10-K405 1 v71074e10-k405.txt FORM 10-K405 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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 December 31, 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 0-20034 ELITE INFORMATION GROUP, INC. (Exact name of Registrant as specified in its charter) DELAWARE 41-1522214 -------- ---------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 5100 WEST GOLDLEAF CIRCLE LOS ANGELES, CALIFORNIA 90056 ----------------------- ------ (Address of principal executive offices) (Zip code) (323) 642-5200 (Registrant's telephone number, including area code) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common Stock, $.01 par value (Title of class) 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 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. [ ]. The aggregate market value of voting stock held by non-affiliates of the Registrant as of February 28, 2001 computed by reference to the closing sale price on such date, was $42,484,008. For the purpose of calculating this amount only, all directors, executive officers and record holders of 10% or more of voting stock are treated as affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes. As of the same date, 9,415,123 shares of Common Stock, $.01 par value, were outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant's 2000 Annual Report (the "Annual Report"), filed as an Exhibit hereto, and the Notice of Annual Meeting of Stockholders and definitive Proxy Statement pertaining to the 2001 Annual Meeting of Stockholders (the "Proxy Statement") to be filed pursuant to Regulation 14A (no later than April 30, 2001), are incorporated herein by reference into Parts II, IV and III, respectively. ================================================================================ 2 PART I ITEM 1. DESCRIPTION OF BUSINESS OVERVIEW Elite Information Group, Inc. ("Elite" or the "Company") is the parent company to Elite Information Systems, Inc. ("EIS"), Elite.com, Inc. and Law Manager, Inc. ("LMI"). Elite Information Systems is an international software product and services company that provides a comprehensive suite of financial and practice management software applications for law firms and other professional service organizations of all sizes. Elite Information Systems' software products are often sold with related services to aid the customer in implementation, data conversion and user training efforts. The Company's products can be licensed outright and installed onsite at the customer's location or are available through an ASP hosting solution ("e-Connect from Elite") where Elite Information Systems maintains hardware and software that is accessed remotely by the customer. Elite.com provides Internet-based time tracking and billing services to smaller professional services companies including legal, management consulting, computer systems consulting and integration, accounting and engineering. Elite.com utilizes hosted, Internet-based applications and services delivered through its various partners and alliances. LMI provides software products including advanced case management, docketing, records management and e-commerce systems, as well as a full range of implementation services to law firms, large corporate legal departments and government agencies. GENERAL DEVELOPMENT OF THE BUSINESS The Company was incorporated in 1985 in connection with the acquisition of Broadway & Seymour, Inc., a North Carolina software product and services company that had been doing business since 1981. The Company adopted a growth through acquisition strategy of products and businesses, which occurred through mid-1995. At this time, the Company began refocusing its efforts on integrating its primary business units, which primarily serviced financial institutions and law firms. To streamline its business, the Company began divesting certain of its non-core businesses beginning in 1995. On May 19, 1999 the Company sold its Customer Relationship Management business ("CRM"), based in Charlotte, North Carolina, to Science Applications International Corporation ("SAIC"). Following the sale of the CRM business, the Company changed its name from Broadway & Seymour, Inc. to Elite Information Group, Inc., to reflect the Company's new single-purpose business. The Company also changed its NASDAQ trading symbol to ELTE and continues to be traded as a National Market Issue on the NASDAQ. During the third quarter of 1999 the Company began start up operations of its new Elite.com subsidiary. Elite.com provides Internet-based time tracking and billing services to smaller professional services firms. These services became available to customers in January 2000, offered through the Elite.com website. On July 11, 2000, the Company acquired all of the outstanding capital stock of Law Manager, Inc. LMI is a software products and services company servicing corporate law firms, large corporate legal departments, and government agencies. 2 3 BUSINESS STRATEGY The Company's strategy is to develop and market industry-leading practice management solutions for the professional service automation (PSA) market, both within the United States and internationally. The Company currently offers software and Internet-based services to assist in timekeeping, billing and related business management functions for legal, accounting, consulting, public relations and other professional services firms. Through its LMI subsidiary, the Company also provides sophisticated case management solutions to large corporations and government agencies. The Company's Elite Information Systems subsidiary has begun marketing its new 32-bit client-server and Internet/intranet-based financial and practice management products with enhanced query capabilities and object-oriented architecture (see "Product and Services Based Solutions" below), which represent an upgrade from the Company's 16-bit Windows-based product line. The Company markets its financial and practice management tools in the United States, Canada, the United Kingdom, Europe, South America and South Africa. Although the Company's customer base is made up largely of law firms, the Company continues to focus on expanding its market presence in other segments of the professional services industry, including accounting, actuarial, consulting, advertising, public relations and other services firms. Elite Information Systems has an extensive field operations unit that performs services including installation, implementation, data conversion, training and consulting for its products. The Company's Professional Services unit also provides follow-on consulting and technical services to its client base on a fee for services basis. Substantially all Elite customers contract with the Company for maintenance and telephone support services on an annual basis. LMI was acquired in July 2000 in order for the Company to take advantage of LMI's industry leading advanced case management, docketing, records management and e-commerce systems, as well as its full range of implementation services. The Company believes it can achieve advantages by coordinated development and marketing of its existing products along with products from LMI. The Company is also interested in expanding into new markets, which LMI will help to do with its presence in law firms, large corporate legal departments and government agencies. Expanding on its efforts to develop and market web-based solutions, in the second half of 1999 the Company began operations of its Elite.com service. Elite.com's strategy is to provide smaller professional service firms with efficient, low cost, time and billing applications via the Internet. Elite.com focuses its hosted Internet-based services on the solo practitioner and small firms in the legal, accounting, management and computer consulting, and engineering markets. These services became available to customers in January 2000, offered through the Elite.com website. PRODUCT AND SERVICES BASED SOLUTIONS Software products mentioned in this document are for identification purposes only and may be trademarks of Elite Information Group, Inc., its subsidiaries or third parties. SOFTWARE PRODUCTS The Company's latest software solutions incorporate 32-bit client-server and open systems architecture using either a Windows or Internet browser interface and can be run on multiple operating systems and major databases including Unix, Windows NT Server, Microsoft SQL Server and Informix. e-Connect from Elite enables firms to utilize Elite's suite of applications through the Internet in a hosted, secure and reliable environment. This Internet-based system eliminates the need for 3 4 hardware/software installation, upgrades and maintenance while delivering Elite's existing applications from any Web browser. Elite Professional Billing System is a comprehensive accounting and information management software product serving legal and professional service firms. The Professional Billing System responds to clients' billing requirements with on-line management information and processes. Elite Financial Management System is a general ledger and accounts payable software product that supports multi-currency and simultaneous cash and accrual-based accounting, as well as budgeting features. Elite Case Management System is a case tracking software system and conflicts/related-party database. This system also includes calendar and docket functions, a case database, a related-party tracking system, on-line viewing of case information and personal calendars and a user-defined reporting system. Elite Marketing System is a comprehensive marketing and practice development tool that tracks relationships, manages mailings and monitors the effectiveness of client development efforts. Elite Conflict of Interest Module is an integrated software tool for checking conflicts of interest, based on a full-text search engine. Elite Records Management Module is a software tool for managing both internal and external records, with bar code support and integration with the Elite Conflict of Interest System. Elite WebView is a software tool that summarizes key information from all Elite applications in a simple and concise manner within a web-browser. By using built in HTML hyperlinks, a user can quickly move from application to application. Elite TimeTrax is an integrated software tool for time and expense entry and tracking. Elite Profitability System is a software tool developed to help companies track the profitability of their firm by client, engagement, office, department and timekeeper. WorkFlow is a software application designed to automate paper-intensive processes by using electronic forms, pre-defined routing of these forms, and password-based approval of the transactions represented by these forms. Event Driven Reporting is an integrated software tool that delivers critical information electronically in an efficient and timely manner to managers, administrators, firm committees, internal staff and clients. Elite Dashboard is a new technology to consolidate information from multiple sources on a single Web page, readily available on a user's desktop from email or a Web browser. This integrated portal can include data from various Elite systems and other sources. Apex is an advanced customer relationship management software application designed for law firms, accounting firms and other professional services firms. Ask Elite! is a Web-based knowledge portal that uses natural-language questions to search large amounts of structured and unstructured data and returns answers to the user. 4 5 SUPPORT SERVICES The Company views its customer support services as a significant part of its strategy to establish and maintain strong customer relationships. The Company offers system maintenance and support at fixed prices under renewable contracts, as well as conversion and installation services as needed by its customers. The degree of maintenance service provided to customers differs depending on the system being supported. Generally, support contracts entitle users to telephone support and regular upgraded product releases. In addition, the Company offers certain training classes and multi-media based instruction to customers that aid in the implementation and effective use of the Company's solutions. ELITE.COM SERVICES Through its Elite.com subsidiary the Company provides Internet-based time tracking and invoicing solutions that are designed to address the specific needs of smaller fee-based businesses including legal, accounting, management and computer consulting, and engineering firms. Using a standard Web browser and Internet connection, customers can track time and expenses, produce invoices, generate information reports, manage accounts receivable and streamline a variety of other practice management functions. RESEARCH AND DEVELOPMENT To meet the changing needs of the professional services industry, the Company expends resources to continually develop and enhance its proprietary software products. The Company believes that ongoing commitment to research and development is important to the long-term success of the business. For the years ended December 31, 2000, 1999 and 1998, the Company's total research and development expenditures from continuing operations (excluding acquired in-process research and development) were $6.1 million, $4.4 million and $3.1 million, respectively. The Company expects research and development expenses for 2001 to increase as a percentage of revenues over 2000. There are inherent risks in the development and introduction of a new product. For example, new products may have quality or other defects in the early stages of introduction that were not anticipated in the design of those products. The Company cannot determine the effects on operating results of unanticipated complications in product introductions or transitions. SALES AND MARKETING New customer contacts are generated by a variety of methods, including customer referrals, personal sales calls, attendance at trade shows and seminars, advertising in trade publications, direct mailings to targeted customers and telemarketing. The Company maintains a direct sales force where sales personnel are given sales responsibility within their targeted regional and customer markets. Additionally, senior management and technical subject matter experts within the Company are directly involved in obtaining and supporting relationships. The Company's business strategy also emphasizes sales to existing customers. Follow-on sales to existing customers include system upgrades, expansion of license rights, migration to new products and maintenance and support services. 5 6 CUSTOMERS The Company serves a client base in the legal and other professional services markets. Elite's customers include over one-third of the top 1,000 law firms in the United States, and over 40 of the largest firms in the United Kingdom and Europe. Other professional services markets include accounting, consulting, public relations, financial services, actuarial, government, software, security, insurance, market research and systems integration. In addition, through Elite.com, the Company serves small and sole practitioner firms in similar professional services markets. The Company provides software solutions under a variety of financial arrangements, including fixed fee contracts and billings on a time and materials basis. Additionally, through e-Connect, the Company's new Internet-based ASP hosting solution, clients can utilize Elite's products via a hosting model with contractual payments on a monthly basis. The majority of the Company's revenue is concentrated in the legal services industry. However, no single customer accounts for 10% or more of the Company's consolidated revenue. GEOGRAPHIC INFORMATION The Company's assets are principally located in North America. The Company's revenue is principally generated in the United States; however, for the years ending December 31, 2000, 1999 and 1998 the Company's revenue generated outside the United States represented 14%, 16% and 17% of the consolidated revenue, respectively. For those same periods, revenue generated in Europe represented approximately 11%, 13% and 13% of consolidated revenue, respectively. Since the Company's contracts with non-U.S. customers generally denominate the amount of payments to be received by the Company in local currencies, exchange rate fluctuations between such local currencies and the U.S. dollar will subject the Company to currency translation risks. Also, the Company may be subject to currency transaction risks when the Company's contracts are denominated in a currency other than the currency in which the Company incurs expenses related to such contracts. COMPETITION The Company's markets are very competitive, due in part to the rapidly changing technology underlying the Company's products and services. The Company produces a number of different software modules and applies those modules across the professional services markets. The Company has a number of competitors for each module and in each market. Some of these competitors compete with the Company with regard to a number of modules or markets. Some of these competitors have greater financial, technical and marketing resources than the Company. The Company believes that no one single competitor is dominant across all markets in which the Company participates. The Company believes that competitive factors for engagements in the professional services markets include knowledge of the industry, capabilities of resources, technologies utilized, ease of use, ability to customize solutions and breadth of functionality of solutions and price. The Company believes it competes favorably on the basis of these factors. BACKLOG A significant portion of the Company's revenue is derived from work to be performed under longer-term contracts entered into in the ordinary course of business. At December 31, 2000, 1999 and 1998, the Company's EIS business had backlog of unearned revenue from signed customer contracts (continuing 6 7 operations) of approximately $15.9 million, $11.6 million and $26.4 million, respectively. Backlog for the Company's LMI business at December 31, 2000 totaled approximately $1.8 million. The Company benefited from exceptional new contract sales levels in the second half of 1998 as customers purchased systems in anticipation of Y2K. However, a corresponding weakness in the market occurred in the last half of 1999 and most of 2000, which caused a significant reduction in backlog. In the fourth quarter of 2000, EIS signed a record $11.9 million in new contracts. EMPLOYEES AND RECRUITMENT The Company believes that its future success will depend in part on its continued ability to hire and retain qualified employees. The Company believes its relations with its employees are good. Competition for personnel in the Company's industry is intense. Although it actively recruits personnel and provides professional employees with career path opportunities, there can be no assurance that the Company will be successful in attracting and retaining sufficient numbers of qualified personnel to conduct its business in the future. The Company seeks employees with expertise and experience in its chosen markets. At February 28, 2001, the Company had 350 full-time employees. None of the Company's employees are represented by a labor union. COPYRIGHTS, TRADEMARKS, PATENTS AND LICENSES The Company currently markets several proprietary software products. Apart from a limited number of third party components, the bulk of the Company's products consist of software and related documentation developed by the Company for which the Company holds the copyright. The Company distributes its software only subject to licenses, which restrict the licensee's rights to use and disclose the software so as to protect the Company's rights. The Company believes that, due to the rapid pace of innovation within its industry, factors such as the technological and creative skills of its personnel are more important in establishing and maintaining a leadership position within the industry than are the various legal protections of its technology. The Company believes that the nature of its customers, the importance of the Company's products to them and their need for continuing product support reduce the risk of unauthorized reproduction. However, there can be no assurance that any such steps taken by the Company in this regard will be adequate to deter misappropriation of its proprietary rights or independent third-party development of functionally equivalent products. The Company believes that its services and products do not infringe on the intellectual property rights of its customers or other third parties. However, particularly given the rapid changes in patent law, there can be no assurance that an infringement claim will not be asserted against the Company in the future. Any such claim, if resolved against the Company, could adversely affect the Company's reputation, preclude it from offering certain products and services, and subject it to substantial liability. YEAR 2000 ISSUES As a software vendor, the so-called "Year 2000 compliance" or "Y2K" issue is an issue that the Company has had to address with respect to its products as well as software and systems provided by others that the Company uses internally. During the Year 2000 date transition, the Company did not experience any failure of mission critical systems, nor has it experienced any significant problem with regard to third party suppliers. Similarly, to management's knowledge, the Company's customers have not experienced any significant Year 2000 problems with the Company's software products and services. The Company does 7 8 not anticipate any material adverse effect to its business or its customers in the future as a result of Year 2000 related problems, however, it is possible that such problems might still arise. The Company may be subject to Year 2000 claims or litigation by: its customers; customers of divested businesses where the Company retained potential product liabilities, including the CRM business; customers of its recently acquired LMI business; or other parties. Although the ultimate outcome of any litigation is uncertain, the Company does not believe that the ultimate amount of liability, if any, from such actions would have a material adverse effect on the Company. To date, the Company has not been subject to any such claims or litigation. As the Company did not, nor does it expect to, experience any significant Year 2000 problems, the Company does not currently expect to incur any significant additional costs related to its Year 2000 compliance efforts. All incremental costs associated with the Year 2000 compliance issue will continue to be expensed as incurred. EURO CURRENCY In January 1999, a new currency called the ECU or the "euro" was introduced in certain Economic and Monetary Union (the "EMU") countries. During 2002, all EMU countries are expected to be operating with the euro as their single currency. As a result, in less than two years all organizations headquartered or maintaining a subsidiary in an EMU country are expected to need to be euro currency enabled and computer software used by these organizations will need to be euro currency enabled. The transition to the euro currency involves the handling of parallel currencies and conversion of legacy data. Uncertainty exists as to the effects the euro currency will have on the marketplace. Additionally, all of the final rules and regulations have not yet been defined and finalized by the European Commission with regard to the euro currency. The Company is monitoring the rules and regulations as they become known in order to make any changes to the software that the Company deems necessary to comply with such rules and regulations. Although the Company currently offers certain software products that are designed to be multi-currency enabled and the Company believes that it will be able to accommodate any required euro currency changes in its software products, there can be no assurance that once the final rules and regulations are completed that the Company's software will contain all of the necessary changes or meet all of the euro currency requirements. ITEM 2. PROPERTIES The Company's corporate offices are located at 5100 West Goldleaf Circle in Los Angeles, California. The Company's lease of those premises (approximately 40,000 square feet) expires July 2008. The Company leases approximately 1,600 square feet of office space in London, United Kingdom for servicing its UK and European customer base. The Company leases approximately 15,000 square feet of office space in Conshohocken, Pennsylvania, which houses its LMI staff. The Company also leases additional facilities, as needed, principally as sales offices in other cities in North America. The Company believes that its facilities are adequate for its current needs. ITEM 3. LEGAL PROCEEDINGS On December 22, 1999, a putative class action, Brooke Howie, et al. v. Elite Information Group, Inc., et al., was commenced in the Los Angeles Superior Court against the Company, the Company's directors, and Solution 6 Holdings Limited ("Solution 6"). The complaint alleged that Elite's directors violated their fiduciary duties to the Company's shareholders by entering into a merger agreement with Solution 6, and sought to enjoin the merger. The action was subsequently removed to federal court and transferred to the 8 9 United States District Court for the District of Delaware. The merger agreement between the Company and Solution 6 was terminated in May 2000. Following the termination of the merger, plaintiffs filed a motion asking the Delaware federal court to dismiss their action as moot but to retain jurisdiction of the matter to consider plaintiffs' petition for an award of attorney fees and expenses. The Company considers the fee request to be without merit and is opposing plaintiffs' petition. The Company is involved in litigation from time to time that is routine in nature and incidental to the conduct of its business. The Company believes that the outcome of any such litigation would not have a material adverse effect on its consolidated results of operations or financial condition. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of the Company's stockholders during the fourth quarter of the fiscal year ended December 31, 2000. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDERS' MATTERS MARKET FOR COMMON STOCK There is hereby incorporated by reference the information appearing under the caption "Market for Common Stock" in the Company's Annual Report to Shareholders for the year ended December 31, 2000. HOLDERS OF RECORD As of February 28, 2001, there were approximately 85 holders of record of the Company's Common Stock. DIVIDENDS The Company has never declared or paid any cash dividends on its Common Stock. The Company currently intends to retain any earnings for use in its business and therefore does not anticipate paying any cash dividends in the foreseeable future. ITEM 6. SELECTED FINANCIAL DATA There is hereby incorporated by reference the information appearing under the caption "Selected Financial Data" in the Company's Annual Report to Shareholders for the year ended December 31, 2000. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS There is hereby incorporated by reference the information appearing under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report to Shareholders for the year ended December 31, 2000. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS A portion of the Company's business is transacted in foreign currencies and the Company may be exposed to financial market risk resulting from fluctuations in foreign currency exchange rates. The Company 9 10 monitors the volatility of foreign currencies and may utilize hedging programs or other derivative financial instruments commonly used to reduce financial market risks if deemed appropriate. The Company has limited exposure to market risk for changes in interest rates related to the Company's cash and cash equivalents. The Company maintains an investment policy designed to ensure the safety and preservation of its cash and cash equivalents by limiting default risk, market risk and reinvestment risk by investing in shorter-term high quality financial instruments and depositing its excess cash and cash equivalents in major financial institutions. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Financial Statements: There is hereby incorporated by reference the information appearing in the consolidated financial statements, "Notes to Consolidated Financial Statements," "Report of Independent Accountants" and "Quarterly Financial Data" in the Company's Annual Report to Shareholders for the year ended December 31, 2000. Financial Statement Schedules: Item 14 includes an index to the financial statement schedules. ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information under the captions "Election of Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy Statement is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information under the captions "Executive Officers, Compensation and Other Information" and "Employment, Severance and Consulting Agreements" in the Proxy Statement is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information under the captions "Principal Stockholders" and "Stock Ownership of Directors and Executive Officers" in the Proxy Statement is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information under the caption "Employment, Severance and Consulting Agreements" in the Proxy Statement is incorporated herein by reference. 10 11 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a)(1) Financial Statements. The following consolidated financial statements and financial information are included in the Company's Annual Report to Shareholders for the year ended December 3l, 2000 and are hereby incorporated by reference: Consolidated Statement of Operations Consolidated Balance Sheet Consolidated Statement of Cash Flows Consolidated Statement of Changes in Stockholders' Equity Notes to Consolidated Financial Statements Report of Independent Accountants (a)(2) Financial Statement Schedules. The following schedules are filed as a part of this report:
Page ---- Schedule II - Valuation and Qualifying Accounts and Reserves 16 Report of Independent Accountants on Financial Statement Schedule 17
All other schedules for which provision is made in the applicable regulation of the Securities and Exchange Commission are not required under the related instructions, are inapplicable, or the required information is included elsewhere in the financial statements. (a)(3) Exhibits:
Exhibit No. Description ----------- ----------- 3.1 Restated Certificate of Incorporation of Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.), dated June 16, 1992 (Incorporated by reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 1999) 3.2 Restated By-laws of Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.) (Incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form S-1, SEC File No. 33-46672) 3.3 Certificate of Designations (Incorporated by reference to Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q for the Quarter Ended March 31, 1999) 3.4 Certificate of Amendment of Certificate of Incorporation of Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.), dated May 27, 1999 (Incorporated by reference to Exhibit 99.3 to the Registrant's Current Report on Form 8-K, filed June 3, 1999)
11 12 4.1 Restated Specimen share certificate (Incorporated by reference to Exhibit 4.1 to the Registrant's Quarterly Report on Form 10-Q for the Quarter Ended March 31, 1999) 4.2 Articles 4 and 5 of Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.), Restated Certificate of Incorporation (Incorporated by reference to Exhibit 4.2 to the Registrant's Registration Statement on Form S-1, SEC File No. 33-46672) 4.3 Article II, Section 2.2 of Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.), Restated By-laws (Incorporated by reference to Exhibit 4.3 to the Registrant's Registration Statement on Form S-1, SEC File No. 33-46672) 4.4 Rights Agreement, dated April 14, 1999, between Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.), and EquiServe Trust Company, N.A. as Rights Agent, including the form of Certificate of Designations with respect to the Series A Junior Participating Preferred Stock, included as Exhibit A to the Rights Agreement, the forms of Rights Certificate and of Election to Exercise, included as Exhibit B to the Rights Agreement, and the form of Summary of Rights to Purchase Share of Series A Junior Participating Preferred Stock included as Exhibit C to the Rights Agreement. (Incorporated by reference to Exhibit 4 to the Company's Registration Statement on Form 8-A dated April 15, 1999) 4.5 First Amendment to Rights Agreement, dated April 14, 1999 between Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.) and EquiServe Trust Company, N.A. as Rights Agent (Incorporated by reference to Exhibit 8 to the Registrant's Solicitation/Recommendation Statement on Schedule 14D-9 filed December 21, 1999) 4.6* Second Amendment to Rights Agreement, dated as of April 14, 1999 between Elite Information Group, Inc. and EquiServe Trust Company, N.A. as Rights Agent 10.1+ Restated 1985 Incentive Stock Option Plan dated June 12, 1985 (Incorporated by reference to Exhibit 10.1 to the Registrant's Registration Statement on Form S-1, SEC File No. 33-46672) 10.2+ Amendment No. 1 to Restated 1985 Incentive Stock Option Plan of Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.), dated February 25, 1993 (Incorporated by reference to Exhibit 10.2 to the Registrant's Annual Report on Form 10-K for the Fiscal Year Ended January 31, 1993) 10.3+ Amendment No. 2 to Restated 1985 Incentive Stock Option Plan of Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.), dated February 17, 1994 (Incorporated by reference to Exhibit 10.16 to the Registrant's Transition Report on Form 10-K for the Eleven Months Ended December 31, 1993) 10.4+ Amendment No. 3 to Restated 1985 Incentive Stock Option Plan of Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.), dated May 15, 1995 (Incorporated by reference to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the Quarter Ended September 30, 1995) 10.5+ Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.) 1996 Stock Option Plan dated September 16, 1996 (Incorporated by reference to Appendix B to the Registrant's Definitive Proxy Statement on Form DEFS14A dated August 14, 1996) 10.6+ Amended Elite Information Group, Inc. 1996 Stock Option Plan (Incorporated by reference to the Registrant's Registration Statement on Form S-8, SEC File No. 333-42900) 10.7 Asset Purchase Agreement between Unisys Corporation and Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.) dated as of July 24, 1997. (Incorporated by reference to Exhibit 10.35 to the Registrant's Quarterly Report on Form 10-Q for the Quarter Ended September 30, 1997)
12 13 10.8 Amendment to Asset Purchase Agreement between Unisys Corporation and Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.) dated September 17, 1997. (Incorporated by reference to Exhibit 10.36 to the Registrant's Quarterly Report on Form 10-Q for the Quarter Ended September 30, 1997) 10.9 Stock Purchase Agreement among TMC Holding Corporation and Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.) dated March 5, 1999. (Incorporated by reference to Exhibit 10.31 to the Registrant's Annual Report on form 10-K for the year ended December 31, 1998) 10.10 Asset Purchase Agreement by and between Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.) and Science Applications International Corporation dated April 14, 1999. (Incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K, filed June 3, 1999) 10.11+ Severance Agreement by and between Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.) and Barry D. Emerson, dated May 10, 1999 (Incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 1999) 10.12+ Employment Agreement by and between Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.) and Christopher K. Poole, dated June 1, 1999 (Incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 1999) 10.13 Agreement and Plan of Merger dated December 14, 1999 among Solution 6 Holdings Limited, EIG Acquisition Corp. and Elite Information Group, Inc. (Incorporated by reference to Exhibit 1 to the Registrant's Solicitation/Recommendation Statement on Schedule 14D-9 filed December 21, 1999) 10.14 Stockholders Agreement dated as of December 14, 1999 among Solution 6 Holdings Limited, EIG Acquisition Corp., Elite Information Group Inc., Christopher K. Poole, Barry D. Emerson, Roger Noall, William G. Seymour, Arthur G. Epker III, Alan Rich and David A. Finley (Incorporated by reference to Exhibit 2 to the Registrant's Solicitation/Recommendation Statement on Schedule 14D-9 filed December 21, 1999) 10.15+ Retirement and Post-Employment Agreement dated as of May 20, 1997 between Alan Rich and Elite Information Systems, Inc. (Incorporated by reference to Exhibit 10.20 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1999) 10.16*+ Amendment No. 1 to Retirement and Post-Employment Agreement dated as of September 30, 2000 between Alan Rich and Elite Information Systems, Inc. 10.17+ Elite.com, Inc. 1999 Stock Option Plan dated August 27, 1999 (Incorporated by reference to Exhibit 10.21 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1999) 10.18 Credit Agreement by and between Elite Information Systems, Inc., Elite Information Group, Inc., and Mellon Bank, N.A. dated May 16, 2000 (Incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2000) 10.19 General Security Agreement by and between Elite Information Systems, Inc., and Mellon Bank, N.A. dated May 16, 2000 (Incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2000)
13 14 10.20 Guarantor Security Agreement by and between Elite Information Group, Inc., and Mellon Bank, N.A. dated May 16, 2000 (Incorporated by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2000) 10.21 Continuing Guaranty of Elite Information Group, Inc. (for the benefit of Mellon Bank, N.A.), dated May 16, 2000 (Incorporated by reference to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2000) 10.22 Stock Purchase Agreement between Elite Information Group, Inc., LMI Acquisition Corporation, Law Manager, Inc., Nicholas Puschak and Davood Tashayyod, dated as of July 7, 2000 (Incorporated by reference to Exhibit 2 to the Registrant's Current Report on Form 8-K filed July 11, 2000) 10.23 2000 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 99.1 to the Registrant's Registration Statement on Form S-8, SEC File No. 333-42906) 11* Computation of earnings per share 13* Portions of the Elite Information Group, Inc. 2000 Annual Report 21* Subsidiaries of Registrant 23* Consent of Independent Accountants dated March 29, 2001.
* Filed herewith. + Management contract or compensatory plan or arrangements required to be filed as an exhibit. (b) Reports on Form 8-K: None. 14 15 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ELITE INFORMATION GROUP, INC. Date: March 30, 2001 By: /s/ Barry D. Emerson ------------------------------------ Barry D. Emerson Vice President, Treasurer, Chief Financial Officer Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities set forth below and on the 30th day of March 2001.
Signature Title --------- ----- /s/ Christopher K. Poole ------------------------------- Christopher K. Poole Chairman, Chief Executive Officer and Director /s/ Barry D. Emerson ------------------------------- Barry D. Emerson Vice President, Treasurer, Chief Financial Officer /s/ Arthur G. Epker III ------------------------------- Arthur G. Epker III Director /s/ David A. Finley ------------------------------- David A. Finley Director /s/ Roger Noall ------------------------------- Roger Noall Director /s/ Alan Rich ------------------------------- Alan Rich Director /s/ William G. Seymour ------------------------------- William G. Seymour Director
15 16 ITEM 14A(2) SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES: Elite Information Group, Inc. Schedule II - Valuation and Qualifying Accounts and Reserves For the Years ended December 31, 2000, 1999 and 1998 ($ in thousands)
Balance at Additions Balance at beginning charged to end of period expense Deductions Other of period ---------- ---------- ---------- --------- ---------- Allowance for doubtful accounts December 31, 2000 $ 2,027 $ 1,683 $ (1,614) $ 209 (1) $ 2,305 December 31, 1999 1,638 1,751 (1,026) (336) (2) 2,027 December 31, 1998 922 1,400 (684) 1,638
(1) Relates to reserve balance of the LMI business, acquired on July 11, 2000. (2) Relates to reserve balance of the CRM business, sold on May 19, 1999. 16 17 REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE To the Board of Directors of Elite Information Group, Inc. Our audits of the consolidated financial statements referred to in our report dated February 16, 2001, appearing in the 2000 Annual Report to Shareholders of Elite Information Group, Inc. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedule listed in Item 14 (a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. PricewaterhouseCoopers LLP Los Angeles, California February 16, 2001 17