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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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MAY 7, 1997
(DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED))
THE BISYS GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 33-45417 13-3532663
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NUMBER)
150 CLOVE ROAD 07424
LITTLE FALLS, NEW JERSEY (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(201) 812-8600
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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ITEM 5. OTHER EVENTS.
SHAREHOLDER RIGHTS AGREEMENT
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On May 7, 1997, the Board of Directors of The BISYS Group, Inc. (the
"COMPANY") declared a dividend distribution of one right ("RIGHT") for each
outstanding share of the Company's Common Stock, par value $.02 per share
("COMPANY COMMON STOCK"), to stockholders of record at the close of business on
May 16, 1997 (the "RECORD DATE") and for each share of Company Common Stock
issued (including shares distributed from the Company's treasury) by the Company
thereafter and prior to the Distribution Date (as defined below). Each Right
entitles the registered holder, subject to the terms of the Rights Agreement (as
defined below), to purchase from the Company one share of Company Common Stock
on the date of exercise at a purchase price of $175.00 per share, in cash (the
"PURCHASE PRICE"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "RIGHTS AGREEMENT") between the
Company and The Bank of New York, as Rights Agent (the "RIGHTS AGENT").
Initially, the Rights will attach to all certificates representing shares
of outstanding Company Common Stock, and no separate Rights certificates will be
distributed. The Rights will separate from the Company Common Stock and the
"DISTRIBUTION DATE" will occur upon the earliest to occur of (i) 10 business
days following a public announcement (the date of such announcement being the
"STOCK ACQUISITION DATE") that (a) a person or group of affiliated or associated
persons (an "ACQUIRING PERSON") has acquired, obtained the right to acquire, or
otherwise obtained beneficial ownership of 15% or more of the then outstanding
shares of Company Common Stock or (b) a majority of the Continuing Directors (as
defined in the Rights Agreement) of the Company has, in accordance with the
criteria set forth in the Rights Agreement, declared a person who beneficially
owns at least 10% of the then outstanding shares of Company Common Stock to be
an "ADVERSE PERSON," (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
becomes an Acquiring Person) following the commencement of a tender offer or
exchange offer that would result in a person or group beneficially owning 15% or
more of the then outstanding shares of Company Common Stock (other than a tender
or exchange offer for all outstanding shares of Company Common Stock at a price
and on terms that a majority of the Continuing Directors of the Company
determines to be fair to and otherwise in the best interests of the Company and
its stockholders), and (iii) the date on which it is publicly announced that a
person or group has become the beneficial owner of 40% or more of the then
outstanding shares of Company Common Stock. Until the Distribution Date, (i)
the Rights will be evidenced by Company Common Stock certificates and will be
transferred with and only with such Company Common Stock certificates, (ii) new
Company Common Stock certificates issued after the Record Date (including shares
distributed from the Company's treasury) will contain a notation incorporating
the Rights Agreement by reference and (iii) the surrender for transfer of any
certificates evidencing outstanding Company Common Stock will also constitute
the transfer of the Rights associated with the Company Common Stock evidenced by
such certificates.
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The Rights are not exercisable until the Distribution Date and will expire
at the close of business on May 16, 2007, unless the Rights are earlier redeemed
or exchanged by the Company.
As soon as practicable after the Distribution Date, separate Certificates
evidencing the Rights ("RIGHTS CERTIFICATES") will be mailed to holders of
record of Company Common Stock as of the close of business on the Distribution
Date and, thereafter, the separate Rights Certificates alone will represent the
Rights.
In the event (a "FLIP-IN EVENT") that (i) a person becomes an Acquiring
Person (other than pursuant to a Flip-Over Event (as defined below)), (ii) a
majority of the Continuing Directors of the Company declares a person to be an
Adverse Person, (iii) the Company is the surviving corporation in a merger with
an Acquiring Person and shares of Company Common Stock shall remain outstanding,
(iv) an Acquiring Person or an Adverse Person engages in one or more
"self-dealing" transactions specified in the Rights Agreement, or (v) during
such time as there is an Acquiring Person or an Adverse Person, an event occurs
which results in such Acquiring Person's or Adverse Person's ownership interest
being increased by more than 1% (E.G., by means of a reverse stock split or
recapitalization), THEN, in each such case, each holder of a Right will
thereafter have the right to receive, upon exercise, shares of Company Common
Stock (or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Right. The
exercise price is the Purchase Price multiplied by the number of shares of
Company Common Stock issuable upon exercise of a Right prior to the Flip-In
Event. Notwithstanding the foregoing, following the occurrence of any Flip-In
Event all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person or Adverse
Person (or by certain related parties) will be null and void.
In the event (a "FLIP-OVER EVENT") that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or other business
combination transaction and the Company is not the surviving corporation, (ii)
any person consolidates or merges with the Company and all or part of the
Company Common Stock is converted or exchanged for securities, cash or property
of any other Person, or (iii) 50% or more of the Company's assets or earning
power is sold or transferred, THEN, in each such case, each holder of a Right
(except Rights which previously have been voided as described above) shall
thereafter have the right to receive, upon exercise, common stock of the
Acquiring Person or Adverse Person having a value equal to two times the
exercise price of the Right.
The Purchase Price payable, and the number of shares of Company Common
Stock issuable, upon exercise of the Rights are subject to adjustment from time
to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Company Common Stock, (ii)
if holders of the Company Common Stock are granted certain rights or warrants to
subscribe for Company Common Stock or convertible securities at less than the
current market price of the Company Common Stock, or (iii) upon the distribution
to the holders of the Company Common Stock of evidences of indebtedness, cash or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
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With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional shares of Company Common
Stock. In lieu thereof, an adjustment in cash may be made based on the market
price of the Company Common Stock prior to the date of exercise.
At any time prior to the Distribution Date, a majority of the Continuing
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.0025 per Right (the "REDEMPTION PRICE"), subject to adjustment in
certain events, payable, at the election of such majority of the Continuing
Directors, in cash, shares of Company Common Stock or such other form of
consideration as the Continuing Directors may determine. Immediately upon
effectiveness of the action of a majority of the Continuing Directors ordering
the redemption of the Rights, the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
At any time prior to the Distribution Date, the Company may exchange the
Rights (other than Rights owned by an Acquiring Person or an Adverse Person, or
an affiliate or an associate of an Acquiring Person or an Adverse Person, which
will have become void), in whole or in part, for shares of Company Common Stock
at an exchange ratio determined as provided in the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. Following exercise, the holder's rights will
be determined by the type of consideration received upon the exercise. Although
the distribution of the Rights should not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize taxable
income in the event that the Rights become exercisable for shares of Company
Common Stock (or other consideration) or are exchanged as provided in the
preceding paragraph.
The provisions of the Rights Agreement may be amended without the approval
of the holders of Company Common Stock at any time prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement may
be amended in order to cure any ambiguity, defect or inconsistency, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or Adverse Person), or to
shorten or lengthen any time period under the Rights Agreement; PROVIDED,
HOWEVER, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
The rights of holders of the Company Common Stock to dividends, liquidation
and voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions.
The Rights may have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by a majority of the Continuing Directors of the Company,
unless the offer is conditioned on a
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substantial number of Rights being acquired. However, the Rights should not
interfere with any merger or other business combination approved by a majority
of the Continuing Directors because the Rights may be redeemed by the Company at
$.0025 per Right at any time on or prior to the tenth business day following the
Stock Acquisition Date (subject to extension by a majority of the Continuing
Directors); PROVIDED, HOWEVER, that the rights will cease to be redeemable if
any person or group acquires beneficial ownership of 40% or more of the
outstanding Company Common Stock. Thus, the Rights are intended to encourage
persons who may seek to acquire control of the Company to initiate such an
acquisition through negotiations with the Board of Directors. However, the
effect of the Rights may be to discourage a third party from making a partial
tender offer or otherwise attempting to obtain a substantial equity position in
the equity securities of, or seeking to obtain control of, the Company. To the
extent any potential acquirors are deterred by the Rights, the Rights may have
the effect of preserving incumbent management in office.
A copy of the Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights is attached as Exhibit 7.1 and is
incorporated herein by reference. The foregoing description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
full text of the Rights Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibit 7.1 Rights Agreement, dated as of May 8, 1997, by and between
The BISYS Group, Inc. and The Bank of New York, as Rights
Agent (including the form of Rights Certificate as Exhibit
A).
Exhibit 7.2 Press Release issued by The BISYS Group, Inc. on May 8, 1997
announcing the adoption of the Rights plan.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report Form 8-K to be signed on its behalf by
the undersigned, hereunto duly authorized.
May 8, 1997
THE BISYS GROUP, INC.
By: /s/ Robert J. McMullan
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Robert J. McMullan
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No. Description
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Exhibit 7.1 Rights Agreement, dated as of May 8, 1997, by and
between The BISYS Group, Inc. and The Bank of New
York, as Rights Agent (including the form of
Rights Certificate as Exhibit A).
Exhibit 7.2 Press Release issued by The BISYS Group, Inc. on
May 8, 1997 announcing the adoption of the Rights
plan.
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