SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: November 30, 1998
MATRIX CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 0-21231 84-1233716
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(State or other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification Number)
1380 Lawrence Street, Suite 1410
Denver, Colorado 80204
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(Address of principal executive offices)
(303) 595-9898
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(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
Year 2000 Information and Readiness Disclosure Act of 1998
Information provided on the Company's year 2000 issues contained in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997
and Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1998
pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Act") are "Year Readiness Disclosures" as defined by the Year 2000 Information
and Readiness Disclosure Act of 1998 (Public Law 105-271, 112 Stat. 2386, a U.S.
statute) enacted on October 19, 1998, to the extent applicable under the Act.
Copies of such disclosures are attached hereto and can be obtained from the
Company upon request.
The Company also maintains a website (www.matrixcap.com) that, by
December 3, 1998, will contain information on various aspects of its Year 2000
readiness progress. Each such statement contained therein is a "Year 2000
Readiness Disclosure" and a "Year 2000 Statement."
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MATRIX CAPITAL CORPORATION
Dated: November 30, 1998 /s/ David W. Kloos
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David W. Kloos
Executive Vice President and
Chief Financial Officer
<PAGE>
YEAR 2000 READINESS DISCLOSURE
[From Form 10-Q for Quarter Ended June 30, 1998]
In the next eighteen months, most companies will face a potentially
serious information systems (computer) problem because many software
applications and operational programs written in the past may not properly
recognize calendar dates beginning in the Year 2000. This problem could force
computers to either shut down or provide incorrect data or information. The
Company has begun the process of identifying the changes required to its
computer programs and hardware, in consultation with software and hardware
providers and regulators.
As of March 1, 1998, the Company has completed an inventory of all of
its systems and applications. Based on this inventory, 125 critical systems were
identified within the Company and its subsidiaries. The Company's deadline for
full system hardware and software compliance for the Year 2000 is January 31,
1999. The Company has established a Year 2000 Plan, which is being implemented
in stages to address critical systems and applications first, and includes
replacement of any systems that cannot be brought into compliance by the stated
deadline. Additionally, the Company and all of is subsidiaries have formed Year
2000 project teams which are overseen by the Company's Chief Information Officer
to ensure that consistent methodologies are being used by the subsidiaries to
address the various Year 2000 issues.
The Company's computing environment consists largely of personal
computers connected to Local Area Network ("LAN") based systems. The exception
to this is an in-house Digital VAX mini-computer used by Sterling Trust. This
VAX system houses the Trust Accounting System which is written in the COBOL
language. Based on the Company's Year 2000 Plan, this system is scheduled to be
in compliance by the January 31, 1999 deadline. The Company's Plan involves
modification and/or replacement of systems as necessary to allow them to
function properly with respect to date in the Year 2000 and thereafter.
Management presently believes that the Year 2000 issue will not pose significant
operational problems for its computer systems. However, if the required
modifications or replacements are not made, or are not completed in a timely
manner, the Year 2000 Issue could have a material impact on the operations of
the Company.
The Company has identified 300 different vendors and suppliers
currently utilized by the Company and its subsidiaries. Letters requesting the
status of the identified vendors' Year 2000 compliance have been sent to
approximately 50% of these vendors. The remaining vendors will be contacted by
the end of September 1998. The Company and its subsidiaries receive information
from many outside sources. As such, the Company will be working closely with
those vendors to minimize its exposure to non-complaint sources of data. Vendors
that cannot meet the January 31, 1999 deadline for compliance will be reviewed
by the appropriate project team to evaluate the Company's need to replace the
affected system and/or the vendor in exchange for an alternative provider.
Processing for many of the Matrix Bank and Matrix Financial systems are
handled by outside service bureaus. Theses service bureaus have already been
contacted by the Company and are either already in compliance, or are expected
to be in compliance by the Company's deadline. However, there can be no
guarantee that the systems of other companies on which the Company relies will
be converted timely and will not have an adverse effect on the Company or its
systems.
The costs for compliance or replacement have been determined for
approximately 60% of the Company's critical systems. The total impact for the
remaining systems will be determined during the next quarter. The current costs
identified approximate $365,000. The Company anticipates that total costs
associated with Year 2000 compliance will not exceed $450,000; as such, Year
2000 compliance is not expected to have a material effect on the results of
operations. Most of the costs associated with the Year 2000 issue will be
expensed as incurred; however, any costs attributable to the purchase of new
software will be capitalized.
The costs of the project and the deadline by which the Company believes
that it will be Year 2000 compliant are based on management's best estimates,
which were derived utilizing numerous assumptions of future events. There can be
no guarantee that these estimates will be achieved and actual results could
differ materially from those anticipated.
<PAGE>
YEAR 2000 READINESS DISCLOSURE
[From Form 10-K for Period Ending December 31, 1997]
In the next two years, most companies will face a potentially serious
information systems (computer) problem because many software applications and
operational programs written in the past may not properly recognize calendar
dates beginning in the Year 2000. This problem could force computers to either
shut down or provide incorrect data or information. The Company has begun the
process of identifying the changes required to its computer programs and
hardware, in consultation with software and hardware providers and regulators.
As of March 1, 1998, the Company has completed an inventory of all of
its systems and applications. Based on this inventory, ninety-five critical
systems have been identified within the Company and its Subsidiaries. The
Company's deadline for full system hardware and software compliance for the Year
2000 Issue is January 31, 1999. The Company has established a Year 2000 Plan,
which will be implemented in stages to address critical systems and applications
first, and includes replacement of any systems that cannot be brought into
compliance by the stated deadline. Additionally, the Company has formed a
combined Year 2000 team spearheaded by the Company's Chief Information Officer
to ensure that consistent methodologies are being used by the Subsidiaries to
address the various Year 2000 issues.
The Company's computing environment consists largely of personal
computers connected to Local Area Network ("LAN") based systems. The exception
to this is an in-house Digital VAX mini-computer used by Sterling Trust. This
VAX system houses the Trust Accounting System which is written in the COBOL
language. Based on the Company's Year 2000 Plan, this system is scheduled to be
in compliance by the January 31, 1999 deadline. The Company's Plan involves
modification and/or replacement of systems as necessary to allow them to
function properly with respect to date in the Year 2000 and thereafter.
Management presently believes that the Year 2000 issue will not pose significant
operational problems for its computer systems. However, if the required
modifications or replacements are not made, or are not completed in a timely
manner, the Year 2000 Issue could have a material impact on the operations of
the Company.
The Company has identified 300 different vendors and suppliers
currently utilized by the Company and its Subsidiaries. Letters requesting the
status of the identified vendors' Year 2000 compliance have been sent to
approximately 25% of these vendors. The remaining vendors will be contacted by
the end of April 1998. The Company and its Subsidiaries receive information from
many outside sources. As such, the Company will be working closely with those
vendors to minimize its exposure to non-complaint sources of data. Vendors that
cannot meet the January 31, 1999 deadline for compliance will be reviewed by the
project team to evaluate the Company's need to replace the affected system
and/or the vendor in exchange for an alternative provider.
Processing for many of the Matrix Bank and Matrix Financial systems are
handled by outside service bureaus. Theses service bureaus have already been
contacted by the Company and are either already in compliance, or are expected
to be in compliance by the Company's deadline. However, there can be no
guarantee that the systems of other companies on which the Company relies will
be converted timely and will not have an adverse effect on the Company or its
systems.
The costs for compliance or replacement have been determined for
approximately 50% of the Company's systems. The total impact for the remaining
systems will be determined during the next quarter. The current costs identified
approximate $300,000. The Company anticipates that total costs associated with
Year 2000 compliance will not exceed $400,000; as such, Year 2000 compliance is
not expected to have a material effect on the results of operations. Most of the
costs associated with the Year 2000 issue will be expensed as incurred; however,
any costs attributable to the purchase of new software will be capitalized.
The costs of the project and the deadline by which the Company believes
that it will be Year 2000 compliant are based on management's best estimates,
which were derived utilizing numerous assumptions of future events. There can be
no guarantee that these estimates will be achieved and actual results could
differ materially from those anticipated.
