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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended June 30, 2000.
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ____________ to ___________.
Commission File Number: 1-12842
SCANSOURCE, INC.
(Exact name of registrant as specified in its charter)
South Carolina 57-0965380
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
6 Logue Court
Greenville, South Carolina 29615
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (864) 288-2432
Securities registered pursuant to Section 12(b) of the Act:
None.
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock of the Registrant held by non-
affiliates of the Registrant at August 31, 2000 was $324,487,250, as computed by
reference to the average bid and asked prices of such stock on such date.
As of June 30, 2000, 5,610,875 shares of the Registrant's Common Stock, no par
value, were outstanding. The Registrant had no other classes of common equity
outstanding as of such date.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the fiscal year
ended June 30, 2000 are incorporated by reference into Parts II and IV of this
Form 10-K, and portions of the Registrant's Proxy Statement to be furnished in
connection with its 2000 Annual Meeting of Shareholders are incorporated by
reference into Part III of this Form 10-K.
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PART I
ITEM 1. Business.
ScanSource Inc. ("ScanSource" or the "Company") is a leading value-added
wholesale distributor of automatic identification ("Auto ID"), point of sale
("POS") and telephony products. These specialty technology products interface
with computer systems used to automate the collection, processing and
communication of information for commercial and industrial applications,
including retail sales, distribution, shipping, inventory control, materials
handling and warehouse management.
Products and Markets
The Company currently markets approximately 16,000 products from over 50
hardware and software vendors from its central warehouse in Memphis, Tennessee
to approximately 11,000 reseller customers.
Auto-ID technology incorporates the capabilities for electronic recognition
and data processing without the need for manual input and consists of a wide
range of products, including bar code printers and labeling devices, contact
wands, light pens, hand-held and fixed-mount laser scanners, portable data
collection devices, keyboard wedges, and magnetic stripe readers. As Auto-ID
technology has become more pervasive, applications have evolved from traditional
uses such as inventory control, materials handling, distribution, shipping and
warehouse management to more advanced applications such as medical research. POS
technology consists of devices used for the capture, processing, analysis, and
dissemination of transaction data. POS product lines include computer-based
terminals, monitors, receipt printers, pole displays, cash drawers, keyboards,
peripheral equipment and fully integrated processing units used primarily in
retail applications. Telephony products include business telephone systems
(PBXs, key systems, telephone handsets and cabling) and computer telephony
components used in voice, fax, data, voice recognition, call center management
and IP telephony applications.
Industry Overview
The distribution channels for specialty technology products generally
consist of manufacturers, wholesale distributors such as ScanSource, resellers
and end-users. In recent years, these distribution channels have evolved through
three stages: (i) direct sales by manufacturers to end-users; (ii) single-tier
distribution in which manufacturers sell to resellers who, in turn, sell
directly to end-users; and (iii) two-tier, or wholesale distribution, in which
manufacturers sell to wholesale distributors, including ScanSource, who sells
only to resellers who, in turn, sell directly to end-users.
Currently, the wholesale distribution channel is highly fragmented and is
comprised of several large national distributors and many smaller regional
distributors. Large national distributors are engaged primarily in conventional
order fulfillment and typically offer few value-added services, while small
regional distributors are limited in the scale and scope of their operations and
services.
Competition among an expanding number of manufacturers has caused product
prices to decrease and product applications to expand, which has resulted in an
increasing number of resellers entering the market in order to support a broader
base of potential end-users. As the number of resellers and end-users grows,
competition among manufacturers and within the reseller channel has intensified,
resulting in a less orderly market structure. As a result of the transition of
specialty technology products to open-systems (whereby a variety of
manufacturers' products can be configured together to create a system solution),
both manufacturers and resellers have become more dependent upon wholesale
distributors such as ScanSource for the organization and maintenance of an
efficient market structure.
In addition, manufacturers which face declining product prices and rising
costs of direct sales increasingly rely upon value-added wholesale distributors
for outsourcing certain support functions, such as product assortment, delivery,
inventory management, technical assistance and marketing. At the same time,
shortened product life cycles and the introduction of new products and
applications have caused resellers increasingly to rely on wholesale
distributors for various inventory management, financing, technical support and
related functions. The Company believes that as the reseller market grows and
becomes more fragmented, and as specialty technology products continue to
transition to open systems, the wholesale distribution channel in which the
Company operates will become increasingly more important.
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Vendors
The Company's vendors include most of the leading Auto-ID and POS
manufacturers, including Axiohm, Cherry Electrical, Cognitive Solutions,
Datamax, Epson America, IBM, Intermec, Ithaca Peripherals, Javelin, Metrologic,
MicroTouch Systems, MMF Cash Drawer, Monarch Marking Systems, PSC, Sato America,
Symbol Technologies and Zebra Technologies. The Company's key telephony vendors
include Lucent Technologies, and Intel/Dialogic.
The Company's merchandising department recruits vendors and manages
important aspects of its vendor relationships, such as purchasing arrangements,
cooperative marketing initiatives, vendor sales force relationships, product
training and monitoring rebate programs and various contract terms and
conditions. The Company generally enters into non-exclusive distribution
agreements with vendors. These agreements typically provide the Company with
stock rotation and price protection provisions that may mitigate the risk of
loss from slow moving inventory, vendor price reductions, product updates or
obsolescence. Some of these distribution agreements contain minimum purchase
amounts in order to receive preferential prices. The distribution agreements are
generally terminable on 30 to 120 days' notice by either party.
Customers
The Company's reseller customers currently include approximately 11,000
active value-added reseller accounts ("VARs") located in the U.S. and Canada.
The largest customer accounted for less than 7% of the total Company's net sales
in fiscal 2000. The Company targets two types of reseller customers:
Specialty Technology VARs. These resellers focus on selling specialty
technology products as a tailored software or integrated hardware solutions for
their end-users' existing applications or incorporating specialty technology
products as part of customized technology solutions for their end-users. Primary
industries served by these resellers include manufacturing, distribution, health
care, pharmaceuticals, hospitality, convenience, grocery and other retail
markets.
General or PC VARs. These resellers develop computer solutions for their
end-users' microcomputer needs. They typically have well-established
relationships with end-user management information system directors and are
seeking additional revenue and profit opportunities in related technology
markets, such as Auto-ID, POS or telephony.
Sales and Electronic Commerce
The Company's sales force is comprised of 64 inside sales representatives
located in South Carolina, California, Georgia, Washington, New Jersey and
Canada. In order to build strong customer relationships, each active reseller
is assigned to a sales representative. Each sales representative negotiates
pricing directly with his assigned customers. The Company also employs several
product managers who are responsible for developing technical expertise within
broad product markets, evaluating competitive markets, and reviewing overall
product and service requirements of resellers. Each sales representative and
product manager receives comprehensive training with respect to the technical
characteristics of each vendor's products. This training is supplemented by
quarterly product seminars conducted by vendors' representatives and by weekly
meetings among product managers, marketing and sales representatives.
Increasingly, customers rely upon the Company's electronic ordering and
information systems, in addition to its product catalogs and frequent mailings,
as sources for product information, including availability and price. Through
the Company's website, most customers can gain remote access to the Company's
information systems to check real-time product availability, see their
customized pricing and place orders. Customers can also follow the status of
their orders and obtain UPS and FedEx package tracking numbers from this site.
By the fourth quarter of fiscal 2000 approximately 22% of the Company's sales
orders were entered electronically.
Marketing
The Company provides a range of marketing services, including cooperative
advertising with vendors through trade publications and direct mail, a product
catalog which is published three times a year, periodic newsletters, management
of sales leads, trade shows with software companies and vendors, direct mail and
sales promotions. In addition, the Company organizes and operates its own
"TechTeach" seminars three times a year, teaming with top vendors to recruit
prospective resellers and
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introduce new applications for the specialty technology products it distributes.
The Company frequently customizes its marketing services for vendors and
resellers.
Value-Added Services
In addition to the basic order fulfillment and credit services that
conventional wholesale distributors typically provide to resellers, the Company
differentiates itself by providing an array of value-added services, including
the following:
Pre-Sale Technical Support. Technical support personnel assist the reseller
with system configurations as the order is placed. Pre-sale support also
includes testing products to ensure their compatibility with other products and
applications.
Post-Sale Technical Support. Technical support personnel also assist sales
representatives and customers in diagnosing and solving technical, configuration
or compatibility issues which may arise after the sale. Technical support
personnel will, if necessary, serve as liaisons or advocates between the
manufacturers and the resellers.
Shipping Options. Product managers and technical support personnel work
together to select specific products that are compatible and continually develop
"solution kits" or bundles to better meet the reseller's needs. Resellers have
come to trust the Company's shipping accuracy and reliability such that many no
longer hold their own inventory. Instead, by the fourth quarter of fiscal 2000,
approximately 66% of sales orders were drop shipped directly to an end user on
behalf of a reseller.
Professional Services Group. The Company's Professional Services Group
assists resellers with pen-based programming and radio-frequency data collection
applications, areas in which resellers need greater technical expertise. This
group offers needs-analysis, pre-sale equipment configuration, sales assistance,
site surveys, on-site installation, post-sale maintenance, software programming
(both utilities and applications), and project management. The Company has
recently hired a group of engineers to begin a similar initiative called
Catalyst Advantage to help telephony resellers.
Operations
Information System
The Company's information system is a highly scalable, centralized
processing system capable of supporting numerous operational functions including
purchasing, receiving, order processing, shipping, inventory management and
accounting. Sales representatives rely on the information system for on-line,
real-time information on product pricing, inventory availability and
reservation, and order status. The Company's warehouse operations use bar code
technology for receiving and shipping, and automated UPS and FedEx systems for
freight processing and shipment tracking, each of which is integrated with the
Company's information system. The customer service and technical support
departments employ the system for documentation and faster processing of
customer product returns. To ensure that adequate inventory levels are
maintained, the Company's buyers depend on the system's purchasing and receiving
functions to track inventory on a continual basis.
Central Warehouse and Shipping
The Company's 233,000 square foot warehouse facility, located approximately
eight miles from the FedEx hub facility in Memphis, Tennessee, serves all of
North America. The Company believes that its centralized distribution creates
several advantages, including: (i) a reduced amount of "safety stock" inventory
which, in turn, reduces the Company's working capital borrowings; (ii) an
increased turnover rate by tighter control over inventory; (iii) maintenance of
a consistent order-fill rate; (iv) improved personnel productivity; (v) improved
delivery time; (vi) simplified purchasing and tracking; (vii) decreased demand
for management personnel; and (viii) flexibility to meet customer needs for
systems integration.
The Company's objective is to ship on the same day all orders received by
8:00 p.m. Eastern Time. Orders are currently processed in the central warehouse,
where bar code technology is utilized to minimize shipping errors. The Company
also has an automated package handling system used to send products from the
picking area to invoicing stations. Upon fulfillment of the order, the package
is immediately shipped to the reseller or "drop-shipped" to an end-user
specified by the reseller by FedEx or UPS. The Company charges its customers
local ground delivery rates for this overnight service.
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Credit Services
The Company routinely offers 20-day credit terms for qualified resellers.
The Company believes this policy eliminates the customer's need to establish
multiple credit relationships with a large number of manufacturers.
Competition
The markets in which the Company operates are highly competitive.
Competition is based primarily on factors such as price, product availability,
speed and accuracy of delivery, effectiveness of sales and marketing programs,
credit availability, ability to tailor specific solutions to customer needs,
quality and breadth of product lines and services, and availability of technical
and product information. The Company's competitors include regional and national
wholesale distributors, as well as hardware manufacturers (including most of the
Company's vendors) that sell directly to resellers and to end-users. In
addition, the Company competes with master resellers which sell to franchisees,
third-party dealers and end-users. Certain of the Company's current and
potential competitors have greater financial, technical, marketing and other
resources than the Company and may be able to respond more quickly to new or
emerging technologies and changes in customer requirements. Such competition
could also result in price reductions, reduced margins and loss of market share
by the Company.
Employees
As of August 17, 2000 the Company had 469 employees, none of whom was a
member of an industry trade union or collective bargaining unit. The Company
considers its employee relations to be good.
Service Marks
The Company conducts its business under the trademark and service mark
"ScanSource." The Company has been issued registrations for the mark
"ScanSource" in the United States and Canada. The Company is also pursuing
registrations of its trademarks and service marks "Catalyst" and "Catalyst
Telecom" in the United States and Canada. The Company does not believe that its
operations are dependent upon any of its trademarks or service marks. The
Company also sells products and provides services under various trademarks,
service marks and trade names to which reference is made in this report that are
the property of owners other than the Company. Such owners have reserved all
rights with respect to their respective trademarks, service marks and trade
names.
Private Securities Litigation Reform Act of 1995
Certain of the statements contained in this PART I, Item 1 (Business) and
PART II, Item 7 (Management's Discussion and Analysis of Financial Condition and
Results of Operations) of this Annual Report on Form 10-K that are not
historical facts are forward-looking statements subject to the safe harbor
created by the Private Securities Litigation Reform Act of 1995. The Company
cautions readers of this Annual Report on Form 10-K that a number of important
factors could cause the Company's activities and/or actual results in fiscal
2000 and beyond to differ materially from those expressed in any such forward-
looking statements. These factors include, without limitation, the Company's
dependence on vendors, product supply, senior management, centralized functions,
and third-party shippers, the Company's ability to compete successfully in a
highly competitive market and manage significant additions in personnel and
increases in working capital, the Company's entry into new products markets in
which it has no prior experience, the Company's susceptibility to quarterly
fluctuations in net sales and operations results, the Company's ability to
manage successfully price protection or stock rotation opportunities associated
with inventory value decreases, and other factors described in other reports and
documents filed by the Company with the Securities and Exchange Commission.
ITEM 2. Properties.
The Company owns a 70,000 square foot building in Greenville, South
Carolina in which its principal executive and sales offices are located. The
Company currently occupies approximately 50,000 square feet of that building for
its own use, and the Company leases the remainder of the building to third
parties until additional space is required for the Company's needs. The Company
owns a 233,000 square foot distribution center in Memphis, Tennessee. The
Company's 20,000 square foot warehouse
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in Toronto, Canada is no longer used, but is leased through January 2003. The
Company also leases small sales offices of 5,400 square feet or less in each of
Lake Forest, California; Norcross, Georgia; Cranford, New Jersey; Bellingham,
Washington; St. Paul, Minnesota; and Vancouver and Toronto, Canada. Management
believes the Company's office and warehouse facilities are adequate to support
its operations at their current level and for the foreseeable future.
ITEM 3. Legal Proceedings.
The Company or its subsidiaries are from time to time parties to lawsuits
arising out of operations. Although there can be no assurance, based upon
information known to the Company, the Company does not believe that any
liability which might result from an adverse determination of such lawsuits
would have a material adverse effect on the Company's financial condition or
results of operations.
ITEM 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
ITEM 5. Market For Registrant's Common Equity and Related Stockholder Matters.
The information called for by this Item is incorporated herein by reference
from the inside back cover page of the Registrant's Annual Report to
Shareholders for the fiscal year ended June 30, 2000.
ITEM 6. Selected Financial Data.
The information called for by this Item is incorporated herein by reference
from page 8 of the Registrant's Annual Report to Shareholders for the fiscal
year ended June 30, 2000.
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The information called for by this Item is incorporated herein by reference
from pages 9 through 15 of the Registrant's Annual Report to Shareholders for
the fiscal year ended June 30, 2000.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk.
The information called for by this Item is incorporated herein by reference
from pages 14 of the Registrant's Annual Report to Shareholders for the fiscal
year ended June 30, 2000.
ITEM 8. Financial Statements and Supplementary Data.
The financial statements listed in Item 14(a)1 of this Form 10-K are
incorporated herein by reference from pages 17 through 31 of the Registrant's
Annual Report to Shareholders for the fiscal year ended June 30, 2000. The
financial statement schedules listed in Item 14(a)2 of this Form 10-K are
included in this report on pages F-1 through F-2.
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ITEM 9. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
Information called for by Part III (Items 10, 11, 12 and 13) of this report
on Form 10-K has been omitted as the Company intends to file with the Securities
and Exchange Commission not later than 120 days after the close of its fiscal
year ended June 30, 2000 a definitive Proxy Statement pursuant to Regulation 14A
promulgated under the Securities Exchange Act of 1934. Such information will be
set forth in such Proxy Statement and is incorporated herein by reference.
ITEM 10. Directors and Executive Officers of the Registrant.
The information required by this item is incorporated herein by reference
to the Proxy Statement for the Company's 2000 Annual Meeting of Shareholders.
ITEM 11. Executive Compensation.
The information required by this item is incorporated herein by reference
to the Proxy Statement for the Company's 2000 Annual Meeting of Shareholders.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is incorporated herein by reference
to the Proxy Statement for the Company's 2000 Annual Meeting of Shareholders.
ITEM 13. Certain Relationships and Related Transactions.
The information required by this item is incorporated herein by reference
to the Proxy Statement for the Company's 2000 Annual Meeting of Shareholders.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a)(1) Consolidated Financial Statements: The following financial statements of
ScanSource, Inc. and Independent Auditors' Report are incorporated herein
by reference from the Registrant's Annual Report to Shareholders for the
fiscal year ended June 30, 2000:
Independent Auditors' Report
Consolidated Balance Sheets as of June 30, 1999 and 2000
Consolidated Statements of Income for the years ended June 30, 1998, 1999
and 2000
Consolidated Statements of Shareholders' Equity for the years ended June
30, 1998, 1999 and 2000
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Consolidated Statements of Cash Flows for the years ended June 30, 1998,
1999 and 2000
Notes to Consolidated Financial Statements
(a)(2) Financial Statement Schedule: The following financial statement schedule
of ScanSource, Inc. and Independent Auditors' Report for the years ended
June 30, 1998, 1999 and 2000 are presented on Pages F-1 to F-2.
Independent Auditors' Report
Schedule - Allowance for Doubtful Accounts Receivable
(a)(3) Exhibits: The Exhibits listed on the accompanying Index to Exhibits on
pages E-1 to E- 2 are filed as part of this report.
(b) Reports on Form 8-K.
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
September 26, 2000
SCANSOURCE, INC.
By: /s/ MICHAEL L. BAUR
-----------------------
Michael L. Baur
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
-------------------------------- ----------------------------- ----------------------------
<S> <C> <C>
/s/ STEVEN H. OWINGS Chairman of the Board September 26, 2000
--------------------------------
Steven H. Owings
/s/ MICHAEL L. BAUR President, Chief Executive September 26, 2000
-------------------------------- Officer and Director
Michael L. Baur
/s/ JEFFERY A. BRYSON Chief Financial Officer and September 26, 2000
-------------------------------- Treasurer (principal
Jeffery A. Bryson financial and accounting officer)
/s/ STEVEN R. FISCHER Director September 26, 2000
--------------------------------
Steven R. Fischer
/s/ JAMES G. FOODY Director September 26, 2000
--------------------------------
James G. Foody
</TABLE>
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INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors
ScanSource, Inc.:
Under date of August 16, 2000, we reported on the consolidated balance sheets of
ScanSource, Inc. and subsidiaries as of June 30, 1999 and 2000, and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the years in the three-year period ended June 30, 2000, which are
incorporated by reference in the Annual Report on Form 10-K for the year 2000.
In connection with our audits of the aforementioned consolidated financial
statements, we also audited the related accompanying consolidated financial
statement schedule listed in Item 14(a)2. The financial statement schedule is
the responsibility of the Company's management. Our responsibility is to express
an opinion on the financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
Greenville, South Carolina /s/KPMG LLP
August 16, 2000
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SCANSOURCE, INC. AND SUBSIDIARIES
Allowance for Doubtful Accounts Receivable
(In thousands)
<TABLE>
<CAPTION>
Balance at
Beginning Amounts Balance at
of Charged to End of
Description Year Bad Debt Expense Deduction Year
------------ ------------- -------------------- -------------- --------------
<S> <C> <C> <C> <C>
Allowance for doubtful
accounts receivable:
Year ended June 30, 1998 $ 1,227 1,230 (412) 2,045
===== ===== ====== =====
Year ended June 30, 1999 $ 2,045 3,582 (625) 5,002
===== ===== ====== =====
Year ended June 30, 2000 $ 5,002 2,983 (2,521) 5,464
===== ===== ====== =====
</TABLE>
F-2
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INDEX TO EXHIBITS
Exhibit
-------
Number Description
------ -----------
3.1 Amended and Restated Articles of Incorporation of the Registrant.
(Incorporated by Reference to Exhibit 3.1 to Registrant's Form SB-
2 filed with the Commission on February 7, 1994, Registration No.
33-75026-A).
3.2 Bylaws of the Registrant (Incorporated by Reference to Exhibit 3.2
to Registrant's Form SB-2 filed with the Commission on February 7,
1994, Registration No. 33-75026-A).
4.1 Form of Common Stock Certificate (Incorporated by Reference to
Exhibit 4.1 to Registrant's Form SB-2 filed with the Commission on
February 7, 1994, Registration No. 33-75026-A).
10.9 Stock Option Agreement dated July 1, 1993 covering stock options
issued to Michael L. Baur. (Incorporated by Reference to Exhibit
10.9 to the Registrant's Form SB-2 filed with the Commission on
February 7, 1994, Registration No. 33-75026-A).
10.10 1993 Incentive Stock Option Plan (As Amended) of the Registrant
and Form of Stock Option Agreement (Incorporated by reference to
Exhibit 10.10 to Registrant's Form S-1 filed with the Commission
on January 23, 1997, Registration No. 333-20231).
10.11 1994 Stock Option Plan for Outside Directors of the Registrant and
Form of Stock Option Agreement. (Incorporated by Reference to
Exhibit 10.11 to the Registrant's Form SB-2 filed with the
Commission on February 7, 1994, Registration No. 33-75026-A).
10.13 1997 Stock Incentive Plan, as amended, of the Registrant and Form
of Stock Option Agreement. (Incorporated by Reference to Exhibit
10.13 to the Registrant's Form 10-K for the fiscal year ended June
30, 1999.)
10.18 Agreement to Terminate Distribution Services dated June 24, 1994
between the Registrant and Gates/FA Distributing, Inc.
(Incorporated by Reference to Exhibit 99.1 to the Registrant's
Form 8-K filed with the Commission on June 6, 1994).
10.21 Software License Agreement dated April 18, 1995 between the
Registrant and Technology Marketing Group, Inc. d/b/a Globelle,
including letter agreement dated November 22, 1995 between the
parties with respect to stock options. (Incorporated by reference
to Exhibit 10.21 to the Registrant's registration statement on
Form S-3 filed with the Commission on December 29, 1995,
Registration No. 33-81043).
10.25 Agreement for Wholesale Financing (Security Agreement) dated April
8, 1996 between the Registrant and IBM Credit Corporation,
including letter agreement dated April 17, 1996 between the
parties. (Incorporated by Reference to Exhibit 10.25 to the
Registrant's Form 10-K for the fiscal year ended June 30, 1998).
10.26 Intercreditor Agreement dated April 8, 1996 among the Registrant,
IBM Credit Corporation, and Branch Banking and Trust Company.
(Incorporated by reference to Exhibit 10.26 to the Registrant's
Form S-1 filed with the Commission on January 23, 1997,
Registration No. 333-20231).
10.27(a) Loan and Security Agreement dated November 25, 1996 between the
Registrant and Branch Banking and Trust Company. (Incorporated by
reference to Exhibit 10.27 to the Registrant's Form S-1 filed with
the Commission on January 23, 1997, Registration No. 333-20231).
10.27(b) Loan Modification Agreement dated January 29, 1999 by and between
the Registrant and Branch Banking and Trust Company, including
Addendum to Promissory Note and Modification, Increase, Renewal
and Restatement of Promissory Note.
E-1
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10.28 Employment Agreement dated as of July 1, 1999 between the
Registrant and Steven H. Owings. (Incorporated by reference to
Exhibit 10.28 to the Registrant's Form 10-Q for the quarter ended
September 30, 1999).
10.29 Employment Agreement dated as of July 1, 1999 between the
Registrant and Michael L. Baur. (Incorporated by reference to
Exhibit 10.29 to the Registrant's Form 10-Q for the quarter ended
September 30, 1999).
10.30 Employment Agreement dated as of July 1, 1999 between the
Registrant and Jeffery A. Bryson. (Incorporated by reference to
Exhibit 10.30 to the Registrant's Form 10-Q for the quarter ended
September 30, 1999).
10.32 Stock Option Agreement dated July 18, 1996 covering stock options
granted to James G. Foody. (Incorporated by reference to Exhibit
10.32 to the Registrant's Form S-1 filed with the Commission on
January 23, 1997, Registration No. 333-20231).
10.33 Stock Option Agreement dated December 3, 1996 covering stock
options granted to Steven H. Owings. (Incorporated by reference to
Exhibit 10.33 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
10.34 Stock Option Agreement dated December 3, 1996 covering stock
options granted to Michael L. Baur. (Incorporated by reference to
Exhibit 10.34 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
10.35 Distribution Agreement dated October 1, 1994 between the
Registrant and Symbol Technologies, Inc. (Incorporated by
Reference to Exhibit 10.35 to the Registrant's Form 10-K for the
fiscal year ended June 30, 1998).
10.36 Distribution Agreement dated January 1, 1996 between the
Registrant and IBM Corporation. (Incorporated by Reference to
Exhibit 10.36 to the Registrant's Form 10-K for the fiscal year
ended June 30, 1998).
10.37 Stock Option Agreement dated January 17, 1997 covering options
granted to Steven H. Owings. (Incorporated by reference to Exhibit
10.37 to the Registrant's Form S-1 filed with the Commission on
January 23, 1997, Registration No. 333-20231).
10.38 Stock Option Agreement dated January 17, 1997 covering options
granted to Michael L. Baur. (Incorporated by reference to Exhibit
10.38 to the Registrant's Form S-1 filed with the Commission on
January 23, 1997, Registration No. 333-20231).
10.39 Stock Option Agreement dated January 17, 1997 covering options
granted to Jeffrey A. Bryson. (Incorporated by reference to
Exhibit 10.39 to the Registrant's Form S-1 filed with the
Commission on January 23, 1997, Registration No. 333-20231).
13* Portions of the Registrant's Annual Report to Shareholders for the
Fiscal Year Ended June 30, 2000.
23* Consent of KPMG LLP
27* Financial Data Schedule.
_____________
* - Filed herewith.
E-2
