SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to [S] 240.14a-12
JACK HENRY & ASSOCIATES, INC.
-----------------------------------------------
(Name of Registrant as Specified in its Charter)
------------------------------------------------------------------------
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computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
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JACK HENRY & ASSOCIATES, INC.
663 Highway 60, P.O. Box 807
Monett, Missouri 65708
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF JACK HENRY & ASSOCIATES, INC.:
PLEASE TAKE NOTICE that the 2001 Annual Meeting of Stockholders of Jack
Henry & Associates, Inc., a Delaware corporation, will be held at the Monett
City Park Casino, Monett, Missouri, on Tuesday, October 30, 2001, 11:00
a.m., local time, for the following purposes:
(1) To elect six (6) directors to serve until the 2002 Annual Meeting
of Stockholders;
(2) To transact such other business as may properly come before the
Annual Meeting and any adjournments thereof.
The close of business on September 24, 2001, has been fixed as the record
date for the Annual Meeting. Only stockholders of record as of that date
will be entitled to notice of and to vote at said meeting and any
adjournment or postponement thereof.
The accompanying form of Proxy is solicited by the Board of Directors of the
Company. Reference is made in the attached Proxy Statement for further
information with respect to the business to be transacted at the Annual
Meeting.
ALL STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU EXPECT TO ATTEND, PLEASE DATE AND SIGN THE ENCLOSED PROXY. IF YOU DECIDE
TO ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN
PERSON.
By Order of the Board of Directors
Janet E. Gray
Secretary
Monett, Missouri
September 25, 2001
JACK HENRY & ASSOCIATES, INC.
663 Highway 60, P.O. Box 807
Monett, Missouri 65708
PROXY STATEMENT
FOR THE 2001 ANNUAL MEETING OF STOCKHOLDERS
To Be Held Tuesday, October 30, 2001
This Proxy Statement and the enclosed proxy card (the Proxy) are furnished
to the stockholders of Jack Henry & Associates, Inc., a Delaware corporation
(the Company), in connection with the solicitation of Proxies by the
Company's Board of Directors for use at the 2001 Annual Meeting of
Stockholders, and any adjournment or postponement thereof (the Annual
Meeting), to be held at the Monett City Park Casino, Monett, Missouri, at
11:00 a.m., local time, on Tuesday, October 30, 2001. The mailing of this
Proxy Statement, the Proxy, the Notice of Annual Meeting and the
accompanying 2001 Annual Report to Stockholders is expected to commence on
or about October 4, 2001.
The Board of Directors does not intend to bring any matters before the
Annual Meeting except those indicated in the Notice and does not know of any
matter which anyone else proposes to present for action at the Annual
Meeting. If any other matters properly come before the Annual Meeting,
however, the persons named in the accompanying form of Proxy, or their duly
constituted substitutes, acting at the Annual Meeting, will be deemed
authorized to vote or otherwise to act thereon in accordance with their
judgment on such matters.
If the enclosed Proxy is properly executed and returned prior to voting at
the Annual Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. Each proposal, including
the election of directors, will require the affirmative vote of a majority
of the shares of common stock voting in person or by Proxy at the Annual
Meeting.
Any stockholder executing a Proxy retains the power to revoke it at any time
prior to the voting of the Proxy. It may be revoked by a stockholder
personally appearing at the Annual Meeting and casting a contrary vote, by
filing an instrument of revocation with the Secretary of the Company, or by
the presentation at the Annual Meeting of a duly executed later dated Proxy.
VOTING
At the 2001 Annual Meeting, Stockholders will consider and vote upon:
(1) The election of six (6) directors; and
(2) Such other matters as may properly come before the Annual Meeting.
Only stockholders of record at the close of business on September 24, 2001,
the record date for the Annual Meeting, are entitled to notice of and to
vote at such meeting. Stockholders are entitled to one vote for each share
of Common Stock on each matter to be considered at the Annual Meeting.
The Company's authorized capital stock currently consists of 250,000,000
shares of common stock, par value $.01 per share (the Common Stock), and
500,000 shares of preferred stock, par value $1.00 per share (the Preferred
Stock). As of August 24, 2001, there were 89,043,335 shares of Common Stock
outstanding and no shares of Preferred Stock outstanding. At such date,
our executive officers and directors were entitled to vote, or to direct the
voting, of 22,184,983 shares of Common Stock, representing 24.9% of the
shares entitled to vote at the 2001 Annual Meeting. Unless otherwise
specified, all share numbers and other share data have been adjusted to
reflect all prior stock splits.
All shares represented by Proxy and all Proxies solicited hereunder will be
voted in accordance with the specifications made by the stockholders
executing such Proxies. If a stockholder does not specify how a Proxy is to
be voted, the shares represented thereby will be voted: (1) FOR the election
as directors of the six (6) persons nominated by management; and (2) upon
other matters that may properly come before the Annual Meeting, in
accordance with the discretion of the persons to whom the Proxy is granted.
STOCK OWNERSHIP OF CERTAIN STOCKHOLDERS
The following table sets forth information as of August 24, 2001, concerning
the equity ownership of those individuals who are known to be the beneficial
owners, as defined in Rule 13d-3 of the Securities Exchange Act of 1934, of
5% or more of the Company's Common Stock, and by all of our directors and
executive officers as a group:
Name and Address of Number of Shares Percentage of Shares
Title of Class Beneficial Owner Beneficially Owned (1) Outstanding (1)
-------------- ------------------- ---------------------- ---------------
$.01 par value Michael E. Henry, 10,988,129 (2) 12.3%
Common Stock Vicki Jo Henry
and JKHY Partners
663 Highway 60
Monett, MO
Jerry D. Hall 5,430,021 (3) 6.1%
663 Highway 60
Monett, MO
All directors and 22,184,983 (4) 24.9%
executive officers as
a group (8 persons)
(1) The persons named in the table have sole voting and investment power
with respect to all shares of Common Stock shown as beneficially owned
by them, except as noted below. With respect to shares held in the
Company's 401(k) Employee Stock Ownership Plan (the 401(k) ESOP), a
participant has the right to direct the voting and disposition of
shares allocated to his account.
(2) Reflects information in filings with the SEC by Michael E. Henry, his
sister Vicki Jo Henry and JHKY Partners, their family partnership.
Michael E. Henry separately may be deemed to beneficially own
10,988,129 shares, including 148,836 shares held individually, 65,193
shares allocated to his 401(k) ESOP account, 1,190,000 shares currently
acquirable by exercise of outstanding stock options, 5,690,000 shares
held by the Partnership, 3,294,100 shares held in a living trust and
600,000 shares held by the Henry Family Limited Partnership, both
established by his mother, Eddina F. Mackey. Michael E. Henry may be
deemed to share beneficial ownership in the shares held by the JKHY
Partners, by the Eddina F. Mackey Trust and by the Henry Family Limited
Partnership because he has been granted proxies to vote such shares.
Vicki Jo Henry does not beneficially own any shares of common stock in
her individual capacity and her business address is 6851 South Holly
Circle, Suite 270, Englewood, Colorado, 80112. The business address of
Michael E. Henry and the Partnership is reflected in the table.
(3) Includes 194,974 shares held in the Company's 401(k) ESOP for Mr.
Hall's account and 210,000 shares beneficially owned by his wife.
(4) Includes 2,002,400 shares which are or will be acquirable within 60
days under outstanding stock options, and 435,967 shares held in the
Company's 401(k) ESOP for the accounts of all officers and directors as
a group.
PROPOSAL 1
ELECTION OF DIRECTORS
Procedure
At the meeting, the stockholders will elect six (6) directors to hold office
for one-year terms ending at the 2002 Annual Meeting of Stockholders or
until their successors are elected and qualified. The Board of Directors has
nominated the Company's six (6) current directors for reelection at the
Annual Meeting.
The stockholders are entitled to one vote per share on each matter submitted
to vote at any meeting of the Stockholders. Unless contrary instructions are
given, the persons named in the enclosed Proxy or their substitutes will
vote "FOR" the election of the nominees named below.
Each of the nominees has consented to serve as director for a one-year term.
However, if any nominee at the time of election is unable to serve or is
otherwise unavailable for election, and as a result other nominees are
designated by the Board of Directors, the persons named in the enclosed
Proxy or their substitutes intend to vote for the election of such
designated nominees.
Nominees For Election
The directors and nominees for election as directors of the Company, as well
as certain information about them, are as follows:
Number of Shares Percentage of
Position with Director Beneficially Shares
Name Company Since Owned (1) Outstanding (1)
---- ------------- ----- ---------------- ---------------
Michael E. Henry Chairman, Chief 1986 10,988,129 12.3%
Executive Officer (2)
and Director
John W. Henry Vice Chairman, 1977 3,413,598 3.8%
Senior Vice (3)
President and
Director
Jerry D. Hall Executive Vice 1977 5,430,021 6.1%
President and (4)
Director
James J. Ellis Director 1985 560,380 *
(5)
Burton O. George Director 1987 330,636 *
(5)
George R. Curry Director 1989 727,812 *
(5)
*Less than 1%
(1) Information is set forth as of August 24, 2001. The persons named in
the table have sole voting and investment power with respect to all
shares of Common Stock shown as beneficially owned by them, except as
noted below. With respect to shares held in the Company's 401(k)
Employee Stock Ownership Plan (the 401(k) ESOP), a participant has the
right to direct the voting and disposition of shares allocated to his
account.
(2) See Stock Ownership of Certain Stockholders - Footnote (2), above.
(3) Includes 169,321 shares held in the Company's 401(k) ESOP for Mr.
Henry's account.
(4) Includes 194,974 shares held in the Company's 401(k) ESOP for Mr.
Hall's account and 210,000 shares beneficially owned by his wife.
(5) Each includes 180,000 shares that are currently acquirable by exercise
of outstanding stock options.
The following information relating to the Company's directors and nominees
for director, all of whom are United States citizens, is with respect to
their principal occupations and positions during the past five years:
Michael E. Henry, age 40, Chairman of the Board, Chief Executive Officer and
Director. Mr. Henry, the son of John W. Henry and a director of the Company
since 1986, has served as Chairman of the Board and Chief Executive Officer
since October, 1994. He previously served as Vice Chairman and Senior Vice
President from 1993 to 1994. He served as Manager of Research and
Development from 1983 to 1993. He joined the Company in 1979.
John W. Henry, age 66, Vice Chairman, Senior Vice President and Director.
Mr. Henry, a founder and principal stockholder of the Company, has served as
Vice Chairman since October, 1994. He previously served as Chairman of the
Board from 1977 through 1994. He also has been a director since the
Company's incorporation in 1977. He previously served as Chief Executive
Officer from 1977 through 1988 and as President until 1989.
Jerry D. Hall, age 58, Executive Vice President and Director. Mr. Hall, a
principal stockholder of the Company, has served as Executive Vice President
since October, 1994. He previously served as Chief Executive Officer from
1990 through 1994. He also has been a director since the Company's
incorporation in 1977. He previously served as President from 1989 through
1993 and as Vice President-Operations from 1977 through 1988.
James J. Ellis, age 68, Director. Mr. Ellis, a director of the Company since
1985, has been Managing Partner of Ellis/Rosier Financial Services since
1992. Mr. Ellis served as general manager of MONY Financial Services,
Dallas, Texas, from 1979 until his retirement in 1992. Mr. Ellis also serves
as a director of Merit Medical Systems, Inc.
Burton O. George, age 74, Director. Mr. George, a director of the Company
since 1987, is retired. He previously had been in the banking business since
1958, and most recently served as Chairman of the Board and Chief Executive
Officer of First National Bank of Berryville, Berryville, Arkansas from 1985
through 1989.
George R. Curry, age 76, Director. Mr. Curry, a director of the Company
since 1989, is Vice Chairman of Central Bank, Lebanon, Missouri, with which
he has been affiliated since 1949, as well as President of Central Shares,
Inc., a bank holding company.
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held six (6) meetings during the last fiscal year.
The Board maintains an Audit Committee and a Compensation Committee of which
Messrs. Curry, George and Ellis are members. The Board does not maintain a
standing Nominating Committee. Each director attended at least 75% of all
meetings of the Board of Directors and all committees on which they served.
The Compensation Committee establishes and reviews the compensation and
benefits of the Executive Officers, considers incentive compensation plans
for our employees and carries out duties assigned to the Committee under our
stock option plans and our employee stock purchase plan. The Audit
Committee makes recommendations to the Board regarding the selection and
retention of an independent auditor, reviews the scope and results of the
audit with the independent auditor and management, reviews and evaluates our
audit and control functions, and regularly reviews regulatory compliance
matters pertaining to our outsourcing services and business recovery
operations. The Audit Committee operates under a written Audit Committee
Charter that has been adopted by the Board of Directors, a copy of which is
attached to this Proxy Statement as Exhibit A. The Audit Committee met
eight (8) times and the Compensation Committee met once during the last
fiscal year.
AUDIT COMMITTEE REPORT
The Audit Committee of the Company's Board of Directors is composed of
three independent directors. The Audit Committee operates under a written
charter adopted by the Board of Directors, a copy of which is attached to
this Proxy Statement as Exhibit A. The Board of Directors and the Audit
Committee believe that the Audit Committee's current member composition
satisfies the rules of the National Association of Securities Dealers, Inc.
(the "NASD") that governs audit committee composition, including the
requirement that audit committee members all be "independent directors" as
that term is defined by NASD Rule 4200(a)(14).
The role of the Audit Committee is to assist the Board of Directors in
its oversight of the Company's financial reporting process. Management has
the primary duty for the financial statements and the reporting process,
including the systems of internal controls. The independent auditors are
responsible for auditing the Company's financial statements and expressing
an opinion as to their conformity to accounting principles generally
accepted in the United States.
In the performance of its oversight function, the Audit Committee has
reviewed and discussed with management and the independent auditors the
Company's audited financial statements. The Audit Committee also has
discussed with the independent auditors the matters required to be discussed
by Statement on Auditing Standards No. 61 relating to communication with
audit committees. In addition, the Audit Committee has received from the
independent auditors the written disclosures and letter required by
Independence Standards Board Standard No. 1 relating to independence
discussions with audit committees, has discussed with the independent
auditors their independence from the Company and its management, and has
considered whether the independent auditor's provision of non-audit services
to the Company is compatible with maintaining the auditor's independence.
The Audit Committee discussed with the Company's internal and
independent auditors the overall scope and plans for their respective
audits. The Audit Committee meets with the internal and independent
auditors, with and without management present, to discuss the results of
their examinations, their evaluations of the Company's internal controls and
the overall quality of the Company's financial reporting. These meetings
without management present are held at least once each year, but generally
more frequently.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved,
that the Company's audited financial statements be included in the Company's
2001 Annual Report to Shareholders and Annual Report on Form 10-K for the
year ended June 30, 2001 for filing with the Securities and Exchange
Commission.
George R. Curry
James J. Ellis
Burton O. George
Members of the Audit Committee
Directors Compensation
The directors who are employed by the Company do not receive any separate
compensation for service on the Board of Directors. Each non-employee
director receives $1,200 for each meeting attended and is reimbursed for
out-of-pocket expenses incurred in attending such meetings. Under the 1995
Non-Qualified Stock Option Plan, each non-employee director is also
compensated by the annual grant of non-statutory stock options to purchase
30,000 shares of Common Stock, subject to an overall grant limitation under
the plan of 300,000 shares to each individual director.
EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
As of June 30, 2001, the executive officers and significant employees of the
Company, as well as certain biographical information about them, are as
follows:
Officer/Significant
Name Position with Company Employee Since
------------------------- ------------------------- --------------
Michael E. Henry Chairman of the Board and 1983
Chief Executive Officer
John W. Henry Vice Chairman and Senior 1977
Vice President
Terry W. Thompson President and Chief 1990
Operating Officer
Kevin D. Williams Chief Financial Officer 2001
and Treasurer
Jerry D. Hall Executive Vice President 1977
Marguerite P. Butterworth Vice President 1993
Tony L. Wormington Vice President 1998
The following information is provided regarding the executive officers and
significant employees not already described herein, all of whom are United
States citizens:
Terry W. Thompson, age 51, President, Chief Operating Officer. On January
18, 2001, Mr. Thompson was appointed by the Board of Directors to serve as
President and Chief Operating Officer of the Company. He previously served
as Vice President, Chief Financial Officer and Treasurer of the Company
since 1990. Mr. Thompson beneficially owns 588,213 shares of Common Stock,
including 4,293 shares held in the Company's 401(k) ESOP for Mr. Thompson's
account and 132,400 shares that are currently acquirable by exercise of
outstanding options.
Kevin D. Williams, age 42, Chief Financial Officer and Treasurer. On
January 18, 2001, Mr. Williams was appointed by the Board of Directors to
serve as Chief Financial Officer and Treasurer of the Company. He
previously served as Controller of the Company since joining the Company in
1998. Mr. Williams beneficially owns 146,194 shares of Common Stock,
including 2,186 shares held in the Company's ESOP for Mr. Williams' account
and 140,000 shares that are currently acquirable upon exercise of
outstanding options.
Marguerite P. Butterworth, age 53, Vice President. Ms. Butterworth has
served as Vice President since February of 1993. Ms. Butterworth joined the
Company in 1983 and has been Hardware Manager since 1984. Ms. Butterworth
beneficially owns 385,409 shares of Common Stock, including 57,809 shares
held in the Company's 401(k) ESOP for Ms. Butterworth's account and 140,000
shares that are currently acquirable by exercise of outstanding options.
Tony L. Wormington, age 39, Vice President. Mr. Wormington has served as
Vice President since October 1998. Mr. Wormington joined the Company in 1980
and has served as Research and Development Manager since 1993. Mr.
Wormington beneficially owns 778,018 shares of Common Stock, including
138,578 shares held in the Company's 401(k) ESOP for Mr. Wormington's
account and 260,000 shares that are currently acquirable by exercise of
outstanding options.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is required to identify any director, officer or greater than
ten percent beneficial owners who failed to timely file with the Securities
and Exchange Commission a report required under Section 16(a) of the
Securities Exchange Act of 1934 relating to ownership and changes in
ownership of the Company's common stock. The required reports consist of
initial statements on Form 3, statements of changes on Form 4 and annual
statements on Form 5.
To the Company's knowledge, based solely on its review of the copies of such
forms received by it, the Company believes that during the fiscal year ended
June 30, 2001, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were
complied with, except that director Burton George reported one transaction
late on a Form 4, director James J. Ellis reported one gift transaction
late on a Form 4 and former President Mike Wallace reported two
transactions late on a Form 4. In addition, annual statements on Form 5 for
George Curry, Mike Henry, Jerry Hall, Marguerite Butterworth and Terry
Thompson were filed approximately 10 days late due to clerical error.
EXECUTIVE COMPENSATION
The following table sets forth certain information with regard to the
compensation paid to the Chief Executive Officer and to the Company's other
four most highly compensated executive officers for the three years ended
June 30, 2001.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Compensation Annual Shares
Underlying
Name and Principal Position Year Salary Bonus (1) Options (2)
--------------------------- ---- -------- -------- -------
Michael E. Henry 2001 $ 255,800 $ 5,000 -
Chairman and Chief Executive 2000 247,647 5,000 200,000
Officer 1999 205,800 5,000 200,000
Terry W. Thompson 2001 210,176 45,000 -
President and Chief Operating 2000 139,133 5,000 40,000
Officer 1999 120,271 5,000 -
Kevin D. Williams 2001 144,040 35,000 -
Treasurer and Chief Financial 2000 126,843 5,000 -
Officer 1999 109,619 6,550 160,000
Tony L. Wormington 2001 132,467 5,000 -
Vice President 2000 104,967 5,000 40,000
1999 99,967 10,000 -
Michael R. Wallace (3) 2001 255,800 35,000 -
Former President and Chief 2000 247,647 5,000 200,000
Operating Officer 1999 205,800 5,000 200,000
(1) Includes corporate 401(k) matching contribution of $5,000 for each
executive officer in each period.
(2) Adjusted for stock splits effected as dividends.
(3) Effective January 18, 2001, Mr. Wallace resigned as President and
Chief Operating Officer of the Company.
The following tables set forth information with respect to stock options
granted to and exercised by the executive officers named in the Summary
Compensation Table during the fiscal year ended June 30, 2001, together with
the number of options outstanding as of such date. Data, as appropriate,
have been adjusted for stock splits.
Option Grants in Fiscal 2001
The Company did not grant options to any of the executive officers named in
the Summary Compensation Table during the fiscal year ended June 30, 2001.
Aggregated Option Exercises in Fiscal 2001 and June 30, 2001, Option Values
Number of Shares Value of
Shares Underlying Unexercised Unexercised In-the-Money
Acquired on Value Options at 6/30/01 Options at 6/30/01
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
------------------ -------- -------- ----------- ------------- ----------- -------------
Michael E. Henry 170,000 $ 4,906,667 1,190,000 - $ 30,623,020 -
Terry W. Thompson 10,000 243,575 112,400 20,000 2,679,592 $ 282,500
Kevin D. Williams 20,000 357,500 140,000 - 3,049,375 -
Tony L. Wormington - - 240,000 20,000 6,392,500 282,500
Michael R. Wallace 1,140,000 22,252,396 - - - -
COMPENSATION COMMITTEE REPORT
The Company's executive officer compensation program is administered and
reviewed by the Compensation Committee. The Compensation Committee consists
of three independent, non-employee directors of the Company. There was no
insider participation on the Compensation Committee.
The objectives of our executive officer compensation program are to:
* Encourage continuation of JHA's entrepreneurial spirit;
* Attract and retain highly qualified and motivated executives; and
* Encourage esprit de corps and reward outstanding performance.
In meeting the foregoing objectives, the Compensation Committee strives for
the interests of management and stockholders to be the same - the
maximization of stockholder value. The components of the executive
compensation program which are employed by the Committee to meet these goals
include base salary, discretionary bonuses, and stock options.
Salaries and bonuses are established at levels to compensate for the
position held and contributions made by each executive. Recommendations
regarding bonuses and increases in salary are based upon subjective
evaluations of each individual's performance and contribution.
Longer term incentives are provided by the award of stock options because
the ultimate value of options granted will be determined by long-term growth
in the Company's stock price. Awards of options are believed to help focus
executives attention on managing the Company from the perspective of an
owner with an equity stake in the business. This component of executive
compensation is provided through the 1996 Stock Option Plan, under which the
executive officers, and all other employees of the Company and its
subsidiaries, are eligible to receive options. The Committee has discretion
to designate optionees and to determine the terms of the options granted.
However, option prices shall be fixed at not less than 100% of fair market
value of the stock at the date of grant, and options may not be exercisable
more than ten years after the date of grant.
In employing the foregoing three elements of compensation, the Compensation
Committee considers the experience, prior compensation levels, personal
performance, number and value of previously granted options, and other
subjective factors relating to each individual and seeks to optimize the
balance between base salary, short-term and long-term incentives.
The base salary of Chief Executive Officer, Michael E. Henry, did not
materially change in our 2001 fiscal year.
The Compensation Committee notes that there is a $1,000,000 cap on the
income tax deduction which may be taken with respect to any individual
officer's compensation. While current cash compensation paid to our
executive officers is substantially less than the cap, the ultimate value of
stock options is not now known, and thus the cap may be important in some
future year. The cap has been considered by the Committee and we intend to
take the steps necessary to conform the Company's compensation structure to
comply with the cap if the issue arises in a future period.
George R. Curry
Burton O. George
James J. Ellis
Members of the Compensation
Committee
COMPANY PERFORMANCE
The following graph presents a comparison for the five-year period ended
June 30, 2001, of the market performance of the Company's common stock with
the S & P 500 Index and an index of peer companies selected by the Company:
The following information depicts a line graph with the following values:
JKHY Peer Group S&P 500
------ ---------- -------
1996 100 100 100
1997 107.95 115.18 134.70
1998 154.28 130.74 175.33
1999 177.41 151.77 215.23
2000 456.21 164.86 230.83
2001 566.79 196.69 196.60
This comparison assumes $100 was invested on July 1, 1996, and assumes
reinvestments of dividends. Total returns are calculated according to
market capitalization of peer group members at the beginning of each period.
Peer companies selected are in the business of providing specialized
computer software, hardware and related services to financial institutions
and other businesses. Companies in the peer group are Bisys Group, Elite
Information, Cerner Corp., Computer Science, Crawford & Co., Electronic
Arts, First Data, Fiserv, Keane, National Data, Hyperfeed Technology,
Rainbow Technology and SEI Investments.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal year ended June 30, 2001, the Company paid $882,467 to
Group VI InterMedia, LLC for marketing and advertising services. Group VI
InterMedia, LLC is owned by Christopher Harding and Vicki Jo Henry who are
husband and wife. Vicki Jo Henry is the daughter of John W. Henry, Director
and Senior Vice President of the Company and the sister of Michael E. Henry,
Chairman of the Board and Chief Executive Officer of the Company. Vicki Jo
Henry is also a general partner in JKHY Partners, a family partnership which
owns 6.4% of the common stock of the Company. The Company believes that the
rates and charges incurred in the transactions with Group VI InterMedia, LLC
are reasonable and competitive with other marketing and advertising
providers.
INDEPENDENT AUDITORS
Deloitte & Touche LLP, certified public accountants, served as
independent auditors for the Company for the year ended June 30, 2001. The
Company has not selected its auditors for the current year, because the
Company does not select its auditors until after the final Audit Committee
meeting on the prior year's audit is held. Representatives of Deloitte &
Touche LLP are expected to be present at the Annual Meeting with the
opportunity to make a statement if they desire to do so and to be available
to respond to appropriate questions.
Principal Accounting Firm Fees
Audit Fees. The aggregate fees billed by the Company's accounting firm,
Deloitte & Touche LLP, for professional services rendered for the audit of
the Company's annual consolidated financial statements for the fiscal year
ended June 30, 2001 and for the reviews of the consolidated financial
statements included in the Company's Quarterly Reports on Forms 10-Q for
that fiscal year were $158,750.
Financial Information Systems Design and Implementation Fees. No fees were
billed by Deloitte & Touche LLP to the Company for professional services
with regard to financial information systems design and implementation.
All Other Fees. The aggregate fees billed for services rendered by Deloitte
& Touche LLP for the year ended June 30, 2001, other than the services
described above, were $351,610.
The Audit Committee determined that the provision of non-audit services did
not negatively impact the maintenance of the auditors' independence
STOCKHOLDER PROPOSALS
Stockholders who intend to present proposals at the 2002 Annual Meeting
of Stockholders must submit their proposals to the Company's Secretary on or
before May 23, 2002.
COST OF SOLICITATION AND PROXIES
Proxy solicitation is being made by mail, although it may also be made by
telephone, telegraph or in person by officers, directors and employees of
the Company not specifically engaged or compensated for that purpose. The
Company will bear the entire cost of the Annual Meeting, including the cost
of preparing, assembling, printing and mailing the Proxy Statement, the
Proxy and any additional materials furnished to stockholders. Copies of the
solicitation materials will be furnished to brokerage houses, fiduciaries
and custodians for forwarding to the beneficial owners of shares held of
record by them and, upon their request, such persons will be reimbursed for
their reasonable expenses incurred in completing the mailing to such
beneficial owners.
FINANCIAL STATEMENTS
Consolidated financial statements of the Company are contained in the 2001
Annual Report on Form 10-K which accompanies this Proxy Statement, and are
incorporated herein by reference.
OTHER MATTERS
The Board of Directors knows of no matters that are expected to be presented
for consideration at the 2001 Annual Meeting which are not described herein.
However, if other matters properly come before the meeting, it is intended
that the persons named in the accompanying Proxy will vote thereon in
accordance with their best judgment.
By Order of the Board of Directors
/s/ Michael E. Henry
Michael E. Henry
Chairman of the Board
Monett, Missouri
September 25, 2001
A copy of the Company's Annual Report on Form 10-K is included herewith.
Exhibits to Form 10-K, listed on pages 37 - 39 thereof, have been omitted.
The Company will furnish a copy of any exhibit subject to charge upon
written request directed to Kevin D. Williams, Chief Financial Officer, Jack
Henry & Associates, Inc., 663 Highway 60, Post Office Box 807, Monett,
Missouri, 65708.
EXHIBIT A
AUDIT COMMITTEE CHARTER
Organization
There shall be a Committee of the Board of Directors of Jack Henry &
Associates, Inc. (the "Company") to be known as the Audit Committee. The
Audit Committee shall be composed of at least three (3) members of the Board
of Directors who are independent of the management of the Company and are
free of any relationship that, in the opinion of the Board of Directors,
would interfere with their exercise of independent judgment as a committee
member.
Statement of Policy
The Audit Committee shall provide assistance to the Corporate Directors in
fulfilling their responsibility to the shareholders, potential shareholders,
and investment community relating to corporate accounting, reporting
practices of the Company, and the quality and integrity of the financial
reports of the Company. In so doing, it is the responsibility of the Audit
Committee to maintain free and open means of communication between the
Directors, the independent auditors, the internal auditors (if any), and the
financial management of the Company.
Responsibilities
1. Provide an open avenue of communication between the internal auditors,
the independent accountant, the internal financial management of the
Company, and the Board of Directors.
2. Review and update the Audit Committee's charter annually.
3. Recommend to the Board of Directors the independent accountants to be
nominated each fiscal year to audit the financial statements of the
Company, approve the compensation of the independent accountant, and
review and recommend the discharge of the independent accountants.
4. Confirm the independence of the independent accountant as required
under applicable Nasdaq Stock Market and Securities and Exchange
Commission ("SEC") rules, including a review of management consulting
services provided by the independent accountant and related fees.
5. Inquire of management and the independent accountant about significant
risks or exposures and assess the steps management has taken to
minimize such risks to the Company.
6. Consider, in consultation with the internal financial management of the
Company and the independent accountant, the audit scope and plan of the
independent accountants.
7. Consider with management and the independent accountant the rationale
for employing audit firms other than the principal independent
accountant.
8. Review with internal financial management and the independent
accountant the coordination of audit effort to assure completeness of
coverage, reduction of redundant efforts, and the effective use of
audit resources.
9. Consider and review with the independent accountant and the internal
financial management:
* The adequacy of the Company's internal controls including
computerized system controls and security.
* Any related significant findings and recommendations of the
independent accountant, including any response of Company's
management thereto.
10. Review with management and the independent accountant at the completion
of the annual audit:
* The Company's annual financial statements and related footnotes.
* The independent accountant's audit of the financial statements and
the report thereon.
* Any significant change required in the audit plan.
* Any serious difficulties or disputes with management during the
course of the audit.
* Other matters related to the audit required to be communicated to
the Committee under generally accepted auditing standards.
11. Review filings with the SEC and other published documents containing
the Company's financial statements and consider whether the information
contained in these documents is consistent with the information
contained in the financial statements.
12. Review with management the interim financial report before it is filed
with the SEC or other regulators.
13. Review policies and procedures with respect to officers' expense
accounts and perquisites, including their use of corporate assets, and
consider the results of any review of these areas by the independent
accountant.
14. Review legal and regulatory matters that may have a material impact on
the financial statements, related Company compliance policies, and
programs and reports received from regulators.
15. Meet with the independent accountant and management in separate
executive sessions to discuss any matters that the Committee or these
groups believe should be discussed privately with the Audit Committee.
16. Report Committee actions to the Board of Directors with such
recommendations as the Committee may deem appropriate.
17. The Audit Committee shall have the power to conduct or authorize
investigations into any matters within the Committee's scope of
responsibilities. The Committee shall be empowered to retain
independent counsel, accountants, or others to assist it in the conduct
of any investigation.
18. The Committee shall meet in person or telephonically at least four
times per year or more frequently as circumstances require. Audit
Committee members shall be compensated for attendance at meetings as
determined from time to time by the Board of Directors. The Committee
may ask members of management or others to attend the meeting and
provide pertinent information and input as necessary.
19. The Committee will perform such other functions as assigned by law, the
Company's charter or bylaws, or the Board of Directors. Members of the
Audit Committee shall serve at the pleasure of the Board of Directors.
The Audit Committee Chairman shall be designated by the full Board of
Directors at each annual meeting of the Board of Directors. The duties
and responsibilities of a member of the Audit Committee are in addition
to those duties set out for the Board of Directors.
PROXY CARD
PROXY
Jack Henry & Associates, Inc. This proxy is Solicited on
663 Highway 60 Behalf of the Board of Directors
P.O. Box 607
Monett, Missouri 65708 The undersigned hereby appoints
Michael E. Henry and Terry W.
Thompson as Proxies, each with the
power to appoint his or her
substitute, and hereby authorizes
them to represent and to vote, as
designated below, all the shares
of common stock of Jack Henry &
Associates, Inc. held of record by
the undersigned on September 24,
2001, at the annual meeting of
shareholders to be held on October
30, 2001 or any adjournment
thereof.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below)
J. Henry, J. Hall, M. Henry, J. Ellis, B. George, G. Curry
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
[Map of Jack Henry Corporate Offices & Monett City Park Casino Appears Here]
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted FOR Proposal 1.
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated ______________________, 2001
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Signature
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Signature if held jointly
PLEASE MARK SIGN DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE