Back to GetFilings.com
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from: __________ to __________
Commission file number : 0-16569
CAM COMMERCE SOLUTIONS, INC.
(Exact name of registrant as specified in its Charter)
DELAWARE 95-3866450
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
17520 NEWHOPE STREET
FOUNTAIN VALLEY, CALIFORNIA 92708
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (714) 241-9241
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Title of each class
-------------------
Common Stock $.001 par value
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K.
The aggregate market value of voting stock held by non-affiliates of
the Registrant as of December 5, 2001 was approximately $10,391,000.
As of December 5, 2001, there were outstanding 3,023,000 shares of
common stock of the Registrant.
DOCUMENTS INCORPORATED BY REFERENCE.
Part II Annual Report to Stockholders for
fiscal year ended September 30, 2001
PART I
ITEM 1. BUSINESS
- --------------------------------------------------------------------------------
GENERAL
Except for the historical information contained herein, this Annual Report on
Form 10-K contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed in this report. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in this section as
well as the section entitled "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations."
THE COMPANY
CAM Commerce Solutions, Inc. (the "Company") was incorporated in California in
1983, and reincorporated in Delaware in 1987. The Company's principal business
is to provide total commerce solutions for small to medium size, traditional
retailers and web retailers. These solutions are based on the Company's open
architecture software products for managing inventory, point of sale, sales
transaction processing and accounting. In addition to software, these solutions
often include hardware, installation, training, service and consulting provided
by the Company. Sales, service, research, and development are located in
California and Nevada, while the Company's customers are located throughout the
United States.
WORKPRO ACQUISITION
In November 2000, the Company acquired the customer base, source code and
application code for the Work Pro software. The acquisition was accounted for
using the purchase method of accounting. The total amount of cash paid was
$600,000 for the purchase of both intangible and tangible assets, of which
$580,000 has been capitalized as an intangible asset. This intangible asset is
being amortized over a five-year period. Effective October 1, 2002 this
intangible asset will no longer be amortized but instead, will be subject to
annual impairment tests in accordance with Statement 142, Goodwill and Other
Intangible Assets. Work Pro software is used by customers in the retail paint
store industry.
THE SYSTEMS
The Company offers four turn key systems:
(1) THE CAM SYSTEM -- designed for hard goods retailers whose inventory is
re-orderable in nature.
(2) THE PROFIT$ SYSTEM -- designed for apparel and shoe retailers whose
inventory is seasonable in nature, and color and size oriented.
(3) THE RETAIL STAR SYSTEM -- a Windows-based system designed to incorporate
multiple functions of both the CAM and Profit$ systems.
(4) THE MICROBIZ SYSTEM -- a Windows-based system designed for single store
hard goods retailers that are generally smaller in size than customers
that utilize the CAM System.
Each of the Company's systems offer the ability to obtain: (i) automated pricing
of each item; (ii) billing for charge account customers; (iii) printing of a
customer invoice; (iv) tracking of inventory count on an item by item basis; (v)
computation of gross profit, dollars and/or percentage of each item; and (vi)
tracking of sales by clerk and department by hour, day and/or month. In
addition, the Company's systems provide full management reporting including zero
sales reports, inventory ranking, overstock and understock, sales analysis,
inventory valuation (cost, average cost and retail) and other reports. The
systems can also provide accounting functions including accounts receivable,
accounts payable, and general ledger.
1
The Company's systems integrate Intel-based personal computers, computer point
of sale stations, hand-held and table top barcode laser scanners, terminal or
computer work stations, printers, and the Company's software. The Company is
able to adapt its software to existing Intel-based personal computer. Each
system is configured to meet the customer's particular needs and, as a result,
the components included in each system, including the personal computer,
printer, point of sale station and the Company's software, depend on the needs,
the size and the industry type of the customer.
The Company's software is derived from software originally designed and
subsequently licensed to (or acquired by) the Company by Retail Solutions, Inc.,
for the CAM system, by MicroStrategies, Inc., for the Profit$ system, by
Teamsoft, Inc. for the Retail Star system, by MicroBiz Inc. for the MicroBiz
system. The Company continues to make modifications and enhancements to the
software.
The Company provides an entire system to each customer on a "turn key" basis, in
that the Company provides all of the hardware and the software as well as the
installation of a system on the customer's premises. All systems, except the
MicroBiz system, are capable of handling multiple stores for a given customer.
In a multiple-store system, the Company typically installs a computer network.
The server computer at each store communicates with the server computer at the
customer's main office. The main server computer compiles all information from
the other locations for processing and reporting.
INVENTORY MANAGEMENT
The Company believes that inventory control is the most important and time
consuming task facing the management of retail stores. Each of the Company's
systems were designed to address the retailer's need for simpler and yet more
accurate means of controlling a large and diverse inventory. All inventory
information, once entered into the system, is updated for each sale that is
transmitted from the point of sale station to the main computer. The systems are
able to provide for the following managerial reports:
(1) POPULARITY RANKING. The systems will report on the popularity of each
item in the store by producing a report listing each item of inventory
ranked according to the number of sales of each item. The report is
generated automatically and can produce a list of daily, weekly,
monthly, year-to-date and/or trailing 13 months of sales basis. The
systems will also analyze the popularity data and indicate to the
retailer which particular items of inventory are needed and which items
are overstocked.
(2) ZERO SALES REPORT. The systems provide a sales analysis on a monthly and
year-to-date basis for inventory items for which no sales have been
made. The analysis can be reported on a total sales basis or on a
departmental or item level basis.
(3) INVENTORY TABULATION AND VALUATION. The systems provide reports listing
all inventory on hand, the valuation of such inventory on a cost and
retail basis, the average cost of each item in inventory, and all items
of inventory on order but not yet received.
(4) AUTOMATIC PURCHASING. The systems provide a report listing all items
that should be ordered based upon historical data stored in the system,
including the number of items in inventory, the number on the shelf, the
number on order and the minimum quantities required. The systems can
also automatically provide a purchase order if desired.
(5) PRICING. The systems are capable of producing price stickers in 20
customized label formats, assigning Uniform Purchase Code numbers and
printing barcodes directly upon the price labels for reading by laser
scanners. In addition, if there is a price change, the systems will
automatically update the pricing information and, if desired, print new
pricing labels.
(6) REPORTS. The systems permit the retailer to customize and produce
reports and forms utilizing data in the system in a format preferred by
the retailer.
ACCOUNTING MANAGEMENT
The CAM System is capable of performing accounting functions through the M.A.S.
90(R) accounting software available from the Company. The Company has developed
its own accounting software, which is integrated to its Retail Star software
product.
2
SERVICE AND SUPPORT
Customer service and support is a critical element in maintaining customer
satisfaction. For a monthly fee, each purchaser of a system receives service and
support from the Company. The service and support provided by the Company
includes:
(1) HARDWARE SERVICE. The Company offers hardware service to its customers
on a time and material billing basis. The Company's service
representatives are trained to determine the source of the problem or
malfunction in the hardware and, once determined, replace the defective
component. Defective components are either repaired at the Company's
facility or sent to a manufacturer's authorized service center for
repair.
(2) TECHNICAL PHONE SUPPORT AND SOFTWARE ENHANCEMENTS. The Company provides
technical support by troubleshooting the customer's systems problems via
the telephone and via modem. The Company, while not performing any
significant customizing of its software for particular customers, is
receptive to comments from customers concerning the Company's software.
Such comments, together with planned enhancements to the software,
result in improvements, which are provided without additional cost to
all customers on a service contract.
(3) INSTALLATION AND TRAINING. In order to assure customers that they will
be able to properly integrate the Company's system into their business,
the Company offers on-site installation and training on the use and
application of the system to each customer. The training can take place
at the Company's in-house training facility or at the customer location.
The amount of training required depends upon the knowledge and
experience of the user plus the complexity of the business to which the
system is being implemented. The Company also offers training to its
customers via the telephone.
MARKETING
DIRECT SALES
The Company markets its systems primarily through the Company's direct sales
force consisting of thirty-eight salespersons and sales associates, all of whom
work exclusively for the Company. The Company's marketing efforts extend
nationwide with offices in the states of California, Nevada, Washington,
Colorado, Georgia, Minnesota, Florida, Missouri, Massachusetts and New Jersey.
Each salesperson is assigned a specific geographical territory and is
responsible for following up on sales leads in that territory. Each salesperson
is provided with a sales kit and demonstration equipment. Each salesperson is
trained by the Company to be able to define the needs of the potential customer,
recommend a system configuration, and provide appropriate price quotes. Upon the
execution of a typical sales contract, the Company is generally able to install
an entire system within four to six weeks. The Company is paid directly by the
customer or by third-party leasing companies. Compensation for salespeople is
based on a percentage of gross profit for each system sold.
BROCHURES, TRADE SHOWS, AND ADVERTISING MEDIA
The Company markets its systems by advertising in trade journals, the World Wide
Web, and other print media targeted at retail businesses, by attending industry
specific trade shows, by using sales promotional videos, and by direct mail
advertising.
SOURCES OF SUPPLY
The computer hardware, which makes up the Company's systems, consists primarily
of standard components purchased by the Company from outside distributors and
includes products such as Intel-based personal computers, Okidata (printers),
Symbol Technologies (hand-held laser scanners and portable data terminals),
Ithaca (40-column printers), and U.S. Robotics (modems). For most computer
hardware components, the Company has more than one source of supply.
3
BACKLOG
The Company purchases component hardware for its systems based upon system
purchase orders and its forecast of demand for its products. Orders from
customers are usually shipped by the Company pursuant to an agreed upon
schedule. However, orders may be canceled or rescheduled by the customer with a
minimal penalty. For this reason, management believes such backlog information
is not indicative of the Company's future sales or business trends and is
subject to fluctuation. As of December 5, 2001, backlog was approximately
$401,000 as compared to $1,031,000 on December 5, 2000. Backlog is based upon
purchase orders placed with the Company which the Company believes are firm
orders.
COMPETITION
The industry in which the Company operates is highly competitive. The Company
competes with suppliers dedicated to one type of business and suppliers of
software that provide functions similar to the Company's software. Most
competitors sell their products through independent dealers on a regional basis.
The Company sells on a direct sales basis.
The Company competes on the basis of the capabilities and features of its
systems. It believes the Windows-based Retail Star software product gives it a
competitive advantage because some of the Company's competitors are still
selling DOS-based software products. The Company considers its systems to have
greater capabilities for the small and medium size retailers than suppliers of
other systems. Included among such capabilities are ongoing software
enhancement, and a service organization in place to support the customer after
the initial sale.
The Company also competes with vertical market suppliers of automated retail
systems, which include hardware and software intended for use by a particular
retail industry segment. Some of these suppliers compete with the Company on the
basis of lower pricing.
The ability of the Company to meet competition will depend upon, among other
things, the Company's ability to maintain its marketing effort, increase the
capabilities of its systems through ongoing enhancements and improvements, and
to obtain financing when, and if, needed.
PATENTS AND TRADEMARKS
The Company has federal trademark registrations pending for the following two
trademarks: Retail Star, Retail Ice, Retail America, I.Star and X-charge. The
Company relies on a combination of trade secrets, copyright laws, and technical
measures to protect its rights to its proprietary software. The software
included in a system is not accessible by customers for purposes of revisions or
copying, as the Company does not release the software source code to customers.
The Company holds no patents and believes that its competitive position is not
materially dependent upon patent protection. The Company believes that most of
the technology used in the design and manufacture of most of the Company's
products is generally known and available to others. Consequently, there are no
assurances that others will not develop, market and sell products substantially
equivalent to the Company's products, or utilize technologies similar to those
used by the Company. Although the Company believes that its products do not
infringe on any third party's patents, there is no assurance that the Company
will not become involved in litigation involving patents or proprietary rights.
Patent and proprietary rights litigation entails substantial legal and other
costs, and there is no assurance that the Company will have the necessary
financial resources to defend or prosecute its rights in connection with any
litigation. Responding to, defending or bringing claims related to the Company's
rights to its intellectual property may require the Company's management to
redirect its resources to address these claims, which could have a material
adverse effect on the Company's business, financial condition and results of
operations.
SEASONALITY
The Company believes that seasonality has not had a significant effect on its
business.
4
SOFTWARE DEVELOPMENT
The Company's software has been developed using a modular approach. Modular
designing allows a programmer to incorporate, replace or delete parts of a
computer software program without affecting the operation of the remaining parts
of the program. Accordingly, modular design facilitates the development of the
Company's software and new products enabling the Company's programmers to
incorporate entire sections from existing programs into the designs for such
products. The incorporation of existing software, which has already been fully
tested, into new products, reduces the time and expense that the Company would
otherwise incur in developing and enhancing its products.
The Company spent approximately $2,187,000, $2,035,000, and $1,607,000 on
software development, including amounts capitalized during the years ended
September 30, 2001, 2000, and 1999, respectively. The Company anticipates that
it will continue to incur software development costs in connection with
enhancements and improvements of its software and the development of new
products. These activities may require an increase in the Company's programming
and technical staff.
EMPLOYEES
As of September 30, 2001, the Company had 185 full time employees, including 15
employed in finance and administration, 32 in programming and quality assurance,
46 in sales and marketing, 26 in training and installation, 50 in technical
support, 11 in operations and 5 in consulting.
None of the Company's employees are represented by a labor union and the Company
believes that it enjoys harmonious relationships with its employees.
ENVIRONMENTAL REGULATIONS
There has been no material effect on the Company from compliance with
environmental regulations.
ITEM 2. PROPERTIES
- --------------------------------------------------------------------------------
The Company currently leases approximately 22,000 square feet of space in
Fountain Valley, California pursuant to a five-year lease expiring April 1,
2002, at an average annual rent of approximately $192,000. This facility houses
the Company's corporate headquarters which includes: executive and
administrative offices, service and support staff, system integration, and
inventory warehouse. The Company signed a five-year lease agreement for
approximately 26,000 square feet of space for a new building in Fountain Valley,
at an average annual rent of $343,000, with the expected move in date in March
2002.
In addition, the Company also leases the following properties: (i) approximately
11,000 square feet of office space in Henderson, Nevada, which houses the
Company's research and development team, the inside sales and telemarketing
group, and the accounting services division on a ten-year lease that expires
March 31, 2007, at an average annual rent of $136,000; (ii) approximately 3,600
square feet of office space in Upper Saddle River, New Jersey for MicroBiz
Division on a three-year lease that expires August 31, 2004; and (iii) various
immaterial month-to-month leases for sales offices throughout the country.
ITEM 3. LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------
Because of the nature of its business, the Company is from time to time
threatened or involved in legal actions. The Company does not believe any of the
legal actions now pending against it will result in material adverse effect on
the Company and, further, does not consider that any such proceedings fall
outside ordinary, routine litigation incidental to the business of the Company.
5
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- --------------------------------------------------------------------------------
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
6
PART II
PURSUANT TO GENERAL INSTRUCTION G (2), ITEMS 5, 6, 7, AND 8 HAVE BEEN OMITTED
SINCE THE REQUIRED INFORMATION IS CONTAINED IN THE COMPANY'S 2001 ANNUAL REPORT
TO STOCKHOLDERS PURSUANT TO RULE 14A-3(b), WHICH IS INCORPORATED HEREIN BY
REFERENCE BELOW.
- -----------------------------------------------------------------------------------------
FORM 10-K ANNUAL REPORT TO STOCKHOLDERS
- -----------------------------------------------------------------------------------------
ITEM 5: MARKET FOR REGISTRANT'S COMMON PAGE 16: STOCK AND DIVIDEND DATA
EQUITY AND RELATED STOCKHOLDER'S MATTERS
- -----------------------------------------------------------------------------------------
ITEM 6: SELECTED FINANCIAL DATA PAGE 17: SELECTED FINANCIAL DATA SEE NOTE
(A) BELOW
- -----------------------------------------------------------------------------------------
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS PAGES 4-5: MANAGEMENT'S DISCUSSION AND
OF FINANCIAL CONDITION AND RESULTS OF ANALYSIS OF FINANCIAL CONDITION AND
OPERATIONS RESULTS OF OPERATIONS
- -----------------------------------------------------------------------------------------
ITEM 8: FINANCIAL STATEMENTS AND SEE BELOW
SUPPLEMENTARY DATA
- -----------------------------------------------------------------------------------------
Note (A) The selected financial data incorporated herein by reference to the
Company's 2001 Annual Report to Stockholders as of September 30, 2001 and 2000
and for each of the years in the three-year period ended September 30, 2001,
have been derived from the Company's audited financial statements included
elsewhere in this report by reference. The selected financial data as of
September 30, 1999 and for the years ended September 30, 1998 and 1997 have been
derived from audited financial statements of the Company not included herein.
The data is qualified in its entirety by reference to, and should be read in
conjunction with, the Company's financial statements and related notes, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this report by reference.
Information for Item 8 is included in the Company's consolidated financial
statements as of September 30, 2001 and 2000, and for each of the years in the
three-year period ended September 30, 2001, and the Company's unaudited
quarterly financial data for the two years ended September 30, 2001 and 2000, on
pages 6 through 15 and page 17, respectively, of the Company's 2001 Annual
Report to Stockholders which is hereby incorporated by reference. The report of
the independent auditors is included on page 16 of the Annual Report to
Stockholders.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- --------------------------------------------------------------------------------
INTEREST RATE RISK
At September 30, 2001 and 2000, the Company's cash equivalents and short-term
investments were approximately $9,451,000 and $10,444,000, respectively. Since
the Company typically does not purchase fixed-income securities, its cash
equivalents are not subject to significant interest rate risk. The Company
places substantially all of its interest bearing investments with major
financial institutions and by policy limits the amount of credit exposure to any
one financial institution. Additionally, the Company does not hold or issue
financial instruments for trading, profit or speculative purposes.
EQUITY PRICE RISK
The Company does not invest in available-for-sale equity securities, and is not
subject to significant equity price risk.
7
FOREIGN EXCHANGE RATE RISK
The Company does not operate internationally and, therefore, is not subject to
market risk from changes in foreign exchange rates.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
- --------------------------------------------------------------------------------
None.
8
PART III
MANAGEMENT
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
- --------------------------------------------------------------------------------
As of September 30, 2001, the executive officers and directors of the Company
and their ages are as follows:
- --------------------------------------------------------------------------------
NAME AGE POSITION WITH THE COMPANY
- --------------------------------------------------------------------------------
Geoffrey D. Knapp 43 Chief Executive Officer,
Chairman of the Board, and
Secretary
- --------------------------------------------------------------------------------
Greg Freeze 42 Chief Operating Officer
- --------------------------------------------------------------------------------
Paul Caceres 41 Chief Financial Officer
and Chief Accounting
Officer
- --------------------------------------------------------------------------------
Walter W. Straub 58 Director
- --------------------------------------------------------------------------------
Corley Phillips 47 Director
- --------------------------------------------------------------------------------
David A. Frosh 43 Director
- --------------------------------------------------------------------------------
Scott Broomfield 44 Director
- --------------------------------------------------------------------------------
GEOFFREY D. KNAPP, founder of the Company, has been a Director, and an officer
of the Company since its organization in September 1983. Mr. Knapp received a
bachelor's degree in marketing from the University of Oregon in 1980.
GREG FREEZE is the Chief Operating Officer of the Company, hired in 1998 as Vice
President of Software Support. Prior to joining the Company, Greg has held
numerous positions in several software companies including Ultimate Southern
California (1985-1988), Legal Management Systems (1988-1995), and DataWorks
(1995-1998). Positions held included: programmer/analyst; senior programmer
analyst; classroom training manager; telemarketing manager; account executive;
marketing manager and vice president. Mr. Freeze holds a bachelor's degree in
Business Administration and a MBA degree in International Business from
California State University, Fullerton. He also holds the CPIM title awarded by
the American Production and Inventory Control Society.
PAUL CACERES has been the Chief Financial Officer and Chief Accounting Officer
of the Company since September 1987. From 1982 to 1987, Mr. Caceres worked in
Public Accounting and was employed by Arthur Young & Company, the predecessor to
Ernst & Young LLP, as an Audit Senior and in 1987, was promoted to Audit
Manager. Mr. Caceres is a Certified Public Accountant, licensed in the state of
California. He received a bachelor's degree in business administration from the
University of Southern California in 1982.
WALTER W. STRAUB has been a Director of the Company since May 1989. From October
1983 to the present he has also served as the President, Chief Executive and
Director or Rainbow Technologies, Inc., a public company engaged in the business
of designing, developing, manufacturing and marketing of proprietary computer
related security products. Mr. Straub received a bachelor's degree in electrical
engineering in 1965 and a master's degree in finance in 1970 from Drexel
University.
CORLEY PHILLIPS joined the Company as Director in September 1996. Mr. Phillips
is an independent investor. From 1996 to 1997, Mr. Phillips served as President,
CEO and Director for Telephone Response Technologies, a Roseville,
California-based developer of computer technology software. From 1995 to 1996,
Mr. Phillips served as Vice President of marketing and product support for State
of The Art, an
9
accounting software company based in Irvine, California. From 1990 to 1994, Mr.
Phillips served as President and CEO of Manzanita Software Systems, a developer
of Windows-based accounting software. From 1984 to 1990, Mr. Phillips was
President and co-founder of Grafpoint, a developer of software for computer
applications based in San Jose, California. Mr. Phillips has also held various
sales and marketing positions with Envision Technology and Hewlett-Packard. Mr.
Phillips holds both a bachelor's degree and a master's degree in electrical
engineering from Washington University in St. Louis, Missouri, as well as a
master's degree in business administration from Santa Clara University in Santa
Clara, California.
DAVID A. FROSH has been a member of the board of directors since August 1991. He
is presently the President of Sperry Van Ness, a commercial real estate
brokerage firm. Mr. Frosh was employed by CAM Commerce as President from June
1996 to March 2001. From June 1990 to June 1996, Mr. Frosh was employed as sales
executive for the national accounts division of Automatic Data Processing "ADP".
ADP provides computerized transaction processing, data communications and
information services. From June 1988 to June 1990, Mr. Frosh served as Director
of Marketing for Optima Retail Systems, a privately held company, which
manufactured and marketed inventory control systems for the retail apparel
industry. Mr. Frosh received a bachelor's degree in marketing from Central
Michigan University in 1980 and a master's degree in business administration
from Claremont Graduate School in 1999.
SCOTT BROOMFIELD has over 20 years experience, with 15 years direct experience
with high technology firms and companies in distress. He is presently the CEO of
VisualE, a start-up software company specializing in solutions that enable
businesses to rapidly deploy business systems that can be modified quickly to
meet constantly changing business requirements. From 1998 through 2001, Scott
was the CEO of Centura Software Corporation, a $55 million software company,
where he was recruited to return capital for the investors. He was successful in
the repositioning Centura to wireless computing and accomplished a ten-fold
capital return to its major investors, before eventually selling the business to
Platinum Equity Holdings. From 1989 through 1997, he was a principal with Hickey
& Hill, Inc. a business turn around management firm. In this capacity, as a
principal, he held senior operational, financial and advisory positions with
Trilogy Systems, Dazix, DEC, Etec, InVision and Samsung. Mr. Broomfield holds an
MBA from Santa Clara University.
The terms of office of directors expire at the next Annual Meeting of
Shareholders, or at such time as their successors have been duly elected and
qualified.
Directors who are not officers of the Company are entitled to an expense
reimbursement for attending meetings. Officers serve at the discretion of the
Board of Directors.
There are no arrangements or understandings by or between any director or
executive officer and any other person(s), pursuant to which he or she was or is
to be selected as a director or officer, respectively.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of the
Company's common stock to file reports of ownership and changes in ownership
with the Securities and Exchange Commission "SEC". Officers, directors, and
greater than ten percent shareholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file. Based solely on a
review of the copies of such reports furnished to the Company, the Company
believes all Section 16(a) filing requirements applicable to all such persons
were complied with during the fiscal year covered by this report.
CERTAIN SIGNIFICANT EMPLOYEES
The Company does not have any significant employees who are not officers.
FAMILY RELATIONSHIPS
There are no family relationships by or between any director and officer of the
Company.
10
ITEM 11. EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
The following table sets forth information concerning compensation paid by the
Company for services rendered to the Company during fiscal year ended September
30, 2001, and the prior two fiscal years, to the Company's Chief Executive
Officer and each additional executive officer whose total compensation exceeded
$100,000 (each "Named Executive Officer"):
- ------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM
COMPENSATION
- ------------------------------------------------------------------------------------------
AWARDS
- ------------------------------------------------------------------------------------------
SECURITIES
NAME AND UNDERLYING
PRINCIPAL OTHER ANNUAL OPTIONS/ ALL OTHER
POSITION YEAR SALARY BONUS(1) COMPENSATION SARS (#) COMPENSATION(2)
- ------------------------------------------------------------------------------------------
Geoffrey Knapp 2001 $266,000 $ -- -- 0 $2,000
Chairman of the 2000 $242,000 $ -- -- 0 $8,000
Board and CEO 1999 $223,000 $140,000 -- 0 $9,000
- ------------------------------------------------------------------------------------------
Paul Caceres 2001 $141,000 $ -- -- 0 $5,000
CFO and CAO 2000 $141,000 $ -- -- 0 $4,000
1999 $137,000 $ 62,000 -- 0 $5,000
- ------------------------------------------------------------------------------------------
(1) Bonuses paid to the Named Executive Officers are pursuant to annual
incentive compensation programs established each year for selected
employees of the Company, including the Company's executive officers.
Under this program, performance goals, relating to such matters as sales
growth, gross profit margin and net income as a percentage of sales and
individual efforts were established each year. Incentive compensation,
in the form of cash bonuses, was awarded based on the extent to which
the Company and the individual achieved or exceeded the performance
goals.
(2) All other compensation consists of interest on employee notes payable to
the Company and the amortization of the notes that was declared
compensation during the year.
STOCK OPTIONS GRANTED AND EXERCISED DURING 2001
- -----------------------------------------------------------------------------------------
OPTION GRANTS IN FISCAL YEAR 2001 -- INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------------------
% OF POTENTIAL REALIZABLE
NUMBER OF TOTAL VALUE AT ASSUMED
SHARES OPTIONS ANNUAL RATES OF
UNDERLYING GRANTED EXERCISE STOCK PRICE
OPTIONS TO OR BASE APPRECIATION FOR
GRANTED EMPLOYEES PRICE EXPIRATION OPTION TERM
NAME NUMBER(1) IN 2001 ($/SHARE) DATE 5%($)/10%($)
- -----------------------------------------------------------------------------------------
Geoffrey Knapp -- -- -- -- --
- -----------------------------------------------------------------------------------------
Greg Freeze 15,000 5% $3.56 4/26/11 $34,000/$85,000
- -----------------------------------------------------------------------------------------
Paul Caceres 15,000 5% $3.56 4/26/11 $34,000/$85,000
- -----------------------------------------------------------------------------------------
(1) Options granted in fiscal 2001 vest over a four year period.
(2) The exercise price was equal to the market price on the date of grant.
The following table sets forth certain information concerning options exercised
by the Named Executive Officers during the fiscal year covered by this report,
and outstanding options at the end of such year held by the Named Executive
Officers.
11
- --------------------------------------------------------------------------------
AGGREGATE OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES
- --------------------------------------------------------------------------------
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES VALUE SEPT. 30, 2001 AT SEPT. 30, 2001
ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (1) UNEXERCISABLE UNEXERCISABLE
- --------------------------------------------------------------------------------
Geoff Knapp -- -- 95,000/35,000 $76,000/$--
- --------------------------------------------------------------------------------
Greg Freeze -- -- 2,000/13,000 $--/$--
- --------------------------------------------------------------------------------
Paul Caceres -- -- 31,000/24,000 17,000/$--
- --------------------------------------------------------------------------------
(1) Market value of the underlying securities at the exercise date minus the
exercise price of the options.
REPORT OF COMPENSATION COMMITTEE
TO: THE BOARD OF DIRECTORS
As members of the Compensation Committee, it is our duty to review and recommend
the compensation levels for members of the Company's management, evaluate the
performance of management and administer the Company's various incentive plans.
This Committee has reviewed in detail the Compensation of the Company's three
executive officers. In the opinion of the Committee, the compensation of the
three executive officers of the Company is reasonable in view of its performance
and the respective contributions of such officers to the Company's performance.
In determining the management compensation, this Committee compares the
compensation paid to management to the level and structure of compensation paid
to management of competing companies. Additionally, the Committee considers the
sales and earnings performance of the Company compared to competing and
similarly situated companies. The Committee also takes into account such
relevant external factors as general economic conditions, geographic market of
work place, stock price performance and stock market prices.
Management compensation is comprised of 60% to 70% of fixed salary, and 30% to
40% variable compensation based on performance factors. Stock options are
granted at the discretion of the Board of Directors, and there is no set minimum
or maximum amount of options that can be issued. Performance factors that
determine management compensation are sales, net income of the Company, and
individual performance.
The committee examines compilations of executive compensation such as various
industry compensation surveys for middle market companies. In 2001, the
compensation for the Chief Executive Officer and the other executive officers
was comparable to other Chief Executive Officers and executive offices of middle
market companies in related industries.
Mr. Knapp, a member of the Committee, is also an executive officer of the
Company. However, Mr. Knapp abstained from any considerations with respect to
any decision directly affecting his compensation.
COMPENSATION COMMITTEE
WALTER STRAUB, SCOTT BROOMFIELD, AND GEOFFREY D. KNAPP
DECEMBER 1, 2001
12
1993 STOCK OPTION PLAN
In April 1993, the shareholders of the Company approved the Company's 1993 Stock
Option Plan (the "1993 Plan") under which non-statutory options may be granted
to key employees and individuals who provide services to the Company, at a price
not less than the fair market value at the date of grant, and expire ten years
from the date of grant. The options are exercisable based on vesting periods as
determined by the Board of Directors. The Plan allows for the issuance of an
aggregate of 1,200,000 shares of the Company's common stock. The Plan has a term
of ten years. There have been 1,154,000 options granted under the 1993 Plan as
of September 30, 2001.
2000 STOCK OPTION PLAN
In April 2000, the Board of Directors of the Company approved the Company's 2000
Stock Option Plan (the "2000 Plan") under which non-statutory options may be
granted to key employees and individuals who provide services to the Company, at
a price not less than the fair market value at the date of grant, and expire ten
years from the date of grant. The options are exercisable based on vesting
periods as determined by the Board of Directors. The Plan allows for the
issuance of an aggregate of 500,000 shares of the Company's common stock. The
Plan term is unlimited in duration. There have been 319,000 options granted
under the 2000 Plan as of September 30, 2001.
401-K PLAN
In July 1991, the Company adopted a contributory profit-sharing plan under
Section 401(k) of the Internal Revenue Code, which covers substantially all
employees. Under the plan, eligible employees are able to contribute up to 15%
of their compensation. The Company's contributions are at the discretion of the
board of directors. There was no Company contribution for the fiscal year ended
September 30, 2001.
STOCK PRICE PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total returns for the
Company, the Nasdaq Composite Stock Market Index and the Nasdaq Computer and
Data Processing Services Index, during the period commencing on September 30,
1996 and ending on September 30 2001. The comparison assumes $100 was invested
on September 30, 1996 in each of the Common stock, the Nasdaq Stock Market
Composite Index, and the Nasdaq Computer and Data Processing Services Stock
Index and assumes the reinvestment of all dividends, if any.
13
[PERFORMANCE GRAPH]
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----
NASDAQ STOCK MARKET 100 137 139 228 302 124
NASDAQ COMPUTER & DATA PROCESSING 100 135 175 298 374 134
SERVICES STOCKS
CAM COMMERCE SOLUTIONS STOCK 100 62 74 224 108 70
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- --------------------------------------------------------------------------------
The following table sets forth as of September 30, 2001, certain information
regarding ownership of the Company's Common Stock by (i) each person that the
Company knows is the beneficial owner of more than 5% of the Company's
outstanding Common Stock, (ii) each director and executive officer of the
Company who owns Common Stock and (iii) all directors and officers as a group.
- --------------------------------------------------------------------------------
SHARES BENEFICIALLY OWNED
- --------------------------------------------------------------------------------
NAME AND ADDRESS OF AMOUNT & NATURE OF PERCENTAGE OF CLASS
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNER(9) (10)
- --------------------------------------------------------------------------------
Common Stock Geoffrey D. Knapp(1) 396,000(2) 11.8%
- --------------------------------------------------------------------------------
Common Stock Paul Caceres(1) 31,000(3) 0.9%
- --------------------------------------------------------------------------------
Common Stock Walter W. Straub(1) 107,000(4) 3.2%
- --------------------------------------------------------------------------------
Common Stock David Frosh(1) 59,000(5) 1.8%
- --------------------------------------------------------------------------------
Common Stock Corley Phillips(1) 49,000(6) 1.5%
- --------------------------------------------------------------------------------
Common Stock Scott Broomfield(1) 23,000(7) 0.7%
- --------------------------------------------------------------------------------
Common Stock Greg Freeze(1) 2,000(8) 0.5%
- --------------------------------------------------------------------------------
Common Stock All Directors and
Officers as a Group
(of 6 persons)(1) 666,000 20.4%
- --------------------------------------------------------------------------------
(1) The address of each beneficial owner is in care of CAM Commerce Solutions,
Inc., 17520 Newhope Street, Fountain Valley, California 92708.
14
(2) Includes (i) an aggregate of 3,100 shares of Common Stock held in trust for
three daughters of Mr. Geoffrey Knapp over which he has shared voting power
(ii) options to purchase an aggregate of 10,000 shares until the sooner of
October 12, 2002, or twelve months after ceasing to serve as a director at
a price of $2.34 per share. (iii) options to purchase an aggregate of
50,000 shares until the sooner of October 20, 2003 or twelve months after
ceasing to serve as a director at a price of $1.93 per share (iv) options
to purchase an aggregate of 20,000 shares until the sooner of December 16,
2006 or twelve months after ceasing to serve as a director at a price of
$3.75 per share (v) options to purchase an aggregate of 50,000 shares until
the sooner of August 2, 2010 or twelve months after ceasing to serve as a
director at a price of $5.91 per share.
(3) Includes options to purchase (i) an aggregate of 15,000 shares of Common
Stock until January 3, 2004, at a price of $2.13 per share (ii) options to
purchase an aggregate of 10,000 shares until December 16, 2006, at a price
of $3.75 per share (iii) options to purchase an aggregate of 15,000 shares
until August 2, 2010, at a price of $5.37 per share (iv) options to
purchase an aggregate of 15,000 shares until April 26, 2011, at a price of
$3.56 per share.
(4) Includes options to purchase (i) an aggregate of 7,500 shares until the
sooner of October 19, 2003, or twelve months after ceasing to serve as a
director at a price of $1.75 per share (ii) an aggregate of 7,500 shares
until the sooner of May 25, 2005, or twelve months after ceasing to serve
as a director at a price of $2.38 per share (iii) an aggregate of 7,500
shares until the sooner of May 9, 2006, or twelve months after ceasing to
serve as a director at a price of $2.50 per share (iv) an aggregate of
7,500 shares until the sooner of May 8, 2007, or twelve months after
ceasing to serve as a director at a price of $3.38 per share (v) an
aggregate of 4,400 shares until the sooner of May 8, 2007, or twelve months
after ceasing to serve as a director at a price of $3.38 per share (vi) an
aggregate of 10,000 shares until the sooner of May 7, 2008, or twelve
months after ceasing to serve as a director at a price of $2.75 per share
(vii) an aggregate of 7,500 shares until the sooner of May 6, 2009, or
twelve months after ceasing to serve at a director at a price of $5.38 per
share (viii) an aggregate of 7,500 shares until the sooner of August 2,
2010, or twelve months after ceasing to serve as a director at a price of
$5.38 per share (ix) an aggregate of 7,500 shares until the sooner of April
5, 2011, or twelve months after ceasing to serve as a director, at a price
of $3.56 per share.
(5) Includes options to purchase (i) an aggregate of 7,500 shares until the
sooner of May 9, 2006, or twelve months after ceasing to serve as a
director at a price of $5.50 per share (ii) an aggregate of 40,000 shares
until June 10, 2006, at a price of $2.50 per share (iii) an aggregate of
4,400 shares until the sooner of May 8, 2007 or twelve months after ceasing
to serve as a director, at a price of $3.38 per share (iv) an aggregate of
7,500 shares until the sooner of April 5, 2011, or twelve months after
ceasing to serve as a director, at a price of $3.56 per share.
(6) Includes options to purchase (i) an aggregate of 5,000 shares until the
sooner of September 23, 2006, or twelve months after ceasing to serve as a
director at a price of $2.50 per share (ii) an aggregate of 7,500 shares
until the sooner of May 8, 2007, or twelve months after ceasing to serve as
a director at a price of $3.38 per share (iii) an aggregate of 10,000
shares until the sooner of May 7, 2008, or twelve months after ceasing to
serve as a director at a price of $2.75 per share (iv) an aggregate of
7,500 shares until the sooner of May 6, 2009, or twelve months after
ceasing to serve as a director at a price of $5.38 per share (v) an
aggregate of 7,500 shares until the sooner of August 2, 2010, or twelve
months after ceasing to serve as a director at a price of $5.38 per share
(vi) an aggregate of 7,500 shares until the sooner of April 5, 2011, or
twelve months after ceasing to serve as a director, at a price of $3.56 per
share.
(7) Includes options to purchase (i) an aggregate of 7,500 shares until the
sooner of May 6, 2009, or twelve months after ceasing to serve at a
director at a price of $5.38 per share (ii) an aggregate of 360 shares
until the sooner of April 22, 2009, or twelve months after ceasing to serve
as a director at a price of $5.25 per share (iii) an aggregate of 7,500
shares until the sooner of August 2, 2010, or twelve months after ceasing
to serve at a director at a price of $5.38 per share (iv) an aggregate of
7,500 shares until the sooner of April 5, 2011, or twelve months after
ceasing to serve as a director, at a price of $3.56 per share.
(8) Includes options to purchase an aggregate of 15,000 shares, until the
sooner of April 26, 2011, at a price of $3.56 per share.
(9) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage
15
ownership of that person, shares of Common Stock subject to options or
warrants held by that person that are currently exercisable, or will become
exercisable within 60 days from the date hereof, are deemed outstanding.
Such shares, however, are not deemed outstanding for purposes of computing
the percentage ownership of any other person.
(10) The percentage of ownership of the class of voting securities in the above
table has been calculated by dividing (i) the aggregate number of shares of
such class actually owned plus all shares of such class which may be deemed
to be "beneficially owned," by (ii) the number of shares of such class
actually outstanding plus the number of shares of such class such
"beneficial owner" may be deemed to "beneficially own" assuming no other
acquisitions of shares of such class through the exercise of any option,
warrant or right by any other person.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
During the fiscal year ended September 30, 2001, the Company granted
non-qualified options to certain employees and directors to purchase an
aggregate of 324,000 shares of Common Stock of the Company at a price ranging
from $3.56 to $7 per share expiring ten years from the date of grant. The
Company leases a building from an officer of the Company. The Company paid
$144,000 in lease payments to the officer during the fiscal year ended September
30, 2001.
16
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
- --------------------------------------------------------------------------------
(a) 1. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements required to be filed hereunder are listed
on page 7 hereof. See Part II, Item 8 of this report for information regarding
the incorporation by reference herein of such financial statements.
(a) 2. CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
The following financial statement schedule of the Company is included on the
page hereof indicated below:
Page
Schedule II - Valuation and Qualifying Accounts 24
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and, therefore, have been omitted.
(a) 3. OTHER EXHIBITS
3(a) Certification of Incorporation of the Company, as amended (incorporated by
reference to Exhibit 3(a) to the 1988 Annual Report on Form 10-K filed on
January 12, 1989 -- SEC File No. 0-16569).
3(b) By-Laws of the Company (incorporated by reference to Exhibit 3(b) to the
S-18 Registration Statement filed July 13, 1987 -- SEC File No. 33-15821-LA).
10(a) Company's Lease for premises at Fountain Valley, California (incorporated
by reference to Exhibit 10(b) to the 1988 Annual Report on Form 10-K filed on
January 12, 1989 -- SEC File No. 0-16569).
10(b) 1993 Stock Option Plan (incorporated by reference to the exhibits on Form
S-8 Registration Statement filed on June 21, 1993).
10(c) Individual Option Agreements (incorporated by reference to the exhibits on
Form S-3 SEC File No. 33-57564 Registration Statement filed on June 17, 1993).
10(d) Extension to Company's Lease for premises at Fountain Valley, California
(incorporated by reference to Exhibit 10 (i) to the 1993 Annual Report on Form
10-K filed on December 27, 1993 --SEC File No. 0-16569).
10(e) Employment Agreement, and Change in Control Agreements for Geoffrey D.
Knapp, dated January 1, 1996, (incorporated by reference to Exhibits 10 (h) and
(i) to the Form 10-Q for the period ended March 31, 1996, filed on May 7, 1996).
10(f) Employment Agreement, and Change in Control Agreements for Paul Caceres,
dated January 1, 1996, (incorporated by reference to Exhibits 10 (j) and (k) to
the Form 10-Q for the period ended March 31, 1996, filed on May 7, 1996).
17
10(h) Amendment to 1993 Stock Option Plan (incorporated by reference to the
exhibits on Form S-8 Registration Statement filed on June 26, 1998).
10(i) 2000 Stock Option Plan (incorporated by reference to Exhibit 10(i) to the
2000 Annual Report on Form 10-K filed on December 21, 2000).
10(j) Fountain Valley New Office Lease Agreement.
13(a) Annual Report to Stockholders for the fiscal year ended September 30,
2001.
23 Consent of Independent Auditors.
(b) REPORTS ON FORM 8-K
There was no Form 8-K filed during the year ended September 30, 2001.
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be filed on its
behalf by the undersigned, thereunto duly authorized.
CAM COMMERCE SOLUTIONS, INC.
By: /s/ Geoffrey D. Knapp
---------------------------------
Geoffrey D. Knapp,
Chief Executive Officer
By: /s/ Paul Caceres.
---------------------------------
Paul Caceres,
Chief Financial Officer and Chief
Accounting Officer
Date: December 20, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
/s/ Geoffrey D. Knapp Chief Executive December 20, 2001
- ----------------------- Officer and Chairman
Geoffrey D. Knapp of the Board
/s/ David Frosh Director December 20, 2001
- -----------------------
David Frosh
/s/ Walter W. Straub Director December 20, 2001
- -----------------------
Walter W. Straub
/s/ Corley Phillips Director December 20, 2001
- -----------------------
Corley Phillips
/s/ Scott Broomfield Director December 20, 2001
- -----------------------
Scott Broomfield
19
CAM COMMERCE SOLUTIONS, INC.
INDEX TO
CONSOLIDATED FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULE
ITEM 14(a)
Page Reference
--------------
Annual Report
to Stockholders Form 10-K
--------------- ---------
Report of Independent Auditors 16
Consolidated Balance Sheets at
September 30, 2001 and 2000 6
Statements of Consolidated Operations for the Years
Ended September 30, 2001, 2000 and 1999 7
Statements of Consolidated Cash Flows for the Years
Ended September 30, 2001, 2000 and 1999 8
Statement of Consolidated Stockholders' Equity
for the Years Ended September 30, 2001,
2000 and 1999 9
Notes to Consolidated Financial Statements 10-15
Report of Independent Auditors on
Financial Statement Schedule 21
II. Valuation and Qualifying Accounts
for the Years Ended September 30, 2001, 2000 and 1999 24
Consent of Independent Auditors 24
All other financial statement schedules are omitted as the required information
is inapplicable or the information is presented in the financial statements or
related notes.
20
REPORT OF INDEPENDENT AUDITORS ON FINANCIAL STATEMENT SCHEDULE
The Board of Directors
CAM Commerce Solutions, Inc.
We have audited the consolidated financial statements of CAM Commerce Solutions,
Inc. as of September 30, 2001 and 2000, and for each of the three years in the
period ended September 30, 2001, and have issued our report thereon dated
November 9, 2001. Our audits also included the financial statement schedule of
CAM Commerce Solutions, Inc. listed in the accompanying index to consolidated
financial statements and financial statement schedule (Item 14(a)). This
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion on this schedule based on our audits.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
/s/ ERNST & YOUNG LLP
Orange County, California
November 9, 2001
21
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3(a) Certification of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 3(a) to the 1988 Annual
Report on Form 10-K filed on January 12, 1989 -- SEC File No.
0-16569).
3(b) By-Laws of the Company (incorporated by reference to Exhibit 3(b)
to the S-18 Registration Statement filed July 13, 1987 -- SEC
File No. 33-15821-LA).
10(a) Company's Lease for premises at Fountain Valley, California
(incorporated by reference to Exhibit 10(b) to the 1988 Annual
Report on Form 10-K filed on January 12, 1989 -- SEC File No.
0-16569).
10(b) 1993 Stock Option Plan (incorporated by reference to the exhibits
on Form S-8 Registration Statement filed on June 21, 1993).
10(c) Individual Option Agreements (incorporated by reference to the
exhibits on Form S-3 SEC File No. 33-57564 Registration Statement
filed on June 17, 1993).
10(d) Extension to Company's Lease for premises at Fountain Valley,
California (incorporated by reference to Exhibit 10 (i) to the
1993 Annual Report on Form 10-K filed on December 27, 1993 --SEC
File No. 0-16569).
10(e) Employment Agreement, and Change in Control Agreements for
Geoffrey D. Knapp, dated January 1, 1996, (incorporated by
reference to Exhibits 10 (h) and (i) to the Form 10-Q for the
period ended March 31, 1996, filed on May 7, 1996).
10(f) Employment Agreement, and Change in Control Agreements for Paul
Caceres, dated January 1, 1996, (incorporated by reference to
Exhibits 10 (j) and (k) to the Form 10-Q for the period ended
March 31, 1996, filed on May 7, 1996).
22
10(h) Amendment to 1993 Stock Option Plan (incorporated by reference to
the exhibits on Form S-8 Registration Statement filed on June 26,
1998).
10(i) 2000 Stock Option Plan (incorporated by reference to Exhibit
10(i) to the 2000 Annual Report on Form 10-K filed on December
21, 2000).
10(j) Fountain Valley New Office Lease Agreement.
13(a) Annual Report to Stockholders for the fiscal year ended September
30, 2001.
23 Consent of Independent Auditors.
23
CAM COMMERCE SOLUTIONS, INC.
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED SEPTEMBER 30, 2001, 2000, AND 1999
- ------------------------------------------------------------------------------------------
(REDUCTIONS)/
BALANCE AT ADDITIONS DEDUCTIONS/ACCOUNTS
BEGINNING OF CHARGED TO WRITTEN OFF NET BALANCE AT END
YEAR INCOME OF RECOVERIES OF YEAR
- ------------------------------------------------------------------------------------------
Allowance for Doubtful Accounts Receivable
- ------------------------------------------------------------------------------------------
2001 $310,000 $108,000 $168,000 $250,000
- ------------------------------------------------------------------------------------------
2000 $380,000 $417,000 $487,000 $310,000
- ------------------------------------------------------------------------------------------
1999 $235,000 $490,000 $345,000 $380,000
- ------------------------------------------------------------------------------------------
24