<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
BROADWAY & SEYMOUR, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[COMPANY LOGO]
BROADWAY & SEYMOUR, INC.
128 South Tryon Street
Charlotte, North Carolina 28202
(704) 372-4281
April 30, 1999
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend
the Annual Stockholders' Meeting on Thursday, May 27, 1999, at 10:00 a.m.,
Pacific Daylight Saving Time. The meeting will be held at the Marina Beach
Marriott hotel located at 4100 Admiralty Way in Marina del Rey, California.
On April 14, 1999, the Company announced that it had entered into an
agreement with Science Applications International Corporation to sell the
assets of its customer relationship management business (CRM) based in
Charlotte, North Carolina. The sale is scheduled to close on May 15, 1999,
subject to expiration or termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the rules
and regulations thereunder, necessary third party consents and other standard
closing conditions. Once the transaction is consummated, the Company's
operations will consist solely of its subsidiary, Elite Information Systems,
Inc., which is based in Los Angeles, California. Subject to approval by you at
the Annual Stockholders' Meeting, the Company will change its name to Elite
Information Group, Inc. as required by the terms of the CRM transaction. The
Company will also change its CUSIP number and its NASDAQ trading symbol to
ELTE. In addition, subject to the closing of the transaction, I will be
resigning as Chairman and Chief Executive Officer of the Company and from the
Board of Directors following the Annual Stockholders' Meeting and will be
succeeded by Christopher K. Poole, Elite's president and a director of the
Company, who will be named Chief Executive Officer.
The attached notice and proxy statement describe the business to be
conducted at the meeting, including approval of the resolution to change the
Company's name to Elite Information Group, Inc. and the election of two
directors. The Board of Directors has nominated Alan Rich and Arthur G. Epker
III to be elected to the Board. Mr. Rich is the non-employee Chairman and
co-founder of Elite Information Systems, Inc. and Mr. Epker is a Vice President
of PAR Capital Management, Inc., one of the Company's principal stockholders.
The Board of Directors appreciates and encourages stockholder
participation. Whether or not you plan to attend the meeting, it is important
that your shares be represented. Please take a moment now to sign, date and
return your proxy in the envelope provided even if you plan to be present. We
hope you will be able to attend the meeting.
Sincerely,
Alan C. Stanford
Chairman and Chief Executive Officer
<PAGE> 3
BROADWAY & SEYMOUR, INC.
128 South Tryon Street
Charlotte, North Carolina 28202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TIME.............................. 10:00 a.m., PDT, on Thursday, May 27, 1999
PLACE............................. Marina Beach Marriott
Santa Monica--Malibu Room
4100 Admiralty Way
Marina del Rey, California 90292
ITEMS OF BUSINESS................. 1. To elect two directors.
2. To approve, subject to consummation of
the pending sale of the Company's
customer relationship management
business, a resolution to amend the
Company's Certificate of Incorporation
to change the Company's name to Elite
Information Group, Inc.
3. To ratify the appointment of
PricewaterhouseCoopers LLP as
independent accountants of the Company
for the period through the annual
meeting to be held in 1999.
RECORD DATE....................... Holders of Common Stock of record at the
close of business on April 16, 1999 are
entitled to vote at the meeting.
ANNUAL REPORT..................... The annual report of the Company for the
year ended December 31, 1998 accompanies
this proxy statement.
IMPORTANT......................... In order to avoid additional soliciting
expense to the Company, please SIGN, DATE
and MAIL your proxy PROMPTLY in the return
envelope provided, even if you plan to
attend the meeting. If you attend the
meeting and wish to vote your shares in
person, arrangements will be made for you
to do so.
By order of the Board of Directors:
Lillian N. Wilson
Secretary
Charlotte, North Carolina
April 30, 1999
<PAGE> 4
BROADWAY & SEYMOUR, INC.
128 South Tryon Street
Charlotte, North Carolina 28202
PROXY STATEMENT
Annual Meeting of Stockholders
May 27, 1999
VOTING SECURITIES, PRINCIPAL HOLDERS AND PROXIES
The accompanying proxy is solicited by the Board of Directors of
Broadway & Seymour, Inc. (the "Company") in connection with the Annual Meeting
of Stockholders of the Company to be held at the Marina Beach Marriott hotel
located at 4100 Admiralty Way, Marina del Rey, California at 10:00 a.m.,
Pacific Daylight Saving Time, on Thursday, May 27, 1999. The accompanying form
of proxy is for use at the Annual Meeting if a stockholder does not attend the
meeting in person or wishes to vote shares by proxy even if the stockholder
plans to attend the meeting. All valid proxies received prior to the meeting
will be voted. Unless marked to the contrary, such proxies will be voted in
favor of Proposals 1, 2 and 3 listed in the accompanying proxy card and
described below. If any other business is brought before the meeting, the
proxies will be voted in accordance with the judgment of the persons voting the
proxies.
A stockholder who has given a proxy may revoke it at any time prior to
such proxy being voted at the meeting by filing with the Secretary of the
Company an instrument revoking it or a duly executed proxy bearing a later date
or by attending the meeting and giving notice of such revocation. Attendance at
the meeting does not by itself constitute revocation of a proxy. This proxy
statement and the accompanying form of proxy are being mailed to the Company's
stockholders on or about April 30, 1999.
The only class of voting securities of the Company is its common
stock, $.01 par value per share (the "Common Stock"). Only stockholders of
record as of the close of business on April 16, 1999 will be entitled to notice
of and to vote at the Annual Meeting of Stockholders or any adjournment
thereof. On April 16, 1999 there were outstanding 8,279,380 shares of Common
Stock. Each share of Common Stock is entitled to one vote.
A majority of the shares entitled to vote at the Annual Meeting,
represented in person or by proxy, will constitute a quorum. The two nominees
receiving the highest vote totals will be elected as Directors of the Company.
Accordingly, abstentions and broker non-votes will not affect the outcome of
the election of directors. All other matters to be voted on will be decided by
the affirmative vote of a majority of the shares present or represented at the
meeting and entitled to vote. On any such matter, an abstention will have the
same effect as a negative vote but, because shares held by brokers will not be
considered entitled to vote on matters as to which the brokers withhold
authority, a broker non-vote will have no effect on the vote.
The Company will bear the cost of preparing the proxy statement and of
soliciting proxies in the accompanying form. The Company expects to solicit
proxies primarily by mail and through the use of Georgeson & Company, Inc., a
professional proxy solicitation firm. Proxies may be solicited personally and
by telephone by directors, officers and employees of the Company without
additional compensation and by employees of the professional proxy solicitation
firm. The Company anticipates that fees and expenses to be paid to the
professional proxy solicitation firm will be approximately $7,000. Arrangements
also may be made with brokerage firms or other custodians, nominees and
fiduciaries who hold the voting securities of record for the forwarding of
solicitation material to the beneficial owners thereof. The Company will
reimburse such brokers, custodians, nominees and fiduciaries for the reasonable
out-of-pocket expenses incurred by them in connection therewith.
<PAGE> 5
PRINCIPAL STOCKHOLDERS
The following table sets forth the names and addresses of, and the
number and percentage of shares beneficially owned by, the persons known to the
Company to beneficially own five percent or more of the Company's outstanding
Common Stock:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS(1)
------------------- -------------------- -----------
<S> <C> <C>
Dimensional Fund Advisors Inc. 694,400(2) 8.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Tudor Investment Corporation 533,400(3) 6.4%
One Liberty Plaza, 51st Floor
New York, New York 10006
PAR Investment Partners, L.P. 1,220,300(4) 14.7%
One Financial Center
Suite 1600
Boston, Massachusetts 02111
</TABLE>
- ----------------
(1) Based on the shares of Common Stock outstanding as of April 16, 1999.
(2) Based upon a Schedule 13G of Dimensional Fund Advisors Inc. dated
February 11, 1999 filed by Dimensional Fund Advisors Inc. on behalf of
certain clients for which it is the investment manager.
(3) Based upon Amendment No. 1 to Schedule 13G of Tudor Investment
Corporation, Paul Tudor Jones II, Tudor BVI Futures, Ltd., Tudor
Proprietary Trading, L.L.C., The Raptor Global Fund L.P., The Raptor
Global Fund Ltd. and The Upper Mill Capital Appreciation Fund Ltd.
dated February 11, 1999.
(4) Based upon a Schedule 13D of PAR Capital Management, Inc. ("PAR
Capital"), PAR Group, L.P. ("PAR Group") and PAR Investment Partners,
L.P. ("PIP"), dated July 6, 1998. Arthur G. Epker III, who has been
nominated by the Board of Directors for election as a director, is a
Vice President of PAR Capital and may be deemed to be a controlling
stockholder of PAR Capital. PAR Capital is a Delaware S Corporation
and the sole general partner of PAR Group. The principal business of
PAR Capital is to act as the general partner of PAR Group. PAR Group
is a Delaware limited partnership and the sole general partner of PIP.
The principal business of PAR Group is that of a private investment
partnership engaging in the purchase and sale of securities for its
own account. PIP is a Delaware limited partnership and its principal
business is that of a private investment partnership engaging in the
purchase and sale of securities for its own account. Mr. Epker
disclaims beneficial ownership of such shares. In addition, Mr.
Epker's wife owns 10,000 shares of the Company's Common Stocks through
an Individual Retirement Account. Mr. Epker also disclaims beneficial
ownership of such shares.
2
<PAGE> 6
PROPOSAL 1
ELECTION OF TWO DIRECTORS
The Company's Bylaws provide that the number of directors constituting
the Company's Board of Directors shall be not less than three nor more than
twenty-one as may be fixed or changed by the Board of Directors or by the
stockholders from time to time. The Board of Directors has fixed the number of
directors constituting the Board at seven. Subject to the closing of the
pending sale of the Company's customer relationship management business based
in Charlotte, North Carolina to Science Applications International Corporation
(the "CRM Transaction"), Mr. Stanford will resign as Chairman and Chief
Executive Officer of the Company and from the Board of Directors at the May
27, 1999 Board of Directors meeting immediately following the Annual
Stockholders' Meeting. The Board of Directors has adopted a resolution that,
effective upon Mr. Stanford's resignation from the Board of Directors, the
number of directors constituting the Board will be reduced to six. The Board of
Directors is divided into three classes, as nearly equal in number as possible,
each of whose members serve for a staggered three-year term. The term of Robert
J. Kelly and George L. McTavish, the two directors designated Class III
directors, will expire at the current annual meeting of stockholders and
Messrs. Kelly and McTavish will not stand for reelection. The term of the three
Class I directors will expire at the annual meeting to be held in 2000 and the
term of the two Class II directors will expire at the annual meeting to be held
in 2001.
NOMINEES
The Board of Directors has nominated Alan Rich and Arthur G. Epker III
for election as directors. If elected, Messrs. Rich and Epker would serve
three-year terms as members of Class III. Directors will be elected by a
plurality of the votes cast. Although the Board of Directors does not expect
that any of the nominees named will be unavailable for election, in the event
that any nominee is unable to serve as a director, it is intended that the
shares represented by proxies will be voted for the election of such substitute
as the Board of Directors may nominate. If Messrs. Rich and Epker are elected
and Mr. Stanford (a member of Class I) resigns, the three classes would be as
follows:
<TABLE>
<CAPTION>
CLASS I CLASS II CLASS III
<S> <C> <C>
Christopher K. Poole David A. Finley Alan Rich
Roger Noall William G. Seymour Arthur G. Epker III
</TABLE>
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
NOMINEES. PROXIES, UNLESS INDICATED TO THE CONTRARY, WILL BE VOTED "FOR" THE
NOMINEES TO THE BOARD OF DIRECTORS.
DIRECTORS
Listed below are the names of the two nominees to serve as directors
and the other four directors who will be continuing in office following the
Annual Meeting and Mr. Stanford, who will resign as Chairman and Chief
Executive Officer of the Company and from the Board of Directors at the
conclusion of the Annual Stockholders' Meeting, subject to the closing of the
pending CRM Transaction, together with their ages, their principal occupations
during the past five years, any other directorships they hold with companies
having securities registered under the Securities Exchange Act of 1934 and the
years during which their current consecutive terms as directors of the Company
first commenced (including terms with the Company's predecessor).
3
<PAGE> 7
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND AGE AND CERTAIN OTHER DIRECTORSHIPS SINCE
------------ ------------------------------- --------
<S> <C> <C>
Arthur G. Epker III, Age 36 Vice President, PAR Capital Management, --
Inc. (1)
David A. Finley, Age 66 President, Investment Management Partners II, 1990
Inc.(2)
Director: Intelligroup, Inc. and Hungarian
Telephone & Cable Corp.
Roger Noall, Age 63 Executive, KeyCorp (3) 1996
Director: Alleghany Corp. and The Victory
Funds
Christopher K. Poole, Age 41 President and Chief Operating Officer, Elite 1999
Information Systems, Inc. (4)
Alan Rich, Age 44 Co-Founder and non-employee Chairman, Elite --
Information Systems, Inc. (5)
William G. Seymour, Age 57 Co-Founder and Vice Chairman, Broadway & Seymour, 1981
Inc.; President, PRIMax Properties, LLC (6)
Director: First Trust Bank
Alan C. Stanford, Age 58 Chairman and Chief Executive Officer, 1995
Broadway & Seymour, Inc. (7)
</TABLE>
- --------------
(1) Mr. Epker has been a Vice President of PAR Capital, an investment
management firm, since July 1992.
(2) Mr. Finley served as Executive Vice President and Chief Financial
Officer of the Company from January 1996 to July 1997 and again served
as Executive Vice President on a temporary basis from mid-September
1997 to mid-November 1997 while Mr. Stanford was recovering from heart
surgery. Prior to joining the Company, Mr. Finley worked as a
consultant and was a private investor and the President, since 1992,
of Investment Management Partners II, Inc., an investment management
firm. Since leaving the Company, Mr. Finley has resumed his work as a
consultant, private investor and President of Investment Management
Partners, Inc. From September 1986 until his retirement in August
1989, Mr. Finley served as Treasurer of International Business
Machines Corporation.
(3) Mr. Noall has been an Executive of KeyCorp since January 1, 1997. Mr.
Noall served as Senior Executive Vice President and Chief
Administrative Officer of KeyCorp from March 1, 1994 to December 31,
1996 and served in the additional positions of General Counsel and
Secretary of KeyCorp from September 1, 1995 to June 14, 1996. Prior to
March 1, 1994, Mr. Noall served as Vice Chairman of the Board and
Chief Administrative Officer of Society Corporation (banking). Mr.
Noall joined KeyCorp on that date upon the merger of Society
Corporation and KeyCorp.
(4) Mr. Poole has been Chief Operating Officer of Elite Information
Systems, Inc., a wholly owned subsidiary of the Company ("Elite"),
since May 1995 and in January 1998 was elected President of Elite.
From November 1989 to May 1995, Mr. Poole was the Director of
Technology and Executive Director of Latham & Watkins, a law firm
based in Los Angeles, California.
4
<PAGE> 8
(5) Mr. Rich is the co-founder of Elite and served as President of Elite
from January 1982 until his retirement in December 1997. Since that
time, Mr. Rich has continued to provide services as consultant to
Elite and as a director and non-employee Chairman of Elite.
(6) Mr. Seymour has served as President of PRIMax Properties, LLC, a real
estate investment company, since his retirement from the Company in
January 1995. Mr. Seymour, a co-founder of the Company, has served as
Vice Chairman of the Board since June 1993 and from September 1985 to
November 1989 and as Secretary of the Company from June 1993 to May
1996. Mr. Seymour also served as Senior Vice President of the Company
from November 1989 to June 1993.
(7) Mr. Stanford served as managing member of Stanford Associates LLC, an
information technology consulting firm, from October 1994 until
joining the Company as its President and Chief Operating Officer in
September 1995. In 1996, Mr. Stanford was named the Company's Chairman
and Chief Executive Officer. From December 1983 to October 1994, Mr.
Stanford served as a partner with Ernst & Young LLP, most recently as
its National Director of Information Technology Consulting Services.
Upon adoption of the 1996 Stock Option Plan on June 25, 1996, each
director who was not also an officer or employee of the Company on that date
(i.e., Mr. Seymour) was granted options to purchase 5,000 shares of Common
Stock at the fair market value of the shares on that date. In addition, under
the 1996 Stock Option Plan, any individual who is not an employee or officer of
the Company and who is first elected to the Board after June 25, 1996 (i.e., Mr.
Noall) shall receive upon the date of such election an option to purchase 5,000
shares of Common Stock at an exercise price per share equal to the fair market
value of a share of Common Stock on such date. The 1996 Stock Option Plan
further provides for awards of options to purchase 5,000 shares of Common Stock
on each January 5 after the adoption of the 1996 Stock Option Plan if the
average daily value of a share of Common Stock for the immediately preceding
month of December is ten percent greater than the average daily value of a
share for the month of December of the immediately prior year. In the event
that the total exercise price of such options for 5,000 shares exceeds
$100,000, the number of shares purchasable under such option are to be reduced
so that the total exercise price of the options granted equals $100,000, and in
the event that the number of shares authorized under the 1996 Stock Option Plan
are not sufficient to make an award to outside directors, options for the
remaining authorized shares shall be awarded pro rata to the outside directors
then entitled to receive such options. To date, no options have been awarded
pursuant to such formula grant. All such options awarded to non-employee
directors under the 1996 Stock Option Plan become exercisable over a period of
four years, with 20% of the total award being exercisable on the date of grant
and an additional 20% becoming exercisable on each of the next four
anniversaries.
There are no family relationships among the executive officers or
directors of the Company.
The Company pays its non-employee directors a fee of $2,500 for each
directors' meeting attended and pays an additional $500 fee to each member of
the Audit Committee and Compensation Committee for each committee meeting
attended. Additional committees are established from time to time and in 1998
members of such committees were paid a total of $8,500 in fees. No fee is paid
for telephonic meetings. Directors who do not reside in Charlotte, North
Carolina are reimbursed for travel and lodging expenses. The Board of Directors
held 13 meetings during the year ended December 31, 1998 and took action on 3
occasions by unanimous written consent. During 1998, no director attended less
than 75% of the total number of meetings of the Board of Directors during his
term of service or the total number of meetings of committees of the Board on
which he served, except for Mr. McTavish who attended 50% of such meetings. In
addition to regular and special meetings of the Board, the Board confers with
management by conference call from time to time.
5
<PAGE> 9
The Board of Directors has a Compensation Committee, which makes
recommendations concerning salaries and incentive compensation for employees of
the Company and administers the Company's 1996 Stock Option Plan and the 1995
Employee Stock Purchase Plan; and an Audit Committee, which reviews the results
and scope of the audit and other services provided by the Company's independent
accountants. Messrs. Noall, Kelly and McTavish currently serve on the
Compensation Committee and upon the resignation of Messrs. Kelly and McTavish
and subject to the election of Mr. Epker to the Board of Directors, Mr. Epker
will be appointed to the Compensation Committee. Messrs. Finley and Seymour
currently serve on the Audit Committee. During the year ended December 31,
1998, the Compensation Committee met 4 times and the Audit Committee met 2
times. The Board of Directors does not have a nominating committee.
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth as of March 31, 1999 the beneficial
ownership of Common Stock by each director and executive officer named in the
Summary Compensation Table below, and by all directors and executive officers
as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED (1)
NAME OF BENEFICIAL OWNER NUMBER PERCENT
------------------------ ------ -------
<S> <C> <C>
David A. Finley 83,666 1%
Keith B. Hall 6,666 *
Robert J. Kelly 13,000 *
George L. McTavish 23,000 *
Roger Noall 23,000 *
Christopher K. Poole 55,165 *
William G. Seymour 436,622 5.2%
Alan C. Stanford 16,766(2) *
All directors and executive officers as a 657,885 7.7%
group (8 in number)
</TABLE>
- ----------
*Less than one percent.
(1) Included in the calculation of the number of shares of Common Stock
owned beneficially are the following shares purchasable under options
exercisable on April 1, 1999 or within 60 days thereafter by the
directors and executive officers indicated and by all the directors
and executive officers as a group: Mr. Hall - 6,666 shares; Mr. Finley
- 81,666 shares; Mr. Kelly - 3,000 shares; Mr. McTavish - 23,000
shares; Mr. Noall - 3,000 shares; Mr. Poole - 55,165; Mr. Seymour -
3,000 shares; and members of the group (including the foregoing) -
175,497 shares.
(2) On January 15, 1999, Mr. Stanford voluntarily forfeited the 400,000
stock options issued to him in July 1997 and none of such stock
options is included in the number of shares of Common Stock owned
beneficially by Mr. Stanford.
6
<PAGE> 10
EXECUTIVE OFFICERS, COMPENSATION AND OTHER INFORMATION
As of the date of this Proxy Statement, Messrs. Stanford, Hall and
Poole are the only executive officers of the Company. The following table sets
forth a summary, for fiscal years ended December 31, 1998, December 31, 1997
and December 31, 1996, of the compensation of the employees serving as
executive officers on December 31, 1998, and Mr. Poole, who became an executive
officer in January 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION -------------------
------------------- SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) UNDERLYING OPTIONS(#) COMPENSATION($)(1)
--------------------------- ---- --------- -------- --------------------- ------------------
<S> <C> <C> <C> <C> <C>
Alan C. Stanford 1998 300,000 100,000(2) 0 2,639
Chairman and Chief Executive 1997 300,000 100,000(2) 0 4,750
Officer 1996 300,000 100,000(3) 400,000(4) 4,750
Keith B. Hall(5) 1998 200,000 25,000 0 5,000
Vice President and 1997 100,000 25,000 20,000 147,022(6)
Chief Financial Officer 1996 -- -- -- --
Christopher K. Poole 1998 270,000 50,000 0 5,000
President and 1997 240,000 77,500 0 4,750
Chief Operating Officer, 1996 200,228 73,333 20,000 4,750
Elite
</TABLE>
- ---------------
(1) Represents matching contributions made by the Company under the
Company's 401(k) retirement plan.
(2) A portion of Mr. Stanford's 1997 and 1998 bonus was in lieu of
reimbursement of certain travel expenses incurred by Mr. Stanford.
(3) Mr. Stanford received an initial bonus as an inducement for his
acceptance of employment with the Company and to partially defray the
costs of exiting his existing businesses, of which $100,000 was paid
in March 1996.
(4) On January 15, 1999, Mr. Stanford voluntarily forfeited such stock
options.
(5) Mr. Hall's employment with the Company commenced July 1, 1997.
(6) Also includes $80,000, adjusted for potential tax liability to
$144,772, paid to Mr. Hall for relocation expenses.
No options were granted during the year ended December 31, 1998 to the
executive officers named in the Summary Compensation Table.
The following table sets forth certain information with regard to
stock options held at December 31, 1998 by each of the executive officers named
in the Summary Compensation Table. No options were exercised by any of the
executive officers named in the Summary Compensation Table in the year ended
December 31, 1998.
7
<PAGE> 11
<TABLE>
<CAPTION>
FY-END OPTION VALUES
VALUE OF SECURITIES UNDERLYING
NUMBER OF SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END(#) OPTIONS AT FY-END($)
NAME EXERCISABLE/ UNEXERCISABLE EXERCISABLE/ UNEXERCISABLE
---- -------------------------- --------------------------
<S> <C> <C>
Alan C. Stanford 266,667/133,333(1) 0/0
Keith B. Hall 6,666/13,334 0/0
Christopher K. Poole(2) 25,999/15,001 0/0
</TABLE>
- -----------------
(1) On January 15, 1999, Mr. Stanford voluntarily forfeited all 400,000
stock options.
(2) On January 19, 1999, Mr. Poole was granted an additional 50,000 stock
options under the Company's 1996 Stock Option Plan at an exercise
price per share equal to the fair market value of a share of Common
Stock on the date of grant ($2.34). The options vest in two equal
installments on January 19, 1999 and 2000.
EMPLOYMENT AGREEMENTS
On January 15, 1999, the Company entered into an amended and restated
employment agreement with Alan C. Stanford in connection with Mr. Stanford's
continued employment with the Company. The agreement amends and restates the
original employment agreement dated September 1, 1995 between Mr. Stanford and
the Company as previously amended. Pursuant to the employment agreement, Mr.
Stanford is to be paid a minimum base salary of $300,000, subject to increases
upon approval of the Compensation Committee of the Board of Directors. Under
the employment agreement, commencing with the year beginning January 1, 1997,
Mr. Stanford became eligible to receive an annual bonus for the prior fiscal
year to be determined by the Compensation Committee. Mr. Stanford was paid a
$100,000 bonus for 1998, a portion of which was in lieu of reimbursement of
certain travel expenses incurred by Mr. Stanford.
The employment agreement also provides that in the event that a CRM
Transaction (as defined) is consummated on or prior to December 31, 1999, Mr.
Stanford shall receive, a bonus equal to 10% of the amount equal to (i) the
excess if any of the Fair Market Value (as defined) of the Company's Common
Stock as of the Measurement Date (as defined), over $7.25 (ii) multiplied by
the number of shares of the Company's Common Stock outstanding on the
Measurement Date. In the event that (A) a CRM Transaction does not occur and
(B) a Company Transaction (as defined) occurs prior to December 31, 1999, Mr.
Stanford shall receive, a bonus equal to 10% of the amount equal to (i) the
excess, if any, of the Fair Market Value of the Company's Common Stock as of
the effective date of the Company Transaction, over $7.25 (ii) multiplied by
the number of shares of the Company's Common Stock outstanding on the effective
date of the Company Transaction.
8
<PAGE> 12
The employment agreement also provides for other employee benefits and
perquisites customary for executive employment agreements. In addition, Mr.
Stanford is to be reimbursed for reasonable travel expenses from his residence
in Indiana and for relocation expenses if Mr. Stanford moves his residence to
facilitate performance of services under the agreement.
The current term of Mr. Stanford's employment agreement expires on
January 14, 2001 and will automatically renew for successive two-year terms
unless either party provides the other with written notice of its intention to
cancel the agreement at least 180 days prior to the scheduled expiration of the
agreement. In addition, the Company may terminate Mr. Stanford's employment and
Mr. Stanford may resign at any time for any reason. In the event that the
Company terminates Mr. Stanford's employment other than for "cause" (as
defined), the employment agreement provides that upon such termination the
Company shall pay Mr. Stanford two times the amount of Mr. Stanford's most
recent annual base salary and bonus. In the event Mr. Stanford is not able to
perform his duties for six months as a result of disability, the Company may
terminate the agreement after such six month period, provided that Mr. Stanford
shall continue to be an employee for all purposes (including employee benefit
plans and the 1996 Stock Option Plan) for an additional two-year period and the
Company shall pay Mr. Stanford any portion of his base salary not paid by the
disability insurance carrier then providing coverage for the Company's
executives. Under the employment agreement, Mr. Stanford may resign his
employment at any time for any reason or without reason. In the event that such
termination is for "good reason," the agreement provides that the Company shall
pay Mr. Stanford two times the amount of Mr. Stanford's most recent annual base
salary and bonus. "Good reason" means (x) a "Change of Control" of the Company,
as defined; (y) a "Constructive Termination," as defined or (z) a failure by
the Company to comply with any material provision of the agreement which has
not been cured within 10 days after written notice of such noncompliance has
been given. During the term of employment and for a period of two years
thereafter, the employment agreement requires Mr. Stanford to refrain from
certain activities in competition with the Company.
Mr. Stanford's employment agreement requires that upon the expiration
of Mr. Stanford's current term as a director of the Company, the Company's
Board of Directors or a nominating committee thereof shall, subject to
fiduciary duties, nominate him for re-election as a director. In addition, the
agreement provides that Mr. Stanford serve as Chief Executive Officer of the
Company.
On May 29, 1997, the Company entered into an employment agreement with
Keith B. Hall in connection with Mr. Hall's acceptance of employment as the
Company's Chief Financial Officer. The employment agreement was amended on
February 19, 1998 and is described herein as amended. Pursuant to the
employment agreement, Mr. Hall is to be paid a minimum base salary of $200,000,
subject to increase upon approval of the Compensation Committee of the Board of
Directors. Under the employment agreement, commencing with the year beginning
January 1, 1997, Mr. Hall became eligible to participate in any annual bonus
compensation program for executives of the Company generally that may be
approved by the Compensation Committee. In addition, the agreement provides
that the Company shall pay Mr. Hall a guaranteed bonus of $25,000 on each of
December 30, 1997 and June 30, 1998, which in the discretion of the
Compensation Committee may be in addition to or in lieu of any bonus
compensation payable under the bonus compensation program. Mr. Hall was paid
only the guaranteed bonus for 1997 and 1998.
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<PAGE> 13
Pursuant to the employment agreement, the Company awarded to Mr. Hall,
as an inducement for his acceptance of employment, options to purchase 20,000
shares of Common Stock. The employment agreement also provides for other
employee benefits and perquisites customary for executive employment
agreements. In addition, the Company agreed to pay Mr. Hall $80,000, adjusted
for potential tax liability, for expenses in connection with his relocation to
Charlotte, North Carolina.
In the event of a change of control of the Company, as defined in the
employment agreement, prior to the time as Mr. Hall shall have been granted
options to purchase an additional 80,000 shares of the Company's Common Stock
and in the further event Mr. Hall is not offered employment in the same or a
comparable position with the Company or the Company's successor following such
change of control, the Company shall pay to Mr. Hall in cash, upon consummation
of such change in control transaction, an amount equal to the gain, if any,
that would have been realized by Mr. Hall upon such change of control had Mr.
Hall been granted options to purchase such additional 80,000 shares (less any
additional options granted to Mr. Hall prior to the change of control, other
than the 20,000 options awarded to Mr. Hall upon his acceptance of employment),
at $12.6875 per share, such gain to be determined by subtracting the option
price(s) from the net per share price paid for Mr. Hall's Common Stock in the
change of control transaction, provided that such amount shall not exceed
$750,000.
The initial term of Mr. Hall's employment agreement will expire on
June 30, 1999 and will automatically renew for successive two-year terms unless
either party provides the other with written notice of its intention to cancel
the agreement at least 180 days prior to the scheduled expiration of the
agreement. No notice of cancellation has been given. The Company may terminate
Mr. Hall's employment on substantially the same terms as contained in Mr.
Stanford's employment agreement described above. During the term of employment
and for a period of two years thereafter, the employment agreement requires Mr.
Hall to refrain from certain activities in competition with the Company. Mr.
Hall may resign at any time.
On February 18, 1999, the Company entered into a letter agreement with
Mr. Hall in connection with Mr. Hall's continuing employment with the Company
and his role following consummation of the CRM Transaction. The agreement
provides that in the event the CRM Transaction is consummated, Mr. Hall may
elect, at any time within the 90-day period following the closing of the CRM
Transaction, to resign in which case the Company shall pay Mr. Hall two times
the amount of Mr. Hall's most recent annual base salary and bonus and Mr. Hall
shall, at the Company's option, provide consulting services on a part-time or
full-time basis for up to 90-days following such resignation, for which Mr.
Hall shall be compensated a pro rata amount based on his most recent annual
base salary.
On December 8, 1998, Elite entered into a letter agreement with
Christopher K. Poole in connection with Mr. Poole's continuing employment with
Elite. The agreement provides that in the event Mr. Poole is terminated without
"just cause" (as defined) or resigns due to a reduction in his base salary
below current levels or a requirement that he relocate outside of the Los
Angeles, California area, Elite shall pay Mr. Poole two times the amount of Mr.
Poole's most recent annual base salary.
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<PAGE> 14
PERFORMANCE GRAPH
The following graph compares the Company's cumulative total
shareholder return for five fiscal years through the end of the most recent
fiscal year, December 31, 1998, assuming the investment on January 31, 1994, of
$100 in Common Stock, along with the cumulative total returns of a broad-based
equity market index -- the Center for Research in Securities Prices (CRSP)
Total Return Index for the Nasdaq Stock Market (U.S. Companies) -- and of a
published industry peer index -- the CRSP Nasdaq Computer & Data Processing
Services Index -- over the same period assuming the investment on January 31,
1994, of $100 in securities that are the components of these indices.
[PERFORMANCE GRAPH TO GO HERE]
<TABLE>
<CAPTION>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
<S> <C> <C> <C> <C> <C> <C>
Nasdaq 100.000 97.752 138.256 170.015 208.580 293.209
Peer 100.000 121.443 184.925 228.243 280.390 501.762
Company 100.000 217.500 162.500 105.000 96.250 22.500
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executive officers
generally are made by the Compensation Committee of the Board. Set forth below
is a report of the Board's Compensation Committee addressing the Company's
compensation policies for 1998 for its executive officers.
OBJECTIVES AND POLICIES
Over the past year, the Committee's policy in compensating executive
officers has been to align the interests of the executives with the strategic
goals established by the Board of Directors and to ensure that compensation and
benefits are at levels that enable the Company to retain the executives it
needs through any strategic transaction and transition period. Consistent with
these objectives, it has been the policy of the Committee to make a portion of
executive compensation dependent upon corporate
11
<PAGE> 15
performance, including the success of the Company in meeting its financial
goals, with a portion being linked to overall corporate results.
The Committee also believes it is essential that the Committee retain
the flexibility to evaluate not only the performance of the individual
executive officer in furthering the Company's strategic goals and the Company's
performance as a whole, but also the overall performance of the individual
executive officer and all circumstances and challenges facing the Company and
the respective executive officer. Consequently, the Committee relies on
subjective evaluation rather than objective formulas in setting and adjusting
the base salary of the Chief Executive Officer and the other executive officers
and in awarding bonuses and other incentive compensation.
BASE SALARIES; OPTIONS; AND ANNUAL BONUSES
In determining 1998 bonuses, the Committee used its subjective
assessment of the overall performance of the individual executive officer in
terms of the strategic goals established by the Board and the performance of
the Company as a whole. No specific weights were assigned to these factors.
Mr. Stanford is currently employed pursuant to an employment agreement
that established his minimum level of salary for 1997 at $300,000, subject to
increases upon approval by the Compensation Committee. The Committee did not
increase Mr. Stanford's salary for 1997 or 1998. Mr. Hall is employed pursuant
to an employment agreement that established his level of salary for 1997 at
$200,000. The Committee did not increase Mr. Hall's salary for 1998. The
agreements for Messrs. Stanford and Hall provide that the Committee may
increase compensation for future periods. Also, the Company did not award any
options to Messrs. Stanford or Hall in 1998 and, on January 15, 1999, Mr.
Stanford voluntarily forfeited 400,000 stock options previously granted.
Under the terms of the employment agreements, Messrs. Stanford and
Hall were eligible to receive annual bonuses for 1998 to be determined by the
Compensation Committee, provided that Mr. Hall was to receive a guaranteed
bonus of $25,000 on June 30, 1998 which, in the discretion of the Compensation
Committee, may be in addition to or in lieu of any other bonus awarded by the
Compensation Committee. Mr. Hall was awarded the $25,000 bonus in satisfaction
of the guaranteed bonus obligations under his employment agreement and in
recognition of his performance as Chief Financial Officer during 1998, but was
awarded no other bonus for 1998.
In determining the bonus to be awarded to Mr. Stanford for 1998, the
Committee evaluated Mr. Stanford's contribution to the Company's overall
financial strength, product development, customer satisfaction, and positioning
the Company to achieve its strategic goals. The Committee also noted that,
under Mr. Stanford's employment agreement, the Company is required to reimburse
him for travel expenses from his residence in Indiana and the Committee
included such reimbursement as part of his bonus rather than pursuant to the
Company's expense reimbursement policy. After considering these factors, the
Committee awarded Mr. Stanford a bonus of $100,000.
TAX POLICY
Section 162(m) of the Internal Revenue Code limits deductions for
certain executive compensation in excess of $1 million. Certain types of
compensation, including compensation pursuant to stock option plans, are
deductible only if performance criteria are specified in detail and are
contingent on stockholder approval of the compensation arrangement. The
Committee anticipates that certain option awards may be made as qualified
incentive stock options for which the Company generally would not be able to
claim a deduction for compensation expense. In addition, compensation expense
arising under option awards made from January 1996 to February 1998 during the
terms of service of William G. Seymour and Robert J. Levenson on the Committee
may not qualify for the exemption from Section 162(m) due to Mr. Seymour's
prior service as an officer of the Company and the level of transactions
12
<PAGE> 16
between Mr. Levenson's employer, First Data Corp., and the Company. While the
Committee will consider deductibility under Section 162(m) with respect to
future compensation arrangements with executive officers, deductibility will
not be the sole factor used in ascertaining appropriate levels or modes of
compensation. Since corporate objectives may not always be consistent with the
requirements for full deductibility, it is conceivable that the Company may
authorize compensation arrangements under which payments may not be deductible
under Section 162(m). The Committee believes that due to the level of current
salary and maximum cash bonus compensation, and anticipated levels of future
stock option awards, the Company will be able to claim full deductibility of
amounts paid under existing executive compensation arrangements.
For the Compensation Committee:
Roger Noall
Robert J. Kelly
George L. McTavish
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of the
Company. Executive officers, directors and greater than ten percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. To the Company's knowledge, based solely
on a review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during the year ended
December 31, 1998, all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than ten percent beneficial owners
were complied with.
PROPOSAL 2
APPROVAL OF AMENDMENT TO COMPANY'S CERTIFICATE OF
INCORPORATION TO CHANGE NAME
The asset purchase agreement entered into by the Company in connection
with the CRM Transaction requires the Company to seek stockholder approval of a
change in the Company's name and, upon such approval, cease using the name
Broadway & Seymour. The Board of Directors of the Company has approved a
resolution to amend the Company's Certificate of Incorporation to change the
Company's name to Elite Information Group, Inc., subject to consummation of the
CRM Transaction.
Approval of this amendment requires the affirmative vote of a majority
of the shares of Common Stock of the Company voting in person or by proxy at
the Annual Meeting. Upon approval of the name change by the stockholders, the
Company plans to change its NASDAQ trading symbol to ELTE and to change its
CUSIP number.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE FOLLOWING RESOLUTION:
"RESOLVED, that subject to consummation of the proposed sale of the
corporation's customer relationship management business, the Broadway &
Seymour, Inc. Restated Certificate of Incorporation
13
<PAGE> 17
be amended to change the name of the corporation to Elite Information Group,
Inc. and that Article 1 of the Restated Certificate of Incorporation be amended
to read in its entirety as follows:
`The name of the Corporation is Elite Information Group, Inc.'"
PROXIES, UNLESS INDICATED TO THE CONTRARY, WILL BE VOTED "FOR" APPROVAL OF THE
RESOLUTION.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company, upon the recommendation of the
Audit Committee, has appointed the firm of PricewaterhouseCoopers LLP to serve
as independent accountants of the Company for the year ending December 31,
1999, subject to ratification of this appointment by the stockholders of the
Company. PricewaterhouseCoopers LLP has served as the Company's independent
accountants for eight years and is considered by management of the Company to
be well qualified.
One or more representatives of PricewaterhouseCoopers LLP will be
present at this year's Annual Meeting and will have an opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions.
Ratification of the appointment of the independent accountants
requires the affirmative vote of a majority of the shares of Common Stock of
the Company voting in person or by proxy at the Annual Meeting. If the
stockholders should not ratify the appointment of PricewaterhouseCoopers LLP,
the Board of Directors will reconsider the appointment.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS. PROXIES,
UNLESS INDICATED TO THE CONTRARY, WILL BE VOTED "FOR" RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS.
STOCKHOLDERS' PROPOSALS
Stockholders' proposals intended for inclusion in the Company's proxy
statement and the form of the proxy for the Annual Meeting in 2000 should be
sent by certified mail, return receipt requested, and must be received by the
Company at its principal executive offices (Attention: General Counsel) by
January 1, 2000. Such proposals may be made only by persons who are
stockholders, beneficially or of record, on the date the proposal is submitted
and who continue in such capacity through the meeting date, of at least 1% or
$1,000 in market value of securities entitled to be voted at the meeting, and
have held such securities for at least one year. In addition, the Company's
Bylaws prescribe the procedure a stockholder must follow to make nominations for
director candidates or to propose any business to be considered at an annual
meeting. Stockholder nominations for director or other proposals will be
considered at an annual meeting if the stockholder delivers to the Secretary of
the Company at its principal executive offices, no less than 60 nor more than 90
days prior to the meeting (or in the event that public disclosure of the date of
the annual meeting is first made less than 70 days in advance of the meeting
date, no later than the close of business on the tenth day after public
disclosure of the date of the annual meeting is made), a written notice setting
forth the information specified in the Company's Bylaws. Any stockholder
desiring a copy of the Company's Bylaws will be furnished one without charge
upon written request to the Secretary of the Company c/o Elite Information
Systems, Inc., 5100 Goldleaf Circle, Suite 100, Los Angeles, California 90056.
14
<PAGE> 18
OTHER BUSINESS
The Board of Directors is aware of no other matter that will be
presented for action at the meeting. If any other matter requiring a vote of
the stockholders properly comes before the meeting, the persons authorized
under management proxies will vote and act according to their best judgment.
FORM 10-K
A copy of the Annual Report on Form 10-K for the year ended December
31, 1998, as filed with the Securities and Exchange Commission may be obtained
upon request and without charge by writing:
Broadway & Seymour, Inc.
c/o Elite Information Systems, Inc.
5100 Goldleaf Circle
Suite 100
Los Angeles, California 90056
Attn: Investor Relations
15
<PAGE> 19
[COMPANY LOGO]
<PAGE> 20
BROADWAY & SEYMOUR, INC.
ANNUAL MEETING OF STOCKHOLDERS
to be held on May 27, 1999
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Christopher K. Poole, Alan C. Stanford, Keith
B. Hall and Lillian N. Wilson as Proxies, each with the power to appoint his
substitute, and hereby authorizes each of them to represent and to vote, as
designated on the reverse side, all the shares of common stock of Broadway &
Seymour, Inc. (the "Company"), held of record by the undersigned on April 16,
1999 at the annual meeting of stockholders to be held on May 27, 1999, or any
adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS AND THIS
PROXY WILL BE VOTED FOR THE PROPOSALS AND FOR THE ELECTION OF THE DIRECTOR
NOMINEES NAMED HEREIN UNLESS THE STOCKHOLDER DIRECTS OTHERWISE, IN WHICH CASE
IT WILL BE VOTED AS DIRECTED.
The undersigned acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement dated April 30, 1999, and revokes all proxies heretofore given by the
undersigned.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
POSTAGE-PAID ENVELOPE.
Please sign exactly as name(s) appear(s) on the reverse. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_______________________________ _______________________________
_______________________________ _______________________________
_______________________________ _______________________________
<PAGE> 21
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
<TABLE>
<S> <C> <C> <C> <C>
- ----------------------------------------------
BROADWAY & SEYMOUR, INC. 1. Election of two Directors
- ---------------------------------------------- FOR ALL WITH- FOR ALL
HOLD EXCEPT
Alan Rich
Arthur G. Epker III [ ] [ ] [ ]
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For all Except" box and strike a line through the name of the nominee.
Your shares will be voted for the remaining nominee.
2. Proposal to approve, subject to consummation of the pending sale of the
Company's customer relationship management business, a resolution to
amend the Company's Certificate of Incorporation to change the Company's
name to Elite Information Group, Inc.
RECORD DATE SHARES:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to ratify the selection of PricewaterhouseCoopers
LLP as the Company's independent accountants.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Mark box at right if an address change or comment has been noted on [ ]
Please be sure to sign ------------ the reverse side of this card.
and date this Proxy. Date
- --------------------------------------------
Stockholder sign here Co-owner sign here
- --------------------------------------------
DETACH CARD DETACH CARD
</TABLE>
