<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
(Rule 14a-101)
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
[X] Definitive proxy statement Commission Only (as permitted by
[ ] Definitive additional materials Rule 14a-6(e)(2))
[ ] Soliciting materials pursuant to
Rule 14a-11(c) or Rule 14a-12
The Intercept Group, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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,
of 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:
<PAGE>
[THE INTERCEPT GROUP LOGO APPEARS HERE]
3150 Holcomb Bridge Road
Suite 200
Norcross, Georgia 30071
April 30, 1999
Dear Shareholder:
We cordially invite you to attend the Annual Meeting of Shareholders
of The InterCept Group, Inc. to be held on June 15, 1999 at 9:00 a.m. local time
at the Ravinia Club, 2 Ravinia Drive, Suite 100, Atlanta, Georgia. At the
Annual Meeting, the Board of Directors will ask the shareholders to:
1. elect two directors to serve on InterCept's Board of Directors,
each for a three year term;
2. ratify the appointment of Arthur Andersen LLP as InterCept's
independent public accountants; and
3. transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
We have included a copy of InterCept's Annual Report to shareholders
with the Proxy Statement. We encourage you to read the Annual Report. It
includes our audited financial statements for the year ended December 31, 1998
as well as information on our operations, markets, products and services.
We urge you to review the Proxy Statement and Annual Report. Whether
or not you plan to attend the Annual Meeting, we ask that you read the material
on the following pages and promptly submit your proxy card in the enclosed
postage paid envelope. If you attend the meeting, you may vote in person if you
wish, even though you have previously returned your proxy card.
Your vote is very important, and we appreciate your cooperation in
considering and acting on the matters presented.
Sincerely,
/s/ John W. Collins
________________________________
John W. Collins
Chief Executive Officer and
Chairman of the Board
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 1999 Annual Meeting of Shareholders of InterCept will be held at the
following place and time:
Date: June 15, 1999
Time: 9:00 a.m. local time
Place: Ravinia Club
2 Ravinia Drive
Suite 100
Atlanta, Georgia
The purposes of the Annual Meeting are:
1. To elect two directors;
2. To ratify the appointment of our independent accountants; and
3. To transact any other business that may properly come before the
meeting or any adjournments thereof.
By Order of the Board of Directors
/s/ John W. Collins
- ----------------------------
John W. Collins
Chairman of the Board and
Chief Executive Officer
April 30, 1999
- -------------------------------------------------------------------------------
The Board of Directors has fixed the close of business on April 15, 1999 as the
record date for determining the shareholders who will be entitled to vote at the
Annual Meeting. Only shareholders of record as of that time and date will be
entitled to notice of, and to vote at, the Annual Meeting or any adjournments
thereof.
The Ravinia Club is accessible to all shareholders. A sign language interpreter
will be provided if requested; requests should be directed to the Corporate
Secretary, The Intercept Group, Inc., 3150 Holcomb Bridge Road, Suite 200,
Norcross, Georgia 30071 and received no later than May 21, 1999.
<PAGE>
The InterCept Group, Inc.
3150 Holcomb Bridge Road, Suite 200
Norcross, Georgia 30071
(770) 248-9600
______________________________________________________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 15, 1999
______________________________________________________
This Proxy Statement and the accompanying proxy card are being mailed,
beginning on or about May 10, 1999, to holders of The InterCept Group, Inc.'s
common stock in connection with the solicitation of proxies by the Board of
Directors for the 1999 Annual Meeting of Shareholders. This proxy procedure is
necessary to permit all InterCept shareholders, many of whom live throughout the
United States and are unable to attend the Annual Meeting, to vote.
At the Annual Meeting, the Board of Directors will ask InterCept's
shareholders to:
(1) elect two directors;
(2) ratify the appointment of independent accountants; and
(3) transact any other business that may properly come before the
meeting or any adjournments thereof.
Except for procedural matters, the Board of Directors does not know of any
matters other than those described in the Notice of Annual Meeting that are to
come before the Annual Meeting. If any other matters are properly brought
before the Annual Meeting, a majority of the Board of Directors will determine
the manner in which the person named in the proxy card will vote the shares
represented by the proxies on such matters.
The Board of Directors encourages you to read this document thoroughly and
to take this opportunity to vote on the matters to be decided at the Annual
Meeting.
THE DATE OF THIS PROXY IS
APRIL 30, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Voting Procedures................................................................. 1
Corporate Governance.............................................................. 2
Election of Directors (Proposal 1)................................................ 5
Ratification of Appointment of Independent Public Accountants (Proposal 2)........ 8
Executive Compensation............................................................ 9
Employment Agreements............................................................. 13
Report of the Compensation and Stock Option Committee on Executive Compensation... 14
Stock Performance Graph........................................................... 17
Security Ownership of Directors and Officers...................................... 17
Submission of Shareholder Proposals and Director Nominations...................... 19
Available Information............................................................. 19
Other Business.................................................................... 19
</TABLE>
<PAGE>
VOTING PROCEDURES
Your vote is very important. Your shares can only be voted at the Annual
Meeting if you are present or if you have sent in your proxy. Whether or not
you plan to attend the Annual Meeting, you are encouraged to vote by proxy to
assure that your shares will be represented. You may revoke this proxy at any
time before it is voted at the Annual Meeting, by written notice to the
Corporate Secretary, by delivering to InterCept a proxy bearing a later date, or
by casting a ballot at the Annual Meeting. Properly executed proxies that are
received before the Annual Meeting's adjournment will be voted in accordance
with the directions provided in the proxy. If no directions are given, your
shares will be voted FOR Proposal 1 to elect two nominees to the Board of
--------------
Directors as directors and FOR Proposal 2 to ratify the appointment of Arthur
--------------
Anderson LLP as independent public accountants for InterCept for the year ending
December 31, 1999.
Who can vote? Shareholders as of the close of business on April 15, 1999 are
entitled to vote. On that day, approximately 9,407,000 shares of common stock
were outstanding and eligible to vote. Each share entitles the holder to one
vote on each matter presented at the Annual Meeting. A list of shareholders
eligible to vote will be available at the offices of The InterCept Group, Inc.,
3150 Holcomb Bridge Road, Suite 200, Norcross, Georgia 30071, beginning May 12,
1999. Shareholders may examine this list during normal business hours for any
purpose relating to the Annual Meeting.
How do I vote? You may vote in person at the Annual Meeting. If you do not
attend the Annual Meeting and vote in person, you may vote your shares by proxy
through the mail. Whether or not you plan to attend the Annual Meeting, we ask
you to send in your proxy. To vote by mail, simply mark, sign and date the
enclosed proxy card, then return it to us.
If you sign and return a proxy card without indicating your voting instructions,
the named proxies will vote your shares FOR Proposal 1 to elect the two nominees
--------------
of the Board of Directors as directors and FOR Proposal 2 to ratify the
--------------
appointment of Arthur Andersen LLP as independent public accountants for the
year ending December 31, 1999.
Can I change my proxy? You can revoke your proxy at any time before the Annual
Meeting by sending a properly signed written notice of your revocation to the
Secretary of InterCept, by delivering to InterCept another proxy that is
properly signed and bears a later date than the proxy you wish to revoke or by
voting in person at the Annual Meeting. Attendance at the Annual Meeting will
not itself revoke an earlier submitted proxy. You should direct any written
notices of revocation and related correspondence to: The InterCept Group, Inc.,
3150 Holcomb Bridge Road, Suite 200, Norcross, Georgia 30071, Attention: Scott
R. Meyerhoff, Secretary.
How are votes counted? The Annual Meeting will be held if a quorum, consisting
of a majority of the outstanding shares of common stock entitled to vote, is
represented. In determining whether a quorum exists at the Annual Meeting for
purposes of all matters to be voted on, shares will be counted if they are
represented at the meeting for any purpose other than to object to holding the
meeting or transacting business at the meeting. Broker non-votes and abstentions
will be counted for purposes of determining whether a quorum has been reached,
but will have no effect on the voting. "Broker non-votes" occur when nominees,
such as banks and brokers, holding shares on behalf of beneficial owners, do not
receive voting instructions from the beneficial owners before the Annual
Meeting.
There are different voting requirements for the various proposals. Directors
will be elected by a plurality of the votes cast at the Annual Meeting. This
means that only votes cast for a nominee will be counted, and the nominees for
1
<PAGE>
director who receive the most votes will be elected as directors. Broker non-
votes and instructions to withhold authority to vote for one or more of the
nominees for director will result in those nominees receiving fewer votes.
Shareholders do not have cumulative voting rights.
The ratification of the appointment of the independent public accountants
requires the approval of a majority of the shares of InterCept common stock
present or represented by proxy at the Annual Meeting and entitled to vote on
the proposal. Abstentions will have the same effect as votes against this
proposal, and broker non-votes will have no effect on the vote.
Who will count the vote? The chairman of the Annual Meeting will appoint the
inspectors of the election for the Annual Meeting who will tabulate
shareholders' votes. The inspectors of the election will count all shares
represented and entitled to vote on a proposal as present, whether voted for or
against the proposal or the shareholder abstains from voting.
Is my vote confidential? InterCept has a policy of vote confidentiality. Your
vote may not be disclosed to the Board of Directors or management of InterCept
except as may be required by law and in other limited circumstances.
Who pays for the cost of the proxy solicitation? The enclosed proxy is
solicited by InterCept for use at the Annual Meeting. InterCept will pay the
cost involved in soliciting proxies. In addition to the use of the mails,
InterCept's officers, directors and employees will solicit proxies personally or
by telephone or facsimile transmission. These individuals will not be
compensated specifically for their solicitation activities. We will also make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries for them to forward proxy materials to the beneficial owners of
shares held of record. InterCept will reimburse these persons for their
reasonable expenses.
- ----------------------------------------------------------------
CORPORATE GOVERNANCE
Our business, property and affairs are managed under the direction of the Board
of Directors. Although directors are not involved in the day-to-day operating
details, they are kept informed of InterCept's business through written reports
and documents provided to them regularly, as well as by operating, financial and
other reports presented by the Chairman of the Board and Chief Executive Officer
and other officers at meetings of the Board of Directors and committees of the
Board.
Meetings of the Board. The Board of Directors held 6 meetings in 1998. Each of
the incumbent directors attended at least 75% of the Board and committee
meetings to which he was assigned. The directors in the aggregate attended 98%
of their Board and assigned committee meetings.
Committees of the Board of Directors. The Board of Directors has established an
Executive Committee, an Audit Committee and a Compensation and Stock Option
Committee.
Executive Committee - may exercise the full power and authority of the Board to
approve acquisitions. Messrs. Collins, Jackson and Sturm currently serve on
this committee. This committee generally meets when action is necessary between
scheduled Board meetings, when a limited time frame exists and a Board quorum is
not readily available. The Executive Committee approves company merger and
acquisition transactions up to $2 million per transaction with a limit of three
transactions quarterly. The Executive Committee met 1
2
<PAGE>
time in 1998.
Audit Committee - monitors the auditing, accounting and financial reporting of
InterCept. Messrs. Sturm, Knox and Leonard currently serve on this committee.
The committee makes recommendations to the Board concerning the accounting firm
to be employed as the independent accountants and consults with these
accountants with regard to the adequacy of internal controls and the scope and
results of their audits. The Audit Committee met 1 time in 1998.
Compensation and Stock Option Committee - oversees the management of human
resources activities of InterCept, including determination of compensation for
senior management, the granting of stock options, and the administration of our
stock option and other employee benefit plans. Messrs. Leonard and Burke
currently serve on this committee. The Compensation and Stock Option Committee
met 2 times in 1998.
Nominating Committee - We do not have a nominating committee. The Board of
Directors nominates candidates to stand for election as directors. The Bylaws
permit shareholders to make nominations for directors but only if such
nominations are made timely and by notice in writing to the Secretary of
InterCept and in compliance with InterCept's Bylaws.
Director Compensation. Directors do not receive cash fees for their services as
directors of InterCept. Upon initial election to the Board of Directors, non-
employee directors owning less than 4% of InterCept's common stock received
options to acquire 35,000 shares of common stock, 11,667 of which vested
immediately and the remainder of which vest ratably on the first and second
anniversaries of such initial election. In addition, on each anniversary date
of a director's initial election to the Board of Directors, each director
receives an automatic grant of options to acquire 5,000 shares of common stock
which vest on the date of grant. The exercise price of these options is equal
to the fair market value of the common stock on the date of grant. Directors
may be reimbursed for out-of-pocket expenses incurred in attending meetings of
the Board of Directors or its committees and for other expenses incurred in
their capacity as directors.
Indemnification. We indemnify our directors and officers to the fullest extent
permitted by law so that they will serve free from undue concern that they will
be held personally liable for InterCept's liabilities. This is required under
our Bylaws and we have also signed agreements with each of our directors and
officers contractually providing this indemnification to them.
Certain Relationships and Related Transactions. The following is a summary of
certain transactions and relationships among InterCept and its associated
entities, and among the directors, executive officers and shareholders of
InterCept and its associated entities during 1998.
On January 30, 1998, InterCept acquired InterCept Communications Technologies,
L.L.C. In exchange for the membership units of InterCept Communications
Technologies, InterCept issued a total of 2,741,029 shares of Common Stock to 17
individuals, including the following:
. John W. Collins - 926,823 shares;
. Donny R. Jackson - 492,950 shares;
. Glenn W. Sturm - 357,419 shares;
. Michael D. Sulpy - 492,992 shares; and
. A total of 470,804 shares to members of Mr. Collins' family, some of whom are
employed at InterCept.
Pursuant to agreements dated July and August of 1997, Messrs. Jackson, Sturm and
Sulpy granted Mr. Collins the right to vote their interest in Technologies.
These rights expired on June 9, 1998, the date the Company's initial public
offering.
3
<PAGE>
Other Transactions and Relationships.
From its inception in March 1996 until October 1997, InterCept Communications
Technologies was taxed as a partnership. Upon its election in October 1997 to
be taxed as a C corporation, Technologies made distributions of $380,495, of
which $61,526 remained unpaid after the January 15, 1998 distribution to its
members, including Messrs. Collins, Jackson, Sulpy and Sturm.
InterCept and Phoenix have entered into a Software License and Development
Agreement dated December 31, 1997. Under this agreement, InterCept licensed ATM
and voice response software from Phoenix and obtained the rights to develop the
software and integrate it with InterCept's existing software programs. On
January 15, 1998, Phoenix and InterCept entered into an agreement whereby
Phoenix licensed EFT software from InterCept and obtained the rights to develop
the software and integrate it with Phoenix's existing programs. Glenn W. Sturm,
a director of InterCept, is also a director of Phoenix.
InterCept provided long distance phone services to Towne Services, Inc. totaling
approximately $130,000 in 1998. Towne Services, Inc. is a publicly-held Atlanta
based company. Messrs. Collins and Sturm are directors of Towne Services, Inc.
Company Policy. All transactions with our shareholders, officers and directors
or their affiliates, if any, are subject to the approval of a majority of the
independent and disinterested outside directors and are conducted on terms no
less favorable than could be obtained from unaffiliated third parties on an
arm's length basis. This has been InterCept's policy since June 9, 1998, when
its initial public offering became effective.
4
<PAGE>
- -------------------------------------------------------------------------------
ELECTION OF DIRECTORS (PROPOSAL 1)
- -------------------------------------------------------------------------------
In accordance with our Articles of Incorporation, the Board of Directors shall
consist of at least 4 and no more than 12 directors. The number of directors is
divided into three classes, each class as nearly equal in number as possible.
The Board of Directors determines the number of directors within these limits.
The term of office of only one class of directors expires in each year. The
directors elected at the Annual Meeting will hold office for a term of three
years or until their successors are elected and qualified.
At this Annual Meeting, two directors will be elected. Unless otherwise
specified on the proxy card, the proxy will vote in favor of the election of the
persons named below as nominees. All nominees are now directors of InterCept.
The Board of Directors believes that the nominees will stand for election and
will serve if elected as directors. If, however, any person nominated by the
Board fails to stand for election or is unable to accept election, the persons
named as proxies will vote in favor of the election of such other person as the
Board of Directors may recommend. Directors will be elected by a plurality of
the votes cast at the Annual Meeting. There are no cumulative voting rights in
the election of directors.
The following biographies provide a brief description of each nominee's
principal occupation and business experience, age (as of March 31, 1999) and
directorships held in other public corporations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE LISTED NOMINEES
---
Information as to Director Nominees, Other Directors and Executive Officers.
The director nominees, other directors and executive officers of InterCept and
their ages and terms of office (in the case of directors) as of March 31, 1999
are as follows:
Director Nominees
- -----------------
<TABLE>
<CAPTION>
Name Age Class Position with Company Term Expires
- ---- --- ----- --------------------- ------------
<S> <C> <C> <C> <C>
Jon R. Burke 51 I Director 1999
Glenn W. Sturm 45 I Director 1999
</TABLE>
Other Directors, Chief Executive Officer and President
- -------------------------------------------------------
<TABLE>
<CAPTION>
Name Age Class Position with Company Term Expires
- ---- --- ----- --------------------- ------------
<S> <C> <C> <C> <C>
John W. Collins 51 III Chief Executive Officer and Chairman of the Board 2001
Donny R. Jackson 50 III President, Chief Operating Officer and Director 2001
Boone A. Knox 62 II Director 2000
Bruce P. Leonard 45 II Director 2000
</TABLE>
5
<PAGE>
Other Executive Officers
- ------------------------
<TABLE>
<CAPTION>
Name Age Position with Company
- ---- --- ---------------------
<S> <C> <C>
Scott R. Meyerhoff 30 Vice President -- Finance, Chief Financial Officer and Secretary
Michael R. Boian 59 Executive Vice President of Alliances and Strategic Partners
Michael D. Sulpy 38 Executive Vice President of Data Communications
</TABLE>
Biographical Information for Director Nominees.
Jon R. Burke has served as a director of InterCept since February 1998. He is
presently the managing member of Capital Appreciation Management Company,
L.L.C., which is the managing general partner of an Atlanta-based merchant
banking fund specializing in acquiring controlling interests in companies
located in the southeastern United States. Mr. Burke is also a principal with
Brown, Burke Capital Partners, Inc., which provides financial advisory services
to middle market corporations in connection with mergers and acquisitions and
financing. He also is a director of United Companies Financial Corporation, a
financial services holding company engaged in consumer lending. From 1973 to
1996, Mr. Burke was employed by The Robinson-Humphrey Company, Inc., most
recently serving as a Senior Vice President and the head of its financial
institutions/banking research.
Glenn W. Sturm has served as a director of InterCept since May 1997. Mr. Sturm
has been a partner in the law firm of Nelson Mullins Riley & Scarborough, L.L.P.
since 1992, where he serves as Corporate Chairman and as a member of its
executive committee. Since 1996, Mr. Sturm has been a director of Phoenix
International Ltd., Inc., a publicly-held provider of client/server application
software for the financial services industry, and Towne Services, Inc., a
publicly-held provider of electronic commerce products and services for small
and mid-sized businesses and community banks. Mr. Sturm is a principal in
Centaurus Ventures, a venture fund which invests in and advises electronic
commerce, transaction processing and computer telephony companies.
Biographical Information for Other Directors
John W. Collins, a co-founder of InterCept, has served as its Chief Executive
Officer and Chairman of the Board of Directors since its formation. Mr. Collins
also has served as the Chairman and Chief Executive Officer of InterCept Switch
since its formation in 1996. Mr. Collins co-founded and served as an officer
and/or director of each of InterCept's subsidiaries prior to their merger with
InterCept in January 1998. Mr. Collins also served as Chairman of InterCept
Communications Technologies, L.L.C. prior to its merger with InterCept in
January 1998. Mr. Collins has over 26 years of experience in multiple areas of
electronic commerce for community financial institutions. Mr. Collins also
serves as a director for Towne Services.
Donny R. Jackson, a co-founder of InterCept, has served as President, Chief
Operating Officer and director of InterCept since its formation. Mr. Jackson
also has served as the President and Chief Operating Officer of InterCept Switch
since its formation in 1996. He has also served as the President and Chief
Executive Officer and director of ProVesa since July 1994 and the President of
ProImage, Inc. (a subsidiary of ProVesa) since July 1996. Mr. Jackson also
served as President and director of InterCept Systems, Inc. and InterCept
Communications Technologies, L.L.C until their merger with InterCept in January
1998. Prior to joining InterCept, Mr. Jackson was the President of Bank Atlanta
from 1991 to 1992. Mr. Jackson has over 24 years of experience working with
community financial institutions, including in service bureau, enterprise
software and other processing and accounting operations.
6
<PAGE>
Boone A. Knox has served as a director of InterCept since February 1998. He is
a director of Merry Land Properties, a publicly held real estate investment
trust, a director of Cousins Properties, Inc., a publicly-held Atlanta-based
real estate development company and is also a director of Equity Residential
Properties Trust, a publicly-held Chicago based real estate investment company.
He serves as Chairman of the Board of Directors of the southeast division
(formerly Allied Bank of Georgia) of Regions Financial Corp., and served as
Allied's President and Chief Executive Officer from 1975 through 1986. He was
Chairman of the Board of Directors of Merry Land & Investment Co. from December
1996 until October 1998. He was Chairman of the Board of Directors and Chief
Executive Officer of Allied Bankshares, Inc., the holding company of Allied,
from its formation in 1984 until January 1997.
Bruce P. Leonard has served as a director of InterCept since May 1997. Mr.
Leonard has been the President and Chief Executive Officer of The Bankers Bank
in Atlanta, Georgia, and its holding company, Community Financial Services,
Inc., since 1990.
Biographical Information for Other Executive Officers
Scott R. Meyerhoff has served as Chief Financial Officer and Secretary of
InterCept since January 1998 and additionally as Vice President of Finance since
March 1999. For the seven years prior to joining InterCept, Mr. Meyerhoff was
employed by Arthur Andersen LLP, most recently as an audit manager. Mr.
Meyerhoff received his B.S. degree, with honors, in accounting from The
Pennsylvania State University, where he was member of The University's Scholars
Program. He is a Certified Public Accountant.
Michael R. Boian has served as Vice President of Alliances and Strategic
Partners since March 1999 and was Executive Vice President of Sales and
Marketing for InterCept from January 1998 until March 1999. From February 1997
to January 1998, Mr. Boian served as Vice President of Sales and Marketing of
InterCept. Prior to joining InterCept, he was Regional Vice-President of Debit
Services for MasterCard International from May 1992 to November 1996. Mr. Boian
has over 33 years of financial technology experience, primarily in electronic
funds transfer and authorization systems, including debit and credit
authorization systems
Michael D. Sulpy has served as Executive Vice President of Data Communications
for InterCept since January 1998. Mr. Sulpy co-founded InterCept Communications
Technologies, L.L.C. in March 1996 and served as its Vice President of
Communications until its merger with InterCept in January 1998. He joined
InterCept in 1987, and from January 1993 to January 1996, he served as its
network manager, responsible for data network design and maintenance and
personnel training. Mr. Sulpy has over 16 years of data communications
management and telecommunications network experience.
7
<PAGE>
- ------------------------------------------------------------------------------
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 2)
- ------------------------------------------------------------------------------
The Board of Directors has appointed the firm of Arthur Andersen LLP to continue
as independent public accountants for InterCept for the year ending December 31,
1999, subject to ratification of such appointment by our shareholders. Arthur
Andersen has served as InterCept's independent public accountants since 1997.
Unless otherwise indicated, the persons named as proxies in the proxy card will
vote in favor of ratifying the appointment of Arthur Andersen, independent
certified public accountants, to audit the books and accounts of InterCept for
the year ending December 31, 1999. The Board of Directors has not determined
what action the Board of Directors would take if the shareholders do not ratify
the appointment.
One or more representatives of Arthur Andersen are expected to be present at the
Annual Meeting. They will have an opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION
---
8
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or accrued by InterCept for
services rendered by our Chief Executive Officer and the four most highly
compensated other executive officers whose total salary and bonus exceeded
$100,000 (collectively, the "Named Executive Officers") during the year ended
December 31, 1998. InterCept did not grant any stock appreciation rights or
make any long-term incentive plan payouts during the periods shown. None of our
executive officers has received or is expected to receive perquisites that
exceed the lesser of $50,000 or 10% of the salary and bonus of such executive.
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
Long-Term Compensation
Awards
---------------------
Annual Compensation Securities Underlying
Name and ------------------------------------ Options/
Principal Position Year Salary($) Bonus($) SARs(#)
--------- ------------------------------------ ----------------------
<S> <C> <C> <C> <C>
John W. Collins.................... 1998 265,000 50,000 --
Chief Executive Officer 1997 240,000 10,000 --
Donny R. Jackson................... 1998 189,750 27,000 100,000
President and Chief Operating 1997 172,500 7,500 157,898
Officer
Scott R. Meyerhoff................. 1998 119,163 6,250 160,189
Vice President Finance, Chief 1997 -- -- --
Financial Officer and Secretary
Michael R. Boian................... 1998 140,000 -- --
Executive Vice President of 1997 106,750 5,000 21,053
Alliances and Strategic Partners
Michael D. Sulpy................... 1998 113,333 3,000 --
Executive Vice President of Data 1997 97,500 2,000 --
Communications
Vir A. Nanda....................... 1998 193,125 3,125 --
Senior Vice President of Technology 1997 204,167 -- --
Farrell S. Mashburn................ 1998 125,000 3,000 --
Senior Vice President of Data 1997 125,000 7,500 --
Services
</TABLE>
_______________
9
<PAGE>
Option Grants. The following table sets forth information concerning each grant
of stock options to the Named Executive Officers during the year ending December
31, 1998:
Option / SAR Grants in Last Fiscal Year
-----------------------------------------------------
<TABLE>
<CAPTION>
Percent Potential Realizable Value
Number of of Total at Assumed Annual
Securities Options Rates of Stock Price Appreciation
Underlying Granted to Exercise for Option Term(1)
Options Employees in or Base Expiration ---------------------------------
Granted(#) Fiscal Year Price($/Sh) Date 5%($) 10%($)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John W. Collins......... 200,000 29.32% $7.70 6/17/2003 $246,792 $714,714
Donny R. Jackson........ 100,000 14.16% $7.00 6/17/2008 $440,223 $1,115,618
Scott R. Meyerhoff...... 110,189 (2) 15.6% $7.00 2/11/2008 $485,077 $1,229,288
50,000 7.10% $7.00 6/17/2008 $220,112 $557,809
</TABLE>
_______________
(1) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the Securities and Exchange Commission. There can
be no assurance that the actual stock price appreciation over the term
will be at the assumed 5% and 10% levels or at any other defined level.
Unless the market price of the common stock appreciates over the option
term, no value will be realized from the option grants made to the Named
Executive Officers.
(2) These options were originally granted at $7.70 each and were subsequently
repriced to $7.00 per share to reflect the IPO price.
The following table sets forth certain information regarding the exercise of
options and the number of options held by the Named Executive Officers who have
been granted stock options, as of December 31, 1998:
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Securities Underlying In-the-Money
Options at Fiscal Year End(#) Options at Fiscal Year End($)
---------------------------------------- --------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John W. Collins.................................. 116,843 100,000 $82,194 -
Donny R. Jackson................................. 121,580 144,739 $375,073 $494,722
Scott R. Meyerhoff............................... 69,079 91,110 $17,270 $22,778
Michael R. Boian................................. 8,421 12,632 $42,863 $64,297
</TABLE>
10
<PAGE>
Stock Option Plans
1996 Stock Option Plan. The Board of Directors and shareholders of InterCept
approved our 1996 Stock Option Plan, effective as of November 12, 1996. The
purpose of the 1996 Stock Option Plan is to advance the interests of InterCept,
its subsidiaries and its shareholders by affording certain employees and
directors of InterCept, as well as key consultants and advisors to InterCept or
any subsidiary, an opportunity to acquire or increase their proprietary
interests in InterCept. The objective of the issuance of stock options and
grants of restricted stock under the 1996 Stock Option Plan is to promote the
growth and profitability of InterCept and its subsidiaries because the optionees
and grantees will be provided with an additional incentive to achieve objectives
through participation in its success and growth and will be encouraged to
continue their association with or service to InterCept.
Awards under the 1996 Stock Option Plan are granted by the Compensation and
Stock Option Committee (the "Committee") composed of at least two independent
directors. Awards issued under the 1996 Stock Option Plan may include incentive
stock options ("ISOs"), non-qualified stock options ("NQSOs") and grants of
restricted stock. The Committee administers the 1996 Stock Option Plan and
generally has discretion to determine the terms of an option grant, including
the number of option shares, option price, term, vesting schedule, the post-
termination exercise period and whether the grant will be an ISO or NQSO.
Notwithstanding this discretion: (i) the number of shares subject to options
granted to any individual in any fiscal year may not exceed 315,795 shares
(subject to certain adjustments); (ii) if an option is intended to be an ISO and
is granted to a shareholder holding more than 10% of the combined voting power
of all classes of InterCept's stock or the stock of its parent or subsidiary on
the date of the grant of the option, the option price per share of common stock
may not be less than 110% of the fair market value of such share at the time of
grant; and (iii) the term of an ISO may not exceed 10 years, or 5 years if
granted to a shareholder owning more than 10% of the total combined voting power
of all classes of stock on the date of the grant of the option.
The Stock Option Plan provides for the granting of non-qualified stock options
to the directors of InterCept. The Board of Directors has authorized the
issuance of up to 175,000 shares of common stock to directors under the Stock
Option Plan pursuant to options having an exercise price equal to the fair
market value of the common stock on the date the options are granted. The Board
of Directors has approved grants to directors of (i) options to purchase 35,000
shares to each non-employee director of InterCept who beneficially owns less
than 4% of our outstanding common stock on the date of his election to the Board
of Directors and (ii) options to purchase 5,000 shares to each director on each
anniversary date of his election to the Board at an exercise price equal to the
fair market value of the common stock on the date the options are granted. Each
individual director's option grant vests during the director's three-year term
of service and each annual grant vests on the date of grant. Each director grant
expires five years after the date of grant, unless canceled sooner as a result
of termination of service or death, or unless such option is fully exercised
prior to the end of the option period.
The maximum number of shares of common stock that currently may be subject to
outstanding options, determined immediately after the grant of any option, is
1,540,634 shares (subject to certain adjustments). The 1996 Stock Option Plan
provides that the number of shares of common stock available for issuance
thereunder shall be automatically increased on the first trading day of each
calendar year beginning January 1, 1999 by the lesser of (i) three percent of
the number of shares outstanding on the preceding trading day or (ii) 315,795
shares (subject to certain adjustments). Shares of common stock that are
attributable to awards which have expired, terminated or been canceled or
forfeited during
11
<PAGE>
any calendar year are available for issuance or use in connection with future
awards.
The 1996 Stock Option Plan will remain in effect until terminated by the Board
of Directors. The 1996 Stock Option Plan may be amended by the Board without the
consent of the shareholders of InterCept, except that any amendment, although
effective when made, will be subject to shareholder approval within one year
after approval by the Board of Directors if the amendment (i) increases the
total number of shares issuable pursuant to ISOs (other than the permitted
annual increase), (ii) changes the class of employees eligible to receive ISOs
that may participate in the 1996 Stock Option Plan, or (iii) otherwise
materially increases the benefits accruing to recipients of ISOs.
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
disallows a public Company's tax deduction for compensation to the chief
executive officer and four other most highly compensated executive officers in
excess of $1,000,000 in any tax year. Compensation that qualifies as
"performance-based compensation" is excluded from the $1,000,000 deductibility
cap, and therefore remains fully deductible. InterCept intends that options
granted with an exercise price at least equal to 100% of fair market value of
the underlying stock at the date of grant will qualify as such "performance-
based compensation," although other awards under the 1996 Stock Option Plan may
not so qualify.
ProVesa, Inc. 1994 Stock Option Plan. In November 1996, as part of the
acquisition of ProVesa, one of our subsidiaries, InterCept executed a Stock
Option Plan Assumption Agreement, pursuant to which 20,000 options outstanding
under the ProVesa, Inc. 1994 Stock Option Plan (the "ProVesa Plan") were
converted into options to acquire 42,106 shares of InterCept common stock.
InterCept assumed the rights and obligations of ProVesa under the ProVesa Plan.
The purpose of the ProVesa Plan is to advance the interests of InterCept, its
subsidiaries, and its shareholders by affording certain employees and directors
of InterCept and its subsidiaries, as well as key consultants and employees of
InterCept's suppliers and contractors, an opportunity to acquire or increase
their proprietary interests in InterCept. The objective of the issuance of stock
options and grants of restricted stock under the ProVesa Plan is to promote the
growth and profitability of InterCept and its subsidiaries because the optionees
and grantees will be provided with an additional incentive to achieve
InterCept's objectives through participation in its success and growth and by
encouraging their continued association with or service to InterCept.
Awards under the ProVesa Plan are granted by the Board of Directors but may be
granted by a committee. Awards under the ProVesa Plan may include ISOs, NQSOs or
restricted stock. The committee that administers the ProVesa Plan generally has
discretion to determine the terms of an option grant, including the number of
option shares, option price, term, vesting schedule, the post-termination
exercise period and whether the grant will be an ISO or NQSO. Notwithstanding
this discretion, if an option is intended to be an ISO and is granted to a
shareholder holding more than 10% of the combined voting power of all classes of
InterCept's stock or of its parent or subsidiary on the date of the grant of the
option, the option price per share of common stock may not be less than 110% of
the fair market value of such shares and the term of any option may not exceed
10 years, or 5 years if the option is intended to be an ISO and is granted to a
shareholder owning more than 10% of total combined voting power of all classes
of stock on the date of the grant of the option. Effective February 24, 1998,
the Board of Directors determined that InterCept will not issue any additional
options under the ProVesa Plan.
12
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require InterCept to
disclose late filings of stock transaction reports by its executive officers and
directors. Based solely on a review of reports filed by these individuals and
written representations from them that no other reports were required,
InterCept's directors and executive officers met their Section 16(a) filing
requirements during calendar year 1998.
- ------------------------------------------------------------------------------
EMPLOYMENT AGREEMENTS
Collins and Jackson Agreements. Mr. Collins and InterCept entered into an
employment agreement effective as of January 30, 1998 (the "Collins Agreement")
under which he will serve as the Chief Executive Officer of InterCept. The
Collins Agreement provides that Mr. Collins will receive a base salary of not
less than $265,000 per year. Mr. Jackson and InterCept entered into an
employment agreement effective as of January 30, 1998 (the "Jackson Agreement")
under which he will serve as the President and Chief Operating Officer of
InterCept. The Jackson Agreement provides that Mr. Jackson will receive a base
salary of not less than $190,000 per year. Mr. Collins' and Mr. Jackson's base
salaries may be increased upon a periodic review by the Board of Directors or a
Board committee. In addition, Mr. Collins and Mr. Jackson are each entitled to
incentive compensation as determined by the Board of Directors or a Board
committee based upon achievement of targeted levels of performance and such
other criteria as the Board of Directors or a committee shall establish from
time to time, and an additional annual bonus as determined by the Board of
Directors or a Board committee. Each of Mr. Collins and Mr. Jackson may
participate in InterCept's 1996 Stock Option Plan and can receive health
insurance for himself and his dependents, long-term disability insurance, civic
and social club dues, use of an automobile owned or leased by InterCept and
other benefits.
The Collins Agreement and the Jackson Agreement each have terms of three years
and renew daily until either party fixes the remaining term at three years by
giving written notice. InterCept can terminate the Collins Agreement and the
Jackson Agreement upon the executive's death or disability or for cause, and the
executive can terminate his employment for any reason within a 90-day period
beginning on the 30th day after any occurrence of a change in control or within
a 90-day period beginning on the one-year anniversary of the occurrence of any
change in control. If Mr. Collins' or Mr. Jackson's employment is terminated
after a change in control (i) by InterCept without cause or otherwise in breach
of the Collins Agreement or the Jackson Agreement, as applicable, or (ii) by Mr.
Collins or Mr. Jackson for any reason, InterCept must pay the executive all
accrued compensation and bonus amounts and one-twelfth of his annual base salary
and bonus for each of 36 consecutive 30-days periods following the termination.
In addition, InterCept must continue life and health insurance for the executive
until he reaches age 65, and the executive's outstanding options to purchase
common stock would vest and become immediately exercisable.
In the event Mr. Collins ceases to be the Chief Executive Officer of InterCept
for any reason other than by voluntary resignation, InterCept shall offer to
repurchase all of the common stock owned by Mr. Collins at a purchase price
equal to the fair market value (as defined in the Collins Agreement). Also, in
the Collins Agreement and the Jackson Agreement, InterCept granted, with respect
to their shares of common stock, piggyback and, after any termination of
employment, demand
13
<PAGE>
registration rights to each of Mr. Collins and Mr. Jackson. Each have further
agreed to maintain the confidentiality of InterCept's trade secrets for a period
of one year, if terminated for cause, and not to solicit employees or customers
of InterCept.
Other Employment Agreements. On February 1, 1998, Mr. Meyerhoff and InterCept
entered into an employment agreement (the "Meyerhoff Agreement") in which he
serves as the Chief Financial Officer of InterCept. The Meyerhoff Agreement has
a term of one year which renews automatically at the end of each term unless
earlier terminated by InterCept or Mr. Meyerhoff. InterCept can terminate the
Meyerhoff Agreement upon his death or disability or for cause, and Mr. Meyerhoff
can terminate his employment for any reason within a 90-day period beginning on
the 30th day after any occurrence of a change in control or within a 90-day
period beginning on the one-year anniversary of the occurrence of any change in
control. If Mr. Meyerhoff's employment is terminated for any reason after a
change in control, InterCept must pay Mr. Meyerhoff a lump sum cash payment
equal to three-fourths of his annual base salary and bonus and Mr. Meyerhoff's
outstanding options to purchase common stock would vest and become immediately
exercisable.
Compensation Committee Interlocks And Insider Participation. The Compensation
and Stock Option Committee of the Board was formed on July 6, 1998. The current
members of the Compensation and Stock Option Committee are Messrs. Burke and
Leonard. Neither Messrs. Burke nor Leonard have been an officer or employee of
InterCept at any time.
- --------------------------------------------------------------------------
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of our previous or
future filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that might incorporate
this Proxy Statement or future filings with the Securities and Exchange
Commission, in whole or in part, the following report and the Stock Performance
Chart which follows shall not be deemed to be incorporated by reference into any
such filing.
The Compensation and Stock Option Committee (the "Committee") consists of the
following members of the Board: Jon R. Burke and Bruce P. Leonard. The
Committee reviews and determines InterCept's executive compensation objectives
and policies. The Committee also reviews and sets the compensation of
InterCept's Chief Executive Officer and certain other highly compensated
executive officers.
The objectives of our executive compensation program are to: (i) attract, retain
and motivate highly talented and productive executives; (ii) provide incentives
for superior performance by paying above-average compensation; and (iii) align
the interests of the executive officers with the interests of our shareholders
by basing a significant portion of compensation upon InterCept's performance.
Our executive compensation program combines the following three components, in
addition to the benefit plans offered to all employees: base salary (including
cash provided for automobile allowances); bonus; and long-term incentive
compensation consisting of stock option grants. Each component of our executive
compensation program serves a specific purpose in meeting InterCept's
objectives.
It is our policy to set base salary levels, bonuses and long-term incentive
compensation above an industry average. We select comparison corporations on
the basis of a number of factors, such as their
14
<PAGE>
size and complexity, the nature of their businesses, the regions in which they
operate, the structure of their compensation programs (including the extent to
which they rely on bonuses and other contingent compensation) and the
availability of compensating information. These other corporations are not
necessarily those included in the indices used to compare the shareholder return
in the Stock Performance Graph. Further, the corporations selected for such
comparison may vary from year to year based upon market conditions and changes
in both InterCept's and the corporations' businesses over time. We believe that
above-average compensation levels are necessary to attract and retain high
caliber executives necessary for the successful conduct of our business.
Base salary. The Committee reviews the salaries of InterCept's executives
annually. When setting base salary levels, in a manner consistent with the
objectives outlined above, the Committee considers competitive market conditions
for executive compensation, company performance and individual performance.
The measures of individual performance considered in setting salaries included,
to the extent applicable to an individual executive officer, a number of factors
such as InterCept's historical and recent financial performance in the principal
area of responsibility of the officer (including measures such as gross margin,
net income, sales, customer count and market share), the individual's progress
toward non-financial goals within his area of responsibility, individual
performance, experience and level of responsibility and other contributions made
to InterCept's success. The Committee has not found it practicable, nor has it
attempted, to assign relative weights to the specific factors used in
determining base salary levels, and the specific factors used may vary among
individual officers. As is typical for most corporations, payment of base
salary is not conditioned upon the achievement of any specific, pre-determined
performance targets.
Bonus. InterCept's cash bonus program seeks to motivate executives to work
effectively to achieve our financial performance objectives and to reward them
when those objectives are met. Executives' bonus payments are based upon the
overall profitability of InterCept.
Long-term incentive compensation. We believe that option grants: (i) align
executive interests with shareholder interests by creating a direct link between
compensation and shareholder return; (ii) give executives a significant, long-
term interest in InterCept's success; and (iii) help retain key executives in a
competitive market for executive talent.
Benefits. We believe that InterCept must offer a competitive benefit program to
attract and retain key executives. During 1998, InterCept provided on behalf of
each executive officer medical and other benefits.
Compensation of the Chief Executive Officer. The Chief Executive Officer's
compensation plan includes the same elements and performance measures as the
plans of our other executive officers as described above. The Committee
believes that Mr. Collins' total compensation reflects the unique contributions
that he makes to InterCept's long-term strategic performance as one of the
leading innovators in the financial services technology industry. For the year
ending December 31, 1998, Mr. Collins' base salary was $265,000 and he was
awarded a $50,000 bonus for the year. Mr. Collins' salary and bonus payments for
1998 were based on, among other factors, the Company's performance and the 1997
compensation of chief executive officers of comparable companies, although his
compensation was not linked to any particular group of these companies.
Ten Year Option Repricings. On June 17, 1998, InterCept repriced options
previously granted at above the initial public offering price of $7.00 to
reflect the offering price. There was no change in the total
15
<PAGE>
number of options granted. The total options repriced for executive officers was
110,189.
The following table presents information with respect to adjustments to the
exercise price of stock options previously awarded to any current officer since
the Comp any became a reporting company on June 17, 1998, pursuant to the
Securities Exchange Act of 1934.
<TABLE>
<CAPTION>
Ten Year Option Repricings
------------------------------------------------------------------
------------
Length of
Number of Market Original
Securities Price of Exercise Option Term
Underlying Stock at Price at Remaining at
Options Time of Time of New Date of
Repriced or Repricing or Repricing or Exercise Repricing or
Name Date Amended (#) Amendment($) Amendment($) Price($) Amendment
---------- ----------- ----------- ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Scott R. Meyerhoff 6/17/98 110,189 $7.00 $7.70 $7.00 9 years, 5 months
</TABLE>
Pay Deductible Limit. Under Section 162(m) of the Internal Revenue Code and
federal tax regulations, public companies are prohibited from receiving a tax
deduction for compensation in excess of $1 million paid to the chief executive
officer or any of the four other most highly compensated executive officers for
any fiscal year. The prohibition does not apply to certain performance based
compensation. InterCept takes into consideration this compensation deductibility
limit in structuring its compensation programs and in determining executive
compensation. At this time, InterCept's applicable executive officer
compensation does not exceed $1 million, and we do not expect that it is likely
to be affected by these nondeductibility rules in the near future.
Submitted by: Jon R. Burke
Bruce P. Leonard
16
<PAGE>
- --------------------------------------------------------------------------------
STOCK PERFORMANCE GRAPH
The chart below compares the cumulative total shareholder return on the common
stock of InterCept with the cumulative total return on the Nasdaq (U.S.
Companies) Index and the Nasdaq (Computer and Data Processing Services) Index
for the period commencing June 11, 1998 (the first day of trading of the common
stock as a result of our initial public offering) and ending December 31, 1998,
assuming an investment of $100 and the reinvestment of any dividends. The base
price for InterCept's stock is the initial public offering price of $7.00 per
share. Our common stock was traded on the American Stock Exchange until Friday,
March 26, 1999. On Monday, March 29, 1999 our common stock began trading on the
Nasdaq National Market. The comparisons in the graph below are based upon
historical data and are not indicative of, nor intended to forecast, future
performance of the common stock.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG THE INTERCEPT GROUP, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ COMPUTER & DATA PROCESSING INDEX
<TABLE>
<CAPTION>
Cumulative Total Return
--------------------------------------------------------
6/11/98 6/30/98 9/30/98 12/31/98
<S> <C> <C> <C> <C>
THE INTERCEPT GROUP, INC. 100 102 83 100
NASDAQ STOCK MARKET (U.S.) 100 109 98 127
NASDAQ COMPUTER & DATA PROCESSING 100 117 111 143
</TABLE>
- --------------------------------------------------------------------------------
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth certain information regarding the beneficial
ownership of InterCept's common stock by: (i) each person or entity known by
InterCept to beneficially own more than 5% of the outstanding common stock; (ii)
each director of InterCept; (iii) each Named Executive Officer; and (iv) all
directors and executive officers of InterCept as a group. The information in
the table is based on information from the named persons regarding their
ownership of common stock. Unless otherwise indicated, each of the holders
listed below has sole voting power and investment power over the shares
beneficially owned and each person known by InterCept to beneficially own more
than 5% of the common stock has an address in care of InterCept's principal
office.
For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares that such person or group has the right to
acquire within 60 days after March 31, 1999 or with respect to which such person
otherwise has or shares voting or investment power. For purposes of computing
the percentages of outstanding shares held by each person or group of persons on
a given date, shares which such person or group has the right to acquire within
60 days after such date are deemed to be outstanding for purposes of computing
the percentage for such person or group but are not deemed to be outstanding for
the purpose of computing the percentage of any other person or group. The
numbers shown in the vested options column are as of March 31, 1999. No options
will vest during the 60 days following March 31, 1999. We had 9,406,907 shares
outstanding on March 31, 1999.
17
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vested Beneficial Shares
------ -----------------
Name Shares Owned Options(2) Owned %
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John W. Collins 2,455,270 116,843 2,572,113 27.0
Donny R. Jackson 534,045 153,160 687,205 7.2
Scott R. Meyerhoff - 91,113 91,113 *
Michael R. Boian 6,000 12,632 18,632 *
Michael D. Sulpy 470,714 - 470,714 5.0
Farrell S. Mashburn 204,214 8,421 212,635 2.2
Vir A. Nanda 901,044 - 901,044 9.6
Jon R. Burke - 28,333 28,333 *
Boone A. Knox - 28,333 28,333 *
Bruce P. Leonard - 28,333 28,333 *
Glenn W. Sturm 381,004 5,000 386,004 4.1
Capital Research and
Management Company (1) 525,000 - 525,000 5.6
Robert Fleming, Inc. (2) 505,550 - 505,550 5.4
All directors and executive
and key officers as a group
(11 persons) 4,952,291 472,168 5,424,459 54.9
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
______________
* Indicates less than 1%
(1) As reported by Capital Research and Management Company ("Capital") in a
Statement on Schedule 13G filed with the Securities and Exchange
Commission on February 11, 1999. In its Statement on Schedule 13G, Capital
reports that it is an investment adviser registered under Section 203 of
the Investment Advisers Act of 1940 to several investment companies.
Capital's address is 333 South Hope Street, 55th Floor, Los Angeles,
California 90071.
(2) As reported by Robert Fleming, Inc. ("Fleming") in a Statement on Schedule
13G filed with the Securities and Exchange Commission as of February 10,
1999. Fleming's address is 320 Park Avenue, 11th Floor, New York, New York
10022
18
<PAGE>
- -------------------------------------------------------------------------------
SUBMISSION OF SHAREHOLDER PROPOSALS
AND DIRECTOR NOMINATIONS
Any proposal a shareholder may desire to have included in our proxy materials
for presentation at our 2000 Annual Meeting of Shareholders must be received by
us, Attention: Scott R. Meyerhoff, Secretary, at our principal executive offices
by December 5, 1999. Our By-laws provide procedures which a shareholder must
follow to nominate persons for election as directors or to introduce an item of
business at an annual meeting of shareholders. These procedures require
shareholder proposals to be submitted in writing to the Secretary of InterCept
at 3150 Holcomb Bridge Rd., Suite 200, Norcross, Georgia 30071. The nomination
or proposed item of business must be received no later March 16, 2000.
- --------------------------------------------------------------------------------
AVAILABLE INFORMATION
InterCept is subject to the informational requirements of the Exchange Act and
is required to file reports, proxy statements and other information with the
Securities and Exchange Commission. Shareholders may inspect and copy such
reports, proxy statements and other information at the Public Reference Section
of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite
1300, New York, New York 10048. Shareholders may also obtain copies of the
reports, proxy statements and other information from the Public Reference
Section of the Commission, Washington, D.C. 20549, at prescribed rates. The
Commission maintains a World Wide Web site on the internet at http://www.sec.gov
------------------
that contains reports, proxies, information statements, and registration
statements and other information filed with the Commission through the EDGAR
system. The common stock of InterCept is traded on the Nasdaq National Market
(Symbol: ICPT), and such reports, proxy statements and other information
concerning InterCept also can be inspected at the offices of Nasdaq, 1735 K
Street, N.W. Washington, D.C. 20006. Nasdaq maintains a web site at
www.nasdaq.com.
OTHER BUSINESS
The Board of Directors does not know of any other matters to be presented
for action by the shareholders at the Annual Meeting. If, however, any other
matters not now known are properly brought before the Annual Meeting, the
persons named in the proxy card will vote such proxy on such matters as
determined by a majority of the Board of Directors.
By Order of the Board of Directors
/s/ John W. Collins
----------------------------------
John W. Collins
Chairman of the Board
19
<PAGE>
PROXY SOLICITED FOR ANNUAL MEETING
OF SHAREHOLDERS OF
THE INTERCEPT GROUP, INC.
TO BE HELD ON JUNE 15, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby constitutes and appoints JOHN W. COLLINS and DONNY R.
JACKSON each of them, his true and lawful agents and proxies with full power of
substitution in each, to represent and vote, as indicated below, all of the
shares of Common Stock of The InterCept Group, Inc. ("InterCept") that the
undersigned would be entitled to vote at the 1999 Annual Meeting of Shareholders
of InterCept to be held at the Ravinia Club, 2 Ravinia Club, Suite 100, Atlanta,
Georgia on Tuesday, June 15, 1999 at 9:00 a.m., local time, and at any
adjournment, upon the matters described in the accompanying Notice of Annual
Meeting of Shareholders and Proxy Statement, receipt of which is acknowledged,
and upon any other business that may properly come before the meeting or any
adjournment. Said proxies are directed to vote on the matters described in the
Notice of Annual Meeting of Shareholders and Proxy Statement as follows, and
otherwise in their discretion upon such other business as may properly come
before the meeting or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS ONE AND TWO AS STATED BELOW AND AS THE PROXY HOLDER MAY DETERMINE
IN HIS DISCRETION WITH REGARD TO ANY OTHER MATTER PROPERLY BROUGHT BEFORE THIS
MEETING.
PLEASE MARK, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
1. Election of Directors:
Class I Nominees (terms expire 2002)
Jon R.Burke
Glenn W. Sturm
[ ] For all nominees [ ] Withhold Authority to
listed (except as vote for all nominees voted
marked to the contrary)
(INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write that nominee's name(s) in the space provided below.)
2. Ratification of the selection of Arthur Andersen LLP as the Company's
independent auditors for the year ending December 31, 1999.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
<PAGE>
3. IN THEIR DISCRETION, to act upon such other business as may properly come
before the meeting or any adjournment thereof.
Dated: , 1999
-----------
- -----------------------------
Signature of Shareholder(s)
- ----------------------------
Signature of Shareholder(s)
Note: Please sign exactly as name or names appear hereon. Where more than one
owner is shown, each should sign. Persons signing in fiduciary or representative
capacity shall give full title. If a corporation, please sign in full corporate
name by authorized officer. If a partnership, please sign in partnership name by
authorized person.
