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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITES EXCHANGE ACT
OF 1934.
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from ____________ to ____________
Commission file number 000-24931
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
S1 Corporation 401 (k) Savings Plan.
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive offices:
S1 Corporation, 3390 Peachtree Road, NE, Suite 1700, Atlanta, GA 30326
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Plan Administrator of the
S1 Corporation 401(k) Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the S1 Corporation 401(k) Savings Plan (the "Plan") at December 31, 2000 and
1999, and the changes in net assets available for benefits for the year ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibility
of the Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ PricewaterhouseCoopers LLP
Atlanta, Georgia
June 8, 2001
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S1 CORPORATION
401(K) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31,
2000 1999
ASSETS
Investments $21,455,293 $21,294,853
Restricted S1 Corporation common stock 758,332 --
----------- -----------
Total investments 22,213,625 21,294,853
----------- -----------
Receivables
Participant contributions 202,479 86,260
Employer contributions 92,512 23,288
----------- -----------
Total receivables 294,991 109,548
----------- -----------
Net assets available for benefits $22,508,616 $21,404,401
=========== ===========
The accompanying notes are an integral part of these financial statements.
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S1 CORPORATION
401(K) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR
ENDED
DECEMBER 31,
2000
Additions to net assets attributed to
Interest and dividends $ 1,623,083
------------
Contributions
Participant 6,412,819
Employer 2,878,174
Rollovers from other plans 1,598,569
------------
Total contributions 10,889,562
------------
Total additions 12,512,645
------------
Deductions from net assets attributed to
Net depreciation in fair value of investments (22,301,520)
Benefits paid to participants (3,440,309)
------------
Total deductions (25,741,829)
------------
Net decrease in net assets available for benefits
before transfers from merged plans (13,229,184)
Transfers of net assets available for plan benefits
from merged plans 14,333,399
------------
Net increase in net assets available for benefits 1,104,215
Net assets available for benefits
Beginning of period 21,404,401
------------
End of period $ 22,508,616
============
The accompanying notes are an integral part of these financial statements.
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S1 CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following description of the S1 Corporation 401(k) Savings Plan
(the "Plan") provides only general information. Participants should
refer to the Plan agreement for a more complete description of the
Plan's provisions.
GENERAL
The Plan, which commenced on July 1, 1996, is a defined contribution
plan covering all eligible employees of S1 Corporation (the "Company").
Employees are eligible to participate immediately upon hire. Enrollment
in the Plan occurs as soon as administratively feasible. The Plan is
subject to certain provisions of the Employee Retirement Income
Security Act of 1974 (ERISA), as amended.
AMENDMENTS
The Company changed its name from Security First Technologies, Inc. to
S1 Corporation in November 1999. During January 2000, the Plan was
amended to change its name from the Security First Technologies, Inc.
401(k) Savings Plan to the S1 Corporation 401(k) Savings Plan.
Also in January 2000, the custodian and recordkeeper was changed from
Principal Life Insurance Company ("Principal") to T. Rowe Price Trust
Company ("T. Rowe Price"). All net assets previously held by Principal
were transferred into T. Rowe Price funds in January 2000.
CONTRIBUTIONS
Participants may contribute from 1% to 15% of their pretax earnings, up
to a maximum of $10,500 in 2000 and $10,000 in 1999. Rollover
contributions from other qualified plans are permitted. Effective
January 2000, the Company makes matching contributions of $1.00 for
every dollar that participants elect to contribute, up to a defined
limit. Employer contributions are limited to the first 4% of the
employee's eligible compensation and are made in the form of S1
Corporation common stock. Participants are restricted from transferring
employer contributions until 12 calendar months following the date the
contribution was made. During 1999, the Company made matching
contributions of $.25 for every dollar that participants elected to
contribute to investments other than the S1 Corporation Common Stock
Fund and $1.00 for every dollar that participants elected to contribute
to the S1 Corporation Common Stock Fund, up to a defined limit.
Employer contributions were limited to the first 4% of the employee's
eligible compensation.
ROLLOVERS FROM OTHER PLANS
Transfers of account balances from other qualified retirement plans by
newly employed participants are presented as "rollovers from other
plans" in the Statement of Changes in Net Assets Available for
Benefits.
PARTICIPANT ACCOUNTS
All contributions made to the selected investment funds are participant
directed with the exception of employer matching contributions made to
S1 Corporation common stock. Each participant's account is credited
with the participant's contribution and allocations of (a) the
Company's contribution and (b) Plan earnings. Allocations are based on
participant
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S1 CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
INVESTMENTS
The Plan's assets are invested in mutual funds and S1 Corporation
common stock. Participants may change their investment allocation, as
well as elections on future investments, at any time. Investment
transfers from the S1 Corporation Common Stock Fund are subject to
certain restrictions, as defined in the Plan agreement. The Plan
allocates earnings to participants based on the ratio of the
participant's account balance in each investment fund to the total of
all participants' account balances in each investment fund. Earnings
allocations to participant accounts occur at various intervals
throughout the year and depend on which funds the participant has
invested. For a description of the Plan's investment options,
participants should refer to the Plan document and each fund's most
current prospectus.
VESTING
Participants vest immediately in their contributions plus earnings
thereon. Retroactively effective January 1, 2000, Company contributions
plus earnings thereon vest at a rate of 25% per year starting with the
first year of participation. Participants become fully vested in
Company contributions upon reaching normal retirement age, total and
permanent disability, or death. Prior to January 1, 2000, employees
vested in their Company contributions at a rate of 33-1/3% per year
starting with the third year of participation.
As discussed in Note 4, the net assets of the Edify Corporation
employee retirement plan were merged into the Plan during January 2000.
Employees of Edify Corporation hired prior to January 1, 2000, will
follow the vesting schedule of the Edify Corporation 401(k) Profit
Sharing Plan (the "Edify Plan") for all balances transferred, together
with earnings thereon, from the Edify Plan. The Edify Plan vests
ratably over three years beginning with the first year of
participation.
DISTRIBUTION OF BENEFITS
Participants who separate from service for any reason other than
retirement and whose value of all vested accounts is $5,000 or less may
have the value of their vested contributions distributed to them in a
lump sum or elect a rollover distribution. If the vested account
balance is greater than $5,000, the participant may elect to receive a
lump sum distribution, make a rollover distribution or delay receiving
the distribution until normal retirement age. Distribution of benefits
to retired participants can be made in either lump sum or periodic
payments. If participants die before receiving distribution of their
accounts, the full amount of their accounts will be paid to their
designated beneficiaries.
As discussed in Note 4, the net assets of the Edify Corporation
employee retirement plan were merged into the Plan during January 2000.
Former Edify Corporation employees who have account balances as of
December 31, 1999, are subject to special provisions. If the
participant was married on the date benefits are to begin, the
participant will automatically receive a joint and survivor annuity,
unless he elects otherwise. If the participant was single on the date
elections are to begin, the participant will receive a single life
annuity, unless he elects otherwise. Participants may make a written
election to waive the annuity form of payment during the 90-day period
before the annuity is to begin.
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S1 CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
PARTICIPANT LOANS
Beginning in January 2000, participants are allowed to borrow from
their vested account balances. Participants may borrow at a minimum
$1,000 and at a maximum the lesser of (a) $50,000 reduced by the
participants' highest outstanding Plan loan balances during the 12
months preceding the date of the loan or (b) one-half the value of the
participants' vested interests in their accounts. Interest on the loans
is 1% over the prime rate on the first business day of the calendar
quarter immediately preceding the date as of which the loan is issued.
Participants may have only one loan outstanding at any time.
FORFEITURES
Participants forfeit the nonvested portion of the employer matching
contributions upon the earlier of (a) the distribution of the vested
portion of their accounts, or (b) when the participant incurs five
consecutive years with a break in service. Forfeitures are used by the
Company to pay administrative expenses. Forfeitures not used to pay
expenses shall be applied to reduce the earliest employer contributions
made after the forfeitures are determined. Forfeitures amounted to
$147,000 and $166,000 in 2000 and 1999, respectively.
ADMINISTRATIVE EXPENSES
Administrative expenses in excess of forfeitures are paid by the
Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared on the
modified accrual basis.
INVESTMENTS
Investments are stated at fair value. Shares of registered investment
companies are valued at quoted market prices, which represent the net
asset value of shares held by the Plan at year-end. The Company's stock
is valued at its quoted market price. Purchases and sales of
investments are recorded on a trade-date basis.
Net depreciation in fair value of investments, including realized gains
and losses, represents the change in fair value during the year and
realized gains and losses on investments sold or distributed during the
year.
CONTRIBUTIONS
Employee and employer contributions are generally recorded in the
period after the Company makes payroll deductions from the
participants' earnings. At period end, receivables are recorded to
reflect contributions made but not yet received.
USE OF ESTIMATES
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosures of contingent assets
and liabilities. Actual results could differ from those estimates.
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S1 CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
PAYMENT OF BENEFITS
Benefits are recorded when paid.
RISKS AND UNCERTAINTIES
The Plan's investments are subject to market risk due to changes in
securities prices. In particular, the Plan's investments in S1
Corporation common stock are exposed to significant market risk due to
the high volatility of the Company's common stock price. At December
31, 2000 and 1999, the Plan has a significant investment balance in S1
Corporation common stock. Depending on the Company's common stock
price, the Plan could experience significant fluctuations in asset
values due to market volatility.
3. INVESTMENTS
The following table presents investments that represent 5 percent or
more of the Plan's net assets:
DECEMBER 31,
2000 1999
------------ ------------
Janus Fund $ 1,272,478 $ --
T. Rowe Price Value Fund 1,466,656 --
T. Rowe Price Equity Index 500 Fund 2,534,198 --
T. Rowe Price Science & Technology Fund 2,876,563 --
T. Rowe Price Mid-Cap Growth Fund 1,978,682 --
T. Rowe Price Small-Cap Stock Fund 1,137,938 --
T. Rowe Price Balanced Fund 2,864,749 --
T. Rowe Price Blue Chip Growth Fund 2,645,091 --
S1 Corporation Common Stock 2,210,007 17,850,623
The S1 Corporation Common Stock balance includes amounts contributed
based on participant elections and employer matching contributions. As
discussed in Note 1, employer matching contributions are restricted for
a period of 12 calendar months from the date of contribution.
4. PLAN MERGERS
In November 1999, the Company completed the acquisitions of Edify
Corporation ("Edify"), FICS Group, N.V. ("FICS") and VerticalOne
Corporation ("VerticalOne"). In April 2000, the Company completed the
acquisitions of Q-Up Systems, Inc. ("Q-Up") and Davidge Data Systems
Corporation ("Davidge"). In November 2000, the Company completed the
acquisition of LevelNext, Inc. ("LevelNext"). The employee retirement
plans of Q-Up, Davidge and LevelNext were terminated and participants
were given the option to enroll in the Plan upon acquisition. The
assets of Edify's, FICS' (domestic operations only) and VerticalOne's
employee retirement plans were merged into the Plan in January 2000. As
a result of the Plan mergers, the number of participants increased from
approximately 600 at December 31, 1999 to approximately 1,600 at
December 31, 2000. The following table presents the value of plan net
assets transferred into the Plan from the respective acquired company's
plan:
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S1 CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
Edify $12,313,768
FICS 1,801,214
VerticalOne 218,417
Generally, the participants in these plans are given full credit for
their service with their previous employers for purposes of both
eligibility and vesting in the Plan.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In the event
of plan termination, participants will become 100 percent vested in
their accounts.
6. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated August 2, 1999, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (IRC). Although the Plan has been amended since receiving the
determination letter, the Plan administrator and the Plan's tax counsel
believe that the Plan is designed and is currently being operated in
compliance with the applicable requirements of the IRC.
7. RELATED PARTY TRANSACTIONS
At December 31, 2000 and 1999, the Plan holds 420,954 and 228,488
shares of S1 Corporation common stock with a market value of $2,210,007
and $17,850,623, respectively.
In January 2000, the custodian and recordkeeper changed to T. Rowe
Price. Certain Plan investments are shares of mutual funds managed by
T. Rowe Price and therefore, these transactions qualify as
party-in-interest transactions. During 1999, certain Plan investments
were shares of mutual funds managed by Principal. Principal was the
custodian and the recordkeeper of the Plan during 1999 and, therefore,
these transactions qualify as party-in-interest transactions. Fees
incurred for administrative expenses amounted to approximately $20,000
and $62,000 for the years ended December 31, 2000 and 1999,
respectively.
8. SUBSEQUENT EVENT
On January 18, 2001, the Company sold VerticalOne, a wholly-owned
subsidiary of the Company, to Yodlee.com, Inc. As a result, all
individuals who were employees of VerticalOne and were Plan
participants were severed from Plan participation effective January 18,
2001. The Plan net assets attributable to the employees of VerticalOne
will be transferred out of the Plan in accordance with the terms of the
sale agreement.
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S1 CORPORATION
401(K) SAVINGS PLAN
SCHEDULE H, LINE 4I - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2000
DESCRIPTION OF CURRENT
IDENTITY OF ISSUE INVESTMENT SHARES COST VALUE
- ----------------- ------------------- ------- ---------- -----------
Participant Loans - Interest rates of
7.5% to 10.5% Participant Loans N/A $ -- $ 252,636
Janus Fund Mutual Fund 38,224 1,676,498 1,272,478
* T. Rowe Price Value Fund Mutual Fund 76,588 1,344,663 1,466,656
* T. Rowe Price International Stock Fund Mutual Fund 56,642 1,014,875 822,440
* T. Rowe Price International Discovery Fund Mutual Fund 38,216 1,397,945 972,609
* T. Rowe Price Prime Reserve Fund Mutual Fund 766,782 766,781 766,781
* T. Rowe Price Equity Index 500 Fund Mutual Fund 71,386 2,773,786 2,534,198
* T. Rowe Price Science & Technology Fund Mutual Fund 80,870 4,782,294 2,876,563
* T. Rowe Price Mid-Cap Growth Fund Mutual Fund 49,728 2,038,844 1,978,682
* T. Rowe Price Small-Cap Stock Fund Mutual Fund 47,672 1,111,974 1,137,938
* T. Rowe Price Balanced Fund Mutual Fund 149,439 2,926,251 2,864,749
* T. Rowe Price GNMA Fund Mutual Fund 44,197 395,693 412,797
* T. Rowe Price Blue Chip Growth Fund Mutual Fund 78,142 2,840,477 2,645,091
* S1 Corporation Common Stock Common Stock 276,510 3,824,105 1,451,675
* Restricted S1 Corporation Common Stock Common Stock 144,444 2,631,882 758,332
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$29,526,068 $22,213,625
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* Party-in-interest to the Plan
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S1 CORPORATION
401(K) SAVINGS PLAN
SCHEDULE H, LINE 4J - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
DESCRIPTION PURCHASE SELLING COST OF CURRENT OF VALUE NET GAIN
IDENTITY OF ISSUE OF ASSET PRICE PRICE ASSET OF ASSET OR (LOSS)
- ----------------- ----------- ---------- ---------- ---------- ---------------- ---------
Janus Fund Mutual Fund $2,993,896 $ -- $2,993,896 $2,993,896 $ --
Janus Fund Mutual Fund -- 1,302,177 1,315,918 1,302,177 (13,741)
* T. Rowe Price Value Fund Mutual Fund 1,781,970 -- 1,781,970 1,781,970 --
* T. Rowe Price Value Fund Mutual Fund -- 439,518 434,887 439,518 4,631
* T. Rowe Price International Stock Mutual Fund 1,288,987 -- 1,288,987 1,288,987 --
* T. Rowe Price International Stock Mutual Fund -- 257,726 271,994 257,726 (14,268)
* T. Rowe Price International Discovery Fund Mutual Fund 1,625,173 -- 1,625,173 1,625,173 --
* T. Rowe Price International Discovery Fund Mutual Fund -- 191,628 226,586 191,628 (34,958)
* T. Rowe Price Prime Reserve Fund Mutual Fund 1,609,991 -- 1,609,991 1,609,991 --
* T. Rowe Price Prime Reserve Fund Mutual Fund -- 828,072 828,072 828,072 --
* T. Rowe Price Equity Index 500 Fund Mutual Fund 3,701,401 -- 3,701,401 3,701,401 --
* T. Rowe Price Equity Index 500 Fund Mutual Fund -- 894,291 923,302 894,291 (29,011)
* T. Rowe Price Science & Technology Fund Mutual Fund 5,574,058 -- 5,574,058 5,574,058 --
* T. Rowe Price Science & Technology Fund Mutual Fund -- 691,563 789,253 691,563 (97,690)
* T. Rowe Price Mid-Cap Growth Fund Mutual Fund 2,338,403 -- 2,338,403 2,338,403 --
* T. Rowe Price Mid-Cap Growth Fund Mutual Fund -- 310,276 300,623 310,276 9,653
* T. Rowe Price Small-Cap Stock Mutual Fund 1,379,735 -- 1,379,735 1,379,735 --
* T. Rowe Price Small-Cap Stock Mutual Fund -- 287,880 270,273 287,880 17,607
* T. Rowe Price Balanced Fund Mutual Fund 3,811,112 -- 3,811,112 3,811,112 --
* T. Rowe Price Balanced Fund Mutual Fund -- 886,551 885,186 886,551 1,365
* T. Rowe Price GNMA Fund Mutual Fund 661,141 -- 661,141 661,141 --
* T. Rowe Price GNMA Fund Mutual Fund -- 269,598 265,487 269,598 4,111
* T. Rowe Price Blue Chip Growth Fund Mutual Fund 3,652,606 -- 3,652,606 3,652,606 --
* T. Rowe Price Blue Chip Growth Fund Mutual Fund -- 841,141 817,449 841,141 23,692
* S1 Corporation Common Stock Common Stock 4,876,850 -- 4,876,850 4,876,850 --
* S1 Corporation Common Stock Common Stock -- 1,364,294 940,368 1,364,294 423,926
* Restricted S1 Corporation Common Stock Common Stock 2,795,097 -- 2,795,097 2,795,097 --
* Restricted S1 Corporation Common Stock Common Stock -- 46,424 152,541 46,424 (106,117)
* Party-in-interest to the Plan
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
S1 Corporation 401 (k) Savings Plan
401 (k) Plan Committee
Date: June 29, 2001 By: /s/ Robert F. Stockwell
------------------------------------
Name: Robert F. Stockwell
Title: Committee Member
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EXHIBIT INDEX
Exhibit No. Exhibit
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23 Consent of Independent Accountants