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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-K
            FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTION 13
                OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1998
 
                                       OR
 
[ ] 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 0-27030
 
                            INFINIUM SOFTWARE, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
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<S>                                                    <C>
                 MASSACHUSETTS                                            04-2734036
        (STATE OR OTHER JURISDICTION OF                                 (IRS EMPLOYER
         INCORPORATION OR ORGANIZATION)                              IDENTIFICATION NO.)
       25 COMMUNICATIONS WAY, HYANNIS, MA                                   02601
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)                               (ZIP CODE)
</TABLE>
 
       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (508) 778-2000
 
        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 $0.01
                                (TITLE OF CLASS)
 
                            ------------------------
 
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]  No [ ].
 
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]
 
     The aggregate market value of voting stock held by non-affiliates of the
registrant based upon the closing price of such stock as reported on the Nasdaq
National Market on November 19, 1998, was $71,762,474.
 
     As of November 19, 1998, 12,606,745 shares of the registrant's Common Stock
were outstanding.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     Specifically identified information in the registrant's definitive proxy
statement for its Annual Meeting of Stockholders which is currently expected to
be held on February 5, 1999, to be filed pursuant to Regulation 14A, is
incorporated by reference into Part III of this Form 10-K. Portions of the
registrant's 1998 Annual Report to Stockholders for the fiscal year ended
September 30, 1998 are incorporated by reference into Parts II and IV hereof.
 
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<PAGE>   2
 
                                     PART I
 
ITEM 1.  BUSINESS
 
     All statements contained herein that are not historical facts, including
but not limited to, statements regarding anticipated future capital
requirements, the Company's future products and product development plans, the
Company's ability to obtain debt, equity or other financing, and the Company's
ability to generate cash from operations, are based on current expectations.
These statements are forward looking in nature and involve a number of risks and
uncertainties, as more fully described under "Factors Affecting Future
Performance" in "Management's Discussion and Analysis of Financial Condition and
Results of Operations." Actual results may differ materially.
 
     Infinium Software, Inc. (the "Company", "Infinium Software" or "Infinium")
develops, markets and supports enterprise-level business software applications
for dynamic growing organizations (typically companies with revenues of $25
million to $5 billion). The Company has two primary product lines. One product
line is designed exclusively for AS/400 servers. These applications capitalize
on native IBM AS/400 capabilities to automate the financial management, human
resource management and materials management functions of organizations in a
broad range of industries worldwide. The Company also offers a specialized
AS/400 manufacturing system designed to manage process manufacturing operations.
The Company's second product line is designed exclusively for Microsoft Windows
NT servers. These applications capitalize on native Microsoft Windows NT
capabilities to automate the financial management and human resource management
operations of service organizations. Additional Microsoft Windows NT
applications are under development and expected to be available during 1999. The
Company's more than 1,800 customers include Abbott Laboratories, Circus Circus
Enterprises, Coca-Cola Enterprises, Warner Bros. Records, Mirage Resorts, and
MCA/Universal Studios.
 
INDUSTRY BACKGROUND
 
     For many years businesses have used packaged software applications to
cost-effectively automate back-office accounting and payroll functions.
Recently, heightened competitive pressures and rapidly changing market
conditions have forced many organizations to reduce costs, increase the
productivity of their personnel and become more responsive to customer
requirements. In addition, many dynamic growing companies have expanded their
operations and now require software applications that support more product
lines, international operations and a larger workforce. These businesses also
are demanding applications that take advantage of the capabilities of the
Internet to manage relationships with their employees, customers, partners and
suppliers. As a result, businesses are replacing their existing accounting,
human resource and payroll software applications with new, more flexible
systems. These new systems are designed to not only keep track of basic
accounting records but also provide best practice capabilities to monitor and
measure the operational performance of the business.
 
     There have also been advances in technology which have stimulated the
replacement and augmentation of enterprise business applications. Network
centric computing has become the standard business computing environment,
incorporating personal computers for user interaction networked together with
large servers for database computing, internet access, email routing, workflow
processing, and other capabilities. IBM commonly refers to this collection of
technologies as e-Business. Microsoft commonly refers to this technology as DNA,
Distributed iNternet Architecture. The network centric environment facilitates
widespread access from both within the organization and from outside the
organization via the Internet by business professionals seeking access to
corporate information. This information is presented through an easy-to-use
graphical user interface and integrates with commonly used desktop productivity
tools such as spreadsheets, all while allowing the enterprise business
applications to be more readily customized to meet changes in business
requirements. In addition, there is a preference among users of enterprise
business systems to acquire entire suites of integrated applications that are
designed to work together rather than to purchase single components, such as a
general ledger or accounts payable system.
 
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     The requirement for more flexible business applications and the resulting
shift to network centric computing has created a strong demand for new software
applications for financial management, human resources and other areas of
business. For example, International Data Corporation ("IDC") estimates that the
worldwide market for accounting software across all platforms is in excess of
$6.12 billion in 1998 and is predicted to grow at a 14.8% compounded annual rate
through 2002 with projected spending of approximately $10.5 billion in 2002.
 
     There is an additional factor driving the demand for new business
application software packages. Many businesses today use financial, human
resources and other application software systems that were either developed by
their own internal information systems staff or were acquired in the 1970's or
1980's. Such systems may not be able to process transactions beginning in the
year 2000, since they were programmed to assume that every year begins with
'19xx'. These systems must now be revised or replaced in order to prevent a
business interruption. Many businesses are choosing to replace their older or
internally developed systems with purchased application software that has been
designed to support processing in the year 2000 and beyond.
 
     With over 500,000 systems installed, the IBM AS/400 is one of the world's
most popular business computing systems. Shipments of new AS/400 systems in 1998
are estimated at approximately 60,000 units, partly as the result of new models
introduced by IBM which offer improved price performance and more industry
standard "open" features. These new models include networking capabilities to
facilitate electronic commerce, multi-processor architectures and expanded
interoperability with other systems, all of which facilitate the use of the
AS/400 as a server in a network centric computing architecture. The Company
believes that the AS/400 is widely used because of the large number of business
application software packages available for it and because fewer skilled
technical professionals are required to implement and maintain it, resulting in
a lower cost of ownership compared to other systems. This is important in
today's market, where organizations must implement and support business
applications with fewer, more productive resources than ever before.
 
     The Microsoft Windows NT server is currently the fastest growing computing
platform for business applications. The Company believes that NT will rapidly
become the most popular application software platform for dynamic growing
organizations. According to IDC, the markets for NT based financial and human
resources applications are expected to grow at an annual rate of 32% and 46%,
respectively, through the year 2002. The Company believes that Microsoft Windows
NT is being widely accepted because of the market dominance of Microsoft, the
low cost of ownership of NT servers, and the benefits of integration with other
Microsoft technologies and software applications.
 
THE INFINIUM SOFTWARE SOLUTION
 
     Infinium Software is a provider of enterprise-level business software
applications for dynamic growing organizations. The Company offers two separate
application product lines. It provides applications for the financial
management, human resource management and materials management functions of
dynamic growing organizations that use IBM AS/400 servers. The Company also
offers a fully integrated solution for process manufacturing operations.
Infinium's AS/400 products run in either a network centric or a traditional
host/terminal configuration.
 
     In 1997, the Company began offering applications that automate the finance
operations of organizations that utilize the Microsoft Windows NT servers. In
June 1998, the Company launched an NT Human Resource product line, designed to
automate workforce management, and acquired an NT Payroll solution.
 
     The Company's products enable businesses to automate their financial
management, human resource management, materials management and process
manufacturing operations with highly functional software
 
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products that afford them the flexibility and ease of use of network centric
computing while retaining low cost of ownership. Infinium's products are
designed based on the following principles:
 
AS/400 PRODUCT LINE:
 
     - ROBUST FUNCTIONALITY AND SCALABILITY.  Infinium's products are designed
       to provide high-end features and transaction processing functionality
       while providing flexibility and ease of use features that have not been
       attained on mainframe platforms. In addition, the Company's products
       operate in integrated suites of applications which provide users with a
       consistent user interface and the ability to easily access data and
       perform operations that span multiple applications. The Company's
       products are scalable to support increasing and changing levels of
       operations as customers' businesses expand.
 
     - HIGH DEGREE OF FLEXIBILITY.  Infinium's products are designed to function
       within a wide range of organizations. Infinium enables individual users
       to customize their desktop environments to respond to business changes
       and to streamline their daily operations. For example, the Company
       believes the flexible chart of accounts scheme within its General Ledger
       product facilitates monitoring the performance of a wide range of
       operating and financial measurements as well as record keeping for
       accounting and financial statement purposes.
 
     - YEAR 2000 SUPPORT.  The Company's financial management and human
       resources product lines have been designed from the beginning to support
       processing in the Year 2000 and beyond. The Company's materials
       management and process manufacturing product lines have been revised to
       support Year 2000 processing. The Company is continuing to validate its
       products' ability to support Year 2000 processing.
 
     - SUPERIOR DATA ACCESS AND ANALYSIS THROUGH OBJECT-ORIENTED USER
       INTERFACE.  The Company's AS/400 product line is designed to allow
       business professionals to "mine" the information contained in the
       application databases without knowledge of the underlying database
       structure. The Company's "drag and drop" object-oriented user interface
       represents the underlying data in the form of graphical icons and allows
       the end user to interactively access data by manipulating the icons.
 
     - INTERNET/INTRANET EXTENSIONS.  The Company's e-Business extensions allow
       Infinium customers to extend application functionality to their
       employees, customers, partners and suppliers through the Internet or
       their internal intranet. For example, employees are provided with secure
       access to their personnel information via the Internet/Intranet. Infinium
       e-Business extensions utilize IBM's Lotus Domino technology, running on
       the AS/400 or other supported Domino platforms, to extend the
       functionality of Infinium business to connect employees, customers,
       partners and suppliers to manage relationships, lower transaction costs
       and optimize business practices.
 
     - PRODUCTS OPTIMIZED FOR THE AS/400.  Infinium Software currently has a
       line of products specifically designed for the AS/400 computing
       environment. The Company's products take full advantage of the many
       unique characteristics of the AS/400 operating system and database to
       maximize performance for its customers.
 
WINDOWS NT PRODUCT LINE:
 
     The Company's product line for Windows NT servers is the result of a
combination of internal development and acquired technology. In January 1997,
the Company acquired Time Open Systems, Ltd. ("Time"), a privately-held
application software company based in Chatham, England. The products acquired
from Time form the foundation for the Company's Financials for Microsoft Windows
NT product line and its OneBook design. Subsequent to the acquisition, Infinium
significantly enhanced the product and introduced Infinium Financials for
Microsoft Windows NT in September 1997.
 
     In June 1998, the Company introduced its new Human Resource Management
application, Infinium Human Resources for Microsoft Windows NT. The product's
OneForce design offers unique capabilities in
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workforce management, giving companies using it the ability to track the skills
and competencies of their entire workforce, including employees, applicants,
contractors, and retirees. The OneForce design enables strategic management of
individuals and dynamic, cross-functional teams. In June 1998, the Company
acquired Cort Directions, Inc. ("Cort"), a privately held application software
vendor based in Bend, Oregon which offered a robust payroll application for
Microsoft Windows NT servers. The payroll system complements the OneForce design
of the human resource management system.
 
     In addition to Infinium Financials for Microsoft Windows NT and Infinium
Human Resources for Microsoft Windows NT, the Company is currently developing
new purchasing and inventory systems specifically designed and optimized for
Microsoft Windows NT.
 
     The design principals behind the Windows NT applications include:
 
     - TOTAL TEAM MANAGEMENT THROUGH THE ONEFORCE DESIGN.  Infinium's Human
       Resources for Microsoft Windows NT features a design that delivers
       instant access to one integrated source of workforce information from
       anywhere, at any time. The OneForce design provides up-to-the-minute,
       multiple profile access of an individual in an organization's workforce,
       regardless of current employment status, that flows back to a single
       portfolio of available talent. This design gives managers the knowledge
       and power to build and deploy world-class teams at the click of a mouse.
       Infinium believes service-based, team-oriented organizations looking to
       optimize the utilization of available workforce talent, skills, and
       knowledge will benefit from this design.
 
     - LOW COST, BEST-PRACTICE SELF-SERVICE CAPABILITIES.  Infinium's Human
       Resources for Microsoft Windows NT offers employee and manager
       self-service capabilities including Internet, intranet, and kiosks to
       enable remote users to easily retrieve data, update employee records and
       communicate with managers. The self-service capabilities help
       organizations dramatically reduce costs and errors associated with manual
       procedures. In addition, the OneForce design features time saving,
       collaborative workflow processes triggered by user-defined events.
 
     - BEST-PRACTICE ACCOUNTING THROUGH THE ONEBOOK DESIGN.  Infinium's
       Financials for Microsoft Windows NT features a design that delivers
       real-time financial management to dynamic growing organizations. All
       subledgers (such as accounts payable, accounts receivable) immediately
       post to the General Ledger system giving operating and financial managers
       the ability to always know where the company stands as of the last
       transaction without having to go through time consuming batch updates and
       adjustments at month end closes. The major advantage of this OneBook
       design is that time-consuming monthly closing cycles are substantially
       reduced.
 
     - PROJECT ACCOUNTING & CUSTOMER PROFITABILITY.  The Company's Financials
       for Microsoft Windows NT product has been designed for dynamic growing
       project-oriented service businesses. Companies that need to determine
       customer profitability by attributing associated revenues and expenses to
       a particular project or customer can easily do so with the Job Management
       module of the Company's Financials for Microsoft Windows NT product.
 
     - FLEXIBLE BUSINESS RULES.  The Company's Financials for Microsoft Windows
       NT products can be tailored to meet the specific needs of an organization
       quickly with business rules that are delivered with the applications. The
       application business rules can be modified by customers without changing
       the source code of the application. This design allows changes to be made
       without corrupting future enhancements delivered by the Company.
 
     - OPTIMIZED FOR MICROSOFT WINDOWS NT.  The Company has chosen to design and
       optimize its products exclusively on the Microsoft Windows NT operating
       system. The applications are built on Microsoft's DNA (Distributed
       iNternet Architecture) and take full advantage of Microsoft's Backoffice
       suite of products and technologies. The Company believes that optimizing
       its applications for use solely on Windows NT servers gives it an
       advantage over competitors whose applications are ported from UNIX or
       other operating systems.
 
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     - YEAR 2000 SUPPORT.  The Company's Microsoft Windows NT products are
       designed to support processing in the year 2000 and beyond. The Company
       is continuing to validate its products' ability to support Year 2000.
 
STRATEGY
 
     Infinium Software's objective is to be a leading provider of business
software applications for dynamic growing organizations. The Company believes
that the Microsoft Windows NT and the IBM AS/400 servers will be the two most
popular application software platforms for dynamic growing organizations because
they offer customers the lowest cost-of-ownership. These integrated computing
platforms shield customers from significant systems integration work and are
valued by resource-constrained organizations.
 
     The Company's AS/400 products are specifically designed and optimized for
use on the AS/400 operating system and database platforms for enterprise-level
use. Likewise, the Company's NT products are specifically designed and optimized
for use on the Microsoft Windows NT operating system and accompanying
components. The Company believes that application software products deliver the
best performance and reliability only when they are designed for specific target
computing platforms, and that products written in a "one size fits all" manner
to run on multiple platforms perform poorly on platforms other than the one for
which they were designed. The Company is committed to enhancing its core
competencies in the areas of financial management, human resource management,
materials management and process manufacturing and delivering systems which can
interoperate with other applications within an organization. The key elements of
the Company's strategy are:
 
     - BECOME A LEADING APPLICATION SOFTWARE SUPPLIER TO SERVICES INDUSTRIES.
       The Company's strategy is to increase its marketing activities and focus
       them on gaining market share in selected services industry sectors. The
       Company believes that the effective management of professional knowledge
       workers is becoming a critical requirement for success among service
       organizations, especially business and professional service
       organizations. Consequently, the Company believes its NT-based product
       line, revolving around its innovative human resource management system
       written with the OneForce design, offers significant competitive
       advantage to companies using it to make sure they match the right skills
       and competencies with the needs of their clients.
 
     - PROVIDE NETWORK CENTRIC SOLUTIONS TO THE AS/400 MARKET.  The Company
       targets dynamic growing organizations that use the IBM AS/400 server and
       plan to capitalize on network centric capabilities. The Company's server
       products were initially designed for the AS/400 and the Company had
       traditionally served the AS/400 market exclusively. The Company has added
       new capabilities to its AS/400 products supporting network computing. The
       Company believes that it has established a strong reputation and a loyal
       base of more than 1,400 customers within the AS/400 market, which it
       intends to continue to leverage with its new products.
 
     - PROVIDE INDUSTRY-LEADING APPLICATIONS FOR MICROSOFT WINDOWS NT
       SERVERS.  The Company's strategy is to focus a significant part of its
       new product development efforts on the Microsoft Windows NT server
       market, similar to the strategy it used to establish its position in the
       AS/400 market. The Company introduced its Financials for Windows NT
       series of products in fiscal 1997, its Human Resources and Payroll
       applications in fiscal 1998, and intends to build as well as acquire
       additional application products for the Microsoft Windows NT platform in
       fiscal 1999.
 
     - BUILD LONG TERM COMPETITIVE ADVANTAGE FOR ITS MICROSOFT WINDOWS NT
       PRODUCTS THROUGH USE OF NATIVE MICROSOFT CORE TECHNOLOGIES.  The Company
       believes that as the Microsoft Windows NT environment becomes more mature
       as an enterprise application software platform, customers will demand
       that applications take maximum advantage of all of NT's system
       capabilities. To deliver optimal systems capabilities, Infinium is
       designing its new internally-developed applications to be native to the
       Windows NT "DNA" technologies. The Company believes this design strategy
       will become an increasingly important purchasing criteria in the market
       for NT business applications, and that cross-platform applications or
       applications ported from UNIX will be at a disadvantage to applications
       designed expressly for the Microsoft DNA environment.
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     - INVEST TO DELIVER PRODUCT FEATURE/FUNCTION LEADERSHIP.  The Company plans
       to continuously enhance its products to respond to changes in customer
       requirements, improve functionality and performance, and incorporate
       relevant new technologies. In particular, the Company plans to deliver
       numerous enhancements to its Windows NT products, and incorporate
       Domino-based workflow and e-Business extensions for its AS/400 products.
 
     - PROVIDE WORLD CLASS IMPLEMENTATION CAPABILITIES.  The Company is
       continuing to invest in its people, infrastructure, and methodology to
       insure that our applications are implemented in a rapid, professional
       manner, as well as aggressively hiring experienced consulting
       professionals to maintain the growth and quality of the services
       business. The Company believes that customers select Infinium for its
       ability to provide a total solution with the right combination of
       software, consulting services, and professional customer support.
 
     - EXTEND THE CAPABILITIES OF PRODUCTS THROUGH COMPLEMENTARY RELATIONSHIPS
       AND ALLIANCES.  The Company will continue to develop relationships with
       third parties that provide software products that add value to the
       solution offered by the Company. Furthermore, the Company will continue
       to develop relationships with service providers who can supplement the
       Company's staff and assist in installing and customizing the Company's
       products and addressing customers' networking needs.
 
     - INCORPORATE INTERNET TECHNOLOGIES.  Infinium's Human Resources for
       Microsoft Windows NT is a complete Internet application. Through the
       Company's e-Business extensions, the Company has released enhancements to
       its AS/400 products that will enable them to operate over the Internet
       and within corporate intranets. The Company is also utilizing World Wide
       Web technologies to provide its customers with rapid and low-cost access
       to customer support and service applications through its electronic
       customer support offerings called Infinium Link and Infinium Weblink.
 
PRODUCTS
 
     Infinium Software offers enterprise-level business software applications
designed to automate the back-office operations of dynamic growing
organizations. The Company's products can function as stand-alone applications
or as integrated suites of applications and may be interfaced with products from
other vendors. The Company offers business applications that automate the
financial management, human resources management, materials management and
process manufacturing functions.
 
AS/400 PRODUCT LINE
 
     The Company's AS/400 series of products are server-based products that can
function in a traditional host/terminal configuration or in a network centric
configuration with a graphical user interface on the users' desktop. The
Company's Infinium Advanced Desktop object-oriented software products can be
added to the AS/400-based Financial Management, Human Resources or Materials
Management product lines to provide a network centric computing architecture. In
this configuration, some of the product functions traditionally provided by the
AS/400 host application are distributed to the users' personal computers,
providing more intuitive data access and analytical capabilities. The Infinium
Advanced Desktop and Desktop Manager products run under the Microsoft Windows
3.1, Windows 95, Windows 98, and Windows NT operating systems for personal
computers.
 
     The Infinium Advanced Desktop product line is designed to allow business
professionals to "mine" the information contained in the application databases
without knowledge of the underlying database structure. The Company believes
that Infinium's "drag and drop" object-oriented user interface is an advance
over standard graphical user interfaces because it represents the underlying
data in the form of graphical icons and allows the user to interactively access
data by manipulating the icons. For example, a user can simply drag the Vendor
icon and drop it on an Invoice icon to see the invoice data for that particular
company. Successive drag and drop operations can take the user to successively
lower levels of detail as needed. In addition, the data in an Infinium
application can be easily moved into popular spreadsheets or word processors for
incorporation into reports or presentations. As a result, users spend less time
searching for data and can devote more time to
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analysis and decision making. The Company believes that its object-oriented user
interface represents a competitive advantage in the business application
software market.
 
     The Company believes that the Infinium Advanced Desktop and Desktop Manager
architecture, which allows the Company's AS/400 applications to function as
either traditional host/terminal applications or object-oriented network centric
applications, provides the Company's base of more than 1,400 customers with a
means of migrating to network centric without replacing their existing Infinium
AS/400 business applications. This also offers a competitive solution to
customers seeking to combine the benefits of network centric computing with the
performance, stability and low cost of ownership of an AS/400 server-based
architecture.
 
     The AS/400 product suites and included applications currently offered by
Infinium Software are as follows:
 
     FINANCIAL MANAGEMENT
       Infinium FM Advanced
       General Ledger
       Payables Ledger
       Accounts Receivable
       Fixed Assets
       Currency Management
       Global Taxation
       Project Accounting
 
     MATERIALS MANAGEMENT
       Infinium MM Advanced
       Purchase Management
       Inventory Control
       Order Processing
HUMAN RESOURCES/PAYROLL
  Infinium HR Advanced
  Payroll
  Human Resources
  Flexible Benefits
  Training Administration
  Occupational Health
 
PROCESS MANUFACTURING
  Regulatory Management
  Formula Management
  Advanced Planning
  Manufacturing Control
  Laboratory Analysis
 
     FINANCIAL MANAGEMENT.  The Company's Financial Management products provide
key financial management and accounting functions for dynamic growing
organizations and business units of large companies. Infinium Financial
Management provides these applications with icon-based user access to the
underlying accounting, statistical and performance data through graphical "drag
and drop" operations. The Company's primary Financial Management applications
are currently available in English, French, German, Dutch and Spanish versions
for multi-national and international businesses. The current list license fees
for Financial Management server products range from $8,000 to $300,000 per
application. License fees vary based on a number of factors, including hardware
configuration, number of users and application options licensed.
 
     HUMAN RESOURCES/PAYROLL.  The Company's Human Resources/Payroll products
are designed to handle the requirements of dynamic growing organizations and
business units of large companies. For example one customer produces payroll for
more than 160,000 employees weekly using Infinium Software's Human Resources
products. Infinium HR Advanced provides these applications with icon-based user
access to the underlying accounting, statistical and performance data through
graphical "drag and drop" operations. While the Company offers versions of its
Human Resources systems for use around the world, the Payroll system is
localized and currently available for use in the United States, Canada, United
Kingdom, Australia, New Zealand, Spain, Sweden, Indonesia, Malaysia,
Philippines, and Thailand. The current list license fees for Human
Resources/Payroll server products range from $9,000 to $292,000 per application.
License fees vary based on a number of factors, including hardware
configuration, number of users and application options licensed.
 
     MATERIALS MANAGEMENT.  The Company's Materials Management products are
targeted mainly to non-manufacturing businesses, such as hospitals, hotels,
transportation companies, service organizations and utilities. These products
integrate closely with the Financial Management product line, and are often
considered an extension of the core financial applications. The current list
license fees for Materials
 
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Management products range from $15,000 to $191,000 per application. License fees
vary based on a number of factors, including hardware configuration, number of
users and application options licensed.
 
     PROCESS MANUFACTURING.  The Company's Process Manufacturing products cover
a full range of formula-based process manufacturing operations. These products
are fully integrated with the Company's Financial Management product line. The
current list license fees for Process Manufacturing products range from $15,000
to $191,000 per application. License fees vary based on a number of factors,
including hardware configuration, number of users and application options
licensed.
 
WINDOWS NT PRODUCT LINE
 
     The Company offers enterprise-level business software applications for
Microsoft Windows NT servers designed to automate the back-office and workforce
management operations of dynamic growing organizations. The Company's products
can function as stand-alone applications or as integrated suites of applications
and may be interfaced with products from other vendors. The Company currently
offers internally developed Microsoft Windows NT business applications that
automate the human resource management, payroll and financial management
functions, and is currently developing its purchasing and inventory applications
for Microsoft Windows NT.
 
     The Company's Microsoft Windows NT series of products are designed and
built for a Microsoft-standard architecture. Infinium's applications take full
advantage of Microsoft Back Office technologies, including Windows NT, ActiveX,
and Microsoft Transaction Server. The applications operate with the Microsoft
SQL Server database on Windows NT. In addition, the Company's Windows NT
applications will operate with the Oracle database on all supported Oracle
platforms, including Microsoft Windows NT.
 
     The Company's Financials for Windows NT applications are designed to give
corporate accounting departments and end users the ability to make better
business decisions and give faster responses, improving an organization's
ability to react quickly to changes in their business. Infinium's OneBook design
provides users with a single unified accounting system that improves the
efficiency and quality of information while significantly reducing the time and
costs of the monthly accounting closing cycle. All transactions recorded in the
detail ledgers (such as accounts payable, accounts receivable, etc.) are
immediately posted to the summary records in the general ledger. In this way,
the books are always up-to-date. Separate closing and reconciliation steps are
significantly removed. Accounting and operating managers can see business
activity and results at any time without needing to wait for a monthly closing
and reporting cycle. The OneBook design turns accounting systems into a real
time financial management system. The Company believes that the OneBook
capabilities provide a competitive advantage both to Infinium and to its
customers.
 
     The Company released its Human Resources for Windows NT applications in
1998. They allow businesses to automate the management of their entire workforce
using the OneForce design. The applications have been designed to include
features that support many of the emerging trends in human resource management,
including numerous sophisticated compensation planning and management features,
skill and competency-based tracking and querying, robust performance management
and monitoring features for both individuals and teams, extensive use of
Internet/intranet capabilities, employee and manager self service and numerous
other capabilities. Infinium has optimized the Human Resource solution for
professional service organizations whose primary asset is human capital -- the
skills and knowledge of their workforce. Infinium's Human Resources for NT
allows users to search their talent pool and manage relationships within the
entire workforce to strategically deploy the right team to the right project at
the right time.
 
     Infinium's acquisition of Cort in 1998 added a comprehensive payroll system
to augment the Human Resources for Microsoft Windows NT application suite. The
Cort Payroll system is designed to easily manage the most complex payroll
requirements, including job-based pay, cash and non-cash compensation
processing, multi-state taxing issues, retroactive pay, and non-standard pay
cycles. The payroll system features user-defined, rules based processing
capabilities, allowing users to customize the system for their unique
requirements without the need for custom programming or IS department support.
 
                                        8
<PAGE>   10
 
     Infinium believes that there have been dramatic changes in the workforce
over the past few years. Use of third party workers at all levels has risen
dramatically, yet most Human Resource systems are designed for tracking and
managing only employees or potential employees. Likewise, employee compensation
and benefit policies have changed and are no longer driven by longevity of
employment. Many industries are facing a shortage of skilled workers. The
Infinium Human Resources for NT product line was designed to help dynamic
growing organizations manage these and many other human resource management
issues as we approach the 21st century.
 
<TABLE>
<S>                                                <C>
INFINIUM FINANCIALS FOR MICROSOFT WINDOWS NT       HUMAN RESOURCES FOR MICROSOFT WINDOWS NT
  Infinium Ledger                                  Infinium Personnel
  Infinium Payables                                Infinium Benefits Administration
  Infinium Receivables                             Infinium Skill & Competency Management
  Infinium Job Management                          Infinium Performance Management
  Infinium Cash Book                               Infinium Recruiting
                                                   Infinium Compensation Management
                                                   Infinium Payroll
</TABLE>
 
CUSTOMER SUPPORT AND PRODUCT MAINTENANCE
 
     The Company believes that providing a high level of support to its
customers is a critical requirement for customer satisfaction and the long-term
success of the Company. The Company believes that it has established a strong
history of responsiveness to customer requirements and a high level of support,
which has resulted in a loyal customer base. As of September 30, 1998, the
Company had 94 employees in its customer support operations.
 
     The Company provides product updates and enhancements and customer support
services under an annual maintenance agreement. Initial maintenance fees are
based on a percentage of the list price of the licensed software products. The
renewal rate for annual maintenance agreements with customers for the Company's
products has been in excess of 90% for each of the previous three fiscal years.
 
     The Company's primary customer support center is located at the Company's
headquarters in Hyannis, Massachusetts. The Company also maintains support
operations in Bend, Oregon supporting the NT Payroll customers, and in its
United Kingdom and Singapore offices, servicing customers outside North America.
First-line support services for customers outside North America and the United
Kingdom are typically provided by the Company's independent distributors for
those areas. The Company also offers an electronic support capability, called
"Infinium Link," which is accessible over the Internet. It allows customers to
have 24 hour, 7 day per week access to product release information, product
bulletins and updates, and tip and technique information as well as to pursue
ordinary customer support dialogues.
 
CONSULTING AND EDUCATION SERVICES
 
     Infinium Software's consulting services organization provides fee-based
services, including implementation assistance, project management, application
extension or customization, integration with existing customer applications and
similar services to the Company's customers. The Company also trains and
certifies third-party organizations, such as consulting firms and system
integrators, to complement the Company's own service operation. The Company has
developed an implementation methodology called the ROI Methodology ("Return On
Investment") which offers a structure for companies together with Infinium to
rapidly implement the Company's solutions. The objective of the methodology is
to provide a proven implementation roadmap, that together with the Company's
business know how and expertise, facilitates a rapid implementation which
accelerates an organization's return on its software investment. The Company
believes that it is able to differentiate itself on its level of service, the
speed of implementation and the quality of personnel that it provides to
customers during the implementation cycle. The Company had 130 employees in its
consulting services organization as of September 30, 1998.
 
                                        9
<PAGE>   11
 
     The Company offers a comprehensive series of fee-based training courses to
its customers. Courses can be taken at the Company's headquarters in Hyannis,
Massachusetts, or at regional training centers in the Atlanta, Boston, Chicago,
Los Angeles, Oregon, London and Toronto metropolitan areas. Course offerings can
also be delivered at a customer's site.
 
CUSTOMERS
 
     The Company's products are used by more than 1,800 customers in a wide
range of industries. No single customer accounted for 10% or more of revenue in
fiscal years 1996, 1997 or 1998. A representative list of current major
customers, segmented by industry concentration, who are currently active on
maintenance with the Company and who have generated at least $100,000 in total
revenue during the last five years, is shown below:
 
AUTOMOTIVE
  Discount Auto Parts
  Mazda Motor of America
  Porsche Cars North America
  Rolls-Royce Motor Cars
  Volvo North America
 
CONSUMER PRODUCTS
  Nintendo of America
  NordicTrack
  Playtex Apparel
  Timberland
  Lost Arrow
 
FINANCIAL AND INSURANCE SERVICES
  Blue Cross and Blue Shield of Maryland
  Countrywide Credit Industries
  The FINOVA Group
  Texas Workers Insurance Compensation Fund
  Experian Information Systems
 
HEALTH CARE
  Tenet Healthcare
  Catholic Healthcare West
  Landmark Medical Center
  Optima Health
  York County Hospital
 
MANUFACTURING
  Alberta-Pacific Forest Industries
  Crown Cork & Seal Company
  General Electric Canada
  Harley-Davidson
  Saint Gobain Corporation
 
RESTAURANTS
  Arby's
  Baskin Robbins
  Brinker International
  McDonalds
  Red Robin
COMMUNICATIONS
  Hearst Magazines
  MCA/Universal Studios/MCA Records
  Newsweek Data Center
  USA Network
  Warner Bros. Records
 
DISTRIBUTION AND TRANSPORTATION
  BOC Distribution Services
  Burlington Motor Carriers
  M.S. Carriers
  Caliber Logistic Systems
  Maverick Transportation
 
FOOD AND BEVERAGE PROCESSING
  Blue Diamond Growers
  Coca-Cola Enterprises
  Sunkist Growers
  Sysco
  Universal Foods
 
HOSPITALITY
  Circus Circus Enterprises
  Promus Hotels
  Harrah's
  MGM Grand Hotel
  Mirage Resorts
 
BUSINESS AND PROFESSIONAL SERVICES
  Wackenhut Corporation
  Keane
  Todd AO Corporation
  Woodbridge Engineering
  BPI Financial Corporation
 
UTILITIES
  Northwestern Public Service Company
  Southern Union Company
  Florida Public Utilities Co.
  Buckeye Pipeline Company
  Pacific Energy
 
                                       10
<PAGE>   12
 
SALES AND MARKETING
 
     The Company offers its products and services through direct sales and
business partner channels throughout the world.
 
     Regional sales and consulting services offices are located in Atlanta,
Boston, Chicago, Los Angeles, Oregon, London, Toronto and Singapore. In
addition, the Company has authorized resellers that license Infinium
applications directly to customers. The Company also has a telesales operation
that markets training and consulting services to the Company's existing customer
base. The Company conducts comprehensive marketing programs that include
advertising, direct mail, telemarketing, seminars, public relations, trade shows
and customer relations. The Company's sales and marketing organizations
consisted of 182 employees as of September 30, 1998.
 
     The Company believes that its continued growth and profitability will
require it to expand its existing domestic and international sales channels. The
Company's strategy is to substantially expand its direct sales operations and
its network of independent distributors to provide a greater worldwide sales and
marketing presence for its products. The Company currently has relationships
with distributors, agents, and resellers world-wide.
 
PRODUCT DEVELOPMENT
 
     The Company devotes substantial resources to research and development in
order to enhance and maintain the competitiveness of its products. The Company's
research and development priorities fall into two principal areas: first, the
development of versions of the Company's products that operate on Microsoft
Windows NT, including development of new features and functions for the existing
NT applications, development of new NT applications and integration with third
party products running on Windows NT; and second, AS/400 product enhancements,
including the development of new product features and functions, the
incorporation of Internet/intranet-related technologies, the further
internationalization of the Company's product lines and integration with third
party complementary products.
 
     The Company maintains multiple research and development operations, located
in Hyannis, Massachusetts; Lexington, Massachusetts; London, England; Chatham,
England; and Paris, France. In addition, the Company uses outsourcing
relationships to supplement its internal development resources. For example, a
portion of the development activity on the Company's Human Resources for Windows
NT product line is currently being outsourced to NIIT in Delhi, India. The
Company has also entered into a development relationship with Cambridge
Technology Partners to develop new Microsoft Windows NT purchasing and inventory
applications. As of September 30, 1998, the Company had 165 employees in its
research and development operations, exclusive of contractors and consultants.
The Company's research and development spending was approximately $17.3 million,
$20.5 million, and $24.2 million for the fiscal years ended September 30, 1996,
1997 and 1998, respectively.
 
STRATEGIC RELATIONSHIPS
 
  IBM RELATIONSHIP
 
     Infinium Software has maintained a strategic relationship with IBM in a
number of key areas, including sales, marketing and research and development.
The Company participates in several formal and informal programs with IBM that
the Company believes affords it valuable experience with IBM's AS/400 products
and insights into IBM's marketing plans. The Company is one of IBM's designated
"Premier Business Partners" and has, in recent years, received numerous awards
and recognitions from IBM, including IBM's Mark of Quality for its high-quality
management practices and standards, the International Rightsizing Leadership
Award and the IBM National Business Partner of the Year Award.
 
     The Company is a member of IBM's Market Development Program and has
received funding and other assistance from IBM for the purposes of jointly
marketing the Company's products and IBM AS/400 systems. In 1998, the Company
participated in IBM's announcement of its pre-loaded "Infinium Custom Server",
which offers customers the ability to purchase an AS/400 server with Infinium
Applications preloaded and
 
                                       11
<PAGE>   13
 
shipped from IBM's manufacturing facility. In addition, in 1998 Infinium earned
"Server Proven" status for the Company's NT applications running on IBM's
Netfinity NT servers.
 
     As a prime provider of AS/400 business solutions, the Company has served as
a test site for new IBM AS/400 products, obtaining valuable early experience
with these technologies. The Company is a member of IBM's "Partners in
Development" program, providing IBM with feedback regarding the design and
development of the database and operating system of the AS/400 Advanced Server.
 
  MICROSOFT RELATIONSHIP
 
     Infinium Software has entered into a relationship with Microsoft
Corporation as part of the Company's overall strategy to provide a line of
application products for the Windows NT server platform. The relationship
includes participation in the Windows ISV Advisory Board, Microsoft Solution
Developers Program, Solution Providers Program, the Microsoft Global Summit and
other less formal programs. In 1998, the Company participated in the keynote
address at Microsoft's Internet World Conference to over 5,000 customers,
developers and press.
 
     The Company's Human Resources for Windows NT application is currently
running in the Microsoft Executive Briefing Center that Microsoft uses to
showcase Infinium and Microsoft technologies.
 
  SALES AND MARKETING RELATIONSHIPS
 
     The Company has entered into arrangements with several third party software
vendors to market their products along with the Infinium network centric product
lines in order to provide a more comprehensive solution to Infinium Software
customers. Those vendors include:
 
  FOR AS/400 PRODUCTS:
 
     - SHOWCASE CORPORATION, for its Strategy Server, Query and Report Writer
       products, which provide a network centric, graphical user interface for
       AS/400 query and report writing
 
     - FRX SOFTWARE CORPORATION, a provider of financial report writing, with
       remote distribution of reports via email or Internet
 
     - RIPPE AND KINGSTON SYSTEMS, INC., for its plant and facility
       maintenance/management and fleet management applications
 
     - PREMENOS CORPORATION, for its EDI/400 product line used in conjunction
       with the Infinium Software Materials Management and Process Manufacturing
       product suites
 
     - SKILLSET CORPORATION, for its Lotus Domino recruiting and applicant
       management software
 
     - MOMENTUM CORPORATION, for its Lotus Domino based automated employee
       expense reporting software
 
     - TIMELINE CORPORATION, a provider of budgeting and financial reporting
       products
 
     - KRONOS CORPORATION, a provider of time and attendance management products
 
  FOR WINDOWS NT PRODUCTS:
 
     - COGNOS CORPORATION, for its Impromptu query and reporting product and
       PowerPlay data analysis product
 
     - FRX SOFTWARE CORPORATION, a provider of financial report writing, with
       remote distribution of reports via e-mail or Internet
 
     - CONDUIT CORPORATION, for its Internet-based employee self service
       application for Human Resource Management
 
                                       12
<PAGE>   14
 
     - TIMELINE CORPORATION, a provider of budgeting and financial reporting
       products
 
     - BEST! SOFTWARE, a provider of asset management products
 
COMPETITION
 
     The business applications software market is highly competitive and rapidly
changing. A number of companies offer products similar to the Company's products
and target the same customers as the Company. The Company believes its ability
to compete depends upon many factors within and outside its control, including
the timely development and introduction of new products and product
enhancements, product functionality, performance, price, reliability, customer
service and support, sales and marketing efforts and product distribution.
 
     The Company's primary competitors are presently J.D. Edwards & Company,
Lawson Software, PeopleSoft and SAP AG. The Company believes, however, that
competition in its industry is undergoing rapid change and that the barriers to
competition between market segments that have previously existed are decreasing.
For example, SAP AG and PeopleSoft, which are currently major competitors within
the UNIX and the Microsoft Windows NT market, have entered the AS/400 market.
Due to the relatively low barriers to entry in the software market, the Company
expects additional competition from these and other emerging companies as the
business application software market continues to develop and expand. Many of
the Company's existing and potential competitors are substantially larger than
the Company and have significantly greater financial, technical and marketing
resources and have established extensive direct and indirect channels of
distribution. As a result, they may be able to respond more quickly to new or
emerging technologies and changes in customer requirements, or to devote greater
resources to the development, promotion and sale of their products than the
Company. The Company also expects that competition will increase as a result of
software industry consolidation. In addition, current and potential competitors
have established or may establish cooperative relationships among themselves or
prospective customers. Accordingly, it is possible that new competitors or
alliances among competitors may emerge and rapidly acquire significant market
share. Increased competition may result in price reductions, reduced gross
margins and loss of market share, any of which would have a material adverse
effect on the Company's business, results of operations and financial condition.
There can be no assurance that the Company will be able to compete successfully
against current or future competitors or that competitive pressure will not have
a material adverse effect on the Company's business, operating results and
financial condition.
 
INTELLECTUAL PROPERTY, PROPRIETARY RIGHTS AND LICENSES
 
     The Company regards certain features of its internal operations, software
and documentation as confidential and proprietary, and relies on a combination
of contract, copyright, trademark and trade secret laws and other measures to
protect its proprietary intellectual property. The Company has no patents, and
existing copyright laws afford only limited protection. The Company believes
that, because of the rapid rate of technological change in the computer software
industry, trade secret and copyright protection are less significant than
factors such as the knowledge, ability and experience of the Company's
employees, frequent product enhancements and the timeliness and quality of
support services.
 
     The Company provides its products to customers under non-exclusive,
nontransferable licenses. The Company generally licenses its products solely for
the customer's internal operations and only on designated computers. In certain
circumstances, the Company makes available enterprise-wide licenses. The Company
provides source code to its customers for certain of its products and has
escrowed its source code with a commercial bank for the benefit of all its
customers. The Company's provision of source code to its customers may increase
the likelihood of misappropriation or other misuse of the Company's intellectual
property.
 
     From time to time, the Company licenses software from third parties for use
with its products. The Company believes that no such license agreement to which
it is presently a party is material and that if any such license agreement were
to terminate for any reason, the Company would be able to obtain a license or
otherwise acquire other comparable technology or software on terms that would
not be materially adverse to the Company.
                                       13
<PAGE>   15
 
EMPLOYEES
 
     As of September 30, 1998, the Company had 658 full-time-equivalent
employees, including 182 in sales and marketing, 165 in product development, 224
in customer support and field services, and 87 in administration. The Company's
success will depend in large part upon its ability to continue to attract and
retain qualified employees. None of the Company's employees is represented by a
labor union or is subject to a collective bargaining agreement. The Company
believes that its relations with its employees are good.
 
ITEM 2.  PROPERTIES
 
     The Company is headquartered in Hyannis, Massachusetts, where it leases an
aggregate of 58,200 square feet of space. Administrative, marketing, product
development and customer support operations are located in the Hyannis space.
The Company is currently expanding this facility by 13,000 square feet to
accommodate growth in these functions. The Company also leases 30,900 square
feet of space in Lexington, Massachusetts and 12,000 square feet of space in
London, England which are shared for product development, marketing, and field
operations (sales and consulting services). The locations in Chatham, England
and Paris, France, where the Company leases 6,000, and 1,200 square feet,
respectively, are also used for product development operations. In addition, the
Company leases an aggregate of 53,500 square feet predominately for use by field
operations located in Atlanta, Chicago, Houston, Irvine, Louisville, Toronto,
Singapore and South Africa. Office facilities and suites are also being leased
for field representatives throughout various locations in North America
aggregating 2,000 square feet. The Cort Payroll Unit is located in Bend, Oregon,
in which the Company leases 12,300 square feet of space for support, field
operations, training, marketing, and administration of the Company's payroll
product for Windows NT. The Company believes that its existing facilities are
adequate to meet current needs and that suitable additional space will be
available as needed to accommodate any further physical expansion of corporate
operations and for additional sales and service field offices.
 
ITEM 3.  LEGAL PROCEEDINGS
 
     From time to time, the Company is involved in litigation relating to claims
arising out of its operations in the normal course of business. The Company is
not a party to any legal proceedings, the adverse outcome of which, individually
or in the aggregate, would have a material adverse effect on the Company's
results of operations or financial position.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     No matters were submitted during the fourth quarter of the fiscal year
ended September 30, 1998 to a vote of security holders of the Company, through
the solicitation of proxies or otherwise.
 
                                    PART II
 
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
     The information required by this item may be found in the section captioned
"Stock Information" appearing in the 1998 Annual Report to Stockholders, and is
incorporated herein by reference.
 
ITEM 6.  SELECTED FINANCIAL DATA
 
     The information required by this item may be found in the section captioned
"Selected Financial Data" appearing in the 1998 Annual Report to Stockholders,
and is incorporated herein by reference.
 
                                       14
<PAGE>   16
 
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS
 
     The information required by this item may be found in the section captioned
" Management's Discussion and Analysis of Financial Condition and Results of
Operations " appearing in the 1998 Annual Report to Stockholders, and is
incorporated herein by reference.
 
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
     Not applicable.
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     The information with respect to this item may be found in the 1998 Annual
Report to Stockholders, and is incorporated herein by reference and indexed by
reference under Item 14(a)(1) and (2) below.
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
 
     There have been no changes in or disagreements with accountants on
accounting or financial disclosure matters.
 
                                    PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The information required by this item with respect to the directors of the
Company is hereby incorporated by reference from the information contained under
the heading "Election of Directors" in the Company's definitive proxy statement
of the Company's 1998 Annual Meeting of Stockholders which will be filed with
the Securities and Exchange Commission within 120 days after the close of the
fiscal year (the "Definitive Proxy Statement").
 
     Certain information concerning directors and executive officers is hereby
incorporated by reference to the information contained under the headings
"Occupations of Directors and Executive Officers" and "Section 16(a) Beneficial
Ownership Compliance Reporting" in the Definitive Proxy Statement.
 
ITEM 11.  EXECUTIVE COMPENSATION
 
     The information required by this item is hereby incorporated by reference
to the information contained under the heading "Compensation of Executive
Officers" in the Definitive Proxy Statement.
 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The information required by this item is hereby incorporated by reference
to the information contained under the heading "Management and Principal Holders
of Voting Securities" in the Definitive Proxy Statement.
 
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     The information required by this item is hereby incorporated by reference
to the information contained under the heading "Certain Relationships and
Related Transactions" in the Definitive Proxy Statement.
 
                                       15
<PAGE>   17
 
                                    PART IV
 
ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K
 
(A)(1) INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
     The following Consolidated Financial Statements of the Company are included
in the Company's 1998 Annual Report to Stockholders and are incorporated herein
by reference:
 
        Report of independent accountants;
 
        Consolidated balance sheet at September 30, 1997 and 1998;
 
        Consolidated statement of operations for the years ended September 30,
           1996, 1997 and 1998;
 
        Consolidated statement of stockholders' equity for the years ended
           September 30, 1996, 1997 and 1998;
 
        Consolidated statement of cash flows for the years ended September 30,
           1996, 1997 and 1998;
 
        Notes to consolidated financial statements.
 
     The Company's 1998 Annual Report to Stockholders is not to be deemed filed
as part of this report except for those parts thereof specifically incorporated
herein by reference.
 
(A)(2) INDEX TO FINANCIAL STATEMENT SCHEDULES
 
     The following Financial Statement Schedules of the Company are filed as
part of this Report:
 
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Schedule I Report of Independent Accountants on Financial
  Statement Schedule........................................  S-1
Schedule II Valuation and Qualifying Accounts and
  Reserves..................................................  S-2
</TABLE>
 
     Schedules not listed above have been omitted because they are not
applicable, not required, or the information required to be set forth therein is
included in the consolidated financial statements or the notes thereto.
 
(A)(3) INDEX TO EXHIBITS
 
     See attached Index to Exhibits.
 
(B) REPORTS ON FORM 8-K
 
     No reports on Form 8-K have been filed during the last quarter of fiscal
1998.
 
                                       16
<PAGE>   18
 
                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, this 23rd
day of December 1998.
 
                                          INFINIUM SOFTWARE, INC.
 
                                          By:   /s/ DANIEL J. KOSSMANN
                                          --------------------------------------
                                                    Daniel J. Kossmann
                                            Vice President and Chief Financial
                                                         Officer
 
     We the undersigned officers and directors of Infinium Software, Inc.,
hereby severally constitute and appoint Frederick J. Lizza and Daniel J.
Kossmann, and each of them singly, our true and lawful attorneys, with full
power to them and each of them singly, to sign for us in our names in the
capacities to do all things in our names and on behalf in such capacities to
enable Infinium Software, Inc. to comply with the provisions of the Securities
Exchange Act of 1934, as amended, and all requirements of the Securities
Exchange Commission.
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
 
<TABLE>
<CAPTION>
                   SIGNATURE                                     TITLE                       DATE
                   ---------                                     -----                       ----
<S>                                                 <C>                                <C>
 
/s/ ROBERT A. PEMBERTON                             Chairman of the Board and          December 23, 1998
------------------------------------------------    Director
      Robert A. Pemberton
 
/s/ FREDERICK J. LIZZA                              President, Chief Executive         December 23, 1998
------------------------------------------------    Officer and Director
      Frederick J. Lizza                            (Principal Executive Officer)
 
/s/ DANIEL J. KOSSMANN                              Chief Financial Officer,           December 23, 1998
------------------------------------------------    (Principal Financial and
      Daniel J. Kossmann                            Accounting Officer)
 
/s/ R. STEPHEN CHEHEYL                              Director                           December 23, 1998
------------------------------------------------
      R. Stephen Cheheyl
 
/s/ MANUEL CORREIA                                  Director                           December 23, 1998
------------------------------------------------
      Manuel Correia
 
/s/ ROLAND D. PAMPEL                                Director                           December 23, 1998
------------------------------------------------
      Roland D. Pampel
 
/s/ ROBERT P. SCHECHTER                             Director                           December 23, 1998
------------------------------------------------
      Robert P. Schechter
</TABLE>
 
                                       17
<PAGE>   19
 
                                                                      SCHEDULE I
 
       REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENTS SCHEDULE
 
To the Board of Directors of
Infinium Software, Inc.:
 
     Our audits of the consolidated financial statements referred to in our
report dated October 20, 1998 appearing on page 26 of the 1998 Annual Report to
Shareholders of Infinium Software, Inc. (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the Financial Statement Schedule listed in Item
14(a)(2) of this Form 10-K. In our opinion, the Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
 
PricewaterhouseCoopers LLP
 
Boston, Massachusetts
October 20, 1998
 
                                       F-1
<PAGE>   20
 
                                                                     SCHEDULE II
 
                            INFINIUM SOFTWARE, INC.
 
                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                 (IN THOUSANDS)
 
--------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                          COLUMN C
             COLUMN A               COLUMN B      CHARGED TO     CHARGED TO      COLUMN D      COLUMN E     COLUMN F
           DESCRIPTION              BEGINNING      EXPENSE         OTHER        DEDUCTIONS      OTHER        ENDING
--------------------------------------------------------------------------------------------------------------------
 
<S>                                 <C>           <C>            <C>            <C>            <C>          <C>
FY 1998
Allowance for Doubtful Accounts...   $1,569          $977            $--          $(916)         $ 20        $1,650
FY 1997
Allowance for Doubtful Accounts...    1,250           397            --            (243)          165         1,569
FY 1996
Allowance for Doubtful Accounts...    1,145           662            --            (557)                      1,250
</TABLE>
 
                                       S-1
<PAGE>   21
 
                            INFINIUM SOFTWARE, INC.
 
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
EXHIBIT
  NO.                                  DESCRIPTION
-------                                -----------
<S>       <C>  <C>
 3.1       --  Second Restated Articles of Organization of the Registrant
               (incorporated by reference to Exhibit 3.2 to the
               Registrant's Registration Statement on Form S-1,
               Registration No. 33-97866).
 3.2       --  Articles of Amendment of the Company (incorporated by
               reference to Exhibit 3(I) to the Company's Form 10-Q for the
               quarterly period ended March 31, 1997).
 3.3       --  Third Amended and Restated By-Laws of the Company
               (incorporated by reference to Exhibit 3(I) to the Company's
               Form 10-Q for the quarterly period ended March 31, 1997).
 4.1       --  Specimen certificate representing the Common Stock
               (incorporated by reference to Exhibit 4 to the Company's
               Form 10-Q for the quarterly period ended March 31, 1997)
10.1*      --  1984 Incentive Stock Option Plan, as amended as of August
               23, 1988 (incorporated by reference to Exhibit 10.1 to the
               Registrant's Registration Statement on Form S-1,
               Registration No. 33-97866).
10.2*      --  1989 Stock Option Plan, as amended as of October 1, 1994
               (incorporated by reference to Exhibit 10.2 to the
               Registrant's Registration Statement on Form S-1,
               Registration No. 33-97866).
10.3*      --  1995 Stock Plan (incorporated by reference to Exhibit 10.3
               to the Registrant's Registration Statement on Form S-1,
               Registration No. 33-97866).
10.4*      --  1995 Employee Stock Purchase Plan (incorporated by reference
               to Exhibit 10.4 to the Registrant's Registration Statement
               on From S-1, Registration No. 33-97866).
10.5*      --  1995 Non-Employee Director Stock Option Plan (incorporated
               by reference to Exhibit 10.5 to the Registrant's
               Registration Statement on Form S-1, Registration No.
               33-97866).
10.6       --  Lease dated March 31, 1995 between the Registrant and
               Independence Park Associates Realty Trust as of August 1995
               (incorporated by reference to Exhibit 10.6 to the
               Registrant's Registration Statement on Form S-1,
               Registration No. 33-97866).
10.7*      --  Form of Executive Compensation Plan (incorporated by
               reference to Exhibit 10.9 to the Registrant's Registration
               Statement on Form S-1, Registration No. 33-97866).
10.8       --  IBM Assistance Agreement, as amended as of June 30, 1995,
               between the Registrant and International Business Machines
               Corporation (incorporated by reference to Exhibit 10.10 to
               the Registrant's Registration Statement on Form S-1,
               Registration No. 33-97866).
10.9*      --  Form of 1995 Stock Plan Option Agreement (incorporated by
               reference to Exhibit 10.16 to the Registrant's Registration
               Statement on Form S-1, Registration No. 33-97866).
10.10*     --  Register of Amendments, Subsections 3.1 and 7.3.4, 1989
               Stock Option Plan (incorporated by reference to Exhibit
               10.17 to the Registrant's Registration Statement on Form
               S-1, Registration No. 33-97866).
10.11*     --  Register of Amendments, Article 5, 1995 Employee Stock
               Purchase Plan (incorporated by reference to Exhibit 10.18 to
               the Registrant's Registration Statement on Form S-1,
               Registration No. 33-97866).
13.1       --  1998 Annual Report to Stockholders (which shall be deemed
               filed only with respect to those portions specifically
               incorporated by reference herein).
21.1       --  Subsidiaries of the Registrant.
23.1       --  Consent of PricewaterhouseCoopers LLP.
24.1       --  Power of Attorney (included on page 17).
27         --  Financial Data Schedule
</TABLE>
 
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* Indicates a management contract or any compensatory plan, contract or
  arrangement required to be filed as an exhibit to Item 14(c).
 
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