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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
THE BISYS GROUP, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No:
3) Filing Party:
4) Date Filed:
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[BISYS LOGO]
THE BISYS GROUP, INC.
150 CLOVE ROAD
LITTLE FALLS, NEW JERSEY 07424
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 16, 1998
The Annual Meeting of Stockholders of The BISYS Group, Inc. ("BISYS"
or the "Company") will be held at the executive offices of the Company at 150
Clove Road, Little Falls, New Jersey 07424, on November 16, 1998, at 9:00 a.m.,
for the following purposes:
1. to re-elect six directors to hold office until the next
Annual Meeting of Stockholders and until their respective
successors shall have been duly elected and qualified;
2. to consider and vote upon a proposal to approve the
Company's 1999 Employee Stock Purchase Plan;
3. to consider and vote upon a proposal to ratify the
selection of PricewaterhouseCoopers LLP, independent public
accountants, as the auditors of the Company for the fiscal
year ending June 30, 1999; and
4. to transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on September
24, 1998 as the record date for the determination of the stockholders of the
Company entitled to notice of and to vote at the Annual Meeting of Stockholders.
Each share of the Company's Common Stock outstanding on the record date is
entitled to one vote on all matters presented at the Annual Meeting.
ALL HOLDERS OF THE COMPANY'S COMMON STOCK (WHETHER THEY EXPECT TO
ATTEND THE ANNUAL MEETING OR NOR) ARE REQUESTED TO COMPLETE, SIGN, DATE AND
RETURN PROMPTLY THE PROXY CARD ENCLOSED WITH THIS NOTICE.
By Order of the Board of Directors
/s/ Kevin J. Dell
-----------------------------------
Kevin J. Dell
Secretary
October 10, 1998
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THE BISYS GROUP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 16, 1998
This Proxy Statement is being furnished to stockholders of record of
The BISYS Group, Inc. ("BISYS" or the "Company") as of September 24, 1998 (the
"Record Date") in connection with the solicitation by the Board of Directors of
BISYS of proxies for the 1998 Annual Meeting of Stockholders (the "Annual
Meeting") to be held at the Company's corporate headquarters at 150 Clove Road,
Little Falls, New Jersey 07424, on November 16, 1998 at 9:00 a.m., and at any
adjournments thereof, for the purposes stated in the Notice of Annual Meeting.
The approximate date of mailing of this Proxy Statement and enclosed form of
proxy to stockholders is October 10, 1998.
As of the Record Date, the Company had outstanding 26,632,367 shares of
Common Stock, $.02 par value ("Common Stock"). Each share of Common Stock
outstanding on the Record Date is entitled to one vote on all matters presented
at the Annual Meeting. A majority of the outstanding shares entitled to vote at
the Annual Meeting will constitute a quorum. Abstentions and broker non-votes
are counted as present for purposes of determining whether a quorum is present.
Directors are elected by a plurality of votes cast. All other matters to
properly come before the Annual Meeting require the approval of a majority of
shares of Common Stock present and entitled to vote with respect to such
matters. Abstentions and broker non-votes have no impact on the election of
directors except to reduce the number of votes for the nominee(s). With respect
to all other proposals, abstentions as to particular proposals will have the
same effect as votes against such proposals, while broker non-votes are not
counted as votes and are not included in calculating the number of votes
necessary for approval.
If the enclosed proxy is signed and returned, it may, nevertheless, be
revoked at any time prior to the voting thereof at the pleasure of the
stockholder signing it, either by a written notice of revocation received by the
person or persons named therein or by voting the shares covered thereby in
person or by another proxy dated subsequent to the date thereof.
Shares represented by duly executed proxies in the accompanying form
will be voted in accordance with the instructions indicated on such proxies,
and, if no such instructions are indicated thereon, will be voted in favor of
the nominees for election as directors named below and for the other proposals
referred to below. If any other matters properly come before the Annual Meeting,
it is intended that the persons named as proxies will vote such shares in
accordance with their own judgment.
1. ELECTION OF DIRECTORS
Six directors are standing for re-election to the Board at the Annual
Meeting for terms expiring at the 1999 Annual Meeting. Mr. Neil P. Marcous, a
non-employee director elected during the fiscal year as Executive Vice President
of the Company with responsibilities as Group President, Marketing & Information
Services, has determined not to stand for re-election. He will step down as a
director immediately prior to the 1999 Annual Meeting and the size of the Board
will be fixed by the Board at six persons. Accordingly, there are six nominees
for election as directors, and proxies may not be voted for a greater number of
persons than the six nominees named herein. The directors will continue to serve
until their respective successors are duly elected and qualified.
Shares represented by proxies returned duly executed will be voted,
unless otherwise specified, in favor of the six nominees for the Board of
Directors named below. If any (or all) such persons should be unable to serve,
the persons named in the enclosed proxy will vote the shares of Common Stock
covered thereby for such substitute nominee (or nominees) as the Board of
Directors may select. Stockholders may withhold authority to vote for any
nominee by entering the name of such nominee in the space provided for such
purpose on the proxy card.
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NOMINEES FOR ELECTION AS DIRECTOR
Name Principal Occupation Served as Director Since
- ---- -------------------- ------------------------
LYNN J. MANGUM Chairman of the Board, President and 1989
Chief Executive Officer of BISYS.
ROBERT J. CASALE Until retirement, Group President, Brokerage Information 1997
Services, Automatic Data Processing, Inc.
THOMAS A. COOPER Chairman, TAC Associates, a financial advisory and 1997
investment firm.
JAY W. DEDAPPER Until retirement, Executive Vice President (Operations) 1989
NL Industries, Inc., a metal, chemical and petroleum company.
JOHN J. LYONS President and Managing Principal, Lyons Advisors, Inc., 1992
a New York-based bank and thrift consulting firm.
THOMAS E. MCINERNEY General Partner of Welsh, Carson, Anderson & Stowe, a 1989
New York investment firm.
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information with respect to each of the
nominees for the office of director and each other executive officer of BISYS:
NOMINEES
MR. MANGUM, 56, has served as a Director and as Chairman of the Board
and Chief Executive Officer of the Company since its founding in August 1989. He
was elected President of the Company in May 1998. Prior to August 1989, he
served as a Corporate Vice President of Automatic Data Processing, Inc. ("ADP")
and as Division President of ADP's Employer Services National Accounts Division
since December 1988. Prior thereto, he served for 22 years in various capacities
in ADP's Financial Services Group including, among other positions, Division
President of the predecessor company of the Company since 1983.
MR. CASALE, 59, has served as a Director of the Company since August
1997. Mr. Casale is the former Group President, ADP, Brokerage Information
Services, a position in which he served from 1988 to 1997. His experience also
includes serving as Managing Director, Mergers & Acquisitions/Corporate Finance
of the High Technology Group of Kidder, Peabody & Co. and more than 10 years in
various executive positions with AT&T, including President-elect of AT&T's
Special Markets Group, responsible for major joint ventures and partnerships. He
is a member of the Board of Directors of The Provident Mutual Life Insurance
Company and the Quantum Corporation, a publicly held disc drive manufacturer.
MR. COOPER, 62, has served as a Director of the Company since August
1997. Mr. Cooper is and has been Chairman of TAC Associates, a financial
advisory and investment firm, since 1996, and Chairman of Flatiron Credit
Company, a finance company, since 1997. He previously served since its formation
and until 1996 as Chairman of TAC Bancshares, Inc., a holding company formed in
1991 to acquire and operate financial service institutions. From August 1993 to
August 1996, he served as Chairman, President and Chief Executive Officer of
Chase Federal Bank, Florida, following the acquisition and merger of Chase
Federal Bank and Financial Federal Bank by TAC Bancshares in August 1993. Mr.
Cooper has over 30 years of broad experience in financial services which include
serving as Chief Executive Officer of Goldome, one of the nation's largest
thrift institutions, from 1988 to 1991; as Chairman and Chief Executive Officer
of INVEST/ISFA Corporation, a
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provider of brokerage, investment, insurance, and related services from 1987 to
1988; and as President and Chief Operating Officer of Bank of America, and
President of BankAmerica Corporation from 1985 to 1987.
MR. DEDAPPER, 74, has served as a Director of the Company since 1989.
Prior to his retirement in 1981, he served for more than five years as Executive
Vice President (Operations) of NL Industries, Inc., a metal, chemical and
petroleum company and served on its Board of Directors.
MR. LYONS, 58, has served as a Director of the Company since 1992.
Since September 1997, Mr. Lyons has been President and Chief Executive Officer
of Gateway American Bank of Florida, a community bank headquartered in Ft.
Lauderdale, Florida. From August 1996 to April 1997, Mr. Lyons served as
President and Chief Executive Officer of Regent National Bank, Philadelphia,
Pennsylvania. From April 1995 to August 1996, he served as President and Chief
Executive Officer and a Director of Monarch Savings Bank, FSB, Clark, New
Jersey. From December 1993 until April 1995, he was President and Chief
Executive Officer of Jupiter Tequesta National Bank, a national bank
headquartered in Tequesta, Florida. From 1980 until December 1993, he was
President and Chief Executive Officer of Lyons, Zomback & Ostrowski, Inc., a New
York-based bank and thrift consulting firm. That firm became a subsidiary of
Advest Group, Inc., a holding company with a brokerage firm as its principal
subsidiary. Mr. Lyons was Vice Chairman of Advest, Inc. during 1993 and from
1989 through 1993 was a member of its Board of Directors. He is a director of
Gateway American Bank of Florida, a publicly held banking company.
MR. MCINERNEY, 57, has served as a Director of the Company since
1989. From September 1987 to the present time, Mr. McInerney has been a general
partner of Welsh, Carson, Anderson & Stowe, a private equity investor
specializing in the information processing and healthcare industries, and is a
general partner of the respective sole general partners of its associated
limited partnerships. He is also a director of The Cerplex Group, Inc., a
publicly held spare parts and repair services provider for computer
manufacturers.
All directors are elected annually and hold office until the next
annual meeting of stockholders and until their successors are duly elected and
qualified. Each of the non-employee directors (i.e., other than Mr. Mangum)
receive a $15,000 annual retainer and a $1,000 fee for their personal attendance
at each meeting, including committee meetings held other than the day of a Board
meeting. Mr. Mangum does not receive any compensation for his services as a
director, but is reimbursed for expenses. Pursuant to the Company's Non-Employee
Director's Stock Option Plan, as amended (the "Non-Employee Director's Stock
Option Plan"), which became effective, as amended, at the 1997 Annual Meeting of
Stockholders, each non-employee director of the Company was granted an option to
purchase 25,000 shares of Common Stock at an exercise price of $34.00 per share,
the fair market value of a share of Common Stock on the date of grant. Pursuant
to the Non-Employee Director's Stock Option Plan, each non-employee director of
the Company elected thereafter by stockholders will be granted an option to
purchase 25,000 shares of Common Stock upon his initial election by stockholders
as a director. Each such option vests 20% on the date of grant and 20% upon such
director's re-election by stockholders at subsequent annual meetings until such
option is fully vested. Each such option is exercisable to the extent vested. A
new stock option for an additional 25,000 shares of Common Stock will be granted
to a non-employee director upon re-election at the next annual meeting after the
annual meeting at which the option becomes fully vested. All stock options under
the Non-Employee Director's Plan are granted at an exercise price equal to the
fair market value of a share of Common Stock on the date of grant. There are
275,000 shares of Common Stock reserved for options under the Non-Employee
Director's stock Option Plan, of which 109,600 shares are currently available
for future options which may be granted thereunder.
During fiscal 1998, the Board of Directors of the Company held four
meetings. The standing committees of the Board of Directors are the Audit
Committee, whose current members are Messrs. Cooper and DeDapper, and the
Compensation Committee, whose current members are Messrs. Casale and Lyons. The
Audit Committee periodically consults with the Company's management and
independent public accountants on financial matters, including the Company's
internal financial controls and procedures. The Audit Committee held four
meetings in fiscal 1998. The Compensation Committee reviews and makes
recommendations with respect to the salary and
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incentive compensation of the Chief Executive Officer and his direct reports,
and certain other employees of the Company and its subsidiaries whose salaries
are in excess of specified levels; administers the Company's stock option plans,
including the granting of stock options and rights to purchase Common Stock; and
administers the Company's annual Employee Stock Purchase Plans, as approved by
the stockholders. During fiscal 1998, the Compensation Committee held five
meetings. The Board of Directors of the Company does not have a standing
Nomination Committee. During fiscal 1998, all of the Company's directors
attended more than 75% of the meetings of the Board of Directors and all
committees on which they served.
OTHER EXECUTIVE OFFICERS
NEIL P. MARCOUS, 50, joined the Company in May 1998 as Executive Vice
President, including responsibilities as Group President, Marketing and
Information Services. Prior to joining the Company, he served as Vice
President/General Manager of the Electronic Commerce Division of Electronic Data
Systems, Inc., a provider of information technologies services including
electronic funds transfer services, since joining that company in 1989. He has
served as a Director of the Company since 1994.
CHARLES J. MOHR, 51, joined the Company in July 1998 as Executive
Vice President, including responsibilities as Group President, Investment
Services. Prior to joining the Company, he served as chief executive officer of
Systematic Financial Management, L.P., an investment management firm, from 1996
and as president and chief executive officer of SunAmerica Asset Management
Corporation, a mutual fund company, from 1990.
DENNIS R. SHEEHAN, 42, serves as Executive Vice President and Chief
Financial Officer of the Company, a position to which he was elected in February
1998. He previously served as Senior Vice President, Finance of the Company,
which became an executive officer position in 1997 and served in a similar
position within the BISYS organization since joining BISYS in connection with
its acquisition of Concord Holding Corporation ("Concord") in March 1995. Since
1992, he served in various executive officer positions with Concord, including
Executive Vice President and Chief Financial Officer.
J. ROBERT JONES, 45, serves as Executive Vice President, Business
Development of the Company. He previously served as Senior Vice President,
Business Development since 1996 and in a similar position within the BISYS
organization since 1991. From March 1989 to June 1991, Mr. Jones served as Vice
President, Sales and Marketing.
MARK J. RYBARCZYK, 43, serves as Executive Vice President, Human
Resources of the Company. He previously served as Senior Vice President, Human
Resources since 1993. He has also served as Vice President, Human Resources of
the Company and its predecessor company since June 1987 and Director, Human
Resources since October 1984.
KEVIN J. DELL, 42, serves as Senior Vice President, General Counsel
and Secretary, having joined the Company as Vice President, General Counsel and
Secretary in 1996. From 1993 until he joined the Company, he served as Vice
President, General Counsel and Secretary of Concurrent Computer Corporation, a
supplier of real-time computer systems, which he joined in 1987 as senior
corporate counsel.
Executive officers serve at the discretion of the Board of Directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of Forms 3, 4 and 5 submitted to the Company during
and with respect to fiscal 1998, all statements of beneficial ownership required
to be filed with the Securities and Exchange Commission (the "Commission") were
timely filed, with the exception of one Form 4 for Mr. Jones, reporting the sale
of 6,000
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shares of Common Stock in four separate sales transactions over a three-day
period, which was inadvertently filed four days late.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, based on filings
with the Securities and Exchange Commission for periods ended March 31 and June
30, 1998, with respect to the shares of Common Stock beneficially owned by
stockholders reporting ownership of more than 5% of the outstanding shares of
Common Stock:
BENEFICIAL OWNER NUMBER OF SHARES BENEFICIALLY OWNED PERCENT OF CLASS
T. Rowe Price Associates, Inc. 3,265,700(1) 12.3%
100 East Pratt Street
Baltimore, Maryland 21202
Wellington Management Company, LLP 2,983,142(2) 11.2%
75 State Street
Boston, Massachusetts 02109
Massachusetts Financial Services Company 1,595,621(3) 6.0%
500 Boylston Street
Boston, MA 02116
(1) These securities are owned by various individual and institutional
investors for which T. Rowe Price Associates, Inc. ("Price
Associates") serves as investment adviser with power to direct
investments and/or sole power to vote the securities. For purposes of
the reporting requirements of the Securities Exchange Act of 1934,
Price Associates is deemed to be a beneficial owner of such
securities; however, Price Associates expressly disclaims that it is,
in fact, the beneficial owner of such securities. The stockholder has
sole investment power with respect to the shares shown as
beneficially owned, and sole voting power with respect to 241,900
shares and no voting power with respect to the remaining shares shown
as beneficially owned by it.
(2) The stockholder has shared investment power with respect to shares
shown as beneficially owned by it; and shared voting power with
respect to 1,810,256 shares and no voting power with respect to the
remaining shares shown as beneficially owned by it.
(3) The stockholder has sole investment and voting power with respect to
the shares shown as beneficially owned by it.
The following table sets forth, as of September 24, 1998, certain
information with respect to the shares of Common Stock beneficially owned by (i)
each director, (ii) each of the persons for whom compensation information is
disclosed below under the heading "Executive Compensation," and (iii) all the
Company's directors and executive officers at June 30, 1998 as a group.
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BENEFICIAL OWNER NO. OF SHARES BENEFICIALLY OWNED(1) PERCENT OF CLASS
- ---------------- ----------------------------------- ----------------
Lynn J. Mangum 499,577(2) 1.9%
Robert J. Casale 10,000(3) *
Thomas A. Cooper 10,000(3) *
Jay W. DeDapper 14,100(4) *
John J. Lyons 15,600(4) *
Thomas E. McInerney 52,723(4) *
Paul H. Bourke(5) 96,862 *
Robert J. McMullan(5) 0 0
Dennis R. Sheehan 68,020(6) *
J. Robert Jones 151,805(7) *
Mark J. Rybarczyk 131,051(8) *
Kevin J. Dell 15,285(9) *
All directors and executive officers as
a group (12 persons) 979,461(10) 3.7%
* Less than 1.0%.
(1) Each person has sole voting and investment power with respect to the
shares shown as beneficially owned by him. Assumes re-election of
nominees for Director and resulting vesting of certain non-employee
director stock options.
(2) Includes an aggregate 426,191 shares subject to stock options
exercisable as of November 23, 1998 (60 days from the record date for
the Annual Meeting).
(3) Assuming re-election as a director, includes an aggregate 10,000
shares subject to stock options exercisable as of November 23, 1998.
(4) Assuming re-election as a director, includes an aggregate 13,600
shares subject to stock options exercisable as of November 23, 1998.
(5) Resigned as an executive officer during fiscal year 1998.
(6) Includes an aggregate 53,276 shares subject to stock options
exercisable as of November 23, 1998.
(7) Includes an aggregate 135,277 shares subject to stock options
exercisable as of November 23, 1998.
(8) Includes an aggregate 111,397 shares subject to stock options
exercisable as of November 23, 1998.
(9) Includes an aggregate 15,000 shares subject to stock options
exercisable as of November 23, 1998.
(10) Includes an aggregate 813,141 shares subject to stock options
exercisable as of November 23, 1998.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows, for the fiscal years ended June 30, 1998,
1997 and 1996, certain compensation information as to the Chief Executive
Officer, each of the four most highly compensated executive officers of the
Company serving as executive officers at June 30, 1998 and, through their
termination date, two former employees (Messrs. Bourke and McMullan) who served
as executive officers during fiscal year 1998 and otherwise would have been
among the four most highly compensated executive officers ("Named Executive
Officers").
Long Term Compensation
Annual Compensation -----------------------------
--------------------------------- Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- -----------------------------------------------------------------------------------------------------------------------------------
Securities
Other Re- Under-
Annual tricted lying LTIP All Other
Comp- Stock Options/ Pay- Compen-
Name and Principal Salary Bonus ensation Awards SARs outs sation(1)
Position Year ($) ($) ($) ($) (#) ($) ($)
- -----------------------------------------------------------------------------------------------------------------------------------
Lynn J. Mangum 1998 449,615 475,000 -- -- 65,000 -- 30,359
Chairman of the Board, 1997 389,154 375,000 -- -- 65,000 -- 4,750
President and Chief 1996 323,612 300,000 -- -- 120,000 -- 2,000
Executive Officer
- -----------------------------------------------------------------------------------------------------------------------------------
Paul H. Bourke, former 1998 261,923 182,216 -- -- 45,000 -- 4,500
President and Chief 1997 276,076 200,000 -- -- 45,000 -- 4,750
Operating Officer(2) 1996 250,560 200,000 -- -- 90,000 -- 2,000
- -----------------------------------------------------------------------------------------------------------------------------------
Robert J. McMullan, 1998 338,750 300,000 -- -- 55,000 -- 5,588
former Executive Vice 1997 277,231 300,000 -- -- 50,000 -- 3,000
President and 1996 230,903 260,000 -- -- 80,000 -- 2,000
Chief Financial Officer(3)
- -----------------------------------------------------------------------------------------------------------------------------------
Dennis R. Sheehan(4) 1998 196,683 245,000 -- -- 60,000 -- 6,608
Executive Vice President 1997 169,956 165,000 -- -- 25,000 -- 4,750
and Chief Financial Officer
- -----------------------------------------------------------------------------------------------------------------------------------
J. Robert Jones 1998 216,539 200,000 -- -- 30,000 -- 16,293
Executive Vice President, 1997 199,711 180,000 -- -- 30,000 -- 4,750
Business Development 1996 156,538 220,000 -- -- 60,000 -- 2,000
- -----------------------------------------------------------------------------------------------------------------------------------
Mark J. Rybarczyk 1998 157,402 150,000 -- -- 25,000 -- 13,132
Executive Vice President, 1997 142,693 95,000 -- -- 25,000 -- 4,750
Human Resources 1996 128,692 95,000 -- -- 50,000 -- 2,000
- -----------------------------------------------------------------------------------------------------------------------------------
Kevin J. Dell(4) 1998 188,269 95,000 -- -- 25,000 -- 7,338
Senior Vice President, 1997 148,154 70,000 -- -- 25,000 -- 4,750
General Counsel and
Secretary
===================================================================================================================================
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- ----------------------------
(1) The entire amount for fiscal year 1996 and 1997, and $5,000 ($4,500
for Mr. Bourke) for fiscal year 1998 represents the Company's
matching contribution under the Company's 401(k) plan. For fiscal
year 1998, includes the economic value of a "split dollar" life
insurance policy as follows: Mr. Mangum, $1,830; Mr. McMullan, $588;
Mr. Sheehan, $356; Mr. Jones, $475; Mr. Rybarczyk, $310; and Mr.
Dell, $338. Also includes for fiscal year 1998, the value of the
Company's matching contribution in Common Stock for deferred
compensation investments in Common Stock under a voluntary executive
deferred compensation program as follows: Mr. Mangum, $23,529; Mr.
Sheehan, $1,250; Mr. Jones, $10,818; Mr. Rybarczyk, $7,822; and Mr.
Dell, $2,000.
(2) Resigned as an executive officer during fiscal year 1998; termination
effective May 15, 1998.
(3) Resigned as an executive officer during fiscal year 1998; termination
effective June 30, 1998.
(4) Became an executive officer of the Company during the fiscal year
ended June 30, 1997.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table contains information concerning the grant of
stock options to the Named Executive Officers during the fiscal year ended June
30, 1998.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL
NUMBER OF % OF REALIZABLE VALUE AT
SECURITIES TOTAL ASSUMED ANNUAL RATES
UNDERLYING OPTIONS OF STOCK PRICE
OPTIONS GRANTED TO EXERCISE OR APPRECIATION FOR
GRANTED (1) EMPLOYEES IN BASE PRICE EXPIRATION OPTION TERM
NAME (#) FISCAL YEAR ($/SH) DATE 5%($) (2) 10%($) (2)
- -----------------------------------------------------------------------------------------------------------------------------------
Lynn J. Mangum 65,000 4.2% 34.00 8/14/07 1,350,153 3,458,948
- -----------------------------------------------------------------------------------------------------------------------------------
Paul H. Bourke 45,000 2.9% 34.00 8/14/07 (3) 934,721 2,394,657
- -----------------------------------------------------------------------------------------------------------------------------------
Robert J. McMullan 55,000 3.6% 34.00 8/14/07 (3) 1,142,437 2,926,803
- -----------------------------------------------------------------------------------------------------------------------------------
Dennis R. Sheehan 10,000 0.7% 34.00 8/14/07 207,716 532,146
50,000 3.2% 37.125 2/26/08 1,157,205 2,942,174
- -----------------------------------------------------------------------------------------------------------------------------------
J. Robert Jones 30,000 1.9% 34.00 8/14/07 623,147 1,596,438
- -----------------------------------------------------------------------------------------------------------------------------------
Mark J. Rybarczyk 25,000 1.6% 34.00 8/14/07 519,290 1,330,365
- -----------------------------------------------------------------------------------------------------------------------------------
Kevin J. Dell 25,000 1.6% 34.00 8/14/07 519,290 1,330,356
===================================================================================================================================
- -----------------------------
(1) Options granted pursuant to the Company's Stock Option Plans, with an
exercise price equal to the fair market value as of the date of grant
and vesting over a five year period, 20% on each anniversary of the
date of grant.
(2) The dollar amounts under these columns are based on the assumed
appreciation rates of 5% and 10% prescribed by the Commission. These
amounts are not intended to forecast possible future appreciation, if
any, of the Company's stock price.
(3) Represents the expiration date at the time of grant. The options
expired unexercised upon termination of the optionee's employment
during fiscal year 1998.
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AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during the last fiscal
year and unexercised options held at the end of the fiscal year ended June 30,
1998 based on the last sale price of a share of Common Stock on June 30, 1998 of
$41.00.
Shares Number of Securities
Acquired Underlying Unexercised Value of Unexercised
on Options at Fiscal In-the-Money Options at
Exercise Value Year End (#) Fiscal Year End
Name (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------------------------------------------------------------------------------------------------------------
Lynn J. Mangum 3,000 $ 87,000 213,191 213,000 $5,051,949 $2,357,000
- ------------------------------------------------------------------------------------------------------------------------
Paul H. Bourke 194,294 $4,431,035 0 0 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------
Robert J. McMullan 128,000 $2,177,130 47,000 0 $ 591,250 $ 0
- ------------------------------------------------------------------------------------------------------------------------
Dennis R. Sheehan 5,000 $ 143,120 46,276 90,000 $1,255,087 $ 541,250
- ------------------------------------------------------------------------------------------------------------------------
J. Robert Jones -- -- 101,277 100,000 $2,478,803 $1,109,750
- ------------------------------------------------------------------------------------------------------------------------
Mark J. Rybarczyk -- -- 85,397 81,000 $2,291,483 $ 875,500
- ------------------------------------------------------------------------------------------------------------------------
Kevin J. Dell -- -- 5,000 45,000 $ 10,000 $ 215,000
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EMPLOYMENT AGREEMENTS
The Company does not have employment agreements with any of its
executive officers.
In May 1995, the Company entered into a Letter Agreement with Mr.
Mangum providing, among other things, that he would receive a lump sum severance
payment equal to one and one-half times the sum of his then current base salary
plus the greater of his then current fiscal year's "At Plan" annual incentive
target amount or the immediately prior fiscal year's annual incentive settlement
amount, in the event his employment is terminated other than for cause or after
a change in control of the Company. In the event of a change in control of the
Company, he may terminate unilaterally his employment with the Company for any
reason for the first 12 months after the change in control and during the 13th
through 36th month after the change in control under certain circumstances and,
in the event of such termination of employment, he would receive a lump sum
severance payment equal to two times the sum of his then current base salary
plus the greater of his current fiscal year's "At Plan" annual incentive target
amount or the immediately prior fiscal year's annual incentive settlement
amount. The agreement does not provide any guarantee of employment or any other
terms and conditions of employment.
In the event of a change in control of the Company, all option shares
then granted to the executive officers of the Company and such other senior
employees of the Company, who in the opinion of the Committee would be adversely
affected in their employment by a change in control of the Company, are
automatically vested, to the extent not previously vested, as of the effective
date of such change in control.
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REPORT ON EXECUTIVE COMPENSATION
All issues relating to executive officer compensation are addressed
by the Board of Director's Compensation Committee. The Compensation Committee,
which for fiscal 1998 was comprised of Messrs. Lyons and Casale, approves base
salary and incentive compensation plans for executive officers reporting to the
chief executive officer and other senior executives with a base salary in excess
of a designated amount, and reviews and recommends base salary and incentive
compensation plans for executive officers who are also directors for final
approval by the Board of Directors. Mr. Mangum, the Company's Chairman,
President and Chief Executive Officer, does not participate in decisions of the
Board regarding his compensation. The Compensation Committee also establishes
stock option plan participation levels for all employees, including executive
officers. This report is submitted by the Compensation Committee.
The components of the Company's executive compensation program
consist of base salaries, annual cash incentive plans and stock options. The
Company's compensation program, with Committee review, is intended to provide
executive officers with overall levels of compensation opportunity that are
competitive within the information and investment services industries, as well
as within a broader spectrum of companies of comparable size and complexity. The
Company's compensation program is structured and administered to support the
Company's business mission and to generate favorable returns for its
stockholders.
BASE SALARY. Each executive officer's and senior executive's base
salary is derived primarily through an analysis prepared at the direction of the
Committee, of appropriate industry and competitive labor markets for executive
officer services. Other factors in formulating base salary recommendations
include the level of an executive's compensation in relation to other executives
in the Company with the same, more and less responsibilities, the performance
of the particular executive's business unit or department in relation to
established strategic plans, the Company's operating budget for the year and the
overall financial and strategic performance of the Company compared to target
objectives.
INCENTIVE COMPENSATION PLAN. For each executive officer and senior
executive, a cash incentive compensation plan is established at the beginning of
each fiscal year in connection with the establishment of the Company's strategic
plans and annual operating budgets. The plan establishes a potential range of
incentive compensation and a number of performance objectives. The performance
objectives generally include operating earnings per share growth, the financial
performance of an executive's business unit, and various other measurable
financial and non-financial objectives. Incentive compensation earned is
determined following completion of the fiscal year based on performance compared
to objectives. Incentive compensation in excess of the established range may be
paid where outstanding accomplishments have been achieved by the executive
during the fiscal year. For fiscal year 1998, the Company and each of the Named
Executive Officers (other than Messrs. Bourke and McMullan who resigned as
executive officers during the fiscal year and were paid incentive compensation
pro-rata through their employment termination date at their respective target
performance objectives) met or exceeded established performance objectives
resulting in the bonus compensation set forth in the summary Compensation Table.
STOCK OPTION AWARDS. The Company maintains stock option plans that
are designed to align executive employees' and stockholders' interests in the
enhancement of stockholder value. In formulating recommendations for stock
option awards, the Compensation Committee evaluates the dilutive impact of
additional stock options, the Company's overall financial performance for the
year, the desirability of long-term service from an executive officer or senior
executive and the number of options held by other executives of the Company with
the same, more and less responsibility than the executive under consideration.
To encourage long-term performance, executive options typically vest over a five
year period and remain exercisable for ten years.
CEO COMPENSATION. Compensation for Mr. Mangum, the Company's
Chairman, President and Chief Executive Officer, is based on the same criteria
used for executive officers generally, including an analysis of chief executive
compensation of comparable companies. Mr. Mangum's incentive compensation for
fiscal 1998
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reflects favorable achievement of the established performance objectives,
particularly revenue and operating earnings per share growth and the strategic
positioning of the Company, the key determinants of Mr. Mangum's incentive
compensation.
August 20, 1998 John J. Lyons
Robert J. Casale
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee during fiscal
year 1998 were John J. Lyons and Robert J. Casale, each of whom are directors
but are not current or former employees of the Company. There were no
Compensation Committee interlocks or insider participation during fiscal 1998.
COMPARISON OF TOTAL CUMULATIVE RETURN ON THE COMMON STOCK AMONG THE BISYS GROUP,
INC., VALUE LINE INVESTMENT SURVEY'S COMPUTER SOFTWARE AND SERVICES GROUP
("INDUSTRY INDEX") AND THE NASDAQ MARKET INDEX.
[LINE GRAPH]
Assumes $100 invested on June 30, 1993 in BISYS Common Stock, the
Industry Index, and the NASDAQ Market Index.
6/30/93 6/30/94 6/30/95 6/30/96 6/30/97 6/30/98
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BISYS $100.00 $112.33 $121.92 $206.85 $228.77 $224.66
- -------------------------------------------------------------------------------------------------------
INDUSTRY INDEX $100.00 $112.51 $174.40 $230.13 $321.94 $470.32
- -------------------------------------------------------------------------------------------------------
NASDAQ $100.00 $109.66 $128.61 $161.89 $195.02 $258.52
=======================================================================================================
The above report of the Compensation Committee and the Stock
Performance Graph is not deemed to be soliciting material or to be filed with or
incorporated by reference into any filing by the Company under the
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Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
except to the extent that the Company specifically incorporates such report or
graph by reference.
2. APPROVAL OF THE 1999 EMPLOYEE STOCK PURCHASE PLAN
On August 20, 1998, the Board of Directors of the Company adopted,
subject to stockholder approval, The BISYS Group, Inc. 1999 Employee Stock
Purchase Plan (the "1999 Plan"). Under the 1999 Plan, which is intended to
qualify as an "employee stock purchase plan" under Section 423 of the Code,
options to purchase shares of Common Stock (hereinafter, "Employee Options")
will be granted to eligible employees of the Company. The Board of Directors
believes that the grant of Employee Options is an important incentive for
attracting, retaining and motivating employees through the opportunity of equity
participation. The 1999 Plan is intended to serve this function. A copy of the
1999 Plan is attached to this Proxy Statement as Exhibit A. The principal
features of the 1999 Plan are summarized below.
An aggregate of 150,000 shares of Common Stock have been reserved for
issuance upon the exercise of Employee Options granted under the 1999 Plan,
subject to stockholder approval of the 1999 Plan. If approved by stockholders,
the 1999 Plan will become effective on January 1, 1999. The 1999 Plan will
terminate on December 31, 1999, unless it is earlier terminated by the Board of
Directors. The approximately 2,200 employees who are regularly scheduled to work
for the Company, or its subsidiaries, at least 20 hours per week and who shall
have completed one month of employment as of January 1, 1999 for the Company, or
its subsidiaries, will be eligible to receive Employee Options. The maximum
number of shares that may be purchased by any participant under the 1999 Plan
will be equal to the lesser of 10% of base pay or $15,000, divided by 85% of the
lesser of fair market value of the Company's Common Stock on January 1, 1999 and
December 31, 1999 based upon the closing price of the Common Stock on the Nasdaq
National Market on the most recent prior trading day. No employee shall be
granted an Employee Option if (i) immediately after such grant such employee
would own stock possessing 5% or more (including stock subject to outstanding
options) of the total combined voting power or value of all classes of stock of
the Company, or (ii) if the exercise of such Employee Option would result in the
employee acquiring a cumulative total of more than 700 shares of Common Stock
under the 1999 Plan. In the event that any outstanding Employee Option expires
or is terminated for any reason, the shares allocable to the unexercised portion
of such Employee Option will be available for issuance under the 1999 Plan.
The 1999 Plan will be administered by a committee of the Board of
Directors (the "Committee"). The Committee shall consist of no less than two
persons and all members shall be "Non-Employee Directors" within the meaning of
Rule 16b-3 under the Securities Exchange Act of 1934. The Committee's authority
to administer the 1999 Plan includes the authority (i) to interpret the 1999
Plan and decide any matters arising thereunder and (ii) to adopt such rules and
regulations, not inconsistent with the provisions of the 1999 Plan, as it may
deem advisable to carry out the purpose of the 1999 Plan. All expenses and
liabilities incurred by the Board of Directors or the Committee in administering
the 1999 Plan are to be borne by the Company.
The 1999 Plan provides that Employee Options are not transferable other
than by will or by the laws of descent and distribution, and during an
optionee's lifetime an Employee Option is exercisable only by an optionee. In
the event that after the adoption of the 1999 Plan the outstanding shares of the
Company's Common Stock are increased or decreased or changed into or exchanged
for a different number or kind of shares of stock or other securities of the
Company or of another corporation through reorganization, merger or
consolidation, recapitalization, stock split, split-up, combination or exchange
of shares or declaration of any dividends payable in Common Stock, the number of
shares of Common Stock (and the price per share) subject to the unexercised
portion of any outstanding Employee Option and the number of shares for which
Employee Options may be granted under the 1999 Plan will be appropriately
adjusted (to the nearest possible full share) by the Board of Directors, and
such adjustment shall be effective and binding for all purposes. Notwithstanding
the foregoing, the Board may make such adjustment as if deems equitable in
respect of outstanding Options, including, without limitation, the revision or
cancellation of any outstanding Options, in the event of an offer to acquire the
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outstanding shares of the Company or a transaction involving the sale of all or
substantially all of the assets of the Company.
The market value of the Common Stock as of the close of business on
September 24, 1998, as reflected by the closing price of the Common Stock on the
Nasdaq National Market, was $40.0625 per share.
The decision whether to participate in the 1999 Plan, and the extent of
such participation, is in the discretion of each eligible employee and, thus,
the amount of Employee Options to be granted is presently not determinable. To
date, no Employee Options have been granted.
FEDERAL INCOME TAX CONSEQUENCES
The tax consequences of the Employee Options issuable under the 1999
Plan are complex. Therefore, the description of tax consequences set forth below
is necessarily general in nature and does not purport to be complete. Moreover,
statutory provisions are subject to change, as are their interpretations, and
their application may vary in individual circumstances. The tax consequences
under applicable state and local income tax laws may not be the same as under
the federal income tax laws.
Employee Options granted pursuant to the 1999 Plan are intended to
qualify as options issued under an "employee stock purchase plan" within the
meaning of Section 423 of the Code. If an optionee makes no disposition of the
shares acquired pursuant to exercise of an Employee Option within one year after
the transfer of shares to such optionee and within two years from grant of the
option, then, (i) such optionee will realize no taxable income as a result of
the grant or exercise of such Employee Option, and (ii) on the subsequent
disposition of the shares received upon exercise of the Employee Option or the
death of the optionee, the optionee generally will realize ordinary compensation
income equal to the lesser of (a) the excess of the fair market value of the
shares at the time of such disposition or death over the exercise price, or (b)
15% of the fair market value of the shares at the time the Employee Option was
granted. In the case of such a disposition, the optionee's basis in the shares
will be increased by the amount of ordinary compensation so realized, with the
result that the optionee generally will realize long-term capital gain or loss
equal to the difference, if any, between the proceeds realized from the
disposition over the sum of (x) the exercise price and (y) the amount of
ordinary compensation income realized. Under these circumstances, the Company
will not be entitled to a deduction for federal income tax purposes with respect
to either the issuance of the Employee Options, the transfer of shares upon
their exercise or the disposition of those shares.
If shares subject to an Employee Option are disposed of prior to the
expiration of the above time periods, the optionee will recognize ordinary
income in the year in which the disqualifying disposition occurs, the amount of
which will generally be the lesser of (i) the excess of the fair market value of
the shares on the date of exercise over the exercise price, or (ii) the gain
recognized on such disposition. Such amount will ordinarily be deductible by the
Company for federal income tax purposes in the same year, provided that the
Company satisfies certain federal income tax withholding requirements. In
addition, the excess, if any, of the amount realized on a disqualifying
disposition over the fair market value of the shares on the date of exercise
generally will be treated as short-term capital gain.
VOTE REQUIRED FOR APPROVAL
The 1999 Plan will be submitted to stockholders for their approval at
the Annual Meeting. The proposal to adopt the 1999 Plan must be approved by the
holders of a majority of the shares of Common Stock present or represented and
entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE TO APPROVE THE 1999
PLAN.
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3. RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed the firm of PricewaterhouseCoopers
LLP, independent public accountants, as the auditors of the Company for the
fiscal year ending June 30, 1999, subject to the ratification of such
appointment by stockholders at the Annual Meeting. Coopers & Lybrand L.L.P.
(which merged with Price Waterhouse LLP in 1998) has audited the Company's
financial statements since the Company's inception in 1989.
If the foregoing appointment of PricewaterhouseCoopers LLP is not
ratified by stockholders, the Board of Directors will appoint other independent
accountants whose appointment for any period subsequent to the 1998 Annual
Meeting of Stockholders will be subject to the approval of stockholders at that
meeting. A representative of PricewaterhouseCoopers LLP is expected to be
present at the Annual Meeting and will have an opportunity to make a statement
should he so desire and to respond to appropriate questions.
VOTE REQUIRED FOR RATIFICATION
The proposal to ratify the appointment of PricewaterhouseCoopers LLP as
the auditors of the Company for fiscal 1999 must be approved by the holders of a
majority of the shares of Common Stock present or represented and entitled to
vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE TO RATIFY THE
APPOINTMENT OF THE FIRM OF PRICEWATERHOUSECOOPERS LLP.
OTHER MATTERS
The Board of Directors does not know of any matters that are to be
presented at the Annual Meeting other than those stated in the Notice of Annual
Meeting and referred to in this Proxy Statement. If any other matters should
properly come before the Meeting, it is intended that the proxies in the
accompanying form will be voted as the persons named therein may determine in
their discretion.
The Company's Annual Report to Stockholders for the year ended June 30,
1998 is being mailed to stockholders together with this Proxy Statement.
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the accompanying form will be
borne by the Company, including expenses in connection with preparing and
mailing this Proxy Statement. In addition to solicitation of proxies by mail,
directors, officers and employees of the Company (who will receive no additional
compensation therefor) and Corporate Investors Communications, Inc. a proxy
solicitor (for an estimated total cost to the Company of $4,500) may solicit the
return of proxies by telephone, telegram or personal interview. Arrangements
have also been made with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation material to the beneficial owners
of stock held of record by such persons, and the Company will reimburse them for
reasonable out-of-pocket expenses incurred by them in connection therewith.
Each holder of the Company's Common Stock who does not expect to be
present at the Annual Meeting or who plans to attend but who does not wish to
vote in person is urged to fill in, date and sign the proxy and return it
promptly in the enclosed return envelope.
STOCKHOLDER PROPOSALS
If any stockholder of the Company intends to present a proposal for
consideration at the 1999 Annual Meeting of Stockholders and desires to have
such proposal included in the proxy statement and form of proxy distributed by
the Board of Directors with respect to such meeting, such proposal must be
received at the
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Company's principal executive offices, 150 Clove Road, Little Falls, New Jersey
07424, Attention: Secretary, not later than June 12, 1999.
DISCRETIONARY AUTHORITY
A duly executed proxy given in connection with the Company's 1999
Annual Meeting of Stockholders will confer discretionary authority on the
proxies named therein, or any of them, to vote at such meeting on any matter of
which the Company does not have written notice on or before August 26, 1999,
which is forty-five days prior to the date on which the Company is first mailing
its proxy materials for its 1998 Annual Meeting of Stockholders, without advice
in the Company 1999 Proxy Statement as to the nature of such matter.
ANNUAL REPORT ON FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED JUNE 30, 1998, FILED BY THE COMPANY WITH THE COMMISSION, WILL BE
FURNISHED, WITHOUT EXHIBITS, WITHOUT CHARGE TO ANY PERSON REQUESTING A COPY
THEREOF IN WRITING AND STATING THAT SUCH PERSON IS A BENEFICIAL HOLDER OF SHARES
OF COMMON STOCK OF THE COMPANY ON SEPTEMBER 24, 1998, THE RECORD DATE FOR THE
ANNUAL MEETING OF STOCKHOLDERS. REQUESTS AND INQUIRIES SHOULD BE ADDRESSED TO
THE BISYS GROUP, INC., 150 CLOVE ROAD, LITTLE FALLS, NEW JERSEY 07424,
ATTENTION: SECRETARY.
By Order of the Board of Directors
/s/ Kevin J. Dell
-------------------------------
Kevin J. Dell
Secretary
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EXHIBIT A
THE BISYS GROUP, INC.
1999 Employee Stock Purchase Plan
Section 1. Purpose. The purpose of The BISYS Group, Inc. 1999 Employee
Stock Purchase Plan (the "Plan") is to promote the interests of The BISYS Group,
Inc., a Delaware corporation (the "Company") and any Subsidiary thereof (as
hereinafter defined), and its stockholders by providing an opportunity to
certain current employees of the Company or any Subsidiary thereof to purchase
Common Stock of the Company. By encouraging such stock ownership, the Company
seeks to attract, retain and motivate such employees and to encourage such
employees to devote their best efforts to the business and financial success of
the Company. It is intended that the Plan qualify as an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code"). The provisions of the Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of Section 423.
Section 2. Definitions. For purposes of this Plan, the following terms
used herein shall have the following meanings, unless a different meaning is
clearly required by the context.
2.01. "Base Pay" shall be determined as of the first business day of
December 1998 by multiplying the normal biweekly rate of a salaried Employee by
26 or the hourly rate of an hourly Employee by 2,080; provided, that, in the
case of a part-time hourly Employee, the Employee's Base Pay shall be determined
by multiplying such Employee's hourly rate by the number of regularly scheduled
hours of work for such Employee during the one-year period beginning on the
first business day of December 1998. The calculation of Base Pay shall be made
without regard to payments for overtime, shift premium, bonuses and other
special payments, commissions and other marketing incentive payments.
2.02. "Board of Directors" shall mean the Board of Directors of the
Company.
2.03. "Committee" shall mean the committee of the Board of Directors
referred to in Section 5 hereof.
2.04. "Common Stock" shall mean the Common Stock, $.02 par value, of
the Company.
2.05. "Employee" shall mean any person, including an officer or
director of the Company or a Subsidiary of the Company, who is customarily
employed on a full-time or part-time basis by the Company or a Subsidiary of the
Company and is regularly scheduled to work at least 20 hours per week.
2.06. "Offering" shall have the meaning described in Section 4.01.
2.07. "Option" shall mean any option to purchase Common Stock granted
to an Employee pursuant to this Plan.
2.08. "Participant" shall mean any Employee that is eligible to
participate in the Plan and who elects to participate in the Plan.
2.09. "Parent of the Company" shall have the meaning set forth in
Section 424(e) of the Code.
2.10. "Subsidiary of the Company" shall have the meaning set forth in
Section 424(f) of the Code.
Section 3. Eligibility and Participation. The following provisions
shall govern the eligibility of Employees to participate in the Plan.
3.01. Initial Eligibility. Any Employee who shall have completed one
(1) month of employment as of
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January 1, 1999 shall be eligible to participate in the Offering.
3.02. Restrictions on Participation. Notwithstanding any provisions of
the Plan to the contrary, no Employee shall be granted an Option under the Plan
(1) if, immediately after such grant, such Employee would own
stock possessing 5% or more of the total combined voting power or value of all
classes of stock of any of the Company, a Subsidiary of the Company or the
Parent of the Company, such ownership to be determined by applying the rules of
Section 424(d) of the Code and treating stock which the Employee may purchase
under outstanding options as stock owned by the Employee; or
(2) which would permit his rights to purchase stock under the
Plan (and under any other plans of the Company qualifying under Section 423 of
the Code) to accrue at a rate which exceeds the lesser of (i) $15,000 or (ii)
10% of the Employee's Base Pay of fair market value of the stock (determined at
the time such Option is granted) for each calendar year in which such Option is
outstanding; or
(3) if the exercise of such Option would result in the
Employee acquiring a cumulative total of more than 700 shares of Common Stock
under the Plan.
3.03. Commencement of Participation. An eligible Employee may become a
Participant in the Plan by completing an authorization for a payroll deduction
on the form provided by the Company and filing it with the office of the Senior
Vice President of Human Resources of the Company on or before the date set
therefor by the Committee which date shall be prior to January 1, 1999. Payroll
deductions shall be made from a Participant's 1999 Base Pay and shall commence
on the first regularly scheduled payday after January 1, 1999 and shall
terminate on the last regularly scheduled payday on or before December 31, 1999,
unless sooner terminated by the Participant pursuant to Section 9.01.
Section 4. Common Stock Subject to the Plan.
4.01. Number of Shares. The total number of shares of Common Stock for
which Options may be granted under this Plan shall not exceed in the aggregate
one hundred fifty thousand (150,000) shares of Common Stock. The Plan will be
implemented by an Offering of shares of Common Stock (the "Offering"). The
Offering shall begin on January 1, 1999 and shall terminate on December 31,
1999.
4.02. Reissuance. The shares of Common Stock that may be subject to
Options granted under this Plan may be either authorized and unissued shares or
shares reacquired at any time and now or hereafter held as treasury stock, as
the Committee may determine. In the event that any outstanding Option expires or
is terminated for any reason, the shares allocable to the unexercised portion of
such Option may again be subject to an Option granted under this Plan.
Section 5. Administration of the Plan.
5.01. Committee. The Plan shall be administered by a committee (the
"Committee") which shall be established by the Board of Directors and shall
consist of no less than two persons. All members of the Committee shall be
"Non-Employee Directors" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934. The Committee shall be appointed from time to time by, and
shall serve at the pleasure of, the Board of Directors.
5.02. Interpretation. The Committee shall be authorized (i) to
interpret the Plan and decide any matters arising thereunder and (ii) to adopt
such rules and regulations, not inconsistent with the provisions of the Plan, as
it may deem advisable to carry out the purpose of this Plan.
5.03. Finality. The interpretation and construction by the Committee of
any provision of the Plan, any
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Option granted hereunder or any agreement evidencing any such Option shall be
final and conclusive upon all parties.
5.04. Voting by Committee Members. Only members of the Committee shall
vote on any matter affecting the administration of the Plan or the granting of
Options under the Plan.
5.05. Expenses, Etc. All expenses and liabilities incurred by the Board
of Directors or the Committee in the administration of the Plan shall be borne
by the Company. The Committee may employ attorneys, consultants, accountants or
other persons in connection with the administration of the Plan. The Company,
and its officers and directors, shall be entitled to rely upon the advice,
opinions or valuations of any such persons. No member of the Board of Directors
or the Committee shall be liable for any action, determination or interpretation
taken or made in good faith with respect to the Plan or any Option granted
hereunder.
Section 6. Payroll Deductions.
6.01. Amount of Deduction. At the time a Participant files his
authorization for payroll deduction pursuant to Section 3.03, he shall elect to
have deductions made from his pay on each payday during the time he is a
Participant in the Offering at the rate of 1, 2, 3, 4, 5, 6, 7, 8, 9 or 10% of
his Base Pay, as determined as of the first business day of December 1998.
6.02. Participant's Account; No Interest. All payroll deductions made
for a Participant shall be credited to his account under the Plan. A Participant
may not make any separate cash payment into such account. No interest shall
accrue on amounts credited to a Participant's account under the Plan, regardless
of whether or not the funds in such account are ultimately used to acquire
shares of Common Stock.
6.03. Changes in Payroll Deductions. A Participant may discontinue his
participation in the Plan pursuant to Section 9.01, but no other change can be
made during the Offering and, specifically, a Participant may not alter the
amount of his payroll deductions for the Offering.
6.04. Use of Funds. All payroll deductions received or held by the
Company under this Plan may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate such payroll deductions.
Section 7. Grant of Option.
7.01. Terms and Conditions. A description of the terms and conditions
of this Plan shall be made available to the Participants in such form and manner
as the Committee shall approve. Such description shall be consistent with this
Plan and with the treatment of Options as being issued under an "employee stock
purchase plan" under Section 423 of the Code.
7.02. Number of Option Shares; Pro Rata Allocation.
(a) On January 1, 1999, each Participant shall be deemed to have been
granted an Option, subject to the limitations of Section 3.02, to purchase a
maximum number of shares of Common Stock equal to the number obtained by
multiplying (i) the percentage of the Employee's Base Pay which he has elected
to have withheld pursuant to Section 6.01 by (ii) the Employee's Base Pay and
dividing the resulting product by the lesser of (y) 85% of the fair market value
of a share of Common Stock of the Company on January 1, 1999, based upon the
closing price of the Common Stock on the Nasdaq National Market on December 31,
1998 and (z) 85% of the fair market value of a share of Common Stock of the
Company on December 31, 1999, based upon the closing price of the Common Stock
on the Nasdaq National Market on December 31, 1999; provided, however, that in
no event shall the total number of shares of Common Stock for which Options are
granted exceed 150,000 shares.
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(b) If the total number of shares of Common Stock for which Options
would have been granted pursuant to Section 7.02(a) would have exceeded 150,000
shares (absent the proviso to that section), the Company shall make a pro rata
allocation of the Options available for grant in as nearly a uniform manner as
shall be practicable and as it shall determine to be equitable.
7.03. Option Price. The Option price of shares of Common Stock subject
to an Option shall be the lower of:
(a) 85% of the fair market value of the shares of Common Stock subject
to the Option on January 1, 1999, based upon the closing price of the Common
Stock on the Nasdaq National Market on December 31, 1998; or
(b) 85% of the fair market value of the shares of Common Stock subject
to the Option on December 31, 1999, based upon the closing price of the Common
Stock on the Nasdaq National Market on December 31, 1999.
7.04. Fair Market Value. For purposes of this Plan, the fair market
value per share of Common Stock as of any day shall mean the closing price as
quoted on the Nasdaq system on such day or, if such day is not a trading day,
the last preceding trading day. If at any time the Common Stock is not quoted in
the Nasdaq system, the fair market value of the shares of Common Stock subject
to an Option on the date the Option is granted shall be the fair market value
thereof determined in good faith by the Board of Directors.
7.05. Interest in Option Stock. A Participant shall have no interest in
shares of Common Stock covered by his Option until such Option has been
exercised.
7.06. Transferability. Neither payroll deductions credited to a
Participant's account nor Options shall be transferable otherwise than by will
or the laws of descent and distribution, and, during an Optionee's lifetime, an
Option shall be exercisable only by the Optionee.
7.07 Tax Withholding. In the event that the Company or any Parent or
Subsidiary of the Company is required to withhold any Federal, state or local
taxes in respect of any compensation income realized by the Participant as a
result of any "disqualifying disposition" of any shares of Common Stock acquired
upon exercise of an Option granted hereunder, the Company shall be entitled to
deduct from any payments of any kind otherwise due to such Participant the
aggregate amount of such Federal, state or local taxes required to be so
withheld or, if such payments are insufficient to satisfy such Federal, state or
local taxes, such Participant will be required to pay to the Company, or make
other arrangements satisfactory to the Company regarding payment to the Company
of, the aggregate amount of any such taxes. All matters with respect to the
total amount of taxes to be withheld in respect of any such compensation income
shall be determined by the Committee in its sole discretion.
Section 8. Exercise of Options.
8.01. Automatic Exercise. Unless a Participant gives written notice to
the Company of withdrawal pursuant to Section 9.01, his Option to acquire Common
Stock with payroll deductions made during any Offering will be deemed to have
been exercised automatically on December 31, 1999 for the purchase of the number
of full shares of Common Stock which the accumulated payroll deductions in his
account at that time will purchase at the applicable Option price (but not in
excess of the number of shares of Common Stock for which Options have been
granted to the Employee pursuant to Section 7.02), and any excess in his account
at that time will be returned to him.
8.02. Fractional Shares. Fractional shares will not be issued under the
Plan and any accumulated payroll deductions which would have been used to
purchase fractional shares will be returned to any Employee promptly following
the termination of the Offering.
8.03. Delivery of Stock. As promptly as practicable after December 31,
1999, the Company will deliver
Page 4 of 6
22
to each Participant, in such Participant's name, the shares of Common Stock
purchased upon exercise of such Participant's Option.
Section 9. Withdrawal.
9.01. In General. A Participant may withdraw payroll deductions
credited to his account under the Plan at any time by giving written notice to
the Executive Vice President of Human Resources of the Company. All of the
Participant's payroll deductions credited to his account will be paid to him
within 30 days after receipt of his notice of withdrawal, and no further payroll
deductions will be made from his pay; provided, that, the Participant gives
notice of withdrawal sufficiently prior to the next scheduled payroll deduction.
9.02. Cessation of Employee Status. In the event a Participant shall
cease to be an Employee, as defined in Section 2.05, for any reason, other than
as a result of his death, the payroll deductions credited to his account will be
returned to him.
9.03. Termination Due to Death. In the event a Participant shall cease
to be an Employee, as defined in Section 2.05, by reason of his death, his legal
representative shall have the right to elect, by written notice given to the
Executive Vice President of Human Resources of the Company prior to December 31,
1999 either:
(a) to withdraw all of the payroll deductions credited to the
Participant's account under the Plan, or
(b) to exercise the Participant's Option granted under Section 7.02 for
the purchase of shares of Common Stock on December 31, 1999 for the purchase of
the number of full shares of Common Stock which the accumulated payroll
deductions in the Participant's account will purchase at the applicable Option
price, and any excess in such account will be returned to the Participant's
legal representative.
In the event that no such written notice of election shall be duly
received by the office of the Executive Vice President of Human Resources of the
Company, the Participant's legal representative shall automatically be deemed to
have elected, pursuant to paragraph (b), to exercise the Participant's Option.
Section 10. Adjustments.
(a) In the event that after the adoption of the Plan by the Board of
Directors, the outstanding shares of the Company's Common Stock shall be
increased or decreased or changed into or exchanged for a different number or
kind of shares of stock or other securities of the Company or of another
corporation through reorganization, merger or consolidation, recapitalization,
reclassification, stock split, split-up, combination or exchange of shares or
declaration of any dividends payable in Common Stock, the Board of Directors
shall appropriately adjust (i) the number of shares of Common Stock (and the
Option price per share) subject to the unexercised portion of any outstanding
Option (to the nearest possible full share); provided, however, that the
limitations of Section 424 of the Code shall apply with respect to such
adjustments; (ii) the number of shares of Common Stock for which Options may be
granted under this Plan, as set forth in Section 4.01 hereof, and such
adjustment shall be effective and binding for all purposes of this Plan.
(b) Notwithstanding the foregoing, in the event of (i) any offer to
holders of the Company's Common Stock generally relating to the acquisition of
their shares, including, without limitation, through purchase, merger or
otherwise, or (ii) any transaction generally relating to the acquisition of
substantially all of the assets or business of the Company, the Board of
Directors may make such adjustment as it deems equitable in respect of
outstanding Options including, without limitation, the revision or cancellation
of any outstanding Options. Any such determination by the Committee shall be
effective and binding for all purposes of this Plan.
Page 5 of 6
23
Section 11. Effect of the Plan on Employment Relationship.
Neither this Plan nor any Option granted hereunder to a Participant
shall be construed as conferring upon such Participant any right to continue in
the employ of the Company or any Subsidiary as the case may be, or limit in any
respect the right of the Company or any Subsidiary to terminate such
Participant's employment or other relationship with the Company or any
Subsidiary, as the case may be, at any time.
Section 12. Amendment of the Plan. The Board of Directors may amend the
Plan from time to time as it deems desirable; provided, however, that, without
the approval of the holders of a majority of the outstanding stock of the
Company entitled to vote thereon at a meeting, the Board of Directors may not
amend the Plan (i) to increase materially the benefits accruing to Participants
under the Plan, (ii) to increase materially (except for increases due to
adjustments in accordance with Section 10 hereof) the aggregate number of shares
of Common Stock for which Options may be granted hereunder or (iii) to modify
materially the requirements as to eligibility for participation in the Plan.
Section 13. Termination of the Plan. The Board of Directors may
terminate the Plan at any time. Unless the Plan shall theretofore have been
terminated by the Board of Directors, the Plan shall terminate one year after
its effective date. No Option may be granted hereunder after termination of the
Plan. The termination or amendment of the Plan shall not alter or impair any
rights or obligations under any Option theretofore granted under the Plan.
Section 14. Effective Date of the Plan. This Plan shall be effective as
of January 1, 1999, subject to approval by the holders of the majority of the
Common Stock present and represented at a special or annual meeting of the
shareholders held on or before December 31, 1998. If the Plan is not so
approved, the Plan shall not become effective.
Page 6 of 6
24
THE BISYS GROUP, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders
Monday, November 16, 1998
The undersigned stockholder of THE BISYS GROUP, INC., a Delaware
corporation, hereby appoints Dennis R. Sheehan and Kevin J. Dell, or either of
them, voting singly in the absence of the other, attorneys and proxies, with
full power of substitution and revocation, to vote, as designated below, all
shares of Common Stock of The BISYS Group, Inc., that the undersigned is
entitled to vote at the Annual Meeting of Stockholders of said corporation to be
held at 150 Clove Road, Little Falls, New Jersey 07424 on November 16, 1998, at
9:00 a.m. (local time) and at any adjournment thereof, in accordance with the
instructions on the reverse side.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED "FOR" ALL NOMINEES IN PROPOSAL NO. 1 AND "FOR" PROPOSAL NO. 2, AND
"FOR" PROPOSAL NO. 3. The proxies are authorized to vote as they may determine
in their discretion upon such other business as may properly come before the
meeting.
PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
USING THE ENCLOSED ENVELOPE.
THE BISYS GROUP, INC.
P. O. BOX 11357
NEW YORK, NY 10203-0357
25
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES IN PROPOSAL NO. 1
AND "FOR" PROPOSALS NO. 2 AND NO. 3.
1. Election of Directors FOR all nominees WITHHOLD AUTHORITY to vote *EXCEPTIONS
listed below for all nominees listed below
Nominees: Lynn J. Mangum, Robert J. Casale, Thomas A. Cooper, Jay W. DeDapper,
John J. Lyons and Thomas E. McInerney
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions
2. The proposal to approve the Company's 1999 Employee Stock Purchase Plan.
FOR ___ AGAINST ___ ABSTAIN ___
3. The proposal to ratify the appointment of PricewaterhouseCoopers LLP as
auditors of the Company for the fiscal year ending June 30, 1999.
FOR ___ AGAINST ___ ABSTAIN ___
4. The proxies are authorized to vote as they may determine in their
discretion upon such other business as may properly come before the
meeting.
Change of Address and or Comments Mark Here
Please sign exactly as name appears hereon.
When shares are held in name of joint
holders, each should sign. When signing as
attorney, executor, trustee, guardian, etc.
please so indicate. If a corporation, please
sign in full corporate name by an authorized
officer. If a partnership, please sign in
partnership name by an authorized person.
Date__________________________________, 1998
Signature___________________________________
Signature (if held jointly)_________________
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY VOTES MUST BE INDICATED
USING THE ENCLOSED ENVELOPE (X) IN BLACK OR BLUE INK. ___