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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 December 31, 2000
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 No.: 0-9233
AMERICAN MANAGEMENT SYSTEMS, INCORPORATED
(Exact name of registrant as specified in its charter)
State of Incorporation: Delaware I.R.S. Employer
Identification No.: 54-0856778
4050 Legato Road
Fairfax, Virginia 22033
(Address of principal executive office)
Registrant's Telephone No., Including Area Code: (703) 267-8000
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: Common Stock
Par Value $0.01
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 March 23, 2001 was $695,949,284.
As of March 23, 2001, 41,590,108 shares of common stock were outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
1. Pursuant to Form 10-K General Instruction G(2), registrant
hereby incorporates by reference those portions of the American Management
Systems, Incorporated 2000 Financial Report necessary to respond to items 5, 6,
7, 7A and 8 of this Form 10-K.
2. Pursuant to Form 10-K General Instruction G(3), registrant
hereby incorporates by reference those portions of the American Management
Systems, Incorporated definitive Proxy Statement for the Annual Meeting of
Shareholders to be held May 11, 2001 necessary to respond to items 10, 11, 12,
and 13 of this Form 10-K.
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CONTENTS
Page
----
Part I Item 1. Business..................................................................... 1
Item 2. Properties................................................................... 4
Item 3. Legal Proceedings............................................................ 5
Item 4. Submission of Matters to a Vote of Security Holders.......................... 6
Part II Item 5. Market for the Registrant's Common Stock
and Related Stockholder Matters.............................................. 7
Item 6. Selected Financial Data...................................................... 7
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................................... 7
Item 7A. Quantitative and Qualitative Disclosures About Market Risk................... 7
Item 8. Financial Statements and Supplementary Data.................................. 7
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure....................................... 7
Part III Item 10. Directors and Executive Officers of the Registrant........................... 8
Item 11. Executive Compensation....................................................... 8
Item 12. Security Ownership of Certain Beneficial Owners
and Management............................................................... 8
Item 13. Certain Relationships and Related Transactions............................... 8
Part IV Item 14. Exhibits, Financial Statements and Schedules,
and Reports on Form 8-K...................................................... 9
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PART I
ITEM 1. BUSINESS
OVERVIEW
The business of American Management Systems, Incorporated and
its wholly owned subsidiaries ("AMS" or the "Company") is to partner with
clients to achieve breakthrough performance through the intelligent use of
information technology. AMS is the premier provider of Next Generation
Enterprise business and technology solutions that dramatically improve business
performance and create value for clients. AMS provides a full range of
consulting services from strategic business analysis to the full implementation
of solutions. AMS's suite of next generation products, deep industry expertise
and business alliances provide a foundation of management and technology
services that integrate the latest technologies with existing IT infrastructures
and internal processes providing productivity gains for clients. AMS measures
success based on the results and business benefits achieved by its clients.
The Company focuses on expanding its delivery of enterprise-wide
business solutions - including eBusiness solutions - tailored to clients in
financial services, new media and communications, federal, state and local
governments as well as health care and utilities. These solutions help firms
achieve greater cost savings, deliver improved customer service and leverage
cross-sell and up-sell opportunities in their markets.
AMS is a trusted business partner for many of the largest and
most respected organizations in the markets in which it specializes. AMS is a
company that transforms organizations into Next Generation Enterprises. A key
element of this is establishing an extensive network of strategic alliances,
partnerships and joint ventures to provide "best of breed" solutions and to
extend AMS's market reach in all of the Company's target markets. Each year,
approximately 85% of the Company's business comes from clients it worked with in
previous years.
The Company, which operates as one segment, focuses on clients
in specific industries, which are referred to as target markets. The Company is
targeting high value sectors within these target markets and striving to be the
market leader in providing Next Generation Enterprise solutions. Organizations
in AMS's target markets - new media and communications firms; financial services
institutions; state and local governments and education organizations; federal
government agencies; and other corporate clients -- have a crucial need to
exploit the potential benefits of information and systems integration
technology. The Company helps clients fulfill this need by ensuring quality
project execution and continuing to build a professional staff, which is
composed of experts in the necessary technical and functional disciplines. The
Company is focused on consolidating operating activities to create new
opportunities for growth and leveraging its deep industry knowledge and existing
client relationships to support that growth.
A significant component of AMS's business is the development of
proprietary software products, either with its own funds or on a jointly funded
basis with other organizations. These products are principally licensed as
elements of custom tailored systems, and, to a lesser extent, as stand-alone
applications. The Company expended $76.2 million in 2000, $102.3 million in
1999, and $77.4 million in 1998 for development associated with proprietary
software. The Company expensed in the accompanying consolidated financial
statements $45.3 million in 2000, $47.1 million in 1999, and $35.4 million in
1998 for research and development associated with proprietary software,
including amortization. In 2000, the Company reduced the unamortized costs by
$5.9 million representing collections from funding partners, compared to $21.8
million in 1999. As a percentage of revenues, license and maintenance fee
revenues were less than 10% during each of the last three years.
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In order to serve clients outside of the United States, AMS has
expanded internationally by establishing subsidiaries or foreign branches.
Exhibit 21 of this Form 10-K provides a complete listing of all twenty-six
active AMS subsidiaries (and branches), showing name, year organized or
acquired, and place of incorporation. Revenues attributable to AMS's non-US
clients were approximately $196.3 million in 2000, $226.7 million in 1999, and
$208.4 million in 1998. Additional information on revenues and assets
attributable to AMS's geographic areas of operation is provided in Note 12 of
the consolidated financial statements appearing in Exhibit 13 of this Form 10-K.
Founded in 1970, AMS services clients worldwide. AMS's
approximately 8,500 employees serve clients from corporate headquarters in
Fairfax, Virginia and from 51 offices worldwide.
NEW MEDIA AND COMMUNICATIONS FIRMS
AMS markets systems consulting and integration services to both
local exchange and interexchange carriers, cellular and wireless telephone
companies as well as cable, new media, DSL eCommerce, and eBusiness
organizations. AMS's services encompass developing and implementing AMS's next
generation software products specializing in customer care, billing, order
processing, accounts receivable, and collections, as well as integrating leading
industry partner products to create solutions for clients.
FINANCIAL SERVICES INSTITUTIONS
AMS provides systems consulting and integration services, as
well as application software products to financial institutions and insurance
companies worldwide. The Company specializes in corporate and international
banking, consumer credit management, customer value and global risk management.
The Company focuses on providing next generation solutions by incorporating its
own suite of products while partnering with leading industry providers as well
as clients to deliver Customer Value Management and facilitate business
transformation for clients.
STATE AND LOCAL GOVERNMENTS AND EDUCATION
AMS provides information technology consulting and systems
integration services to state, county, and municipal governments as well as
universities and colleges. AMS provides these organizations industry experience
and expertise in delivering financial, tax, and revenue management applications
as well as enhancing human resources, social services, public safety and
transportation functions, and environmental systems. The Company specializes in
designing, developing, and implementing next generation- eGovernment- services
and application software products that create productivity gains for clients
through integrating the latest technologies with existing IT infrastructure and
internal services. AMS is working with both clients and leading industry
providers to develop statewide electronic malls to allow all state and local
agencies to purchase goods and services from approved vendors over the web.
FEDERAL GOVERNMENT AGENCIES
AMS's clients include civilian and defense agencies as well as
aerospace companies. AMS's long term relationships with Federal Government
Agencies continue to enhance a deep industry expertise that is central to
providing management consulting services and systems integration that generate
solutions for these clients. AMS's services include developing and implementing
eProcurement and next generation financial solutions as well as providing
information technology consulting, systems re-engineering, large scale systems
integration and maintenance support.
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OTHER CORPORATE CLIENTS
AMS provides enterprise-wide business and technology services
for firms in other industries, including health care and utilities. AMS's suite
of management and technology solutions (including eBusiness) supports projects
with several large organizations in the healthcare and utilities market place,
which AMS intends to pursue further.
PEOPLE
People are AMS's most important asset and its success depends on
its ability to attract, retain and motivate well-qualified people. The Company's
largest investment in recent years has been in recruiting, assimilating, and
developing its people. AMS recruited and successfully assimilated approximately
2,500 new staff members in 2000, including 610 in Europe, Australia, Canada and
Mexico. About 33% of the new staff members came from the Company's college and
university recruiting program.
AMS recruits individuals for a career and hires a balanced mix
of recent university graduates and experienced professionals who have
demonstrated extraordinary technical, analytical, and/or management skills. A
large number have advanced degrees in management, computer science, public
policy, or engineering.
AMS is committed to ensuring individuals have the technical,
integration and project management expertise to enable AMS to manage client
projects through scale and across technology changes and business cycles.
Individuals are assigned to one of the Company's market-oriented groups to
develop expertise in the areas needed for solving its clients' problems.
Transfers between these groups occur regularly to meet the shifting needs of
clients. Performance, in terms of productivity, quality of work, and creativity
in solving problems, determines an individual's advancement. This motivates
staff members to increase their knowledge of AMS's clients' businesses and
industries, to stay current with the technology most suited to AMS's clients,
and to develop the consulting and managerial skills needed to produce results.
The Company continues to develop and implement "AMS University," an integrated,
structured career and leadership development program that includes required as
well as elective courses. The Company believes it can accelerate the development
of individual capabilities and the overall capacity of the Company.
COMPETITIVE FACTORS
AMS's competition comes primarily from the management services
units of large public accounting firms and consulting and systems integration
firms. In addition, prospective clients may decide to perform projects with
their in-house staff.
AMS seeks to meet this competition by leveraging a thirty-year
heritage of providing a suite of management and technology solutions that drive
productivity gains for clients. AMS's key success factors are its long-term
client relationships, industry-specific knowledge and expertise, proprietary
computer application products, alliances with leading industry providers as well
as experience in managing very large design and implementation projects.
Although price is always a factor in clients' decisions, it is typically not the
major factor. Other important factors are the capabilities of AMS's next
generation suite of computer application products, the technical expertise of
project management teams and the focus on quality project execution and
delivery.
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AMS is consolidating operating activities to create new
opportunities for growth in response to a rapidly changing market environment.
These efforts will position AMS to focus development activities, improve
cross-selling of AMS solutions to clients as well as improve operational
efficiencies and the management of large client engagements. Throughout 2001,
AMS is implementing a restructuring plan to realign the Company's internal
operations to a shared services model to significantly streamline support
activities across the organization. These actions will enable AMS to continue to
improve performance and productivity company-wide as well as attain growth in
the marketplace.
MARKETING, CONTRACTS, AND SIGNIFICANT CUSTOMERS
Marketing is performed principally by the senior staff
(executive officers, vice presidents, senior principals, and principals) and by
a relatively small number of full-time salespersons for each large market. In
the U.S. Government markets, AMS replies selectively to requests for proposals,
concentrating on those closely related to previous work done for the same or
similar customers. Certain of the Company's software products and computer
services are sold by a small group of full-time salespersons and, for those
products and services, AMS advertises in trade publications and exhibits at
industry conventions.
For large systems integration projects, AMS typically contracts
for one phase (design, development, or implementation) at a time. Many contracts
may be canceled by the customer on short notice with appropriate compensation to
the Company for actual work performed. Most contracts with federal government
agencies allow for termination for the convenience of the government and for an
annual audit. No contracts are subject to renegotiation at the client's option.
AMS generally contracts either on the basis of reimbursement of costs plus a
fixed fee, a fixed or ceiling price for each phase, unit rates for time and
materials used, or services sold at unit prices. In most cases, AMS receives
monthly or milestone progress payments.
In 2000, the Company worked on projects directly for 91 U.S.
Government clients, representing a total of $342.2 million, or 27% of revenues.
No other customer accounted for 10% or more of revenues in 2000.
ITEM 2. PROPERTIES
Headquartered in Fairfax, Virginia, the Company's principal
operations occupy approximately 1,234,000 square feet of office space under
leases expiring through 2011. The Company also has other long-term lease
commitments totaling approximately 599,000 square feet with varying expirations
through 2011 at other locations throughout the United States.
Additionally, the Company's international staff occupies
approximately 313,000 square feet of office space outside of the U.S. at
locations under leases expiring through 2006.
With regard to its operating environment, the Company maintains
and operates a large- and mid-range computing environment at the AMS Data Center
in Fairfax, Virginia. In addition to physical and data security, the AMS Data
Center facilities include conditioned power, A/C, UPS, and fire suppression. The
Company leases its computing equipment including mainframe processors, small and
mid-size servers, and communications equipment.
The Company believes its facilities and equipment continue to be
adequate for its business as currently conducted.
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ITEM 3. LEGAL PROCEEDINGS
State of Mississippi v. American Management Systems, Inc., No
251-99.382-CIV (Circuit Court of Hinds County, Mississippi). As previously
reported in the Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 2000, June 30, 2000 and March 31, 2000, on April 22, 1999, the
Company was served with a complaint alleging that it failed to deliver software
conforming to a contract that it entered into with the State of Mississippi. In
the complaint, the State sought compensatory damages of approximately $234.3
million and punitive damages of approximately $750.0 million. The matter
proceeded to trial, and on August 23, 2000, a jury awarded the State actual and
punitive damages totaling $474.5 million. On August 28, 2000, the Company
reached a fully negotiated settlement with the State of Mississippi for $185.0
million and, on the same day, the court signed an order dismissing the matter
with prejudice in recognition of the settlement. The present value of the
settlement is approximately $135.0 million, approximately $102.0 million of
which was paid by the Company's insurers and approximately $33.0 million was
paid by the Company.
American Management Systems, Inc. and Federal Insurance Company
v. National Union Fire Insurance Company of Pittsburgh, PA, No. 3-00CV682B-CIV
(US District Court for the Southern District of Mississippi, Jackson County
Division). As previously reported in the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 2000, on September 11, 2000, AMS filed a
lawsuit against National Union Fire Insurance Company, one of its insurance
carriers, seeking damages arising from National Union's failure to take
advantage of opportunities to settle the Mississippi litigation (discussed in
the preceding paragraph) well within National Union's policy limits. Federal
Insurance Company has joined in that claim to recover the amount of secondary
excess coverage that it contributed to the Mississippi settlement. On November
13, 2000, National Union filed a motion to dismiss the case, to stay the matter
pending a decision in the case that it filed against AMS and Federal in the
Fairfax County Circuit Court (discussed in the following paragraph), or in the
alternative, to transfer the case from the United States District Court for the
Southern District of Mississippi to the United States District Court for the
Eastern District of Virginia. AMS and Federal have responded to the motion and
it is pending before the court. The motion to stay may be rendered moot by the
actions of the Fairfax County Circuit Court (discussed below). The court has set
a schedule under which discovery is to be completed by June 1, 2001, substantive
motions are to be filed by June 15, 2001, and a pretrial conference is to be
held on September 14, 2001. The case is scheduled for trial during the period
from October 1, 2001 to October 19, 2001.
National Union Fire Insurance Company of Pittsburgh, PA v.
American Management Systems, Inc. and Federal Insurance Company. On September
22, 2000, the Company was served with a declaratory judgment complaint filed by
National Union in the Circuit Court for Fairfax County, Virginia. National Union
seeks a determination that it did not breach its obligation to the Company in
the failure to settle the Mississippi action (discussed in the first paragraph
of this Item 3) and further seeks a court determination that its excess policy
has been exhausted as a consequence of National Union's payment toward the
settlement. The Company and Federal have filed a motion to dismiss or stay the
Virginia lawsuit in favor of the lawsuit filed by the Company and Federal in
Mississippi. On January 11, 2001, the Fairfax County Court denied the requests
to dismiss or stay the case. The court invited the parties to move for
reconsideration of its order and both the Company and Federal have done so. On
February 9, 2001, the Company and Federal asserted defenses to National Union's
complaint. On the same day, National Union filed a motion to amend its complaint
to add (i) a request for a declaration that National Union has no liability for
any existing or potential claim that otherwise would be within the coverage of
the National Union policy and (ii) a claim that the Company breached duties of
cooperation and participation under the National Union policy and that the
Company is liable to National Union for damages in the amount of $37 million
plus interest. On March 28, 2001, the Court issued a ruling dismissing National
Union's claims without prejudice, with the exception of the counterclaim for $37
million plus interest, which is stayed pending the outcome of the case pending
in Mississippi (discussed above).
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In the Matter of Bezeq, the Israel Telecommunications Company
Ltd. vs. AMS Technical Systems, Inc., CIV COMP. 1420/99 and counterclaim. As
previously reported in the Company's Quarterly Reports on Form 10-Q for the
quarters ended September 30, 2000 and June 30, 2000, on September 9, 1999, Bezeq
filed suit against a subsidiary of the Company alleging that the subsidiary was
in breach of a contract with Bezeq. In the complaint, Bezeq sought damages in
the approximate amount of $39.0 million, which amount included amounts secured
by bank guarantees made in favor of Bezeq. On January 19, 2000, the Company's
subsidiary filed a counterclaim against Bezeq alleging, among other things,
breach of contract and seeking approximately $58.8 million in damages. On
September 21, 2000, the Company's subsidiary and Bezeq entered into a settlement
agreement, pursuant to which, among other things, neither party admitted any
fault and each party released the other and the other's affiliates from any
claims. The total amount paid by the Company's subsidiary to Bezeq pursuant to
the settlement agreement did not exceed the amount previously reserved for
potential losses under the contract. In light of the settlement, the applicable
court dismissed both the claim and counterclaim with prejudice on October 24,
2000. The settlement agreement has been performed fully and the mutual releases
contained therein are effective.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders
during the fourth quarter of 2000.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
Market information for the Company's common stock contained in
the Company's 2000 Financial Report is incorporated herein by reference in
accordance with General Instruction G(2) of Form 10-K.
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data contained in the Company's 2000
Financial Report is incorporated herein by reference in accordance with General
Instruction G(2) of Form 10-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition and
results of operations contained in the Company's 2000 Financial Report are
incorporated herein by reference in accordance with General Instruction G(2) of
Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The information set forth on pages 13 - 15 of the Company's 2000
Financial Report, under the captions "Foreign Currency Hedging" and "Notes
Payable and Line of Credit," is incorporated herein by reference in accordance
with General Instruction G(2) of form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Company, together
with the reports thereon of Deloitte & Touche LLP and the supplementary
financial information, contained in the Company's 2000 Financial Report, are
incorporated herein by reference in accordance with General Instruction G(2) of
Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the directors and executive officers of
the Company contained in the Company's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held May 11, 2001, is incorporated herein by
reference. The Company's definitive Proxy Statement will be filed within 120
days after the close of the Company's fiscal year in accordance with General
Instruction G(3) of Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation contained in the
Company's definitive Proxy Statement for the Annual Meeting of Shareholders to
be held May 11, 2001, is incorporated herein by reference. The Company's
definitive Proxy Statement will be filed within 120 days after the close of the
Company's fiscal year in accordance with General Instruction G(3) of Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information relating to the security ownership of certain
beneficial owners and management contained in the Company's definitive Proxy
Statement for the Annual Meeting of Shareholders to be held May 11, 2001, is
incorporated herein by reference. The Company's definitive Proxy Statement will
be filed within 120 days after the close of the Company's fiscal year in
accordance with General Instruction G(3) of Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information relating to certain relationships and related
transactions contained under the headings "Principal Stockholders" and
"Compensation Committee Interlocks and Insider Participation" in the Company's
definitive Proxy Statement for the Annual Meeting of Shareholders to be held May
11, 2001, is incorporated herein by reference. The Company's definitive Proxy
Statement will be filed within 120 days after the close of the Company's fiscal
year in accordance with General Instruction G(3) of Form 10-K.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES, AND REPORTS ON
FORM 8-K
(a) 1. FINANCIAL STATEMENTS
The consolidated financial statements of American
Management Systems, Incorporated and subsidiaries filed are as follows:
Consolidated Statements of Operations for 2000 -
1998
Consolidated Balance Sheets as of December
31, 2000 and 1999
Consolidated Statements of Cash Flows for 2000 -
1998
Consolidated Statements of Changes in
Stockholders' Equity for 2000 - 1998
Consolidated Statements of Comprehensive Income
2000 - 1998
Notes to Consolidated Financial Statements
Report of Independent Accountants
2. FINANCIAL STATEMENT SCHEDULES
The financial statement schedule of American Management
Systems, Incorporated and subsidiaries filed is as follows:
Reports of Independent Accountants on financial
statement schedules
Schedule II - Valuation and Qualifying Accounts
for 2000 - 1998
All other schedules are omitted because they are not
applicable, or the required information is shown in the financial statements or
the notes thereto.
Individual financial statements of the Company and each
of its subsidiaries are omitted because the Company is primarily an operating
company, and all subsidiaries included in the consolidated financial statements
being filed, in the aggregate, do not have a minority equity interest in and/or
indebtedness to any person other than the Company or its consolidated
subsidiaries in amounts which together exceed five percent of the total assets
as shown by the most recent year-end consolidated balance sheet.
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3. EXHIBITS
The exhibits to the Annual Report on Form 10-K of
American Management Systems, Incorporated filed are as follows:
3. Articles of Incorporation and By-laws
3.1 Second Restated Certificate of
Incorporation of the Company (incorporated herein by reference to the Company's
1995 Annual Report on Form 10-K, filed on April 1, 1996).
3.2 Certificate of Designation of Series A
Junior Participating Preferred Stock (incorporated herein by reference to
Exhibit 2 to the Company's Registration Statement on Form 8-A filed on August 4,
1998).
3.3 By-Laws of the Company, as amended on
June 12, 2000 (filed herewith).
3.4 Certificate of Amendment of Second
Restated Certificate of Incorporation of the Company (incorporated herein by
reference to Exhibit 3.4 of the Company's quarterly report on Form 10-Q for the
quarter ended June 30, 1999).
4. Instruments Defining the Rights of Security
Holders
4.1 Specimen Common Stock Certificate
(incorporated herein by reference to Exhibit 4.1 of the Company's quarterly
report on Form 10-Q for the quarter ended March 31, 1997).
4.2 Rights Agreement dated as of July 31,
1998, between the Company and ChaseMellon Shareholder Services L.L.C. as Rights
Agent (incorporated herein by reference to the Company's Form 8-A filed on
August 4, 1998, including form of Rights Certificate).
10. Material Contracts
10.1 1996 Amended Stock Option Plan F as
amended (incorporated herein by reference to Exhibit A to the Company's
definitive Proxy Statement filed on April 15, 1999).
10.2 Outside Directors Stock-for-Fees Plan
(incorporated herein by reference to Exhibit C to the Company's definitive Proxy
Statement filed on April 10, 1996).
10.3 1992 Amended and Restated Stock Option
Plan E, as amended (incorporated herein by reference to Exhibit B to the
Company's definitive Proxy Statement filed on April 17, 1995).
10.4 Executive Deferred Compensation Plan, as
amended September 1, 1997 (incorporated herein by reference to Exhibit 10.4 of
the Company's 1997 Annual Report on Form 10-K).
10.5 Outside Director Deferred Compensation
Plan, effective January 1, 1997 (incorporated herein by reference to Exhibit
10.5 of the Company's 1997 Annual Report on Form 10-K).
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10.6 Multi-Currency Revolving Credit
Agreement dated as of January 9, 1998 among the Company, certain of the
Company's subsidiaries, the Lenders named therein, and NationsBank N.A. as
administrative agent and Wachovia Bank N.A., as Documentation agent
(incorporated herein by reference to Exhibit 10.6 of the Company's 1997 Annual
Report on Form 10-K).
10.7 Agreement of Lease between Joshua Realty
Corporation and the Company, dated August 10, 1992, as amended (incorporated
herein by reference to Exhibit 10.7 of the Company's 1997 Annual Report on Form
10-K).
10.8 Office Lease Agreement between Hyatt
Plaza Limited Partnership and the Company, dated August 12, 1993, as amended
(incorporated herein by reference to Exhibit 10.8 of the Company's 1997 Annual
Report on Form 10-K).
10.9 Lease Agreement between Fairfax Gilbane,
L.P. and the Company, dated February 15, 1994, as amended (incorporated herein
by reference to Exhibit 10.9 of the Company's 1997 Annual Report on Form 10-K).
10.10 Deed of Lease between Principal Mutual
Life Insurance Company and the Company, dated December 1996 (incorporated herein
by reference to Exhibit 10.10 of the Company's 1997 Annual Report on Form 10-K).
10.11 1996 Incentive Compensation Plan for
Executive Officers (incorporated herein by reference to Exhibit 10.11 of the
Company's 1998 Annual Report on Form 10-K).
10.12 1999 Contractor Stock Option Plan
(incorporated herein by reference to Exhibit 10.12 the Company's 1999 Annual
Report on Form 10-K)
10.13 Departure Agreement, dated as of
November 15, 2000, between the Company and Paul A. Brands (filed herewith).
10.14 Second Amendment to Credit Agreement,
dated as of March 21, 2001, among the Company, certain of the Company's
subsidiaries, the lenders named therein, Bank of America, N.A. as administrative
agent and Wachovia Bank, N.A. as documentation agent (filed herewith).
10.15 Form of Change in Control Executive
Retention Agreement for Senior Executives (filed herewith).
10.16 Form of Employment Agreement for Senior
Executives (filed herewith).
13. 2000 Financial Report (filed herewith).
21. Subsidiaries of the Company (filed herewith).
23. Consent of Independent Accountants (filed
herewith).
(b) REPORTS ON FORM 8-K
None.
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REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Stockholders of
American Management Systems, Incorporated
Fairfax, Virginia
We have audited the consolidated financial statements of American
Management Systems, Incorporated and subsidiaries (the Company) as of December
31, 2000 and for each of the three years in the period ended December 31, 2000
and have issued our report thereon dated February 14, 2001 (incorporated by
reference in this Annual Report on Form 10-K). Our audit also included the
financial statement schedule for the each of the three years in the period ended
December 31, 2000 listed in Item 14(a)(2) of this Form 10-K. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audit. In our opinion, such
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
DELOITTE & TOUCHE LLP
McLean, Virginia
February 14, 2001
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16
Schedule II
American Management Systems, Incorporated
VALUATION AND QUALIFYING ACCOUNTS
For the Year Ended December 31 (In millions) 2000 1999 1998
- ------------------------------------------------------------------------------------
Allowance for Doubtful Accounts
- -------------------------------
Balance at Beginning of Period $10.8 $ 9.8 $ 5.0
Allowance Accruals 6.7 6.2 10.9
Charges Against Allowance (9.5) (5.2) (6.1)
----- ----- -----
Balance at End of Period $ 8.0 $10.8 $ 9.8
===== ===== =====
Deferred Tax Asset Valuation Allowance
- --------------------------------------
Balance at Beginning of Period $ 0.9 $ 1.1 $ 0.5
Allowance Accruals -- -- 0.6
Charges Against Allowance (0.3) (0.2) --
----- ----- -----
Balance at End of Period $ 0.6 $ 0.9 $ 1.1
===== ===== =====
Provision for Contract Losses
- -----------------------------
Balance at Beginning of Period $27.0 $ 7.3 $ --
Allowance Accruals 35.2 20.0 7.3
Charges Against Provision (61.4) (0.3) --
----- ----- -----
Balance at End of Period $ 0.8 $27.0 $ 7.3
===== ===== =====
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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 signed on
its behalf by the undersigned, thereunto duly authorized on the 29th of March,
2001.
American Management Systems, Incorporated
By: s/William M. Purdy
---------------------------------------
William M. Purdy
Chief Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following officers and directors of the
Registrant in the capacities and on the date indicated.
Signature Title Date
--------- ------------------------- --------------------
(i) Principal Executive Officer:
s/William M. Purdy Chief Executive March 29, 2001
--------------------------------- Officer and President
William M. Purdy
(ii) Principal Financial Officer:
s/Ronald L. Schillereff Treasurer and March 29, 2001
--------------------------------- Chief Financial
Ronald L. Schillereff Officer
(iii) Principal Accounting Officer:
s/Nancy Yurek Controller March 29, 2001
---------------------------------
Nancy Yurek
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Signature Title Date
--------- ------------------------- --------------------
(iv) Directors:
s/Daniel J. Altobello Director March 29, 2001
---------------------------------
Daniel J. Altobello
s/James J. Forese Director March 29, 2001
--------------------------------
James J. Forese
s/Patrick W. Gross Director March 29, 2001
---------------------------------
Patrick W. Gross
s/Dorothy Leonard Director March 29, 2001
---------------------------------
Dorothy Leonard
s/W. Walker Lewis Director March 29, 2001
---------------------------------
W. Walker Lewis
s/Frederic V. Malek Director March 29, 2001
---------------------------------
Frederic V. Malek
s/Frank A. Nicolai Director March 29, 2001
---------------------------------
Frank A. Nicolai
s/Alan G. Spoon Director March 29, 2001
---------------------------------
Alan G. Spoon
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EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
3.1 Second Restated Certificate of Incorporation of the Company *
(incorporated herein by reference to the Company's 1995 Annual
Report on Form 10-K, filed on April 1, 1996).
3.2 Certificate of Designation of Series A Junior Participating *
Preferred Stock (incorporated herein by reference to Exhibit 2
to the Company's Registration Statement on Form 8-A filed on
August 4, 1998).
3.3 By-Laws of the Company, as amended on June 12, 2000 (filed *
herewith).
3.4 Certificate of Amendment of Second Restated Certificate of *
Incorporation of the Company (incorporated herein by reference
to Exhibit 3.4 of the Company's quarterly report on Form 10-Q
for the quarter ended June 30, 1999).
4.1 Specimen Common Stock Certificate (incorporated herein by *
reference to Exhibit 4.1 of the Company's quarterly report on
Form 10-Q for the Quarter ended March 31, 1997).
4.2 Rights Agreement dated as of July 31, 1998, between the Company *
and ChaseMellon Shareholder Services L.L.C. as Rights Agent
(incorporated herein by reference to the Company's Form 8-A
filed on August 4, 1998, including form of Rights Certificate).
10.1 1996 Amended Stock Option Plan F as amended (incorporated herein *
by reference to Exhibit A to the Company's definitive Proxy
Statement filed on April 15, 1999).
10.2 Outside Directors Stock-for-Fees Plan (incorporated herein by *
reference to Exhibit C to the Company's definitive Proxy
Statement filed on April 10, 1996).
10.3 1992 Amended and Restated Stock Option Plan E, as amended *
(incorporated herein by reference to Exhibit B to the Company's
definitive Proxy Statement filed on April 17, 1995).
10.4 Executive Deferred Compensation Plan, as amended September 1, *
1997 (incorporated herein by reference to Exhibit 10.4 of the
Company's 1997 Annual Report on Form 10-K).
10.5 Outside Director Deferred Compensation Plan, effective January *
1, 1997 (incorporated herein by reference to Exhibit 10.5 of the
Company's 1997 Annual Report on Form 10-K).
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20
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
10.6 Multi-Currency Revolving Credit Agreement dated as of January 9, *
1998 among the Company, certain of the Company's subsidiaries,
the Lenders named therein, and NationsBank N.A. as
administrative agent and Wachovia Bank N.A., as Documentation
agent. (incorporated herein by reference to Exhibit 10.6 of the
Company's 1997 Annual Report on Form 10-K).
10.7 Agreement of Lease between Joshua Realty Corporation and the *
Company, dated August 10, 1992, as amended (incorporated herein
by reference to Exhibit 10.7 of the Company's 1997 Annual Report
on Form 10-K).
10.8 Office Lease Agreement between Hyatt Plaza Limited Partnership *
and the Company, dated August 12, 1993, as amended (incorporated
herein by reference to Exhibit 10.8 of the Company's 1997 Annual
Report on Form 10-K).
10.9 Lease Agreement between Fairfax Gilbane, L.P. and the Company, *
dated February 15, 1994, as amended (incorporated herein by
reference to Exhibit 10.9 of the Company's 1997 Annual Report on
Form 10-K).
10.10 Deed of Lease between Principal Mutual Life Insurance Company *
and the Company, dated December 1996 (incorporated herein by
reference to Exhibit 10.10 of the Company's 1997 Annual Report
on Form 10-K).
10.11 1996 Incentive Compensation Plan for Executive Officers *
(incorporated herein by reference to Exhibit 10.11 of the
Company's 1998 Annual Report on Form 10-K).
10.12 1999 Contractor Stock Option Plan (incorporated by reference to *
exhibit 10.12 of the Company's 1999 Annual Report on Form 10-K)
10.13 Departure Agreement, dated as of November 15, 2000, between the
Company and Paul A. Brands (filed herewith).
10.14 Second Amendment to Credit Agreement, dated as of March 21,
2001, among the Company, certain of the Company's subsidiaries,
the lenders named therein, Bank of America, N.A. as
administrative agent and Wachovia Bank, N.A. as documentation
agent (filed herewith).
10.15 Form of Change in Control Executive Retention Agreement for
Senior Executives (filed herewith).
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21
10.16 Form of Employment Agreement for Senior Executives (filed
herewith).
13. 2000 Financial Report (filed herewith).
21. Subsidiaries of the Company (filed herewith).
23. Consent of Independent Accountants (filed herewith).
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