SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 2003.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO .
Commission file number: 0-19922
THE BISYS GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3532663
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
90 PARK AVENUE
NEW YORK, NEW YORK 10016
(Address of principal executive offices) (Zip Code)
212-907-6000
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
COMMON STOCK, $0.02 PAR VALUE
(Title of Class)
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Rule 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment of this Form 10-K. [ ]
Indicate by check mark whether the Registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act). Yes [X] No [ ]
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was last sold, or the average bid and asked price of such common
equity, as of December 31, 2002: $1,858,851,113.
State the aggregate market value of voting stock held by non-affiliates
of the Registrant as of September 18, 2003: $2,019,672,796.
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of September 18, 2003: 120,049,729 shares of Common
Stock.
DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Registrant's Fiscal 2003
Annual Report to Shareholders incorporated by reference in Part I, II and IV
herein; portions of the Registrant's definitive Proxy Statement for its November
13, 2003 Annual Meeting of Stockholders incorporated by reference in Part III
herein.
THE BISYS GROUP, INC.
FORM 10-K
JUNE 30, 2003
PAGE
----
Part I
Item 1. Business............................................................................. 1
Item 2. Properties........................................................................... 14
Item 3. Legal Proceedings.................................................................... 15
Item 4. Submission of Matters to a Vote of Security Holders.................................. 15
Part II
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters............ 15
Item 6. Selected Financial Data.............................................................. 15
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations....................................................................... 16
Item 7A. Quantitative and Qualitative Disclosures About Market Risk........................... 16
Item 8. Financial Statements and Supplementary Data.......................................... 16
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure....................................................................... 16
Item 9A. Controls and Procedures ......................................................... 16
Part III
Item 10. Directors and Executive Officers of the Registrant................................... 16
Item 11. Executive Compensation............................................................... 16
Item 12. Security Ownership of Certain Beneficial Owners and Management....................... 16
Item 13. Certain Relationships and Related Transactions....................................... 16
Part IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K..................... 17
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report and the documents incorporated by reference in this report
contain "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
report, regarding our strategy, future operations, financial position, estimated
revenues, projected costs, prospects, and plans and objectives of management are
forward-looking statements. When used in this report or incorporated by
reference herein, the words "will," "believe," "anticipate," "intend,"
"estimate," "expect," "project," "plan," "target" 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 report. We do not 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 report and in documents incorporated
by reference herein are reasonable, we can give no assurance that such plans,
intentions or expectations will be achieved. Factors that could cause our
results to materially differ from our expectations include, but are not limited
to, those factors set forth in this report under Item 1 "Business - Risk
Factors." The cautionary statements qualify all forward-looking statements
attributable to us or persons acting on our behalf. Unless otherwise indicated,
all statistical information provided is as of June 30, 2003.
PART I
ITEM I. BUSINESS.
The BISYS(R) Group, Inc., together with its wholly owned subsidiaries,
supports more than 20,000 financial institutions and corporate clients with
products and services provided through three principal business groups: BISYS
Investment Services, BISYS Insurance and Education Services, and BISYS
Information Services. We distribute and administer approximately 2,100 mutual
funds, hedge funds, private equity funds and other investment products
representing more than $650 billion in assets under contract; provide retirement
plan recordkeeping services to more than 15,000 companies in partnership with 40
of the nation's leading bank and investment management companies; support
approximately 400,000 employers and four million IRA holders with ERISA plan
documents and ancillary services; provide life and commercial property/casualty
insurance distribution solutions, professional certification training and
continuing education, and licensing and compliance-related products and
services; and provide information processing and check imaging solutions to
approximately 1,450 banks, insurance companies and corporations nationwide.
We seek to be our clients' single source for our offered outsourcing
solutions and to improve their performance, profitability and competitive
position. We endeavor to expand the scope of our services through focused
account management, emphasizing services with recurring revenues and long-term
contracts. We increase our business base through (i) organic growth of our
clients, (ii) sales of additional products and services to existing clients,
(iii) direct sales to new clients, and (iv) acquisitions of businesses that
provide similar and/or complementary outsourcing solutions to financial
organizations and other customers.
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We were organized in August 1989 to acquire certain banking and thrift
data processing operations of Automatic Data Processing, Inc. ("ADP"). Our
initial business was established in 1966 by United Data Processing, Inc., the
predecessor of the banking and thrift information processing operations of ADP.
Together with our predecessors, we have been providing outsourcing solutions to
the financial services industry for more than 37 years. We are incorporated
under the laws of Delaware, and our principal executive offices are located at
90 Park Avenue, New York, New York 10016 (telephone 212-907-6000).
Since our founding in 1989, we have completed more than 40 acquisitions
as part of our strategic growth plan. During the last fiscal year, we acquired
the following businesses, which now operate as part of BISYS Insurance and
Education Services:
September 2002 - First Northern Financial Resources, Inc., a
Minnesota-based insurance brokerage firm, increasing our market share
and potential in the North Central United States;
December 2002 - Select Insurance Marketing Corporation, a West
Coast-based long-term care insurance brokerage firm, expanding our
long-term care insurance product offering and increasing our
geographical presence and potential on the West Coast;
December 2002 - Career Brokerage, Inc., a New York-based insurance
brokerage firm, increasing our market share and potential in New York
and broadening our portfolio of insurance products;
March 2003 - Capital Synergies, Inc., an insurance brokerage firm,
increasing our market presence and potential in strategic geographical
areas, including San Francisco, Chicago, Indianapolis, Baltimore,
Columbus, Philadelphia and Seattle;
March 2003 - Tri-City Insurance Brokerage, Inc. and affiliated
companies, a wholesale provider of commercial lines property/casualty
insurance products, enabling our entrance into the property/casualty
insurance marketplace; and
May 2003 - Landau Financial Services, Inc., a Philadelphia-based
insurance brokerage firm, increasing our market share and potential in
the Northeast and in the impaired risk insurance marketplace.
BUSINESS STRATEGY
Financial organizations today are challenged to compete more
effectively, improve productivity and maximize profits during periods of both
economic growth and decline. We provide viable alternatives for automating
critical tasks and functions, and provide specific expertise and experience to
financial organizations. Through our outsourcing solutions, we assist clients in
achieving operational and economic benefits, and provide our clients with
opportunities to generate incremental revenues.
Our objectives are to increase our client base and to expand the
services we offer to them. We seek to be the premier, full-service outsourcing
business partner focused on enhancing our clients' growth, profits and
performance. We seek to build value for our shareholders by consistently
increasing both revenues and earnings per share, through a combination of
organic
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growth from existing clients, cross sales to existing clients, sales to new
clients and strategic acquisitions. Five key principles have guided us since our
formation and continue to shape our strategy for growth:
FOCUS ON CLIENT SERVICE. We seek to thoroughly understand the
converging financial services industry and proactively respond to our
clients' evolving support requirements. Our industry-recognized client
service and rewarding levels of client satisfaction are based on
decades of day-to-day experience, sophisticated support tools, and a
company-wide commitment to strengthen every client relationship with
unsurpassed service.
GROW INTERNALLY AND SELL AGGRESSIVELY. We seek to sell our business
process outsourcing solutions to new clients and cross sell additional
products and services to our existing clients. We intend to continue to
focus highly targeted sales initiatives on large and growing markets,
and to introduce new business solutions and processing capabilities
that will enable our clients to retain and attract customers, and enter
new markets.
LEVERAGE BUSINESS AND PRODUCT SYNERGIES. We seek to leverage the
inherent synergies among our business lines to capitalize on the
opportunities generated by the converging segments of the financial
services industry. We will continue to seek to acquire companies that
provide complementary products and services, new clients and cross-sale
opportunities, and expanded geographical presence and potential.
LEVERAGE TECHNOLOGICAL ADVANCEMENTS. We seek to continue to enhance our
outsourcing platforms by integrating leading-edge products, services
and technologies. We will continue to seek to leverage the tremendous
power of the Internet to revolutionize how we support global clients
and deliver products, services and vital information.
OPTIMIZE HUMAN RESOURCES. We value the contribution of our associates
who represent every business and technical discipline in the financial
services industry. We depend on their collective experience and
expertise to sustain our industry leadership and growth.
We provide our products and services principally through three major
business groups: BISYS Investment Services, BISYS Insurance and Education
Services, and BISYS Information Services. These business groups are separately
managed, strategic business units and are reported as operating segments.
Certain of the business segment information required to be included herein is
incorporated herein by reference to Note 16 of our consolidated financial
statements included in our 2003 Annual Report to Shareholders (the "Annual
Report") on pages 38 and 39. Portions of the Annual Report incorporated by
reference in this report are included in this report as Exhibit 13.
BISYS INVESTMENT SERVICES
Our Investment Services group provides a broad array of investment
services, including mutual fund, hedge fund, private equity fund and retirement
plan services.
We support approximately 100 domestic and offshore mutual fund clients,
representing more than 1,500 registered and non-registered funds, and more than
$575 billion in assets. Our
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fund services include administration and accounting, transfer agency and
shareholder services, compliance and regulatory support, and marketing and
distribution solutions. Through our Financial Research Corporation (FRC)
subsidiary, we also provide the market analytics, research and consulting
services financial services firms need to develop and distribute competitive
products and services.
We are a leading global hedge fund administrator, supporting more than
400 hedge funds, funds of hedge funds and other alternative investments,
representing approximately $60 billion in assets. Our full-service hedge fund
solution includes fund accounting and valuation, investor and transfer agency
services, director and corporate secretarial services, and legal, compliance,
and tax support.
We are also a leading provider of accounting, administration, advisory
and tax services for private equity funds, supporting more than 225 funds with
invested capital of approximately $17 billion.
Through our relationships with 40 institutional clients, we support
more than 15,000 small and mid-size retirement plans and their approximately 1.3
million eligible employees. Our comprehensive retirement plan solution includes
prototype plan design and maintenance, administration and recordkeeping, ERISA
documents and forms, customized marketing and sales support, and staff training
and development. In addition, we provide a turnkey administration and
recordkeeping solution for owner-only Individual(k) plans, and support 13
institutional clients and approximately 850 Individual(k) plans. We also support
approximately 400,000 employers and four million IRA holders with ERISA
documents and ancillary services, and train approximately 12,000 industry
professionals annually.
BISYS INSURANCE AND EDUCATION SERVICES
Our Insurance and Education Services group provides an overall solution
for life insurance and commercial property/casualty insurance distribution, and
financial services education and licensing automation.
We are a leading independent distributor of life insurance and provider
of the support services required to sell multiple lines of life-related
insurance and annuity products and services. We distribute the products of
approximately 200 of the most highly rated insurance companies through
approximately 100,000 career and independent insurance agents and financial
services professionals. The insurance companies manufacture the insurance
products and assume the underwriting risk and full responsibility for the policy
benefits, while the agents and financial services professionals work directly
with consumers. We support the entire sales process for term and fixed universal
life, variable life, long-term care, disability and annuity products with a
comprehensive suite of services, including agent licensing, contracting and
continuing education, sales support, advanced case design, application
processing, medical underwriting support, commission reconciliation, and policy
owner services. We also provide a robust insurance administration system and
advanced Internet-based capabilities designed to expedite the sales process.
We are also a leading independent provider of commercial
property/casualty insurance products. We distribute the products of
approximately 60 property/casualty insurance companies through approximately
1,200 retail brokers and agents. We support the distribution process with
complete sales and back-office support services. We specialize in insurance
solutions for
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complex property and casualty risks, commercial and habitational real estate,
such as apartment and condominium complexes, high-limit property capacity and
property catastrophe, directors' and officers' liability, errors and omissions
liability and employment practices liability.
We provide training solutions for insurance and investment
professionals, supporting compliance requirements at various stages of career
development with more than 215 pre-licensing, continuing education and advanced
designation courses. Financial services professionals have enrolled in more than
300,000 of our courses during the past year, which were delivered through
traditional instructor-led and self-study programs, or through technology-based
alternatives including interactive online and computer-based programs.
Our suite of integrated products and services automates the complex
insurance licensing and securities registration processes, and facilitates
compliance with state and federal regulations. More than 600 insurance
companies, broker-dealers and banks utilize our integrated, Internet-enabled
products and services to automate and track the licensing process.
BISYS INFORMATION SERVICES
Our Information Services group supports approximately 1,450 banks,
insurance companies and corporations with information processing, asset
retention solutions, specialized back-office services required to support
corporate-sponsored cash management programs and check imaging solutions.
Our comprehensive banking platform supports banks with integrated core
deposit and lending, commercial and retail services, ATM and debit card
processing, electronic and Internet-based banking, branch automation, customer
relationship management, executive decision-support tools and document imaging.
We also provide a complete imaging platform, enabling our clients to convert
paper-based checks into digital or "virtual" checks and process them
electronically.
The American Bankers Association, through its Corporation for American
Banking subsidiary, endorses both our core information processing solution and
our check imaging platform on an exclusive basis as the recommended solutions
for community banks.
Our asset retention and corporate banking solutions leverage our
traditional banking services to provide an industry-leading suite of outsourced
solutions, including information and transaction processing, and call center
services. These services enable life and property/casualty insurance companies
to establish ongoing customer relationships with claimants and beneficiaries by
offering personalized checking accounts and online debit and stored value cards
as alternatives to lump sum payments. Our specialized back-office services also
provide complete management for corporate-sponsored cash management programs. We
currently enable life and property/casualty insurance companies and corporations
to retain more than $13.5 billion in assets.
CONTRACTS
We provide services to our clients, for the most part and wherever
possible, on the basis of long-term contracts that renew for successive terms
unless terminated by either party.
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In our Investment Services group, contracts for distribution services
to mutual funds, as required by the Investment Company Act, provide that such
contracts may continue for a period longer than two years only if such
continuance is specifically approved at least annually by both a majority of the
disinterested directors and either the other members of the board of directors
or the holders of a majority of the outstanding shares of the fund. Our fee
structure for mutual fund, hedge fund and private equity fund clients is, in
some cases, based on the average net asset value or invested capital of the
fund, subject to minimum charges, and in some cases consists of or includes
account-based fees and other fixed charges. Our retirement services fee
structure is generally based upon the number of eligible employees or
participants in a plan subject to certain minimums, as well as position-based
fees based on assets held in the retirement plans we service, and transaction
fees. Our retirement services documents and forms are sold on a per unit or
annual subscription basis, and our ERISA training and reference services are
provided on a fee-for-service basis.
In our Insurance and Education Services group, contracts with insurance
carriers supplying products for our customers provide for compensation based on
a percentage of premiums paid and transaction charges, and are generally
cancelable on less than 90 days notice at the discretion of either party. We
also maintain long-term contracts with the distribution arms of a number of
insurance companies, producer groups, broker-dealers and banks to provide
insurance products and services. Our insurance services fee structure is
generally based on sharing with our clients a percentage of commissions and/or
profits we receive. Our education services products are generally provided to
customers on an "as needed" basis pursuant to long-term programs. Our fee
structure for licensing solutions clients is generally based on the type of
services provided and the number of insurance agents and registered
representatives being serviced.
In our Information Services group, our fee structure for banking
solutions and asset retention clients is based primarily on number of accounts,
loans, participants and/or transactions handled for each service, in some cases,
subject to minimum charges, plus additional charges or special options, services
and features. Our check imaging software is licensed subject to a one-time fee
with recurring maintenance fees.
Although contract terminations and non-renewals have an adverse effect
on recurring revenues, we believe that the contractual nature of our businesses,
combined with our historical renewal experience, provides a high level of
recurring revenues.
CLIENT BASE
Our clients are located in all 50 states and several international
locations, principally Western Europe, Bermuda and the Cayman Islands. We
provide outsourcing solutions to commercial banks, mutual savings institutions,
thrift organizations, mutual funds, hedge funds, private equity funds, insurance
companies, insurance producer groups, corporate clients and other financial
organizations, including investment counselors and brokerage firms. Total
revenue from unaffiliated clients located outside the United States for fiscal
2001, 2002 and 2003 was approximately $29.3 million, $36.5 million and $65.5
million, respectively.
DISASTER RECOVERY SYSTEMS
We have implemented business continuity and disaster recovery plans and
procedures for each of our material processing platforms. The key restoration
services include off-site storage
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and rotation of critical files, availability of third-party "hot sites" and
telecommunications recovery capability. We continue to modify our business
continuity and disaster recovery plans to reflect changes in our operating
platforms. Our plans include provisions calling for periodic testing of the
plans, in some cases, in cooperation with our clients.
SALES, MARKETING AND CLIENT SUPPORT
We market our services directly to potential clients. In addition, we
support insurance agents and companies, brokerage firms and other entities in
their endeavors to gain new clients. We have more than 80 sales offices located
throughout the United States.
We utilize an account executive staff that provides client account
management and support. In accordance with our strategy of providing a single
source solution to our clients, the account executive staff also markets and
sells additional products and services to existing clients and manages the
contract renewal process. Using centralized resources, we provide our direct
sales staff and account executives with marketplace data, presentation materials
and telemarketing data. We maintain client support personnel that are
responsible for day-to-day interaction with clients, and also market our
products and services to our existing clients.
COMPETITION
We believe that the markets for our products and services are highly
competitive. We believe that we remain competitive due to several factors,
including our overall company strategy and commitment, product quality,
reliability of service, a comprehensive and integrated product line, timely
introduction of new products and services, and competitive pricing. We believe
that, by virtue of our range of product and service offerings, and our overall
commitment to client service and relationships, we compete favorably in these
categories. In addition, we believe that we have a competitive advantage as a
result of our position as an independent vendor, rather than as a cooperative,
an affiliate of a financial institution, a hardware vendor or competitor to our
clients.
Our principal competitors are third-party administration firms, mutual
fund companies, brokerage firms, insurance companies, distributors of insurance
products, independent vendors of computer software and services, in-house
departments, affiliates of financial institutions or large computer hardware
manufacturers and processing centers owned and operated as user cooperatives. We
believe that no single competitor provides the full range of products and
services that we offer.
PROPRIETARY RIGHTS
We regard certain of our software as proprietary and rely upon trade
secret law, internal nondisclosure guidelines and contractual provisions in our
license, services and other agreements for protection. Other than one patent
relating to our check imaging system, we do not hold any registered patents or
registered copyrights on our software. We believe that legal protection of our
software is less significant than the knowledge and experience of our management
and personnel, and their ability to develop, enhance and market new products and
services. We believe that we hold all proprietary rights necessary to conduct
our business.
Application software similar to that licensed by us is generally
available from alternate vendors. In addition, in instances where we believe
that additional protection is required, the
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applicable license agreement provides us with the right to obtain access to the
software source code upon the occurrence of certain events.
GOVERNMENT REGULATION
Certain of our subsidiaries are registered as broker-dealers with the
Securities and Exchange Commission ("SEC"). Much of the federal regulation of
broker-dealers has been delegated to self-regulatory organizations, principally
the National Association of Securities Dealers, Inc. ("NASD") and the national
securities exchanges. Broker-dealers are subject to regulation which covers all
aspects of the securities business, including sales methods, trading practices,
use and safekeeping of customers' funds and securities, capital structure,
recordkeeping and the conduct of directors, officers and employees. Additional
legislation, changes in rules and regulations promulgated by the SEC, the
Municipal Securities Rulemaking Board, the Office of the Comptroller of the
Currency ("OCC"), the Federal Deposit Insurance Corporation ("FDIC"), the
Federal Reserve Board ("FRB") and the self-regulatory organizations or changes
in the interpretation of enforcement of existing laws, rules and regulations may
also directly affect the mode of operations and profitability of broker-dealers.
The SEC, the FRB, the self-regulatory organizations, state securities law
administrators, the OCC and the FDIC may conduct regulatory proceedings for
violations of applicable laws, rules and regulations. Such violations can result
in disciplinary actions (such as censure, the imposition of fines, the issuance
of cease-and-desist orders or the suspension or revocation of registrations,
memberships or licenses of a broker-dealer or its officers, directors or
employees), as well as civil and criminal penalties. The principal purpose of
such regulations generally is the protection of the investing public and the
integrity of securities markets, rather than protection of securities firms or
their creditors or stockholders.
In addition, our broker-dealer subsidiaries are subject to SEC Rule
15c3-1 (commonly known as the "Net Capital Rule"). The Net Capital Rule, which
specifies the minimum amount of net capital required to be maintained by
broker-dealers, is designed to measure the general financial integrity and
liquidity of broker-dealers, and requires that a certain part of broker-dealers'
assets be kept in relatively liquid form. Failure to maintain the required
minimum amount of net capital may subject a broker-dealer to suspension or
revocation of licenses, registration or membership with the New York Stock
Exchange, Inc., the SEC, the NASD, and various state securities law
administrators, and may ultimately require liquidation of the broker-dealer.
Under certain circumstances, the Net Capital Rule also prohibits payment of cash
dividends, redemption or repurchase of stock, distribution of capital and
prepayment of subordinated indebtedness. Thus, compliance with the Net Capital
Rule could restrict our ability to withdraw capital from our broker-dealer
subsidiaries. At June 30, 2003, each of our broker-dealer subsidiaries met or
exceeded the requisite net capital requirement. At June 30, 2003, our
broker-dealer subsidiaries had aggregate net capital of approximately $9.4
million, which exceeded the requirements of the Net Capital Rule by
approximately $8.1 million.
Under the Investment Company Act of 1940, the distribution agreements
between each mutual fund and our subsidiary terminate automatically upon
assignment of the agreement. The term "assignment" includes direct assignments
by us, as well as assignments which may be deemed to occur, under certain
circumstances, upon the transfer, directly or indirectly, of a controlling block
of our voting securities. The Investment Company Act of 1940 presumes that any
transfer of more than 25% of the voting securities of any person represents a
transfer of a controlling block of voting securities.
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Our offshore Fund Services, Hedge Fund Services and Private Equity
Services operations are regulated by financial regulatory bodies in their
respective jurisdictions. These operating platforms are examined periodically by
such regulatory bodies and failure to comply with their rules and regulations
can result in disciplinary actions (such as censure, the imposition of fines,
the issuance of cease-and-desist orders, or the suspension or revocation of
registrations, memberships or licenses of our offshore subsidiaries or its
officers, directors or employees), as well as civil and criminal penalties. The
principal purpose of such regulations generally is the protection of the
investing public and the integrity of securities markets, rather than protection
of securities firms or their creditors or stockholders.
As a provider of services to banking institutions, we are not directly
subject to federal or state banking regulations. However, we are subject to
review from time to time by the FDIC, the National Credit Union Association, the
Office of Thrift Supervision, the OCC and various state regulatory authorities.
These regulators make certain recommendations to us regarding various aspects of
our operations. In addition, our processing operations are reviewed annually by
an independent auditing firm.
Banks and other depository institutions doing business with us are
subject to extensive regulation at the federal and state levels under laws,
regulations and other requirements specifically applicable to regulated
financial institutions, and are subject to extensive examination and oversight
by federal and state regulatory agencies. As a result, the activities of our
bank clients are subject to comprehensive regulation and examination, including
those activities specifically relating to the sale by or through them of mutual
funds and other investment products.
Federal regulatory agencies have promulgated guidelines or other
requirements which apply to depository institutions subject to their respective
supervisory jurisdiction with respect to the sale of mutual funds and other
non-FDIC insured investment products to retail customers. These requirements
apply to, among other things, sales of investment products on bank premises by
or through the use of third-party service providers. These requirements
generally require banking institutions which contract to sell investment
products through the use of third-party service providers to implement
appropriate measures to ensure that such activities are being conducted in
accordance with applicable bank and securities regulatory requirements
(including the agencies' retail sales guidelines), and may in some instances
impose certain "due diligence" obligations on regulated depository institutions
with respect to the nature and the quality of services provided by such
third-party service providers. Such regulatory requirements may increase the
extent of oversight which federal regulatory agencies may require our bank
clients to exercise over our activities.
Federal and state banking laws grant state and federal regulatory
agencies broad authority to take administrative enforcement and other adverse
supervisory actions against banks and other regulated depository institutions
where there is a determination that unsafe and unsound banking practices,
violations of laws and regulations, failures to comply with or breaches of
written agreements, commitments or undertakings entered into by such banks with
their regulatory agencies, or breaches of fiduciary and other duties exist.
Banks engaged in, among other things, mutual fund-related activities may be
subject to such regulatory enforcement and other adverse actions to the extent
that such activities are determined to be unlawful, unsound or otherwise
actionable.
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Certain of our operations are subject to regulation by the insurance
departments of the states in which we distribute insurance products. Certain of
our employees are required to be licensed as insurance producers in certain
states.
The Financial Services Modernization Act of 1999 and regulations
promulgated thereunder also impose restrictions on financial institutions with
respect to the use and disclosure of non-public consumer information. Some of
our businesses may be covered entities under the Act and therefore subject to
regulations governing privacy of non-public consumer information. In addition,
as a service provider to financial institutions, we are required by our
customers to safeguard non-public consumer information of their customers that
comes into our possession.
The USA PATRIOT Act and regulations promulgated thereunder impose
certain requirements on our clients and certain of our businesses to establish
anti-money laundering programs. These programs are required to include processes
for verifying the identities of customers, identifying suspicious transactions
and reporting such transactions to the appropriate governmental agency,
preventing transactions with individuals in specifically designated countries
and checking certain customer names against published lists of terrorist
organizations. We are subject to similar laws and regulations in each of the
foreign jurisdictions in which we act as a transfer agent.
EMPLOYEES
As of June 30, 2003, we employed approximately 4,900 employees. None of
our employees are represented by a union and there have been no work stoppages,
strikes or organization attempts. We believe that our relations with our
employees are good.
The service nature of our businesses makes our employees an important
corporate asset. Most of our employees are not subject to employment agreements,
however, a limited number of executives of our operating subsidiaries have such
agreements that were entered into in connection with the acquisition of their
businesses.
AVAILABLE INFORMATION
We maintain a website with the address www.bisys.com. We are not
including the information contained on our website as part of, or incorporating
it by reference into, this Annual Report on Form 10-K. We make available, free
of charge, through our website, our Annual Report on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K, and amendments to these
reports, as soon as reasonably practicable after we electronically file such
material with, or furnish such material to, the Securities and Exchange
Commission.
RISK FACTORS
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.
10
Some of our subsidiaries are registered with the Securities 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 exchange.
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
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.
A portion of our revenues in our Insurance and Education Services group
are based on income tax-driven and estate planning-driven sales of life
insurance and annuity products. Changes in laws, rules and regulations relating
to income taxes and estate taxes could adversely affect this portion of our
business.
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.
Changes in interest rates or a substantial decline in the securities market
could influence an investor's decision whether to invest or maintain an
investment in an investment vehicle administered by us. As a result,
fluctuations could occur in the amount of assets which we administer. If
investors were to seek alternatives to those investment vehicles, it could have
a negative impact on our revenues by reducing the amount of assets we
administer. Changes in the securities markets could also have a negative impact
on demand for our securities training and education products and services.
11
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
that result from mergers or consolidations could decide to perform some or all
of the services themselves which we currently provide or could provide. If that
were to occur, it could have a material adverse impact on our business and our
results of operations.
OUR ACQUISITION STRATEGY SUBJECTS US TO RISKS, INCLUDING INCREASED DEBT,
ASSUMPTION OF UNFORESEEN LIABILITIES AND DIFFICULTIES IN INTEGRATING OPERATIONS.
Since our founding, 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 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;
- dilution to existing stockholders from the issuance of our common stock
to make or finance acquisitions; and
- incurrence of debt.
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 our bank and insurance company
clients we service, and our Investment Services group maintains transfer agency
records and processes trades for our mutual fund clients. If our systems or
facilities 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.
DISRUPTION OF OUR DISASTER RECOVERY PLANS AND PROCEDURES IN THE EVENT OF A
CATASTROPHE COULD ADVERSELY AFFECT OUR OPERATIONS.
We have made a significant investment in our infrastructure, and our
operations are dependent on our ability to protect the continuity of our
infrastructure against damage from catastrophe or natural disaster, breach of
security, loss of power, telecommunications failure or
12
other natural or man-made events. A catastrophic event could have a direct
negative impact on us or an indirect impact on us by adversely affecting our
customers, the financial markets or the overall economy. While we have
implemented business continuity and disaster recovery plans, it is impossible to
fully anticipate and protect against all potential catastrophes. If our business
continuity and disaster recovery plans and procedures were disrupted or
unsuccessful in the event of a catastrophe, we could experience a material
adverse interruption of our operations.
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. We cannot assure 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 prospects.
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 July 1,
2002 to September 18, 2003, the last sale price of our common stock ranged from
a low of $13.32 per share to a high of $32.20 per share.
13
FUTURE SALES OF OUR COMMON STOCK MAY DEPRESS OUR STOCK PRICE.
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 August 29, 2003,
we had 119,585,515 shares of common stock outstanding. As of August 29, 2003, we
also had options to purchase 14,429,147 shares of our common stock outstanding,
8,516,096 shares of our common stock reserved for issuance pursuant to options
available for issuance under our stock option plans and employee stock purchase
plan, and 8,983,740 shares of our common stock reserved for issuance upon the
conversion of our 4% Convertible Subordinated Notes due 2006.
ANTI-TAKEOVER EFFECTS OF CERTAIN BY-LAW PROVISIONS, DELAWARE LAW, AND OUR
SHAREHOLDER RIGHTS PLAN COULD DISCOURAGE, DELAY OR PREVENT A CHANGE IN CONTROL.
We have a shareholder rights plan. Under the plan, if a person or group
were to acquire or 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 $175, 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.
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.
ITEM 2. PROPERTIES.
All of our principal properties are leased. We maintain offices
throughout the United States and in the United Kingdom, Ireland, Guernsey,
Luxembourg and Bermuda. Our principal data centers and operating centers are
located in:
- Birmingham, Alabama (Information Services);
- San Francisco, California (Insurance and Education Services);
- Atlanta, Georgia (Insurance and Education Services);
- Lombard, Illinois (Information Services);
- Indianapolis, Indiana (Insurance and Education Services);
- Boston, Massachusetts (Investment Services and Insurance and Education
Services);
- Brainerd, Minnesota (Investment Services);
- Cherry Hill, New Jersey (Information Services);
- New York, New York (Corporate Headquarters and Investment Services);
- Columbus, Ohio (Investment Services);
- Dresher, Pennsylvania (Investment Services);
- Harrisburg, Pennsylvania (Insurance and Education Services);
- Houston, Texas (Information Services);
- Salt Lake City, Utah (Insurance and Education Services);
- Hamilton, Bermuda (Investment Services);
- Guernsey, Channel Islands (Investment Services);
14
- Dublin, Ireland (Investment Services); and
- The Grand Duchy of Luxembourg (Investment Services).
Leases on our properties expire periodically during the next 15 years.
We own or lease central processors and associated peripheral equipment
used in our data processing operations and communications network, retirement
services business and electronic banking business.
We believe that our existing facilities and equipment, together with
expansion in the ordinary course of business, are adequate for our present and
foreseeable needs.
ITEM 3. LEGAL PROCEEDINGS.
Our Insurance Services division is involved in litigation with a West
Coast-based distributor of life insurance products, with which we had a former
business relationship. We intend to continue to vigorously defend the claims
asserted and have asserted a number of counterclaims. We believe that we have
adequate defenses against claims arising in such litigation and that the outcome
of this matter will not have a material adverse effect upon our financial
position, results of operations or cash flows.
We are also involved in other litigation arising in the ordinary course
of business. We believe that we have adequate defenses and/or insurance coverage
against claims arising in such litigation and that the outcome of these
proceedings, individually or in the aggregate, will not have a material adverse
effect upon our financial position, results of operations or cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of our security holders during the
fourth quarter of fiscal 2003.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Certain of the information required by this Item 5 is incorporated
herein by reference to page 40 of our 2003 Annual Report under the heading
"Market Price Information" and Note 5 to our consolidated financial statements
included therein. We have not paid or declared any cash dividends during our
most recent two fiscal years. Portions of the Annual Report incorporated by
reference in this report are included in this report as Exhibit 13.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by this Item 6 is incorporated herein by
reference to page 18 of the Annual Report, included in this report as Exhibit
13.
15
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information required by this Item 7 is incorporated herein by
reference to pages 19 through 22 of the Annual Report, included in this report
as Exhibit 13.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We do not have material exposure to market risk from derivative or
non-derivative financial instruments. We do not utilize such instruments to
manage market risk exposures or for trading or speculative purposes. We do,
however, invest available cash and cash equivalents in highly liquid financial
instruments with original maturities of three months or less. As of June 30,
2003, we had approximately $79.6 million of cash and cash equivalents invested
in highly liquid debt instruments purchased with original maturities of three
months or less, including $2.3 million of overnight repurchase agreements. We
believe that potential near-term losses in future earnings, fair values and cash
flows from reasonably possible near-term changes in the market rates for such
instruments are not material to us.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this Item 8 is incorporated herein by
reference to pages 23 through 40 of the Annual Report, included in this report
as Exhibit 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES.
We maintain disclosure controls and procedures that are designed to
ensure that information required to be disclosed in our reports, filed pursuant
to the Securities Exchange Act of 1934, is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms, and
that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.
We carried out an evaluation as of June 30, 2003, under the supervision
and with the participation of the Company's management, including the Company's
Chief Executive Officer and the Company's Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. Based on the foregoing, the Company's Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures were effective. There have been no changes in the Company's internal
control over financial reporting during the fiscal quarter ended June 30, 2003,
that has materially affected, or is reasonably likely to affect, our internal
control over financial reporting.
PART III
Pursuant to Instruction G(3) to Form 10-K, the information required by
Items 10 through 13 of this report is incorporated by reference from our
definitive proxy statement, which is
16
expected to be filed with the SEC pursuant to Regulation 14A within 120 days
after the end of our fiscal year.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)(1) Financial Statements
Our consolidated financial statements as of June 30, 2003 and 2002, and
for each of the three years in the period ended June 30, 2003, together with the
report of PricewaterhouseCoopers LLP dated July 29, 2003, are incorporated
herein by reference to pages 23 through 40 of the Annual Report, included in
this report as Exhibit 13.
(a)(2) Financial Statement Schedules
All financial statement schedules are omitted for the reason that they
are either not applicable or not required, or because the information required
is contained in the consolidated financial statements or notes thereto.
(a)(3) Exhibits:
3.1 Amended and Restated Certificate of Incorporation of The BISYS
Group, Inc., as amended by Certificates of Amendment to Amended and
Restated Certificate of Incorporation of The BISYS Group, Inc.
(Incorporated by reference to Exhibit 3.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended
December 31, 2001.)
3.2 Amended and Restated By-Laws of The BISYS Group, Inc. (Incorporated
by reference to Exhibit 3.2 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 2003.)
4.1 Rights Agreement, dated as of May 8, 1997 (the "Rights Agreement"),
by and between The BISYS Group, Inc. and The Bank of New York, as
Rights Agent (including the form of Rights Certificate as Exhibit
A). (Incorporated by reference to Exhibit 2.1 of Form 8-A filed on
May 8, 1997 with the SEC.)
4.2 Amendment to the Rights Agreement, dated as of August 15, 2002.
(Incorporated by reference to Exhibit 4.2 of Form 8-A/A filed on
September 26, 2002 with the SEC.)
4.3 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.)
10.1 Amended and Restated Deferred Compensation Plan, dated as of June
14, 2002. (Incorporated by reference to Exhibit 10.2 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
June 30, 2003.)
10.2 Executive Life Insurance Plan (Incorporated by reference to Exhibit
10.3 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1998, Commission File No. 0-19922.)
10.3 The BISYS Group, Inc. Executive Officer Annual Incentive Plan.
(Incorporated by reference to Exhibit C to Registrant's proxy
statement for its 1999 annual meeting of stockholders, Commission
File No. 0-19922.)
17
10.4 The BISYS Group, Inc. 1999 Equity Participation Plan. (Incorporated
by reference to Exhibit B to Registrant's proxy statement for its
1999 annual meeting of stockholders, Commission File No. 0-19922.)
10.5 BISYS 401(k) Savings Plan. (Incorporated by reference to Exhibit
10.7 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1999, Commission File No. 0-19922.)
10.6 The BISYS Group, Inc. Non-Employee Directors' Stock Option Plan, as
amended (Incorporated by reference to Exhibit 10.8 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
June 30, 1998, Commission File No. 0-19922.)
10.7 Executive Loan Agreement (Incorporated by reference to Exhibit 10.1
to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999, Commission File No. 0-19922.)
10.8 Credit Agreement (the "Credit Agreement") by and among The BISYS
Group, Inc., the Lenders party thereto, The Chase Manhattan Bank,
The First National Bank of Chicago, First Union National Bank and
Fleet Bank, National Association, as co-Agents, and The Bank of New
York, as Administrative Agent, with BNY Capital Markets, Inc., as
Arranger, dated as of June 30, 1999, without exhibits. (Incorporated
by reference to Exhibit 10.17 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1999, Commission File
No. 0-19922.)
10.9 Amendment No. 1 to the Credit Agreement, dated as of September 28,
2000 (Incorporated by reference to Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30,
2000, Commission File No. 0-19922.)
10.10 Amendment No. 2 to the Credit Agreement, dated as of September 24,
2002 (Incorporated by reference to Exhibit 10.11 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended June 30, 2003.)
10.11* Transition Services Agreement, dated as of October 30, 2002, by and
between The BISYS Group, Inc. and Lynn J. Mangum.
13* Pages 18 - 40 of the Registrant's 2003 Annual Report to
Shareholders.
21* List of significant subsidiaries of The BISYS Group, Inc.
23* Consent of PricewaterhouseCoopers LLP.
31.1* Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2* Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32* Section 1350 Certifications.
*Filed herewith.
(b) Reports on Form 8-K
No Current Reports on Form 8-K were filed with the Securities
and Exchange Commission during the fiscal quarter ended June 30, 2003. A Current
Report on Form 8-K, dated July 29, 2003, was furnished to the Securities and
Exchange Commission (Item 12 - Results of Operations and Financial Condition) to
report the announcement of the Corporation's financial results for the fiscal
quarter and fiscal year ended June 30, 2003.
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
The BISYS Group, Inc.
Date: September 18, 2003 By: /s/ Andrew C. Corbin
---------------------
Andrew C. Corbin
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the 18th day of September, 2003.
Signature Title
/s/ Dennis R. Sheehan Director and Chief
- ------------------------ Executive Officer (Principal Executive Officer)
(Dennis R. Sheehan)
/s/ Andrew C. Corbin Executive Vice President and Chief Financial Officer
- ------------------------ (Principal Financial and Accounting Officer)
(Andrew C. Corbin)
/s/ Lynn J. Mangum Director and Chairman of the Board
- ------------------------
(Lynn J. Mangum)
/s/ Denis A. Bovin Director
- ------------------------
(Denis A. Bovin)
/s/ Robert J. Casale Director
- ------------------------
(Robert J. Casale)
/s/ Thomas A. Cooper Director
- ------------------------
(Thomas A. Cooper)
/s/ Jay W. DeDapper Director
- ------------------------
(Jay W. DeDapper)
/s/ John J. Lyons Director
- ------------------------
(John J. Lyons)
/s/ Thomas E. McInerney Director
- ------------------------
(Thomas E. McInerney)
/s/ Joseph J. Melone Director
- ------------------------
(Joseph J. Melone)
19
INDEX TO EXHIBITS FILED HEREWITH
EXHIBIT NO. DESCRIPTION
10.11 Transition Services Agreement, dated as of October 30, 2002, by and
between The BISYS Group, Inc. and Lynn J. Mangum.
13 Pages 18 - 40 of the Registrant's 2003 Annual Report to
Shareholders.
21 List of significant subsidiaries of The BISYS Group, Inc.
23 Consent of PricewaterhouseCoopers LLP
31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32 Section 1350 Certifications
20