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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, EFFECTIVE OCTOBER 7, 1996)
For the fiscal year ended December 31, 1996
[ ] 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
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
128 SOUTH TRYON STREET
CHARLOTTE, NORTH CAROLINA 28202
(Address of principal executive offices) (Zip code)
(704) 372-4281
(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 March 19, 1997 computed by reference to the closing sale
price on such date, was $104,097,793. As of the same date, 9,051,982 shares of
Common Stock, $.01 par value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 1996 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 1997 Annual Meeting of Stockholders
(the "Proxy Statement") to be filed pursuant to Regulation 14A (no later than
April 30, 1997) are incorporated herein by reference into Parts II and IV, and
Part III, respectively.
TOTAL PAGES 50
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ITEM 1. DESCRIPTION OF BUSINESS
OVERVIEW
Broadway & Seymour, Inc. ("Broadway & Seymour" or the "Company") is an
information technology software and services company providing integrated
business solutions for the financial services industry and time and practice
management solutions for the legal and professional services industries. The
solutions are often customized to the specific needs of individual customers
through systems integration and development services. Products mentioned in
this document are for identification purposes only and may be trademarks of
Broadway & Seymour, its subsidiaries or third parties.
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 business alliances and
internal product development, rather than acquisitions. Operations were
reorganized to integrate independent business units and certain non-core
business units were disposed of during 1996:
- In May 1996, the Company sold substantially all the assets,
subject to certain related liabilities, of its Asset
Management Services Group ("AMSG").
- In November 1996, the Company sold all of the issued and
outstanding capital stock of the Company's wholly owned
subsidiary, Corbel & Co. ("Corbel").
In addition, in September of 1996, the Company developed a plan to close its
National Pension Alliance ("NPA") business following a transition period for NPA
customers. These dispositions are more fully described under Item 7 below.
BUSINESS STRATEGY
While Broadway & Seymour had previously used acquisitions to grow the
Company, its new strategy is to establish and maintain key customer
relationships in chosen markets with a focus on developing and marketing a
flexible set of core technology solutions.
In the financial services market, the Company's focus is in three
areas: industry-specific solutions, customer relationship management solutions
and systems integration services. To meet customer needs, the Company continues
to upgrade and enhance its industry specific solutions with new features and
functions and by ensuring compatibility with advancing technologies. In the area
of customer relationship management, the Company is committed to the ongoing
development and marketing of its customer sales and service solution,
TouchPoint(TM), designed to aid in the efficient gathering and sharing of
customer information from various sources throughout an organization. The
Company also plans to provide systems integration and custom development
services to large, market leading organizations that will offer opportunities
for growth through value-adding relationships.
In the professional services industry, the Company's strategy is to
aggressively market and continually develop a client/server Windows(TM) based
billing and time management system to law firms, and to expand its presence to
other professional service firms, including accounting, actuarial, public
relations and consulting firms.
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SERVICE AND PRODUCT SOLUTIONS
SYSTEMS INTEGRATION AND CUSTOM DEVELOPMENT SERVICES
A significant part of Broadway & Seymour's revenue is generated through
systems integration and custom development engagements. These engagements
typically involve the development of technology solutions for difficult
business and technical problems and are often provided as part of a complex
solution that includes proprietary software, 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.
The Company's systems integration and custom development engagements typically
include some or all of the following:
- strategic planning, including an assessment of a customer's
technology-related needs and the development of an overall
strategy to meet those needs;
- development of functional specifications designed to ensure
that the system will meet the customer's identified needs;
- development of the system architecture and the technical
design specifications;
- building and testing the system, including the development of
the software code and the testing of the code in a simulated
work environment;
- transition services, including data conversion, training,
documentation and implementation of the system; and
- product support services, including maintenance, ongoing
enhancement of the software and contingency support.
The Company performs systems integration and custom development work
under a variety of financial arrangements, including fixed fee contracts and
billings on a time and materials basis. The Company also enters into financial
arrangements from time to time that provide incentives to the Company for
completing a project in less than the budgeted hours. Although the Company
generally seeks major projects, the Company may undertake smaller projects
because it believes that such projects often have the potential to develop into
major systems projects or long-term customer relationships.
TOUCHPOINT(TM)
The TouchPoint solution is a combination of the Company's integration
and customization services, proprietary software and third party software that
can be uniquely modified for each client to aid it in the enterprise-wide
gathering and sharing of customer information through numerous sources,
including call centers, offices, branches, the Internet, kiosks or network
computers. Through the use of computer telephony integration and
object-oriented programming, TouchPoint consolidates customer information on
composite screens and automates customer relationship tools and processes.
TouchPoint has an open, three-tier client/server architecture which gives it
flexibility to be integrated with existing client data processing architectures
and makes it scaleable so that it can be implemented in single departments or
enterprise-wide using a phased approach.
BANCSTAR(R)
BANCStar is a branch automation system 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 is an automated banking solution that supports a graphical user
interface,
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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.
CRISP(TM)
CRISP is a decision support system 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.
VISUALIMPACT(TM)
VisualImpact is an integrated image-enabled item and remittance
processing software system that runs under the Windows NT(TM) operating system
on both client and server workstations. The solution uses advanced hardware,
networking and operating system features to distribute the workload across
multiple, distributed servers. In addition, VisualImpact has a common transport
interface that allows it to interface with transports from multiple hardware
vendors and uses high bandwidth printer interfaces to drive printers. The
distribution rights to VisualImpact have been exclusively licensed to a third
party distributor.
LEGAL AND PROFESSIONAL SERVICES SOLUTIONS
Elite Information Systems, Inc. ("Elite"), a subsidiary of Broadway &
Seymour acquired in February 1994, provides office automation, time keeping,
accounting and information management software to the professional service
industries. Elite's products incorporate client-server and open-systems
architecture within the Windows(TM) environment.
The Elite Billing System - is a comprehensive accounting and
information management software package serving legal and professional service
firms. The Elite Billing System responds to client and professional service
billing requirements with on-line management information needed to guide such
firms.
The Elite Case Management System - is a prospect tracking
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.
SUPPORT SERVICES
The Company views its support activities 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.
The degree of maintenance service provided to customers differs depending on the
product being supported. Generally, support contracts entitle users to telephone
support and regular upgraded product releases. In addition, the Company is able
to offer certain training classes and multi-media based instruction to customers
that aid in the implementation and effective use of the Company's solutions.
RESEARCH AND DEVELOPMENT
To meet the changing needs of the financial and professional services
industries, the Company expends resources to continually develop and enhance
systems development technologies and approaches that may have broad application
in systems integration projects and solutions. The Company believes that ongoing
commitment to research and development is important to the long-term success of
the business.
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For the years ended December 31, 1996, 1995 and 1994, the Company's
total research and development expenditures were $7.4 million, $8.9 million and
$7.5 million, respectively. The Company anticipates continued investment in
research and development to provide growth and enhancement to its existing
solution offerings, and it believes spending relative to revenue will continue
at its current level.
There are inherent risks in the 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
The Company's sales personnel are given sales responsibility within
their targeted customer markets. Additionally, senior management within the
Company is directly involved in obtaining and supporting relationships.
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, direct mailings to targeted
customers and telemarketing.
CUSTOMERS
Broadway & Seymour's customers include a broad variety of institutions
and companies in the financial services industry. In addition, the Company
serves a client base of law firms and other professional service firms through
its Elite operations. Elite has over 500 customers using its software, including
some of the largest law firms in the United States and the United Kingdom.
The Company's follow-on sales to existing customers, including
multi-year systems integration and custom development projects, system
upgrades and expansion, new products and maintenance and support services,
represent a significant portion of total revenue. The Company's business
strategy emphasizes sales to existing customers.
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 several 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 market.
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 customers. The Company
believes 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 Company's future
operating results and financial condition may be adversely affected by the
increasingly competitive environment of the software industry.
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BACKLOG
A majority 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 the majority of the Company's agreements are cancelable on relatively
short notice, generally 30 days, the Company does not believe that agreements
for work outstanding at any specific time provide a meaningful indication of
future revenue.
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 and believes that
its turnover is no higher than the industry average, 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 seeks employees with expertise
and experience in its chosen markets.
At March 25, 1997, the Company had approximately 500 full-time
employees. None of the Company's employees is represented by a labor union.
COPYRIGHTS, TRADEMARKS, PATENTS AND LICENSES
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.
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
confidentiality 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
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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.
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 124,000 square feet) expires December 31, 2000, with two
five-year renewal options thereafter. Elite maintains its offices (approximately
14,370 square feet) in Los Angeles, California under a lease that expires in
February 1998. The Company leases additional facilities in New York City, New
York; Hunt Valley, Maryland; Whistler, British Columbia -Canada and London,
England. 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, 1996.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDERS' MATTERS
MARKET FOR COMMON STOCK
Since June 16, 1992, the date of the Company's initial public offering
("IPO"), its common stock, $.01 par value, (the "Common Stock") has traded on
the National Association of Securities Dealers, Inc. Nasdaq National Market
System ("Nasdaq") under the symbol BSIS. The following table shows the price
range in the Company's Common Stock for the past two fiscal years:
Quarter ended 12/31/96 9/30/96 6/30/96 3/31/96 12/31/95 9/30/95 6/30/95 3/31/95
--------------------------------------- --------------------------------------
High $14 $14 1/8 $17 1/8 $16 1/4 $26 1/2 $30 1/8 $20 3/4 $21 5/8
Low $ 7 3/4 $ 9 1/4 $10 $10 1/2 $15 3/4 $21 $15 1/2 $17
HOLDERS OF RECORD
As of March 19, 1997, there were approximately 154 holders of record of
Common Stock.
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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
SELECTED FINANCIAL DATA
(in thousands, except per share data)
Eleven months Fiscal
Years ended ended Year ended
December 31, Dec. 31, January 31,
Operations: 1996 1995 1994 1993 1993
---- ---- ---- ---- ----
Total revenue $ 89,351 $114,738 $132,858 $71,665 $65,610
Operating costs and expenses 99,609 $130,583 $118,983 $74,520 59,109
-------- -------- -------- ------- -------
Operating income (loss) (10,258) (15,845) 13,875 (2,855) 6,501
-------- -------- -------- ------- -------
Gain on disposition of non-strategic
business units 9,652
Net interest (expense) income (187) (493) (821) (25) 137
-------- -------- -------- ------- -------
Income (loss) before income taxes and
accounting change (793) (16,338) 13,054 (2,880) 6,638
Provision (benefit) for income taxes 1,455 (4,958) 5,858 1,298 3,215
-------- -------- -------- ------- -------
Income (loss) before accounting change (2,248) (11,380) 7,196 (4,178) 3,423
Effect of income tax accounting change 377
-------- -------- -------- ------- -------
Net income (loss) $ (2,248) $(11,380) $ 7,196 $(3,801) $ 3,423
======== ======== ======== ======= =======
Per common and common equivalent share:
Income (loss) before accounting change $ (0.25) $ (1.26) $ 0.85 $ (0.53) $ 0.51
Effect of accounting change 0.04
-------- -------- -------- ------- -------
Net income (loss) $ (0.25) $ (1.26) $ 0.85 $ (0.49) $ 0.51
======== ======== ======== ======= =======
Selected balance sheet data: 12/31/96 12/31/95 12/31/94 12/31/93 1/31/93
-------- -------- -------- -------- -------
Working capital (deficit) $ 15,907 $ 490 $ (407) $ (467) $ 6,000
Total assets 66,474 83,245 75,683 50,717 39,910
Long-term debt, including current portion 611 2,373 1,765 899
Stockholders' equity 32,190 32,437 34,780 25,087 23,567
The selected financial data includes the results of acquired businesses from the
date of acquisition and, in the case of Micro/Resources, Inc. (accounted for
using the pooling of interests method), for all periods presented. The
comparability of the results of operations for the periods presented is also
impacted by dispositions of certain businesses as discussed in Item 7,
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information under the caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations" on pages 7 through 15 of the
Annual Report is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements:
The financial statements, together with the report thereon of Price
Waterhouse LLP dated February 7, 1997 appearing on pages 16 through 32 of the
Annual Report are incorporated herein by reference.
Financial Statement Schedule:
Item 14 includes an index to the financial statement schedule.
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 caption "Voting Securities, Principal Holders
and Proxies" 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 financial statements, including the report thereon of
Price Waterhouse LLP dated February 7, 1997, appearing on pages 16 through 32
of the Annual Report, are incorporated herein by reference:
Consolidated Balance Sheet
Consolidated Statement of Operations
Consolidated Statement of Stockholders' Equity
Consolidated Statement of Cash Flows
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., date 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)
10.1** 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)
10.2** 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)
10.3** 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)
10.4** 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)
10.5** 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)
10.6 Limited Partnership Agreement of National Pension Alliance
dated April 8, 1994 by and among Corbel/NPA Inc., Stuart Hack
Corp. and Michael E. Callahan, Inc. (Incorporated by reference
to Exhibit 10.7 to the Registrant's Quarterly Report on Form
10-Q for the Quarter Ended September 30, 1995)
10.7 Stock Purchase Agreement dated January 10, 1994 by and among
Broadway & Seymour, Inc., certain shareholders of Elite Data
Processing, Inc. and Harvey Rich (Incorporated by reference to
Exhibit 2.1 to the Registrant's Current Report on Form 8-K
dated February 1, 1994)
10.8 Stock Pledge Agreement dated as of February 1, 1994 by and
among Broadway & Seymour, Inc., Alan Richeimer (a/k/a Alan
Rich) and Harvey Rich and Eva Rich, as trustees of the Harvey
and Eva Rich Family Trust created by that Trust Agreement
dated September 19,1988 (Incorporated by reference to Exhibit
10.1 to the Registrant's Current Report on Form 8-K dated
February 1, 1994)
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Exhibit No. Description
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10.9 Asset Purchase Agreement dated as of June 9, 1995 by and among
Broadway & Seymour Inc., The MiniComputer Company of Maryland,
Inc., Robert W. Johnson, Michael W. Matthai and Robert A.
Erich, Jr. (Incorporated by reference to Exhibit 10.18 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended September 30, 1995)
10.10 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)
10.11 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)
10.12 Quantech License and Services Agreement, dated April 10, 1996,
by and between Fidelity Investments Institutional Services
Company, Inc. and Corbel & Company. (Incorporated by reference
to Exhibit 2.2 to the Registrant's Current Report on Form 8- K
dated May 15, 1996)
10.13 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)
10.14 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)
10.15 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)
10.16 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)
10.17 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)
10.18 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).
12
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Exhibit No. Description
----------- -----------
10.19** 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)
10.20** Employment Agreement dated as of January 19, 1995 by and
between Broadway & Seymour, Inc. and David A. Finley
(Incorporated by reference to Exhibit 10.26 to the
Registrant's Annual Report on Form 10-K for the Year Ended
December 31, 1995)
10.21** Retirement and Post-employment agreement as of July 15, 1996
by and between Broadway & Seymour, Inc. and William W. Neal,
III (Incorporated by reference to Exhibit 10.22 to the
Registrant's Quarterly Report on Form 10-Q for the Period
Ended September 30, 1996).
10.22** Termination Agreement dated as of March 1, 1996 by and between
Broadway & Seymour, Inc. and David Durham (Incorporated by
reference to Exhibit 10.26 to the Registrant's Annual Report
on Form 10-K for the Year Ended December 31, 1995)
11* Computation of earnings per share
13* Portions of the Registrant's 1996 Annual Report, consisting
of: Management Discussion and Analysis of Financial
Condition and Results of Operations, Financial Statements and
report thereon of Price Waterhouse LLP dated February 7, 1997
and Supplementary Data.
21* Subsidiaries of the Registrant
23* Consent of Independent Accountants dated March 24, 1997
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.
13
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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, 1997 By /s/David A. Finley
------------------
David A. Finley, Executive 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 1997.
Signature Title
--------- -----
/s/Alan C. Stanford Chairman of the Board, President, Chief Executive
- ------------------------------ Officer and Director
Alan C. Stanford
/s/David A. Finley Executive Vice President, Chief Financial Officer
- ------------------------------ and Director
David A. Finley
/s/William G. Seymour Vice Chairman of the Board and Secretary
- ------------------------------
William G. Seymour
/s/Roger Noall Director
- ------------------------------
Roger Noall
/s/George L. McTavish Director
- ------------------------------
George L. McTavish
/s/Steven S. Elbaum Director
- ------------------------------
Steven S. Elbaum
/s/Robert J. Kelly Director
- ------------------------------
Robert J. Kelly
/s/Robert J. Levenson Director
- ------------------------------
Robert J. Levenson
14
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ITEM 14(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, 1996, 1995 AND 1994
Additions/
Balance at (reductions) Balance at
beginning charged to end
of period expense Deductions Other of period
--------- ------- ---------- ----- ---------
(In thousands)
Allowance for doubtful accounts (shown
as a deduction from receivables)
December 31, 1996 $941 $1,076 $1,125 $-- $892
December 31, 1995 563 632 323 69(1) 941
December 31, 1994 224 496 453 296(2) 563
Reserve against long-term assets (shown
as a deduction from other assets)
December 31, 1996 $250 $ -- $ 250 $--
December 31, 1995 123 127 250
December 31, 1994 175 $ 52 123
(1) Relates to balance at date of acquisition of acquired companies.
(2) Includes $294,000 related to balances at dates of acquisition of
acquired companies.
(3) Relates to balance at date of acquisition of acquired company.
15
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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 7, 1997 appearing on page 32 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 7, 1997
16
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INDEX TO EXHIBITS
(A)(3) EXHIBITS:
Exhibit No. Description Page Number
3.1 Restated Certificate of Incorporation of Broadway & Seymour,
Inc., date 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)
10.1** 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)
10.2** 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)
10.3** 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)
10.4* 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)
10.5** 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)
10.6 Limited Partnership Agreement of National Pension Alliance
dated April 8, 1994 by and among Corbel/NPA Inc., Stuart Hack
Corp. and Michael E. Callahan, Inc. (Incorporated by reference
to Exhibit 10.7 to the Registrant's Quarterly Report on Form
10-Q for the Quarter Ended September 30, 1995)
10.7 Stock Purchase Agreement dated January 10, 1994 by and among
Broadway & Seymour, Inc., certain shareholders of Elite Data
Processing, Inc. and Harvey Rich (Incorporated by reference to
Exhibit 2.1 to the Registrant's Current Report on Form 8-K
dated February 1, 1994)
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10.8 Stock Pledge Agreement dated as of February 1, 1994 by and
among Broadway & Seymour, Inc., Alan Richeimer (a/k/a Alan
Rich) and Harvey Rich and Eva Rich, as trustees of the Harvey
and Eva Rich Family Trust created by that Trust Agreement
dated September 19,1988 (Incorporated by reference to Exhibit
10.1 to the Registrant's Current Report on Form 8-K dated
February 1, 1994)
10.9 Asset Purchase Agreement dated as of June 9, 1995 by and among
Broadway & Seymour Inc., The MiniComputer Company of Maryland,
Inc., Robert W. Johnson, Michael W. Matthai and Robert A.
Erich, Jr. (Incorporated by reference to Exhibit 10.18 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended September 30, 1995)
10.10 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)
10.11 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)
10.12 Quantech License and Services Agreement, dated April 10, 1996,
by and between Fidelity Investments Institutional Services
Company, Inc. and Corbel & Company. (Incorporated by reference
to Exhibit 2.2 to the Registrant's Current Report on Form 8- K
dated May 15, 1996)
10.13 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)
10.14 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)
10.15 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)
10.16 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)
10.17 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)
18
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10.18 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).
10.19** 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)
10.20** Employment Agreement dated as of January 19, 1995 by and
between Broadway & Seymour, Inc. and David A. Finley
(Incorporated by reference to Exhibit 10.26 to the
Registrant's Annual Report on Form 10-K for the Year Ended
December 31, 1995)
10.21** Retirement and Post-employment agreement as of July 15, 1996
by and between Broadway & Seymour, Inc. and William W. Neal,
III (Incorporated by reference to Exhibit 10.22 to the
Registrant's Quarterly Report on Form 10-Q for the Period
Ended September 30, 1996).
10.22** Termination Agreement dated as of March 1, 1996 by and between
Broadway & Seymour, Inc. and David Durham (Incorporated by
reference to Exhibit 10.26 to the Registrant's Annual Report
on Form 10-K for the Year Ended December 31, 1995)
11* Computation of earnings per share
13* Portions of the Registrant's 1996 Annual Report, consisting
of: Management Discussion and Analysis of Financial
Condition and Results of Operations, Financial Statements and
report thereon of Price Waterhouse LLP dated February 7, 1997
and Supplementary Data.
21* Subsidiaries of the Registrant
23* Consent of Independent Accountants dated March 24, 1997.
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.
19