?

Yes. Once we have accepted options tendered by you, your options will be cancelled and you will no longer have any rights under those options. (See Section 5.)

What will the exercise price of the new options be?

The exercise price of the new options will equal the last reported sale price of our common stock on the Nasdaq National Market on the date we grant the new options. Accordingly, we cannot predict the exercise price of the new options. However, because we will not grant new options until at least six months and one day after the date we cancel tendered options accepted for exchange, the new options may have a higher exercise price than some or all of your current options. We recommend that you obtain current market quotations for our common stock before deciding whether to tender your options. (See Section 8.)

When will the new options vest?

Regardless of the vesting schedule of any options that you elect to exchange, the new options you receive will become exercisable in three equal annual installments beginning on the first anniversary of the grant date. Even if the options you tender are fully or partially vested, the new options you receive will be subject to the new three-year vesting period described above.

Does the commencement of a new vesting period under the new options mean that I would have to wait a longer period before I can purchase common stock under my options?

Potentially. Because any new options you receive will not be vested, you will lose the benefits of any vesting under options you tender in the offer. As described above, no portion of the new options we grant will be immediately vested, even if the eligible options you tender for exchange are fully or partially vested. The vesting schedule of the new options will not begin until the grant date of those options. Because the new options will not begin vesting until the grant date, which is at least six months and a day after the date we cancel tendered options, you generally will not be able to purchase our common stock upon exercise of any of the new options until at least one year after the new grant date.

3

What if we enter into a change of control or similar transaction?

We are reserving the right to take any actions we deem necessary or appropriate to complete a change of control transaction that our board of directors believes is in the best interest of our company and our shareholders. This could include terminating your right to receive new options under this offer to exchange. If we were to terminate your right to receive new options under this offer in connection with such a transaction, employees who have tendered options for cancellation pursuant to this offer would not receive options to purchase securities of the acquiror or any other consideration for their tendered options. (See Section 2.)

Will I have to pay taxes if I exchange my options in the offer?

If you exchange your current options for new options, we believe that you will not be required under current law to recognize income for U.S. income tax purposes as a result of the exchange. Neither the tender of your options nor the grant of new options should, under current law, result in income for U.S. income tax purposes. If you are an Australian resident employee of Radiant or one of our subsidiaries and you exchange your options pursuant to the offer, the circumstances will vary on whether the exchange will be a taxable event to you. We recommend that you consult with your own tax adviser to determine the tax consequences of tendering options pursuant to this offer. (See Sections 13 and 14.)

If your current options are incentive stock options, your new options will be granted as incentive stock options to the maximum extent they qualify as incentive stock options under the tax laws on the date of the grant. Among other requirements, for options to qualify as incentive stock options under the current U.S. tax laws, the value of shares subject to options that first become exercisable by the option holder in any calendar year cannot exceed $100,000, as determined using the fair market value of the stock subject to the option as of the grant date. The excess value is deemed to be subject to a non-qualified stock option, which is an option that is not qualified to be an incentive stock option under the current tax laws.

What happens to options that I choose not to tender or that are not accepted for exchange?

Options that you choose not to tender for exchange or that we do not accept for exchange remain outstanding and retain their current exercise price and current vesting schedule.

When does the offer expire? Can the offer be extended, and if so, how will I be notified if it is extended?

The offer expires on December 30, 2004, at 11:59 p.m., Eastern Time, unless we extend it. Although we do not currently intend to do so, we may, in our discretion, extend the offer at any time. If the offer is extended, we will make a public announcement of the extension no later than 9:00 a.m. on the next business day following the previously scheduled expiration of the offer period. If the offer is extended, then the grant date of the new options will also be extended. (See Section 15.)

How do I tender my options?

If you decide to tender your options, you must deliver, before 11:59 p.m., Eastern Time, on December 30, 2004, a properly completed and duly executed Letter of Transmittal Form and any other documents required by the Letter of Transmittal Form to Radiant Systems, Inc., Attention: Corporate Benefits, 3925 Brookside Parkway, Alpharetta, Georgia 30022 (facsimile: (770) 754-7773). We will only accept a paper copy or a facsimile copy of your executed Letter of Transmittal

4

Form. The Letter of Transmittal Form must be used to participate; instructions via e-mail message will not be accepted.

If the offer is extended by us beyond December 30, 2004, you must deliver these documents before the extended expiration of the offer.

We reserve the right to reject any or all tenders of options that we determine are not in appropriate form or that we determine are unlawful to accept. Otherwise, we expect to accept all properly and timely tendered options which are not validly withdrawn. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept all such properly tendered options promptly after the expiration of the offer. (See Section 5.)

During what period of time may I withdraw previously tendered options?

You may withdraw your tendered options at any time before 11:59 p.m., Eastern Time, on December 30, 2004. If we extend the offer beyond that time, you may withdraw your tendered options at any time until the extended expiration of the offer. You also may withdraw your tendered options after the expiration of 40 business days from the commencement of the offer (that is, January 28, 2005) if we have not yet accepted the options for payment. To withdraw tendered options, you must deliver to us a written notice of withdrawal, or a facsimile thereof, with the required information while you still have the right to withdraw the tendered options.

Once you have withdrawn options, you may re-tender options only by again following the delivery procedures described above prior to the expiration of the offer. (See Section 4.)

What do we and our board of directors think of the offer?

Although our board of directors has approved this offer, neither we nor our board of directors makes any recommendation as to whether you should tender or refrain from tendering your options. You must make your own decision whether to tender options. (See Section 10.)

5

Who should I contact if I have questions about the offer?

For additional information or assistance, view information at http://portal.radiant.com/sites/OEP, or contact:

Radiant Systems, Inc.

Attention: Corporate Benefits

3925 Brookside Parkway

Alpharetta, Georgia 30022

telephone: (770) 576-6350

facsimile: (770) 754-7773

e-mail: corporatebenefits@radiantsystems.com

6

CERTAIN RISKS OF PARTICIPATING IN THE OFFER

Participation in the offer involves a number of potential risks, including those described below. This list briefly highlights some of the risks and is necessarily incomplete. You should carefully consider these and other risks and we encourage you to speak with an investment and tax adviser as necessary before deciding to participate in the offer. In addition, we strongly urge you to read the rest of this document, along with the accompanying documents before deciding to participate in the exchange offer. The list of risks does not include certain risks that may apply to employees who live and work outside of the United States; again, we urge you to read Section 14 of this offer to exchange, which discusses tax consequences in Australia, as well as the rest of the offer to exchange and related documents for a fuller discussion of the risks which may apply to you.

Risks Related to the Exchange Offer

If the stock price increases after your tendered options are cancelled, your cancelled options might have been worth more than the new options that you have received in exchange for them.

For example, if you cancel options with an exercise price of $8.00, and our stock appreciates to $12.00 when the new option grants are made, your option will have a higher exercise price than the cancelled option.

If your employment terminates prior to the grant of the new option, you will receive neither a new option nor the return of your cancelled option.

Once your option is cancelled, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the cancelled option nor the new option. The offer does not involve any guarantee of employment for any period.

The term of your replacement option may be shorter than the term of your existing option.

The options that we are offering to exchange generally had an original ten-year term, subject to earlier termination in the event of the termination of the option holder’s employment. The replacement option will have the same early termination provisions, but will have an initial term of five years. Accordingly, depending on when your options were granted, if you participate in this exchange offer, your new options may expire earlier than your existing options would have expired.

If we enter into a change of control transaction, you may not receive new option grants.

We reserve the right to take any actions we deem necessary or appropriate to complete a change of control transaction that our board of directors believes is in the best interest of our company and our shareholders. This could include terminating your right to receive new options under this offer to exchange. We will not grant new options to you if we are prohibited by applicable law or regulations (such as SEC rules, regulations or policies or Nasdaq requirements).

Risks Related to our Business

For information on where to find a description of risks related to our business, please see Section 18 of this document.

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THE OFFER

1. Number of Options; Expiration Date.

We are offering our employees, below Director level, the opportunity to exchange outstanding options to purchase shares of our common stock for new options that we will grant under our Amended and Restated 1995 Option Plan. (the “Option Plan”) We are making this offer upon the terms and subject to the conditions described in this document and the accompanying Letter of Transmittal Form (which together, as they may be amended from time to time, constitute the “offer”).

For options with exercise prices of less than or equal to $15.00 per share, the new options will be exercisable for one share of our common stock for every two shares of our common stock issuable upon exercise of a surrendered option. For options with exercise prices greater than $15.00 per share, the new options will be exercisable for one share of our common stock for every three shares of our common stock issuable upon exercise of a surrendered option. These exchange ratios are subject to appropriate adjustment in the event of any stock splits or similar events. No options to purchase fractional shares will be issued. Instead, all options will be rounded to the nearest whole share.

The exercise price of the new options will be the fair market value of our common stock on the grant date, which will be determined as the last sale price during regular trading hours of our common stock on the Nasdaq National Market the day of the grant of the new options. The new options will become exercisable in three equal annual installments beginning on the first anniversary of the grant date and will expire on the fifth anniversary of the grant date, or earlier in the event of the termination of your employment.

We will grant the new options on or about the first business day which is at least six months and one day following the date we cancel the options accepted for exchange by us. If you tender options for exchange, we will grant you new options under the terms of the Option Plan and a new option agreement between us and you.

This offer is not conditioned upon a minimum number of options being tendered by employees. You may tender options for all or part of the shares of common stock subject to your options as long as you tender in full options under any particular grant. In addition, if you tender an option grant for exchange, you will be required to also tender for exchange any option grants that you received during the six months immediately prior to the date we commenced this offer with an exercise price lower than the exercise price of any other options being tendered. If you attempt to tender some of your options but do not include all of the options granted to you during the six months immediately prior to the date we commenced this offer with an exercise price lower than the exercise price of any other options being tendered, your entire tender will be rejected. In addition, this offer is subject to conditions which we describe in this document.

As of November 30, 2004 options to purchase 6,863,889 shares of our common stock were issued and outstanding under the Option Plan. Of these options, options to purchase 1,964,804 shares of our common stock were held by employees eligible to participate in this offer. The shares of common stock issuable upon exercise of options we are offering to exchange represent approximately 29% of the total shares of common stock issuable upon exercise of all options outstanding under the Option Plan as of November 30, 2004.

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All options accepted by us pursuant to this offer will be cancelled, and employees will have no further rights with respect to such cancelled options.

The offer will expire at 11:59 p.m., Eastern Time, on December 30, 2004, although we may, in our discretion, extend the period of time during which the offer will remain open. See Section 15 for a description of our rights to extend, delay, terminate and amend the offer.

If we decide to take any of the following actions, we will publish notice or otherwise inform you in writing of such action:

• We increase or decrease the amount of consideration offered for the eligible options;

• We decrease the number of options eligible to be tendered in the offer; or

• We increase the number of options eligible to be tendered in the offer by an amount that exceeds 2% of the shares of common stock issuable upon exercise of the options that are subject to the offer immediately prior to the increase.

If the offer is scheduled to expire at any time earlier than the 10th business day from, and including, the date that notice of such increase or decrease is first published, sent or given in the manner specified in Section 15, we will extend the offer so that the offer is open at least 10 business days following the publication, sending or giving of notice.

We will also notify you of any other material change in the information contained in this document.

For purposes of the offer, a “business day” means any day other than a Saturday, Sunday or U.S. federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, Eastern Time.

2. Purpose of the Offer.

We issued or assumed the options outstanding under the Option Plan for the following purposes:

• To encourage and enable our employees to acquire or increase their holdings of common stock and other proprietary interest in us, in order to promote a closer identification of their interests with those of Radiant and our shareholders and to encourage participants to enhance the efficiency, soundness, profitability, growth and shareholder value of Radiant; and

• To encourage our employees to continue their employment with us.

Retention of our employees is one of the keys to our continued growth and success. The offer provides an opportunity for us to offer our employees an incentive to stay with our company. Many of our outstanding options, whether or not they are currently exercisable, have exercise prices that are significantly higher than the current market price of our common stock. We believe these

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options are unlikely to be exercised in the foreseeable future. By making this offer to exchange outstanding options for new options that will have an exercise price equal to the fair market value of our common stock on the grant date, we intend to provide our employees with the benefit of owning options that over time may have a greater potential to increase in value, create better performance incentives for employees and thereby maximize shareholder value.

Our stock price could increase (or decrease) between the date of this offer and the date we intend to grant the new options, due to a change of control transaction or other factors or events, and the exercise price of the new options, if awarded, could be higher (or lower) than the exercise price of eligible options you elect to have cancelled as part of this offer. As outlined in Section 8, the exercise price of any new options granted to you in return for your tendered options will be at the fair market value of our common stock on the date of that grant. You will be at risk of any such increase in our stock price during the period prior to the grant date of the new options for these or any other reasons.

We are also reserving the right to take any actions we deem necessary or appropriate to complete a change of control transaction that our board of directors believes is in the best interest of our company and our shareholders. This could include terminating your right to receive new options under this offer to exchange. If we were to terminate your right to receive new options under this offer in connection with such a transaction, employees who have tendered options for cancellation pursuant to this offer would not receive options to purchase securities of the acquiror or any other consideration for their tendered options.

Except as otherwise disclosed in this offer to exchange or in our filings with the SEC, we presently have no plans or proposals that relate to or would result in:

• An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving us or any of our subsidiaries;

• Any purchase, sale or transfer of a material amount of our assets or the assets of any of our subsidiaries;

• Any material change in our present dividend rate or policy, or our indebtedness or capitalization;

• Any change in our present board of directors or management, including a change in the number or term of directors or to fill any existing board vacancies or to change any executive officer’s material terms of employment;

• Any other material change in our corporate structure or business;

• Our common stock not being authorized for quotation in an automated quotation system operated by a national securities association;

• Our common stock becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;

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• The suspension of our obligation to file reports pursuant to Section 13 of the Exchange Act;

• The acquisition by any person of any material amount of our securities or the disposition of any material amount of our securities; or

• Any change in our certificate of incorporation or bylaws, or any actions which may impede the acquisition of control of us by any person.

Neither we nor our board of directors makes any recommendation as to whether you should tender your options, nor have we authorized any person to make any such recommendation. Note that the new options may have a higher exercise price than some or all of your current options. You are urged to evaluate carefully all of the information in this offer to exchange and to consult your own investment and tax advisers.

You must make your own decision whether to tender your options for exchange.

3. Procedures for Tendering Options.

Proper Tender of Options. To validly tender your options pursuant to the offer, you must, in accordance with the terms of this offer to exchange and the Letter of Transmittal Form, properly complete, sign and deliver to us the Letter of Transmittal Form, or a facsimile or scan thereof, along with any other required documents. We will only accept a properly executed paper copy or a facsimile or scanned copy of your Letter of Transmittal Form and any other required documents. We will not accept instructions by e-mail message. We must receive all of the required documents at 3925 Brookside Parkway, Alpharetta, Georgia 30022, Attention: Corporate Benefits (facsimile: (770) 754-7773), before the expiration date. Your new options will be granted on a date at least six months and one day after the date that we cancel the tendered options accepted for exchange.

A copy of the Letter of Transmittal Form has been distributed with this document.

The method of delivery of all documents, including letters of transmittal and any other required documents, is at the election and risk of the tendering option holder. If delivery is by mail, we recommend that you use registered mail with return receipt requested. In all cases, you should allow sufficient time to ensure timely delivery. Your options will not be considered tendered until we receive them. We will not accept delivery by e-mail.

Determination of Validity; Rejection of Options; Waiver of Defects; No Obligation to Give Notice of Defects. We will determine, in our discretion, all questions as to form of documents and the validity, form, eligibility, including time of receipt, and acceptance of any tender of options. Our determination of these matters will be final and binding on all parties. We may reject any or all tenders of options that we determine are not in appropriate form or that we determine are unlawful to accept. Otherwise, we expect to accept all properly and timely tendered options which are not validly withdrawn. We may also waive any of the conditions of the offer or any defect or irregularity in any tender with respect to any particular options or any particular option holder, which if we waive for any option holder we will waive for all option holders. No tender of options will be deemed to have been properly made until all defects or irregularities have been cured by the tendering option holder

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or waived by us. Neither we nor any other person is obligated to give notice of any defects or irregularities in tenders, and no one will be liable for failing to give notice of any defects or irregularities.

Our Acceptance Constitutes an Agreement. Your tender of options pursuant to the procedures described above constitutes your acceptance of the terms and conditions of the offer. Our acceptance for exchange of your options tendered by you pursuant to the offer will constitute a binding agreement between us and you upon the terms and subject to the conditions of the offer.

Subject to our rights to extend, terminate and amend the offer, we currently expect that promptly after the expiration of the offer we will accept all properly tendered options that have not been validly withdrawn.

4. Withdrawal Rights.

You may only withdraw your tendered options in accordance with the provisions of this Section 4.

You may withdraw your tendered options at any time before the expiration date. If the offer is extended by us beyond that time, you may withdraw your tendered options at any time until the extended expiration of the offer. Further, you may withdraw your tendered options after the expiration of 40 business days from the commencement of the offer (that is, January 28, 2005) if we have not yet accepted the options.

To validly withdraw tendered options, you must deliver to us at the address or facsimile number set forth in Section 3 a notice of withdrawal with the required information, while you still have the right to withdraw the tendered options. Except as described in the following sentence, the notice of withdrawal must be executed by the option holder who tendered the options to be withdrawn exactly as such option holder’s name appears on the option agreement or agreements evidencing such options.

You may not rescind any withdrawal, and any options you withdraw will thereafter be deemed not properly tendered for purposes of the offer, unless you properly re-tender those options before the expiration date by following the procedures described in Section 3.

To validly change your election regarding the tender of options but continue to elect to tender some of your options, you must deliver a new Letter of Transmittal Form at the address or facsimile number set forth in Section 3. If you deliver a new Letter of Transmittal Form, it will replace any previously submitted Letter of Transmittal Form, which will be disregarded.

Neither we nor any other person is obligated to give notice of any defects or irregularities in any notice of withdrawal, nor will we incur any liability for failure to give any such notice. We will determine, in our discretion, all questions as to the form and validity, including time of receipt, of notices of withdrawal. Our determination of these matters will be final and binding.

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5. Acceptance of Options for Exchange and Issuance of New Options.

Upon the terms and subject to the conditions of this offer and as promptly as practicable following the expiration date, we expect to accept for exchange and cancel options properly tendered and not validly withdrawn before the expiration date. Subject to the terms and conditions of this offer, if your options are properly tendered and accepted for exchange, these options will be cancelled as of the date of our acceptance and you will be granted new options on or about the first business day that is at least six months and a day after the date we cancel the options accepted for exchange. If we cancel options accepted for exchange on December 30, 2004, you will be granted new options on or about July 1, 2005, which is the first business day that is at least six months and one day following the date we intend to cancel options accepted for exchange.

For options with exercise prices of less than or equal to $15.00 per share, the new options will be exercisable for one share of our common stock for every two shares of our common stock issuable upon exercise of a surrendered option. For options with exercise prices greater than $15.00 per share, the new options will be exercisable for one share of our common stock for every three shares of our common stock issuable upon exercise of a surrendered option. No options to purchase fractional shares will be issued. Instead, all options will be rounded to the nearest whole share.

If you are not an employee of Radiant Systems, Inc. or one of our subsidiaries from the date you tender options through the date we grant the new options, you will not receive any new options or any other consideration in exchange for your tendered options that have been accepted for exchange. This means that if you die or quit or we terminate your employment, with or without cause, prior to the date we grant the new options for any reason, you will not receive anything for the options that you tendered and we cancelled. Nothing in the terms of this offer or the Option Plan requires us to continue your employment for any specified period of time.

We will take any actions we deem necessary to complete a change of control transaction that our board of directors believes is in the best interest of our company and our shareholders. This could include terminating your right to receive new options under this offer to exchange.

For purposes of the offer, we will be deemed to have accepted for exchange options that are validly tendered and not properly withdrawn, if and when we give oral or written notice to the option holders of our acceptance for exchange of such options, which may be by press release. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept promptly after the expiration of the offer all properly tendered options that are not validly withdrawn. Promptly after we accept tendered options for exchange, we will send each tendering option holder a letter indicating the number of shares subject to the options that we have accepted for exchange, the corresponding number of shares that will be subject to the new options and the expected grant date of the new options.

6. Conditions of the Offer.

Notwithstanding any other provisions of this offer, we will not be required to accept any options tendered for exchange, and we may terminate or amend the offer, or postpone our acceptance and cancellation of any options tendered for exchange, in each case, subject to Rule 13e-4(f)(5) under the Exchange Act, if at any time on or after December 2, 2004 and before the expiration date, we determine that any of the following events has occurred and, in our reasonable judgment the

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occurrence of the event makes it inadvisable for us to proceed with the offer or to accept and cancel options tendered for exchange:

• Any threatened, instituted or pending action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, domestic or foreign, before any court, authority, agency or tribunal that directly or indirectly challenges the making of the offer, the acquisition of some or all of the tendered options pursuant to the offer, the issuance of new options, or otherwise relates in any manner to the offer or that, in our reasonable judgment, could materially and adversely affect the business, condition (financial or other), income, operations or prospects of Radiant or our subsidiaries, or otherwise materially impair in any way the contemplated future conduct of our business or the business of any of our subsidiaries or materially impair the benefits that we believe we will receive from the offer;

• Any action is threatened, pending or taken, or any approval is withheld, or any statute, rule, regulation, judgment, order or injunction is threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the offer or us or any of our subsidiaries, by any court or any authority, agency or tribunal that, in our reasonable judgment, would or might directly or indirectly:

(1) Make the acceptance for exchange of, or issuance of new options for, some or all of the tendered options illegal or otherwise restrict or prohibit consummation of the offer or otherwise relates in any manner to the offer;

(2) Delay or restrict our ability, or render us unable, to accept for exchange, or issue new options for, some or all of the tendered options; or

(3) Materially and adversely affect the business, condition (financial or other), income, operations or prospects of us or our subsidiaries, or otherwise materially impair in any way the contemplated future conduct of our business or the business of any of our subsidiaries;

• Any change in generally accepted accounting standards which could or would require us for financial reporting purposes to record compensation expense against our earnings in connection with the offer;

• A tender or exchange offer with respect to some or all of our common stock, or a merger or acquisition proposal for us, is proposed, announced or made by another person or entity or is publicly disclosed; or

• Any change or changes occurs in our business, condition (financial or other), assets, income, operations, prospects or stock ownership or in that of our subsidiaries that, in our reasonable judgment, is or may be material to us or our subsidiaries or materially impairs or may materially impair the benefits that we believe we will receive from the offer.

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The conditions to the offer are for our benefit. We may assert them in our discretion regardless of the circumstances giving rise to them prior to the expiration date. We may waive them, in whole or in part, at any time and from time to time prior to the expiration date, in our discretion, whether or not we waive any other condition to the offer. Our failure at any time to exercise any of these rights will not be deemed a waiver of any such rights. The waiver of any of these rights with respect to particular facts and circumstances is not a waiver with respect to any other facts and circumstances. Any determination we make concerning the events described in this Section 6 will be final and binding upon everyone.

7. Price Range of Common Stock Underlying the Options.

Our common stock is quoted on the Nasdaq National Market under the symbol “RADS.” The following table shows, for the periods indicated, the high and low closing sales prices per share of our common stock as reported by the Nasdaq National Market.

	High		Low
2004
Fourth Quarter (through December 1, 2004)	$	6.60	$	4.22
Third Quarter	$	4.55	$	3.88
Second Quarter	$	6.08	$	4.10
First Quarter	$	8.29	$	4.90
2003
Fourth Quarter	$	8.40	$	6.13
Third Quarter	$	6.84	$	5.20
Second Quarter	$	7.66	$	6.00
First Quarter	$	10.25	$	6.75
2002
Fourth Quarter	$	11.87	$	8.28

As of December 1, 2004, the last reported sale price of our common stock, as reported by the Nasdaq National Market, was $6.60 per share. We recommend that you obtain current market quotations for our common stock before deciding whether to tender your options.

8. Source and Amount of Consideration; Terms of New Options.

Consideration. We will issue new options to purchase common stock under the Option Plan in exchange for outstanding eligible options properly tendered and accepted for exchange by us. For options with exercise prices of less than or equal to $15.00 per share, the new options will be exercisable for one share of our common stock for every two shares of our common stock issuable upon exercise of a surrendered option. For options with exercise prices greater than $15.00 per share, the new options will be exercisable for one share of our common stock for every three shares of our common stock issuable upon exercise of a surrendered option. These exchange ratios are subject to appropriate adjustment in the event of any stock splits or similar events. If we receive and accept tenders of all outstanding eligible options, we expect to grant new options to purchase a total of 982,442 shares of our common stock. The options subject to this offer to exchange represent approximately 29% of the total options outstanding under our Option Plan as of November 30, 2004.

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Terms of New Options. The new options will be issued under the Option Plan. A new option agreement will be entered into between us and each option holder who has tendered options in the offer. The new option agreements will be substantially the same as the form option agreements filed as Exhibit (d)(5) to the Tender Offer Statement on Schedule TO that we filed with the SEC on December 2, 2004. Except with respect to the exercise price, the date the vesting begins, the vesting period and certain other terms specified in the offer, the terms and conditions of the new options will be substantially the same as the terms and conditions of the options tendered for exchange. The material terms of the Option Plan are described below. Because we will not grant new options until at least six months and a day after the date we cancel the tendered options, the new options may have a higher exercise price than some or all of the tendered options.

The following description summarizes the material terms of the Option Plan and the options granted under the Plan. This description is only a summary, and may not be complete. For complete information please refer to the copies of the Option Plan and the new option agreements that have been filed with the SEC as exhibits to the Tender Offer Statement on Schedule TO. You may also view documents at http://portal.radiant.com/sites/OEP or contact us at Radiant Systems, Inc., Attention: Corporate Benefits, 3925 Brookside Parkway, Alpharetta, Georgia 30022 (telephone: (770) 576-6350, facsimile: (770) 754-7773 and e-mail: corporatebenefits@radiantsystems.com) to request copies of the Option Plan or the forms of the new option agreements, which will be provided at our expense.

General Information. The Option Plan provides the maximum number of shares issuable pursuant to the exercise of options currently may not exceed 13,000,000 shares.

The Option Plan permits the granting of options intended to qualify as incentive options under the Code and the granting of options that do not qualify as incentive options.

Administration. The Option Plan is administered by the compensation committee of our board of directors. The compensation committee is composed of a majority of “nonemployee directors” as defined in Rule 16b-3 under the Exchange Act and “outside directors” for purposes of Section 162(m) of the Code. The members of the compensation committee are appointed from time to time by our board of directors and may be removed at any time by the board. Vacancies in the compensation committee are filled by the board.

Term. Under the Option Plan, the term of each option will be determined by the compensation committee and may generally not exceed 10 years from the date of grant (or five years with respect to 10% shareholders). The new options to be granted pursuant to the offer will have a term of five years, subject to early termination in the event of the termination of the option holder’s employment. Unless your option agreement otherwise provides, options granted pursuant to the Option Plan are subject to the following termination provisions. Options will terminate following the termination of your employment for any reason other than disability or death, unless the options are exercised, to the extent that they were exercisable immediately before such termination, before the earlier of (i) three months following your termination or (ii) the end of the option period. In the event that the termination of your employment is by reason of disability or death while you are an employee, you, or your executors, administrators, legatees or distributees of your estate, may exercise your options to the extent that they were exercisable on the date of your employment termination, before the earlier of (i) the end of the 12-month period after your termination; or (ii) the end of the option period.

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Exercise Price. The exercise price of each option will be determined by the compensation committee. In the case of an incentive stock option, the exercise price may not be less than 100% of the fair market value of a share of our common stock on the grant date. For 10% shareholders, the exercise price of an incentive stock option may not be less than 110% of the fair market value of a share of common stock on the date the option is granted. The exercise price of the new options to be granted pursuant to the offer will be equal to the fair market value (or in the case of a 10% shareholder, 110% of the fair market value) of our common stock on the grant date, which will be determined by the last reported sale price during regular trading hours of our common stock on the Nasdaq National Market on the grant date.

Vesting and Exercise. The compensation committee has the authority to determine at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment during which options may be exercised. The new options granted pursuant to the offer generally will become exercisable in one-third increments on each of the first three anniversary dates of the grant date.

Payment of Exercise Price. You may exercise your options by delivery of a written notice to us on any business day at the address listed on your exercise notice, which specifies the number of shares for which the option is being purchased and which is accompanied by payment in full of the purchase price. The permissible methods of payment of the option exercise price generally are the following:

• cash;

• delivery of shares of our common stock which have been owned by the option holder for no less than six months and otherwise are acceptable to the compensation committee; or

• a combination of these methods as elected by you.

Amendment of the Option Plan. Our board may amend or terminate the Option Plan at any time and in any manner, subject to certain restrictions.

No Shareholder Rights. A participant shall have no shareholder rights with respect to the shares of our common stock subject to his or her outstanding options until such shares are purchased in accordance with the provisions of the Option Plan.

Transferability of Options. Incentive options are not transferable other than by will or the laws of intestate succession. Nonqualified options granted under the Option Plan are not transferable other than by will or the laws of intestate succession, except as may be permitted by the compensation committee in a manner consistent with the registration provisions of the Securities Act of 1933, as amended (the “Securities Act”). In addition, options (except in the case of a permitted nonqualified option transfer) may be exercised during your lifetime only by you or your guardian or legal representative.

Registration of Option Shares. All shares of common stock issuable upon exercise of options under the Option Plan, including the shares that will be issuable upon exercise of all new options to

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be granted pursuant to the offer, have been registered under the Securities Act on a registration statement on Form S-8 filed with the SEC. Unless you are one of our affiliates, you will be able to sell your option shares free of any transfer restrictions under applicable securities laws.

Tax Consequences. You should refer to Sections 13 and 14 for a discussion of the U.S. and Australian federal income tax consequences of accepting or rejecting the new options under this offer to exchange. Whether you are an employee based inside or outside of the United States, we recommend that you consult with your own tax adviser to determine the tax consequences of this transaction under the laws of the country in which you live and work.

Our statements in this offer to exchange concerning the Option Plan and the new options are merely summaries and do not purport to be complete. The statements are subject to, and are qualified in their entirety by reference to, all provisions of our Option Plan and the form of option agreement under the Option Plan. Please refer to copies of the Option Plan and the new option agreement that have been filed with the SEC as exhibits to the Tender Offer Statement on Schedule TO. You may also refer to documents that are posted at http://portal.radiant.com/sites/oep, or contact Corporate Benefits at Radiant Systems, Inc., 3925 Brookside Parkway, Alpharetta, Georgia 30022 (telephone: (770) 576-6350) to receive copies of the Option Plan and the form of option agreement thereunder. We will promptly furnish you copies of these documents at our expense.

9. Information Concerning Radiant Systems, Inc.

Business

We provide innovative store technology for the foodservice, petroleum, convenience store and cinema industries. We deliver site management systems, including point-of-sale (POS), self-service kiosk, and back-office systems. Our site management solution includes software products, site hardware, professional services and support services. Each product can be purchased independently or as a suite of integrated products depending on the customer’s individual preferences.

We offer best-of-breed solutions designed for ease of integration with operators’ existing infrastructures. Our site management technology enables retail and food service operators to improve customer service and profitability. We believe our approach to site management is unique in that our product solutions provide visibility and control at the site, field, and headquarters levels. Additionally, we focus on addressing the unique requirements of the highly specialized environments in which our customers operate. These environments require a high degree of reliability, specialized functionality, and peripheral compatibility. Using our point-of-sale, customer self-service and back-office technology, businesses are able to improve their speed of service, reduce fraud and shrink, optimize labor resources, and effectively manage inventory. Our full line of open, standards-based site management hardware allows operators to leverage advance technology built specifically for the environment that they operate in.

We believe our current generation of point-of-sale and customer self-service products, which utilize Microsoft Windows 2000, Windows XP, Windows XP Embedded, and Windows CE operating systems, represents an innovative platform based on an open, modular software and

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hardware architecture that offers increased functionality and stability compared to other systems in the marketplace, at a lower total cost of ownership.

The Radiant Solution

Our site management solution is tailored to the unique requirements of the markets of the retail and food service industries that we serve, such as petroleum and convenience stores, quick service restaurants, table service restaurants, and cinemas. We believe that our site management solutions provide unique value and are easy to implement. Assuming the site is using an existing technology system, it typically requires less than one week to install our system and a few hours to train individual users. Depending on the customer’s particular needs, we can provide an entire suite of integrated products or the customer can purchase these products individually.

Point-of-Sale

We build and deliver open point-of-sale technology for petroleum and convenience store, food service, and cinema businesses. With ten years experience in providing touch-screen systems for the retail and food service industries, our point-of-sale systems increase speed and quality of service, minimize user training, and provide mission-critical reliability. The point-of-sale systems can be integrated with our back-office system or other third party back-office applications. Our point-of-sale software runs on IBM, NCR, PAR, WincorNixdorf, and our hardware. At the same time, our point-of-sale hardware supports our Point-of-Sale software and third-party point-of-sale software products that adhere to open standards. Our point-of-sale terminals offer an open architecture, retail-hardened design, comprehensive support and return-to-service programs, and run on Windows CE, Windows XP, Windows XP Embedded, and Windows 2000.

Customer Self-Service (CSS)

Within many markets of the retail and food service industry, customer self-service has emerged as a preferred ordering and transaction method. We have an easy to use, consumer-activated system that allows a consumer to purchase tickets, place a food order, pay with a credit card, make inquiries, and view promotions through the use of a touch screen application. The software development environment and authoring tools allow various media such as video clips, logos, pictures, and recordings to be quickly integrated into a consumer-friendly application.

We believe customer self-service kiosks allow food service and cinema operators to accelerate speed of service, increase revenues through suggestive up-selling, increase order accuracy, capture consumer information at the point-of-sale, increase labor productivity, and respond quickly to changing consumer preferences. Our Customer Self-Service products help operators create a uniform and repeatable approach to customer service while improving revenue.

Back-Office Systems—Legacy

Our back-office software provides operators with the capabilities to manage employees and inventory, automate daily reports, analyze costs, and forecast results. Additionally, these systems provide the means for operators to easily gather point-of-sale and management information including current sales monitoring.

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Headquarters-Based Management Systems—Legacy

Our headquarters-based management systems permit convenience store operators to manage individual sites from headquarters including inventory management, price book management, purchasing and receiving, decision support tools and reporting.

Professional Services

The integration, design, implementation, application and installation of technology solutions are critical to our ability to effectively market our solutions. The following is a summary of some of the professional services we provide:

• Consulting. Business consultants, systems analysts and technical personnel assist customers in all phases of systems development, including systems planning and design, customer specific configuration of application modules and on-site implementation or conversion from existing systems. Directors in our consulting organization typically have significant consulting or retail technology experience. Our consulting personnel undergo extensive training in retail operations and our products. Consulting services typically are billed on a per diem basis.

• Customization. We provide custom application development work for customers billed on a project or per diem basis. All customization remains our property.

• Training. We have a formal training program available to our customers, which is provided on a per diem rate at our offices or at the customer’s site.

Our principal executive offices are located at 3925 Brookside Parkway, Alpharetta, Georgia 30022 and our telephone number at that address is (770) 576-6000.

Financial Information

The financial statements included in our annual report on Form 10-K for the fiscal year ended December 31, 2003 and quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2004 are incorporated herein by reference. See “Additional Information” below for instructions on how you can obtain copies of our SEC filings, including filings that contain our financial statements.

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The following table summarizes certain of our historical consolidated financial data.

	Year Ended December 31,
(in thousands, except per share data)	2003			2002		2001			2000		1999
Statement of Operations Data:
Revenues:
System sales	$	47,320		$	81,432	$	71,268		$	79,987	$	91,946
Client support, maintenance and other services		64,449			64,725		60,711			48,057		37,720
Total revenues		111,769			146,157		131,979			128,044		129,666
Cost of revenues:
System sales		28,785			43,348		38,799			39,620		46,001
Impairment of capitalized software and acquired software technology		17,626			—		—			—		—
Client support, maintenance and other services		43,906			39,000		38,043			37,356		29,989
Total cost of revenues		90,317			82,348		76,842			76,976		75,990
Gross profit		21,452			63,809		55,137			51,068		53,676
Operating expenses:
Product development		15,714			14,470		11,234			11,030		11,125
Sales and marketing		16,708			21,141		19,718			12,720		12,302
Depreciation and amortization		4,319			4,997		9,643			7,706		6,057
Impairment of TriYumf asset		10,589			—		—			—		—
Impairment of goodwill		6,172			—		—			—		—
Non-recurring charges		1,179			—		1,244			—		—
General and administrative		13,377			12,791		15,056			15,818		13,204
(Loss) income from operations		(46,606	)		10,410		(1,758	)		3,794		10,988
Interest income, net		605			754		1,513			5,760		1,613
(Loss) income before income taxes		(46,001	)		11,164		(245	)		9,554		12,601
Income tax provision		1,730			4,623		183			2,773		4,992
Net (loss) income	$	(47,731	)	$	6,541	$	(428	)	$	6,781	$	7,609
Basic (loss) income per share (1)	$	(1.71	)	$	0.24	$	(0.02	)	$	0.24	$	0.31
Diluted (loss) income per share (1)	$	(1.71	)	$	0.23	$	(0.02	)	$	0.23	$	0.28
Weighted average shares outstanding:
Basic (1)		27,835			27,753		27,726			27,294		24,630
Diluted (1)		27,835			28,995		27,726			29,791		27,519

	December 31,
	2003		2002		2001		2000		1999
Balance Sheet Data:
Working capital	$	44,529	$	66,201	$	55,205	$	70,882	$	65,947
Total assets		92,704		145,256		125,162		131,261		111,999
Long-term debt and shareholder loan, including current portion		136		1,151		1,610		—		4,355
Shareholders’ equity		66,923		114,710		103,614		108,387		85,935

⁽¹⁾ On April 1, 2000 the Company effected a 3-for-2 stock split. All historical shares and weighted average shares have been restated to account for this split.

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The ratio of earnings to fixed charges for the years ended December 31, 2002 was approximately 124x, and was computed by dividing earnings (income from continuing operations before income taxes and extraordinary gain, adjusted for fixed charges) by fixed charges. Fixed charges included interest incurred on long-term debt and the interest factor deemed to be included in lease expense. For the year ended December 31, 2003, the Company incurred significant pretax losses. Consequently, earnings during this period were not sufficient to cover our fixed charges which totaled approximately $60,000 for the twelve months ended December 31, 2003. For the nine months ended September 30, 2004, the ratio of earnings to fixed charges (of approximately $775,000) was 0.94x.

The book value of our common stock as of September 30, 2004 was $2.43.

10. Interests of Directors and Officers; Transactions and Arrangements Concerning the Options.

A list of our directors and executive officers is attached to this document as Schedule A. As of November 30, 2004, our executive officers and directors as a group beneficially owned options outstanding under the Option Plan to purchase a total of 2,090,570 shares of our common stock, which represented approximately 30% of the shares subject to all options outstanding under the Option Plan as of that date. None of these stock options are eligible to be tendered in the offer.

There have been no transactions in options to purchase our common stock or in our common stock which were effected during the past 60 days by us or, to our knowledge, by any of our executive officers, directors, affiliates or subsidiaries, except (1) ordinary course purchases by employee participants under our Employee Stock Purchase Plan, and (2) ordinary course grants of stock options to employees who are not executive officers.

11. Status of Options Acquired by Us in the Offer; Accounting Consequences of the Offer.

Options we acquire pursuant to the offer will be cancelled and the shares of common stock subject to those options will be returned to the pool of shares available for grants of new options under the Option Plan and for issuance upon the exercise of such new options or the grant of other stock-based awards. To the extent such shares are not fully reserved for issuance upon exercise of the new options to be granted in connection with the offer, the shares will be available for future awards to employees and other eligible plan participants without further shareholder action, except as required by applicable law, regulation or the rules of the Nasdaq National Market or any other securities quotation system or any stock exchange on which our common stock is then quoted or listed.

We believe that we will not incur any compensation expense solely as a result of the transactions contemplated by this offer because:

• we will not grant any new options until a business day that is at least six months and one day after the date that we accept and cancel options tendered for exchange;

• the exercise price of all new options will equal the market value of the common stock on the date we grant the new options;

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• we will require any option holder who tenders options in the offer to tender all options that he or she received during the six months immediately prior to the date on which the offer expires if those options have an exercise price lower than the exercise price of the options he or she tendered in the offer; and

• we will defer the grant of any other options to which an option holder who tendered options in the offer may be entitled until after the date on which we grant the new options.

12. Legal Matters; Regulatory Approvals.

We are not aware of any license or regulatory permit that appears to be material to our business that might be adversely affected by our exchange of options and issuance of new options as contemplated by the offer, or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of our options as contemplated herein. Should any such approval or other action be required, we presently contemplate that we will seek such approval or take such other action. We are unable to predict whether we may determine that we are required to delay the acceptance of options for exchange pending the outcome of any such matter. We cannot assure you that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to our business. Our obligation under the offer to accept tendered options for exchange and to issue new options for tendered options is subject to conditions, including the conditions described in Section 6.

13. Material U.S. Federal Income Tax Consequences.

The following is a general summary of the material U.S. federal income tax consequences of an exchange of options pursuant to the offer. This discussion is based on the Code, its legislative history, Treasury Regulations and administrative and judicial interpretations as of the date of the offer, all of which are subject to change, possibly on a retroactive basis. This summary does not discuss all of the tax consequences that may be relevant to you in light of your particular circumstances, nor is it intended to be applicable in all respects to all categories of option holders. This summary assumes that no option holder has paid any consideration for any options.

We believe that the exchange of outstanding incentive or nonqualified stock options for new options will be treated as a non-taxable exchange and that you will not be required to recognize income for U.S. federal income tax purposes either at the time you tender your existing options for exchange or at the date of grant of the new options.

If you tender incentive stock options and those options are accepted for exchange, the new options will be granted as incentive stock options to the maximum extent they qualify. Among other requirements, for options to qualify as incentive stock options, the value of shares subject to options that first become exercisable by the option holder in any calendar year cannot exceed $100,000, as determined using the fair market value of the stock subject to the option as of the grant date. Any excess value is deemed to be subject to a non-qualified stock option.

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U.S. Federal Income Tax Consequences for Outstanding Incentive Stock Options. Under the provisions of Section 422 of the Code, you will not recognize taxable income on the grant to you or the exercise by you of an incentive stock option. You will be taxed only when the stock acquired upon exercise of the incentive stock option is sold or otherwise disposed of in a taxable transaction. If at the time of the sale or disposition you have held the shares for the required holding period (the later of (i) two years from the date the option was granted or (ii) one year from the date of the transfer of the shares to you upon exercise of the option), you will recognize long-term capital gain or loss, as the case may be, based upon the difference between the exercise price and the net proceeds of the sale. However, if you dispose of the shares before the end of the required holding period, you will recognize ordinary income on the disposition in an amount equal to the lesser of (a) the amount of gain on the sale or other disposition; or (b) the amount by which the fair market value of the shares on the date of exercise exceeded the option exercise price, with any excess gain being capital gain, long-term or short-term, depending on whether or not you had held the shares for more than one year on the date of the sale or disposition. If at the time of exercise the option is no longer eligible for treatment as an incentive stock option (e.g., because the option is exercised more than three months after your employment with Radiant terminates, unless the termination results from death or disability), the option will be considered a nonqualified stock option, and the exercise of the option will result in the tax consequences described below. The references above to capital gain or loss treatment assume that you hold the option shares as a capital asset. A sale or other disposition which results in your recognition of ordinary income will also result in a corresponding income tax deduction for Radiant.

Despite the deferral of regular income tax liability provided by incentive stock options, the excess of the fair market value of shares acquired through the exercise of an incentive stock option over the exercise price is taken into account in computing alternative minimum taxable income. As a result, the exercise of an incentive stock option could result in the imposition of an alternative minimum tax liability.

U.S. Federal Income Tax Consequences of Nonqualified Stock Options. Under current law, you generally do not realize taxable income upon the grant of a nonqualified stock option. However, when you exercise the option, the difference between the exercise price of the option and the fair market value of the shares subject to the option on the date of exercise will be treated as taxable compensation income to you, and you will be subject to withholding of income and employment taxes at that time. We will generally be entitled to a deduction equal to the amount of compensation income taxable to you.

The subsequent sale by you of shares acquired pursuant to the exercise of a nonqualified stock option generally will give rise to capital gain or loss equal to the difference between the sale price and the sum of the exercise price paid for the shares plus the ordinary income recognized with respect to the shares at the time of option exercise. The capital gain or loss will be treated as long-term capital gain or loss if you held the shares for more than one year following exercise of the option.

We strongly recommend that you consult your own tax adviser with respect to the federal, state and local tax consequences of participating in the offer.

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14. Certain Tax Consequences for Australia-Based Employees.

If you are an Australian resident employee the exchange of options will be an event which may require you under the Australian Income Tax provisions to calculate whether any assessable income arises from the exchange of the options.

Options issued under the Option Plan are ‘qualifying rights’ for Australian Income Tax purposes. How the Australian Income Tax law will apply if you exchange your options, is dependant upon whether you elected to be assessed in the year of grant for the discount benefit arising from the grant of the options. If you did not make the election there would not have been any discount benefit included in your assessable income in the year of grant. The inclusion of the discount being delayed until the year of exercise of the option.

Where you elected to include the discount as income in the year of grant there should not be any amount required to be included in your assessable income from the disposal of the options. It is likely a capital loss equal to the amount included in your assessable income will be created during the year of the exchange of the options.

If you did not make the election then the exchange of the options will be the time at which the discount is required to be calculated. If the exercise price of the options disposed of is not at least twice the market price of the common stock, then for Australian taxation purposes an amount is likely to be included in your assessable income as a result of the disposal of the options.

The replacement options to be received by you under the exchange of options program will be ‘qualifying rights’ for Australian Tax purposes. Upon the receipt of the replacement options you will be permitted to delay the time at which you are required to include the discount benefit on the replacement options to a later tax year. Alternatively, you may make the election to have the discount calculated at the time of issue and to have the discount included in your assessable income for the year of grant of the options.

The summary as to how the Australian Tax laws may apply to you cannot be taken to be complete advice due to the complexity of the taxation laws. You should therefore considering obtaining your own independent advice as to the operation of the Australian Tax laws.

15. Extension of Offer; Termination; Amendment.

We expressly reserve the right, in our discretion at any time and from time to time, to extend the period of time during which the offer is open and delay accepting any options tendered to us by publicly announcing the extension and giving oral or written notice of the extension to the option holders and making a public announcement thereof. If the offer is extended, then the grant date of the new options will also be extended.

We also expressly reserve the right, in our reasonable judgment, prior to the expiration date to terminate or amend the offer and to postpone our acceptance and cancellation of any options tendered for exchange upon the occurrence of any of the conditions specified in Section 6, by giving oral or written notice of such termination or postponement to the option holders and making a public announcement thereof. Our reservation of the right to delay our acceptance and cancellation of options tendered for exchange is limited by Rule 13e-4(f)(5) promulgated under the Exchange Act, which requires that we must pay the consideration offered or return the options tendered promptly after termination or withdrawal of a tender offer.

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Subject to compliance with applicable law, we further reserve the right, in our discretion, and regardless of whether any event set forth in Section 6 has occurred or is deemed by us to have occurred, to amend the offer in any respect, including, without limitation, by decreasing or increasing the consideration offered in the offer to option holders or by decreasing or increasing the number of options being sought in the offer.

Amendments to the offer may be made at any time and from time to time by public announcement of the amendment. In the case of an extension, the amendment must be issued no later than 9:00 a.m., Eastern Time, on the next business day after the last previously scheduled or announced expiration date. Any public announcement made pursuant to the offer will be disseminated promptly to option holders in a manner reasonably designated to inform option holders of such change. Without limiting the manner in which we may choose to make a public announcement, except as required by applicable law, we have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a press release to the Dow Jones News Service.

If we materially change the terms of the offer or the information concerning the offer, or if we waive a material condition of the offer, we will extend the offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the Exchange Act. These rules require that the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer, other than a change in price or a change in percentage of securities sought, will depend on the facts and circumstances, including the relative materiality of such terms or information.

16. Fees and Expenses.

We will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of options pursuant to this offer to exchange. You will be responsible for any expenses incurred by you in connection with your election to participate in this offer, including, but not limited to, mailing, faxing and telephone expenses, as well as any expenses associated with any tax, legal or other advisor consulted or retained by you in connection with this offer.

17. Additional Information.

This document is part of a Tender Offer Statement on Schedule TO that we have filed with the SEC. This document does not contain all of the information contained in the Schedule TO and the exhibits to the Schedule TO. We recommend that you review the Schedule TO, including its exhibits and any amendments, and the following materials that we have filed with the SEC before deciding whether to tender your options:

(a) Our Annual Report on Form 10-K for the year ended December 31, 2003, as amended;

(b) Our Quarterly Report on Form 10-Q for the quarter ended September 30, 2004; and

(c) The description of our common stock contained in our registration statement on Form 8-A filed with the SEC on January 27, 1997.

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These filings, our other annual, quarterly and current reports, our proxy statements and our other SEC filings may be examined, and copies may be obtained, at the SEC public reference room at 450 Fifth Street, N.W., Room 1024,Washington, D.C. 20549.

You may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the public on the SEC’s Internet site at http://www.sec.gov.

We will also provide without charge to each person to whom a copy of this offer to exchange is delivered, upon the written or oral request of any such person, a copy of any or all of the documents to which we have referred you, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such documents). Requests should be directed to:

Radiant Systems, Inc.

Attention: Corporate Benefits

3925 Brookside Parkway

Alpharetta, Georgia 30022

Telephone: (770) 576-6350

Facsimile: (770) 754-7773

E-mail: corporatebenefits@radiantsystems.com

between the hours of 9:00 a.m. and 4:00 p.m., Atlanta, Georgia local time. As you read the documents listed above, you may find some inconsistencies in information from one document to another. Should you find inconsistencies between the documents, or between a document and this offer to exchange, you should rely on the statements made in the most recent document. The information about Radiant contained in this offer to exchange should be read together with the information contained in the documents to which we have referred you.

18. Forward Looking Statements; Miscellaneous.

This offer to exchange and our SEC reports referred to above contain certain forward-looking statements, including or related to our future results, including certain projections and business trends. Assumptions relating to forward-looking statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. When used in this offer to exchange, the words “estimate,” “project,” “intend,” “believe” and “expect” and similar expressions are intended to identify forward-looking statements. Although we believe that assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate, and we may not realize the results contemplated by the forward-looking statement. Management decisions are subjective in many respects and susceptible to interpretations and periodic revisions based on actual experience and business developments, the impact of which may cause us to alter our business strategy or capital expenditure plans that may, in turn, affect our results of operations. In light of the significant uncertainties inherent in the forward-looking information included in this offer to exchange, you should not regard the inclusion of such information as our representation that we will achieve any strategy, objectives or other plans.

These and other statements, which are not historical facts, are based largely on management’s current expectations and assumptions and are subject to a number of risks and uncertainties that

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could cause actual results to differ materially from those contemplated by such forward-looking statements. These risks and uncertainties include, among others, those found in our Annual Report on Form 10-K for the year ended December 31, 2003, which risks are incorporated herein by reference.

We are not aware of any jurisdiction where the making of the offer is not in compliance with applicable law. If we become aware of any jurisdiction where the making of the offer is not in compliance with any valid applicable law, we will make a good faith effort to comply with such law. If, after such good faith effort, we cannot comply with such law, the offer will not be made to, nor will tenders be accepted from or on behalf of, the option holders residing in such jurisdiction.

We have not authorized any person to make any recommendation on our behalf as to whether you should tender or refrain from tendering your options pursuant to the offer. You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to give you any information or to make any representations in connection with the offer other than the information and representations contained in this document or in the related Letter of Transmittal Form. If anyone makes any recommendation or representation to you or gives you any information, you must not rely upon that recommendation, representation or information as having been authorized by us.

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SCHEDULE A

INFORMATION CONCERNING

THE DIRECTORS AND EXECUTIVE OFFICERS

OF RADIANT SYSTEMS, INC.

The directors and executive officers of Radiant Systems, Inc. and their positions and offices as of December 2, 2004, are set forth in the following table:

Name	Positions and Offices Held
Alon Goren	Chairman of the Board and Chief Technology Officer
John H. Heyman	Chief Executive Officer and Director
Mark E. Haidet	Chief Financial Officer
Andrew S. Heyman	Chief Operating Officer
Carlyle M. Taylor	President – Radiant Computer Products
James S. Balloun	Director
John H. Heyman	Director
J. Alexander Douglas, Jr.	Director
Michael Z. Kay	Director
Alon Goren	Director

The address of each director and executive officer is: c/o Radiant Systems, Inc., 3925 Brookside Parkway, Alpharetta, Georgia 30022.

A - 1

EX-99.A2

EXHIBIT (a)(2)

RADIANT SYSTEMS, INC.

LETTER OF TRANSMITTAL

PURSUANT TO THE OFFER TO EXCHANGE OUTSTANDING STOCK OPTIONS

DATED DECEMBER 2, 2004

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT

11:59 P.M., EASTERN TIME, ON DECEMBER 30, 2004,

UNLESS THE OFFER IS EXTENDED

To: Radiant Systems, Inc.

Attention: Corporate Benefits

3925 Brookside Parkway

Alpharetta, Georgia 30022

Telephone: (770) 576-6350

Facsimile: (770) 754-7773

THIS LETTER MUST BE DELIVERED EITHER TO THE ABOVE ADDRESS

OR VIA FACSIMILE TO THE ABOVE-REFERENCED NUMBER ONLY.

TRANSMISSION VIA E-MAIL WILL NOT BE ACCEPTED.

Pursuant to the terms and subject to the conditions of the Offer to Exchange dated December 2, 2004 and this Letter of Transmittal, I hereby tender the following options to purchase shares of common stock, no par value per share (“Option Shares”), outstanding under the Amended and Restated 1995 Stock Option Plan of Radiant Systems, Inc. (to validly tender such options or portions thereof you must complete the following table according to instructions 2 and 3 on page 5 of this Letter of Transmittal):

Grant Date of Option to be
Tendered ⁽¹⁾ Exercise Price of Option Total Number of Shares
Subject to Option ⁽²⁾ Number of Option Shares
to be Tendered ⁽³⁾

⁽¹⁾ List each option on a separate line even if more than one option was issued on the same grant date.

⁽²⁾ Please provide the total number of Option Shares subject to the entire option in this column.

⁽³⁾ You must tender all of the option shares for a particular option so this number must match that in prior column or state “all.”

To Radiant Systems, Inc.:

Upon the terms and subject to the conditions set forth in the Offer to Exchange dated December 2, 2004 (the “Offer to Exchange”), my receipt of which I hereby acknowledge, and in this Letter of Transmittal (this “Letter” which, together with the Offer to Exchange, as they may be amended from time to time, constitutes the “Offer”), I hereby tender to Radiant Systems, Inc., a Georgia corporation, the options to purchase shares (“Option Shares”) of common stock, no par value per share, of Radiant specified in the table on page 1 of this Letter in exchange for new options. All new options will be subject to the terms of the Amended and Restated 1995 Stock Option Plan of Radiant Systems, Inc. (the “Option Plan”), as applicable, and to a new option agreement between Radiant and me.

Subject to, and effective upon, Radiant’s acceptance for exchange of the tendered options in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), I hereby sell, assign and transfer to, or upon the order of, Radiant all right, title and interest in and to the tendered options.

I hereby represent and warrant that I have full power and authority to tender the tendered options and that, when and to the extent the tendered options are accepted for exchange by Radiant, the tendered options will be free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof (other than pursuant to the applicable option agreement) and the tendered options will not be subject to any adverse claims. Upon request, I will execute and deliver any additional documents deemed by Radiant to be necessary or desirable to complete the exchange of the tendered options pursuant to the Offer.

The name and social security number of the registered holder of the tendered options appears below exactly as it appears on the option agreement or agreements representing the tendered options. In the appropriate boxes of the table, I have listed for each tendered option the grant date of the tendered option, the exercise price, the total number of Option Shares subject to the tendered option and the number of Option Shares I am tendering.

I understand and acknowledge that:

(1) I agree to all of the terms and conditions of the Offer.

(2) I may tender all or a portion of my options outstanding under the Option Plan, and that I am not required to tender any of such options in the Offer. I must also tender any option I received within the six months immediately prior to the date the Offer commenced with an exercise price lower than the exercise price of any other options tendered.

(3) All options properly tendered prior to 11:59 p.m., Eastern Time, on December 30, 2004, unless Radiant has extended the period of time the Offer will remain open (the “Expiration Date”), and not properly withdrawn will be exchanged for new options, upon the terms and subject to the conditions of the Offer, including the conditions described in Sections 1 and 6 of the Offer to Exchange.

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(4) Upon Radiant’s acceptance of the tendered options for exchange, I understand that the option agreement or agreements to which the tendered options are subject will be terminated and the options thereunder will be cancelled. All new options will be subject to the terms and conditions of the Option Plan.

(5) The new options will not be granted until the first business day that is at least six months and one day after the date Radiant accepts for exchange and cancels the tendered options and will have (a) an exercise price equal to the fair market value of Radiant’s common stock on the grant date, as determined by the last reported sale price during regular trading hours of Radiant’s common stock on the Nasdaq National Market on the grant date; (b) generally a vesting schedule of one-third on each of the first three anniversaries of the grant date; and (c) generally a term of five years from the grant date.

(6) I must be an employee of Radiant or one of its subsidiaries from the date I tender the tendered options through the date the new options are granted in order to receive the new options, and, if for any reason I do not remain an employee, I will not receive any new options or any other consideration for the tendered options. Participation in the Offer will not be construed as a right to my continued employment with Radiant or any of its subsidiaries for any period and my employment with Radiant or any of its subsidiaries can be terminated at any time by me or Radiant (or one of its subsidiaries, as applicable), with or without cause or notice.

(7) By tendering the tendered options pursuant to the procedure described in Section 3 of the Offer to Exchange and in the instructions to this Letter, I accept the terms and conditions of the Offer. Radiant’s acceptance for exchange of the tendered options will constitute a binding agreement between Radiant and me upon the terms and subject to the conditions of the Offer.

(8) Under certain circumstances set forth in the Offer to Exchange, Radiant may terminate or amend the Offer and postpone its acceptance and cancellation of any tendered options, and in any such event, the tendered options delivered herewith but not accepted for exchange will be returned to me at the address indicated below.

(9) All options that I choose not to tender for exchange or that are not accepted for exchange, assuming they are not required to be tendered for exchange as described in clause (3) above, shall remain outstanding and retain their current exercise price and vesting schedule.

(10) Radiant has advised me to consult with my own advisers as to the consequences of participating or not participating in the Offer.

All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive, my death or incapacity, and all of my obligations hereunder shall be binding upon my heirs, personal representatives, successors and assigns. Except as stated in the Offer, this tender is irrevocable.

I agree to all of the terms and conditions of the Offer.

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You must complete and sign the following exactly as your name appears on the option agreement or agreements evidencing the tendered options.

SIGNATURE OF OWNER

(Signature of Holder — See Instructions 1 and 4)

Date:                        , 2004

Print Name:                                                                                  

Address:                                                                                        

Telephone No. (with area code):                                          

Tax ID/Social Security No.                                                    

The offer is not being made to (nor will tenders of options be accepted from or on behalf of) holders in any jurisdiction in which the making or acceptance of the offer would not be in compliance with the laws of such jurisdiction.

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INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1. Delivery of Letter of Transmittal. A properly completed and duly executed original of this Letter (or a facsimile thereof), and any other documents required by this Letter, must be received by Radiant at its address set forth on the front cover of this Letter on or before the Expiration Date.

The method by which you deliver any required documents is at your option and risk, and the delivery will be deemed made only when actually received by Radiant. If you elect to deliver your documents by mail, Radiant recommends that you use registered mail with return receipt requested. E-mail delivery will not be accepted. In all cases, you should allow sufficient time to ensure timely delivery.

Tenders of options made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. If the Offer is extended by Radiant beyond that time, you may withdraw your tendered options at any time until the extended expiration of the Offer. In addition, unless Radiant accepts your tendered options before 11:59 p.m., Eastern Time, on December 30, 2004, you may withdraw your tendered options at any time after December 2, 2004 and prior to the Expiration Date. You may also withdraw tendered options after the expiration of 40 business days from the commencement of the Offer (that is, January 28, 2005) if Radiant has not yet accepted the options for payment. To withdraw tendered options you must deliver a Notice of Withdrawal, or a facsimile thereof, with the required information to Radiant while you still have the right to withdraw the tendered options. Withdrawals may not be rescinded and any tendered options withdrawn will thereafter be deemed not properly tendered for purposes of the Offer unless such withdrawn tendered options are properly re-tendered prior to the Expiration Date by following the procedures described above.

To change your election regarding particular tendered options while continuing to elect to tender some options, you must deliver a new Letter of Transmittal, with the required information, following the procedures described above. Upon the receipt of a new Letter of Transmittal, any previously submitted Letter of Transmittal will be disregarded and will be considered replaced in full by the new Letter of Transmittal.

Radiant will not accept any alternative, conditional or contingent tenders. All tendering option holders, by execution of this Letter (or a facsimile of it), waive any right to receive any notice of the acceptance of their tender, except as provided for in the Offer to Exchange.

2. Inadequate Space. If the space provided herein is inadequate, the information requested by the table on page 1 of this Letter regarding the options to be tendered should be provided on a separate schedule attached hereto.

3. Tenders. If you intend to tender options pursuant the Offer, you must complete the table on page 1 of this Letter by providing the following information for each option that you intend to tender: grant date, exercise price, total number of Option Shares subject to the option and number of Option Shares you are tendering. If you decide to tender options, you must tender all options outstanding under any particular grant. If you tender any options, you must tender all options granted within six months

5

prior to the date the Offer commenced with an exercise price lower than the exercise price of any other options tendered.

4. Signatures on This Letter of Transmittal. If this Letter is signed by the holder of the options, the signature must correspond with the name as written on the face of the option agreement or agreements to which the options are subject without alteration, enlargement or any change whatsoever.

5. Requests for Assistance or Additional Copies. Any questions or requests for assistance, as well as requests for additional copies of the Offer to Exchange or this Letter may be directed to Corporate Benefits, at the address and telephone number given on the front cover of this Letter. Copies will be furnished at Radiant’s expense.

6. Irregularities. All questions as to the number of Option Shares subject to options to be accepted for exchange, and the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tender of options will be determined by Radiant in its discretion, which determinations shall be final and binding on all parties. Radiant reserves the right to reject any or all tenders of options Radiant determines not to be in proper form or the acceptance of which may, in the opinion of Radiant’s counsel, be unlawful. Radiant also reserves the right to waive any of the conditions of the Offer and any defect or irregularity in the tender of any particular options, and Radiant’s interpretation of the terms of the Offer (including these instructions) will be final and binding on all parties. No tender of options will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as Radiant shall determine. Neither Radiant nor any other person is or will be obligated to give notice of any defects or irregularities in tenders, and no person will incur any liability for failure to give any such notice.

7. Important Tax Information. You should refer to Sections 13 and 14 of the Offer to Exchange, which contains important tax information.

IMPORTANT: To accept the Offer, this letter (or a facsimile copy thereof) together with all other required documents must be received by Radiant, on or prior to the Expiration Date. You must deliver a properly executed paper copy or facsimile copy of the documents. E-mail delivery will not be accepted.

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EX-99.A3

EXHIBIT (a)(3)

RADIANT SYSTEMS, INC.

NOTICE OF WITHDRAWAL

PURSUANT TO OFFER TO EXCHANGE DATED DECEMBER 2, 2004

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT

11:59 P.M., EASTERN TIME, ON DECEMBER 30, 2004

UNLESS THE OFFER IS EXTENDED

To: Radiant Systems, Inc.

Attention: Corporate Benefits

3925 Brookside Parkway

Alpharetta, Georgia 30022

Telephone: (770) 576-6350

Facsimile: (770) 754-7773

THIS NOTICE MUST BE DELIVERED EITHER TO THE ABOVE ADDRESS OR

VIA FACSIMILE TO THE ABOVE-REFERENCED NUMBER ONLY.

TRANSMISSION VIA E-MAIL WILL NOT BE ACCEPTED.

I previously received a copy of the Offer to Exchange dated December 2, 2004 (the “Offer to Exchange”) and a letter of transmittal (the “Letter of Transmittal” which, together with the Offer to Exchange, constitutes the “Offer”). I signed and returned the Letter of Transmittal in which I tendered some of or all of my options (the “Tendered Options”). I now wish to withdraw my Tendered Options. I understand that by signing this Notice of Withdrawal and delivering it to Corporate Benefits at the address or facsimile number listed above by 11:59 p.m., Eastern Time, on December 30, 2004, I will be able to withdraw my Tendered Options. I have read and understand all the terms and conditions of the Offer to Exchange. I have read and understand the instructions attached to this Notice of Withdrawal.

I understand that by withdrawing the Tendered Options, I will not receive any new options pursuant to the Offer to Exchange and I will keep the options that I have. These options will continue to be governed by the stock incentive plan under which they were granted and by the existing option agreements between Radiant and me.

I understand that I may change this withdrawal, and once again tender options by submitting a new letter of transmittal to Corporate Benefits at the address or facsimile number set forth above prior to 11:59 p.m., Eastern Time, on December 30, 2004.

I have signed this Notice of Withdrawal and printed my name exactly as it appears on the Letter of Transmittal.

I do not tender any options for exchange.

SIGNATURE OF OWNER
X
	(Signature of Holder — See Instructions 1 and 2)

Date:____________________, 2004

Print Name:

Address:

Telephone No. (with area code):

Tax ID/Social Security No.:

RETURN TO CORPORATE BENEFITS NO LATER THAN

11:59 P.M., EASTERN TIME, ON DECEMBER 30, 2004, AT

3925 BROOKSIDE PARKWAY

ALPHARETTA, GEORGIA 30022

FACSIMILE: (770) 754-7773

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1. Delivery of Notice of Withdrawal.

A properly completed and executed original of this Notice of Withdrawal (or a facsimile of it), and any other documents required by this Notice of Withdrawal, must be received by Corporate Benefits at the address or facsimile number on the front cover of this Notice of Withdrawal on or before 11:59 p.m., Eastern Time, on December 30, 2004 (the “Expiration Date”).

THE METHOD BY WHICH YOU DELIVER ANY REQUIRED DOCUMENTS IS AT YOUR OPTION AND RISK, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY RADIANT. YOU MAY HAND DELIVER YOUR NOTICE OF WITHDRAWAL TO CORPORATE BENEFITS AT THE ADDRESS OR FACSIMILE NUMBER LISTED ON THE FRONT COVER OF THIS NOTICE OF WITHDRAWAL. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY.

Although by submitting a Notice of Withdrawal you have withdrawn your tendered options, you may change your mind and re-tender the options until the Expiration Date of the Offer. Tenders of options made through the Offer may be made at any time before the Expiration Date. If the Offer is extended by the Company beyond that time, you may tender your options at any time until the extended expiration of the Offer. To change your mind and elect to participate in the Offer, you must deliver a new Letter of Transmittal, or a facsimile of the Letter of Transmittal, with the required information to the Company, while you still have the right to participate in the Offer. Your options will not be properly tendered for purposes of the Offer unless the withdrawn options are properly re-tendered before the Expiration Date by delivery of the new Letter of Transmittal following the procedures described in the Instructions to the Letter of Transmittal.

IF YOU DO NOT WISH TO WITHDRAW ALL YOUR TENDERED OPTIONS FROM THE OFFER, YOU SHOULD NOT FILL OUT THIS NOTICE OF WITHDRAWAL. IF YOU WISH TO CHANGE YOUR ELECTION WITH RESPECT ONLY TO PARTICULAR OPTIONS, YOU SHOULD SUBMIT A NEW LETTER OF TRANSMITTAL INSTEAD. To change your election regarding particular tendered options while continuing to elect to participate in the Offer, you must deliver a new Letter of Transmittal, with the required information, following the procedures described in the Instructions to the Letter of Transmittal before the Expiration Date or, if the Offer is extended, before the extended expiration of the Offer. Upon the receipt of such a new Letter of Transmittal, any previously submitted Letter of Transmittal or Notice of Withdrawal will be disregarded and will be considered replaced in full by the new Letter of Transmittal.

By signing this Notice of Withdrawal (or a facsimile of it), you waive any right to receive any notice of the withdrawal of the tender of your options, except as provided for in the Offer to Exchange.

2. Signatures on This Notice of Withdrawal.

If this Notice of Withdrawal is signed by the holder of the Options, the signature must correspond with the name as written on the face of the option agreement or agreements to which the options are subject without alteration, enlargement or any change whatsoever.

3. Requests for Assistance or Additional Copies.

Any questions or requests for assistance, as well as requests for additional copies of the Offer to Exchange, the Letter of Transmittal or this Notice of Withdrawal may be directed to Corporate Benefits at the address and telephone number given on the front cover of this Notice of Withdrawal.

4. Irregularities.

All questions as to the validity, form, eligibility (including time of receipt) and acceptance of this withdrawal from the Offer will be determined by the Company in its discretion. The Company’s determinations shall be final and binding on all parties. The Company reserves the right to reject any or all Notices of Withdrawal that the Company determines not to be in proper form or the acceptance of which may, in the opinion of the Company’s counsel, be unlawful. The Company also reserves the right to waive any of the conditions of the Offer and any defect or irregularity in the Notice of Withdrawal, and the Company’s interpretation of the terms of the Offer (including these instructions) will be final and binding on all parties. No Notice of Withdrawal will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with Notices of Withdrawal must be cured within the time as the Company shall determine. Neither the Company nor any other person is or will be obligated to give notice of any defects or irregularities in Notices of Withdrawal, and no person will incur any liability for failure to give any such notice.

IMPORTANT: THE NOTICE OF WITHDRAWAL (OR A FACSIMILE COPY OF IT) TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE COMPANY, ON OR BEFORE THE EXPIRATION DATE.

5. Important Tax Information.

You should refer to Sections 13 and 14 of the Offer to Exchange, which contain important information.

EX-99.A4

Exhibit (a)(4)

[RADIANT LETTERHEAD]

December 2, 2004

Dear Employee Option Holder:

Many of our employees hold stock options that that have been granted under our Amended and Restated 1995 Stock Option Plan (the “Option Plan”) that have exercise prices above the current market value of our stock.

In order to give employees another opportunity to get the best value from their options, I am happy to announce that we are offering you the opportunity to tender for exchange your currently outstanding options (vested and unvested) under the Option Plan (the “Offer”). If you decide to tender options, you must tender all options under any particular grant to us in exchange for new options. In other words, you may not make any partial tenders of a particular option grant. In addition, if you tender any option grants for exchange, you must also tender for exchange all option grants that you received during the six months immediately prior to the date we commenced this offer which have an exercise price which is lower than the exercise price of any other options being tendered. Of course, you have the right to choose not to tender any of your options.

For options with exercise prices of less than or equal to $15.00 per share, the new options will be exercisable for one share of our common stock for every two shares of our common stock issuable upon exercise of a surrendered option. For options with exercise prices greater than $15.00 per share, the new options will be exercisable for one share of our common stock for every three shares of our common stock issuable upon exercise of a surrendered option.

We will grant the new options on the first business day which is at least six months and one day following the date we accept and cancel the tendered options. We expect to grant the new options to you on or about July 1, 2005. Unfortunately, we are not able to simply reprice your current options, offer an immediate grant date, or carry forward current market prices to the grant date because doing so would mandate additional and unfavorable compensation expenses under our accounting and financial reporting requirements.

Please note that this Offer is only to current employees of Radiant and our subsidiaries, with the exception of Director, Vice President and Executive employees, and you must continue to be an employee of Radiant or one of our subsidiaries from the date you tender your options for exchange through the date the new options are scheduled to be granted in order to receive new options. If you do not remain an employee of Radiant or any of our subsidiaries for any reason during such period, you will not receive any new options or any other consideration for the options tendered by you and cancelled.

The terms and conditions of new options will be substantially the same as the terms and conditions of your current options, except as described below and in the Offer to Exchange:

• the per share exercise price of any new options granted to you will equal the fair market value of our common stock on the date we grant the new options, as

determined by the last reported sale price of our common stock on the Nasdaq National Market on the date we grant the new options;

• regardless of whether and to what extent the options that you tender for exchange have vested, any new options granted to you generally will vest in one-third increments on each of the first three anniversary dates of the grant date; and

• regardless of the original term of the options you tender for exchange, all replacement options will have a term of five years, subject to earlier termination in the event of the termination of your employment.

We cannot predict what the price of our common stock will be during the next six months or thereafter. It is possible that the market price of our common stock on the date of grant of any new options issued to you will be higher than the current exercise price of your options. It is also possible that you will no longer be employed with us or any of our subsidiaries at the anticipated time of such new option grant. For these reasons, you should make a decision to tender only after careful, considered thought.

Our board of directors makes no recommendation as to whether you should tender or refrain from tendering your options in the Offer. You must make your own decision whether to tender your options.

This offer is being made under the terms and subject to the conditions of an Offer to Exchange and a related Letter of Transmittal Form which are enclosed with this letter. You should carefully read these documents before you decide whether to tender all or any portion of your options. A tender of options involves risks which are discussed in the Offer to Exchange.

To tender options, you will be required to properly complete and return to us the Letter of Transmittal Form and any other documents specified in that letter by the expiration date of the Offer. You must deliver a properly executed paper copy or facsimile copy of the documents. E-mail delivery will not be accepted.

If you have any questions about the offer, please refer to the documents posted at http://portal.radiant.com/sites/OEP or contact Corporate Benefits at telephone: (770) 576-6350, facsimile: (770) 754-7773 or e-mail: corporatebenefits@radiantsystems.com. We thank you for your continued efforts on behalf of Radiant.

Sincerely,

/s/ John H. Heyman

John H. Heyman, Chief Executive Officer

EX-99.A5

Exhibit (a)(5)

[Radiant Letterhead]

[Date]

Dear Employee Option Holder:

On behalf of Radiant Systems, Inc. (the “Company”), I am writing to provide you with the results of the Company’s recent offer to exchange (the “Offer”) outstanding options (the “Options”) granted under our Amended and Restated 1995 Stock Option Plan (the “Plan”) for new options the Company will grant under the Plan (the “New Options”). All capitalized terms used in this letter which are not defined herein have the meanings given to those terms in the letter of transmittal (the “Letter of Transmittal”) accompanying the Company’s offer to exchange dated December 2, 2004 (the “Offer of Exchange”).

The Offer expired at 12:00 midnight, Eastern time, on December 30, 2004. Promptly following the expiration of the Offer and pursuant to the terms and conditions of the Offer, the Company accepted for exchange Options tendered to it for a total of                      shares of Common Stock and cancelled all such Options. The Company has accepted for exchange and cancelled the number of Options tendered by you equal to the number of Option Shares set forth on Attachment A to this letter.

In accordance with the terms and subject to the conditions of the Offer, you will have the right to receive New Options under the Plan for the number of shares of Common Stock which is equal to the number of Option Shares set forth on Attachment A, as adjusted for any stock splits, stock dividends and similar events. Also in accordance with the terms of the Offer, the terms and conditions of the New Options will be substantially the same as the terms and conditions of the Options you tendered for exchange, except as specified in the Offer, and will include the following terms:

• The per share exercise price under the New Options will equal the fair market value of the Common Stock on the date the Company grants the New Options, as determined the last reported sale price of the Common Stock on the Nasdaq National Market on the date the Company grants the New Options; and

• The vesting schedule of the New Options generally will vest in one-third increments on the first three anniversaries of the grant date.

In accordance with the terms of the Offer, the Company will grant you the New Options on July 1, 2005. At the time, as described in the Offer to Exchange, you will receive a New Option agreement executed by the Company.

In accordance with the terms of the Offer, and as provided in the Plan, you must be an employee of the Company or one of our subsidiaries from the date you tendered options through the New Option grant date in order to receive your New Options. If you do not remain an

employee, you will not receive New Options or any other consideration for the Options tendered by you and cancelled by the Company.

If you have any questions about your rights in connection with the grant of New Options, please refer to the documents posted at http://portal.radiant.com/sites/OEP or contact Radiant Systems, Inc., Attention: Corporate Benefits, 3925 Brookside Parkway, Alpharetta, Georgia 30022, telephone: (770) 576-6350, facsimile: (770) 754-7773 and e-mail: corporatebenefits@radiantsystems.com.

Sincerely,

/s/ John H. Heyman

John H. Heyman, Chief Executive Officer

ATTACHMENT A

(Name of Option Holder)

Total Number of Option Shares Subject to Option Number of Option Shares Subject to Tendered Option Accepted for Exchange Exercise Price of Tendered Option Accepted for Exchange Date of Acceptance of Tender

Number of Option Shares Subject to New Options to be Granted to you on or about July 1, 2005.

EX-99.A6

Exhibit (a)(6)

OPTION EXCHANGE PROGRAM - HIGHLIGHTS

DECEMBER 2 – 30, 2004

WHO:	The Option Exchange program is available to all employees of Radiant Systems that are below the Director level (Leadership Team of Director and above are not eligible to participate). Participation in the Option Exchange Program is completely voluntary.
WHAT:	The Option Exchange program is an opportunity to exchange current stock options for stock options to be granted on July 1, 2005. •      Options with a strike price less than or equal to $15 can be exchanged at a ratio of 2:1 (i.e. 2 higher-priced stock options can be exchanged for 1 new stock option to be granted in the future). An exchange ratio higher than 1:1 is more palatable to our shareholders and the investment community and still provides opportunity to get value out of underwater stock options. •      Options with a strike price of greater than $15 can be exchanged on a ratio of 3:1 (i.e. 3 higher-priced stock options can be exchanged for 1 new stock option to be granted in the future). •      New stock options will be granted after satisfying the minimum “black out” period of 6 months and one day from the cancellation date of exchanged options, per accounting rules (please refer to the 6-Month “black out” period under Important Terms on the following page). •      The strike price for the new stock options will be fair market value on new grant date, and they will vest over 3 years in 1/3 increments beginning with the first anniversary of the new grant date. The new stock options will generally expire 5 years from the date of issue, or July 1, 2010.
WHY:	Many of our employees hold stock options that have exercise prices above the current market value of our stock. Over 825,000 options held by employees are priced over US$10, some as high as US$45.00. The goal of the Option Exchange program is to give employees additional opportunities to get value out of current stock options.
WHEN:	The four-week Election Period to participate in the Option Exchange begins on December 2, 2004 when the program is filed with the Securities and Exchange Commission and expires on December 30, 2004 at 11:59 p.m. EST. Cancellation of exchanged options will be the next business day after the expiration of the Election Period, or December 31, 2004. The new grant date will be July 1, 2005.
YOU WILL RECEIVE AN INFORMATION PACKET WITH ADDITIONAL INSTRUCTIONS WITHIN THE NEXT WEEK. THE INFORMATION BELOW IS AN OVERVIEW OF THE MECHANICS OF THE OPTION EXCHANGE PROGRAM.
•      You can elect to exchange any outstanding option grants. Outstanding option grants are options that have not been exercised, whether vested or unvested. To help you identify the option grants you have available for exchange, refer to the column titled “Outstanding” on the Personnel Option Status document included in your information packet.
•      You can elect to exchange as many outstanding option grants as you would like (e.g., all grants priced over a certain amount); however, option grants must be exchanged all or none. If you have exercised a portion of an option grant, you may elect to exchange the remaining portion of the grant as long as you exchange all of the remaining options in that grant. For example, assume you were granted 500 options and you exercised 125 options last year, leaving you with 375 options remaining in the grant. You can elect to exchange all 375 but cannot elect to only exchange a portion of those remaining (less than 375).
•      If you elect to exchange any options, you are also required to exchange any options received during the 6 month period immediately preceeding the start date of the Offer Exchange whose strike price is equal to or less than any of the option grants you are exchanging due to accounting rules. Please refer to 6-month “look back” period under Important Terms on the following page.
•      Your elections must be made via the Letter of Transmittal that will be included in your information packet. The Letter of Transmittal must be returned to the Corporate Benefits department by December 30, 2004 at midnight Eastern Standard Time. We cannot accept Letters of Transmittal after the expiration of the Election Period since the cancellation date is the following business day, December 31, 2004.
•      The new options are Incentive Stock Options for U.S. tax purposes, unless the IRS US$100,000 rule is triggered, in which case some of those options must be categorized as Non-Qualified stock options. Tax laws vary from country to country, so please consult a tax accountant for expert advice.
John Heyman, our CEO, will be hosting a series of Information Sessions to give you an opportunity to learn more about the Option Exchange Program and to ask additional questions. The schedule for the Info Sessions will be sent via email. Please carefully consider participating in this opportunity to exchange higher-priced stock options for new options to be granted on July 1, 2005.

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IMPORTANT TERMS
6 - Month Look Back Period	For regulatory accounting reasons, there is a 6-month “look back” period that must be considered if you decide to exchange any option grant. This means that if you decide to exchange options, you must also exchange any options received during the previous 6 months where the strike price of the options received during the 6 month “look back” is equal to or less than any of the option grants you tender for exchange. The 6 month “look back” period is calculated backwards using the first day of the election period.
Election Period	The 4-week period of time in which employees have to decide whether to participate in the Option Exchange program.
Cancellation Date	The date on which options tendered for exchange under the Option Exchange program will be cancelled. The cancellation date is the next business day following the expiration of the Election Period.
6 - Month Black Out Period	For regulatory accounting reasons, there is also a 6-month-and-1-day “black out” period whereby options cannot be granted to participants in an Option Exchange until at least 6 months & 1 day have passed. The “black out” period creates risk to both the employer and the employee, which causes employers to consider the financial implications before offering such a program and employees to consider several things – potential rise in the stock price during the “black out” period which could cause the strike price of the new options to be greater than the strike price of the exchanged options, the fact that the vesting schedule starts over at a new grant date, and the fact that options cannot be granted to Option Exchange program participants during the “black out” period.
New Grant Date	The date the new options will be granted.

TIMELINE
6-month look back date Jun 2, 2004	Election Period Begins Dec 2, 2004	Election Period Ends Dec 30, 2004	Cancellation Date Dec 31, 2004	New Grant Date July 1, 2005

6-month “look back” (6 months prior to first day of Election Period) Election period         (4-weeks)             6-month “black out” (minimum 6 months + 1 day       after cancellation date)

EXAMPLES
Example 1 Grant1 – Apr 15, 2000 $26.00 Grant2 – Jun 15, 2004 $10.00	You elect to exchange Grant1 with strike price of $26.00. You ARE required to exchange Grant2 options because they were granted during the 6 month “look back” period and have a strike price less than $26.00.
Example 2 Grant3 – Apr 15, 2000 $26.00 Grant4 – May 15, 2003 $10.00	You elect to exchange Grant3 with strike price of $26.00. You ARE NOT required to exchange Grant4 options because they were not granted during the 6 month “look back” period even though they have a strike price less than $26.00.
Example 3 Grant5 – Jun 15, 2001 $12.50 Grant6 – Jul 15, 2004 $15.50	You elect to exchange Grant5 with strike price of $12.50. You ARE NOT required to exchange Grant6 even though they were granted during the 6 month look back period because the strike price of these options is greater than the strike price of Grant5.
Info is posted at http://portal.radiant.com/sites/oep. PLEASE CONTACT CORPORATE BENEFITS IF YOU HAVE ANY QUESTIONS: 770-576-6690, corporatebenefits@radiantsystems.com
John Heyman, our CEO, will be hosting a series of Information Sessions to give you an opportunity to learn more about the Option Exchange Program and to ask additional questions. The schedule for the Info Sessions will be sent via email. Please carefully consider participating in this opportunity to exchange higher-priced stock options for new options to be granted on July 1, 2005.

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EX-99.A7

EXHIBIT(a)(7)

[E-mail to Employees Eligible to Participate in Option Exchange Program]

We are pleased to announce the Option Exchange program, open to employees December 2 through December, 30, 2004. Many of our employees hold stock options that have exercise prices above the current market value of our stock. The Option Exchange gives employees an opportunity to reprice options by exchanging current option grants for future option grants.

Details about the program including legal documents, instructions on how to participate, and Atlanta’s schedule of information sessions hosted by John Heyman (targeted communications for international & Dallas will follow): http://portal.radiant.com/sites/OEP. Please take the time to attend meetings which will provide additional information about the mechanics of the Option Exchange and allow you to get any questions answered.

Corporate Benefits will provide each employee a summary of individual options eligible for exchange during the Option Exchange. Documents will be provided no later than Friday, December 3rd, and to participate you must enroll between December 2 and December 30, 2004.

EX-99.D5I

Exhibit (d)(5)(i)

Notice of Grant of Stock

Option Agreement

December 2, 2004

LASTFIRST	BUILDING
ADDRESS
CITYSTATEZIP

Effective GRANTDATE you have been granted an Incentive Stock Option to buy SHARES shares of Radiant Systems, Inc. (the Company) stock at $PRICE per share.

The total option price of the shares granted is $TOTAL.

Shares in each period will become fully vested on the date shown.

Shares	Full Vest	Expiration
XXXX	XXXX	XXXX
XXXX	XXXX	XXXX
XXXX	XXXX	XXXX
XXXX	XXXX	XXXX

By your signature and the Company’s signature below, you and the Company agree that these options are granted under and governed by the terms and conditions of the Company’s Stock Option Plan as amended. A copy of which is available on the Company’s internal network at the Public Folders>All Public Folders>Company Reference>Benefits Information>Stock Plan. Refer to the posting titled 1995 Stock Option Plan Amended & Restated.

Radiant Systems Inc.	Date
LASTFIRST	Date

Please review the above information, sign, and return this document to the Corporate Benefits department in Brookside I. The company will countersign and return a copy for your records.

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EX-99.D5II

Exhibit (d)(5)(ii)

RADIANT SYSTEMS, INC.

STOCK OPTION AGREEMENT

(AUSTRALIAN EMPLOYEE)

THIS STOCK OPTION AGREEMENT (“Option Agreement”) made and entered into this XX day of XX, XX (the “Date of Grant”) by and between Radiant Systems, Inc. (the “Company”) and XX XX (“Employee”);

WITNESSETH:

The Board of Directors of the Company has adopted (1) that certain Amended and Restated 1995 Stock Option Plan, as amended (the “U.S. Plan”), a copy of which is attached hereto as Exhibit ”A” and incorporated herein by reference, and (2) that certain Australian Addendum to the U.S. Plan, a copy of which is attached hereto as Exhibit “B” and incorporated herein by reference (the “Australian Addendum,” and together with the U.S. Plan, the “Plan”). Pursuant to the terms of the Plan, the Board of Directors has selected Employee to participate in the Plan and desires to grant to Employee certain stock options to purchase shares of the Company’s authorized Common Stock, no par value per share (“Stock”), subject to the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual promises, agreements and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. INCORPORATION OF PLAN PROVISIONS

This Option Agreement is subject to and is to be construed in all respects in a manner which is consistent with the terms of the Plan, the provisions of which are hereby incorporated by reference into this Option Agreement. Unless specifically provided otherwise, all terms used in this Option Agreement shall have the same meaning as in the Plan.

2. GRANT OF OPTION

Subject to the further terms and conditions of this Option Agreement, Employee is hereby granted an option to purchase XX shares of Stock, effective as of the date first written above. This stock option is not intended to be an Incentive Stock Option as provided in § 422 of the Internal Revenue Code (United States), but is intended to be a “qualifying right” pursuant to Australian law.

3. OPTION PRICE

The price for each share of Stock purchased under this Option Agreement shall be AUD XX the Australian Dollar Equivalent of U.S.$XX. As used herein, the term “Australian Dollar Equivalent” shall mean, with respect to any monetary amount expressed in U.S. Dollars, such amount converted to Australian Dollars at the U.S./Australian currency exchange rate published by [National Australia Bank] on the business day immediately preceding the date on which this option or any portion thereof is exercised.

4. EXPIRATION OF OPTIONS

Notwithstanding anything to the contrary contained herein, the option to acquire Stock pursuant to this Option Agreement shall expire (to the extent not previously fully exercised) upon the first to occur of

the following:

(a) the fifth anniversary of the Date of Grant;

(b) the date which is three (3) months following the date upon which Employee ceases his employment with the Company or any subsidiary of the Company, otherwise than as a result of Employee’s death or total disability;

(c) the date which is the first anniversary of the date upon which Employee ceases to be employed by the Company, or any subsidiary of the Company, by reason of Employee’s death or total disability; and

(d) the date upon which Employee ceases his employment with the Company or any subsidiary of the Company, for any reason, including death or total disability, with respect to any portion of this option that is not then exercisable on the date Employee ceases his employment with the Company.

5. EXERCISE OF OPTION

Unless options hereunder shall earlier lapse or expire pursuant to Article 4 hereof, this option may be exercised as follows:

(i) as of the first anniversary of the Date of Grant, XX shares;

(ii) as of the second anniversary of the Date of Grant, an additional XX shares; and

(iii) as of the third anniversary of the Date of Grant, an additional XX shares.

To the extent this option becomes exercisable in accordance with the foregoing, Employee may exercise this option, in whole or in part, from time to time. The option exercise price may be paid by Employee either in cash, or, in the event that an organized trading market in the Stock exists on the date of exercise of the option, by surrender of other shares held by Employee of the Stock of the Company; provided that the shares surrendered have been held by Employee for more than six months on the date of surrender.

For the purposes of this Article 5, an “organized trading market” shall be deemed to exist on the date of exercise of the option if: (a) the Stock is listed on a national securities exchange, or (b) the Stock has been quoted on the Nasdaq Stock Market for the 15 trading days preceding the date of exercise of the option, or (c) bid and asked quotations for the Stock have been published by the National Quotation Bureau or other recognized inter-dealer quotation publication (other than Nasdaq) during 20 of the 30 trading days preceding the date of exercise of the option. In the event that an organized trading market for the Stock exists on the date of exercise of the option, Employee shall be given credit against the option exercise price hereunder for such shares surrendered equal to (i) if the Stock is listed on a national securities exchange or is quoted on the Nasdaq National Market, the last actual sales transaction price reported on the day preceding exercise of the option, or, if there were no actual sales transactions reported for such date, on the date next preceding such date on which actual sales transactions were reported, or (ii) if the Stock is quoted on Nasdaq (other than the Nasdaq National Market) or by the National Quotation Bureau or other recognized inter-dealer quotation publication, the average of the high and low price quotations on the day preceding exercise of the option, or, if there were no price quotations for such date, on the date next preceding such date on which there were high and low price quotations for the Stock.

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6. MANNER OF EXERCISE

This stock option may be exercised by written notice to the Secretary of the Company specifying the number of shares to be purchased and signed by Employee or such other person who may be entitled to acquire Stock under this Option Agreement. If any such notice is signed by a person other than Employee, such person shall also provide such other information and documentation as the Secretary of the Company may reasonably require to determine that such person is entitled to acquire Stock under the terms of the Plan and this Option Agreement. After receipt of the notice and any other information and documentation requested by the Company under this Article 6, and upon receipt of the full option price, the Company shall issue to the person giving notice of exercise under this Option Agreement the number of shares specified in such notice.

7. RESTRICTIONS ON TRANSFERABILITY

The stock option granted hereunder shall not be transferable by Employee otherwise than by will or by the laws of descent and distribution, and such stock option shall be exercisable during Employee’s lifetime only by Employee.

8. FURTHER RESTRICTIONS ON EXERCISE AND SALE OF STOCK

Employee acknowledges and understands that the Stock subject to this Option Agreement is subject to certain restrictions on transferability. In addition, the Stock subject to this Option Agreement is not registered under the Corporations Law (Australia) (the “Local Law”). Each option shall be subject to the requirement that if at any time the Board of Directors shall determine, in its discretion, that the listing, registration or qualification of the shares subject to such option upon any securities exchange or under any state or federal law, or the consent or approval of any government regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of such option or the issue or purchase 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 Board of Directors. The costs of any such listing, registration, qualification, consent or approval shall be paid by the Company.

9. REORGANIZATION

In the event that dividends are payable in Common Stock of the Company or in the event there are splits, subdivisions or combinations of shares of Common Stock of the Company, the number of Shares available under the Plan shall be increased or decreased proportionately, as the case may be, and the number of Shares deliverable upon the exercise thereafter of any Option theretofore granted shall be increased or decreased proportionately, as the case may be, without change in the aggregate purchase price.

In case the Company is merged or consolidated with another corporation and the Company is not the surviving corporation, or in case the property or stock of the Company is acquired by another corporation, or in case of a separation, reorganization, recapitalization or liquidation of the Company, the Board of Directors of the Company, or the Board of Directors of any corporation assuming the obligations of the Company hereunder, shall either (i) make appropriate provision for the protection of any outstanding Options by the substitution on an equitable basis of appropriate stock of the Company, or of the merged, consolidated or otherwise reorganized corporation which will be issuable in respect to the shares of Common Stock of the Company, provided only that the excess of the aggregate fair market value of the shares subject to option immediately after such substitution over the purchase price thereof is not more than the excess of the aggregate fair market value of the shares subject to option immediately before such substitution over the purchase price thereof, or (ii) upon written notice to the Employee provide that this option (including the shares not then exercisable) must be exercised within sixty (60) days of the date of such notice or it will be terminated.

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IN WITNESS WHEREOF, the Company has caused this Option Agreement to be executed by a member of the Board of Directors or a duly authorized officer of the Company, and Employee has executed this Option Agreement as of the date first written above.

RADIANT SYSTEMS, INC.
By:
	John Heyman Chief Financial Officer

“EMPLOYEE”

    XXX

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