<PAGE> 1
The following items were the subject
of a Form 12b-25 and are included
herein: Items 9-12
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
AMENDMENT NO. 1
TO
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED MARCH 31, 1998
COMMISSION FILE NUMBER: 0-18034
ENTERPRISE SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 68-015837
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
38705 Seven Mile Road, Suite 435, Livonia, MI 48152
(Address of principal executive offices) (Zip Code)
(248) 380-6070
(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, $.001 PAR VALUE
(Title of each class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to filed such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
---- ----
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB. [ ]
Revenues for the issuer's most recent fiscal year ended March 31, 1998 were
$24,175,736.
As of June 24, 1998 there were 18,052,425 shares of Common Stock issued and
outstanding, and the aggregate market value of the issued and outstanding Common
Stock held by non-affiliates was approximately $32 million.
Documents incorporated by reference: None.
Transitional Small Business Disclosure Format (check one): Yes No x
---- ----
<PAGE> 2
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Management of the Company
Set forth below is certain information with respect to the current
directors and executive officers of the Company:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION WITH THE COMPANY SINCE
---- --- ------------------------- --------
<S> <C> <C> <C>
Andre A. Blay 61 Chairman of the Board and Chief Executive Officer 1996
Thomas H. Baur 53 Director 1995
Robert Beauregard 59 Director 1997
H. Bradley Eden 39 Director and Secretary 1997
Richard L. Schleufer 45 Director; Chief Executive Officer of Enterprise 1996
Systems Group Limited (hereafter in Part III,
"Enterprise Ltd.")
David W. Martin 48 Chief Financial Officer, Financial Director of --
Enterprise Ltd.
Robert A. Blay 40 Vice President of Business Development and
Assistant Secretary --
</TABLE>
ANDRE A. BLAY became Chairman of the Board of the Company in April 1997
and its Chief Executive Officer in July 1997. He has been a Director of the
Company since the Company's acquisition of Starcom Television Services, Inc.
("Starcom") in February 1996. Until it was acquired by the Company, Mr. Blay
served as a director of Starcom. Mr. Blay also is a major shareholder and
director of Media Station, Inc., a multimedia company based in Ann Arbor,
Michigan, serves on the board of directors of Geppetos Workshop, a
privately-held software company, and is an advisor to the Enterprise Development
Fund and the Michigan State University Foundation. In 1969 Mr. Blay founded
Magnetic Video Corp., the world's first pre-recorded video cassette company,
which subsequently was acquired by Twentieth Century Fox. In 1981, he founded
The Blay Corp., which subsequently was acquired by Coca-Cola. Mr. Blay also has
produced motion pictures for Universal, Columbia, and Paramount.
THOMAS H. BAUR is the Chairman and largest stockholder of Travel
Technology Group, a private corporate travel management company. He has been a
Director of the Company since March 1995. From 1975 until the acquisition by the
Company of Mediatech, Inc. ("Mediatech") in February 1995, Mr. Baur was the
Chairman and Chief Executive Officer of Mediatech. From the time of that
acquisition until July 18, 1997, when the Company sold all of its interest in
Mediatech to an unaffiliated third party, he was the President of Mediatech. He
now serves as a consultant to the buyer of Mediatech. Mr. Baur is a member of
the board of directors of the Chicago Museum of Broadcast Communication and was
a founder of the International Television Association and the Chicago Coalition.
In 1989 he received the Arthur Andersen & Co. small business award for
excellence.
ROBERT BEAUREGARD is President of The Beauregard Group, Inc., a marketing
and communications consulting company, a position he has held since founding
that company in 1994. From 1988 to 1994, he was the group publisher and then
President of Sports Publishing Group, Inc., a Times Mirror Magazine company, and
from 1964 until joining Times Mirror, he held various executive offices with
several J. Walter Thompson advertising agency and publishing companies in
Canada, Europe, and the United States. Mr. Beauregard has been a Director of the
Company since August 1997.
H. BRADLEY EDEN is the Chairman of Eden Capital, LLC ("Eden"), a holding
company formed by Mr. Eden in 1996 to hold ownership interests in various
investment advisory firms. Before forming Eden, he served as President of Fund
Evaluation Group, an investment consulting firm that he co-founded in 1985. Mr.
Eden has been a Director of the Company since June 1997. He became Secretary of
the Company during the current calendar year.
RICHARD L. SCHLEUFER has been a Director of the Company since the Company
acquired Enterprise Ltd. in May 1996. He was appointed Chief Executive Officer
of Enterprise Ltd. in June 1996, after serving since 1987 as President and Chief
Executive Officer of Enterprise Systems Group, Inc., the North American
subsidiary of Enterprise Ltd. Mr. Schleufer joined Enterprise Systems Group,
Inc. in 1986 as its Vice President of Finance and Administration.
<PAGE> 3
DAVID W. MARTIN has been Chief Financial Officer of the Company since June
1998. He also is the Group Financial Director of Enterprise Ltd., a position he
has held since September 1989. Mr. Martin joined Enterprise Ltd. in 1982.
ROBERT A. BLAY became Vice President of Business Development and Assistant
Secretary of the Company in November 1997. Prior to joining the Company he had
served for over five years in various executive capacities for various other
software and media-related companies.
All Directors of the Company hold office until the next annual meeting
of its stockholders or until their successors are elected or appointed. Officers
of the Company are elected by and serve at the discretion of the Board of
Directors. No director or officer of the Company is related to any other Company
director or officer, except that Andre Blay is the father of Robert Blay.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors and executive officers and any beneficial
owner of more than ten percent of its outstanding common stock to file with the
Securities and Exchange Commission (the "SEC") initial reports of beneficial
ownership and subsequent reports of changes in beneficial ownership of Company
equity securities. SEC regulations also require such persons to furnish the
Company with copies of all Section 16(a) forms that they file.
Based solely on a review of Section 16(a) forms filed with the SEC and
submitted to the Company with respect to its fiscal year ended March 31, 1998
("fiscal 1998") by persons subject to Section 16(a) reporting concerning
Company equity securities during that fiscal year and a review of written
statements from some of them to the effect that other Section 16(a) forms were
not required, the Company believes that all Section 16 forms required of such
persons with respect to fiscal 1998 were timely filed, except that Mr. Graeme R.
Jenner (who was an executive officer of the Company for part of the fiscal
year) was late in filing a report concerning his beneficial ownership of
Company equity securities as of the time he first became an executive officer;
Mr. Robert Blay also was late in filing such a report; each of Messrs.
Beauregard and Eden was late in filing a report concerning his beneficial
ownership of Company equity securities as of the time he became a director of
the Company; Mr. Beauregard was late in reporting two purchases of shares of
Company common stock that occurred last October and six share purchases that
occurred last December; Mr. Eden was late in reporting a share purchase that
occurred last September; Mr. Baur was late in reporting four sales of shares
that occurred last September and three share purchases that occurred last
March; Mr. Schleufer was late in reporting a share purchase that occurred last
March; Mr. Andre Blay was late in reporting four share purchases that occurred
last February and four share purchases that occurred last March; and the
following former executive officers or directors of the Company: Mr. Jenner,
Mr. Richard J. Parent, Mr. Robert E. Derham, Mr. Carey S. Fitchey, and Mr.
William A. Kunkel, did not file a Form 5 with respect to fiscal 1998 and also
did not advise the Company in writing that such a filing was not required.
<PAGE> 4
ITEM 10. EXECUTIVE COMPENSATION
Certain Summary Information
The following table provides information concerning the compensation
for services in all capacities to the Company for fiscal 1998 and the
immediately preceding fiscal year (if he also was an executive officer of the
Company during that year) of Andre Blay, who has been the Company's Chief
Executive Officer ("CEO") since late July 1997, Graeme Jenner, who served as CEO
from the beginning of fiscal 1998 until succeeded by Mr. Blay, and each other
individual who served as an executive officer of the Company during fiscal 1998
and whose total salary and bonus for that year exceeded $100,000 (Messrs. Blay
and Jenner and such other individuals, the "named executives"). No information
for the fiscal year ended March 31,1996 is presented in table because none of
the named executives was an executive officer of the Company during that year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION(1) COMPENSATION
-------------- ------------
AWARDS
------------
SHARES OF
COMMON STOCK
NAME AND FISCAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS #(2) COMPENSATION($)
- ------------------------------ -------- ---------- ---------- ---------------- ----------------------
<S> <C> <C> <C> <C> <C>
Andre A. Blay............... 1998 $196,800(3) $ -0- -0- $ -0-
Chairman of the Board and
Chief Executive Officer
Graeme R. Jenner............ 1998 $215,314(4) $ -0- -0- $495,527(7)
Former Chief Executive 1997 $169,600(5) 50,000(6) $120,460
Officer
Richard L. Schleufer........ 1998 $219,600(8) $75,000 -0- $ -0-
Chief Executive Officer of 1997 $169,600(8) $ -0- 31,250 $ -0-
Enterprise Ltd.
Richard J. Parent........... 1998 $294,394(9) $ -0- 7,500(10) $161,947(11)
Former Chief Financial 1997 $117,479 $ -0- 20,000(12) $ -0-
Officer
</TABLE>
- ----------------
(1) Does not include any information concerning perquisites or other
personal benefits, the incremental cost to the Company of which, for
each named executive in each fiscal year, was less than 10% of the
total salary and bonus reported for the executive for the fiscal year.
(2) Share numbers have been adjusted for a 4-to-1 reverse split of the
Company's common stock that became effective during July 1998.
(3) Includes a $6,800 automobile allowance and includes $125,000 paid as
consulting fees to Mackinac Media, Inc., which is affiliated with Mr.
Andre Blay.
(4) Includes a $3,750 automobile allowance.
(5) Includes a $4,500 automobile allowance.
(6) In connection with the termination of Mr. Jenner's employment in July
1997, all of these options were purchased and thereafter canceled by
the Company.
(7) Consists of $395,527 paid to Mr. Jenner as severance benefits in
connection with his employment termination and $100,000 paid for the
purchase of options referred to in note (6).
(8) Includes a $9,600 automobile allowance.
(9) Includes a $6,000 automobile allowance.
(10) These options expired unexercised in connection with the termination of
Mr. Parent's employment in January 1998.
<PAGE> 5
(11) Consists of $84,000 of severance benefits paid to Mr. Parent in fiscal
1998 in connection with his employment termination and $77,947 paid
him for the purchase of options referred to in note (12). For
additional information concerning Mr. Parent's severance benefits,
see "Employment Contracts, Termination of Employment, and Change in
Control Arrangements" below.
(12) These options were purchased by the Company and thereafter canceled in
connection with Mr. Parent's employment termination.
<PAGE> 6
Certain Information Concerning Stock Options
The following table provides information concerning options to purchase
the Company's common stock granted to named executives by the Company during
fiscal 1998. The share number and exercise price reported in this table have
been adjusted for the Reverse Stock Split.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
------------------------------------------------------------------------------------------
NUMBER OF PERCENTAGE OF TOTAL
SECURITIES OPTIONS GRANTED
UNDERLYING TO EMPLOYEES EXERCISE PRICE
NAME OPTIONS GRANTED IN FISCAL YEAR (PER SHARE) EXPIRATION DATE
- ----------------------------- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Andre A. Blay -0- N/A N/A N/A
Graeme R. Jenner -0- N/A N/A N/A
Richard L. Schleufer -0- N/A N/A N/A
Richard J. Parent 7,500 % $6.52 N/A(1)
</TABLE>
(1) These options expired unexercised in connection with Mr. Parent's employment
termination.
During fiscal 1998, none of the named executives exercised any option
to purchase Company common stock that had been granted to him by the Company.
The following table provides information concerning their holdings of such
options at the end of the fiscal year. Share numbers reported in this table give
effect to the Reverse Stock Split. Values have been calculated by multiplying
those numbers by the NASDAQ closing price of the common stock at fiscal year
end, adjusted for the Reverse Stock Split, and subtracting the aggregate
exercise price for the optioned shares.
<TABLE>
<CAPTION>
FISCAL YEAR END OPTION VALUES
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR END (#) AT FISCAL YEAR END ($)
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- ------ --------------- ---------------
<S> <C> <C>
Andre A. Blay 123,598/0 $849,736/$0
Graeme R. Jenner 0/0 $0/$0
Richard L. Schleufer 31,250/0 $62,500/$0
Richard J. Parent 0/0 $0/$0
</TABLE>
<PAGE> 7
Employment Contracts, Termination of Employment, and Change in Control
Arrangements
Andre Blay has an employment agreement with the Company. Its stated term
expires on August 31, 2002, though either party can terminate it with or
without cause on 30 days' notice. Under the agreement, Mr. Blay is entitled to
receive a base salary at the rate of $240,000 per year until August 31, 1998,
$300,000 per year from September 1, 1998 through August 31, 1999, and $360,000
per year after August 31, 1999, and a discretionary annual bonus in an amount
to be determined by the Compensation Committee and the Board of Directors based
on his achievement of personal performance goals to be established each year by
the Committee or the Board. The agreement also contemplates that the Company
will grant Mr. Blay options to purchase 600,000 shares of its common stock, but
due to the stockholders' failure to approve the new stock option plan at their
July 2, 1998 meeting, none of these options has been granted. If the Company
terminates Mr. Blay's employment (other than for "cause," as defined in the
agreement) during the two years following a "change of control" (as there
defined), it must make a cash payment to him in an amount equal to the greater
of twice his annual base salary or his annual base salary multiplied by the
number of years remaining in the agreement's stated term. Except in connection
with a change of control, if the Company terminates his employment (other than
for cause or due to death or disability), he is entitled to continue to receive
his base salary for one year following termination. The Company must require
any assignee of substantially all of its business or assets to assume the
agreement, and if it does not, it must pay Mr. Blay the same amount it would
have been required to pay if it had terminated his employment within two years
following a change of control.
Richard Schleufer also has an employment agreement with the Company. Its
stated term expires on May 23, 2003, though either party can terminate it with
or without cause on 30 days' notice. Under the agreement, Mr. Schleufer is
entitled to receive a base salary at the rate of $250,000 per year and a
discretionary annual bonus in an amount to be determined by the Compensation
Committee and the Board of Directors based on his achievement of personal
performance goals to be established each year by the Committee or the Board. The
agreement also contemplates that the Company will grant Mr. Schleufer options to
purchase 300,000 shares of its common stock, but due to the stockholders'
failure to approve the new stock option plan, none of these options has been
granted. If the Company terminates Mr. Schleufer's employment (other than for
"cause," as defined) during the two years following a "change of control" (as
defined), it must make a cash payment to him in an amount equal to the greater
of twice his annual base salary or his annual base salary multiplied by the
number of years remaining in the agreement's stated term. Except in connection
with a change of control, if the Company terminates his employment (other than
for cause or due to death or disability), he is entitled to continue to receive
his base salary for one year following termination. The Company must require any
assignee of substantially all of its business or assets to assume the agreement,
and if it does not, it must pay Mr. Schleufer the same amount it would have been
required to pay if it had terminated his employment within two years following a
change of control.
While he was Chief Executive Officer of the Company, Graeme Jenner had an
employment agreement with the Company, the initial term of which had not
expired by the time he left the Company. The agreement contemplated that he
would receive a severance payment equal to at least one year's salary if he
were terminated by the Company prior to the end of the agreement's term. In
connection with negotiating a mutually agreeable termination of his employment,
the Company agreed to pay Mr. Jenner the $395,527 cash severance benefits
reported for him as fiscal 1998 "All Other Compensation" in the Summary
Compensation Table above and to purchase for $100,000 the options that had
been granted to him in the preceding fiscal year, which amount also is
reported under that item of the Summary Compensation Table. In addition to
these severance and option repurchase payments, in connection with the
termination of his employment the Company paid $348,310 to Mr. Jenner to
purchase certain promissory notes that had been issued by the Company to Mr.
Jenner or affiliates of Mr. Jenner in May 1996 in connection with the Company's
acquisition of Enterprise Ltd. (Mr. Jenner and those affiliates had been among
the stockholders of Enterprise Ltd. at the time of that acquisition.) When
these promissory notes were purchased by the Company, the aggregate principal
of and accrued interest on the notes was $409,777.
While he was Chief Financial Office of the Company, Richard Parent also had
an employment agreement with the Company, the term of which also had not
expired by the time he left the Company. The agreement contemplated that he
would receive severance benefits equal to at least one year's salary if he were
terminated by the Company before the agreement expired. In connection with
negotiating a mutually agreeable termination of Mr. Parent's employment, the
Company agreed to pay him cash severance benefits totaling $126,000 (half at
termination and the remainder in $10,500 increments over the next six months)
and to purchase for $77,947 the options on Company common stock that had been
granted to him in the preceding fiscal year. The severance payments made
to Mr. Parent in fiscal 1998 and the purchase price for the options are reported
for him in the Summary Compensation Table as fiscal 1998 "All Other
Compensation."
Director Compensation
Beginning in the current fiscal year, directors of the Company other than
those who also are employees of the Company or a subsidiary are paid $1,000
for each Board meeting attended. The Company also reimburses non-employee
directors for travel expenses incurred to attend Board meetings. In certain
years before fiscal 1998, non-employee directors automatically were granted
options to purchase Company common stock in January of the year. During fiscal
1998, the terms of options granted in the preceding fiscal year were modified to
lower the exercise price per share.
Compensation Committee Interlocks and Insider Participation
Certain decisions concerning the fiscal 1998 compensation of executive
officers of the Company, including the named executives, were made by the
Compensation Committee of the Board of Directors of the Company. All other such
decisions were made by the full Board of Directors.
The current members of the Compensation Committee are Mr. Andre Blay, Mr.
Baur, Mr. Eden, and Mr. Beauregard. Mr. Blay was a member of the committee
throughout fiscal 1988, Mr. Baur joined the committee after Mediatech was sold
in July 1997, and Messrs. Eden and Beauregard joined the committee in October
1997. The only other persons who served on the committee or on the Board of
Directors at any time during fiscal 1998 are the Company's former directors Cary
Fitchey and William Kunkel, each of whom served on the committee from the
beginning of the fiscal year until leaving the Board.
Andre Blay is the Chairman of the Board (since April 1997) and Chief
Executive Officer (since July 1997) of the Company. The fiscal 1998 "Salary"
reported for Mr. Blay in the Summary Compensation Table includes $125,000 paid
as consulting fees to Mackinac Media, Inc., which is controlled by Mr. Blay.
Before the Company sold Mediatech in July 1998, Mr. Baur was employed by
the Company as the President of Mediatech. While Mediatech was owned by the
Company, Mediatech leased office, production, and warehousing facilities in
Chicago, Illinois from real estate partnerships affiliated with Mr. Baur. Rental
payments made for these premises in fiscal 1998 totaled $184,886.
Mr. Fitchey is a former employee and former executive officer of Coral,
Inc., a predecessor of the Company.
<PAGE> 8
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principal Stockholders
The following table provides information regarding each person known by
the Company to beneficially own, as of July 30, 1998 (unless otherwise indicated
by footnote), more than five percent of the Company's outstanding common stock.
Information concerning each Company director named in the table has been
provided by him; the sources of information concerning other parties named are
indicated in notes to the table. Where a source of information is dated prior to
the Reverse Stock Split, the number of shares reported has been adjusted to
reflect the Reverse Stock Split.
<TABLE>
<CAPTION>
Name and Address of
Beneficial Owner Number of Shares(1) Percent of Class(1)
- ---------------- ------------------- -------------------
<S> <C> <C>
Andre A. Blay 386,032(2) 8.33%
38705 Seven Mile Road, Suite 435
Livonia, MI 48152
Thomas H. Baur 246,757(3) 5.44
38705 Seven Mile Road, Suite 435
Livonia, MI 48152
Killer Barn, Inc.(4) 382,500 8.48
821 Tavern Road
Alpine, CA 91901
AWM Investment Company, Inc., 325,000 7.20
Austin W. Marze, and
certain related limited
partnerships(5)
153 East 53rd Street
New York, NY 10222
The TCW Group, Inc. 231,600 5.13
and Robert Day (6)
865 South Figueroa Street
Suite 1800
Los Angeles, CA 90017(7)
InterEquity Capital 286,738 6.35
Partners, L.P., Irvin
Schlass and certain
of his relatives, and Stephen
Raphael and certain of
his relatives (8)
c/o InterEquity Capital Corp.
220 Fifth Avenue
New York, NY 10001
</TABLE>
(1) Pursuant to applicable SEC regulations, for purposes of reporting
shares and the percentage of outstanding shares owned by a person or
group of persons identified in this table, shares subject to options or
warrants owned by such person or group that currently are exercisable
or that will become exercisable within the next 60 days are treated as
outstanding, but no shares subject to options or warrants owned by any
other person or group are treated as outstanding. Unless otherwise
indicated by subsequent notes, each person or group of persons
identified in this table has sole voting power and sole dispositive
powers over the shares reported for that person or group.
(2) Includes shares held in the Andre A. Blay Living Trust or the Robert A.
Blay Trust, for each of which Andre Blay acts as sole trustee, and
shares held in the Andre A. Blay Individual Retirement Account, for
which he acts as sole custodian. Also includes 123,958 shares subject
to currently exercisable options. Does not include 3,400 shares held in
the Nancy Blay Individual Retirement Account. Andre Blay's wife, Nancy,
acts as sole custodian with respect to that account, and Mr. Blay
disclaims beneficial ownership of any shares held in that account.
(3) Includes 25,000 shares subject to currently exercisable options.
<PAGE> 9
(4) Killer Barn, Inc. is owned and controlled by Mr. William D. Killion,
who served as a director of IndeNet, Inc. from November 1995 until
January 30, 1997. Information concerning shares owned by Killer Barn
has been provided to the Company by Mr. Killion.
(5) Information reported is based on a Schedule 13G (the "AWM Schedule")
filed with the SEC February 12, 1998 by AWM Investment Company, Inc.
("AWM"), Mr. Marze, Special Situations Fund III, L.P. ("SS Fund"), and
MGP Advisers Limited Partnership, L.P. ("MGP"). According to the AWM
Schedule: AWM, an investment advisor, is a general partner of and
advisor to MGP and also is an advisor to Special Situations Cayman
Fund, L.P. ("Cayman"); MGP, also an investment advisor, is a general
partner of and advisor to SS Fund; and Mr.Marze is the Chief Executive
Officer of AWM and a general partner and the principal limited partner
of MGP and principally responsible for the selection, acquisition,
and disposition of portfolio securities by AWM on behalf of MPG, SS
Fund, and Cayman. Based on the AWM Schedule, AWM and Mr. Marze may be
viewed as sharing voting and dispositive power over all of the
reported shares, partially with MGP and SS Fund, and partially with
Cayman.
(6) Information reported is based on a Schedule 13G (the "TCW Schedule")
filed with the SEC February 12, 1998 by The TCW Group, Inc. ("TCW")
and Mr. Day. According to the TCW Schedule, the reported shares are
held by Trust Company of the West, a bank as defined in Section
3(a)(6) of the Exchange Act, or TCW Asset Management Company, an
investment advisor, both of which are subsidiaries of TCW, and Mr. Day
may be deemed to control TCW. The TCW Schedule reports that TCW and
Mr. Day each have sole voting and dispositive power over the reported
shares.
(7) The address above is the address reported in the TCW Schedule for TCW;
the address reported for Mr. Day is 200 Park Avenue, Suite 2200,
New York, NY 10166.
(8) Information reported is based on a Schedule 13D (the "InterEquity
Schedule") filed with the SEC on June 18, 1988 by InterEquity Capital
Partners, L.P. ("InterEquity"), Mr. Schlass, Natalie Schlass, Jack
Schliefer, Mr. Raphael, Marjorie Raphael, Lucille Raphael, Jacqueline
Raphael, and Joanne Alonso. According to the InterEquity Schedule:
InterEquity is a small business development company, the sole general
partner of which is InterEquity Capital Corporation ("ICC"); Mr.
Schlass is the Chairman and Chief Executive Officer and Mr. Raphael is
a director of ICC; Natalie Schlass and Mr. Schliefer are relatives of
Mr. Schlass; and the other reporting persons are relatives of Mr.
Raphael. Based on the InterEquity Schedule (after adjustment for the
Reserve Stock Split), InterEquity beneficially owns 101,863 of the
reported shares (with shared voting and/or dispositive power over some
of them), Natalie Schlass has shared voting and dispositive power over
11,250 of the reported shares; Mr. Schlass has sole voting and
dispositive power over 17,000 of the reported shares; Mr. Schliefer
has sole voting and dispositive power over 68,875 of the reported
shares; Mr. Raphael has sole voting and dispositive power over 42,125
of the reported shares; Marjorie Raphael has sole voting and
dispositive power over 500 of the reported shares; Lucille Raphael has
sole voting and dispositive power over 500 of the reported shares; and
Joanne Alonso has sole voting and dispositive power over 4,500 of the
reported shares.
<PAGE> 10
Officers and Directors
The following table provides information concerning the beneficial
ownership of Company common stock by each current director and executive
officer of the Company, in each case based on information provided by him, and
by all current directors and executive officers as a group.
<TABLE>
<CAPTION>
Number of
Name Shares(1) Percent of Class(1)
- ---------------- ---------- -------------------
<S> <C> <C>
Andre A. Blay 386,032(2) 8.33%
Thomas H. Baur 246,757(3) 5.44
Robert Beauregard 18,750 *
H. Bradley Eden 3,841 *
Richard L. Schleufer 50,047(4) *
David W. Martin 22,218(5) *
Robert A. Blay 0(6) *
All directors and executive
officers as a group (7 persons) 727,645 15.46
</TABLE>
(1) Pursuant to applicable SEC regulations, for purposes of reporting
shares and the percentage of outstanding shares owned by a named
individual, shares subject to options or warrants owned by that individual
and currently exercisable or which will become exercisable within the next
60 days (but no shares subject to options or warrants owned by any other
individual) are treated as outstanding. For purposes of reporting with
respect to the group, shares subject to options or warrants reported for
any named individual are treated as outstanding. Unless otherwise indicated
by other notes to this table, each individual named has sole voting power
and sole dispositive power over the shares reported for him.
(2) See note (2) to the immediately preceding table.
(3) See note (3) to the immediately preceding table.
(4) Includes 31,250 shares subject to currently exercisable options.
(5) Includes 13,750 shares subject to currently exercisable options.
(6) Does not include any shares held in the Robert A. Blay Trust, over
which Mr. Blay has no voting or dispositive power. As to those shares,
see note (2) to the immediately preceding table
* Less than 1%.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information concerning promissory note purchases from Graeme Jenner
provided in Item 10 under the heading "Employment Contracts, Termination of
Employment, and Change in Control Arrangements" and the information concerning
transactions relating to Andre Blay and Thomas Baur provided in Item 10 under
the heading "Compensation Committee Interlocks and Insider Participation"
hereby are incorporated by reference in response to this Item.
<PAGE> 11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to the
Annual Report on Form 10-KSB to be signed on its behalf by the undersigned,
thereunto duly authorized.
ENTERPRISE SOFTWARE, INC.
By /s/ Andre A. Blay
--------------------------------------
Andre A. Blay
Chairman and Chief Executive Officer
Date: August 13, 1998
