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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 31, 1997
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ______ to ______.
Commission file number 0-20034
BROADWAY & SEYMOUR, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 41-1522214
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
128 SOUTH TRYON STREET
CHARLOTTE, NORTH CAROLINA 28202
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(Address of principal executive offices (Zip code)
(704) 372-4281
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(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.01 par value
(Title of class)
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 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 .
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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 February 28, 1998 computed by reference to the closing sale
price on such date, was $71,521,828. As of the same date, 9,228,623 shares of
Common Stock, $.01 par value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 1997 Annual Report (the "Annual Report"), filed as
an Exhibit hereto, and the Notice of Annual Meeting of Stockholders and
definitive Proxy Statement pertaining to the 1998 Annual Meeting of Stockholders
(the "Proxy Statement") to be filed pursuant to Regulation 14A (no later than
April 30, 1998) are incorporated herein by reference into Parts II and IV, and
Part III, respectively.
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TOTAL PAGES - 18
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ITEM 1. DESCRIPTION OF BUSINESS
OVERVIEW
Broadway & Seymour, Inc. (the "Company") is a software product and
services company, providing integrated solutions to the financial services and
legal and professional services markets.
Broadway & Seymour, the Company's customer relationship management
business, is based in Charlotte, North Carolina and provides product-based and
services-based solutions that address the customer relationship management needs
of the financial services industry and related markets. Broadway & Seymour's
solutions for customer relationship management include the proprietary software
products TouchPoint(TM), CRISP(TM) and BANCStar(R), which are often integrated
and customized to provide a tailored business solution to banks and other
financial institutions. Through its services-based solutions Broadway & Seymour
provides consulting and custom systems integration and development services
focused on customer relationship management.
Elite Information Systems, Inc. ("Elite"), the Company's legal and
professional services business, is based in Los Angeles, California and provides
integrated time tracking, invoicing, general ledger and office automation
software solutions and consulting services to the legal and professional
services markets.
GENERAL DEVELOPMENT OF THE BUSINESS
The Company was incorporated in 1985 in connection with the acquisition
of Broadway & Seymour, Inc., a North Carolina corporation that had been doing
business since 1981. The Company followed a strategy of growth through the
acquisition of products and businesses through mid-1995. At the end of 1995, the
Company changed its strategic direction to focus on achieving sustained
performance of core operations and growth through internally developed product
based solutions and selected services, rather than acquisitions. Operations were
reorganized to integrate independent business units, and certain non-core
business units were disposed of in 1995, 1996 and 1997 (see Management's
Discussion and Analysis - Significant Transactions).
BUSINESS STRATEGY
The Company's strategy is to develop and provide business solutions
that address the customer relationship management and practice management needs
of its targeted markets with a focus on the top financial institutions and
legal and professional service firms.
In the financial services industry, the Company is committed to the
ongoing development and delivery of its customer relationship management
software products: TouchPoint(TM), BANCStar(R) and CRISP(TM) (see "Software and
Service Based Solutions" below). In addition, the Company intends to leverage
its knowledge, software and services into other markets. The Company also plans
to continue to provide consulting and systems integration and custom development
services to large, market leading organizations that will offer opportunities
for growth through value added relationships.
In the legal and professional services industries, the Company will
continue to develop and market its client/server Windows(TM) and Windows NT(TM)
based accounting and information management products (see "Software and Service
Based Solutions" below) to law firms in North America, Europe and the Pacific
Rim. In addition, the Company will focus on expanding its presence in other
segments of the professional services industry, including accounting, actuarial,
public relations and consulting firms.
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PRODUCT AND SERVICES BASED SOLUTIONS
Software products mentioned in this document are for identification
purposes only and may be trademarks of Broadway & Seymour, its subsidiaries or
third parties.
SOLUTIONS FOR THE FINANCIAL SERVICES MARKET
TouchPoint(TM) is a proprietary software solution that is integrated
with an institution's host hardware and software systems to retrieve customer
data and present it through a variety of delivery channels, including call
centers, offices and branches. TouchPoint can be modified to address an
institution's specific requirements and the solution may involve integrated
third party hardware and software developed and provided by other vendors.
TouchPoint allows an institution to improve customer service by consolidating
customer and account information from existing legacy systems and presenting it
on a universal workstation to a customer service representative. The open
client/server architecture also makes TouchPoint scaleable so that it can be
implemented in single departments of the institution or enterprise-wide using a
phased installation approach.
BANCStar(R) is a proprietary branch automation software
product used to automate major banks and integrate branch networks. BANCStar
supports teller, customer service, sales and loan calculation activities, as
well as basic system functions such as providing branch statistics and storing
and forwarding information to other computers. BANCStar Prism(TM) is an
automated banking system that supports a graphical user interface, allowing for
video and sound, dynamic data exchange and a multi-tasking environment to help
streamline banking operations to the bank's other computers without interrupting
workstation activity. Custom systems integration and development services, as
well as third party hardware and software, may be provided as part of the
BANCStar solution.
CRISP(TM) is a proprietary decision support software product
that assists commercial bankers in the management of their relationships,
products and employees. Fully graphical and intuitive, CRISP delivers
comprehensive product and profitability analyses on a variety of bank or
customer organizational levels. CRISP provides a single repository of on-line
customer information from multiple other systems. Custom systems integration and
development services, as well as third party hardware and software, may be
provided as part of the CRISP solution.
Systems Integration, Consulting and Custom Development
Services are provided as services-based solutions. These engagements typically
involve the development of technology solutions for difficult business and
technical problems and are often provided as part of a complex system that may
include third party hardware and software products and training and
documentation services. The Company may be retained to perform all aspects of a
complex project or a discrete portion of a project.
SOLUTIONS FOR THE LEGAL AND PROFESSIONAL SERVICES MARKETS
Elite Billing System is a comprehensive accounting and
information management software product serving legal and professional service
firms. The Elite Billing System responds to clients' billing requirements with
on-line management information and processes.
Elite Financial Management System is a general ledger and
accounts payable software product that supports multi-currency and simultaneous
cash and accrual-based accounting as well as budgeting features.
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Elite Case Management System is a case tracking software
system and conflicts/related-party database. This system also includes calendar
and docket functions, a case database, a related-party tracking system, on-line
viewing of case information and personal calendars and a user-defined reporting
system.
Elite Practice Development System is a comprehensive
marketing and practice development tool that tracks relationships, manages
mailings and monitors the effectiveness of client development efforts.
Elite Conflict of Interest Module is an integrated software
tool for checking conflicts of interest, based on a full-text search engine.
Elite Records Management Module is a software tool for
managing both internal and external records, with bar code support and
integration with the Elite Conflict of Interest System.
Elite Professional's Desktop is a software tool that
summarizes key information from all Elite applications in a simple and concise
manner within a web-browser. By using built in HTML hyperlinks, a user can
quickly move from application to application.
Elite's solutions incorporate client server and open systems
architecture within the Windows(TM) environment.
SUPPORT SERVICES
The Company views its customer support services as a significant part
of its strategy to establish and maintain strong customer relationships. The
Company offers system maintenance and support at fixed prices under renewable
contracts as well as conversion and installation services as needed by its
customers. The degree of maintenance service provided to customers differs
depending on the system being supported. Generally, support contracts entitle
users to telephone support and regular upgraded product releases. In addition,
the Company offers certain training classes and multi-media based instruction to
customers that aid in the implementation and effective use of the Company's
solutions.
YEAR 2000 ISSUES
From the early days of the software industry, many software
applications have been designed to store only the last two digits of the
four-digit year date, for example, "98" rather than "1998". These applications,
and other applications which retrieve or process such data, then "assume" the
first two digits of the year date to be "19". Applications designed in this
manner may not be able to process dates with years following 1999; for example,
"00" may be treated as 1900 rather than the year 2000. Results of this failure
to process the date correctly could include miscalculations and system
breakdowns. The Company has recognized this potential problem and has reviewed,
and when necessary modified, its current software products so that they can
process data relating to dates subsequent to December 31, 1999 ("Year 2000
compliance").
Although the Company believes that its current versions of proprietary
software products are Year 2000 compliant, no assurance can be given that
additional modifications for Year 2000 compliance will not be necessary. The
Company's software systems as installed are integrated with its customers'
software and hardware systems and other vendors' software and hardware systems
and have, in many cases, been uniquely customized to the customers'
specifications. The customers' systems and other vendors' systems with which the
Company's systems interoperate may not be Year 2000 compliant. Generally, the
operation of the Company's software in these environments or the failure of
these systems to be compliant could
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impact the Year 2000 compliance of the Company's systems and the Company may
incur costs in ascertaining the cause of the failure and modifying its software.
In addition to its proprietary software products, the Company offers
related software products developed and provided by other software vendors. The
Company is seeking assurances from these vendors that such products are
compliant. However, the risks of interoperability with other software products
exist for these products as well. While in some cases the Company has Year 2000
compliance obligations to its customers for such third party products, the
Company believes that the vendors of such products bear primary responsibility
for such obligations.
Many of the Company's customers presently use earlier versions of the
Company's software products that are not Year 2000 compliant. These customers
will need to upgrade to a Year 2000 compliant version of the Company's software
or implement other alternatives to meet their business needs. The Company's
customers may be entitled to receive such software upgrades as part of their
regular maintenance contracts or may purchase such upgrades. However, customers
may need to upgrade add-on third party products and their host software and
hardware systems that share data with the Company's products in order to utilize
the Company's software upgrades. Many clients, as part of their upgrade effort,
may also need to modify previous customizations to the Company's software and
third party software provided by the Company or others. The Company does not
believe that it would have any contractual responsibility for upgrades of third
party products, host system upgrades or modifications of custom software.
The Company believes that Year 2000 compliance issues may affect the
purchasing patterns of its customers and potential customers in a variety of
ways. Many companies are expending significant amounts and rededicating
personnel to correct or patch their current software systems for Year 2000
compliance. These expenditures may result in reduced funds available to purchase
software products such as those offered by the Company. It is possible that
certain of the Company's customers are purchasing support contracts with the
intent of discontinuing such support after January 1, 2000 when they have
satisfied themselves that the supported product is Year 2000 compliant. Many
potential customers may also choose to defer purchasing Year 2000 compliant
products until they believe it is absolutely necessary, thus resulting in
potentially stalled market sales within the industry.
Conversely, Year 2000 compliance issues may cause other companies to
accelerate purchases, thereby causing an increase in short-term demand and a
consequent decrease in long-term demand for software products. Additionally,
Year 2000 compliance issues could cause a significant number of companies,
including current Company customers, to reevaluate their current system needs
and as a result to consider switching to other systems or suppliers.
While management believes it is successfully addressing the Year 2000
compliance issue in its proprietary software products, upon which its results of
operations are significantly dependent, any of the foregoing could result in a
material adverse effect on the Company's business, operating results and
financial condition. In addition, third party software and computer technology
used internally, if not Year 2000 compliant, may materially impact the Company.
The Company is reviewing what actions will be required to make all software
systems used internally Year 2000 compliant as well as to mitigate its
vulnerability to Year 2000 compliance problems that its service suppliers may
have.
The Company will continue to test current and new versions of its
proprietary software, work with the vendors of third party software that it
resells, update its inventory of potentially affected internal systems and
communicate with vendors and customers regarding the Year 2000 compliance issue.
The total cost and time associated with the impact of Year 2000 compliance
cannot presently be determined. Any costs of addressing Year 2000 compliance are
being expensed as incurred.
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EURO CURRENCY
Beginning in January 1999, a new currency called the ECU or the "euro"
is scheduled to be introduced in certain Economic and Monetary Union (the "EMU")
countries. During 2002, all EMU countries are expected to be operating with the
euro as their single currency. As a result, in less than one year, computer
software used by many organizations headquartered or maintaining a subsidiary in
an EMU country will need to be euro currency enabled, and in less than three
years all organizations headquartered or maintaining a subsidiary in an EMU
country are expected to need to be euro currency enabled.
The transition to the euro currency will involve the handling of
parallel currencies and conversion of legacy data. Uncertainty exists as to the
effects the euro currency will have on the marketplace. Additionally, all of the
final rules and regulations have not yet been defined and finalized by the
European Commission with regard to the euro currency.
The Company is monitoring the rules and regulations as they become
known in order to make any changes to the software that the Company deems
necessary to comply with such rules and regulations. Although the Company
currently offers certain software products that are designed to be
multi-currency enabled and the Company believes that it will be able to
accommodate any required euro currency changes in its software products, there
can be no assurance that once the final rules and regulations are completed that
the Company's software will contain all of the necessary changes or meet all of
the euro currency requirements.
RESEARCH AND DEVELOPMENT
To meet the changing needs of the financial and professional services
industries, the Company expends resources to continually develop and enhance its
proprietary software products. The Company believes that ongoing commitment to
research and development is important to the long-term success of the business.
For the years ended December 31, 1997, 1996 and 1995, the Company's
total research and development expenditures were $6.0 million, $7.4 million and
$8.9 million, respectively.
There are inherent risks in the development and introduction of a new
product. For example, new products may have quality or other defects in the
early stages of introduction that were not anticipated in the design of those
products. The Company cannot determine the effects on operating results of
unanticipated complications in product introductions or transitions.
SALES AND MARKETING
New customer contacts are generated by a variety of methods, including
customer referrals, personal sales calls, attendance at trade shows and
seminars, advertising in trade publications and direct mailings to targeted
customers and telemarketing.
The Company's sales personnel are given sales responsibility within
their targeted customer markets. Additionally, senior management and technical
subject matter experts within the Company are directly involved in obtaining and
supporting relationships.
The Company's business strategy also emphasizes sales to existing
customers. Follow-on sales to existing customers include system upgrades,
expansion of license rights, migration to new products and maintenance and
support services.
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CUSTOMERS
Broadway & Seymour's customers include a broad variety of institutions
and companies in the financial services industry, including some of the largest
banks in the United States. In addition, the Company serves a client base of law
firms and other professional service firms through its Elite operations. Elite's
customers include over half of the 100 largest law firms in the United States
and several large firms in the United Kingdom.
The Company provides software solutions under a variety of financial
arrangements, including fixed fee contracts and billings on a time and materials
basis.
For 1997 and 1996, the Company had two customers that exceeded certain
disclosure requirement thresholds and are therefore classified as significant
customers. In 1997, Chase Manhattan Bank ("Chase") accounted for $10.3 million,
or 13% of the Company's consolidated revenue. Also, in 1997 and 1996, First Data
Corp. ("FDC") accounted for $8.0 million, or 10.1%, of consolidated revenue and
$9.6 million, or 10.6%, of consolidated revenue, respectively.
In September 1997, the Company amended its contract with FDC,
substantially reducing the scope of work and the amount of future revenue and
eliminating certain exclusivity restrictions on the Company. While the Company
may provide some ongoing services to FDC, the remaining personnel previously
assigned to work with this client have been reassigned to other projects.
GEOGRAPHIC INFORMATION
The Company's revenue is principally generated in North America;
however, for the years ending December 31, 1997, 1996, and 1995, revenue
generated in Europe represented 9.4%, 5.0%, and 2.2% of consolidated revenue,
respectively. The Company's assets are principally located in North America.
COMPETITION
The Company's businesses are competitive. The Company is not aware of
any one competitor that offers the same combination of services and products
offered by the Company, but believes that a number of firms compete with the
Company in all areas. In the markets in which it competes, the Company believes
there are participants that have greater financial, technical and marketing
resources. However, the Company believes that no one competitor is dominant in
its markets.
The Company competes for engagements with a variety of companies
offering all or a portion of the services offered by the Company. Many large
accounting and management consulting firms offer services that overlap with at
least a portion of the Company's solutions and services, and computer hardware
and software companies are increasingly becoming involved in similar services.
The Company also competes with the internal operations of its customers. The
Company believes that the competitive factors for these projects include
reputation, capability and resources, technological expertise, knowledge of the
industry, quality and reliability of service and price. The Company believes
that it competes favorably on the basis of these factors. However, the
increasingly competitive environment of the software industry may adversely
affect the Company's future operating results and financial condition.
BACKLOG
A significant portion of the Company's revenue is derived from work to
be performed under long-term, cancelable contracts entered into in the ordinary
course of business. These contracts often relate to ongoing projects with
respect to which the continuation of work is at the option of the customer.
Because a significant portion of the Company's agreements are cancelable, the
Company does not believe that agreements for work outstanding at any specific
time provide a meaningful indication of future revenue.
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EMPLOYEES AND RECRUITMENT
The Company believes that its future success will depend in part on its
continued ability to hire and retain qualified employees. The Company believes
its relations with employees are good. Competition for personnel in the
Company's industry is intense. Although it actively recruits personnel and
provides professional employees with career path opportunities, there can be no
assurance that the Company will be successful in attracting and retaining
sufficient numbers of qualified personnel to conduct its business in the future.
The Company actively recruits at college campuses and also seeks employees with
expertise and experience in its chosen markets.
At February 28, 1998, the Company had approximately 450 full-time
employees. None of the Company's employees is represented by a labor union.
COPYRIGHTS, TRADEMARKS, PATENTS AND LICENSES
The Company currently markets several proprietary software products.
The Company attempts to protect its rights in its proprietary software by
retaining the title to and copyright in the software and documentation and
attempts to protect rights in all software it markets (including third-party
software) by including appropriate contractual restrictions on use and
disclosure in its licenses and by requiring its employees to execute
non-disclosure agreements. However, the Company provides source code for some of
its software products to users for their internal use in connection with the
license of these products. The Company believes that, due to the rapid pace of
innovation within its industry, factors such as the technological and creative
skills of its personnel are more important in establishing and maintaining a
leadership position within the industry than are the various legal protections
of its technology. The Company believes that the nature of its customers, the
importance of the Company's products to them and their need for continuing
product support reduce the risk of unauthorized reproduction. However, there can
be no assurance that any such steps taken by the Company in this regard will be
adequate to deter misappropriation of its proprietary rights or independent
third-party development of functionally equivalent products.
The Company's business includes the development of custom software in
connection with specific customer engagements. Although the Company frequently
assigns to its customer the copyright and other intellectual property rights in
the software and documentation developed for the customer, the Company
negotiates to retain the right to develop similar products for other customers.
In a limited number of circumstances, the Company has agreed not to use certain
specific technological know-how developed in an engagement for one customer to
perform projects for other customers or to develop a system for a competitor of
the customer that is similar to the system developed for the customer. However,
the Company believes these restrictions will not have a material adverse effect
on the Company.
The Company believes that its services and products do not infringe on
the intellectual property rights of its customers or other third parties.
However, particularly given the rapid changes in copyright and patent law, there
can be no assurance that an infringement claim will not be asserted against the
Company in the future. Any such claim, if resolved against the Company, could
adversely affect the Company's reputation, preclude it from offering certain
products and services, and subject it to substantial liability.
ITEM 2. PROPERTIES
The Company's principal offices are located at 128 South Tryon Street
in Charlotte, North Carolina. The Company's lease of those premises
(approximately 129,000 square feet) expires December 31, 2000, with two
five-year renewal options thereafter. Elite maintains its offices (approximately
25,000
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square feet) in Los Angeles, California under a lease that expires July 2008.
The Company also leases additional facilities, as needed, principally as sales
offices in other cities in North America and the United Kingdom. The Company
believes that its facilities are adequate for its current needs.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in litigation from time to time that is routine
in nature and incidental to the conduct of business. The Company believes that
the outcome of any such litigation would not have a material effect on the
financial condition or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's stockholders
during the fourth quarter of the fiscal year ended December 31, 1997.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDERS' MATTERS
MARKET FOR COMMON STOCK
The information under the caption "Market for Common Stock" on page 11
of the Annual Report is incorporated herein by reference.
HOLDERS OF RECORD
As of February 28, 1998, there were 136 holders of record of Common
Stock.
DIVIDENDS
The Company has never declared or paid any cash dividends on its Common
Stock. The Company currently intends to retain any earnings for use in its
business and therefore does not anticipate paying any cash dividends in the
foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
The information under the caption "Selected Financial Data" on page 11
of the Annual Report is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
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The information under the caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations" on pages 12 through 17 of the
Annual Report is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements:
The consolidated financial statements and related notes, together with
the report thereon of Price Waterhouse LLP dated February 6, 1998 appearing on
pages 18 through 31 of the Annual Report are incorporated herein by reference.
Financial Statement Schedules:
Item 14 includes an index to the financial statement schedules.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information under the captions "Election of Directors" and
"Executive Officers, Compensation and Other Information" in the Proxy Statement
is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information under the caption "Executive Officers, Compensation and
Other Information" in the Proxy Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information under the captions "Principal Stockholders" and
"Election of Directors" in the Proxy Statement is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the captions "Employment Agreements" and
"Compensation Committee Interlocks and Insider Participation" in the Proxy
Statement is incorporated herein by reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) Financial Statements.
The following consolidated financial statements and related notes, including the
report thereon of Price Waterhouse LLP dated February 6, 1998, appearing on
pages 18 through 31 of the Annual Report, are incorporated herein by reference:
Consolidated Statement of Operations
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Consolidated Statement of Stockholders' Equity
Notes to Consolidated Financial Statements
Report of Independent Accountants
(a)(2) Financial Statement Schedules.
The following schedules are filed as a part of this report:
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Schedule II - Valuation and Qualifying Accounts and Reserves 17
Report of Independent Accountants on the Financial
Statement Schedule 18
All other schedules for which provision is made in the applicable
regulation of the Securities and Exchange Commission are not required under the
related instructions, are inapplicable, or the required information is included
elsewhere in the financial statements.
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(a)(3) EXHIBITS:
Exhibit No. Description
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3.1 Restated Certificate of Incorporation of Broadway & Seymour,
Inc., dated June 16, 1992 (Incorporated by reference to
Exhibit 3.1 to the Registrants Annual Report on Form 10-K for
the Fiscal Year Ended January 31, 1993)
3.2 Restated By-laws of the Company (Incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on Form
S-1, SEC File No. 33-46672)
4.1 Specimen share certificate (Incorporated by reference to
Exhibit 4.1 to the Registrant's Registration Statement on Form
S-1, SEC File No. 33-46672)
4.2 Articles 4 and 5 of Broadway & Seymour, Inc.'s Restated
Certificate of Incorporation (Incorporated by reference to
Exhibit 4.2 to the Registrant's Registration Statement on Form
S-1, SEC File No. 33-46672)
4.3 Article II, Section 2.2 of the Company's Restated By-laws
(Incorporated by reference to Exhibit 4.3 to the Registrant's
Registration Statement on Form S-1, SEC File No. 33-46672)
10.01** Restated 1985 Incentive Stock Option Plan of Broadway &
Seymour, Inc. dated June 12, 1985 (Incorporated by reference
to Exhibit 10.1 to the Registrant's Registration Statement on
Form S-1, SEC File No. 33-46672)
10.02** Amendment No. 1 to Restated 1985 Incentive Stock Option Plan
of Broadway & Seymour, Inc. dated February 25, 1993
(Incorporated by reference to Exhibit 10.2 to the Registrant's
Annual Report on Form 10-K for the Fiscal Year Ended January
31, 1993)
10.03** Amendment No. 2 to Restated 1985 Incentive Stock Option Plan
of Broadway & Seymour, Inc. dated February 17, 1994
(Incorporated by reference to Exhibit 10.16 to the
Registrant's Transition Report on Form 10-K for the Eleven
Months Ended December 31, 1993)
10.04** Amendment No. 3 to Restated 1985 Incentive Stock Option Plan
of Broadway & Seymour, Inc. dated May 15, 1995 (Incorporated
by reference to Exhibit 10.4 to the Registrant's Quarterly
Report on Form 10-Q for the Quarter Ended September 30, 1995)
10.05** Broadway & Seymour, Inc. 1996 Stock Option Plan dated
September 16, 1996 (Incorporated by reference to Appendix B to
the Registrant's Definitive Proxy Statement on Form DEFS14A
dated August 14, 1996)
10.06 Asset Purchase Agreement, dated as of April 10,1996 by and
between Fidelity Investments Institutional Services Company
Inc. and Broadway & Seymour, Inc., BancCorp Systems, Inc.,
Heebink Group, Inc., and National Systems Group, Inc.
(Incorporated by reference to Exhibit 2.1 to the Registrant's
Current Report on Form 8-K dated May 15, 1996)
10.07 Amendment No. 1 to Asset Purchase Agreement dated May 15, 1996
by and between Fidelity Investments Institutional Services
Company Inc. and Broadway & Seymour, Inc., BancCorp Systems,
Inc., Heebink Group, Inc., and National Systems Group, Inc.
(Incorporated by reference to Exhibit 2.1a to the Registrant's
Current Report on Form 8-K dated May 15, 1996)
10.08 Quantech License and Services Agreement, dated April 10, 1996,
by and between Fidelity Investments Institutional Services
Company, Inc. and Corbel & Co. (Incorporated by reference to
Exhibit 2.2 to the Registrant's Current Report on Form 8-K
dated May 15, 1996)
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Exhibit No. Description
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10.09 Licenses and Services Agreement, dated April 10, 1996, by and
between Fidelity Investments Institutional Services Company,
Inc. and BancCorp Systems, Inc. (Incorporated by reference to
Exhibit 2.3 to the Registrant's Current Report on Form 8-K
dated May 15, 1996)
10.10 Temporary Professional Services Agreement, dated May 15, 1996,
by and between Fidelity Investments Institutional Services
Company, Inc. and Broadway & Seymour, Inc. (Incorporated by
reference to Exhibit 2.4 to the Registrant's Current Report on
Form 8-K dated May 15, 1996)
10.11 Guaranty and Indemnity Agreement, dated April 10, 1996, by and
between Fidelity Investments Institutional Services Company,
Inc. and Broadway & Seymour, Inc. (Incorporated by reference
to Exhibit 2.5 to the Registrant's Current Report on Form 8-K
dated May 15, 1996)
10.12 Amendment No. 1 to the Guaranty and Indemnity Agreement, dated
May 15, 1996 by and between Fidelity Investments Institutional
Services Company, Inc. and Broadway & Seymour, Inc.
(Incorporated by reference to Exhibit 2.5a to the Registrant's
Current Report on Form 8-K dated May 15, 1996)
10.13 Transition Services and Support Agreement, dated May 15, 1996,
by and between Fidelity Investments Institutional Services
Company, Inc. and Broadway & Seymour, Inc. (Incorporated by
reference to Exhibit 2.6 to the Registrant's Current Report on
Form 8-K dated May 15, 1996)
10.14 Stock Purchase Agreement, dated as of November 19, 1996, by
and among Broadway & Seymour, Inc., Corbel & Co. and SunGard
Investment Ventures, Inc. (Incorporated by reference to
Exhibit 2.1 to the Registrant's Current Report on Form 8-K
dated November 19, 1996)
10.15 Asset Purchase Agreement between Unisys Corporation and
Broadway & Seymour, Inc. dated as of July 24, 1997.
(Incorporated by reference to Exhibit 10.35 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended September 30, 1997)
10.16 Amendment to Asset Purchase Agreement between Unisys
Corporation and Broadway & Seymour, Inc. dated September 17,
1997. (Incorporated by reference to Exhibit 10.36 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended September 30, 1997)
10.17 Loan Agreement by and among Broadway & Seymour, Inc., Elite
Information Systems, Inc., The Minicomputer Company of
Maryland, Inc., Elite Information Systems International, Inc.,
Pragmatix Telephony Solutions, Inc., and Fleet National Bank
(as agent and lender) for $15,000,000 secured revolving credit
loan dated as of July 23, 1997. (Incorporated by reference to
Exhibit 10.21 to the Registrant's Quarterly Report on Form
10-Q for the Quarter Ended June 30, 1997)
10.18 Security Agreement by and between Broadway & Seymour, Inc. and
Fleet National Bank dated as of July 23, 1997 (Incorporated by
reference to Exhibit 10.22 to the Registrant's Quarterly
Report on Form 10-Q for the Quarter Ended June 30, 1997)
10.19 Security Agreement by and between Elite Information Systems,
Inc. and Fleet National Bank dated as of July 23, 1997
(Incorporated by reference to Exhibit 10.23 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 1997)
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Exhibit No. Description
----------- -----------
10.20 Security Agreement by and between Elite Information Systems
International, Inc. and Fleet National Bank dated as of July
23, 1997 (Incorporated by reference to Exhibit 10.24 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 1997)
10.21 Security Agreement by and between The Minicomputer of
Maryland, Inc. and Fleet National Bank dated as of July 23,
1997 (Incorporated by reference to Exhibit 10.26 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 1997)
10.22 Security Agreement by and between Pragmatix Telephony
Solutions, Inc. and Fleet National Bank dated as of July 23,
1997 (Incorporated by reference to Exhibit 10.26 to the
Registrant's Quarterly Report of Form 10-Q for the Quarter
Ended June 30, 1997)
10.23 Conditional Trademark Assignment by and between Broadway &
Seymour, Inc. and Fleet National Bank dated as of July 23,
1997 (Incorporated by reference to Exhibit 10.27 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 1997)
10.24 Conditional Trademark Assignment by and between Elite
Information Systems, Inc. and Fleet National Bank dated as of
July 23, 1997 (Incorporated by reference to Exhibit 10.28 to
the Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 1997)
10.25 Conditional Trademark Assignment by and between Elite
Information Systems International, Inc. and Fleet National
Bank dated as of July 23, 1997 (Incorporated by reference to
Exhibit 10.29 to the Registrant's Quarterly Report on Form
10-Q for the Quarter Ended June 30, 1997)
10.26 Conditional Trademark Assignment by and between The
Minicomputer of Maryland, Inc. and Fleet National Bank dated
as of July 23, 1997 (Incorporated by reference to Exhibit
10.30 to the Registrant's Quarterly Report on Form 10-Q for
the Quarter Ended June 30, 1997)
10.27 Conditional Trademark Assignment by and between Pragmatix
Telephony Solutions, Inc. and Fleet National Bank dated as of
July 23, 1997 (Incorporated by reference to Exhibit 10.31 to
the Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 1997)
10.28 Stock Pledge Agreement by and between Broadway & Seymour, Inc.
and Fleet National Bank dated as of July 23, 1997
(Incorporated by reference to Exhibit 10.32 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 1997)
10.29 Stock Pledge Agreement by and between Elite Information
Systems, Inc. and Fleet National Bank dated as of July 23,
1997 (Incorporated by reference to Exhibit 10.33 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 1997)
10.30 Letter dated June 30, 1997 regarding the disposition of the
holdback and termination of the indemnification provisions
contained in the Asset Purchase Agreement between Broadway &
Seymour, Inc. and Fidelity Investments Institutional Services
Company, Inc. (Incorporated by reference to Exhibit 10.34 to
the Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 1997)
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Exhibit No. Description
----------- -----------
10.31* First Amendment to Loan Agreement by and among Broadway &
Seymour, Inc., Elite Information Systems, Inc., The
Minicomputer Company of Maryland, Inc., Elite Information
Systems International, Inc., and Fleet National Bank (as agent
and lender) dated September 30, 1997.
10.32* Second Amendment to Loan Agreement by and among Broadway &
Seymour, Inc., Elite Information Systems, Inc., The
Minicomputer Company of Maryland, Inc., Elite Information
Systems International, Inc., and Fleet National Bank (as agent
and lender) dated February 6, 1998.
10.33** Employment Agreement, dated as of May 29, 1997 (executed June
1, 1997), by and between Broadway & Seymour, Inc. and Keith B.
Hall (Incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997)
10.34** Employment Agreement dated as of September 1, 1995 by and
between Broadway & Seymour, Inc. and Alan C. Stanford
(Incorporated by reference to Exhibit 10.28 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended September 30, 1995)
11* Computation of earnings per share
21* Subsidiaries of the Registrant
23* Consent of Independent Accountants dated March 25, 1998
27* Financial Data Schedule, which is submitted electronically to
the Securities and Exchange Commission for information only
and not filed.
* Filed herewith.
** Management contract or compensatory plan or arrangement required to be filed
as an exhibit.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BROADWAY & SEYMOUR, INC.
Date: March 25, 1998 By: /s/ Keith B. Hall
-----------------
Keith B. Hall,
Vice President and Chief
Financial Officer
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, this report has been signed by the following persons on
behalf of the Registrant and in the capacities set forth below and on the 25 day
of March 1998.
Signature Title
--------- -----
/s/ Alan C. Stanford
- -----------------------------
Alan C. Stanford Chairman, President, Chief Executive
Officer and Director
/s/ William G. Seymour
- -----------------------------
William G. Seymour Vice Chairman and Director
/s/ David A. Finley
- -----------------------------
David A. Finley Director
/s/ Roger Noall
- -----------------------------
Roger Noall Director
/s/ George L. McTavish
- -----------------------------
George L. McTavish Director
/s/ Steven S. Elbaum
- -----------------------------
Steven S. Elbaum Director
/s/ Robert J. Kelly
- -----------------------------
Robert J. Kelly Director
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ITEM 14a(2) SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES:
Broadway & Seymour, Inc.
Schedule II - Valuation and Qualifying Accounts and Reserves
For the Years Ended December 31, 1997, 1996, and 1995
Additions/
Balance at (reductions) Balance at
beginning charged to end
of period expense Deductions Other of period
---------- ------------ ---------- ----- ----------
Allowance for doubtful accounts (shown
as a deduction from receivables)
December 31, 1997 $ 892 $ 1,046 $ 1,016 $ - $ 922
December 31, 1996 941 1,076 1,125 - 892
December 31, 1995 563 632 323 69 (1) 941
Reserve against long-term assets (shown
as a deduction from other assets)
December 31, 1997 $ - $ - $ - $ - $ -
December 31, 1996 250 - 250 - -
December 31, 1995 123 127 - - 250
(1) Relates to balance at date of acquisition of acquired companies
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REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENTS SCHEDULE
To the Board of Directors and Stockholders
of Broadway & Seymour, Inc.
Our audits of the consolidated financial statements referred to in our report
dated February 6, 1998 appearing on page 31 of the Company's Annual Report
(which is incorporated by reference in this Form 10-K) also included an audit of
the Financial Statement Schedule listed in Item 14(a)(2) of this form 10-K. In
our opinion, this Financial Statement Schedule presents fairly, in all material
respects, the information set forth herein when read in conjunction with the
related consolidated financial statements.
Price Waterhouse LLP
Charlotte, North Carolina
February 6, 1998
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