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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

|   |  |                                                                                                                             
|-- |  | ----------------------------------------------------------------------------------------------------------------------------
|x  |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED APRIL 30, 2002
|  
|or
|  
|o  |  | 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 0-27694

SCB COMPUTER TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)

|                                                                                                    |  |                                             
|--------------------------------------------------------------------------------------------------- |  | --------------------------------------------
|Tennessee
(State or other jurisdiction of incorporation or organization)                            |  | 62-1201561
(IRS Employer Identification No.)
|                                                                                                   
|3800 Forest Hill-Irene Road, Suite 100, Memphis, Tennessee
(Address of principal executive offices) |  | 38125
(Zip code)                            

Registrants telephone number, including area code:(901) 754-6577

Securities registered pursuant to Section 12(b) of the Act:None

Securities registered pursuant to Section 12(g) of the Act:Common Stock, par value $.01 per share

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  o

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 the 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 shares of common stock held by
non-affiliates of the registrant at June 30, 2002, based on the closing sale
price of $0.87 per share as reported on the OTC Bulletin Board, was
approximately $12,746,419.

At June 30, 2002, there were 24,985,324 shares of common stock
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part II of Form 10-K is incorporated herein by
reference from the registrants 2002 annual report to shareholders. The
information required by Part III of Form 10-K, to the extent not set forth
herein, is incorporated herein by reference from the registrants definitive
proxy statement for its 2002 annual meeting of stockholders, which will be
filed with the Securities and Exchange Commission pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended, within 120 days after
the end of the registrants fiscal year ended April 30, 2002.





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TABLE OF CONTENTS



|                                                 |                                                                                                         |  |  |  |  |  |  | 
|------------------------------------------------ | ------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS
|PART I                                          
|                                                 | Item 1. Business                                                                                       
|                                                 | Item 2. Properties                                                                                     
|                                                 | Item 3. Legal Proceedings                                                                              
|                                                 | Item 4. Submission of Matters to a Vote of Security Holders                                            
|PART II                                         
|                                                 | Item 5. Market for Registrants Common Equity and Related Stockholder Matters                          
|                                                 | Item 6. Selected Financial Data                                                                        
|                                                 | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations          
|                                                 | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                                    
|                                                 | Item 8. Financial Statements and Supplementary Data                                                    
|                                                 | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure           
|PART III                                        
|                                                 | Item 10. Directors and Executive Officers of the Registrant                                            
|                                                 | Item 11. Executive Compensation                                                                        
|                                                 | Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|                                                 | Item 13. Certain Relationships and Related Transactions                                                
|PART IV                                         
|                                                 | Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K                              
|SIGNATURES                                      
|SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS 
|EXHIBIT INDEX                                   
|AMENDED AND RESTATED CHARTER OF THE COMPANY     
|SEPARATION AND CONSULTING AGREEMENT             
|PORTIONS OF THE ANNUAL REPORT                   
|SUBSIDIARIES OF THE REGISTRANT                  
|CONSENT OF BDO SEIDMAN, LLP                     



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SCB COMPUTER TECHNOLOGY, INC.

ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

|                                                 |          |      |                                                                                                |  |  |   |    |      |  | 
|------------------------------------------------ | -------- | ---- | ---------------------------------------------------------------------------------------------- |  |  | - | -- | ---- |  | 
|                                                 |          |      |                                                                                                |  |  |   |    | Page
|                                                 |          |      |                                                                                                |  |  |   |    |     
|Cautionary Note About Forward-Looking Statements |          |      | 1                                                                                              | 
|Part I                                          
|                                                 | Item 1.  |      | Business                                                                                       |  |  | 2 |   
|                                                 | Item 2.  |      | Properties                                                                                     |  |  | 6 |   
|                                                 | Item 3.  |      | Legal Proceedings                                                                              |  |  | 6 |   
|                                                 | Item 4.  |      | Submission of Matters to a Vote of Security Holders                                            |  |  | 7 |   
|Part II                                         
|                                                 | Item 5.  |      | Market for Registrants Common Equity and Related Stockholder Matters                          |  |  | 8 |   
|                                                 | Item 6.  |      | Selected Financial Data                                                                        |  |  | 8 |   
|                                                 | Item 7.  |      | Managements Discussion and Analysis of Financial Condition
and Results of Operations          |  |  | 8 |   
|                                                 | Item 7A. |      | Quantitative and Qualitative Disclosures About Market Risk                                     |  |  |   | 8  |     
|                                                 | Item 8.  |      | Financial Statements and Supplementary Data                                                    |  |  | 8 |   
|                                                 | Item 9.  |      | Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure           |  |  | 8 |   
|Part III                                        
|                                                 | Item 10. |      | Directors and Executive Officers of the Registrant                                             |  |  |   | 9  |     
|                                                 | Item 11. |      | Executive Compensation                                                                         |  |  |   | 9  |     
|                                                 | Item 12. |      | Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters |  |  |   | 9  |     
|                                                 | Item 13. |      | Certain Relationships and Related Transactions                                                 |  |  |   | 9  |     
|Part IV                                         
|                                                 | Item 14. |      | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                               |  |  |   | 10 |     
|Signatures                                       |          |      | 11                                                                                             | 
|Schedule                                         |          |      | S-1                                                                                            | 
|Exhibit Index                                    |          | EI-1





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CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements. All statements made in
this report, other than statements of historical fact, are forward-looking
statements. They usually include, without limitation, the words believes,
anticipates, expects, estimates, projects, intends, plans, hopes,
future and words of similar phrasing and meaning. Forward-looking statements
reflect managements current assumptions, beliefs, and expectations and express
managements views of future performance and trends.

Forward-looking statements are subject to a number of risks and
uncertainties, including those discussed below, that could cause actual results
to differ materially from historical or anticipated results. These factors
include, but are not limited to, the potential for the Companys business
relationships with its significant customers to change or deteriorate; the
potential early termination of the Companys IT service contracts without
penalty; the potential for the Companys customers to reduce their IT services
outsourcing; the Companys potential liability to its customers in connection
with the provision of IT services; the Companys potential inability to
attract, develop and retain qualified IT employees; potential changes in the
utilization and productivity rates of the Companys IT employees; the Companys
dependence on key management personnel; the types and mix of IT services that
the Company performs during any particular period; potential changes in the
Companys gross profit due to a variety of factors, including increased wage
and benefit costs that are not offset by billed rate increases; the Companys
potential inability to finance, sustain and manage growth; the Companys
potential inability to develop or acquire additional IT service offerings; the
Companys potential inability to effectively identify, integrate and manage
acquired businesses; the potential effects of competition; the potential
outcome of litigation and investigations involving the Company; the Companys
decision to focus on its core competencies of IT outsourcing, consulting and
professional staffing; and potential deterioration in the condition of the U.S.
economy and the IT services industry.

The Company disclaims any intent and undertakes no obligation to publicly
release any revision to or update of any forward-looking statement contained in
this report to reflect events occurring or circumstances existing after the
date hereof or otherwise.

1



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PART   I




Item 1.   Business

General

SCB Computer Technology, Inc. (the Company) is a leading provider of
information technology (IT) management and technical services to state and
local governments and commercial enterprises. The Companys services consist
of (1) consulting, which entails the evaluation, design and re-engineering of
computer systems, management, quality assurance and technical directions for IT
projects, network planning and implementation, and functional expertise and
training; (2) outsourcing, which involves system development and integration,
maintenance, data center management, help desk and technical services; and (3)
professional staffing, which includes providing skilled IT staff on an
as-needed basis.

The Company was founded as a partnership in 1976 and was incorporated
under the laws of the State of Tennessee in 1984. The Companys principal
executive offices are located at 3800 Forest Hill-Irene Road, Suite 100,
Memphis, Tennessee 38125, and its telephone number at that address is (901)
754-6577. The Company also can be contacted on the Internet at
http://www.scb.com.

Business Development

In fiscal 2002, the Companys performance reflected the dramatic change in
its strategic direction that occurred in fiscal 2001. In fiscal 2001,
management re-evaluated the Companys strategic direction and concluded that
while the acquisition and diversification strategy followed by the Company
since fiscal 1997 had grown revenues at a robust rate, the Companys net income
had declined over the same period. Accordingly, management changed the
Companys business development strategy to focus on its historical core
competencies of providing IT consulting, outsourcing, and professional staffing
services (the core operations). In addition, beginning in fiscal 2001 and
continuing through fiscal 2002, the Company disposed of several underperforming
business units. These non-core business units were engaged in specialized
policy consulting, computer hardware and specialty software sales, enterprise
resource planning, and computer equipment leasing (the non-core operations).

Disposition of Non-Core Operations

The Company began disposing of its non-core operations beginning in fiscal
2001 and continuing through fiscal 2002.

On May 2, 2000, the Company sold substantially all the assets of its
Technology Management Resources business unit, which was engaged in specialized
policy consulting, for $9.7 million in cash plus the assumption of certain
related liabilities. The Company used $8.9 million of the sale proceeds to
reduce its debt and $0.8 million for working capital.

On November 30, 2000, the Company sold substantially all the assets of its
Proven Technology business unit, which was engaged in computer hardware sales,
for 50,000 shares of the Companys common stock plus the assumption of certain
related liabilities.

On November 30, 2000, the Company sold substantially all the assets of its
Global Services business unit, which was engaged in computer hardware sales,
for 10,000 shares of the Companys common stock.

On June 20, 2001, the Company sold substantially all the assets of its
Enterprise Resource Planning business unit for $9.1 million in cash plus the
assumption of certain related liabilities. The Company used $8.5 million of the
sale proceeds to reduce its debt and $0.6 million for working capital and to
pay expenses related to the transaction.

On February 28, 2002, the Company sold substantially all the assets of its
Delta Software business unit, which was engaged in specialty software sales,
for the assumption of certain related liabilities.

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On April 1, 2002, the Company sold certain assets relating to its Partners
Capital Group business unit, which was engaged in computer equipment leasing,
for $60,000 in cash plus the assumption of certain related liabilities,
including $4.6 million of non-recourse debt.

Services

Consulting

The objective of the Companys consulting services engagements is to use
proven techniques to assist customers in evaluating and redesigning IT
operations to achieve improvements in IT cost, quality and efficiency. The
Companys consultants frequently employ state-of-the-art information
engineering methodologies and processes to assist customers in migrating from
centralized mainframe systems to open client/server and other network
architectures. General IT consulting services typically are designed to
evaluate all phases of customers projects, from front-end needs assessment
surveys to detailed design and implementation of appropriate systems. These
services include:



| |  |  | performing an IT wellness test on a customers existing IT
systems to determine whether the overall management information systems
(MIS) function is performing to optimal management and technical
specifications.                                                                                            
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | developing an information systems plan (ISP) that identifies a
customers strategic organizational objectives, recommends an IT
infrastructure (either firm-wide or by business unit), and establishes
a timeline and prioritizes tasks for accomplishing the ISP.                                               
|
| |  |  | forecasting a customers expected returns or cost savings on a particular technology investment.                                                                                                                                                                                                                   
|
| |  |  | creating IT project specifications that can be submitted for bids.                                                                                                                                                                                                                                                 
|
| |  |  | designing and implementing hardware, networks, operating systems,
and database infrastructures as well as integrating software
applications with these infrastructures.                                                                                                                                            
|
| |  |  | networking and telecommunications solutions such as network
services (LAN/WAN design and engineering), staffing of help desk
centers, project management of larger network related projects, remote
network monitoring and management, development and implementation of
disaster recovery solutions, and training.

The Companys consulting services are delivered by professionals who are
specialists in providing complete systems development lifecycle consulting and
who have extensive experience working with relational database, networking,
client/server, and related technologies. The Companys consultants also have
the business acumen necessary to understand customers IT systems support
needs.

The Companys consulting service contracts are typically for short periods
of time and specify the discrete tasks to be performed. The Companys
consulting fees are negotiated on a case-by-case basis, depend on the size of
the project and the skills required, and range from billing at hourly rates to
fixed-price engagements.

Outsourcing

The Company believes that the outsourcing of IT systems management and
operations is growing primarily because outsourcing often allows large
organizations to add expertise and improve end-user service in their IT
operations at a reduced cost. Because of the emerging hardware and software
technologies and the demands by end-users for more memory, speed and
flexibility, many large organizations have been forced to selectively deploy
their IT assets and personnel. Many of the Companys customers have elected to
focus their internal staffs on the emerging technologies and, therefore, have
engaged the Company to maintain and enhance their legacy systems in connection
with the development and operation of newer systems. The Company believes that
these developments will increase the need to outsource IT services.

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The Companys outsourcing services are designed to support a wide range of
legacy and client/server systems and include network design and management,
systems support and maintenance, programming and application software
development, client/server and other network maintenance, data center
management, customer staff training, and help desk services. Under the general
direction of the customer, the Company assumes full and ongoing management and
technical responsibility for the installation or operation of a customers
systems on a long-term basis, both at the customers business site and at the
Companys sites. Outsourcing services sometimes involve substantial up-front
expenditures to purchase equipment, hire personnel, and operate the IT systems
on behalf of the customers.

Outsourcing contracts tend to be for longer terms and to produce more
revenue per contract than consulting or professional staffing contracts.
Outsourcing contracts are expressed in terms of fixed prices for defined
services or hourly rates. In general, the Company determines its prices based
on the salaries and overhead costs of professionals assigned to a project plus
a margin designed to cover other expenses and provide a profit. The Company
also provides outsourcing services on a fixed-price basis to some customers
when the Company has a well defined understanding of the services to be
delivered or extensive knowledge of the customers business.

Professional Staffing

The Company provides the services of highly skilled professional IT
personnel at customers facilities on an as-needed basis. These services are
provided primarily to customers who desire the flexibility to supplement
internal staff with people having particular skill sets or to eliminate the
need to recruit, hire and train technical employees whose skills may not be
needed between projects. The Companys objectives in providing professional
staffing services include developing an understanding of the customers
business and IT systems needs and positioning the Company to provide consulting
and outsourcing services if the need arises. Professional staffing engagements
range from short-term discrete projects to long-term support arrangements.

Markets and Customers

The Company performs IT services for customers in two distinct markets:
state and local governments, and commercial enterprises. In fiscal 2002,
approximately 58% of the Companys revenue was attributable to state and local
governments, an increase from 48% and 38% in fiscal 2001 and 2000,
respectively, while commercial enterprises accounted for 42% of the Companys
revenue, a decrease from 52% and 62% in fiscal 2001 and 2000, respectively.
The Company believes that it is a leading provider of IT services to state and
local governments in the United States of America. This strong presence in the
state and local government market creates a competitive advantage and market
differentiator for the Company.

The Company currently provides IT services for over 150 customers. Most
of the Companys customers are large organizations for which the Company
delivers services to a number of business units or agencies. The Company earns
a significant portion of its revenue from relatively few customers. In fiscal
2002, the Companys five largest revenue-generating customers accounted for 52%
of its revenue, an increase from 44% in fiscal 2001. In fiscal 2002, the
following customers accounted for 10% or more of the Companys revenue: State
of Tennessee (15%), State of Kentucky (13%), and Honeywell International Inc.
(11%). One customer, Honeywell International Inc., accounted for 86% of the
Companys revenue from outsourcing operations, an increase from 47% in fiscal
2001.

Generally, the Companys contracts with its customers are, in accordance
with industry practice, cancelable on short notice and without penalty (except
with respect to the Companys larger outsourcing contracts), provide for
monthly payment of fees, and establish other basic terms such as the hourly
billing rates for each type of Company professional who performs work pursuant
to the contract. Some contracts specifically define the services to be
performed pursuant to the contract, while other contracts, particularly
professional staffing contracts, merely establish the basic parameters of the
work (i.e., the system to be evaluated, designed or maintained) and require
that additional work orders be submitted for services to be performed. The
Company is the exclusive service provider under certain contracts, while other
contracts, particularly professional staffing contracts, specifically allow the
customer to engage other vendors for the projects covered by the contract.

4



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Marketing and Sales

The Company markets its services through senior management and a sales
staff of 29 people. The Company currently has personnel located at sales
offices in 19 cities. Relationships with the Companys larger clients and key
government personnel are maintained and fostered by at least one of the
Companys executive officers. The Company believes that its senior
managements hands-on involvement with major clients is a significant
competitive advantage.

Account managers market the Companys services and serve as the primary
contacts in maintaining client relationships. Accordingly, account managers
learn the basic aspects of a clients business in order to identify
opportunities for providing additional IT services to the client. Account
managers are paid a salary plus commissions based on the revenues associated
with client relationships under their supervision. In general, account
managers are not IT technicians. They are, however, supported by Company
technical personnel in their marketing and sales efforts.

Personnel and Recruiting

The Companys current headcount, including employees and independent
subcontractors, is approximately 814 persons consisting of 708 technicians, 29
salespersons, 25 recruiters, 4 executives, and 48 other administrative
personnel. Approximately 9% of the Companys headcount consists of independent
subcontractors. The Company competes for personnel with in-house MIS
departments and other IT services firms. In general, the Company seeks to hire
professionals who have substantial experience either with an in-house MIS
department or another IT services firm. The Company recruits worldwide by
soliciting resumes generated by advertisements in trade journals and major city
newspapers. Employee referrals are another major source of recruiting leads.
In addition, the Companys web site on the Internet (www.scb.com) is used for
recruiting. Most of the Companys recruiters have technical or IT sales
backgrounds and understand the skill sets needed for the project for which they
are recruiting.

Competition

The Company believes that its principal competitors, categorized according
to the services performed, are as follows: (1) consulting  International
Business Machines Corporation (IBM), CACI International, Inc., Affiliated
Computer Services, Inc., Tier Technologies, Inc., Accenture Ltd, Computer
Horizons Corporation, and Electronic Data Systems Corporation (EDS); (2)
outsourcing  IBM, EDS, Perot Systems Corporation, Computer Sciences
Corporation, Affiliated Computer Services, Inc., American Management Systems,
Inc., and Accenture Ltd; and (3) professional staffing  Computer Task Group,
Inc., Computer Horizons Corporation, Keane, Inc., and Analysts International
Corp.

The Company believes that the principal competitive factors in the IT
services industry are (1) responsiveness to clients needs and speed in
delivering IT solutions; (2) effectiveness of delivered solutions as measured
through cost reductions and improvements in price/performance ratios; (3)
output per employee as reflected in utilization rates; (4) quality of service;
(5) price; and (6) technical expertise. The Company believes that its ability
to estimate costs accurately, particularly for existing clients, and its lower
labor costs, which are a function, in part, of higher than industry average
utilization rates, cause it to be a lower cost provider than many of its
competitors, which is especially critical in a competitive bid environment.

The Company also competes for the hiring and retention of management and
other professional personnel. See Business  Personnel and Recruiting. In
connection with professional staffing engagements, particularly in situations
where the Company is one of a number of approved vendors, the Company competes
to provide services based on the relative qualifications of its personnel.

Potential Liability to Customers

Many of the Companys engagements involve projects that are critical to
the operations of its customers businesses and provide benefits that may be
difficult to quantify. Any failure in a customers system could result in a
claim for substantial damages against the Company, regardless of the Companys
responsibility for such failure. The Company attempts to limit contractually
its liability for damages arising from negligent acts, errors, mistakes

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and omissions in rendering its IT services. The Company also maintains
general liability insurance coverage, including coverage for errors or
omissions. Although the Company believes that the insurance coverage is
adequate in scope and amount, there can be no assurance that such coverage will
continue to be available on acceptable terms or sufficient to cover one or more
large claims. Furthermore, any litigation, regardless of its outcome, could
result in substantial costs to the Company, diversion of managements attention
from operations, and negative publicity, any of which could adversely affect
the Companys results of operations and financial condition.

Executive Officers

The table below sets forth information with respect to the business
experience of the Companys executive officers during at least the past five
years.

|                  |  |     |    |                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----------------- |  | --- | -- | ----------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name              |  | Age |    | Position and Term
|                  |  |     |    |                  
|T. Scott Cobb     |  |     | 65 |                   |  | Mr. Cobb is a co-founder of the Company and has
been its Chief Executive Officer and President
since 2000. He previously served the Company
as Chairman of the Board (1984-1999) and
President (1984-1996). Mr. Cobb was a partner
in Seltmann, Cobb & Bryant, the Companys
predecessor, from its formation in 1976 to
1984. He is the father of Jeffrey S. Cobb.                                                                                                                                                                                                                                                                                                   
|                 
|Michael J. Boling |  |     | 55 |                   |  | Mr. Boling has been Executive Vice President
and Chief Financial Officer of the Company
since 1999 and its Treasurer since 2000. Prior
to joining the Company, he was President and
Chief Operating Officer of TBN of Tennessee,
Inc. (TBN), a management company that
provides information processing services to
affiliated companies in the home health care
business, from 1998 to 1999. Mr. Boling was a
partner with PricewaterhouseCoopers LLP and its
predecessor, Coopers & Lybrand LLP, from 1991
to 1998. He was an accountant with Ernst &
Young LLP and its predecessor, Arthur Young &
Company, from 1976 to 1991 and became a partner
there in 1982.
|                 
|Jeffrey S. Cobb   |  |     | 40 |                   |  | Mr. Cobb has been Executive Vice President and
Chief Operating Officer of Professional
Services of the Company since 2000. He
previously served the Company as President of
the Professional Services Division (1999-2000),
Chief Operating Officer (1998-1999), Executive
Vice President of Operations (1995-1998),
Senior Vice President of Operations and
Administration (1992-1995), Director of
Projects (1990-1992), and Director of
Recruiting (1989-1990). He is the son of T.
Scott Cobb.                                                                                                                                                                   
|                 
|Steven H. Smith   |  |     | 47 |                   |  | Mr. Smith has been Executive Vice President of
State Government Services since 2001. He
previously served the Company as Executive Vice
President of National Sales (2000-2001), Senior
Vice President of Marketing (1995-2000), Senior
Vice President of Marketing and Recruiting
(1990-1995), Vice President of Sales
(1989-1990), and Sales Representative
(1986-1989)                                                                                                                                                                                                                                                                                            




Item 2.   Properties

The Company leases its corporate headquarters building in Memphis,
Tennessee, under a lease expiring in June 2009. The Company leases sales
offices in Montgomery, Alabama; Phoenix, Arizona; Little Rock, Arkansas;
Jacksonville, Florida; Atlanta, Georgia; Indianapolis, Indiana; Jackson,
Mississippi; Nashville, Tennessee; and Dallas, Texas.




Item 3.   Legal Proceedings

In April 2000, a consolidated lawsuit was filed on behalf of the Companys
shareholders against the Company, certain of its current and former directors
and officers, and the Companys former independent auditor. The lawsuit, filed
in the United States District Court for the Western District of Tennessee,
Memphis Division, arose from the

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Companys restatement of its consolidated financial statements for fiscal
1998 and 1999 and the first three quarters of fiscal 2000. The district court,
upon the defendants motions, dismissed the lawsuit with prejudice in February
2001. The lead plaintiffs appealed the dismissal order to the United States
Court of Appeals for the Sixth Circuit in March 2001. In order to avoid the
risks, costs, and distraction of burdensome, protracted litigation, including
the pending Sixth Circuit appeal, the Company and the individual defendants,
after extensive negotiations, reached an agreement with the lead plaintiffs to
settle the lawsuit. Under the terms of the settlement, the Company, through
its insurer, paid $2.1 million into a settlement fund to be administered under
the supervision of the district court for the benefit of the plaintiff class.
In reaching the settlement, the Company and the individual defendants denied
and continue to deny each and every claim of alleged violations of law made by
the plaintiffs in the lawsuit. The district court preliminarily approved the
settlement on December 7, 2001. After conducting a final settlement hearing on
March 15, 2002, the district court approved the fairness of the settlement.
The 30-day period in which a party with standing to appeal the district courts
approval of the settlement could do so expired on April 15, 2002, without any
appeal having been filed. As to the Company and the individual defendants, the
case has now been concluded.

In April 2000, the Securities and Exchange Commission (the SEC)
commenced an investigation of the Companys past accounting and financial
reporting practices. The SEC investigation arose from the Companys
restatement of its consolidated financial statements for fiscal 1998 and 1999
and the first three quarters of fiscal 2000. Throughout the investigation, the
Company has cooperated fully with the SEC by voluntarily providing documents
and records, by making its current employees available for interviews or
depositions, and by encouraging its former employees to cooperate with the
SECs investigation. On November 20, 2001, the Company received from the SEC
staff a preliminary notice that it had determined that the Company had
committed certain civil violations of the Securities Exchange Act of 1934 and
the SECs rules thereunder. In response to such notice, the Company has held
extensive discussions with the SEC staff with a view to resolving the
investigation and any resulting enforcement proceeding on a basis that would be
acceptable to the Company. As a result of these discussions, the Company has
submitted an offer of settlement that would resolve the charges asserted
against the Company by the SEC. There can be no assurance that the SEC will
accept the Companys offer of settlement, although management currently is not
aware of any reason that the SEC would not do so.

The Company from time to time is subject to various other claims and
lawsuits arising out of its operations in the ordinary course of business.
Management believes that the disposition of such other currently pending claims
and lawsuits will not have a material adverse affect on the Companys financial
condition or results of operations.




Item 4.   Submission of Matters to a Vote of Security Holders

No matter was submitted to a vote of the Companys security holders during
the fiscal quarter ended April 30, 2002.

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PART   II




Item 5.    Market for Registrants Common Equity and Related Stockholder Matters

The information set forth under the caption Market for the Companys
Common Stock in the Companys 2002 annual report to shareholders (the Annual
Report) is incorporated herein by reference in response to this item.




Item 6.   Selected Financial Data

The information set forth under the caption Financial Highlights in the
Annual Report is incorporated herein by reference in response to this item.




Item 7.   Managements Discussion and Analysis of Financial Condition and Results of Operations

The information set forth under the caption Managements Discussion and
Analysis of Financial Condition and Results of Operations in the Annual Report
is incorporated herein by reference in response to this item.




Item 7A.   Quantitative and Qualitative Disclosures About Market Risk

The information set forth under the caption Quantitative and Qualitative
Disclosures About Market Risk in the Annual Report is incorporated herein by
reference in response to this item.




Item 8.   Financial Statements and Supplementary Data

The information set forth under the caption Consolidated Financial
Statements in the Annual Report is incorporated herein by reference in
response to this item. The supplementary data is set forth in Schedule II to
this report.




Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

8



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##### Table of Contents






PART   III




Item 10.   Directors and Executive Officers of the Registrant

The information to be presented under the captions Proposal 1  Election
of Directors and Stock Ownership  Section 16(a) Beneficial Ownership
Reporting Compliance in the Companys definitive proxy statement for its 2002
annual meeting of shareholders (the Proxy Statement) and the information set
forth under the caption Item 1. Business  Executive Officers in this report
are incorporated herein by reference in response to this item.




Item 11.   Executive Compensation

The information to be presented under the captions Proposal 1  Election
of Directors  How are directors compensated? and Executive Compensation in
the Proxy Statement is incorporated herein by reference in response to this
item.




Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information to be presented under the caption Stock Ownership  How
much common stock do the Companys management and its largest shareholders
own? in the Proxy Statement is incorporated herein by reference in response to
this item.

Equity Compensation Plan Information

The table below sets forth certain information concerning the Companys
equity compensation plans:

|                                                           |  |                   |           |                      |  |                           |      |                         |  |  |           | 
|---------------------------------------------------------- |  | ----------------- | --------- | -------------------- |  | ------------------------- | ---- | ----------------------- |  |  | --------- | 
|                                                           |  | (a)               |           | (b)                  |  | (c)                      
|                                                           |  | Number of         |           |                      |  |                           |      |                         |  | 
|                                                           |  | Securities to be  |           |                      |  |                           |      | Number of Securities   
|                                                           |  | Issued upon       |           |                      |  |                           |      | Remaining Available for
|                                                           |  | Exercise of       |           | Weighted Average     |  | Future Issuance Under    
|                                                           |  | Outstanding       |           | Exercise Price of    |  | Equity Compensation Plans
|                                                           |  | Options, Warrants |           | Outstanding Options, |  | (Excluding Securities    
|Plan Category                                              |  | and Rights        |           | Warrants and Rights  |  | Reflected in Column (a)) 
|                                                           |  |                   |           |                      |  |                          
|Equity compensation
plans approved by
security holders     |  |                   | 2,614,109 |                      |  | $                         | 4.09 |                         |  |  | 2,185,891 | 
|Equity compensation
plans not approved
by security holders |  |                   | 550,000   |                      |  |                           | 0.69 |                         |  |  |          | 
|                                                           |  |                   |           |                      |  |                           |      |                         |  |  |           | 
|Total                                                      |  |                   | 3,164,109 |                      |  | $                         | 3.50 |                         |  |  | 2,185,891 | 
|                                                           |  |                   |           |                      |  |                           |      |                         |  |  |           | 

On December 15, 2000, in connection with the modification of its then
existing credit facility, the Company granted to the lender a warrant to
purchase 250,000 shares of common stock, at an exercise price of $0.31 per
share, at any time during the three-year period beginning on January 1, 2001,
and ending on January 1, 2004. On July 23, 2001, in connection with obtaining
its currently existing credit facility, the Company granted to the lender and a
debt placement agent warrants to purchase 80,000 shares and 220,000 shares,
respectively, of common stock, at an exercise price of $1.00 per share, at any
time during the three-year period beginning on July 23, 2001, and ending on
July 23, 2004.




Item 13.   Certain Relationships and Related Transactions

The information to be presented under the caption Certain Transactions
in the Proxy Statement is incorporated herein by reference in response to this
item.

9



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##### Table of Contents






PART   IV




Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K



|(a) |  | 1.   Financial Statements
|--- |  | -------------------------

The financial statements incorporated by reference herein are as follows:

Consolidated Balance Sheets at April 30, 2002 and 2001
          
Consolidated Statements of Operations for the Fiscal Years Ended April 30, 2002, 2001 and 2000
          
Consolidated Statements of Shareholders Equity for the Fiscal Years Ended April 30, 2002, 2001 and 2000
          
Consolidated Statements of Cash Flows for the Fiscal Years Ended April 30, 2002, 2001 and 2000
          
Notes to Consolidated Financial Statements
          
Report of BDO Seidman, LLP, Independent Certified Public Accountants

2.   Financial Statement Schedules

The financial statement schedule filed as part of this report is as
follows:

Schedule II  Valuation and Qualifying Accounts
          
Report of BDO Seidman, LLP, Independent Certified Public Accountants

3.   Exhibits

The exhibits listed in the Exhibit Index following the signature page
hereof are filed as part of this report or are incorporated herein by
reference.



|(b) |  | Reports on Form 8-K
|--- |  | -------------------

On March 22, 2002, the Company filed with the SEC a current report on Form
8-K relating to the issuance of a press release by the Company announcing that
it has received final court approval of a settlement of a lawsuit originally
filed on behalf of its shareholders in April 2000. See Item 3. Legal
Proceedings in this report for further information.

On April 17, 2002, the Company filed with the SEC a current report on Form
8-K relating to the sale of certain assets of the Partners Capital Group
business unit, which was engaged in computer equipment leasing. Included in
such report are an unaudited pro forma condensed consolidated balance sheet as
of January 31, 2002, and unaudited pro forma condensed consolidated statements
of operations for the nine months ended January 31, 2002, and the year ended
April 30, 2001. See Item 1. Business  Disposition of Non-Core Operations
in this report for further information.

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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.

|                    |  |                               |  |                                                    
|------------------- |  | ----------------------------- |  | ---------------------------------------------------
|                    |  | SCB COMPUTER TECHNOLOGY, INC.
|                   
|                    |  | By:                           |  | /s/ T. Scott Cobb                                  
|                    |  |                               |  |                                                    
|                    |  |                               |  | T. Scott Cobb
President and Chief Executive Officer
|                   
|Date: July 26, 2002 |  |                               |  |                                                    

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.

|                      |  |                                                                  |  |              
|--------------------- |  | ---------------------------------------------------------------- |  | -------------
|Signature             |  | Title                                                            |  | Date         
|                      |  |                                                                  |  |              
|                     
|/s/ Jack R. Blair     |  | Chairman of the Board                                            |  | July 26, 2002
|                      |  |                                                                  |  |              
|Jack R. Blair         |  |                                                                  |  |              
|                     
|/s/ T. Scott Cobb     |  | Director, President and Chief Executive Officer                  |  | July 26, 2002
|                      |  | (principal executive officer)                                    |  |              
|T. Scott Cobb         |  |                                                                  |  |              
|                     
|/s/ Michael J. Boling |  | Executive Vice President, Chief Financial Officer, and Treasurer |  | July 26, 2002
|                      |  | (principal financial and accounting officer)                     |  |              
|Michael J. Boling     |  |                                                                  |  |              
|                     
|/s/ George E. Cates   |  | Director                                                         |  | July 26, 2002
|                      |  |                                                                  |  |              
|George E. Cates       |  |                                                                  |  |              
|                     
|/s/ James E. Harwood  |  | Director                                                         |  | July 26, 2002
|                      |  |                                                                  |  |              
|James E. Harwood      |  |                                                                  |  |              
|                     
|/s/ Robert G. McEniry |  | Director                                                         |  | July 26, 2002
|                      |  |                                                                  |  |              
|Robert G. McEniry     |  |                                                                  |  |              

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SCB COMPUTER TECHNOLOGY, INC.




SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

|                                                                                                    |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|--------------------------------------------------------------------------------------------------- |  | ---------- | ----- | ------------ |  | --------- | ----- | ---------- |  | --------- | - | ------- |  | - | ------ | - |  | - | ----- | 
|COL. A                                                                                              |  | COL. B     |       | COL. C       |  | COL. D    |       | COL. E    
|                                                                                                    |  |            |       |              |  |           |       |           
|                                                                                                    |  |            |       |              |  | ADDITIONS |       |            |  |           |   |         |  |  
|                                                                                                    |  |            |       |              |  |           |       |            |  |           |   |         |  |  
|                                                                                                    |  | BALANCE AT |       | CHARGED      |  | CHARGED   |       |            |  |           |   | BALANCE
|                                                                                                    |  | BEGINNING  |       | TO COSTS     |  | TO OTHER  |       |            |  |           |   | AT END 
|DESCRIPTION                                                                                         |  | OF PERIOD  |       | AND EXPENSES |  | ACCOUNTS  |       | DEDUCTIONS |  | OF PERIOD
|                                                                                                    |  |            |       |              |  |           |       |            |  |          
|Fiscal Year Ended April 30, 2002                                                                    |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|Reserves deducted in the balance
sheet from the assets to which they apply                          |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|Allowance for losses on:                                                                            |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|Accounts Receivable  Trade                                                                         |  | $          | 624   |              |  | $         | (63   | )          |  | $         |  |         |  | $ | (396   | ) |  | $ | 165   | 
|Other Assets  Notes Receivable                                                                     |  |            | 1,320 |              |  |           | (90   | )          |  |           |  |         |  |   | (876   | ) |  |   | 354   | 
|                                                                                                    |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|                                                                                                    |  | $          | 1,944 |              |  | $         | (153  | )          |  | $         |  |         |  | $ | (1,272 | ) |  | $ | 519   | 
|                                                                                                    |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|Fiscal Year Ended April 30, 2001                                                                    |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|Reserves deducted in the balance
sheet from the assets to which they apply                          |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|Allowance for losses on:                                                                            |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|Accounts Receivable  Trade                                                                         |  | $          | 1,519 |              |  | $         | 1,317 |            |  | $         |  |         |  | $ | (2,212 | ) |  | $ | 624   | 
|Other Assets  Notes Receivable                                                                     |  |            | 1,000 |              |  |           | 320   |            |  |           |  |         |  |   |       |   |  |   | 1,320 | 
|                                                                                                    |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|                                                                                                    |  | $          | 2,519 |              |  | $         | 1,637 |            |  | $         |  |         |  | $ | (2,212 | ) |  | $ | 1,944 | 
|                                                                                                    |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|Fiscal Year Ended April 30, 2000                                                                    |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|Reserves deducted in the balance
sheet from the assets to which they apply
Allowance for losses on: |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|Accounts Receivable  Trade                                                                         |  | $          | 579   |              |  | $         | 3,024 |            |  | $         |  |         |  | $ | (2,084 | ) |  | $ | 1,519 | 
|Other Assets  Notes Receivable                                                                     |  |            |      |              |  |           | 1,000 |            |  |           |  |         |  |   |       |   |  |   | 1,000 | 
|                                                                                                    |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 
|                                                                                                    |  | $          | 579   |              |  | $         | 4,024 |            |  | $         |  |         |  | $ | (2,084 | ) |  | $ | 2,519 | 
|                                                                                                    |  |            |       |              |  |           |       |            |  |           |   |         |  |   |        |   |  |   |       | 

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Shareholders
SCB Computer Technology, Inc.

The audits referred to in our report dated June 14, 2002, relating to the
consolidated financial statements of SCB Computer Technology, Inc., which is
incorporated in Item 8 of the Form 10-K by reference to the annual report to
shareholders for the year ended April 30, 2002, included the audit of the
financial statement schedule listed in the accompanying index. This financial
statement schedule is the responsibility of the Companys management. Our
responsibility is to express an opinion on this financial statement schedule
based upon our audits.

In our opinion, the financial statement schedule referred to above presents
fairly, in all material respects, the information set forth therein.

|                                 |  |                     
|-------------------------------- |  | --------------------
|                                 |  | /s/ BDO Seidman, LLP
|Memphis, Tennessee
June 14, 2002 |  |                     

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EXHIBIT INDEX

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Number  |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2.1     |  | Asset Purchase Agreement dated as of April 29, 2000, among
MAXIMUS, Inc., the Company, and Technology Management
Resources, Inc. (incorporated herein by reference to Exhibit
2.1 to the Companys current report on Form 8-K dated April
29, 2000). Schedules and exhibits have been omitted from
this filing. The Company will furnish, as supplementary
information, copies of the omitted materials to the SEC upon
request.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       
|2.2     |  | Asset Purchase Agreement dated as of June 12, 2001, among
Partners Resources Inc., the Company, Partners Capital
Group, Charles A. Vermillion, Scott R. Meyer, and OneNeck IT
Services, Corporation (incorporated herein by reference to
Exhibit 2 to the Companys current report on Form 8-K dated
June 20, 2001). Schedules and exhibits have been omitted
from this filing. The Company will furnish, as supplementary
information, copies of the omitted materials to the SEC upon
request.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       
|2.3     |  | Purchase and Sale Agreement dated April 1, 2002, between
Partners Capital Group and CTI Gateway, L.L.C. (incorporated
herein by reference to Exhibit 2 to the Companys current
report on Form 8-K dated April 1, 2002). Schedules and
exhibits have been omitted from this filing. The Company
will furnish, as supplementary information, copies of the
omitted materials to the SEC upon request.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       
|3.1*    |  | Amended and Restated Charter of the Company (incorporated
herein by reference to Exhibit 3 to the Companys quarterly
report on Form 10-Q for the fiscal quarter ended October 31,
1998), as amended by (1) Articles of Merger of SCB Software
Services, Inc., a Tennessee corporation, with and into the
Company, filed with the office of the Secretary of State for
the State of Tennessee on June 28, 2001, (2) Articles of
Merger of Proven Technology, Inc., a Tennessee corporation,
with and into the Company, filed with the office of the
Secretary of State for the State of Tennessee on June 28,
2001, (3) Articles of Amendment to Amended and Restated
Charter of the Company, filed with the office of the
Secretary of State for the State of Tennessee on September
21, 2001, and (4) Articles of Merger of Technology
Management Resources, Inc., a Tennessee corporation, with
and into the Company, filed with the office of the Secretary
of State for the State of Tennessee on July 10, 2002 (Items
(1), (2) and (3) are incorporated herein by reference to
Exhibit 3.1 to the Companys quarterly report on Form 10-Q
for the fiscal quarter ended October 31, 2001).
|       
|3.2     |  | Amended and Restated Bylaws of the Company effective as of
December 5, 2001 (incorporated herein by reference to
Exhibit 3.2 to the Companys quarterly report on Form 10-Q
for the fiscal quarter ended October 31, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       
|4.1     |  | Specimen certificate evidencing the Companys common stock
(incorporated herein by reference to Exhibit 4.1 to the
Companys registration statement on Form S-1 (Registration
No. 33-80707)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       
|4.2     |  | Article 7 of the Amended and Restated Charter of the
Company, as amended (included in Exhibit 3.1 hereto, which
is incorporated herein by reference to Exhibit 3 to the
Companys quarterly report on Form 10-Q for the fiscal
quarter ended October 31, 1998).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       
|10.1    |  | Loan and Security Agreement dated as of July 23, 2001, among
the Company, SCB Computer Technology of Alabama, Inc.,
Partners Resources Inc., and Foothill Capital Corporation,
as agent and lender. Schedules and exhibits have been
omitted from this filing. The Company will furnish, as
supplementary information, copies of the omitted materials
to the Commission upon request (incorporated herein by
reference to Exhibit 10.1 to the Companys annual report on
Form 10-K for the fiscal year ended April 30, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       
|10.2   |  | SCB Computer Technology, Inc. 1995 Stock Incentive Plan
(incorporated herein by reference to Exhibit 10.2 to the
Companys Registration Statement on Form S-1 (Registration
No. 33-80707)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.3  |  | SCB Computer Technology, Inc. 1997 Stock Incentive Plan
(incorporated herein by reference to Appendix A to the
Companys definitive proxy statement dated September 25,
1998), as amended by (1) Amendment No. 1 to 1997 Stock
Incentive Plan dated as of November 3, 1998, (2) Amendment
No. 2 to 1997 Stock Incentive Plan dated as of December 14,
1999, and (3) Amendment No. 3 to 1997 Stock Incentive Plan
dated as of August 7, 2000 (Items (1), (2) and (3) are
incorporated herein by reference to the Companys annual
report on Form 10-K for the fiscal year ended April 30,
2000).
|      
|10.4* |  | Separation and Consulting Agreement dated April 29, 2002,
between the Company and Lyle J. Seltmann.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|      
|11     |  | Computation of Earnings Per Share (included in Note 11 of
the Notes to Consolidated Financial Statements in the
Companys 2002 annual report to shareholders filed as
Exhibit 13 hereto).                                                                                                                                                                                                                                                                                                                                                                                                      
|      
|13*    |  | Portions of the Companys 2002 annual report to shareholders
that are expressly incorporated by reference herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      
|21*    |  | Subsidiaries of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      
|23*    |  | Consent of BDO Seidman, LLP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



---



|* |  | All or part of this exhibit is filed herewith.                                                                                                     
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | This is a management contract or compensatory plan or arrangement that is
required to be filed as an exhibit pursuant to Item 14(c) of this report.

EI-2