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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 13, 2001
REGISTRATION NO. 333-62154
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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THE BISYS GROUP, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3532663
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
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150 CLOVE ROAD, LITTLE FALLS, NJ 07424
(973) 812-8600
FAX: (973) 812-1217
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
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KEVIN J. DELL, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
THE BISYS GROUP, INC.
150 CLOVE ROAD, LITTLE FALLS, NJ 07424
(973) 812-8600
FAX: (973) 812-1217
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies to:
VINCENT J. PISANO, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
4 TIMES SQUARE
NEW YORK, NY 10036
(212) 735-3000
FAX: (212) 735-2000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this registration statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING SECURITYHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING
OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED JUNE 13, 2001
PROSPECTUS
[BISYS LOGO]
THE BISYS GROUP, INC.
$300,000,000
4% CONVERTIBLE SUBORDINATED NOTES DUE 2006
AND SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES
We issued the notes in a private placement in March 2001. Under this
prospectus, the selling securityholders named in this prospectus or in
prospectus supplements may offer and sell their notes and/or the shares of
common stock issuable upon conversion of their notes.
Holders may surrender the notes for conversion into shares of our common
stock at a conversion rate of 14.9729 shares of our common stock per each $1,000
principal amount of notes at any time before the close of business on the
maturity date, unless we have previously redeemed or repurchased the notes. The
conversion rate may be adjusted as described in this prospectus under
"Description of Notes -- Conversion." The notes will mature on March 15, 2006.
We will pay interest on the notes in cash on March 15 and September 15 of
each year. The first interest payment will be made on September 15, 2001. The
notes will bear interest at a fixed annual rate of 4%.
We may redeem all or a portion of the notes at any time on or after March
20, 2004 at the prices set forth in this prospectus under "Description of the
Notes -- Optional Redemption by BISYS." In addition, upon the occurrence of a
change in control occurring on or before March 15, 2006, holders of the notes
may require us to repurchase all or a portion of their notes.
The notes are general unsecured obligations of BISYS and are subordinated
in right of payment to all of our existing and future senior indebtedness and
structurally subordinated to the indebtedness and other liabilities of our
subsidiaries.
Shares of our common stock are quoted on the Nasdaq National Market under
the symbol "BSYS." The last reported sale price of our common stock on June 12,
2001 was $56.09 per share.
INVESTING IN OUR NOTES OR SHARES OF OUR COMMON STOCK INVOLVES RISKS. SEE
"RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS.
We will not receive any of the proceeds from the sale of the notes or the
shares of common stock by any of the selling securityholders. The notes and the
shares of common stock may be offered in negotiated transactions or otherwise,
at market prices prevailing at the time of sale or at negotiated prices. The
timing and amount of any sale are within the sole discretion of the selling
securityholders. In addition, the shares of common stock may be offered from
time to time through ordinary brokerage transactions on the Nasdaq National
Market. See "Plan of Distribution." The selling securityholders may be deemed to
be "underwriters" as defined in the Securities Act of 1933, as amended. Any
profits realized by the selling securityholders may be deemed to be underwriting
commissions. If the selling securityholders use any broker-dealers, any
commission paid to broker-dealers and, if broker-dealers purchase any notes or
shares of common stock as principals, any profits received by such
broker-dealers on the resale of the notes or shares of common stock may be
deemed to be underwriting discounts or commissions under the Securities Act.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is , 2001.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY BISYS.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF BISYS SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES OTHER THAN THOSE
SPECIFICALLY OFFERED HEREBY OR OF ANY SECURITIES OFFERED HEREBY IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. THE INFORMATION CONTAINED IN THIS PROSPECTUS SPEAKS ONLY AS OF
THE DATE OF THIS PROSPECTUS UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT
ANOTHER DATE APPLIES.
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TABLE OF CONTENTS
PAGE
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Special Note Regarding Forward-Looking
Statements........................... 1
Incorporation of Certain Documents by
Reference............................ 1
Prospectus Summary..................... 3
The Offering........................... 4
Risk Factors........................... 6
Use of Proceeds........................ 11
Dividend Policy........................ 11
PAGE
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Selected Consolidated Financial and
Other Data........................... 12
Description of Notes................... 14
Description of Common Stock............ 27
Selling Securityholders................ 29
Plan of Distribution................... 35
Legal Matters.......................... 38
Experts................................ 38
Where You Can Find More Information.... 38
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus contains "forward-looking statements" within the meaning of the
securities laws. These forward-looking statements are subject to a number of
risks and uncertainties, many of which are beyond our control. All statements
other than statements of historical facts included or incorporated by reference
in this prospectus, including the statements under "Prospectus Summary -- BISYS"
and elsewhere in this prospectus regarding our strategy, future operations,
financial position, estimated revenues, projected costs, prospects, plans and
objectives of management are forward-looking statements. When used in this
prospectus, the words "will," "believe," "anticipate," "intend," "estimate,"
"expect," "project" and similar expressions are intended to identify
forward-looking statements, although not all forward-looking statements contain
such identifying words. All forward-looking statements speak only as of the date
of this prospectus. Neither we nor any of the initial purchasers undertake any
obligation to update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise. Although we believe
that our plans, intentions and expectations reflected in or suggested by the
forward-looking statements we make in this prospectus are reasonable, we can
give no assurance that such plans, intentions or expectations will be achieved.
The cautionary statements qualify all forward-looking statements attributable to
us or persons acting on our behalf.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This prospectus "incorporates by reference" certain of the reports, proxy
and information statements and other information that we have filed with the
Commission under the Exchange Act. This means that we are disclosing important
information to you by referring you to those documents. The information that we
file later with the Commission will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the Commission under sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act until all of the securities offered by this prospectus are
sold.
- Annual Report on Form 10-K for the year ended June 30, 2000, filed on
September 15, 2000 (Commission File No. 0-19922);
- Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, filed
on May 7, 2001 (Commission File No. 0-19922);
- Quarterly Report on Form 10-Q for the quarter ended December 31, 2000,
filed on February 12, 2001 (Commission File No. 0-19922);
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- Quarterly Report on Form 10-Q for the quarter ended September 30, 2000,
filed on November 14, 2000 (Commission File No. 0-19922);
- Current Report on Form 8-K dated July 1, 2000, filed on July 13, 2000
(Commission File No. 0-19922);
- Current Report on Form 8-K/A dated September 15, 2000, filed on September
15, 2000 (which includes our pro forma financial statements which give
effect to our acquisition of Pictorial Holdings, Inc.) (Commission File
No. 0-19922);
- Current Report on Form 8-K dated March 8, 2001, filed on March 8, 2001
(Commission File No. 0-19922);
- Current Report on Form 8-K dated March 15, 2001, filed on March 15, 2001
(Commission File No. 0-19922);
- Current Report on Form 8-K dated June 1, 2001, filed on June 5, 2001
(Commission File No. 0-19922);
- Definitive Proxy Statement dated October 11, 2000 with respect to the
Annual Meeting of Stockholders held on November 16, 2000 (Commission File
No. 0-19922); and
- The description of our common stock and purchase rights for shares of our
common stock attached to our common stock described in our registration
statements on Form 8-A filed with the Commission on March 10, 1992 and on
May 8, 1997 pursuant to Section 12 of the Exchange Act (Commission File
No. 0-19922) and any amendment or report filed for the purpose of
updating those descriptions.
All documents that we file with the Commission from the date of this
prospectus to the end of the offering of the notes and shares of common stock
shall also be deemed to be incorporated herein by reference.
Any statement contained in a document incorporated or considered to be
incorporated by reference in this prospectus shall be considered to be modified
or superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or in any subsequently filed document that is or is
considered to be incorporated by reference modifies or supersedes such
statement. Any statement that is modified or superseded shall not, except as so
modified or superseded, constitute a part of this prospectus.
You may request a copy of any of the documents which are incorporated by
reference in this prospectus, other than exhibits which are not specifically
incorporated by reference into such documents, and our Amended and Restated
Certificate of Incorporation and By-Laws, at no cost, by writing or telephoning
BISYS at the following:
The BISYS Group, Inc.
150 Clove Road
Little Falls, New Jersey 07424
Attention: Secretary
Telephone: (973) 812-8600
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PROSPECTUS SUMMARY
This prospectus constitutes part of a registration statement on Form S-3
that we filed with the Securities and Exchange Commission (the "Commission")
using a "shelf" registration process. Under this shelf process, any selling
securityholder may sell any combination of the securities described in this
prospectus in one or more offerings. This prospectus provides you with a general
description of the securities the selling securityholders may offer. All
references to "we," "us," "our," or "BISYS" in this prospectus are to The BISYS
Group, Inc.
BISYS
We and our wholly-owned subsidiaries provide value-added business process
outsourcing solutions to more than 15,000 financial institutions and corporate
clients through our integrated business units.
Our services include:
- information processing and check imaging solutions;
- distribution and administration of mutual funds;
- retirement plan recordkeeping;
- insurance distribution solutions;
- professional certification training, licensing and continuing
education; and
- investment industry consulting.
We were organized in August 1989 to acquire certain banking and thrift data
processing operations of Automatic Data Processing, Inc. ("ADP"). Our
traditional business was established in 1966 by United Data Processing, Inc.,
the predecessor of the banking and thrift data processing operations of ADP.
Together with our predecessors, we have provided outsourcing solutions to the
financial services industry for more than 30 years.
Our principal executive offices are located at 150 Clove Road, Little
Falls, New Jersey 07424. Our telephone number is (973) 812-8600.
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THE OFFERING
Notes Offered................. $300.0 million principal amount of 4%
Convertible Subordinated Notes due 2006.
Maturity...................... March 15, 2006
Interest...................... The notes bear interest at a fixed annual rate
of 4% to be paid in cash every March 15 and
September 15 of each year, beginning on
September 15, 2001.
Conversion.................... The notes are convertible into shares of our
common stock at a conversion rate of 14.9729
shares of common stock per $1,000 principal
amount of notes. This is equivalent to a
conversion price of approximately $66.79 per
share. The conversion price may be subject to
adjustment under certain circumstances. The
notes are convertible at any time before the
close of business on the maturity date, unless
we have previously redeemed or repurchased the
notes. You may convert your notes called for
redemption or submitted for repurchase up to
and including the close of business on the
second business day immediately preceding the
date fixed for redemption or repurchase, as the
case may be.
Subordination................. The notes are general unsecured obligations of
BISYS. The notes are subordinated in right of
payment to all of our existing and future
senior indebtedness and structurally
subordinated to the indebtedness and other
liabilities of our subsidiaries. We are not
prohibited from incurring senior indebtedness
or other debt under the indenture.
Sinking Fund.................. None.
Optional Redemption........... We may redeem some or all of the notes at any
time on or after March 20, 2004 at the
redemption prices listed in "Description of
Notes -- Optional Redemption by BISYS."
Change of Control............. Upon the occurrence of a change of control, as
described in this prospectus, and before the
maturity or redemption of the notes, you will
have the right to require us to repurchase all
or part of your notes at a price equal to 100%
of the principal amount of the notes being
repurchased, plus interest and liquidated
damages, if any.
Trading....................... The notes issued in the initial private
placement are eligible for trading in the
PORTAL market. However, notes sold using this
prospectus will no longer be eligible for
trading in the PORTAL market. Our common stock
is traded on the Nasdaq National Market under
the symbol "BSYS."
Use of Proceeds............... We will not receive any of the proceeds from
the sale by any selling securityholder of the
notes or shares of common stock offered under
this prospectus.
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RISK FACTORS
An investment in the notes or shares of common stock involves significant
risks. You should carefully consider all the information in this prospectus. In
particular, you should evaluate the specific risk factors set forth under "Risk
Factors," beginning on page 6.
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RISK FACTORS
An investment in the notes and shares of common stock involves significant
risks. In addition to reviewing other information in this prospectus, you should
carefully consider the following factors before deciding to purchase the notes
or shares of common stock. This prospectus contains forward-looking statements
that involve risk and uncertainties. We use words such as "anticipates,"
"believes," "plans," "expects," "future," "intends" and similar expressions to
identify forward-looking statements. Our actual results could differ materially
from those anticipated in the forward-looking statements as a result of certain
factors, including the risks described below and elsewhere in this prospectus.
We disclaim any obligation to update information contained in any
forward-looking statement.
RISKS RELATED TO OUR BUSINESS
THE ADOPTION OF THE FINANCIAL SERVICES MODERNIZATION ACT OF 1999 COULD ADVERSELY
IMPACT OUR BUSINESS BY EXPANDING THE POWERS OF OUR BANKING CLIENTS AND REDUCING
THEIR OUTSOURCING.
The adoption of the Financial Services Modernization Act of 1999 repeals
key provisions of the Glass-Steagall Act and lifts many restrictions limiting
banks from the underwriting and distribution of securities. As a result of these
recent regulatory changes, we expect that some of our bank customers with
proprietary mutual funds may, over time, internalize certain distribution
functions that we currently provide. If that were to happen, it could have a
material adverse impact on our business and results of operations.
OUR BUSINESS CAN BE SIGNIFICANTLY AFFECTED BY DIRECT AND INDIRECT GOVERNMENTAL
REGULATION, WHICH REDUCES OUR FLEXIBILITY AND INCREASES THE COSTS OF DOING
BUSINESS.
Our business is affected by federal, state and foreign regulations. Our
noncompliance with these regulations could result in the suspension or
revocation of our licenses or registrations, including broker/dealer licenses
and registrations and insurance producer licenses and registrations. Regulatory
authorities could also impose on us civil fines and criminal penalties for
noncompliance.
Some of our subsidiaries are registered with the Securities and Exchange
Commission as broker-dealers. Much of the federal regulation of broker-dealers
has been delegated to self-regulatory organizations, principally the National
Association of Securities Dealers, Inc. and the national securities exchanges.
Broker-dealers are subject to regulations which cover all aspects of their
securities business, including, for example:
- sales methods;
- trading practices;
- use and safekeeping of customers' funds and securities;
- capital structure;
- recordkeeping; and
- the conduct of directors, officers and employees.
The operations of our broker-dealers and their profitability could be affected
by:
- federal and state legislation;
- changes in rules and regulations of the SEC, banking and other regulatory
agencies, and self-regulatory agencies; and
- changes in the interpretation or enforcement of existing laws, rules and
regulations.
Banks and other depository institutions with whom we do business are also
subject to extensive regulation at the federal and state levels under laws and
regulations applicable to regulated financial institutions. They are also
subject to extensive examination and oversight by federal and state regulatory
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agencies. Changes in the laws, rules and regulations affecting our client banks
and financial institutions and the examination of their activities by applicable
regulatory agencies could adversely affect our results of operations.
Some of our subsidiaries, and officers and employees of these subsidiaries,
are required to be licensed as insurance producers in various jurisdictions in
which we conduct our insurance services business. They are subject to regulation
under the insurance laws and regulations of these jurisdictions. Changes in the
laws, rules and regulations affecting licensed insurance producers could
adversely affect our operations.
OUR REVENUES AND EARNINGS ARE SUBJECT TO CHANGES IN THE SECURITIES MARKETS.
A significant portion of our earnings are derived from fees based on the
average daily market value of the assets we administer for our clients. A sharp
rise in interest rates or a sudden decline in the securities market could
influence an investor's decision whether to invest or maintain an investment in
a mutual fund. As a result, fluctuations could occur in the amount of assets
which we administer. If investors were to seek alternatives to mutual fund
investments, it could have a negative impact on our revenues by reducing the
amount of assets we administer.
CONSOLIDATION IN THE BANKING AND FINANCIAL SERVICES INDUSTRY COULD ADVERSELY
IMPACT OUR BUSINESS BY ELIMINATING THE NUMBER OF EXISTING AND POTENTIAL CLIENTS.
There has been and continues to be merger, acquisition and consolidation
activity in the banking and financial services industry. Mergers or
consolidations of banks and financial institutions in the future could reduce
the number of our clients or potential clients. A smaller market for our
services could have a material adverse impact on our business and results of
operations. Also, it is possible that the larger banks or financial institutions
which result from mergers or consolidations could decide to perform themselves
some or all of the services which we currently provide or could provide. If that
were to occur, it could have a material adverse impact on our business and
results of operations.
OUR ACQUISITION STRATEGY SUBJECTS US TO RISKS, INCLUDING INCREASED DEBT,
ASSUMPTION OF UNFORESEEN LIABILITIES AND DIFFICULTIES IN INTEGRATING OPERATIONS.
In the past several years, we have acquired a number of other companies. We
may make additional acquisitions. We cannot predict if or when any additional
acquisitions will occur or whether they will be successful.
Acquiring a business involves many risks, including:
- incurrence of debt;
- incurrence of unforeseen obligations or liabilities;
- difficulty in integrating the acquired operations and personnel;
- difficulty in maintaining uniform controls, procedures and policies;
- possible impairment of relationships with employees and customers as a
result of the integration of new personnel;
- risk of entering markets in which we have minimal prior experience;
- decrease in earnings as a result of non-cash charges; and
- dilution to existing stockholders from the issuance of our common
stock to make or finance acquisitions.
OUR SYSTEMS MAY BE SUBJECT TO INFILTRATION BY UNAUTHORIZED PERSONS.
We maintain and process data on behalf of our clients, some of which is
critical to the business operations of our clients. For example, our Information
Services Group maintains account information for
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our bank and insurance company clients it services and our Investment Services
Group maintains transfer agency records and processes trades for our mutual fund
clients. If our systems were infiltrated and damaged by unauthorized persons,
our clients could experience data loss, financial loss and significant business
interruption. If that were to occur, it could have a material adverse effect on
our business, financial condition and results of operations.
WE FACE SIGNIFICANT COMPETITION FROM OTHER COMPANIES.
We face significant competition from other companies. Many of our
competitors are well-established companies, and some of them have greater
financial, technical and operating resources than we do. Competition in our
business is based primarily upon pricing, quality of products and services,
breadth of products and services, new product development and the ability to
provide technological solutions.
WE DEPEND ON KEY MANAGEMENT PERSONNEL, MOST OF WHOM DO NOT HAVE LONG TERM
EMPLOYMENT AGREEMENTS.
Our success depends upon the continued services of our key senior
management personnel, including our executive officers and the senior managers
of our businesses. None of our executive officers have employment agreements
with us and substantially all of our other senior management personnel do not
have employment agreements with us. The loss or unavailability of these
individuals could have a material adverse effect on our business prospects.
WE DEPEND ON OUR ABILITY TO ATTRACT AND RETAIN SKILLED PERSONNEL.
Our success depends on our ability to attract and retain highly skilled
personnel in all areas of our business, including our information processing,
fund management and insurance services businesses. We cannot assure you that we
will be able to attract and retain personnel on acceptable terms in the future.
Our inability to attract and retain highly skilled personnel could have an
adverse effect on our business.
RISKS RELATED TO THE NOTES
THE PRICE OF OUR COMMON STOCK AND THE PRICE OF OUR NOTES MAY FLUCTUATE
SIGNIFICANTLY, WHICH MAY RESULT IN LOSSES FOR INVESTORS.
The market price for our common stock may be volatile. We expect our stock
to be subject to fluctuations as a result of a variety of factors, including
factors beyond our control. These include:
- quarterly variations in operating results;
- changes in financial estimates by securities analysts;
- changes in market valuations of related companies;
- announcements by us or our competitors of new products or of
significant acquisitions, strategic partnerships or joint ventures;
- any loss of a major customer;
- additions or departures of key personnel;
- any deviations in net revenues or in losses from levels expected by
securities analysts; and
- future sales of common stock.
We may fail to meet expectations of our stockholders or of analysts at some
time in the future, and our stock price, and therefore the price of our notes,
could decline as a result.
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THE NOTES ARE SUBORDINATED, AND HOLDERS OF SENIOR INDEBTEDNESS WILL BE PAID
BEFORE HOLDERS OF THE NOTES ARE PAID.
The notes are unsecured and subordinated in right of payment to all of our
existing and future senior indebtedness. Following the initial offering of the
notes and the application of the net proceeds, we had no senior indebtedness
outstanding, but we may incur new senior indebtedness. We are not prohibited
from incurring debt, including indebtedness secured by our assets, under the
indenture. In the event of our bankruptcy, liquidation or reorganization or upon
acceleration of the notes due to an event of default under the indenture and in
certain other events, our assets will be available to pay obligations on the
notes only after all of our senior indebtedness has been paid. As a result,
there may not be sufficient assets remaining to pay amounts due on any or all of
the outstanding notes. See "Description of Notes -- Subordination of Notes."
OUR INDEBTEDNESS IS EFFECTIVELY SUBORDINATED TO THE INDEBTEDNESS OF OUR
SUBSIDIARIES.
Although following the application of the net proceeds from the initial
offering of the notes to repay borrowings under our existing credit facility to
which certain of our subsidiaries are guarantors, our subsidiaries had no
outstanding indebtedness, the notes will be effectively subordinated in right of
payment to any future indebtedness and other liabilities of our subsidiaries,
including guarantees of any future borrowings under our credit facility. The
notes are not guaranteed by any of our subsidiaries. Our cash flow and ability
to service our indebtedness, including the notes, will depend upon the cash flow
of our subsidiaries and payments of funds by those subsidiaries to us in the
form of repayment of loans, dividends or otherwise. These subsidiaries are
separate and distinct legal entities with no legal obligation to pay any amounts
due on the notes or to make funds available therefor. In addition, our
subsidiaries may become parties to financing arrangements that contain
limitations on the ability of our subsidiaries to pay dividends or to make loans
or advances to us or otherwise make cash flow available to us. Neither we nor
our subsidiaries are prohibited from incurring debt, including senior
indebtedness, under the indenture. If we or our subsidiaries incur additional
debt or liabilities, our ability to pay our obligations on the notes could be
adversely affected.
THERE IS NO PUBLIC MARKET FOR THE NOTES, WHICH COULD LIMIT THEIR MARKET PRICE OR
YOUR ABILITY TO SELL THEM FOR THEIR INHERENT VALUE.
The notes are a new issue of securities for which there currently is no
active trading market. As a result, we cannot provide any assurances that an
active trading market will develop for the notes or that you will be able to
sell your notes. The notes may trade at a discount from their initial offering
price. Future trading prices of the notes will depend on many factors, including
prevailing interests rates, the market for similar securities, general economic
conditions and our financial condition, performance and prospects. Historically,
the market for convertible debt has been subject to disruptions that have caused
substantial fluctuations in the prices of the securities. Accordingly, you may
be required to bear the financial risk of an investment in the notes for an
indefinite period of time.
We do not intend to apply for listing or quotation of the notes. The notes,
however, are designated for trading in the PORTAL market. We have been informed
by the initial purchasers of the notes that they intend to make a market in the
notes. The initial purchasers are not obligated to do so, and they may cease
their market-making at any time without notice. In addition, this market-making
activity will be subject to the limitations imposed by the Securities Act and
the Securities Exchange Act of 1934, as amended, and may be limited during the
effectiveness of a registration statement relating to the notes. See
"Description of Notes."
WE WILL HAVE BROAD DISCRETION WITH RESPECT TO THE USE OF PROCEEDS FROM THIS
OFFERING.
The net proceeds of the initial offering were approximately $292.0 million.
Our management will retain broad discretion as to the use and allocation of the
proceeds remaining after we repay borrowings
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under our existing credit facility. Accordingly, you will not have the
opportunity to evaluate the economic, financial and other relevant information
that we may consider in the application of the net proceeds.
RISKS RELATED TO OUR COMMON STOCK
WE DO NOT INTEND TO PAY DIVIDENDS.
We have never paid cash dividends to stockholders and do not anticipate
paying cash dividends in the foreseeable future. In addition, our existing
credit facility limits our ability to pay cash dividends.
OUR STOCK PRICE HAS BEEN AND IS LIKELY TO CONTINUE TO BE VOLATILE.
The market price of our common stock has been volatile. From January 1,
1999 to June 12, 2001, the last sale price of our common stock ranged from a low
of $20.98 per share to a high of $56.625 per share.
FUTURE SALES OF OUR COMMON STOCK MAY DEPRESS OUR STOCK PRICE AND THE PRICE FOR
THE NOTES.
Sales of a substantial number of shares of our common stock in the public
market, or the appearance that such shares are available for sale, could
adversely affect the market price for our common stock. As of April 30, 2001, we
had 58,084,850 shares of common stock outstanding. As of April 30, 2001, we also
had options to purchase 7,396,098 shares of our common stock outstanding and
4,606,308 shares of our common stock reserved for issuance pursuant to options
available for issuance under our stock option plans and employee stock purchase
plan.
ANTI-TAKEOVER EFFECTS OF CERTAIN BY-LAW PROVISIONS, DELAWARE LAW, THE INDENTURE
AND OUR SHAREHOLDER RIGHTS PLAN COULD DISCOURAGE, DELAY OR PREVENT A CHANGE IN
CONTROL.
We have a shareholder rights plan. Under the plan, each holder of shares of
our common stock will receive a right to buy one share of our common stock at an
exercise price of $175. If a person or group were to acquire, or to announce the
intention to acquire, 15% or more of our outstanding shares of common stock, and
in some cases 10%, each right would entitle the holder, other than the acquiring
person or group, to purchase shares of our common stock at the exercise price of
the right with a value of twice the exercise price. This plan could have the
effect of discouraging, delaying or preventing persons from attempting to
acquire us.
The indenture relating to the notes provides that in the event of certain
changes in control, each holder of the notes will have the right to require us
to repurchase such holder's notes at a premium over the principal amount of the
notes.
In addition, the Delaware General Corporation Law, to which we are subject,
prohibits, except under circumstances specified in the statute, a corporation
from engaging in any mergers, significant sales of stock or assets or business
combinations with any stockholder or group of stockholders who own at least 15%
of our common stock.
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USE OF PROCEEDS
We will not receive any of the proceeds from the sale by any selling
securityholder of the notes or the shares of common stock offered in this
prospectus.
DIVIDEND POLICY
We have not paid any cash dividends since our inception. We currently
anticipate that we will retain all of our future earnings for use in the
expansion and operation of our business. In addition, our existing credit
facility limits our ability to pay cash dividends. Thus, we do not anticipate
paying any cash dividends on our capital stock in the foreseeable future.
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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
The selected consolidated financial and other data set forth below should
be read together with our consolidated financial statements and the related
notes thereto and with "Management's Discussion and Analysis of Results of
Operations and Financial Condition," both which are incorporated by reference
herein. The selected consolidated financial and other data for the years ended
June 30, 1996, 1997, 1998, 1999 and 2000, and for the nine months ended March
31, 2000 and 2001 are derived from our audited consolidated financial statements
and our unaudited Quarterly Report on Form 10-Q incorporated by reference
herein. Historical results are not necessarily indicative of results that may be
expected in the future.
(UNAUDITED)
NINE MONTHS ENDED
YEARS ENDED, JUNE 30, MARCH 31,
----------------------------------------------------- -------------------
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- -------- --------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
STATEMENT OF OPERATIONS DATA:
Revenues.......................... $247,061 $318,988 $386,344 $472,676 $ 571,401 $416,014 $507,103
-------- -------- -------- -------- --------- -------- --------
Operating costs and expenses:
Service and operating........... 131,708 170,717 221,767 266,800 326,315 241,432 292,574
General and administrative...... 39,980 54,638 58,061 69,696 78,719 57,901 65,509
Selling and conversion.......... 9,248 12,410 17,064 22,509 26,949 20,403 23,212
Research and development........ 10,176 10,408 11,731 11,523 12,504 9,187 8,823
Amortization of intangibles..... 3,811 3,613 3,819 7,756 11,444 8,520 14,639
Business divestitures, merger
expenses and other charges,
net........................... 22,250 1,500 11,998 400 (520) -- 4,245
Acquired in-process research and
development................... -- -- -- 19,000 -- -- --
-------- -------- -------- -------- --------- -------- --------
Operating earnings................ 29,888 65,702 61,904 74,992 115,990 78,571 98,101
Interest income, net.............. 372 2,216 4,849 1,200 49 (562) (4,763)
-------- -------- -------- -------- --------- -------- --------
Income before income tax
provision....................... 30,260 67,918 66,753 76,192 116,039 78,009 93,338
Income tax provision.............. 12,236 27,167 26,729 38,076 45,835 30,813 36,869
-------- -------- -------- -------- --------- -------- --------
Net income........................ $ 18,024 $ 40,751 $ 40,024 $ 38,116 $ 70,204 $ 47,196 $ 56,469
======== ======== ======== ======== ========= ======== ========
Basic earnings per share(1)....... $ 0.38 $ 0.81 $ 0.76 $ 0.71 $ 1.28 $ 0.86 $ 0.99
Diluted earnings per share(1)..... $ 0.36 $ 0.77 $ 0.73 $ 0.68 $ 1.23 $ 0.83 $ 0.94
Basic weighted average shares
outstanding(1).................. 47,484 50,076 52,628 53,392 54,916 54,712 56,966
Diluted weighted average shares
outstanding(1).................. 50,136 52,714 54,694 55,872 56,986 56,768 59,776
OTHER FINANCIAL DATA:
Depreciation...................... $ 6,154 $ 8,146 $ 11,092 $ 15,804 $ 19,198 $ 14,182 $ 16,286
Amortization of intangible
assets.......................... 3,811 3,613 3,819 7,756 11,444 8,520 14,639
Capital expenditures.............. 12,698 15,974 16,930 27,740 27,963 20,466 21,212
Ratio of earnings to fixed
charges(2)...................... 6.1x 13.8x 12.4x 10.3x 12.7x 10.8x 8.2x
SUPPLEMENTAL DATA:
Adjusted EBITDA(3)................ $ 62,103 $ 78,961 $ 88,813 $117,952 $ 146,112 $101,273 $133,271
Operating results(4).............. 55,949 70,815 77,721 102,148 126,914 87,091 116,985
Net cash from operating
activities...................... 39,720 46,341 62,619 52,300 90,018 64,131 78,306
Net cash from (used in) investing
activities...................... (3,245) (11,832) (50,324) (91,142) (130,828) (14,571) (93,343)
Net cash from (used in) financing
activities...................... (4,487) 6,158 1,157 (4,972) 61,398 (46,482) 201,377
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(UNAUDITED)
JUNE 30, MARCH 31,
----------------------------------------------------- -------------------
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- -------- --------- -------- --------
(IN THOUSANDS)
BALANCE SHEET DATA:
Cash and cash equivalents......... $ 39,284 $ 79,951 $ 93,403 $ 49,589 $ 70,177 $ 52,667 $256,517
Working capital, exclusive of
short-term borrowings........... 40,448 87,641 97,822 74,084 99,598 75,527 306,482
Total assets...................... 214,625 265,085 334,101 459,661 601,051 465,877 904,028
Long-term debt, including current
maturities...................... 1,974 1,668 1,702 -- -- -- 300,000
Short-term borrowings(5).......... -- -- -- 52,000 115,000 9,000 --
Stockholders' equity.............. 143,172 191,919 238,290 288,506 361,641 334,682 462,237
- ---------------
(1) Restated for effect of 2 for 1 stock split.
(2) These ratios are calculated by dividing (a) earnings before income taxes
adjusted for fixed charges by (b) fixed charges. Fixed charges included
interest expense plus capitalized interest costs and the portion of
operating rental expense which we believe is representative of the interest
component of rental expense.
(3) Adjusted EBITDA represents EBITDA before giving effect to other special
charges in connection with business divestitures, merger expenses and other
charges, and write-off of acquired in-process research and development costs
aggregating $22.2 million, $1.5 million, $12.0 million, $19.4 million and
$(0.5) million in fiscal years ended June 30, 1996, 1997, 1998, 1999 and
2000, respectively, and $0 and $4.2 million for the nine months ended March
31, 2000 and 2001, respectively. EBITDA consists of net income before net
interest expense, income taxes, depreciation and amortization. Adjusted
EBITDA is presented because we believe it is an indicator of our ability to
incur and service debt and is used by our lenders in determining compliance
with financial covenants. However, Adjusted EBITDA should not be considered
as an alternative to cash flow from operating activities, as a measure of
liquidity or as an alternative to net income as a measure of operating
results in accordance with generally accepted accounting principles. Our
definition of Adjusted EBITDA may differ from definitions of Adjusted EBITDA
used by other companies.
(4) Operating results represent operating earnings before amortization of
intangibles, business divestitures, merger expenses and other charges, and
write-off of acquired in-process research and development costs.
(5) Includes amounts outstanding under our $300 million revolving credit
facility. Our revolving credit facility bears interest at prime or, at our
option, LIBOR plus a margin not to exceed 1.325% based on a leverage ratio
schedule.
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DESCRIPTION OF NOTES
We issued the notes under an indenture dated as of March 13, 2001, between
us and Chase Manhattan Trust Company, National Association, as trustee. The
terms of the notes include those provided in the indenture and those provided in
the registration rights agreement dated as of March 13, 2001, between us and
Bear, Stearns & Co. Inc. and Credit Suisse First Boston Corporation.
The following description is only a summary of the material provisions of
the notes, the indenture and the registration rights agreement and is not
complete. We urge you to read these documents in their entirety because they,
and not this description, define your rights as holders of these notes. You may
request copies of these documents at our address set forth below under "Where
You Can Find More Information."
GENERAL
The notes are unsecured general obligations of BISYS and are subordinate in
right of payment as described under "Subordination of Notes." The notes are
convertible into shares of our common stock as described under "Conversion of
Notes." The notes are limited to $300,000,000 aggregate principal amount at
maturity. The notes were issued only in denominations of $1,000 or in multiples
of $1,000. The notes will mature on March 15, 2006, unless earlier redeemed by
us at our option or purchased by us at your option upon a change in control.
We are not restricted from paying dividends, incurring debt, or issuing or
repurchasing our securities under the indenture. In addition, there are no
financial covenants in the indenture. You are not protected under the indenture
in the event of a highly leveraged transaction or a change in control of BISYS,
except to the extent described under "Purchase of Notes at Your Option Upon a
Change in Control."
The notes will bear interest at the annual rate of 4%. Interest will be
payable on March 15 and September 15 of each year, beginning September 15, 2001,
subject to limited exceptions if the notes are redeemed or purchased prior to
the interest payment date. The record dates for the payment of interest will be
March 1 and September 1. Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months.
We will maintain an office in The City of New York where the notes may be
presented for registration, transfer, exchange or conversion. This office will
initially be an office or agency of the trustee.
CONVERSION OF NOTES
You have the right, at your option, to convert your notes into shares of
our common stock at any time prior to maturity, unless previously redeemed or
purchased, at the conversion price of approximately $66.79 per share, subject to
the adjustments described below. You may convert the notes in denominations of
$1,000 and multiples of $1,000.
Except as described below, we will not make any payment or other adjustment
for accrued interest on the notes or dividends on any common stock issued upon
conversion of the notes. If you submit your notes for conversion between a
record date for an interest payment and the opening of business on the next
interest payment date (except for notes or portions of notes called for
redemption on a redemption date occurring during the period from the close of
business on a record date and ending on the opening of business on the first
business day after the next interest payment date, or if this interest payment
date is not a business day, the second business day after the interest payment
date), you must pay funds equal to the interest payable on the principal amount
to be converted. We will not issue fractional shares of common stock upon
conversion of notes. Instead, we will pay a cash amount based upon the closing
market price of the common stock on the last trading day prior to the date of
conversion. If the notes are called for redemption or are subject to purchase
following a change in control, your conversion rights on the notes called for
redemption or so subject to purchase will expire at the close of business on the
second business day before the redemption date or purchase date, as the case may
be, unless we default in the payment of the redemption price or purchase price.
If you have submitted your notes for purchase upon a
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change in control, you may only convert your notes if you withdraw your election
in accordance with the indenture.
The conversion price will be adjusted upon the occurrence of:
(1) the issuance of shares of our common stock as a dividend or
distribution on our common stock;
(2) the subdivision or combination of our outstanding common stock;
(3) the issuance to all or substantially all holders of our common stock
of rights or warrants entitling them for a period of not more than
60 days to subscribe for or purchase our common stock, or securities
convertible into our common stock, at a price per share or a
conversion price per share less than the then current market price
per share, provided that the conversion price will be readjusted to
the extent that such rights or warrants are not exercised prior to
the expiration;
(4) the distribution to all or substantially all holders of our common
stock of shares of our capital stock, evidences of indebtedness or
other non-cash assets or rights or warrants, excluding:
- dividends, distributions and rights or warrants referred to in
clause (1) or (3) above; and
- dividends or distributions exclusively in cash referred to in
clause (5) below.
(5) the distribution to all or substantially all holders of our common
stock of all-cash distributions in an aggregate amount that together
with (A) any cash and the fair market value of any other
consideration payable in respect of any tender offer by us or any of
our subsidiaries for our common stock consummated within the
preceding 12 months not triggering a conversion price adjustment and
(B) all other all-cash distributions to all or substantially all
holders of our common stock made within the preceding 12 months not
triggering a conversion price adjustment exceeds an amount equal to
10% of our market capitalization on the business day immediately
preceding the day on which we declare such distribution; and
(6) the purchase of our common stock pursuant to a tender offer made by
us or any of our subsidiaries to the extent that the same involves
aggregate consideration that together with (A) any cash and the fair
market value of any other consideration payable in respect of any
tender offer by us or any of our subsidiaries for our common stock
consummated within the preceding 12 months not triggering a
conversion price adjustment and (B) all-cash distributions to all or
substantially all holders of our common stock made within the
preceding 12 months not triggering a conversion price adjustment,
exceeds an amount equal to 10% of our market capitalization on the
expiration date of such tender offer.
In the event of:
- any reclassification of our common stock, or
- a consolidation, merger or combination involving BISYS, or
- a sale or conveyance to another person of the property and assets
of BISYS as an entirety or substantially as an entirety,
in which holders of our outstanding common stock would be entitled to receive
stock, other securities, other property, assets or cash for their common stock,
holders of notes will generally be entitled to convert their notes into the same
type of consideration received by common stock holders immediately prior to one
of these types of events.
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You may, in some circumstances, be deemed to have received a distribution
or dividend subject to United States federal income tax as a result of an
adjustment or the nonoccurrence of an adjustment to the conversion price.
We are permitted to reduce the conversion price of the notes by any amount
for a period of at least 20 days if our board of directors determines that such
reduction would be in the best interest of BISYS. We are required to give at
least 15 days' prior notice of any reduction in the conversion price. We may
also reduce the conversion price to avoid or diminish income tax to holders of
our common stock in connection with a dividend or distribution of stock or
similar event.
No adjustment in the conversion price will be required unless it would
result in a change in the conversion price of at least one percent. Any
adjustment not made will be taken into account in subsequent adjustments. Except
as stated above, we will not adjust the conversion price for the issuance of our
common stock or any securities convertible into or exchangeable for our common
stock or the right to purchase our common stock or such convertible or
exchangeable securities.
SUBORDINATION OF NOTES
The indebtedness evidenced by the notes is subordinated to the extent
provided in the indenture to the prior payment in full, in cash or other payment
satisfactory to holders of senior indebtedness, of all of our existing and
future senior indebtedness. Upon any distribution of our assets upon any
dissolution, winding-up, liquidation or reorganization, or in bankruptcy,
insolvency, receivership or similar proceedings, payment of the principal of,
premium, if any, interest and all other obligations in respect of the notes,
including by way of redemption, acquisition or other purchase thereof, is to be
subordinated in right of payment to the prior payment in full, in cash or other
payment satisfactory to holders of senior indebtedness, of all of our existing
and future senior indebtedness. In addition, the notes are also effectively
subordinated to all indebtedness and other liabilities, including trade payables
and lease obligations and preferred stock, if any, of our subsidiaries. Certain
of our subsidiaries are guarantors under our existing credit facility.
In the event of any acceleration of the notes because of an event of
default, the holders of any senior indebtedness then outstanding would be
entitled to payment in full, in cash or other payment satisfactory to holders of
senior indebtedness, of all obligations in respect to such senior indebtedness
before the holders of notes are entitled to receive any payment or other
distribution. We are required to promptly notify holders of senior indebtedness
if payment of the notes is accelerated because of an event of default.
We also may not make any payment upon or redemption of or purchase or
otherwise acquire the notes if:
- a default in the payment of principal of, premium, if any, interest or
other obligations in respect of designated senior indebtedness occurs
and is continuing beyond any applicable period of grace, or
- any other default occurs and is continuing with respect to designated
senior indebtedness that permits holders of the designated senior
indebtedness as to which such default relates to accelerate its
maturity and the trustee receives a notice of such default, which we
refer to as a payment blockage notice, from us or any other person
permitted to give this notice under the indenture.
We may and shall resume making payments on the notes:
- in the case of a payment default, when the default is cured or waived
or ceases to exist, and
- in the case of a nonpayment default, the earlier of when such
nonpayment default is cured or waived or ceases to exist or 179 days
after receipt of the payment blockage notice.
No new period of payment blockage may be commenced pursuant to a payment
blockage notice unless and until 365 days have elapsed since the initial
effectiveness of the prior payment blockage notice.
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No default that existed or was continuing on the date of delivery of any
payment blockage notice to the trustee shall be the basis for a subsequent
payment blockage notice.
In the event of our bankruptcy, dissolution or reorganization, holders of
senior indebtedness may receive more, ratably, and holders of the notes may
receive less, ratably, than the other creditors of BISYS. Such subordination
will not prevent the occurrence of any event of default under the indenture.
A substantial portion of our operations are conducted through our
subsidiaries. As a result, our cash flow and our ability to service our debt,
including the notes, is dependent upon the earnings of our subsidiaries. In
addition, we are dependent on the distribution of earnings, loans or other
payments by our subsidiaries to us.
Our subsidiaries are separate and distinct legal entities. Our subsidiaries
have no obligation to pay any amounts due on the notes or to provide us with
funds for our payment obligations, whether by dividends, distributions, loans or
other payments. In addition, any payment of dividends, distributions, loans or
advances by our subsidiaries to us could be subject to statutory or contractual
restrictions. Payments to us by our subsidiaries will also be contingent upon
our subsidiaries' earnings and business consideration. There can be no assurance
that we will receive adequate funds from our subsidiaries to pay interest due on
the notes or to repay the notes when redeemed or upon maturity.
Our right to receive any assets of any of our subsidiaries upon its
liquidation or reorganization, and therefore the right of the holders of the
notes to participate in those assets, will be effectively subordinated to the
claims of that subsidiary's creditors, including trade creditors. In addition,
even if we were a creditor of any of our subsidiaries, our rights as a creditor
would be subordinate to any security interest in the assets of our subsidiaries
and any indebtedness of our subsidiaries senior to that held by us.
Following the application of the net proceeds from the initial offering of
the notes, we had no senior indebtedness outstanding, but we may incur new
senior indebtedness. In addition, after the application of the net proceeds to
repay borrowings under our existing credit facility to which certain of our
subsidiaries are guarantors, our subsidiaries had no outstanding indebtedness.
The notes will be effectively subordinated to any future indebtedness and other
liabilities of our subsidiaries, including guarantees of any future borrowings
under our credit facility.
Neither we nor our subsidiaries are limited in or prohibited from incurring
senior indebtedness or any other indebtedness or liabilities under the
indenture.
DEFINITIONS OF SENIOR INDEBTEDNESS, INDEBTEDNESS AND DESIGNATED SENIOR
INDEBTEDNESS
"DESIGNATED SENIOR INDEBTEDNESS" means all senior indebtedness under our
credit facility, as amended, supplemented or refinanced at any time, and, after
payment in full in cash of all senior indebtedness under the credit facility,
any particular senior indebtedness in which the instrument creating or
evidencing the senior indebtedness or the assumption or guarantee thereof (or
related documents or agreements to which we are a party) expressly provides that
such indebtedness shall be "designated senior indebtedness" (provided that such
instrument may place limitations and conditions on the right of such senior
indebtedness to exercise the rights of designated senior indebtedness), the
aggregate principal amount of which is equal to or greater than $50 million.
"INDEBTEDNESS" means:
(1) all of our indebtedness, obligations and other liabilities,
contingent or otherwise, for borrowed money, including
obligations:
- in respect of overdrafts, foreign exchange contracts, currency
exchange agreements, interest rate protection agreements, and any
loans or advances from banks, whether or not evidenced by notes or
similar instruments, or
- evidenced by bonds, debentures, notes or similar instruments,
whether or not the recourse of the lender is to all of our assets
or to only a portion thereof, other than any account
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payable or other accrued current liability or obligation incurred
in the ordinary course of business in connection with the obtaining
of materials or services,
(2) all of our reimbursement obligations and other liabilities,
contingent or otherwise, with respect to letters of credit, bank
guarantees or bankers' acceptances,
(3) all of our obligations and liabilities, contingent or otherwise, in
respect of leases required, in conformity with generally accepted
accounting principles, to be accounted for as capitalized lease
obligations on our balance sheet, or under other leases for
facilities equipment or related assets, whether or not capitalized,
entered into or leased for financing purposes, as determined by
BISYS,
(4) all of our obligations and other liabilities, contingent or
otherwise, under any lease or related document, including a purchase
agreement, in connection with the lease of real property or
improvements thereon (or any personal property included as part of
any such lease) which provides that we are contractually obligated
to purchase or cause a third party to purchase the leased property
and thereby guarantee a residual value of leased property to the
lessor and all of our obligations under such lease or related
document to purchase or to cause a third party to purchase the
leased property (whether or not such lease transaction is
characterized as an operating lease or a capitalized lease in
accordance with generally accepted accounting principles),
(5) all of our obligations, contingent or otherwise, with respect to an
interest rate, currency or other swap, cap, floor or collar
agreement, hedge agreement, forward contract, or other similar
instrument or agreement or foreign currency hedge, exchange,
purchase or similar instrument or agreement,
(6) all of our direct or indirect guaranties or similar agreements to
purchase or otherwise acquire or otherwise assure a creditor against
loss in respect of indebtedness, obligations or liabilities of
another person of the kind described in clauses (1) through (5),
(7) any indebtedness or other obligations described in clauses (1)
through (6) secured by any mortgage, pledge, lien or other
encumbrance existing on property which is owned or held by us,
regardless of whether the indebtedness or other obligation secured
thereby has been assumed by us, and
(8) any and all deferrals, renewals, extensions and refundings of, or
amendments, modifications supplements to, any indebtedness,
obligation or liability of the kind described in clauses (1) through
(7).
"SENIOR INDEBTEDNESS" means the principal of, premium, if any, interest,
including all interest accruing subsequent to the commencement of any bankruptcy
or similar proceeding, whether or not a claim for post-petition interest is
allowable as a claim in any such proceeding, and rent payable on or in
connection with, and all fees, costs, expenses and other amounts accrued or due
on or in connection with, indebtedness of BISYS whether outstanding on the date
of the indenture or thereafter created, incurred, assumed, guaranteed or in
effect guaranteed by BISYS, including all deferrals, renewals, extensions or
refundings of, or amendments, modifications or supplements to, the foregoing,
unless in the case of any particular indebtedness the instrument creating or
evidencing the same or the assumption or guarantee thereof expressly provides
that such indebtedness shall not be senior in right of payment to the notes or
expressly provides that such indebtedness is on the same basis or junior to the
notes.
Senior indebtedness does not include any indebtedness of BISYS to any
subsidiary of BISYS.
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OPTIONAL REDEMPTION BY BISYS
We may redeem the notes in whole or from time to time in part on or after
March 20, 2004, on at least 20 days', and no more than 60 days', notice at the
following redemption prices expressed as percentages of the principal amount:
REDEMPTION
PERIOD PRICE
- ------ ----------
Beginning on March 20, 2004 and ending on March 14, 2005.... 101.00%
Beginning on March 15, 2005 and thereafter.................. 100.00%
In each case, we will pay accrued interest to, but excluding, the redemption
date. If the redemption date is an interest payment date, interest will be paid
to the record holder on the relevant record date.
If fewer than all of the notes are to be redeemed, the trustee will select
the notes to be redeemed by lot, or in its discretion, on a pro rata basis. If
any note is to be redeemed in part only, a new note in principal amount equal to
the unredeemed principal portion will be issued. If a portion of your notes is
selected for partial redemption and you convert a portion of your notes, the
converted portion will be deemed to be of the portion selected for redemption.
No sinking fund is provided for the notes.
PURCHASE OF NOTES AT YOUR OPTION UPON A CHANGE IN CONTROL
In the event of a change in control, you will have the right to require us
to purchase all or any part of your notes 30 business days after the occurrence
of a change in control at a purchase price equal to 100% of the principal amount
of the notes plus accrued and unpaid interest to, but excluding, the purchase
date. Notes submitted for purchase must be in $1,000 or multiples of $1,000
principal amount.
We shall mail to the trustee and to each holder a written notice of the
change in control within 10 business days after the occurrence of a change in
control. This notice shall state among other things:
- the terms and conditions of the change in control;
- the procedures required for exercise of the change in control purchase
feature; and
- the holder's right to require BISYS to purchase the notes.
You must deliver written notice of your exercise of this purchase right to
a paying agent at any time prior to the close of business on the business day
prior to the change in control purchase date. The written notice must specify
the notes for which the purchase right is being exercised. If you wish to
withdraw this election, you must provide a written notice of withdrawal to the
paying agent at any time prior to the close of business on the business day
prior to the change in control purchase date.
A change in control will be deemed to have occurred if any of the following
occurs:
- any "person" or "group" is or becomes the "beneficial owner," directly
or indirectly, of shares of voting stock of BISYS representing 50% or
more of the total voting power of all outstanding classes of voting
stock of BISYS or has the power, directly or indirectly, to elect a
majority of the members of the board of directors of BISYS;
- BISYS consolidates with, or merges with or into, another person or
BISYS sells, assigns, conveys, transfers, leases or otherwise disposes
of all or substantially all of the assets of BISYS, or any person
consolidates with, or merges with or into, BISYS, in any such event
other than pursuant to a transaction in which the persons that
"beneficially owned," directly or indirectly, shares of voting stock
of BISYS immediately prior to such transaction "beneficially own,"
directly or indirectly, shares of voting stock of BISYS, representing
at least a majority of the total voting power of all outstanding
classes of voting stock of the surviving or transferee person; or
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- a liquidation or dissolution of BISYS.
However, a change in control will not be deemed to have occurred if either:
- the last sale price of our common stock for any five trading days
within
- the period of ten consecutive trading days immediately after the
later of the change in control or the public announcement of the
change in control, in the case of a change in control resulting
solely from a change in control under the first bullet point above,
or
- the period of ten consecutive trading days immediately preceding
the change in control, in the case of a change in control under the
second and third bullet points above,
is at least equal to 105% of the conversion price in effect on such day;
or
- in the case of a merger or consolidation, all of the consideration
excluding cash payments for fractional shares in the merger or
consolidation constituting the change in control consists of common
stock traded on a United States national securities exchange or quoted
on the Nasdaq National Market (or which will be so traded or quoted
when issued or exchanged in connection with such change in control)
and as a result of such transaction or transactions the notes become
convertible solely into such common stock.
For purposes of this change in control definition:
- "person" or "group" have the meanings given to them for purposes of
Sections 13(d) and 14(d) of the Exchange Act or any successor
provisions, and the term "group" includes any group acting for the
purpose of acquiring, holding or disposing of securities within the
meaning of Rule 13d-5(b)(1) under the Exchange Act, or any successor
provision;
- a "beneficial owner" will be determined in accordance with Rule 13d-3
under the Exchange Act, as in effect on the date of the indenture,
except that the number of shares of voting stock of BISYS will be
deemed to include, in addition to all outstanding shares of voting
stock of BISYS and unissued shares deemed to be held by the "person"
or "group" or other person with respect to which the change in control
determination is being made, all unissued shares deemed to be held by
all other persons;
- "beneficially owned" has a meaning correlative to that of beneficial
owner;
- "unissued shares" means shares of voting stock not outstanding that
are subject to options, warrants, rights to purchase or conversion
privileges exercisable within 60 days of the date of determination of
a change in control; and
- "voting stock" means any class or classes of capital stock pursuant to
which the holders of capital stock under ordinary circumstances have
the power to vote in the election of the board of directors, managers
or trustees of any person or other persons performing similar
functions irrespective of whether or not, at the time, capital stock
of any other class or classes shall have, or might have, voting power
by reason of the happening of any contingency.
The term "all or substantially all" as used in the definition of change in
control will likely be interpreted under applicable state law and will be
dependent upon particular facts and circumstances. There may be a degree of
uncertainty in interpreting this phrase. As a result, we cannot assure you how a
court would interpret this phrase under applicable law if you elect to exercise
your rights following the occurrence of a transaction which you believe
constitutes a transfer of "all or substantially all" of our assets.
We will under the indenture:
- comply with the provisions of Rule 13e-4 and Rule 14e-1, if
applicable, under the Exchange Act;
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- file a Schedule TO or any successor or similar schedule if required
under the Exchange Act; and
- otherwise comply with all federal and state securities laws in
connection with any offer by us to purchase the notes upon a change in
control.
This change in control purchase feature may make more difficult or
discourage a takeover of BISYS and the removal of incumbent management. However,
we are not aware of any specific effort to accumulate shares of our common stock
or to obtain control of us by means of a merger, tender offer, solicitation or
otherwise. In addition, the change in control purchase feature is not part of a
plan by management to adopt a series of anti-takeover provisions. Instead, the
change in control purchase feature is a result of negotiations between us and
the initial purchasers.
We could, in the future, enter into certain transactions, including
recapitalizations, that would not constitute a change in control but would
increase the amount of debt, including senior indebtedness, outstanding or
otherwise adversely affect a holder. Neither we nor our subsidiaries are
prohibited from incurring debt, including senior indebtedness, under the
indenture. The incurrence of significant amounts of additional debt could
adversely affect our ability to service our debt, including the notes.
If a change in control were to occur, we may not have sufficient funds to
pay the change in control purchase price for the notes tendered by holders. In
addition, we may in the future incur debt that has similar change of control
provisions that permit holders of this debt to accelerate or require us to
repurchase this debt upon the occurrence of events similar to a change in
control. Our failure to repurchase the notes upon a change in control will
result in an event of default under the indenture, whether or not the purchase
is permitted by the subordination provisions of the indenture.
EVENTS OF DEFAULT
Each of the following constitute an event of default under the indenture:
(1) failure to pay principal of or premium, if any, on any note when
due, whether or not prohibited by the subordination provisions of
the indenture;
(2) failure to pay any interest on any note when due, if such failure
continues for 30 days, whether or not prohibited by the
subordination provisions of the indenture;
(3) failure of BISYS to perform any other covenant required of us in the
indenture, if such failure continues for 60 days after written
notice has been given by the trustee, or the holders of at least 25%
in aggregate principal amount of the outstanding notes; and
(4) certain events in bankruptcy, insolvency or reorganization of BISYS.
If an event of default, other than an event of default described in clause
(4) above, occurs and is continuing, either the trustee or the holders of at
least 25% in aggregate principal amount of the outstanding notes may declare the
principal amount of the notes to be due and payable immediately. If an event of
default described in clause (4) above occurs, the principal amount of the notes
will automatically become immediately due and payable. Any payment by us on the
notes following any such acceleration will be subject to the subordination
provisions described above.
After any such acceleration, but before a judgment or decree based on
acceleration, the holders of a majority in aggregate principal amount of the
notes may, under certain circumstances, rescind and annul such acceleration if
all events of default, other than the non-payment of accelerated principal, have
been cured or waived.
Subject to the trustee's duties in the case of an event of default, the
trustee will not be obligated to exercise any of its rights or powers at the
request of the holders, unless the holders have offered to the trustee
reasonable indemnity. Subject to the trustee's indemnification, the holders of a
majority in aggregate principal amount of the outstanding notes will have the
right to direct the time, method and
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place of conducting any proceeding for any remedy available to the trustee or
exercising any trust or power conferred on the trustee with respect to the
notes.
No holder has the right to institute any proceeding under the indenture, or
for the appointment of a receiver or a trustee, or for any other remedy under
the indenture unless:
- the holder has previously given to the trustee written notice of a
continuing event of default with respect to the notes;
- the holders of at least 25% in aggregate principal amount of the
outstanding notes have made a written request and have offered
reasonable indemnity to the trustee to institute such proceeding as
trustee; and
- the trustee has failed to institute such proceeding, and has not
received from the holders of a majority in aggregate principal amount
of the outstanding notes a direction inconsistent with such request
within 60 days after such notice, request and offer.
However, these limitations do not apply to a suit instituted by a holder
for the enforcement of payment of the principal of or any premium or interest on
any note or the right to convert the note on or after the applicable due date.
We are required to furnish to the trustee, on an annual basis, a statement
by our officers as to whether or not BISYS, to the officer's knowledge, is in
default in the performance or observance of any of the terms, provisions and
conditions of the indenture. If so, such statement will specify any known
defaults.
MODIFICATION AND WAIVER
We and the trustee may make modifications and amendments to the indenture
with the consent of the holders of a majority in aggregate principal amount of
the outstanding notes.
However, neither we nor the trustee may make any modification or amendment
without the consent of the holder of each outstanding note who is affected by
the modification or amendment if such modification or amendment would do any of
the following:
- extend the stated maturity of the principal of or interest on any
note,
- reduce the principal amount of, or any premium or interest on, any
note,
- reduce the amount of principal payable upon acceleration of the
maturity of any note,
- change the place or currency of payment of principal of, or any
premium or interest on, any note,
- impair the right to institute suit for the enforcement of any payment
on, or with respect to, any note,
- adversely affect the right of holders to convert notes other than as
provided in or under the indenture,
- reduce the percentage in principal amount of outstanding notes, the
consent of whose holders is required for modification or amendment of
the indenture,
- reduce the percentage in principal amount of outstanding notes
necessary for waiver of compliance with certain provisions of the
indenture or for waiver of certain defaults, or
- modify such provisions with respect to modification and waiver.
Holders of a majority in aggregate principal amount of the outstanding
notes may waive, on behalf of the holders of all of the notes, compliance by us
with respect to certain restrictive provisions of the indenture.
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Generally, the holders of not less than a majority of the aggregate
principal amount of the outstanding notes may, on behalf of all holders of the
notes, waive any past default or event of default unless:
- we fail to pay principal, premium or interest on any note when due;
- we fail to convert any note into common stock; or
- we fail to comply with any of the provisions of the indenture that
would require the consent of the holder of each outstanding note
affected.
Any notes held by us or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with us shall be
disregarded (from both the numerator and denominator) for purposes of
determining whether the holders of a majority in principal amount of the
outstanding notes have consented to a modification, amendment or waiver of the
terms of the indenture.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with or merge into any other person, in a
transaction in which we are not the surviving corporation, or convey, transfer
or lease our properties and assets substantially as an entirety to any successor
person, unless:
- the successor person, if any, is a corporation, limited liability
company, partnership, trust or other entity organized and existing
under the laws of the United States, or any state of the United
States, and assumes our obligations on the notes and under the
indenture; and
- immediately after giving effect to the transaction, no default or
event of default shall have occurred and be continuing.
REGISTRATION RIGHTS
We entered into a registration rights agreement with the initial purchasers
of the notes. If you sell the notes or shares of common stock issued upon
conversion of the notes under this registration statement, you generally will be
required to be named as a selling securityholder in this prospectus, deliver
this prospectus to purchasers and be bound by applicable provisions of the
registration rights agreement, including some indemnification provisions.
In the registration rights agreement, we agreed to file a registration
statement that includes this prospectus with the Securities and Exchange
Commission by June 11, 2001. We agreed to use all reasonable best efforts to
cause this registration statement to become effective as promptly as
practicable, but before September 9, 2001. We agreed to keep this registration
statement effective until the earliest of (i) two years after the filing date,
(ii) the date when all of the securities registered under this registration
agreement are sold, or (iii) the period applicable to the notes and underlying
shares of our common stock held by non-affiliates under Rule 144(k) under the
Securities Act expires. We may suspend the use of this prospectus under limited
circumstances, including pending corporate developments or public filings with
the Securities and Exchange Commission, for a period not to exceed 45 days in
any 90-day period and 90 days in any 360-day period. We also agreed to pay
liquidated damages to holders of the notes and shares of common stock issued
upon conversion of the notes if the registration statement is not timely filed
or made effective or if the prospectus is unavailable for periods in excess of
those permitted above. You should refer to the registration rights agreement for
a description of these liquidated damages.
SATISFACTION AND DISCHARGE
We may, at our option, satisfy and discharge our obligations under the
indenture while notes remain outstanding if (1) all outstanding notes will
become due and payable at their scheduled maturity within one year or (2) all
outstanding notes are scheduled for redemption within one year, and, in either
case, we have deposited with the trustee an amount sufficient to pay and
discharge all outstanding notes on the date of their scheduled maturity or the
scheduled date of redemption.
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TRANSFER AND EXCHANGE
We have initially appointed the trustee as security registrar, paying agent
and conversion agent, acting through its corporate trust office. We reserve the
right to:
- vary or terminate the appointment of the security registrar, paying
agent or conversion agent;
- appoint additional paying agents or conversion agents; or
- approve any change in the office through which any security registrar
or any paying agent or conversion agent acts.
PURCHASE AND CANCELLATION
All notes surrendered for payment, redemption, registration of transfer or
exchange or conversion shall, if surrendered to any person other than the
trustee, be delivered to the trustee. All notes delivered to the trustee shall
be cancelled promptly by the trustee. No notes shall be authenticated in
exchange for any notes cancelled as provided in the indenture.
We may, to the extent permitted by law, purchase notes in the open market
or by tender offer at any price or by private agreement. Any notes purchased by
us may, to the extent permitted by law, be reissued or resold or may, at our
option, be surrendered to the trustee for cancellation. Any notes surrendered
for cancellation may not be reissued or resold and will be promptly cancelled.
REPLACEMENT OF NOTES
We will replace mutilated, destroyed, stolen or lost notes at your expense
upon delivery to the trustee of the mutilated notes, or evidence of the loss,
theft or destruction of the notes satisfactory to us and the trustee. In the
case of a lost, stolen or destroyed note, indemnity satisfactory to the trustee
and us may be required at the expense of the holder of such note before a
replacement note will be issued.
GOVERNING LAW
The indenture and the notes are governed by, and construed in accordance
with, the law of the State of New York, without regard to conflicts of laws
principles.
CONCERNING THE TRUSTEE
Chase Manhattan Trust Company, National Association is the trustee under
the indenture. The trustee will be permitted to deal with BISYS and any
affiliate of BISYS with the same rights as if it were not trustee. However,
under the Trust Indenture Act, if the trustee acquires any conflicting interest
and there exists a default with respect to the notes, the trustee must eliminate
such conflicts or resign. J.P. Morgan Chase & Co., an affiliate of the trustee,
is a co-agent under our existing credit facility.
The holders of a majority in principal amount of all outstanding notes have
the right to direct the time, method and place of conducting any proceeding for
exercising any remedy or power available to the trustee. However, any such
direction may not conflict with any law or the indenture, may not be unduly
prejudicial to the rights of another holder or the trustee and may not involve
the trustee in personal liability.
BOOK-ENTRY, DELIVERY AND FORM
The notes were originally issued in registered book-entry form, without
coupons. The notes that are sold under this prospectus will be represented by
one or more global securities. The global securities will be deposited with the
trustee as custodian for DTC and registered in the name of a nominee of DTC.
Except as set forth below, the global security may be transferred, in whole and
not in part, only to DTC or another nominee of DTC. Purchasers of notes under
this prospectus may hold their interests in the global security directly through
DTC if you have an account with DTC or indirectly through organizations which
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have accounts with DTC. Notes in definitive certificated form (called
"certificated securities") will be issued only in certain limited circumstances
described below.
DTC has advised us that it is:
- a limited purpose trust company organized under the laws of the State
of New York;
- a member of the Federal Reserve System;
- a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
- a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act.
DTC was created to hold securities of institutions that have accounts with
DTC (called "participants") and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. DTC's
participants include securities brokers and dealers, which may include the
initial purchasers, banks, trust companies, clearing corporations and certain
other organizations. Access to DTC's book-entry system is also available to
others such as banks, brokers, dealers and trust companies (called, the
"indirect participants") that clear through or maintain a custodial relationship
with a participant, whether directly or indirectly.
Ownership of beneficial interests in the global security will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests in the global security will be shown on, and the
transfer of those ownership interests will be effected only through, records
maintained by DTC (with respect to participants' interests), the participants
and the indirect participants. The laws of some jurisdictions may require that
certain purchasers of securities take physical delivery of such securities in
definitive form. These limits and laws may impair the ability to transfer or
pledge beneficial interests in the global security.
Beneficial owners of interests in global securities who desire to convert
their interests into common stock should contact their brokers or other
participants or indirect participants through whom they hold such beneficial
interests to obtain information on procedures, including proper forms and
cut-off times, for submitting requests for conversion.
So long as DTC, or its nominee, is the registered owner or holder of a
global security, DTC or its nominee, as the case may be, will be considered the
sole owner or holder of the notes represented by the global security for all
purposes under the indenture and the notes. In addition, no beneficial owner of
an interest in a global security will be able to transfer that interest except
in accordance with the applicable procedures of DTC. Except as set forth below,
as an owner of a beneficial interest in the global security, you will not be
entitled to have the notes represented by the global security registered in your
name, will not receive or be entitled to receive physical delivery of
certificated securities and will not be considered to be the owner or holder of
any notes under the global security. We understand that under existing industry
practice, if an owner of a beneficial interest in the global security desires to
take any action that DTC, as the holder of the global security, is entitled to
take, DTC would authorize the participants to take such action, and the
participants would authorize beneficial owners owning through such participants
to take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
We will make payments of principal of, premium, if any, and interest on the
notes represented by the global security registered in the name of and held by
DTC or its nominee to DTC or its nominee, as the case may be, as the registered
owner and holder of the global security. Neither we, the trustee nor any paying
agent will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in the
global security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
We expect that DTC or its nominee, upon receipt of any payment of principal
of, premium, if any, or interest on the global security, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the global security
as shown on the records
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of DTC or its nominee. We also expect that payments by participants or indirect
participants to owners of beneficial interests in the global security held
through such participants or indirect participants will be governed by standing
instructions and customary practices and will be the responsibility of such
participants or indirect participants. We will not have any responsibility or
liability for any aspect of the records relating to, or payments made on account
of, beneficial ownership interests in the global security for any note or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests or for any other aspect of the relationship between DTC and
its participants or indirect participants or the relationship between such
participants or indirect participants and the owners of beneficial interests in
the global security owning through such participants.
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds.
DTC has advised us that it will take any action permitted to be taken by a
holder of notes only at the direction of one or more participants to whose
account the DTC interests in the global security is credited and only in respect
of such portion of the aggregate principal amount of notes as to which such
participant or participants has or have given such direction. However, if DTC
notifies us that they are unwilling to be a depository for the global security
or ceases to be a clearing agency or there is an event of default under the
notes, DTC will exchange the global security for certificated securities which
it will distribute to its participants and which will be legended, if required,
as set forth under the heading "Transfer Restrictions."
Although DTC is expected to follow the foregoing procedures in order to
facilitate transfers of interests in the global security among participants of
DTC, they are under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither we nor
the trustee will have any responsibility or liability for the performance by DTC
or the participants or indirect participants of their respective obligations
under the rules and procedures governing their respective operations.
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DESCRIPTION OF COMMON STOCK
The following summary describes the material terms of our capital stock.
However, it does not purport to be complete and is qualified in its entirety by
the actual terms of our capital stock contained in our Amended and Restated
Certificate of Incorporation and Amended and Restated By-laws, both as currently
in effect.
As of April 30, 2001, our authorized capital stock consists of 160,000,000
shares, consisting of 160,000,000 shares of common stock, par value $0.02 per
share, and no shares of preferred stock. As of April 30, 2001, there were
58,084,850 shares of common stock outstanding. As of April 30, 2001, there were
options to purchase 7,396,098 shares of our common stock outstanding and
4,606,308 shares of common stock reserved for issuance under our stock option
plans and employee stock purchase plan.
COMMON STOCK
The holders of our common stock are entitled to one vote per share on all
matter submitted to a vote of the stockholders. The holders of our common stock
are entitled to receive ratably such dividends, if any, as may be declared from
time to time by the board of directors out of funds legally available for that
purpose. The common stock has no preemptive or conversion rights or other
subscription rights. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are fully
paid and non-assessable.
ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF OUR BY-LAWS, DELAWARE LAW AND
OUR SHAREHOLDER RIGHTS PLAN
We are subject to the "business combination" provisions of the Delaware
General Corporation Law. In general, such provisions prohibit a publicly held
Delaware corporation from engaging in various "business combination"
transactions with any "interested stockholder" for a period of three years after
the date of the transaction in which the person became an "interested
stockholder" unless:
- the transaction is approved by the board of directors prior to the
date the "interested stockholder" obtained such status;
- upon consummation of the transaction which resulted in the stockholder
becoming an "interested stockholder," the "interested stockholder"
owned at least 85% of the voting stock of the corporation outstanding
at the time the transaction commenced, excluding for purposes of
determining the number of shares outstanding those shares owned by (a)
persons who are directors and also officers and (b) employee stock
plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer; or
- on or subsequent to such date, the "business combination" is approved
by the board of directors and authorized at an annual or special
meeting of stockholders by the affirmative vote of at least 66 % of
the outstanding voting stock which is not owned by the "interested
stockholder."
A "business combination" is defined to include mergers, asset sales and
other transactions resulting in financial benefit to a stockholder. In general,
an "interested stockholder" is a person who, together with affiliates or
associates, owns 15% or more of a corporation's voting stock or within three
years did own 15% or more of a corporation's voting stock. The statute could
prohibit or delay mergers or other takeover or change in control attempts with
respect to us and, accordingly, may discourage attempts to acquire us.
We have a shareholder rights plan. Under the plan, each holder of shares of
our common stock will receive a right to buy one share of our common stock at an
exercise price of $175. If a person or group were to acquire, or to announce the
intention to acquire, 15% or more of our outstanding shares of common stock, and
in some cases 10%, each right would entitle the holder, other than the acquiring
person or group, to purchase shares of our common stock at the exercise price of
the right with a value of
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twice the exercise price. This plan could have the effect of discouraging,
delaying or preventing persons from attempting to acquire us.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is The Bank of New
York.
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SELLING SECURITYHOLDERS
The notes were originally issued by us and sold by Bear, Stearns & Co. Inc.
and Credit Suisse First Boston Corporation (the "Initial Purchasers") in
transactions exempt from the registration requirements of the Securities Act to
persons reasonably believed by the Initial Purchasers to be "qualified
institutional buyers" as defined by Rule 144A under the Securities Act. The
selling securityholders may from time to time offer and sell pursuant to this
prospectus any or all of the notes listed below and the shares of common stock
issued upon conversion of such notes. When we refer to the "selling
securityholders" in this prospectus, we mean those persons listed in the table
below, as well as the pledgees, donees, assignees, transferees, successors and
others who later hold any of the selling securityholders' interests.
The table below sets forth the name of each selling securityholder, the
principal amount at maturity of notes that each selling securityholder may offer
pursuant to this prospectus and the number of shares of common stock into which
such notes are convertible. Unless set forth below, to our knowledge, none of
the selling securityholders has, or within the past three years has had, any
material relationship with us or any of our predecessors or affiliates or
beneficially owns in excess of 1% of the outstanding common stock.
The principal amounts of the notes provided in the table below is based on
information provided to us by each of the selling securityholders as of June 12,
2001, and the percentages are based on $300,000,000 principal amount at maturity
of notes outstanding. The number of shares of common stock that may be sold is
calculated based on the current conversion rate of 14.9729 shares of common
stock per $1,000 principal amount at maturity of the notes.
Since the date on which each selling securityholder provided this
information, each selling securityholder identified below may have sold,
transferred or otherwise disposed of all or a portion of their notes in a
transaction exempt from the registration requirements of the Securities Act.
Information concerning the selling securityholders may change from time to time
and any changed information will be set forth in supplements to this prospectus
to the extent required. In addition, the conversion ratio, and therefore the
number of shares of our common stock issuable upon conversion of the notes, is
subject to adjustment. Accordingly, the number of shares of common stock
issuable upon conversion of the notes may increase or decrease.
The selling securityholders may from time to time offer and sell any or all
of the securities under this prospectus. Because the selling securityholders are
not obligated to sell the notes or the shares of common stock issuable upon
conversion of the notes, we cannot estimate the amount of the notes or how many
shares of common stock that the selling securityholders will hold upon
consummation of any such sales.
AGGREGATE NUMBER OF SHARES PERCENTAGE OF
PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF
MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK
THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
------------------ ------------- ---------------- --------------
1976 Distribution Trust FBO A.R.
Lauder/Zinterhofer.............. $ 7,000 * 105 *
1976 Distribution Trust FBO Jane
A. Lauder....................... $ 14,000 * 210 *
2000 Revocable Trust FBO A.R.
Lauder/Zinterhofer.............. $ 7,000 * 105 *
AAM/Zazove Institutional Income
Fund L.P. ...................... $ 1,250,000 * 18,716 *
Alexandra Global Investment Fund
1, Ltd. ........................ $ 5,000,000 1.667% 74,865 *
Allstate Insurance Company........ $ 600,000 * 8,984 *
Allstate Life Insurance Company... $ 150,000 * 2,246 *
Alpine Associates................. $ 4,150,000 1.383% 62,138 *
Alpine Partners, L.P. ............ $ 700,000 * 10,481 *
American Skandia Trust............ $ 150,000 * 2,246 *
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AGGREGATE NUMBER OF SHARES PERCENTAGE OF
PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF
MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK
THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
------------------ ------------- ---------------- --------------
AMICO Advent...................... $ 521,000 * 7,801 *
Arapahoe County Colorado.......... $ 51,000 * 764 *
Arbitax Master Fund, L.P. ........ $ 14,500,000 4.833% 217,107 *
Arkansas Teachers Retirement...... $ 4,503,000 1.501% 67,423 *
Associated Electric & Gas
Insurance Services Limited...... $ 500,000 * 7,486 *
Aventis Pension Master Trust...... $ 175,000 * 2,620 *
B.C. McCabe Foundation............ $ 450,000 * 6,738 *
Bancroft Convertible Fund,
Inc. ........................... $ 1,000,000 * 14,973 *
Bank America Pension Plan......... $ 3,000,000 1.000% 44,919 *
Baptist Health of South Florida... $ 447,000 * 6,693 *
BBT Fund, L.P. ................... $ 7,500,000 2.500% 112,297 *
Bear, Stearns & Co. Inc. ......... $ 6,980,000 2.327% 104,511 *
Black Diamond Offshore Ltd. ...... $ 252,000 * 3,773 *
Boilermaker -- Blacksmith Pension
Trust........................... $ 1,100,000 * 16,470 *
Boston Museum of Fine Art......... $ 134,000 * 2,006 *
British Virgin Islands Social
Security Board.................. $ 38,000 * 569 *
CALAMOS(R) Convertible Fund --
CALAMOS(R) Investment Trust..... $ 3,245,000 1.082% 48,587 *
CALAMOS(R) Convertible Growth and
Income Fund -- CALAMOS(R)
Investment Trust................ $ 2,800,000 * 41,924 *
CALAMOS(R) Convertible
Portfolio -- CALAMOS(R) Advisors
Trust........................... $ 150,000 * 2,246 *
CALAMOS(R) Convertible Technology
Fund -- CALAMOS(R) Investment
Trust........................... $ 60,000 * 898 *
CALAMOS(R) Global Convertible
Fund -- CALAMOS(R) Investment
Trust........................... $ 100,000 * 1,497 *
CALAMOS(R) Market Neutral
Fund -- CALAMOS(R) Investment
Trust........................... $ 4,005,000 1.335% 59,966 *
Christian Science
Trustees -- Gifts &
Endowments...................... $ 185,000 * 2,770 *
Chrysler Corporation Master
Retirement Trust................ $ 6,000,000 2.000% 89,837 *
CIBC World Markets................ $ 2,000,000 * 29,946 *
City of Albany Pension Plan....... $ 75,000 * 1,123 *
City of Knoxville Pension
System.......................... $ 225,000 * 3,369 *
City of New Orleans............... $ 211,000 * 3,159 *
City University of New York....... $ 126,000 * 1,887 *
Clarica Life Insurance
Co. -- U.S. .................... $ 530,000 * 7,936 *
Clinton Riverside Convertible
Portfolio Limited............... $ 7,000,000 2.333% 104,810 *
30
34
AGGREGATE NUMBER OF SHARES PERCENTAGE OF
PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF
MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK
THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
------------------ ------------- ---------------- --------------
Consulting Group Capital Markets
Fund............................ $ 320,000 * 4,791 *
Convert ARB QIB................... $ 1,300,000 * 19,465 *
David Lipscomb University......... $ 55,000 * 824 *
DeAM Convertible Arbitrage FD..... $ 3,400,000 1.133% 50,908 *
Delta Airlines Master Trust....... $ 2,000,000 * 29,946 *
Delta Pilots D & S Trust.......... $ 855,000 * 12,802 *
Delta Pilots Disability and
Survivorship Trust.............. $ 725,000 * 10,855 *
Double Black Diamond Offshore
LDC............................. $ 1,180,000 * 17,668 *
Drury University.................. $ 70,000 * 1,048 *
Ellsworth Convertible Growth and
Income Fund, Inc. .............. $ 1,000,000 * 14,973 *
Engineers Joint Pension Fund...... $ 545,000 * 8,160 *
Enterprise Convertible Securities
Fund............................ $ 144,000 * 2,156 *
EQAT Alliance Growth Investors.... $ 2,600,000 * 38,930 *
Equitable Life Assurance Separate
Account -- Balanced............. $ 75,000 * 1,123 *
Equitable Life Assurance Separate
Account -- Convertibles......... $ 1,500,000 * 22,459 *
The Fondren Foundation............ $ 80,000 * 1,198 *
Fuji U.S. Income Open............. $ 350,000 * 5,241 *
Global Burmuda Limited
Partnership..................... $ 1,200,000 * 17,967 *
GM Employees Global GRP PEN TR.... $ 2,000,000 * 29,946 *
Grady Hospital Foundation......... $ 110,000 * 1,647 *
Granville Capital Corporation..... $ 4,750,000 1.583% 11,121 *
H.K. Porter Company, Inc. ........ $ 20,000 * 299 *
HFR Master Fund Ltd. ............. $ 350,000 * 5,241 *
Highbridge International LLC...... $ 18,713,000 6.238% 280,188 *
Hotel Union & Hotel Industry of
Hawaii.......................... $ 260,000 * 3,893 *
Independence Blue Cross........... $ 104,000 * 1,557 *
Innovest Finanzdienstleistungs.... $ 485,000 * 7,262 *
J.P. Morgan Securities, Inc. ..... $ 16,000,000 5.333% 239,566 *
JMG Capital Partners, LP.......... $ 2,375,000 * 35,561 *
Kettering Medical Center Funded
Depreciation Account............ $ 50,000 * 749 *
Knoxville Utilities Board
Retirement System............... $ 150,000 * 2,246 *
Lakeshore International Ltd. ..... $ 2,800,000 * 41,924 *
Lancer Securities Cayman Ltd. .... $ 700,000 * 10,481 *
Lincoln National Convertible
Securities Fund................. $ 1,000,000 * 14,973 *
Lincoln National Global Asset
Allocation Fund, Inc. .......... $ 37,000 * 554 *
Local Initiatives Support
Corp. .......................... $ 52,000 * 779 *
Lord, Abbett Bond Debenture
Fund............................ $ 10,000,000 3.333% 149,729 *
Louisiana Workers' Compensation
Corporation..................... $ 120,000 * 1,797 *
31
35
AGGREGATE NUMBER OF SHARES PERCENTAGE OF
PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF
MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK
THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
------------------ ------------- ---------------- --------------
Lumbermens Mutual Casualty........ $ 563,000 * 8,430 *
Maryland Retirement Agency........ $ 2,655,000 * 39,753 *
McMahan Securities Co. L.P. ...... $ 2,800,000 * 41,924 *
Memphis Light, Gas & Water
Retirement Fund................. $ 925,000 * 13,850 *
Merrill Lynch Insurance Group..... $ 258,000 * 3,863 *
Met Investors Bond Debenture
Fund............................ $ 350,000 * 5,241 *
Morgan Stanley Dean Witter
Convertible Securities Trust.... $ 1,000,000 * 14,973 *
Municipal Employees............... $ 111,000 * 1,662 *
Museum of Fine Arts, Boston....... $ 20,000 * 299 *
Nabisco........................... $ 29,000 * 434 *
National Fuel Gas Company
Retirement Plan................. $ 200,000 * 2,995 *
New Orleans Firefighters Pension/
Relief Fund..................... $ 115,000 * 1,722 *
Nicholas Applegate Convertible
Fund............................ $ 1,960,000 * 39,347 *
North Pole Capital Investments
Ltd. ........................... $ 2,650,000 * 39,678 *
OCM Convertible Trust............. $ 4,145,000 1.382% 62,063 *
Ohio Bureau of Workers
Compensation.................... $ 120,000 * 1,797 *
Oxford, Lord Abbett & Co. ........ $ 1,800,000 * 26,951 *
Pacific Life Insurance Company.... $ 1,000,000 * 14,973 *
Palladin Securities LLC........... $ 900,000 * 13,476 *
Paloma Securities LLC............. $ 7,500,000 2.500% 112,297 *
Parker-Hannifin Corporation....... $ 50,000 * 749 *
Pell Ridman Trust Company......... $ 2,500,000 * 57,432 *
Peoples Benefit Life Insurance
Company......................... $ 3,750,000 1.250% 56,148 *
Peoples Benefit Life Insurance
Company TEAMSTERS............... $ 2,500,000 * 37,432 *
Physicians Life................... $ 430,000 * 6,438 *
Polar Hedge Enhanced Income
Trust........................... $ 350,000 * 5,241 *
Policemen and Firemen Retirement
System of the City of Detroit... $ 550,000 * 8,235 *
Port Authority of Allegheny County
Retirement and Disability
Allowance Plan for the Employees
Represented by Local 85 of the
Amalgamated Transit Union....... $ 1,150,000 * 17,219 *
Pro Mutual........................ $ 623,000 * 9,328 *
Putnam Asset Allocation Funds --
Balanced Portfolio.............. $ 220,000 * 3,294 *
Putnam Asset Allocation Funds --
Conservative Portfolio.......... $ 180,000 * 2,695 *
32
36
AGGREGATE NUMBER OF SHARES PERCENTAGE OF
PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF
MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK
THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
------------------ ------------- ---------------- --------------
Putnam Convertible Income-Growth
Trust........................... $ 1,430,000 * 21,411 *
Putnam Convertible Opportunities
and Income Trust................ $ 70,000 * 1,048 *
Putnam Variable Trust -- Putnam VT
Global Asset Allocation Fund.... $ 100,000 * 1,497 *
Raytheon Master Trust............. $ 561,000 * 8,400 *
Retail Clerks Pension Trust....... $ 3,000,000 1.000% 44,919 *
RJR............................... $ 92,000 * 1,378 *
San Diego County Convertible...... $ 2,278,000 * 34,108 *
San Diego County Employees
Retirement Association.......... $ 2,500,000 * 37,432 *
San Diego City Retirement......... $ 1,042,000 * 15,602 *
SCI Endowment Care Common Trust
Fund -- National Fiduciary
Services........................ $ 230,000 * 3,444 *
SCI Endowment Care Common Trust
Fund -- Suntrust................ $ 100,000 * 1,497 *
Screen Actors Guild Pension....... $ 583,000 * 8,729 *
SG Cowen Securities............... $ 5,000,000 1.667% 74,865 *
SG Cowen Securities Inc. ......... $ 15,000,000 5.000% 224,594 *
Shell Pension Trust............... $ 434,000 * 6,498 *
SPT............................... $ 850,000 * 12,727 *
St. Albans Partners Ltd. ......... $ 3,000,000 1.000% 44,919 *
Teachers Insurance and Annuity
Association..................... $ 2,000,000 * 29,946 *
The Dow Chemical Company
Employees' Retirement Plan...... $ 2,270,000 * 33,958 *
The Estate of James Campbell...... $ 740,000 * 12,080 *
The First Foundation.............. $ 260,000 * 3,893 *
The Grable Foundation............. $ 94,000 * 1,407 *
The John Henry Mennen GST......... $ 55,000 * 824 *
Total Fina Elf Finance USA,
Inc. ........................... $ 225,000 * 3,369 *
Triton Capital Investment,
Ltd. ........................... $ 2,375,000 * 35,561 *
Unifi, Inc. Profit Sharing Plan
and Trust....................... $ 85,000 * 1,273 *
Union Carbide Retirement
Account......................... $ 1,700,000 * 25,454 *
United Food and Commercial Workers
Local 1262 and Employers Pension
Fund............................ $ 550,000 * 8,235 *
University of Rochester........... $ 30,000 * 449 *
Value Line Convertible Fund,
Inc. ........................... $ 250,000 * 3,743 *
Van Waters & Rogers, Inc.
Retirement Plan................. $ 300,000 * 4,492 *
Vanguard Convertible Securities
Fund, Inc. ..................... $ 2,000,000 * 29,946 *
Wake Forest University............ $ 999,000 * 14,958 *
White River Securities L.L.C. .... $ 750,000 * 11,230 *
33
37
AGGREGATE NUMBER OF SHARES PERCENTAGE OF
PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF
MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK
THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
------------------ ------------- ---------------- --------------
Wilmington Trust Co. as owner &
trustee for the Forrestal
Funding Master Trust............ $ 7,150,000 2.383% 107,056 *
Worldwide Transactions Ltd. ...... $ 63,000 * 943 *
Writers Guild Convertible......... $ 341,000 * 5,106 *
Wyoming Stable Treasurer.......... $ 1,162,000 * 17,399 *
Zurich HFR Calamos Holdings
Limited......................... $ 80,000 * 1,198 *
Zurich Institutional Benchmarks
Master Fund Ltd. ............... $ 1,200,000 * 17,967 *
All other holders of notes or
future transferees, pledgees,
donees, assignees or successors
of any such holders(3)(4)....... $ 40,281,000 13.427% 603,123 1.038%
------------ ------ --------- -----
Total............................. $300,000,000 100.00% 4,491,870 7.733%
============ ====== ========= =====
- ---------------
* Less than one percent (1%).
(1) Assumes conversion of all of the holder's notes at a conversion rate of
14.9729 shares of common stock per $1,000 principal amount at maturity of
the notes. This conversion rate is subject to adjustment, however, as
described under "Description of the Notes -- Conversion Rights". As a
result, the number of shares of common stock issuable upon conversion of the
notes may increase or decrease in the future.
(2) Calculated based on Rule 13d-3(d)(i) of the Exchange Act, using 58,084,850
shares of common stock outstanding as of April 30, 2001. In calculating
this amount for each holder, we treated as outstanding the number of shares
of common stock issuable upon conversion of all that holder's notes, but we
did not assume conversion of any other holder's notes.
(3) Information about other selling securityholders will be set forth in
prospectus supplements, if required.
(4) Assumes that any other holders of the notes or any future pledgees, donees,
assignees, transferees or successors of or from any other such holders of
the notes, do not beneficially own any shares of common stock other than
the common stock issuable upon conversion of the notes at the initial
conversion rate.
34
38
PLAN OF DISTRIBUTION
The selling securityholders will be offering and selling all of the
securities offered and sold under this prospectus. We will not receive any of
the proceeds from the offering of the notes or the shares of common stock by the
selling securityholders. In connection with the initial offering of the notes,
we entered into a registration rights agreement dated March 13, 2001 with the
initial purchasers of the notes. Securities may only be offered or sold under
this prospectus pursuant to the terms of the registration rights agreement.
However, selling securityholders may resell all of a portion of the securities
in open market transactions in reliance upon Rule 144 or Rule 144A under the
Securities Act, provided they meet the criteria and conform to the requirements
of one of these rules. We are registering the notes and shares of common stock
covered by this prospectus to permit holders to conduct public secondary trading
of these securities from time to time after the date of this prospectus. We have
agreed, among other things, to bear all expenses, other than underwriting
discounts and selling commissions, in connection with the registration and sale
of the notes and the shares of common stock covered by this prospectus.
The selling securityholders may sell all or a portion of the notes and
shares of common stock beneficially owned by them and offered hereby from time
to time:
- directly; or
- through underwriters, broker-dealers or agents, who may receive
compensation in the form of discounts, commissions or concessions from
the selling securityholders and/or from the purchasers of the notes and
shares of common stock for whom they may act as agent.
The notes and the shares of common stock may be sold from time to time in
one or more transactions at:
- fixed prices, which may be changed;
- prevailing market prices at the time of sale;
- varying prices determined at the time of sale; or
- negotiated prices.
These prices will be determined by the holders of the securities or by agreement
between these holders and underwriters or dealers who may receive fees or
commissions in connection with the sale. The aggregate proceeds to the selling
securityholders from the sale of the notes or shares of common stock offered by
them hereby will be the purchase price of the notes or shares of common stock
less discounts and commissions, if any.
The sales described in the preceding paragraph may be effected in
transactions:
- on any national securities exchange or quotation service on which the
notes or shares of common stock may be listed or quoted at the time of
sale, including the Nasdaq National Market in the case of the shares of
common stock;
- in the over-the counter market;
- in transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
- through the writing of options.
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as an agent on both sides of the
trade.
In connection with sales of the notes and shares of common stock or
otherwise, the selling securityholders may enter into hedging transactions with
broker-dealers. These broker-dealers may in turn engage in short sales of the
notes and shares of common stock in the course of hedging their positions. The
selling securityholders may also sell the notes and shares of common stock short
and deliver the notes
35
39
and shares of common stock to close out short positions, or loan or pledge notes
and shares of common stock to broker-dealers that in turn may sell the notes and
shares of common stock.
To our knowledge, there are currently no plans, arrangements or
understandings between any selling securityholders and any underwriter,
broker-dealer or agent regarding the sale of the notes and the shares of common
stock by the selling securityholders. Selling securityholders may not sell any,
or may not sell all, of the notes and the shares of common stock offered by them
pursuant to this prospectus. In addition, we cannot assure you that a selling
securityholder will not transfer, devise or gift the notes and the shares of
common stock by other means not described in this prospectus. In addition, any
securities covered by this prospectus which qualify for sale pursuant to Rule
144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule 144A
rather than pursuant to this prospectus.
The outstanding shares of common stock are listed for trading on the Nasdaq
National Market.
The selling securityholders and any broker and any broker-dealers, agents
or underwriters that participate with the selling securityholders in the
distribution of the notes or the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act. In this case, any
commissions received by these broker-dealers, agents or underwriters and any
profit on the resale of the notes or the shares of common stock purchased by
them may be deemed to be underwriting commissions or discounts under the
Securities Act. In addition, any profits realized by the selling securityholders
may be deemed to be underwriting discounts and commissions under the Securities
Act. To the extent the selling securityholders may be deemed to be underwriters,
the selling securityholders may be subject to statutory liabilities, including,
but not limited to, liability under Sections 11, 12 and 17 of the Securities Act
and Rule 10b-5 under the Exchange Act.
Because the selling securityholders may be deemed to be underwriters within
the meaning of Section 2(11) of the Securities Act, they will be subject to the
prospectus delivery requirements of the Securities Act. At any time a particular
offer of the securities is made, a revised prospectus or prospectus supplement,
if required, will be distributed which will disclose:
- the name of the selling securityholders and any participating
underwriters, broker-dealers or agents;
- the aggregate amount and type of securities being offered;
- the price at which the securities were sold and other material terms of
the offering;
- any discounts, commissions, concessions or other items constituting
compensation from the selling securityholders and any discounts,
commissions or concessions allowed or reallowed or paid to dealers; and
- that the participating broker-dealers did not conduct any investigation
to verify the information in this prospectus or incorporated in this
prospectus by reference.
The prospectus supplement or a post-effective amendment will be filed with the
Securities and Exchange Commission to reflect the disclosure of additional
information with respect to the distribution of the securities. In addition, if
we receive notice from a selling securityholder that a donee or pledgee intends
to sell more than 500 shares of our common stock, a supplement to this
prospectus will be filed.
The notes were issued and sold in March 2001 in transactions exempt from
the registration requirements of the Securities Act to persons reasonably
believed by the Initial Purchasers to be "qualified institutional buyers," as
defined in Rule 144A under the Securities Act. Pursuant to the registration
rights agreement, we have agreed to indemnify the Initial Purchasers and each
selling securityholder, and each selling securityholder has agreed to indemnify
us against specified liabilities arising under the Securities Act. The selling
securityholders may also agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the securities against some
liabilities, including liabilities that arise under the Securities Act.
The selling securityholders and any other person participating in such
distribution will be subject to the Exchange Act. The Exchange Act rules
include, without limitation, Regulation M, which may limit
36
40
the timing of purchases and sales of any of the notes and the underlying shares
of common stock by the selling securityholders and any such other person. In
addition, Regulation M of the Exchange Act may restrict the ability of any
person engaged in the distribution of the notes and the underlying shares of
common stock to engage in market-making activities with respect to the
particular notes and the underlying shares of common stock being distributed for
a period of up to five business days prior to the commencement of distribution.
This may affect the marketability of the notes and the underlying shares of
common stock and the ability of any person or entity to engage in market-making
activities with respect to the notes and the underlying shares of common stock.
Under the registration rights agreement, we are obligated to use our
reasonable best efforts to keep the registration statement of which this
prospectus is a part effective until the earlier of:
- two years after the last date of original issuance of any of the notes;
- the date when the holders of the notes and the shares of common stock
issuable upon conversion of the notes are able to sell all such
securities immediately without restriction pursuant to the volume
limitation provisions of Rule 144(k) under the Securities Act; and
- the sale, pursuant to the registration statement to which this prospectus
relates, of all the securities registered thereunder.
Our obligation to keep the registration statement to which this prospectus
relates effective is subject to specified, permitted exceptions set forth in the
registration rights agreement. In these cases, we may prohibit offers and sales
of the notes and shares of common stock pursuant to the registration statement
to which this prospectus relates.
We may suspend the use of this prospectus if we learn of any event that
causes this prospectus to include an untrue statement of a material fact
required to be stated in the prospectus or necessary to make the statements in
the prospectus not misleading in light of the circumstances then existing. If
this type of event occurs, a prospectus supplement or post-effective amendment,
if required, will be distributed to each selling securityholder. Each selling
securityholder has agreed not to trade securities from the time the selling
securityholder receives notice from us of this type of event until the selling
securityholder receives a prospectus supplement or amendment. This time period
will not exceed 45 days in any 90-day period or 90 days in a 360-day period.
37
41
LEGAL MATTERS
Certain legal matters with respect to the notes will be passed upon for us
by Kevin J. Dell, Esq., Executive Vice President and General Counsel of The
BISYS Group, Inc. Mr. Dell holds shares of our common stock and options to
acquire shares of our common stock.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K of The BISYS Group, Inc. for the
year ended June 30, 2000 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on authority of said
firm as experts in auditing and accounting.
The financial statements of Pictorial Holdings, Inc. incorporated in this
prospectus by reference to the audited historical financial statements included
on page 5 of The BISYS Group, Inc.'s Form 8-K/A dated September 15, 2000 have
been so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on authority of said firm as experts in auditing
and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). In accordance with the Exchange
Act, we file reports, proxy and information statements and other information
with the Commission. Such reports, proxy statements and other information can be
inspected and copied at prescribed rates at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the Commission:
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661 and 7 World Trade Center, 13th Floor, New York, New York 10048. The
Commission also maintains a website that contains reports, proxy and information
statements and other information. The website address is http://www.sec.gov.
Please call the Commission at 1-800-SEC-0330 for further information on the
public reference rooms.
38
42
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
We are paying all of the selling securityholders' expenses related to this
offering, except the selling securityholders will pay any applicable broker's
commissions and expenses. The following table sets forth the approximate amount
of fees and expenses payable by us in connection with this Registration
Statement and the distribution of the notes and the shares of common stock
registered hereby. All of the amounts shown are estimates except the Securities
and Exchange Commission registration fee.
Securities and Exchange Commission Registration Fee......... $ 76,800
Transfer Agent's, Trustees' and Depositary's Fees and
Expenses.................................................. 5,000
Printing and Engraving Fees and Expenses.................... 15,000
Accounting Fees and Expenses................................ 8,000
Legal Fees.................................................. 50,000
Miscellaneous Expenses...................................... 5,000
--------
Total.................................................. $159,800
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant is organized under the laws of the State of Delaware.
Section 145 of the Delaware General Corporation Law permits a Delaware
corporation to indemnify any person who is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of such corporation) by reason of the fact that such person
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation or other enterprise. The indemnity may include
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, provided that such person acted in good faith
and in a manner such person reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such person's conduct was
unlawful. A Delaware corporation may similarly indemnify directors, officers,
employees and other agents of such corporation in the case of actions or suits
brought by or in the right of a corporation under the same conditions against
expenses (including attorney's fees) actually and reasonably incurred by the
person in connection with the defense and settlement of such action or suit,
except that no indemnification is permitted without judicial approval if the
person to be indemnified has been adjudged to be liable to the corporation.
Where a present or former director or officer of the corporation is successful
on the merits or otherwise in the defense of any action, suit or proceeding
referred to above or in defense of any claim, issue or matter therein, the
corporation must indemnify such person against the expenses (including
attorneys' fees) which he or she actually and reasonably incurred in connection
therewith.
Any indemnification shall be made by the corporation only as authorized in
the specific case upon a determination that indemnification is proper in the
circumstances because the person has met the aforesaid standard of conduct. Such
determination shall be made (1) by a majority vote of the directors who were not
parties to the action, suit, or proceeding, whether or not a quorum, or (2) if
there are no such directors, or if such directors so direct, by independent
legal counsel in a written opinion, or (3) by the stockholders. To the extent
that a director, officer, employee or agent of a corporation has been successful
on the merits, or otherwise, in defense of any action, suit or proceeding
described above, or in the defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred in connection therewith. The statute also
provides that it is not exclusive of any other rights to which those seeking
indemnification may be entitled under any
II-1
43
bylaws, agreement, vote of stockholders or disinterested directors, or
otherwise. The Registrants' By-Laws provide for the indemnification of its
directors and officers to the fullest extent permitted by law.
Section 174 of the General Corporation Law of the State of Delaware
provides, among other things, that a director who willfully or negligently
approves of an unlawful payment of dividends or an unlawful stock purchase or
redemption, may be held liable for such actions. A director who was either
absent when the unlawful actions were approved or dissented at the time, may
avoid liability by causing his or her dissent to such actions to be entered into
the books containing the minutes of the meetings of the board of directors at
the time such action occurred or immediately after such absent director receives
notice of the unlawful acts.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
allows a Delaware corporation to limit or eliminate the personal liability of
directors to a corporation or its stockholders for monetary damages for a breach
of a fiduciary duty as a director. However, this provision excludes any
limitation on liability (1) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (2) for acts or omissions not in good faith
or which involved intentional misconduct or a knowing violation of law, (3) for
intentional or negligent payment of unlawful dividends or stock purchases or
redemptions or (4) for any transaction from which the director derived an
improper benefit. Moreover, while this provision provides directors with
protection against awards for monetary damages for breaches of their duty of
care, it does not eliminate such duty. Accordingly, this provision will have no
effect on the availability of equitable remedies such as an injunction or
rescission based on a director's breach of his or her duty of care. Finally,
this provision applies to an officer of a corporation only if he or she is a
director of such corporation and is acting in his or her capacity as a director,
and does not apply to officers of the corporation who are not directors.
The Registrant's Amended and Restated Certificate of Incorporation provides
for the limitation on liability permitted by Section 102(b)(7).
We maintain, at our expense, a policy of insurance which insures our
directors and officers, subject to exclusions and deductions as are usual in
these kinds of insurance policies, against specified liabilities which may be
incurred in those capacities.
ITEM 16. EXHIBITS
The following is a list of all exhibits filed as a part of this
registration statement on Form S-3, including those incorporated in this
registration statement by reference.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
3.1 Amended and Restated Certificate of Incorporation of The
BISYS Group, Inc. (incorporated by reference to Exhibit 4.1
to the Registrant's Registration Statement on Form S-8,
Registration No. 333-02932).
3.2 Amended and Restated By-Laws of The BISYS Group, Inc.
(incorporated by reference to the Registrant's Annual Report
on Form 10-K for the fiscal year ended June 30, 1997,
Commission File No. 0-19922).
3.3 Specimen of Common Stock Certificate (incorporated by
reference to Exhibit 4.1 to the Registrant's Registration
Statement on Form S-1, Registration No. 33-45417).
4.1 Indenture dated as of March 13, 2001 between The BISYS
Group, Inc. and Chase Manhattan Trust Company, National
Association, as trustee (incorporated by reference to
Exhibit 4.1 to the Registrant's Current Report on Form 8-K
dated March 15, 2001, Commission File No. 0-19922).
4.2 Form of 4% Convertible Subordinated Note (included in
Exhibit 4.1).
4.3 Registration Rights Agreement dated as of March 13, 2001,
between The BISYS Group, Inc., Bear, Stearns & Co. Inc. and
Credit Suisse First Boston Corporation.**
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44
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
5.1 Opinion of Kevin J. Dell, Esq.**
12.1 Statement re: Computation of Ratio of Earnings to Fixed
Charges.**
23.1(a) Consent of PricewaterhouseCoopers LLP, Independent
Accountants.*
23.1(b) Consent of PricewaterhouseCoopers LLP, Independent
Accountants.*
23.2 Consent of Kevin J. Dell, Esq. (included in Exhibit 5.1).**
24.1 Powers of Attorney.**
25.1 A Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Chase Manhattan Trust
Company, National Association, trustee under the
Indenture.**
- ---------------
*Filed herewith.
**Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (1)(a) and (1)(b) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of
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45
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been informed that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933, as amended, and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.
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46
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that is has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Township of Little Falls, in the State of New
Jersey on June 13, 2001.
THE BISYS GROUP, INC.
By /s/ LYNN J. MANGUM
------------------------------------
Name: Lynn J. Mangum
Title: Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed below by the following
persons in the capacities indicated on June 13, 2001.
SIGNATURE TITLE
--------- -----
/s/ LYNN J. MANGUM Chairman of the Board of Directors, Chief Executive
- --------------------------------------------- Officer and Director (Principal Executive Officer)
Lynn J. Mangum
/s/ DENNIS R. SHEEHAN Executive Vice President and Chief Financial Officer
- --------------------------------------------- (Principal Accounting and Principal Financial Officer)
Dennis R. Sheehan
* Director
- ---------------------------------------------
Robert J. Casale
* Director
- ---------------------------------------------
Thomas A. Cooper
* Director
- ---------------------------------------------
Jay W. DeDapper
* Director
- ---------------------------------------------
John J. Lyons
* Director
- ---------------------------------------------
Thomas E. McInerney
* Director
- ---------------------------------------------
Joseph J. Melone
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47
*Lynn J. Mangum hereby signs this Amendment No. 1 to the Registration
Statement on Form S-3 on behalf of each of the indicated persons for whom he is
attorney-in-fact on June 13, 2001 pursuant to the powers of attorney previously
filed.
By: /s/ LYNN J. MANGUM
----------------------------------
Lynn J. Mangum
Attorney-in-fact
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48
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
3.1 Amended and Restated Certificate of Incorporation of The
BISYS Group, Inc. (incorporated by reference to Exhibit 4.1
to the Registrant's Registration Statement on Form S-8,
Registration No. 333-02932).
3.2 Amended and Restated By-Laws of The BISYS Group, Inc.
(incorporated by reference to the Registrant's Annual Report
on Form 10-K for the fiscal year ended June 30, 1997,
Commission File No. 0-19922).
3.3 Specimen of Common Stock Certificate (incorporated by
reference to Exhibit 4.1 to the Registrant's Registration
Statement on Form S-1, Registration No. 33-45417).
4.1 Indenture dated as of March 13, 2001 between The BISYS
Group, Inc. and Chase Manhattan Trust Company, National
Association, as trustee (incorporated by reference to
Exhibit 4.1 to the Registrant's Current Report on Form 8-K
dated March 15, 2001, Commission File No. 0-19922).
4.2 Form of 4% Convertible Subordinated Note (included in
Exhibit 4.1).
4.3 Registration Rights Agreement dated as of March 13, 2001,
between The BISYS Group, Inc., Bear, Stearns & Co. Inc. and
Credit Suisse First Boston Corporation.**
5.1 Opinion of Kevin J. Bell, Esq.**
12.1 Statement re: Computation of Ratio of Earnings to Fixed
Charges.**
23.1(a) Consent of PricewaterhouseCoopers LLP, Independent
Accountants.*
23.1(b) Consent of PricewaterhouseCoopers LLP, Independent
Accountants.*
23.2 Consent of Kevin J. Dell, Esq. (included in Exhibit 5.1).**
24.1 Powers of Attorney.**
25.1 A Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Chase Manhattan Trust
Company, National Association, trustee under the
Indenture.**
- ---------------
*Filed herewith.
** Previously filed.
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