<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Data Systems & Software Inc.
----------------------------
(Name of Issuer)
Common Stock, $0.01 par value
-------------------------------
(Title of Class of Securities)
237887104
--------------
(CUSIP Number)
Mr. Yacov Kaufman
200 Route 17, Mahwah, New Jersey 07430
---------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 3, 1998
-------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1 (b)(3) or (4), check the following box. [ ]
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18 of
the Securities Exchange Act of 1934 ("Act") or otherwise subject
to the liabilities of that section of the Act but shall be subject
to all other provisions of the Act (however, see the Notes).
Page 1 of 26 Pages
PAGE
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CUSIP No.: 237887104 13D Page 2 of 26 Pages
- -----------------------------------------------------------------------------
1. Name of reporting person: Cummer/Moyers Capital Advisors, Inc.
IRS Identification No. of above person: 75-2681494
2. Check the appropriate box if a member (a) [X]
of a group (b) [ ]
3. SEC use only ________________________
4. Source of funds: WC
5. Check box if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or place of organization: Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. Sole voting power: 0
8. Shared voting power: 0
9. Sole dispositive power: 0
10. Shared dispositive power: 192,000 shares
11. Aggregate amount beneficially owned by each reporting person:
192,000 shares
12. Check box if the aggregate amount in Row (11) excludes
certain shares: [X]
13. Percent of class represented by amount in Row (11): 2.61%
14. Type of reporting person: IA
PAGE
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CUSIP No.: 237887104 13D Page 3 of 26 Pages
- -----------------------------------------------------------------------------
1. Name of reporting person: Cummer/Moyers Capital Partners, Inc.
IRS Identification No. of above person: 75-2551678
2. Check the appropriate box if a member (a) [X]
of a group (b) [ ]
3. SEC use only ________________________
4. Source of funds: WC
5. Check box if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or place of organization: Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. Sole voting power: 210,000 shares
8. Shared voting power: 0
9. Sole dispositive power: 210,000 shares
10. Shared dispositive power: 0
11. Aggregate amount beneficially owned by each reporting person:
210,000 shares
12. Check box if the aggregate amount in Row (11) excludes
certain shares: [X]
13. Percent of class represented by amount in Row (11): 2.85%
14. Type of reporting person: CO
PAGE
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CUSIP No.: 237887104 13D Page 4 of 26 Pages
- -----------------------------------------------------------------------------
1. Name of reporting person: Jeffrey A. Cummer
IRS Identification No. of above person:
2. Check the appropriate box if a member (a) [X]
of a group (b) [ ]
3. SEC use only ________________________
4. Source of funds: PF
5. Check box if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or place of organization: United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. Sole voting power: 1,800 shares
8. Shared voting power: 220,000 shares
9. Sole dispositive power: 1,800 shares
10. Shared dispositive power: 412,000 shares
11. Aggregate amount beneficially owned by each reporting person:
413,800 shares
12. Check box if the aggregate amount in Row (11) excludes
certain shares: [X]
13. Percent of class represented by amount in Row (11): 5.62%
14. Type of reporting person: IN
PAGE
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CUSIP No.: 237887104 13D Page 5 of 26 Pages
- -----------------------------------------------------------------------------
1. Name of reporting person: Dwayne A. Moyers
IRS Identification No. of above person:
2. Check the appropriate box if a member (a) [X]
of a group (b) [ ]
3. SEC use only ________________________
4. Source of funds: PF
5. Check box if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or place of organization: United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. Sole voting power: 11,600 shares
8. Shared voting power: 220,000 shares
9. Sole dispositive power: 11,600 shares
10. Shared dispositive power: 412,000 shares
11. Aggregate amount beneficially owned by each reporting person:
423,600 shares
12. Check box if the aggregate amount in Row (11) excludes
certain shares: [X]
13. Percent of class represented by amount in Row (11): 5.75%
14. Type of reporting person: IN
PAGE
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CUSIP No.: 237887104 13D Page 6 of 26 Pages
- -----------------------------------------------------------------------------
1. Name of reporting person: Cummer/Moyers Holdings, Inc.
Profit Sharing Plan
IRS Identification No. of above person: 75-2625318
2. Check the appropriate box if a member (a) [X]
of a group (b) [ ]
3. SEC use only ________________________
4. Source of funds: PF
5. Check box if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or place of organization: Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. Sole voting power: 10,000 shares
8. Shared voting power: 0
9. Sole dispositive power: 10,000 shares
10. Shared dispositive power: 0
11. Aggregate amount beneficially owned by each reporting person:
10,000 shares
12. Check box if the aggregate amount in Row (11) excludes
certain shares: [ ]
13. Percent of class represented by amount in Row (11): 0.14%
14. Type of reporting person: EP
PAGE
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DATA SYSTEMS & SOFTWARE INC.
SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER
The class of securities to which this statement relates is the common
stock, par value $0.01 per share (the "Common Stock"), of Data Systems &
Software Inc., a Delaware corporation (the "Issuer"), which has its principal
executive offices located at 200 Route 17, Mahwah, New Jersey 07430.
ITEM 2. IDENTITY AND BACKGROUND
This statement is being filed by the following beneficial owners of
425,400 shares of Common Stock (approximately 5.77%) of the total number of
shares of Common Stock outstanding as of October 31, 1997 (collectively
referred to as the "Reporting Persons"):
Cummer/Moyers Capital Advisors, Inc. ("Advisors")
is a Texas corporation which is engaged in the
business of providing investment advisory services.
Advisors is an investment advisor registered with
the Securities and Exchange Commission and is also
a wholly-owned subsidiary of Cummer/Moyers Capital
Partners, Inc. ("Capital Partners"). The address
of its principal business is 3417 Hulen Street,
Fort Worth, Texas 76107.
Capital Partners is a Texas corporation which
serves as the general partner of Investors
Strategic Partners I, Ltd., a Texas limited
partnership which operates as an investment limited
partnership, investing primarily in equity
securities (the "Partnership"). As the general
partner of the Partnership, Capital Partners
provides management services to the Partnership and
in this capacity is responsible for investment
decisions, portfolio management, and trading
activities. Capital Partners is a wholly-owned
subsidiary of Cummer/Moyers Holdings, Inc.
("Holdings"). The address of its principal
business is 3417 Hulen Street, Fort Worth, Texas
76107.
Jeffrey A. Cummer ("Mr. Cummer"), whose business
address is 3417 Hulen Street, Fort Worth, Texas
76107, serves as the President and a Director of
Holdings and its subsidiaries Cummer/Moyers
Securities, Inc. ("Securities"), Capital Partners
and Advisors. Mr. Cummer is a United States
citizen.
Dwayne A. Moyers ("Mr. Moyers"), whose business
address is 3417 Hulen Street, Fort Worth, Texas
76107, serves as the Vice President, Secretary,
Treasurer and a Director of Holdings and its
subsidiaries Securities, Capital Partners and
Advisors. Mr. Moyers is a United States citizen.
The Cummer/Moyers Holdings Inc. Profit Sharing Plan
(the "Plan") is the profit sharing plan established
for the benefit of the employees of Holdings and
its subsidiaries. Mr. Cummer and Mr. Moyers serve
as trustees of the Plan.
During the past five years, the Reporting Persons (Advisors, Capital
Partners, Mr. Cummer, Mr. Moyers and the Plan) have not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding were or are subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activity subject to, federal or state securities
laws or finding any violations with respect to such laws.
Page 7 of 26 Pages
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The affiliates of the Reporting Persons are as follows:
Holdings is a Texas corporation which serves as a
holding company for its subsidiaries engaged in
brokerage activities, advisory services and other
related activities. Holdings owns of record and
beneficially all of the issued and outstanding
shares of capital stock of Securities and Partners.
Mr. Cummer and Mr. Moyers are the officers and
directors of Holdings. The address of its
principal business is 3417 Hulen Street, Fort
Worth, Texas 76107.
Securities is a Texas corporation which is engaged
in the securities brokerage business. Securities
is registered as a broker/dealer with the
Securities and Exchange Commission and the National
Association of Securities Dealers, Inc. Mr. Cummer
and Mr. Moyers are the officers and directors of
Securities. The address of its principal business
is 3417 Hulen Street, Fort Worth, Texas 76107.
During the past five years, neither Holdings nor Securities have been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding were or are subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activity subject to,
federal or state securities laws or finding any violations with respect to
such laws.
Attached hereto as SCHEDULE 1 and incorporated by reference herein is
a table setting forth each of the Reporting Persons and their affiliates,
together with their respective addresses and beneficial ownership of the
Common Stock.
Pursuant to Rule 13d-4 of the Securities Exchange Act of 1934, each
Reporting Person hereby expressly declares that the filing of this statement
is not an admission that such Reporting Person is the beneficial owner of any
shares of Common Stock other than those listed on Schedule 1 as being
beneficially owned by such Reporting Person. The Reporting Persons disclaim
beneficial ownership of 85,470 shares of Common Stock of the Issuer held in
non-discretionary client accounts at Securities.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Prior to July 1997, Mr. Cummer served as a registered principal and
branch manager of Investment Management and Research, Inc. ("IMR") and Mr.
Moyers served as a registered representative of IMR. IMR is a wholly-owned
subsidiary of Raymond James Financial, Inc., a Florida based holding company
which offers a wide range of financial services to individual, corporate,
governmental and institutional clients through its various subsidiaries. In
these capacities Mr. Cummer and Mr. Moyers acquired approximately 176,750
shares of Common Stock on behalf of discretionary client accounts held by
IMR. The source of funds used by Mr. Cummer and Mr. Moyers to acquire
the 176,750 shares of Common Stock are funds contributed into the
discretionary accounts by the account holders. In mid-July 1997, following
the formation of Advisors and Securities by Holdings and the termination of
Mr. Cummer's and Mr. Moyers' relationship with IMR, these account holders
transferred their discretionary client accounts to Securities and established
an investment advisory relationship with Advisors. Since the conversion in
mid-July, Advisors has purchased additional shares of Common Stock on behalf
of various discretionary client accounts established at Securities. The
192,000 shares were acquired since December 1995 at prices ranging from
$4.375 to $8.50 per share.
Page 8 of 26 Pages
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The source of funds used by Capital Partners to acquire 210,000
shares of Common Stock on behalf of the Partnership are the capital
contributions made by the limited partners to the Partnership. Capital
Partners purchased the 210,000 shares in numerous separate transactions from
December 29, 1995 to December 31, 1997 at prices ranging from $4.50 to
$8.75 per share.
The source of funds used by Mr. Cummer to acquire 1,800 shares of
Common Stock was Mr. Cummer's personal funds. Mr. Cummer purchased the
1,800 shares in a single transaction on November 25, 1997 at a price of
$5.125 per share for a total amount of $9,225.
The source of funds used by Mr. Moyers to acquire 11,600 shares of
Common Stock on behalf of the Dwayne A. Moyers IRA was Mr. Moyers' personal
funds. Mr. Moyers, as the custodian of his IRA, purchased the 11,600 shares
in eight separate transactions from December 28, 1995 to July 7, 1997 at
prices ranging from $4.8661 to $7.50 per share for a total amount of
approximately $68,844.
The source of funds used by the Plan to acquire 10,000 shares of
Common Stock was the contributions to the Plan made by the employees of
Holdings and its subsidiaries. The Plan purchased the 10,000 shares in
eight (8) separate transactions from March 15, 1996 to June 13, 1997 at
prices ranging from $5.00 to $6.625 per share for a total amount of $55,876.
ITEM 4. PURPOSE OF TRANSACTION
On January 3, 1998, certain of the Reporting Persons and their
affiliates formed the Committee to Enhance Data Systems & Software Inc.
Stockholder Value (the "Committee") in response to their concerns over the
poor financial performance of the Issuer's operations and the poor
performance of the Issuer's stock. The members of the Committee are
Cummer/Moyers Holdings, Inc., Cummer/Moyers Capital Partners, Inc.,
Cummer/Moyers Capital Advisors, Inc., Dwayne A. Moyers, and Jeffrey A.
Cummer. A copy of the agreement setting forth the rights and obligations of
each member of the Committee is included as Exhibit B to this Schedule 13D.
In particular, the Committee is concerned over the following matters:
(1) The Issuer had losses in excess of $5,600,000
for the nine month period ended September 30, 1997, as
reported in the Issuer's Quarterly Report on Form 10-Q dated
November 13 ,1997 for the period ended September 30, 1997;
(2) The Issuer's most significant asset, a 24%
interest in Tower Semiconductor Corp., Ltd., declined in value
by over $75,000,000 since September 1995; and
(3) The Issuer's stock price declined by over 58%
since September 1995 (from $11 5/8 to $4 7/8) while the market
for computer-related companies, as reflected by the NASDAQ
Computer Index, has rallied 71% during the same period.
Despite the poor performance of the Issuer, the current Board of
Directors of the Issuer, under the leadership of the Issuer's Chairman and
CEO, George Morgenstern, has raised Mr. Morgenstern's annual base
compensation from $300,000 per year to its current level of $420,000 per
year, awarded Mr. Morgenstern stock options, restricted stock, and other
compensation, having a value of over $1.75 million, and extended other
benefits to Mr. Morgenstern. Additionally, during this same period of time
the current Board of Directors has taken numerous steps to reduce the rights
of stockholders of the Issuer in order to entrench themselves in their
positions. Such steps include the adoption of (a) a "poison pill" Rights
Agreement dated March 19, 1996 (the "Rights Agreement") which is triggered
by the acquisition of 15% of the issued and outstanding stock of the Issuer
and (b) various amendments to the Issuer's By-laws which eliminated the
ability of the stockholders to call a special meeting of the stockholders and
significantly curtailed the ability of the stockholders to nominate and
install directors to the Board of Directors of the Issuer.
Page 9 of 26 Pages
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Additionally, the Committee believes that the various businesses
which are a part of the Issuer lack a strategic fit and synergy. As a
result, these businesses do not complement each other and do not contribute
any significant benefit to the value of the Issuer and, ultimately, the
value of the Issuer's stock. The Committee believes that the marketplace
would value these businesses at a higher level if they were operated on a
"stand-alone basis" rather than as part of a conglomerate.
Based on the foregoing, the Committee has determined to proceed with
the solicitation of consents from the stockholders of the Issuer for the
express purpose of bringing about certain fundamental corporate changes in
the Issuer in order to increase stockholder value. On January 7, 1998 the
Committee filed with the Securities and Exchange Commission a Preliminary
Consent Solicitation Statement and related form of Consent, seeking the
approval of numerous actions, including the removal of the existing Board of
Directors; the election of the following five (5) individuals selected by
the Committee to fill the vacated directorships, Dwayne A. Moyers,
Jeffrey A. Cummer, Kyle G. Kennedy, William Nelson II, and Alan M. Steinmetz
(collectively, the "Nominees"); the repeal of certain recent amendments to
the By-laws of the Issuer which eliminate or curtain the rights of
stockholders (discussed above); and the termination of the Rights Agreement,
or in the discretion of the Board of Directors, the amendment of the Rights
Agreement to increase the triggering event from a 15% acquisition of the
outstanding stock of the Issuer to a 25% acquisition of the outstanding stock
of the Issuer.
In the event the Committee is successful in its efforts to replace
the existing Board of Directors of the Issuer, the Committee believes the
new Board will retain the services of independent auditors and financial
advisors to evaluate the various businesses of the Issuer with a view toward
restructuring the Issuer in a manner aimed at improving stockholder value.
It is expected that such restructuring may include the sale, divestiture,
spin-off, merger, repositioning or other reorganization of one or more of the
Issuer's businesses or assets. However, as of the date of this Schedule 13D
the Committee has no specific plans with regard to such a restructuring of
the Issuer.
In the future, the Reporting Persons, either as members of the
Committee or otherwise, may decide to purchase additional shares of Common
Stock of the Issuer or sell part or all of their inventory of Common Stock
of the Issuer.
Except as set forth above, none of the Reporting Persons have any
present plans or intentions which would result in or relate to any of the
transactions described in subparagraphs (a) through (j) of Item 4 of
Schedule 13D.
The Committee has agreed to indemnify each Nominee for any losses
which may be incurred by such Nominee as a result of serving in such
capacity.
THE DISCLOSURES SET FORTH IN THIS SCHEDULE 13D ARE NOT
INTENDED AS, AND THEREFORE SHOULD NOT BE DEEMED, A SOLICITA-
TION OF CONSENTS IN FAVOR OF THE COMMITTEE'S PROPOSALS
PURSUANT TO THE COMMITTEE'S PRELIMINARY CONSENT SOLICITATION
STATEMENT ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
The Reporting Persons beneficially own 425,400 shares of the class of
securities identified in Item 1 which is 5.77% of such class of securities.
The information contained in Schedule 1 hereto regarding the aggregate number
and percentage of the class of securities identified in Item 1 beneficially
owned by each Reporting Person is incorporated herein by reference.
Page 10 of 26 Pages
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The Issuer reported on its Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997 that it had 7,369,178 shares of Common Stock
outstanding as of October 31, 1997. None of the Reporting Persons nor their
affiliates have any options or warrants to purchase shares of Common Stock of
the Issuer.
The information contained in Schedule 1 hereto regarding the power to
vote or dispose of securities identified in Item 1 beneficially owned by the
Reporting Persons is incorporated herein by reference. All shares of Common
Stock owned by a Reporting Person who is an individual is subject to such
Reporting Person's sole power to vote and dispose of such shares of Common
Stock. All voting and disposition decisions concerning shares of Common
Stock owned by a Reporting Person that is a corporation will be made by the
majority vote of the Board of Directors of such Reporting Person. All
voting and disposition decisions concerning shares of Common Stock owned
by the Plan will be made by the trustees of the Plan, Mr. Cummer and Mr.
Moyers.
None of the Reporting Persons effected any transactions in shares of
Common Stock of the Issuer within the sixty (60) days prior to the date of
the event requiring the filing of this statement, except for:
15,250 shares acquired by Advisors on the open
market at prices ranging from $4.375 to $6.50 per
share from October 8, 1997 to December 31, 1997.
60,000 shares acquired by Partners on the open
market at prices ranging from $4.50 to $5.3125 per
share from October 15, 1997 to December 31, 1997.
25,000 shares sold by Partners on the open market
at $5.375 per share in two transactions on November
6, 1997.
300 shares sold by Dwayne Moyers on the open market
at $4.6875 per share on November 14, 1997.
The Reporting Persons know of no other person who has a right to
receive or the power to direct receipt of dividends or proceeds from the
sale of the securities of the Issuer that are the subject of this Schedule
13D.
The Reporting Persons have not ceased to be subject to the reporting
requirements of Schedule 13D during the period of this statement.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Except as set forth below, there are no contracts, arrangements,
understandings or relationships among the Reporting Persons or between any
of the Reporting Persons and any other person with respect to any securities
of the Issuer.
Advisors has entered into agreements with Securities and its
customers regarding the provision of discretionary investment advisory
services on behalf of such customers. Pursuant to such agreements Advisors
has the sole investment authority with regard to assets in such customer
accounts.
Partners serves as the general partner of Investors Strategic
Partners I, Ltd. (the "Partnership"). In this capacity, Partners has the
sole and exclusive right to buy and sell securities on behalf of the
Partnership and to vote same. Partners' authority is set forth in the
Limited Partnership Agreement.
Page 11 of 26 Pages
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Except as set forth below, there are no exhibits required to be filed
as part of this Schedule 13D.
Exhibit A Joint Acquisition Statement
Exhibit B Committee Organization Letter
Page 12 of 26 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
CUMMER/MOYERS CAPITAL ADVISORS, INC.
Dated: January 13, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, President
Dated: January 13, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Vice President,
Secretary and Treasurer
CUMMER/MOYERS CAPITAL PARTNERS, INC.
Dated: January 13, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, President
Dated: January 13, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Vice President,
Secretary and Treasurer
Dated: January 13, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer
Dated: January 13, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers
CUMMER/MOYERS HOLDINGS, INC. PROFIT
SHARING PLAN
Dated: January 13, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, Trustee
Dated: January 13, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Trustee
Page 13 of 26 Pages
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EXHIBIT INDEX
Sequentially
Exhibit Document Numbered Page
A Joint Acquisition Statement 17
B Committee Organization Letter 18
Page 14 of 26 Pages
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Schedule 1
Reporting Persons and Beneficial Ownership
<TABLE>
<CAPTION>
Address of
Principal Principal Amount
Name of Business Office Business or Beneficially Percent
Reporting Person or Residence Occupation Owned of Class
- --------------------- -------------------- ---------- ------------ --------
<S> <C> <C> <C> <C>
Cummer/Moyers Capital 3417 Hulen Street
Advisors, Inc. Fort Worth, TX 76107 (1) 192,000 2.61%
Cummer/Moyers Capital 3417 Hulen Street
Partners, Inc. Fort Worth, TX 76107 (2) 210,000 2.85%
Jeffrey A. Cummer 3417 Hulen Street
Fort Worth, TX 76107 (3) 413,800 5.62%
Dwayne A. Moyers 3417 Hulen Street
Fort Worth, TX 76107 (5) 423,600 5.75%
Cummer/Moyers Holdings, 3417 Hulen Street
Inc. Profit Sharing Plan Fort Worth, TX 76107 (6) 10,000 0.14%
</TABLE>
<TABLE>
<CAPTION>
Number of Shares as
to Which Such Person Has
-----------------------------------------------------------
Sole Power Shared Sole Power Shared Power
to Vote or Power to to Dispose to Dispose
Name of to Direct Vote or to or to Direct or to Direct
Reporting Person Vote Direct Vote Disposition Disposition
- ---------------------- ---------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Cummer/Moyers Capital
Advisors, Inc. 0 0 0 192,000
Cummer/Moyers Capital
Partners, Inc. 210,000 0 210,000 0
Jeffrey A. Cummer 1,800 220,000 1,800 412,000
Dwayne A. Moyers 11,600 220,000 11,600 412,000
Cummer/Moyers Holdings,
Inc. Profit Sharing Plan 10,000 0 10,000 0
</TABLE>
Page 15 of 26 Pages
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1 Cummer/Moyers Capital Advisors, Inc. is engaged in the business of
providing investment advisory services.
2 Cummer/Moyers Capital Partners, Inc. serves as the general partner
of Investors Strategic Partners I, Ltd., a Texas limited partnership
which operates as an investment limited partnership, investing
primarily in equity securities.
3 Jeffrey A. Cummer serves as the President and a Director of
Cummer/Moyers Holdings, Inc. and its subsidiaries Cummer/Moyers
Securities, Inc., Cummer/Moyers Capital Partners, Inc. and
Cummer/Moyers Capital Advisors, Inc.
4 Mr. Cummer and Mr. Moyers have shared power to direct the disposition
of these shares of Common Stock in their capacities as officers and
directors of Cummer/Moyers Capital Advisors, Inc. and Cummer/Moyers
Capital Partners, Inc. and as trustees of the Cummer/Moyers Holdings,
Inc. Profit Sharing Plan.
5 Dwayne A. Moyers serves as the Vice President, Secretary, Treasurer
and a Director of Cummer/Moyers Holdings, Inc. and its subsidiaries
Cummer/Moyers Securities, Inc., Cummer/Moyers Capital Partners, Inc.
and Cummer/Moyers Capital Advisors, Inc.
6 The Cummer/Moyers Holdings Inc. Profit Sharing Plan is the profit
sharing plan established for the benefit of the employees of
Cummer/Moyers Holdings, Inc. and its subsidiaries.
Page 16 of 26 Pages
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EXHIBIT A
JOINT ACQUISITION STATEMENT
The undersigned each hereby acknowledge that the statement on
Schedule 13D to which this Joint Acquisition Statement is attached is filed
on behalf of each of the undersigned.
CUMMER/MOYERS CAPITAL ADVISORS, INC.
Dated: January 13, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, President
Dated: January 13, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Vice President,
Secretary and Treasurer
CUMMER/MOYERS CAPITAL PARTNERS, INC.
Dated: January 13, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, President
Dated: January 13, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Vice President,
Secretary and Treasurer
Dated: January 13, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer
Dated: January 13, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers
CUMMER/MOYERS HOLDINGS, INC. PROFIT
SHARING PLAN
Dated: January 13, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, Trustee
Dated: January 13, 1998 /s/ Dwayne A. Moyers
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Dwayne A. Moyers, Trustee
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EXHIBIT B
THE COMMITTEE TO ENHANCE
DATA SYSTEMS & SOFTWARE INC.
STOCKHOLDER VALUE
C/O: DWAYNE A. MOYERS
3417 HULEN STREET
FORT WORTH, TX 76107
800-275-5404
GENTLEMEN:
Thank you for your expression of interest in becoming part of The
Committee to Enhance Data Systems & Software Inc. Stockholder Value
(the "Committee"), an independent stockholder committee being
formed for the purpose of seeking relief from certain past and
contemplated actions by the current management and directors of
Data Systems & Software Inc. ("DSSI," or the "Company"), a Delaware
corporation. This letter agreement, when signed by you and all
other prospective members of the Committee (hereinafter defined and
referred to as the "Members"), will be the principal organizational
document of the Committee, as well as your agreement to the terms
and conditions set forth below outlining your role and responsibil-
ities as a Member of the Committee, as well as the duties,
responsibilities and authority of the representatives (hereinafter
defined and referred to as the "Representatives"). Furthermore, as
specifically set forth hereafter, your acknowledgment of and
agreement to this letter agreement and the attachments and exhibits
hereto will evidence your agreement to appoint the Committee to
act, by and through the Representatives, on your behalf in the
exercise of your rights as a stockholder of DSSI in all relevant
matters, including, but not limited to, actions taken in connection
with the filing of legal actions and the voting of securities held
by you directly and/or as a "beneficial owner."
STATUS AND GOALS OF THE COMMITTEE
---------------------------------
The Committee is organized to act as a committee of Data Systems &
Software Inc. common stock holders for the purposes of (i)
protecting the stockholders from the effect of previous actions
taken by the current management and directors of DSSI, (ii)
protecting the interests of the stockholders in light of the
Committee's belief that the present management and directors are
acting in a manner which is not in the best interest of the Company
and the stockholders, (iii) organizing and mobilizing stockholders
to take certain stockholder action which is appropriate and
necessary to correct the effects of certain actions previously
taken by the management and directors which substantially impaired
stockholders' rights and authority and to restore those rights and
authority of the stockholders which had been stripped or reduced,
and (iv) organizing and mobilizing stockholders in the event that
stockholder action is deemed appropriate and necessary to seek
remedial action against DSSI and/or its present management,
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directors and control persons, including possibly other parties
presently known and unknown who have been and/or are involved in
directing business and stock market related activities for or on
behalf of management and/or insiders of DSSI. More specifically,
the Committee is being formed and will act, once formed, through
the Representatives to attempt to accomplish the following goals
(the "Goals"):
1. To take action to remove the present board of directors and
management of DSSI and replace them with competent directors
and management committed to returning the Company to profit-
ability and possibly seek remedy and retribution from the
current directors and management for any improper, unautho-
rized and/or illegal conduct;
2. To investigate and, if deemed appropriate, seek compensation
from the current board of directors, management and/or third
party affiliates of DSSI for any illegal and/or improper
actions which have been taken by them for personal gain and/or
to the detriment of DSSI and its stockholders;
3. To amend the By-laws for the purposes of repealing certain
amendments made to the By-laws by the current board of
directors and management which were enacted by the current
directors and management for the purpose of impairing, and
which substantially impair, the ability of the stockholders to
exercise certain rights traditionally held by stockholders and to
further amend the By-laws to prevent a board from taking a similar
action in the future;
4. To terminate or otherwise reduce the effects on and exposure to
the stockholders of the rights, or "poison pill," agreement which
creates a substantial disincentive to any party from attempting to
take control of the Company and entrenches the present board's and
management's control over the Company; and
5. To the extent legally possible, seek to minimize the economic
impact George Morgenstern's employment agreement has on the
Company.
The Representatives are hereby irrevocably granted by each Member of the
Committee the authority to diligently and aggressively pursue the above
Goals on behalf and in the name of each and all Members individually and
collectively, of the Committee, as stockholders' representatives.
The Goals may be expanded in scope according to the exigencies of the
matters pursued by the Committee in the discretion of the
Representatives. Additional goals not concerning matters reasonably
connected or related to the above-stated Goals may be added by amendment
to this letter agreement if adopted by written consent of a majority of
Representatives, provided that such additional goals materially related
to DSSI and the circumstances and actions contemplated in and by this
letter agreement.
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REPRESENTATIVES
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The Committee will initially be comprised of Cummer/Moyers Holdings,
Inc.; Cummer/Moyers Capital Advisors, Inc.; Cummer/Moyers Capital
Partners, Inc.; Dwayne A. Moyers ("Moyers") and Jeffrey A. Cummer
("Cummer") (collectively, the "Members"), all of which Members have
interests, direct and indirect, by security holdings or otherwise in the
matters to be acted upon by the Committee.
Moyers and Cummer are executive officers and directors of Cummer/Moyers
Holdings, Inc. and its subsidiaries, Cummer/Moyers Capital Advisors,
Inc. and Cummer/Moyers Capital Partners, Inc. They are also principal
shareholders of Cummer/Moyers Holdings, Inc. Moyers and Cummer will be
and are hereby denominated Representatives for all Members of the
Committee and who hereafter will have full authority and responsibility
for making day-to-day operating decisions concerning actions to be taken
to achieve the Goals of the Committee and who hereafter will manage and
oversee the safekeeping and application of the Fund (as hereinafter
defined) for such purposes. By execution of this letter agreement (and
by signing the Consent Statement attached hereto and incorporated herein
by reference) you hereby grant the Representatives authority to file any
legal proceedings, Securities and Exchange Commission required reports,
complaints, notices, demands and publish reports and proxy solicitations
to stockholders, in the name of and on behalf of all Members
individually and as a stockholders committee, as are deemed necessary
and appropriate in the sole discretion of the Representatives.
The Representatives will be advanced and reimbursed for their expenses,
including travel, meals and incidentals. In addition, the Committee has
agreed to pay Alan Steinmetz a Success Fee in the amount of $50,000 only
in the event that the Committee receives reimbursement from the Company
for such Success Fee.
The signature of two Representatives will be required on any bank
accounts opened in respect of the Fund and on all checks in excess of
$100 of Fund moneys. Any actions which the Representatives desire to
take concerning use of the Fund shall be taken only upon a majority
consent of the Representatives.
The Representatives and those individuals serving as Nominee Directors
will be indemnified and held harmless by Cummer/Moyers Holdings, Inc.
for their actions on behalf of the Committee to the extent such actions
are taken in good faith and in the absence of fraud or gross negligence.
The Representatives are fully authorized by all Members to bind the
Committee and the Members to any contract or agreement made in
connection with legitimate activities of the Committee including,
without limitation, agreements to retain lawyers and accountants, and
settlement agreements, without further authorization of the Members.
The Representatives may, in their discretion, seek the advice and/or
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consent of any or all Members prior to taking any specific contemplated
action, but shall not be required to do so nor to act according to the
majority consent of Members if, in their reasonable business judgment,
such action or inaction is warranted under the specific circumstances.
MEMBERS
-------
The individual and entity stockholders as set forth in Appendix A to
this agreement are Members as of the effective date of the formation of
the Committee, which effective date shall be January 3, 1998 for all
purposes. Members will execute and have witnessed the enclosed Consent
Solicitation Statement and Consent Card for purposes of the Committee
collecting the requisite number of consents necessary in order to
achieve the Goals as stated and set forth by the Committee. Each Member
shall be required to remit an initial cash contribution, which amount
will be determined on an individual basis. The requirement can be
waived or modified as pertains to a Member in the discretion of the
Representatives if there would be a financial hardship imposed by the
requirement or otherwise. However, nothing in this agreement shall be
deemed to limit the time, extent or amount of the indemnification of the
Representatives by each Member.
Each Member agrees to contribute its pro rata share of all of the
expenses incurred by the Committee on a per share basis according to the
maximum number of shares represented by all Members during the existence
of the Committee. Members' obligations and entitlements shall be
calculated on the date the Goals are achieved and/or the Committee is
terminated or some earlier date if deemed appropriate by the
Representatives. The initial contribution requested is $0.10 per each
share owned by a Member to cover the Consent Solicitation Statement
solicitation and legal fees necessary to prepare for, preempt and/or
defend any counter-attacks or strategies employed by the current
directors and management of DSSI against the Committee. The
Representatives may request from time to time that each Member
contribute further amounts based on budgets and anticipated expenses
determined from time to time in the reasonable judgment of the
Representatives. The Committee shall not be obligated to return any
contributions spent or obligated in the course of pursuing the Goals,
but will reimburse any unused portion of the Fund on termination on a
pro rata basis after refunding any Members who contributed moneys in
excess of their pro rata share, to the extent of such overpayment.
Members may not be expelled for any reason other than discovery of
previously undisclosed involvement in material business dealings with
DSSI, its current management, directors or promoters or a business
involvement initiated previously or subsequently to becoming a Member
which would, in the sole judgment of the Representatives, conflict or
prejudice the position of the Committee as an independent stockholder
committee. Members may also be terminated if they no longer own the
securities held by them when originally admitted, unless such sale or
transfer would not disqualify them as parties to any pending litigation
or legal action or proceeding in which the Committee is involved.
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While the Committee has not been formed to obtain a specific financial
reward for its efforts, depending on whether or not the Committee is
successful in its efforts, of which there is no assurance, the Committee
may recover all or a portion of its expenses and/or exemplary damages in
an agreement with DSSI or through court decree, in which event each
Member will receive a pro rata share of such recovery up to the actual
amount contributed by such Member as of the date of termination of this
venture. One hundred percent (100%) of any amounts recovered in excess
of the actual amounts paid in by all Members (recoveries for exemplary
damages, negotiated settlement, etc.) will be divided equally among the
Representatives.
The identity and share holdings of the Members will be subject to public
disclosure under Schedule 13D to be filed with the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of
1934 disclosing the existence and intentions of the Committee, and will
be disclosed in the Consent Solicitation Statement filed with the SEC
and delivered to security holders and management of DSSI and to DSSI.
Additionally, the Committee may file litigation in any court concerning
DSSI and/or call a stockholders meeting in the name of the Committee,
its Members as a class or otherwise, in which case the holdings and
interests of the Members may also be subject to disclosure. Consent to
such disclosure is hereby expressly authorized by each Member, unless
disclosure is optional or discretionary under the provisions of any
judgment or ruling of a court or as provided in any applicable law or
regulation, in which event the express permission of each Member shall
be required for such information to be disclosed.
ACTION OF MEMBERS
-----------------
Any action required or requested by the Representatives to be approved
or ratified by Members may be made by written consent of Members on two
days written notice to all Members, or by a physical meeting on five
days written notice. Notice is deemed given when mailed (plus 3 days if
not sent by overnight courier). Notice may also be given by facsimile
with a copy by first class mail. Any Member or group of Members who,
individually or in the aggregate, holds at least 25% of the total shares
represented by the Committee may call a meeting by providing a demand
for a meeting to the Representatives, and the Representatives shall upon
receipt of such notice by such Member or Members deliver notice of such
meeting to all Members. Members who wish to vote at a meeting, but who
can not attend personally or through a legal representative, may vote by
proxy providing that their proxy is timely delivered to the mailing
address of the Committee, as listed above. Proxies shall be revocable
until the time they are voted by attendance of the Member at the meeting
or by submission of a later dated proxy. In all cases, proxies for such
meetings may be given either to the Representatives, a legal
representative of the Member or to another Member.
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Unless otherwise stated herein, the vote of a majority of shares
represented in person or by proxy at a meeting, or a majority of all
shares represented by Members submitted by written consent if no meeting
is held, shall constitute the action of all Members. Attendance in
person or by proxy of at least 1/2 of all shares owned by Members at a
physical meeting shall constitute a quorum.
REMOVAL/RESIGNATION OF REPRESENTATIVES
--------------------------------------
Representatives will immediately be placed in a high profile, high
liability position, and may be subjected to personal legal attack and
counter-offensive legal maneuvers by DSSI and/or its affiliates once the
Committee becomes active. Therefore, Representatives may not be removed
by Members except under extreme circumstances of malfeasance and/or non-
feasance by the Representatives. Representatives may become disabled or
become unwilling to continue, in which event the remaining
Representatives shall nominate the replacement(s), subject to the
ratification of the Members. In the event that Representatives resign
or are removed, they shall immediately be reimbursed for their time and
expenses which have not been paid through the date of their termination,
plus any further time required of them to complete pending matters
including filing notices of substitution or any matters required to be
attended to in order to accomplish their termination without
interference with the smooth operation of the Committee.
WITHDRAWAL OF MEMBERS
---------------------
Once Members are admitted, they are expected to remain Members until the
termination of the Committee. The Committee should not be placed in a
position where its status as a stockholder representative is subject to
change at any time. Members may, however, terminate their active status
as Members upon written notice to the Representatives, which withdrawal
will: (a) not revoke the authority granted hereby by the Member to the
Representatives to pursue any legal or corporate action on such Member's
behalf, with respect to any pending or contemplated matter which was
initiated and/or authorized by the Member prior to such withdrawal; (b)
end the Member's obligation to make ongoing contributions in excess of
such Member's pro rata share of expenses incurred by the Committee up to
the time of such Member's withdrawal (but not end any contribution from
the Member for its share of such expenses incurred through such date);
(c) remove the Member's name from the roll of Members of the Committee
and revoke the Member's proxy to vote its shares unless otherwise stated
by the Member in its notice of withdrawal; and (d) not entitle the
withdrawing Member to demand return of any contributions made until the
termination of the Committee (and such withdrawing Member will receive
reimbursement only to the extent of its actual contributions, on a pro
rata basis, as specified otherwise herein, if such funds are available
at the time of termination of the Committee). Notwithstanding the
foregoing, no withdrawal of any Member shall be effective if such
withdrawal will substantially defeat any pending legal or corporate
actions or otherwise threaten the legal status of the Committee at a
time which would inordinately expose the Representatives to personal
liability.
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In the event that sufficient Members notify the Committee of their
intent to withdraw, to vitiate the purpose of the Committee and render
impossible the achievement of the Goals, the Representatives shall have
the right to immediately resign and commence the winding up of the
affairs of the Committee, including termination of any legal attachments
with attorneys, accountants and their involvement in any legal
proceedings on behalf of the Committee. The Representatives shall
continue to be compensated and indemnified by the Committee and its
Members, and all Members shall continue to be responsible to defer all
of the expenses of the Committee including Representatives' compensation
and the payment of all legal, accounting and other professionals
retained by the Committee. Representatives shall remain authorized to
unwind or terminate involvement by the Committee in all such matters, if
possible, and, if not possible, shall continue to act until the
opportunity to disengage the Committee from such matters becomes
available. In this regard, all Members understand and agree that once
the Committee becomes involved in litigation, it may not be able to
withdraw or otherwise terminate its involvement without being held
responsible to the other party litigant(s) for its/their reasonable
costs and attorneys' fees. In such event, it may be necessary for the
Committee to continue its involvement in such cases notwithstanding the
lack of willingness of Members to do so. Members are not protected by
any corporate shield or status as limited partner, etc. from liability
to third party litigants. All Members' agreement to indemnify the
Representatives as set forth herein continue indefinitely beyond the
termination of the Committee.
TERMINATION OF THE COMMITTEE
----------------------------
The existence of the Committee will automatically terminate upon the
first to occur of any of the following events:
1. The successful attainment of the Goals described herein or such
additional goals as may be adopted and ratified subsequently to
the execution hereof by written consent of a majority of the
Members;
2. Merger of the Committee into a class of all stockholders of DSSI
under the caption of derivative action and/or class action suit
filed against DSSI and/or its present board of directors,
management and affiliates, which suit in substance pursues all of
the Goals of the Committee; and/or
3. Termination or abandonment of the Committee upon the recommen-
dation of the Representatives and ratification of the same by a
majority written consent of the Members. In the event the
Representatives recommend termination or abandonment of the
Committee and the Members do not tender their consent to such
termination or abandonment, Representatives may tender their
resignations and the Members may appoint new Representatives to
the Committee by majority consent or vote.
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MISCELLANEOUS
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1. This agreement will be governed by the laws of Delaware concerning
stockholders committees and the duties and rights of stockholders'
representatives.
2. This agreement consists of this letter agreement and attachments;
and the Consent Solicitation Statement and the Consent Card; and
may be executed in counterparts by Members to be effective on the
date of each respective Member's countersignature.
3. The payment by any Member of its initial or any subsequent
contribution shall not create a debt by the Committee (and/or the
Representatives) to the Member nor shall the Member have a claim
to the funds of the Committee as equity, but the funds shall
become the exclusive property of the Committee subject to
reimbursement as provided for herein, provided that funds exist on
termination to reimburse all or any portion of any actual
contribution made by a Member. Obligations to make contributions
that are arranged by a Member and the Representatives constitute a
contract which is enforceable by the Committee, although Members
understand that the Committee may or may not have the funds or the
facilities to enforce such contract against a defaulting Member.
4. Each party to this letter agreement represents to all parties
signing this letter agreement and to the Representatives that this
constitutes the entire agreement and that no party or third person
has made any oral representation or agreement, nor has such party
offered or has been offered any compensation or other promise of
financial remuneration for becoming a Member or making a
contribution to the Committee.
5. Each party represents to the Committee and to the Representatives
that they have read the attached Consent Solicitation Statement
and Consent Card concerning the solicitation of their participa-
tion in the Committee and understand that the proposed
Representatives do not have access to material information
concerning DSSI other than the facts that have been publicly
disclosed and will, in all likelihood, not have any independently
acquired information until extensive resources have been expended
to compile such information with any actions or litigation which
may be required to be initiated in order for the Committee to
successfully protect the interests of its Members and the general
population of stockholders of DSSI.
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Agreed to and acknowledged by the undersigned, effective this 3rd day of
January, 1998.
MEMBERS: CUMMER/MOYERS HOLDINGS, INC.
By:/s/ Dwayne A. Moyers
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Title:Vice President
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Date:January 3, 1998
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CUMMER/MOYERS CAPITAL ADVISORS, INC.
By:/s/ Dwayne A. Moyers
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Title:Vice President
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Date:January 3, 1998
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CUMMER/MOYERS CAPITAL PARTNERS, INC.
By:/s/ Dwayne A. Moyers
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Title:Vice President
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Date:January 3, 1998
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/s/ Dwayne A. Moyers
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Dwayne A. Moyers
/s/ Jeffrey A. Cummer
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Jeffrey A. Cummer
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